A lot of people are saying, and you’ve probably heard of this already, that you have to invest if you want to retire rich. Sure, a steady paycheck, especially if it’s a high-paying job, can give you a comfortable life. However, a lot of people have found out the hard way that it’s not a guarantee.
You can get sick or injured.
You can die in an accident.
You can get fired.
Suddenly, that high-paying job can’t help you anymore.
This is why you have to invest. We’re not talking about investing your money in your savings account. That’s just for your immediate needs and emergency fund (more on this later).
You know why? It’s because inflation will kill whatever value your money has if it’s in a bank. In order to beat inflation, you have to invest your money where it will outgrow inflation. So for example the average inflation rate in the Philippines last 2018 is 5.2%. If you want to retire rich, you have to invest your money in investment vehicles that offer a higher return rate than 5.2%.
Invest in an Emergency Fund First
This is the first thing that you have to do. This is your financial safety net. Think worst case scenario wherein for some reason, you can’t work and earn money for 6 months. You have to have enough money for expenses to last you these 6 months while you find a way to get back up.
Calculate your monthly expenses and multiply that by 6. If your family spends PHP 100,000 a month, you need to have PHP 600,000 in the bank for emergencies.
Invest in your Protection
We’re not talking about personal protection (although that’s important so we have tips here). We’re talking about financial protection. What happens if you die? Who will take care of your family?
Talk to a financial advisor so you can invest in insurance plans.
Invest in Low-risk Investment Vehicles
You can also talk to this financial advisor about low-risk investment vehicles like mutual funds. Mutual funds, if managed by a competent fund manager, typically outgrows inflation rate. It’s a good long-term strategy for you.
Some insurance plans have this incorporated in the plan, so talk to your financial advisor about it.
You can also invest in the stock market! There are several online platforms that allow you to easily do so. You can get started with just PHP 5,000. Start with blue chip stocks. Think long-term.
Invest in Land
You probably know someone who got rich investing in land. As far as value appreciation is concerned, land is premium. This is especially true if you develop foresight if an area is going to boom or not.
One day a land may be filled with dust and weeds. The next day, big-time investors are knocking on your door and bidding on your land. This was, and remains the case, in Lipa City. Invest wisely in land now and there’s a good chance that it will appreciate in value.
Invest in a Home
Now, this is more for your peace of mind. This year, you can finally stop renting and start living in your own home. From an investment perspective, you can build a home and sell it to someone else and earn hundreds of thousands of dollars. Either way, get in touch with us today!