The MOST Important Financial EQUATION!
DREAMS, DREAMS, DREAMS
Have I told you that I've been in the Insurance and Financial services industry for the past 26 years? However, I'm first to admit that financially my situation is yet to be desired. If I'm going to rewind my life and go back to when I first started working out of college, if somebody told me about this equation, I would be way better financially today. In fact, I could have been retired at 40 and just pursuing my passions such as computer engineering (yes, that was first choice not Psychology), electronics (yes I can fix your appliances and read circuit boards), music (yes, I'm a closet DJ), and anything about technology. I could have been the next Bill Gates or Steve Jobs. I could have launched my own company, MANGOES (not the apparel brand). So what is it? Tada!
E=mc2! Ooops, wrong equation (thats from my uncle Alby, it's for building a nuclear bomb!)
EQUATION
So here it is!
INCOME (100)- SAVINGS (20) = EXPENSES (80)
Yes, Virginia, that's the equation. You millenials reading this take note of this and make it your mantra. So what does this mean? It means, for every 100 pesos/dollars/yen/etc that you earn, take 20 off right away as savings, the 80 that was left spend to your hearts contents (it's harder than you think it is, that means budgeting. Nobody told me about this when I started working. So now I'm telling you! This is the best way to achieve financial success. And be happy for the rest of your financial life! By the way the 20 for savings you keep it in a place almost inaccessible to you. Place it in a vault with 25 alphanumeric code, lock it in a time deposit, buy stocks or bitcoin(?), anything which will make it hard to liquidate. With discipline, you will be a multi-millionaire by 40. Guaranteed!
Looking back at how foolishly spent my income through the years, I only have regrets. I had it backwards. Income (20) - Expenses (80) = Savings (-60)! Huhuhu!
REWIND
If I'm going to rewind my life, before I get married, I would save up for my own house and car. Buy a 50 Million insurance coverage. Start a business. Save up for educational expenses of my future children. Save up for medical expense fund. Save up for investment. Save up for retirement. In that way, when I do get married, I'm already settled financially. Saves me the hassle of arguments over money. I could have had a blissful, stress-free family life. And if it still doesn't work out, I'm still a millionaire! I'll go buy myself a trophy wife! (Hope my wife doesn't read this!)
FINANCIAL FREEDOM
Seriously, I could be in a much better place right now financially If I just got this advice. But that's life. You make lemonades out of lemons. So to young people starting out in life, remember this equation. Put it your bedroom, bathroom, cupboard, everywhere to remind you of this. Set your financial plan early. Or better yet talk to a Financial Planner to assist you. Do this for a happy, blissful, stress-free, and fulfilling LIFE! Strive for FINANCIAL FREEDOM! The freedom to live your life the way you want it by getting money out of the way!
More financial planning advice later. Happy Steeming everyone!
I retired at 34. Haha! 😅
Great for you mam!
Ay ate, ilan yrs ago n yun?
10 years ago 😂😂😂
Hala sha seryoso? 😱
Ay grabe 50 million insurance? Whew.
I think everyone is like that. We all start by spending our money away when we are young, especially if our parents do not have the mindset of saving thus never passed it down to us.
Ah well. Hopefully the millennials will get to read this.
Meron ako 1M lang sa Pioneer pero pinabayaan ko na loan ko hahaha mas gusto ko sa SSS maglagay pera kasi pwede mo itigil o ituloy anytime at pwede magbayad thru Coins.ph 😊
Hellooo. Andito ka rin pala nangangapitbahay he he. Sayang coverage mo. Kinain na ng interest ng loan mo ang cash values at dividends ng policy mo. Pero at 44 pwede ka kumuha ng bago combination life and investment program. For 1M you only pay mga 2k a month or less. Believer ka pala ng life insurance. Impressive. Konti pa lang sa Pinas ang aware nito. You're ahead of your time mam.
Loan? Bkit loan? Insurance may loan?
Meron kambal yung plan ko eh 😂
Ay waw... Dun ka n lng s walang loan. Meron nmn insurance n walang loan ah? D ko maisip bkit may loan. haha
Ano 'to may kasamang kotse or motor? Ndi ako familiar s Pioneer eh... Life insurance b yan? Parang wla nmn Pioneer ah?
