“If you can’t save the little money you have, you can never save anything even when you have a lot.” – Jaycee De Guzman
My gosh! I faint every time I remind my friends with my own quotation. I should have had millions earlier than my target retirement age had I started investing when I was still a poor employee. Yes! You can invest even if you’re a rank-and-file employee. You don’t have to be a businessman, a good speaker or a good writer.
Aside from my Internet Marketing businesses, I have invested a lot of money in mutual funds and in the stock market. Neither will I let my money lose its purchasing power by depositing it in the bank nor will I want to live on the interest that is lower than the inflation rate.
Based on my research, there was an 8.30% inflation rate in 2008. From 1958 until 2012, we still hold the record for a jaw-dropping average of a 9.05% inflation rate. The inflation rate is a term we learned in our Economics 101 way back in high school or in college. When inflation rate increases, our money loses its purchasing power.
When I was still five or six years old, I can still remember that the jeepney fare from our town to the bus terminal was only PHP5.00 (more or less $0.125). After more than 20 years, it’s almost PHP30.00 (more or less $0.75). Put your money in the bank as a regular deposit and you’ll get 3% interest rate. Put it in a time deposit and you’ll get 5% interest rate, perhaps. If we’re still averaging at 9.05% inflation rate and you’ll only get a fixed 5% interest rate on your money in the bank, you’re losing 4.05%.
Simple. Elementary. No-brainer. Did that shock you now? Oh, not yet. Hold it. I’m yet to speak the shock of your life.
While I’m busy with my Internet Marketing businesses, I have dabbled in investing in the stock market and in mutual funds. On a yearly basis, my investments average a growth rate of 12%. Not only that. There are some years where my investment played at 20%. Now, please do your elementary Arithmetic and find the difference between the 5% interest rate for a time deposit in a bank and the 20% aggressive yet volatile interest rate of my investments in mutual funds and in the stock market. That’s a wriggley-wiggley 15% difference.
Now, I want you to see my potential earnings when I reach the page of 50 if I will be investing at least PHP5,000.00 a month and if my investment will play at an annual rate of 12%. Please hold your armchair tight because one of my friends almost fell off of his chair when I gave him an advice how I invest my money. Take note: I invest. I don’t trade. Trading is when you put your money in the stock market or in mutual funds and you sell your shares of stocks just within a few days. That’s not investing. Investing is when you put your money in the stock market and you leave it for long years just like how I show my illustration below.
Again, I don’t trade. I invest.
Friends, I want to be very rich so I can fund my organizations in uplifting Filipinos’ financial literacy. I have come to the point where I have felt from within me that it is not enough that I am a great provider for my family. I’ve grown. I’ve become better. I’ve set my goals to the limitless blessings of God’s universe.
- AskJaycee#14: Build a Business Based on Your or Customers’ Personality? - August 21, 2020
- AskJaycee#13: Will the Stock’s Price Go Up or Down? - June 19, 2020
- AskJaycee#12: Will the Philippine Stock Exchange Index Re-enter 7,000 This Week? - June 15, 2020