If They Can, Why Can’t You?

This post is inspired by Bro Bo Sanchez’s book My Maid Invests in the Stock Market. 

I read the book many times already and it always struck me why a simple kasambahay (house maid) can invest in a sophisticated manner while other employees who earn more has nothing to put aside?

This one is a true story. I know a kasambahay who is very young but knows how to handle her money. Her monthly income is below the minimum wage bracket. She takes care of the laundry of the family as well as maintaining the cleanliness of the house. She lives simply, spends simply, eats simply and maintains a very simple life style. A part of her salary goes to the family in the province and is used for their business. The other part she saves for her future studies. 

Although this kasambahay is not yet investing in the stock market, she knows and defines what part of her salary stays and what part goes to the business. She can compute how much her money has grown over a period of time given that the circumstances favor her. Likewise, she knows how much she will lose if fortune is not on her side.

The maid in the book and the maid in my story are alike in many ways. 

1. They both send money to their families.
2. They have the discipline to save a constant amount each month.
3. They are both business minded.
4. They have a vision in life.

How many of us send money to our families? Almost all I guess.

But how many of us are saving a constant amount each month?

How many of us are business minded?

And how many of us have a vision in life?

Our only difference from the two maids are our mindset. They want to get out of the lower class that’s why they strive hard to earn and invest (in their own simple ways.)

I hope we all do what the two maids are doing. And I hope we can all have a vision in life, before it’s too late.

~Till then.

Why become an Investor?

I’ve been talking a lot about saving money and I noticed that readers might stop at that. So I decided to write about the great things about investing money.

Saving money is just the beginning while investing it is the process. The fruits of your money’s labor will be reap when you need it and only when you need it.

Reminders before investing:

Investing requires math.

Mind you, the mathematics involved in investing are very simple addition, subtraction, multiplication and division only. No need for advance mathematics. No need for calculus and trigonometry. MDAS will be fine.

Invest with a specific goal in mind.

Before investing be certain of the reason why you are going to invest. Will this be for the downpayment of your dream house? Will this be for the college education of your children? Will this be for a grand wedding you want to have? Any reason is valid as long as you have a particular reason.

We usually think of banks when it comes to saving money. Why? Because our parents taught us to do so. During the time of our parents banks give higher interest rates. Way higher than what they offer now. That’s why during their times banks are good investment facilities. But things change. Right now, banks themselves say that they are not investment facilities. So where will we put our money? Answer: Invest it!

If you put your 100,000php in a bank that gives 1% per annum how many years will it take to double? If you don’t have a calculator then do it in Excel. You’ll be amazed to find out that your money will become 200,000php after 72 years. Question: Will you still be alive after 72 years? I hope so. If you want your money to grow faster put it in an investment facility which earns higher than inflation rate. Averagely about 12% per annum. Now, using your calculator or your Excel find out how long will it take your 100,000php to become 200,000php. Amazingly, it would only take 6 years.