Anyone can be a millionaire in 10 years... Guaranteed!

[aticus]

Believe it or not, there are ways for even the average wage-earner to be a multi-millionaire. ;) For instance, if you had zero savings in the bank, but decided to set aside P5,000 a month to an account that earned 5% a year, and assuming you decided to increase your monthly contributions by 10% every year (ex. Yr.1 - P5K, Yr.2 - P5.5K, Yr.3 - P6.05K), you would be able to generate a savings account worth over P1,195,000 in 10 years... ;) It goes up to over P5 million in 20 years time. ;)

I've just created another Excel spreadsheet that calculates monthly compound interest over a 30 year period. It shows how much money you can make by any given month over the next 30 years, and factors in such things as annual interest rate, yearly income increase, monthly contributions to savings, inflation rate, amount after inflation, etc.

If anyone's interested, just let me know and I'll make it available for use. :)

[aticus]

By the way, for the skeptics who say, "What about inflation...?"

Using the above example (P5K a month, up by 10% a year each year), even assuming an inflation rate of 5% per annum, your money will still be worth over P959,000 at today's prices.

In 20 years, it will be worth over P3,664,000 (adjusted for inflation). If you're a 21 year old fresh grad, just ask yourself, "How many of the 41 year old people I know have over P3.5 million in CASH?" :)

And all with a zero starting balance and savings that start at P5K a month... with ZERO DEBT. ;)

It CAN be done... Start now! :D

[KuyaDanny]

Where's the spreadsheet? Put it up, man! ;)

[ruff]

aticus, pwede pa request na i-attach dito you excel file? :glee:

[aticus]

Yup. :) Will do.. Just give me a short while to write down the instructions for how to use it. :)

It should be up no later than 4 pm today (August 3, 2001). :)

[aticus]

Here's the file. :)

Please remember that it is copyrighted. You may distribute it to your friends, but please don't delete the first row indicating the copyright. (With or without it, I still own the copyright, but I would like for it to be up there. :) )

In any case, this program is free. ;) Don't bother selling it... :lol:

Happy wealth-building! :D

[ruff]

salamat mr. aticus! :)

[aticus]

Originally posted by ruff
salamat mr. aticus! :)

You're welcome, ruff. :) Please just post here if you've used it... I'd like to get your feedback. :)

Let me know if it's useful. ;)

[aticus]

By the way, in case I haven't yet made it clear, EOM (end of month) Balance is the amount of money you have in savings at any given month. :) So if you want to know how much you're worth in, say, June of the 3rd year.. Just go to the cell with "30" under MO. and look up the EOM Balance to the right of that in that same row. That's how much money you have at that point. :)

[munik]

Would this still work if i withdraw on a monthly basis too? :lol:

Okay, let's all be millionaires in 10 years time.
We'd have a PEx millionaires' club. :)

[aticus]

Originally posted by munik
Would this still work if i withdraw on a monthly basis too? :lol:

Okay, let's all be millionaires in 10 years time.
We'd have a PEx millionaires' club. :)

:lol:

Obviously it won't work if you take out the money. It's meant to take advantage of compounded interest... so your money has to stay in to grow. :) Otherwise you won't earn interest on it.

But for those who only want to calculate how much their CURRENT balance would be worth, forget about monthly contributions, just keep MO. Savings at zero and put your starting balance instead. :)

And, yes, I guarantee I'm following my own advice... See all the PEx millionaire club members in 10 years! :D

[aticus]

Any other feedback? ;)

I'd be happy to answer other questions about investing with my limited understanding. :) I'll ask for KuyaDanny's help, of course! :) He's the man! :D

[NoisyCricket]

Kewl! I just downloaded it. I will look it. Thanks, man. :)

[ruff]

mr. aticus,
ano yung inflation? i know i should know it by now.. (gawd, i just graduated not long ago! :glee: ).. pero i'm wondering where does the 5% of the savings go. :rolleyes:

[KuyaDanny]

A roundabout way to explain inflation:

Suppose today you had P200 and you could buy the following:

Rice P30
Clothes P60
Fuel P10

After going shopping you would have P100 left over. You decide to put it in the bank where it earns interest at 8%. After one year, you withdraw everything - P108 so you can go shopping again.

When you get to the market, you find that the prices have gone up.

Rice P31.50
Clothes P63.00
Fuel P10.50

The same goods you bought last year for P100 now cost P105. After going shopping you have P3 left. How come you have P3 left when you made P8 from investing? The P5 was the loss in purchasing power because of inflation.

