Hello all! My name is Neil and nice to meet you! I used to be an Associate Financial Planner of the Philippines (certification expired, just needs renewing) and here I am, writing this blog to share what I know to aspiring investors!
Back in my college days which is not too long ago (really not too long), I thought of building a business, investing in stocks. I was thinking of many ways to earn money, to make myself rich! Then I found out that in making that dream come true, I have to save money and use that money to make money grow, here is a pretty simple rule:
Basics on investing and rule # 1: You gotta have cash! Yes! To make money work for you you have to have...Money!
People often ask me “how could I save if I have a lot of expenses?”. This line is very, very common.
Now to start off and you might have heard of this before, we do have a very simple formula to start saving money!
Here it is:
100% 10% 20% 70%
Income - tithes - savings = expenses
So for example, my salary is 10,000, I take 10% of that for tithes which is 1000 Php. I take 2000 Php which is for my savings and finally I am left with 7000 Php for all my expenses. Save first before spending and not the other way around! That simple.
So for example, my salary is 10,000, I take 10% of that for tithes which is 1000 Php. I take 2000 Php which is for my savings and finally I am left with 7000 Php for all my expenses. Save first before spending and not the other way around! That simple.
You may wonder where we got this. These are Biblical.
Now when payday comes, net of tax, you receive 100% of your pay. The tithes which is 10% is Biblical, as this is giving back to the Lord. (If this is not your faith, your 10% may go to a family in need or charity.)
Why 20% savings? This is also Biblical, when Joseph interpreted the dreams of the Pharaoh, it was said that the Pharaoh should keep ⅕ of the crops to survive the 7 years of famine, which in percentage is 20%.
Then the remaining should be for all your expenses. This formula sounds very simple but for some, it’s not easy to do but as the famous Nike quote say, “Just do it”.
Saving takes discipline and it is a habit, if spending is a habit so is saving. So take a turn, make saving money a habit, remember, this is the stepping stone to investing, if this is achieved then investing is not far from you!
Cheers!
Credit goes to Chocoholikitty from http://browse.deviantart.com/art/Kawaii-Piggy-Bank-97990926 for the piggy bank picture.
Credit goes to Chocoholikitty from http://browse.deviantart.com/art/Kawaii-Piggy-Bank-97990926 for the piggy bank picture.
