Minimum wage earners complain about their salary. They say they can’t retire as rich. Most of them do their job and retire relying only on their small SSS pension and the small pension their company offers them.
For most low-wage earners, becoming a millionaire when they retire is an impossible dream. They argue that they can only become millionaires if they receive a large amount of pension money from their company.
Can you achieve millionaire status only by your own efforts? (Speaking humanly) This is actually considering the scenario.
In the Philippines, in the Central Visayas region, the current minimum wage is B241.00. Multiply it by 26 days and you get P6,266.00.
Suppose you are 30 years old, you actually save that P 266.00 per month and spend the remaining P 6,000.00, which is P 3,192.00 per year.
Do the math. If you put that P 3,192.00 in an investment vehicle, it will give you 10% interest (compound) per month and if you know how much your money will change in 30 years, it will be P 1,052,001.00. If you start this type of savings plan when you are 30, you will retire a millionaire at the age of 60 with your own savings plan alone, as well as your monthly pension “savings” from your company’s pension offers, SSS and your PAGIBIG. ”
What if you decide to add another P 500.00 to your monthly investment and invest P 766.00 instead? It will be P 9,192.00 per annum and at the end of 30 years it will be P 3,029,447.00 (plus 10% interest per annum)
Maybe if you get a pay raise, you can raise your savings to $ 1,766.00 a month. If you do this even in the 10th year when you started saving only P 266.00 per month, you will retire with P 4,472,777.00.
The growth of your money is possible as we know it as the rule of 72 in the financial world.
Albert Einstein's greatest invention was not the theory of relativity, it was the 72 law. (Although some say this rule existed before he was born, most would agree that he popularized it)
What does the 72 rule have to do with investing and growing your money?
Basically knowledge of Rule 72 is the basic framework of learning that every emerging investor should have.
Rule 72 simply determines the following:
1.) What interest rate do you need to get your money to double quickly.
2.) How many years does it take to double your money.
Rule 72 summarizes as follows:
72 interest rate divided by income = it takes many years for your money to double.
So, if you put P 100,000.00 in a bank account, your money will be P 200,000.00 for 72 years because the bank only offers 1% interest rate. (72 divided by 1 = 72)
You might be a little clever, if you put your P100,000.00 into a one-time deposit account, it takes 18 years for your money to turn into P200,000.00 (72 divided by 4 = 18)
Basically the higher the interest rate the less years it takes for your money to double.
So, if you put your p100,000.00 in a tool that pays 12% interest, it only takes 6 years to double your money (72 divided by 12 = 6)
Keep in mind, however, that the rule of 72 is more accurate with a lower interest rate, the higher the interest rate it becomes accurate. (An example of this is that if you earn P 100.00, invest in an instrument at 72% interest rate per annum according to 72 rules. Your money will change to P 200.00 in 1 year. Required)
Interested in how many years your money will be for TRIPLE and what should be the interest rate you should get? You must use Rule 115. It basically works just like Rule 72, replace 72 with 115.
Do you earn the minimum wage? No problem with Rule 72, you can be a millionaire!