[aticus]

ruff, I think you just need to read KuyaDanny's explanation. It answers the question quite nicely, I think. :)

But remember that the 5% inflation I put was just a test variable. Feel free to change the figure to simulate different economic conditions. (ex. In times of high inflation, raise the figure and your money is worth less over time. You'll then have to find ways to get a higher rate of return on your savings. In times of low inflation, your money is worth more. Try it out with different values... ;) )

Any other feedback? :)

[munik]

aticus,

Some factors to consider:
-Banks deduct withholding tax from the interest they pay out.
-With the amount of deposit one has to make (let's take the 10year, 5T initial deposit, 5% interest as example) especially on the 9th to 10th year, the average-income earner would have some difficulty shelling out 10T monthly for savings.
-With the 10% increase on deposits one has to make, one also has to have a yearly increase in wages.

[KuyaDanny]

I thought I'd add a poll to this discussion and ask you to consider the case of unexpected income.

This summer 92 million Americans will receive checks from the government representing refunds resulting from a tax reform measure. It is income they did not expect getting.

What if it happened to you? It could come in different forms - maybe a signing bonus, an extra-healthy profit share, a gift from a rich relative abroad, or maybe even an income tax refund.

Supposing you received P50,000 of money you did not expect. What would you do with it?

[lupuS]

Originally posted by munik
-With the amount of deposit one has to make (let's take the 10year, 5T initial deposit, 5% interest as example) especially on the 9th to 10th year, the average-income earner would have some difficulty shelling out 10T monthly for savings.
-With the 10% increase on deposits one has to make, one also has to have a yearly increase in wages.

I think the model assumes this, and I think we all should assume this will happen in planned future because:

1) We will get promoted over time because we are good people and work hard;

2) Salary adjustments can and do happen, either because of inflation, government regulation, job hopping, and increased value added from the employee.

I can say this because I have seen this happen in my lifetime. At our silver jubilee high school reunion, for example, everyone in my class (who was still employed) was earning 40 - 200 times the starting salaries they had when they graduated from college.

[jopert]

kewl!!!

ill officially nominate this thread as the most informative thread for the next pex anniv!

i hope i can do this.

kudos to you aticus!:D

[aticus]

Originally posted by jopert
kewl!!!

ill officially nominate this thread as the most informative thread for the next pex anniv!

i hope i can do this.

kudos to you aticus!:D

Thanks, jopert. :) I'm just trying to help out...

And, munik, if you're not sure that monthly income will increase, you can always set the yr.%inc. to zero to see different options... ;) As for the withholding tax, the model I'm using can be done two different ways: 1) the int. rate can be assumed to be NET after gov't tax... 2) since this is really a long-term savings model, withholding tax won't even apply anymore if you select the right savings instrument... the law allows you to invest in long-term instruments of 5 years or more with ZERO WITHHOLDING TAX... ;)

So, folks, if you really want your money to earn, don't touch it for at least five years and put it in a long-term (minimum five years) account... that way you keep the 20% the government would otherwise take from you. Believe me, over time that's a LOT of money... and since it's all yours, I'd really like you to keep it all. :D

[the_BuGs]

Originally posted by aticus
Believe it or not, there are ways for even the average wage-earner to be a multi-millionaire. ;) For instance, if you had zero savings in the bank, but decided to set aside P5,000 a month to an account that earned 5% a year, and assuming you decided to increase your monthly contributions by 10% every year (ex. Yr.1 - P5K, Yr.2 - P5.5K, Yr.3 - P6.05K), you would be able to generate a savings account worth over P1,195,000 in 10 years... ;) It goes up to over P5 million in 20 years time. ;)

I've just created another Excel spreadsheet that calculates monthly compound interest over a 30 year period. It shows how much money you can make by any given month over the next 30 years, and factors in such things as annual interest rate, yearly income increase, monthly contributions to savings, inflation rate, amount after inflation, etc.

If anyone's interested, just let me know and I'll make it available for use. :)

oo tapos after twenty years eh. yung halaga na yan eh sampung libo na lang ehehehehehhe

[aticus]

Originally posted by the_BuGs


oo tapos after twenty years eh. yung halaga na yan eh sampung libo na lang ehehehehehhe

Actually, it'll be worth over P3.5 million of today's money. :) Just check out the column under inf.adj.bal... ;)

[aticus]

Any other feedback? :) As of this moment, 33 people have downloaded the file but I've only heard from a few... ;)

Any comments, questions and suggestions are greatly appreciated. :) I'm planning version 2.0 of the software, only with an easier user-interface for people who want a smoother view... and I'm thinking of putting this up online for people who want to calculate anything from car dealer rates to house mortgage payments from anywhere with an internet connection. :) All for free, of course... ;)

I'll be creating new spreadsheets on things like Insurance annuities and other investment vehicles... all will be made available as I finish, for free as usual... (please bear with me if I don't get them up right away, though... I DO have a job, after all...) :D

[guapa]

There is this formula that my a family friend has been following since many years back (perhaps 40 yrs na).