Life insurance ang Pioneer. Malaki din ito na company. Pero if you want to know the top 5 Life Insurance Companies are 1. Axa Life 2. Insular Life 3. Philam Life 4. Pru Life 5. Sun Life. Any of these companies can give you a good life insurance na may kambal na (hindi loan) investment program para if you live too long meron kang retirement fund.
Oh ok po. Bkit wala ang Manulife? Haha based on popularity po b yan? D ko tlga alam yung Pioneer.
Ang alam ko lang most of the above plus Prudential and of course Manulife. 😂
No. 6 ang Manulife.
Thank You po magaling lang yung unit manager na nameet ko noon parang nahypnotized ako hindi ako nakatanggi
hahaha :-D
Ayun, kaya naman pala naglapse. Kinalimutan ka ng i-follow up ng ahente he he. Nawala yung hypnosis. But joking aside (may post nga pala ako bago panay jokes he he kung type mo tumawa) kumuha ka ng bagong plan. Kayang kayang bayaran ng mga cents mo ang premium. Hindi naman kamahalan. Unsolicited advice lang naman : ()
Traditional insurance policies before such as whole life, limited pay life, endowments have cash values. Cash values came from your premium payments, coupled with investments, it increases each year as it reaches toward maturity. At maturity, say a 20 year endowment will mature after 20 years, cash value is already equal to the insurance coverage. In between now and maturity, in case of emergency, you badly need cash, you can borrow the cash value of your policy in the form of a policy loan. I hope it makes sense to you now even with all the technical jargon.
Ok. Not sure if that's what she did but thanks for the info.
Sayang mam, a 1 Million insurance coverage maybe today is not that much but it still 1 Million cash to your loved ones if something happens to you. In financial planning, after setting up your emergency fund, the next step would be protection planning, that is, life and medical/hospitalization insurance. A single illness or a death of the breadwinner can wipe-out the savings of a family. SSS is not enough mam kasi I think the highest pension you can get is P 15,000 per month. I don't know if you can live comfortably with 15k with all the skyrocketing expenses today. Burial assistance is only 25K may be enough for a decent casket but not enough for the funeral services and memorial lot. You really have to augment it through your own savings and investment. Getting a life insurance is one way and the easiest way to prepare for life's eventualities. Remember, there are 2 things in life that are inevitable and inescapable: Death and Taxes!
So mauna yung health insurance tlga kesa VUL? Meron naman health add ons po ung VUL pag starting ka p lng mg-insurance keri lang yun d b?
Why 50 Million insurance, if you can afford it, by my estimation will set you back at 2 to 3 Million pesos in premiums a year. 50 Million by today standards can buy you 10 brand-new Toyota Land Cruisers. After 10 years, maybe 10 Toyota Corollas. Inflation my dear!
Well if keri ng budget why not, go for the 50M. :)
pakasal na lang ako sa dom na malaki pension pag nadedo transfer sakin yun hahaha 😂
Aguuuuy. Hahahaha.
Yes! Have you read the book "The Richest Man in Babylon"? It talks about "paying yourself" first, and of course, as Christian myself, I put giving before all expenses, and savings second. However, I also think it depends on how you spend money as well. If someone is already extremely careful with spending money, putting savings at last may bring in the max savings at the end of the day.
However, one thing I don't see here is "letting the money work for you" part of getting financial freedom? Savings are important, but knowing how to and what to invest in is equally so important as well :)
I write about personal finances quite frequently, feel free to come follow me. :)
Blessings,
@stepbie
Thank you for your keen comments mam. I just briefly mentioned in my post that the 20% outright savings should be put in a place where it should be inaccessible to you and harder to liquidate. I'm hinting here that part of the savings can be your seed money for investment such as bonds, stocks, mutual funds, etc. That way it earns money for you. That's the second part of savings which is saving to invest. Yes mam I will follow you to get a different insight on financial planning. Thank you for taking the time to read my post. Happy steeming!
lol my bad! I jumped the gun! haha! Look forward to more posting from you! Enjoy! :)
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