Save

One of the things that I learned recently is that if you earn 100K a month and then your expenses are costing you 100K a month, then you are not rich. You are definitely poor. All millionaires are great savers.

I read somewhere that to be able to do this, we must change our way of thinking from "cash in, cash out" to "cash in, force savings, cash out".

I also read this interesting article on the Sunlife website:

How To Become A Millionaire

Almost anyone can be a millionaire. All you need is to have the discipline to regularly set aside a portion of your disposable money and place it a high-yielding instrument.

Now, just how long would it take for you to have P1M? There are three factors to consider: a) how much are you willing to set aside in month or a year, b) how much interest is money earning in the instrument of your choice, and c) how long are you willing to save.

The table below shows the number of years you need to reach P1M.

	Number of Years
Savings/Month	5yrs	10yrs	15yrs	20yrs	25yrs	30yrs	35yrs
P 1,000/mo or P 12,000/annum	90%	35%	19%	13%	9%	6%	5%
P 2,000/mo or P 24,000/annum	71%	25%	13%	7%	4%	3%	1%
P 3,000/mo or P 36,000/annum	59%	19%	8%	4%	1%	0%	0%
P 4,000/mo or P 48,000/annum	50%	15%	5%	0.5%	0%	0%	0%
P 5,000/mo or P 60,000/annum	43%	10%	2%	0%	0%	0%	0%
P 10,000/mo or P 120,000/annum	20%	0%	0%	0%	0%	0%	0%
P 15,000/mo or P 180,000/annum	5%	0%	0%	0%	0%	0%	0%
P 20,000/mo or P 240,000/annum	0%	0%	0%	0%	0%	0%	0%
RATE TO REACH P1M

At present, the most popular saving instrument is a time deposit account, which generates a gross interest of 8-9% p.a. or net interest of 6.4-7.2%p.a. However, if your timeframe is less than 15 years, you may want to look for an instrument where your money will have greater growth potential, such as stocks, bonds or mutual fund. However, before investing in any of these three instruments, one must first understand the risks involved in investing in equity, bond, and mutual fund, and accept that higher growth potential comes with greater risk.

Malot Oquendo

Source: http://www.sunlife.com.ph/mutualfunds/investmenttips2.asp