Income-Savings = Expenses

Once he receive his income for the period, he takes out a big % for savings first and spend the rest for expenses only.
He is a multi-millionaire now, with lots of money in the bank!
He is bed-ridden now though now because of a stroke but he is not hiring a private nurse for his wife is a nurse. And in their household, they buy foods, fresh because they want to save on electricity expenses by not turning on their refrigirator. When he was still driving, he drives his very old car (i dont know what model it is but i believe its the only one of its kind here "alive") but he bought each of his children nice cars (it's a gift to each of them).
When his children were younger (one is my classmate/barkada), my friend would tell us that during breakfast, they eggs is cooked scrambled and had to be sliced to equal parts.
well, they are happy with their lifestyle tho.
but for me, i dont think i would be happy with lots of money in the bank and i am still using my 30 year old belt!

[Leigh]

aticus, i have looked at it already and actually i had the same comment with The_Bugs ( my initial reaction hehe), but you pointed out to me that there was this column about it, and KuyaDanny and i sort of discussed it and said that it is very possible since:

"your money earns 5% (which is possible) per year, and you increase your monthly contribution by 10% per year (also possible)."

Nice work aticus. thanks for sharing and encouraging other Working Filipinos.

[aticus]

Originally posted by guapa
There is this formula that my a family friend has been following since many years back (perhaps 40 yrs na).

Income-Savings = Expenses

Once he receive his income for the period, he takes out a big % for savings first and spend the rest for expenses only.
He is a multi-millionaire now, with lots of money in the bank!
He is bed-ridden now though now because of a stroke but he is not hiring a private nurse for his wife is a nurse. And in their household, they buy foods, fresh because they want to save on electricity expenses by not turning on their refrigirator. When he was still driving, he drives his very old car (i dont know what model it is but i believe its the only one of its kind here "alive") but he bought each of his children nice cars (it's a gift to each of them).
When his children were younger (one is my classmate/barkada), my friend would tell us that during breakfast, they eggs is cooked scrambled and had to be sliced to equal parts.
well, they are happy with their lifestyle tho.
but for me, i dont think i would be happy with lots of money in the bank and i am still using my 30 year old belt!

True, but that doesn't mean you have to stop saving at all. There is nothing so difficult about the model I created. If you're not satisfied with your current lifestyle after saving 5,000 a month, then by all means save 3,000... but please... save SOMETHING... :) After all, your son or daughter's education, in a private school, from prep till masters, will cost over 10 MILLION in total tuition fees...

So while you don't have to be as fanatic, using 30 year old belts, neither should we buy a belt every 3 months whenever there's a sale in our favorite clothing store. :)

[aticus]

Originally posted by Leigh
aticus, i have looked at it already and actually i had the same comment with The_Bugs ( my initial reaction hehe), but you pointed out to me that there was this column about it, and KuyaDanny and i sort of discussed it and said that it is very possible since:

"your money earns 5% (which is possible) per year, and you increase your monthly contribution by 10% per year (also possible)."

Nice work aticus. thanks for sharing and encouraging other Working Filipinos.

Thanks, Leigh! ;) Just doing my part to help promote financial awareness... :D

[denise]

leigh and the bugs : ndi po ba yun na nga yung purpose ng paglagay ng inflation sa equation, para yung halaga ng pera ay nasa real value ndi nominal pagdating ng panahon


yan ay sa aking palagay lamang

[pexpress]

what happens if you get sick? accident? ..life is full of unexpectation

[lupuS]

That's why we have insurance. But that's another discussion altogether.

[aticus]

Originally posted by lupuS
That's why we have insurance. But that's another discussion altogether.

lupuS, that's absolutely right. :) I'm still deciding how to come up with a spreadsheet that will help people compare different insurance policies to see which is best for them. :) Maybe I'll start a separate thread discussing issues like term, whole and universal life insurance. ;)

[aticus]

Hope people are watching Oprah now. :) There's a feature on "Ordinary Millionaires." ;)

Echoes everything in "Rich Dad, Poor Dad," and "The Millionaire Next Door," and probably "The Richest Man in Babylon." (Which, admittedly, I have yet to read...but will do so soon.. ;) )

I'm serious folks, ANYONE can be a millionaire. All we need is a serious savings plan and the self-discipline to save religiously. :D

[VINCEsanity]

im trying all my best to become one of that. goal ko yun

[Leigh]

denise, yes you're right. It was just an initial reaction thing that i had. :)

