Congratulations, You Just Wasted Your Money

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.

Louis Vuitton Bags in Cages

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.

Continue receiving information on growing your money and living a frugal lifestyle by subscribing to BurnGutierrez.Com for FREE.

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 burngutierrezblog@yahoo.com.ph if you have any questions. Click here to join!.

P.S. 2. 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.

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Starbucks Store Online

20 Responses to Congratulations, You Just Wasted Your Money

  1. neil says:

    is sending flowers to your loved ones via online shopping is considered wasting of money?

    • I don’ think so, Neil. Because I sell flowers! :P

      Seriously, I can’t compare sending flowers to sending electronic gadgets to your loved ones. Relatively, it’s really up to you if you can afford to buy any of them.

      Investing in relationships is the best kind of investment. But have a reality check first whether your ways of doing it are reasonable.

  2. Edmund Lao says:

    I can never disagree… Bum is right …

  3. Rogie says:

    Spending some money on things we love to have or do once in a while is good. As long as we have extra cash alloted for that. But for some who makes it a part of their lifestyle even though they can’t really afford it is another thing. A lot of them who are doing it just to impress other people or because of envy should think about it again. Especially if they don’t really need it. And I suggest them to read this blog post of yours.

    Thanks Burn!

  4. Emmanuel says:

    hi sir..is buying a condo unit be listed in your asset column or your liability column?..thanks sir!!God bless..

    • Hi Emmanuel! Thanks for visiting and for your question.

      Robert Kiyosaki’s perception on the classification of condo units/houses is a different story altogether though. It’s more on whether the house or condo unit you purchase will generate cash right away or not. If it generates cash inflow, then it is an asset. If it costs you more, then it’s viewed as a liability.

      Accounting-wise, condo units are considered part of assets. However, it depends on how it is recognized as one whether it’s an investment, a fixed asset, or even an inventory, among other possible treatment. Of course, there will be corresponding costs (mortgages [long-term], depreciation, repairs & maintenance, taxes, etc.) that will naturally be part of the liability side.

  5. Well said Burn!

    A lot of times we spend on luxuries thinking it’s what we’ve worked for, never realizing they’re delaying or preventing a brighter future by not investing the money instead.

    Not that we can’t enjoy or spend on luxuries, just as long as we do it after saving and investing a part of our income.

    “A part of what you earn is yours to keep.” ;)

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  8. “Don’t tell me where your priorities are. Show me where you spend your money and I’ll tell you what they are.” – James W. Frick

  9. Tammy says:

    I believe that life is well felt if you enjoy it. A more successful life is not getting rich but to have a balanced stable life. ;) Yes, build your emergency fund, have some investments, assure you have your insurance, pay your bills and enjoy the fruits of your hardwork (travel, buy what you want and share what you have to your loved ones, eat out and savor every moment). That is a happier scenario I guess. Investing in the stock market is not that easy.. but will be trying that too next year, Im still 26.. not yet a bad age to begin learning the market i guess.

    • The ultimate purpose of getting rich is to love (help) others. :) Investing in stocks or funds is actually easier than thought. It just depends on your risk appetite/and personal goals in life. Retirement and children’s college education are two of the most common targets and purposes for investing in such instruments.

  10. Peter says:

    nice read. unfortunately, not everyone believes in your perspective of money because a lot is under the power of Mammon. maybe you should write something about it too. “behaviors of worshipers of money”. perhaps if you step on their foot they would wake up… or hate you more. either way at least they have been told :)

  11. John says:

    Hello, I believe doing to 70-30 income saving is unrealistic because the government already takes roughly 30% to begin with, leaving any ordinary employee at 70% income. I am a firm believer that tax is an expenditure since you pay it in exchange for sanity in living in the country you live. Just a thought on why it is hard to maintain 70-30 rule. If an employee earns 100k and gives 30k to the government, the employee only has 20k to even maintain a 50-50 ratio. That 20k should be good enough for food, medicine, utilities, rent/house maintenance, transportation, groceries, children’s education, and so on. Not enough right? Now imagine a more regular employee earning 50k only. Just saying 70-30 does not apply to us or can it? Please help enlighten or am I just putting it the wrong way?

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