If right after graduation, when I got my first job, I had the discipline to save at least P1,000 a month, I would have only needed 14 years more to have accumulated more than 1 million in savings.
Do the math. I graduated in 2000, and I have been working for 8 years now. 8 + 14 for a total of 22 years. You might be wondering, that would only be 22 years x 12 months x 1,000 = P264,000.000. Where in the world can it become P1 million?
That is by using the power of Compounding Interest and for that example, an interest rate of 10% – which according to Einstein is the world’s greatest discovery, greater than his theory of relativity.
With the compounding interest, your money’s interest can still earn interest and the computation goes on and on and on. The only question now is, where can I put my money that could earn an interest of 10% per annum or more?
If you’re a regular saver with either savings or time deposit accounts in any of the commercial banks, I’m sure you are very much aware that the interest rates only ranges from 0.5% – 4% per annum. Not to mention the 20% witholding tax.
Lets’ take a look at the comparison of the different ways of savings that we commonly use, assuming that we are saving P1,000 per month for a period of up to 25 years.
The interest rates that we used for each are as follows:
Alkansya – 0%
Savings Account – 1%
Time Deposit – 4%
Mutual Funds – 10%
| No. of Years | Traditional ‘Alkansya’ | Savings Account | Time Deposit | Mutual Funds |
| 5 years | Php 60,000.00 | Php 61,824.18 | Php 67,097.14 | Php 85,382.27 |
| 10 years | Php 120,000.00 | Php 126,802.02 | Php 147,754.00 | Php 235,855.00 |
| 15 years | Php 180,000.00 | Php 195,095.37 | Php 244,712.90 | Php 501,039.37 |
| 20 years | Php 240,000.00 | Php 266,870.33 | Php 361,266.46 | Php 968,384.83 |
| 25 years | Php 300,000.00 | Php 342,307.58 | Php 501,375.48 | Php 1,792,007.21 |
Your next question might be, is 1Million enough after 25 years of saving and investing?
My answer is another question. Can you only save P1,000.00 a month? How bout P2,000 a month? Or P3,000.00? You’ll be amazed at the future amount of your money, believe me. It’s like ‘money working for money’.
Now the question is, HOW DO I INVEST IN MUTUAL FUNDS? Below are my contact details. You may simply contact me and I can help you. Minimum initial investment is only P5,000.00 and succeeding investment at only P1,000.00
Garry De Castro – Licensed Mutual Fund Representative (Makati / Bulacan / Bataan / Pampanga)
YM – gigabytes27
M – 0922 897 8977 / 09164147400
E – garryzaldy.s.decastro [at] sunlife.com.ph