[ruff]

i think i can do this. i'll try. ;)

pero one more question.. when you say at 10% (or is it 5%?) annual interest, this is a time deposit account right? i browsed a bit at the BPI site and it wasn't much help to me. I only noted that the savings account rate was 2%. but then again, at 2%, it would hit the 1M mark after 12 years. not bad! ;) of course it would be nicer if the rates were higher. :glee:

[aticus]

Originally posted by ruff
i think i can do this. i'll try. ;)

pero one more question.. when you say at 10% (or is it 5%?) annual interest, this is a time deposit account right? i browsed a bit at the BPI site and it wasn't much help to me. I only noted that the savings account rate was 2%. but then again, at 2%, it would hit the 1M mark after 12 years. not bad! ;) of course it would be nicer if the rates were higher. :glee:

It was at 5%. :) BPI gives one of the lowest rates in the industry. Heck, Banco de Oro gives almost DOUBLE that rate for its DOLLAR time deposits. ;)

I just checked with DBS Bank. They have a special savings account for amounts over 100,000. You can NET 8.2% for placements with a minimum of 90 days (that's 8.2% per annum, pro rated at 90 days, which should give you about a 2.05% NET return for 90 days, meaning you'll earn more money putting it in this account for 90 days than you would putting it in BPI for the YEAR).

Pls. do shop around for the best rates. Sometimes the banks you think give good rates actually have very poor ones. :)

[Art Vandelay]

Originally posted by aticus


It was at 5%. :) BPI gives one of the lowest rates in the industry. Heck, Banco de Oro gives almost DOUBLE that rate for its DOLLAR time deposits. ;)

Alam na alam mo dollar rates ah, siguro you have $786,000,000 in the bank. Anak ka ni Ping Lacson ano ?

Pls. do shop around for the best rates. Sometimes the banks you think give good rates actually have very poor ones. :)

Better yet, put it into stocks or mutual funds that way you only get taxed when you pull out.

[Greenwich]

This is good. I tried it out with different scenarios for monthly savings and of course, as the savings get bigger, the interest rates get higher.

Time to work out that million.....

P.S.
Aticus, there's a very minor bug in the spreadsheet. If I try to change the value of the mo. savings for month 2, the mo. savings for month 12 does not automatically change. Of course, you could input the value manually:)

[aticus]

Originally posted by Greenwich
This is good. I tried it out with different scenarios for monthly savings and of course, as the savings get bigger, the interest rates get higher.

Time to work out that million.....

P.S.
Aticus, there's a very minor bug in the spreadsheet. If I try to change the value of the mo. savings for month 2, the mo. savings for month 12 does not automatically change. Of course, you could input the value manually:)

Hi Greenwich, it's not really a bug. I've limited the changes to yearly increases. But you're right... you can always input it manually. ;)

Art, I'm going to make a stock/mutual fund value calculator soon... It should include capital appreciation and dividend payouts, among others... Will post a new thread when I get it done. ;)

[aticus]

Originally posted by Art Vandelay


Alam na alam mo dollar rates ah, siguro you have $786,000,000 in the bank. Anak ka ni Ping Lacson ano ?



No. I'm not.

[indigo]

Hello aticus.

I have a question regarding your computation of the Inf.Adj.Bal. In your spreadsheet, you are multiplying the EOM by (1-inflation rate). So to take the first example, it's $63,351.41*0.95.

What this formula is saying is that my $63,351.41 would only be worth $60,183.84 at year end. However, this is not the case.

Your formula seems to suggest that my $100, would only be worth $95 because of inflation. Inflation, however, does not directly "touch" the money which I have. Inflation does not decrease cash, it increases everything else. Therefore, my $100 should still be worth $100; however, because of inflation, everything else would be worth much more, relative to the money that I have.

This relationship between cash and inflation can be better expressed by the ratio:

Cash/(1+Inflation Rate), which decreases the purchasing power of cash,

instead of

Cash*(1-Inflation Rate), which literally takes the money out of your wallet.

I have since modified my version of your spreadsheet in order to compare the results. Please let me know your insights on this observation.

Also, for those tinkering with the inflation rates, www.census.gov.ph has posted the July inflation rate at 6.8%.

Thanks.

[aticus]

Originally posted by indigo
Hello aticus.

I have a question regarding your computation of the Inf.Adj.Bal. In your spreadsheet, you are multiplying the EOM by (1-inflation rate). So to take the first example, it's $63,351.41*0.95.

What this formula is saying is that my $63,351.41 would only be worth $60,183.84 at year end. However, this is not the case.

Your formula seems to suggest that my $100, would only be worth $95 because of inflation. Inflation, however, does not directly "touch" the money which I have. Inflation does not decrease cash, it increases everything else. Therefore, my $100 should still be worth $100; however, because of inflation, everything else would be worth much more, relative to the money that I have.

