I hear people saying that living only on 70% of their income is completely ridiculous. Impossible. Crazy.
But you won’t see them cutting down their spending on cigarettes, liquor, partying, gourmet food, expensive coffee, and a whole lot of lovin’.
For those who don’t believe in the Power of Compounded Interest, let’s check how much you wasted when you purchased the following things from 2011 to 2012.
1) The iPhone4s you bought in September 2012 worth Php40,000 in September 2012 is now valued at Php25,000 only by most Sulit.com.ph sellers for the brand new unit.
If you invested your Php40,000 instead in Ayala Corporation stocks in September 2012 and sold it this month, you would have at least Php47,000 (17.5% profit) today.
2) The Sony Bravia LED TV you bought at Php20,000 in October 2012 would have grown up to Php26,858 (34.29% profit) at the start of 2013 if you invested it instead in BPI stocks.
3) The Asian tour you spent (from credit card) for Php50,000 in February 2012 would have grown to as much as Php63,875 (27.75% profit) if you invested it instead in SM Prime Holdings stocks and sold it in December 2012.
4) The Louis Vuitton bag worth Php70,000 that you bought in June 2011 would have become Php94,500 (35% profit) by February 2012 if you instead used it to buy Ayala Land shares.
5) The Php80,000 you spent for a grand family reunion (for OFW’s on vacation) in February 2012 (that was attended by so many people you don’t even know) would have grown by as much as 10.32% or Php88,256 in just one month if you bought and sold Nickel Asia stocks.
That’s how you just lost your money.
You threw away thousands of pesos, if not millions.
Change Your Spending Habit This Year
Do you want to grow your money? Then don’t just believe in the numbers I showed you in my examples above about investing in stocks.
You have to make a decision to change your lavish lifestyle. Discipline yourself to change your bad spending habits.
Spend less than what you earn. Live on 70% of your income. Build your emergency fund. Borrow no more. Save at least 20% of what you earn monthly.
Learn how to invest in paper assets (stocks, mutual funds, bonds, etc.), properties, and business.
These are the things you will never regret doing for the rest of your life.
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P.S. 1. Bro. Bo Sanchez has appointed me as a coach for our young and new investors at the TrulyRichClub social site. It’s a fun, learning family with the purpose of “helping good people become rich”. I’m inviting you to join the TrulyRichClub too and email me at firstname.lastname@example.org if you have any questions. Click here to join!.
Learn How To Earn Through Larry Gamboa’s Real Estate System. Real Estate Mentor Larry Gamboa is giving a Seminar on February 9, 2013 on how he buys foreclosed properties or properties from “motivated sellers” and turn them around into rental properties or quick sales. If you’re interested to learn his system, click here now!
P.S. 3. I’m inviting you to attend our entrep webinar called “Negosyo 101 for OFW’s: A Crash Course on Entrepreneurship and Business Development“ on September 28, 2013 at 3PM (Philippine time) with our ever reliable personal finance blogging celebrity Fitz Villafuerte. This online seminar is cool and fits (Fitz!) those who are based abroad and either wanting to grab business ideas or just expand/grow their existing ventures. You can get more details of the webinar by clicking here.
Photo credit: Son of Groucho
Note: Percentage of returns illustrated are based on Truly Rich Club estimates and personal investing/trading results.