Red is the color of love. It is also the color of sale tags in shopping malls every pay day, urging you to answer the call of retail therapy. After months (or years) of living from pay day to pay day, you may think there is no end to this vicious cycle. And that you will never ever be featured in Esquire or hold the name of a tycoon or be mentioned alongside the likes of Gokongwei, Tan or Sy. Time to reshape your future by making your own rags to riches story so that you can retire rich.
1. Pay off debt first
Debt seems to be a household name in the Philippines and it goes side by side with “
Bad debt is when you ignore interest rates and forget to account for borrowed money, which then snowballs into bigger, scarier and harder to manage fees. Have those piling up, and you won't retire rich. Good debt is when you loan money from the bank to upgrade equipment in your coffee business because using internal funds can hurt your financial stability when an unexpected expenditure occurs.
2. Live within your means
When you’re young and making money, it is nice to spend on yourself. It feels good, doesn’t it? If you want to save more, you can start with living frugally as your parents would. Save now, enjoy later. Retirement investing starts as early as you want it to.
Once you receive your bi-weekly salary, the urge to spend is incredibly unrelenting. Watch where you spend the money in the first week and realize that most of them are unnecessary cravings like expensive coffee. Remember that when you spend lavishly on the first week, you'll end up limiting budget for your needs like food on the next week.
If you spend a lot on fast food (which by the way increases the risk of very bad cholesterol in your body) you can try visiting the nearby
3. Maintain expenses amid salary increases
Seasoned economists (aka your parents) have given countless
4. The credit card is your friend
There is a stigma at the mention of “credit card” because people who know people who know people have been in bad debt and weren't able to retire rich because of those darn cards. Though it’s not the fault of banks entirely, it may be mostly because of misuse on the part of the
Before you get a credit card, think about where you spend your money the most: is it on shopping, dining, flying or online purchasing? To get the most out of the card, choose a card that will give you more points wherever you spend the most. Make sure you can handle the interest rate, which determines how big or small you have to pay on top of the monthly dues, in case you miss your due date or paid only the minimum monthly credit. In addition, you can find a card whose rewards will be most beneficial to you such as cashback or a rebate,
5. Shop wisely
Speaking of shopping, retirement investment also involves wise spending, so that you have more to save for later years.
Buy in bulk or bigger portions. Yes, it’s probably more expensive
Explore the grocery store first. Usually, the store re-packs its items as a combo package and sell it cheaper. You can find coffee packaged with sugar and creamer at a discounted price or shampoo packaged with soap and lotion at a cheaper price. This is done especially if the products are about to expire. Don’t worry,
Always check for the expiration date.
Do you want to know more personal finance tips to retire rich? Follow GoBear Philippines for more information.