This relationship between cash and inflation can be better expressed by the ratio:

Cash/(1+Inflation Rate), which decreases the purchasing power of cash,

instead of

Cash*(1-Inflation Rate), which literally takes the money out of your wallet.

I have since modified my version of your spreadsheet in order to compare the results. Please let me know your insights on this observation.

Also, for those tinkering with the inflation rates, www.census.gov.ph has posted the July inflation rate at 6.8%.

Thanks.

Hi indigo.

I'm still studying the formula you've mentioned, and comparing it against mine. It still seems to me that, in both cases, what we're actually finding is the value of tomorrow's money at today's prices. The reason I set mine at that formula is, quite literally, my money WILL be worth less at the end of the year. Please note, however, that in the spreadsheet you can still see how much in actual money you've got at the time (EOM Balance), and that I'm merely using my formula to compute for how much my money will be worth using today's price indices.

I'm still looking at the differences between your formula and mine, however. Right now it seems to be a matter of degree. Your formula leaves a little more money at the end of the day compared to mine, but we both still decrease the actual purchasing power of the money by a significant amount. I'll go ask some bankers how they would compute for inflation and get back to you. If they tell me my formula is all wrong, I'll be happy to change it for version 2.0.

Thanks for the comment.

[aticus]

You know, indigo, I've looked at your formula again, and have come to the conclusion that your formula is a more accurate representation of inflation. That's a happy observation for me, of course, since my money will be worth just that little bit more over time, and I might be able to afford that much more... ;)

So for those who've downloaded the spreadsheet, my apologies, but I think you'll be happy to know that your money will be worth more over time than originally indicated. :)

I'll make the adjustment to the spreadsheet and attach the updated version in a few minutes. ;)

Thanks indigo, for that eminently constructive point.

[aticus]

Here's the updated version, using the new formula for inflation proposed by indigo.

[enchantress]

ey aticus! i am really, really sleepy now. i feel like i'm gonna fall dowm flat on the keyboard! :lol: anyway, computing the savings I've had since March this year, it comes out to 5k a month. see? i told you I still get to save. I just love to b!tch. :lol:

of course my savings fluctuate because of expenses pero on the average, medyo maayos naman. :)

here's to another 11-hour day at the office... :rolleyes:

[aticus]

Originally posted by enchantress
ey aticus! i am really, really sleepy now. i feel like i'm gonna fall dowm flat on the keyboard! :lol: anyway, computing the savings I've had since March this year, it comes out to 5k a month. see? i told you I still get to save. I just love to b!tch. :lol:

of course my savings fluctuate because of expenses pero on the average, medyo maayos naman. :)

here's to another 11-hour day at the office... :rolleyes:

Maybe you've found the secret to saving! :) Sleep! That way, you can't shop... :lol:

[enchantress]

But, but...

I hardly get to shop! not with my sched... once every two weeks lang siguro, if ever. Sometimes I really just don't know where my money trickles off too... Ok, design something that will keep track of expenses and will fit inside a wallet. Not a notebook or anything of the sort, para mahirap. Dapat automatic na mag-log ng expenses. If you think of something, you are officially the god of the working filipino! :glee:

(If I sleep all the time, I will never get rid of my pounds! Aaaaaarrrrggggghhhh!)

[aticus]

Just a note on inflation, to make it easier to see the urgency of saving:

As was pointed out earlier, July's inflation rate is at 6.8%. That means that, if the same rate is projected for a year, your money will be worth much, much less between now and then. Here's a sample illustration:

If you had 1,000 pesos, and you wanted to buy a good book which cost 980 pesos, but you decided to wait a year, here's what would happen.

The book owners would have increased their prices by 6.8%, so your money is worth less. Hence, the 980 peso book is now going to cost you 980 x 1.068 = P1,046.64 (which would probably be rounded up to 1,047.

You still have your 1,000 pesos, but now you can't buy your book. Your 1,000 pesos, then, is now worth only 93.63% of what it was worth at the start of the year.

Can you imagine what that book would cost in 3 years, instead of one? How about 10 years?

And if you don't save, or if you only get a measly 2 or 3% interest from your bank, your money will be increasing at a LOWER rate than inflation, meaning your money will be worth less and less over time, even if you put it in the bank.

That's why I would suggest:
1) You find a bank with better rates, or you put your money in higher-yielding investments
2) You MUST continue to save more and more each year, in order for your net worth to grow, especially relative to our inflation. If you don't save, you will have a very hard time indeed paying for future expenses.

[aticus]

Oh, and once again I would STRONGLY advise against just spending whatever you earn in interest. You should just let it compound along with your principal so that, over time, you will have much more money.

And if your job isn't paying you enough, then you have to do the following:

1) Look for a new job. Continue to scan the job wanted ads, and look for suitable alternatives. Don't be afraid to look around. That's your right.

2) If you see a job you want, but whose qualifications you can't meet as of yet, find out what skills you need to gain, THEN LEARN THEM SOMEHOW. Go back to school if you have to. The job market is getting so tight that I would always advise you to continually seek to improve yourself.

3) If you can't find a new job, and your savings are dangerously low, then I would suggest a lifestyle shift, if possible. For instance, try not to spend on unnecessary items or expenses. I, for one, have already stopped buying softdrinks and now only drink water. That may save you as much as 20 to 30 pesos per meal. If you eat out twice a day, that's up to 60 pesos a day... and if you eat out every working day, that can mean anything from 1,000 to 1,200 pesos in savings a month. :) Plus, you get healthier... :lol:

I really do want us to have a PEx "self-made millionaires" club. :) I firmly believe that, in 10 years, everyone who follows the savings plan religiously will become a millionaire. :D

[aticus]

I've uploaded a very basic, cost-of-living calculator onto another thread. :) It's adjusted for inflation, and it projects prices up to 10 years past the current price.

You can find the file here:

http://www.pinoyexchange.com/forums/showthread.php3?s=&postid=1162107&t=2800#post1162107

Hope it helps. ;)

[aticus]

*bump* :D

[m1_dzey]

:rolleyes:
hmm.tried to download your file but it wouldn't work on my laptop. perhaps i have a lower version of excel?

albeit, this is a very interesting thread you have hear. i've always wondered where i can put my money. i always save a lot of money but end up spending it on food, knick-knacks, and what-have-you s that i don't really need!

ok, so we've got the model/formula on paper...now how do we get started. anyone out there know where we can get the best interest rates? i tried researching on the net but most sites don't really include their rates. i'd really like to start on a rainy day fund.

[aticus]

Originally posted by m1_dzey
:rolleyes:
hmm.tried to download your file but it wouldn't work on my laptop. perhaps i have a lower version of excel?

albeit, this is a very interesting thread you have hear. i've always wondered where i can put my money. i always save a lot of money but end up spending it on food, knick-knacks, and what-have-you s that i don't really need!

ok, so we've got the model/formula on paper...now how do we get started. anyone out there know where we can get the best interest rates? i tried researching on the net but most sites don't really include their rates. i'd really like to start on a rainy day fund.

Hmmmm... were you able to unzip it? If so, perhaps you're right about the Excel version. May I know what version you have so I might be able to design one just for you? :)

As for interest rates, most commercial banks have lower rates, since they've got added stability. But putting your money in their savings bank counterparts (ex. BPI Family Bank instead of BPI, or PSBank instead of Metrobank) will give you higher interest rates, plus give you the security of knowing that they're backed by very stable banking groups.

If you've got additional questions, pls. feel free to post them so we can share the knowledge with everyone! :) Happy saving!

[dudung]

Wouldn't it better if I put my money in a pension plan*? With your yearly savings, you could probably get like 3 pension plans. Plus some pension plans do offer a life insurance benefit?

*Actually I did already. I'm on my second one 'coz I'm about to finish my first one.

[aticus]

Originally posted by dudung
Wouldn't it better if I put my money in a pension plan*? With your yearly savings, you could probably get like 3 pension plans. Plus some pension plans do offer a life insurance benefit?

*Actually I did already. I'm on my second one 'coz I'm about to finish my first one.

It really depends on your specific needs. Pension plans are for long-term savings and investment plans, which is why you get much higher interest rates... You give up liquidity in exchange for a higher return. Many people would want some kind of cash flow for emergency purposes.

Besides, tying up your money in long-term obligations might mean you may miss out on certain investment opportunities that may present themselves over the course of all those years.

I'd say that a good, solid pension plan is a very good investment, but that you shouldn't put all your money in them, as it would limit your liquidity and the scope of opportunities you allow yourself to take advantage of. Besides, many pension plans have fixed rates of return. In case you ever experience periods of extremely high inflation (as what may happen if our economy experiences stagflation, or stagnation of the economy plus high inflation), then you may actually have locked all your money into financial instruments that actually lose money over time, since the fixed rate of return may even be lower than inflation. Just look at the US during the 1970's if you want a good model.

In any case, I wish you luck in your investing, and I do hope you and your family will have a prosperous future indeed! :D

[freestylah]

na-download ko na...i will try it this weekend... no time pa ngyn...

DUDUNG ----> paano ba nag-wowork ang pension plan?

[eenie]

hhhmm, simple but interesting. wala kang gagawin but to wait. it seems at first maliit ang earnings but ull be overwhelmed when it accumulates... well you can always invest it on some other things pag medyo malaki na but then there would be the factor of risk. if u think of it sandali lang and ull have lots of money but most people dont think this way. most dont want to continously save, rather they want to make more money through investment (puttin up an amount of money into something where it would grow) whatever that may be. this thing is really a good alternative.

[eenie]

hhhmm, simple but interesting. wala kang gagawin but to wait. it seems at first maliit ang earnings but ull be overwhelmed when it accumulates... well you can always invest it on some other things pag medyo malaki na but then there would be the factor of risk. if u think of it sandali lang and ull have lots of money but most people dont think this way. most dont want to continously save, rather they want to make more money through investment (puttin up an amount of money into something where it would grow) whatever that may be. this thing is really a good alternative.

[dudung]

Originally posted by freestylah

DUDUNG ----> paano ba nag-wowork ang pension plan?

You pay a certain amount per year depende doon sa magkano ang gusto mong plan. I mean, kung gusto mo ba makakuha ng xxx amount of money (e.g. usually Php500,000.00 or 1 million or 1.5 million) in xxx number of years (e.g. 10 years, 15 years etc. etc). I-co-compute nila iyong monthly/quarterly/yearly payments mo depende doon sa target mong pera na gusto mo makuha by the end of the plan (syempre mas mababa ang bayad kasi parang nag-invest ka, your money is supposed to grow by at least 300% in 10 years or more). Tapos you pay that same monthly/quarterly/yearly amount for the next xxxx number of years. Iyong iba merong life insurance coverage, iyong iba wala. Depende sa agent mo. Kung may life insurance, in case you accidentally die within the ten years na nagbabayad ka, your beneficiary will get xxx amount of money (di kalakihan pero pwede na ipanlibing sa iyo) and then bayad na iyong buong pension plan mo, although makukuha lang ng beneficiary mo iyong package na kinuha mo at the end of the plan. Ngayon, the more upwardly mobile you are (meaning, mas lumalaki ang suweldo mo), mas marami kang chance kumaha pa ng ibang pension plans from other companies. Kasi as time goes by, mura na lang iyong unang pension plan na kinuha mo. Kaya maganda kumuha ng pension plan habang mas bata ka. Start early 'ika nga so if you start by age 20 siguro by age 35 eh meron ka nang malaking halaga na pera (kahit na tingin natin eh barya na lang yon pagdating ng araw).

By the way, 'wag mo ilagay lahat ng pera mo sa pension plan just as aticus had stated. I-deposit mo iyong iba para mas "liquid" ka. Getting a pension plan is just one of the ways by which you can discipline your spending habit. Marami kasi sa atin na as long na may pera na madaling ma-withdraw sa bank account eh gastos na lang ng gastos sa mga bagay na walang kwenta.

Maghanap ka na lang ng insurance agent para ma-explain nila sa iyo ito ng mabuti. General idea lang binibigay ko.

Now back to aticus' million-peso savings plan.....:D

[freestylah]

thanks DUDUNG...actually meron pala akong pension plan, pero my mom is paying for it habang wala pa akong work...

[gUy^]

aticus... *** business would u suggest... if u have 100000....

[aticus]

Originally posted by gUy^
aticus... *** business would u suggest... if u have 100000....

There are a lot of options, and I wouldn't presume to advise you until I knew a bit more about your investment profile. For instance, I'd need to know the answers to the following questions:

1) How much do you know about business? Are you familiar with basic business concepts like accounting and sales? Have you ever prepared a balance sheet before?

2) Does this amount represent a significant portion of your life's savings up to this point, or is this money you can afford to lose?

3) What kind of risk are you willing to assume with this new business? Do you want something that's potentially lucrative, but risky, or would you rather work with lesser returns in exchange for more stability?

4) Do you have partners or anyone else to help you run this business? Are you going to manage this business yourself, or would you rely on others?

5) Are there any kinds of industries and/or businesses you're already familiar with? (ex. you're into computers so you know all about web-site development and how much it costs)

In any event, while you're planning all this, please do save as much as you can. :) Your savings can act as further capital for all your future business endeavors. But you can't use it till you have it. ;)

Good luck!

[gUy^]

im just a student.... *** would u suggest to start up a business?? i dont have any background yet..

[gumacanian]

I downloaded your file but I cannot open it coz I only have Lotus!!
Looks like im doomed to poverty.

[*]

gumacanian, try these files.. i dunno if i converted it to the right versions though. one in .wk1 format, the other in .wk4. hope this works. :)

[gumacanian]

WK1 format works but WK4 doesnt .
Thanks for that!!

[aticus]

Originally posted by gUy^
im just a student.... *** would u suggest to start up a business?? i dont have any background yet..

Then I'd hold off on the investing just yet. :) I would suggest reading some excellent books on business, and studying whichever industry you find most familiar (even if it's just basketball cards... which I happen to have an abundance of, by the way.. ;) )

Some good books I'd suggest:

1) Rich Dad, Poor Dad by Robert Kiwosaki and Sharon Lechter
2) The Millionaire Next Door (forgot the authors, sorry)
3) Ice to the Eskimoes (How to sell something nobody really wants) by Jon Spoelstra
4) The Morgan Stanley Dean Witter Guide to Personal Investing
5) Business Masters Series: Warren Buffet by Robert Heller

Most of them, if not all, may be found in Powerbooks. ;)

[aticus]

*bump* ;)

I think, after Sept. 11, this thread takes on even more meaning... :)

[nance]

The Richest Man In Babylon
by George Clason

The book practically nags you into following a savings plan :teehee:

[charis]

di ko pa na try, i will apply different scenario and i'll let you know how much my family will be worth in 10n years time ;) :cheers:
:socool:

[aticus]

Originally posted by charis
di ko pa na try, i will apply different scenario and i'll let you know how much my family will be worth in 10n years time ;) :cheers:
:socool:

That's great! :D Let's all meet up at a "Millionaire's EB" in 10 years! :)

[charis]

Originally posted by aticus


That's great! :D Let's all meet up at a "Millionaire's EB" in 10 years! :)

That's a deal see you @ Millionaire's EB" in 10 years (I'll be old and grey then :rolleyes: ;)

[thehitman]

Great!

It could use some interface enhancements. I know you can format Excel to make it look like a screen by removing the gridlines. Kinda hard to read, but I followed the logic, and it is really possible. Of course that means I have to be consistent with the 5,000, which is kinda hard of course. :)

[chez-o]

wtg, aticus!!!!

magaling tong isama sa new year's resolution ko....makapgsimula na nga....

[quarklion]

Aticus, Have u tried mutual fund? If you did, what company did u invest in? I've read mutual fund has bigger oppurtunity for novice investors. It also offers better returns than interest from the banks. The record also shows that fund growth beats the inflation rate. But there is corresponding risk in every mutual fund instrument you will choose.

[settelee]

hi guys, Correct me if i'm wrong...inflation is not less than 12%...

REALITY BITES.

[KuyaDanny]

If you carefully choose the goods whose prices you want to measure, I'm sure you can generate an inflation rate greater than 12%. But the measure most often used to calculate the inflation rate is the Consumer Price Index. Based on the data from the National Statistics Office (http://www.census.gov.ph/data/sectordata/datacpi.html), here are the annual inflation rates for the last five years:

1997 6.0%
1998 9.8%
1999 6.7%
2000 4.4%
2001 6.3%

The last figure is as of November 2001.

[settelee]

Thanks, KuyaDanny,

Based from the data...
average = 6.64%
Max.=9.8%

i suggest let inflation greater than 6.64%. Below that is not ideal....

GOODLUCK!
:)

[kamehameha]

Another useful calculator:

http://www.statefarm.com/cgi-bin/calculator2.cgi

[coffee crumble]

hi! i know this thread is 8 years old, but i'd like to get a copy of the excel file that aticus posted....but the links here are not working...if anyone could upload it again i'd really appreciate it, but if not, thanks anyway for the great info in this thread!

[jas22]

up for this thread.

oo nga kamusta na kaya ang mga posters ng thread na to? it'll be their 10th aniversary in 2 years. may millionnaire EB kayang magaganap? :D

sana pwede ulit idownload yung file...gusto ko din!! ;)

[RAMILMO]

up for this thread.

oo nga kamusta na kaya ang mga posters ng thread na to? it'll be their 10th aniversary in 2 years. may millionnaire EB kayang magaganap? :D

sana pwede ulit idownload yung file...gusto ko din!! ;)

palagay ko wala , because of the recession... global financial, economic crisis...:(

[onyxguapo]

Meron ganyang software sa Citibank website:

http://www.citibank.com.ph/global_docs/popup/ucw/sb.htm

[KuyaDanny]

hi! i know this thread is 8 years old, but i'd like to get a copy of the excel file that aticus posted....but the links here are not working...if anyone could upload it again i'd really appreciate it, but if not, thanks anyway for the great info in this thread!


Please try this link:

http://www.mediafire.com/?sharekey=7ee876c9c266b37c61d4646c62b381cb8e72e87e7ac33375ce018c8114394287

[Ice Burn]

KD, link not working. Upping it again since it's such an informative thread. :)