Employees can be millionaires too


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While it’s true that most, if not all, of the top richest men in the world are self-made multi millionaires/billionaires, it’s a proven fact that employees can be millionaires too. Maybe not as millionaire as the top richest people but millionaires nonetheless.

The key to achieving this is to adapt the turtle strategy—that is by investing little amounts of money every month for a loooong time – 5, 10, 15 years. The longer, the better.

How do you do it?

Simple. Write down your goals and break them down into mini goals.

For example, your goal is to have a million pesos in 6 years. Determine how much you need to set aside every year. I do mine in graduated amounts like this.

Year 1- P40,000

Year 2-P80,000

Year 3- P120,000

Year 4-P160,000

Year 5-P200,000

Year 6-P220,000

If you follow the above graduated savings plan, you would have P1,094,355.24 if you invested your money in financial instruments that yield 10% compounded yearly.

Yearly Savings Principal (Last year balance plus yearly savings) Interest at 10% compounded annually (Principal x 10%) Balance (Principal plus interest)
          40,000.00      40,000.00            4,000.00          44,000.00
          80,000.00    124,000.00          12,400.00        136,400.00
       120,000.00    256,400.00          25,640.00        282,040.00
       160,000.00    442,040.00          44,204.00        486,244.00
       200,000.00    686,244.00          68,624.40        754,868.40
       240,000.00    994,868.40          99,486.84    1,094,355.24

Now, here’s the power of breaking down your goals into mini goals. This year, or for the first year, you only have to focus on saving P40,000 – that is P3,333.00 per month or P1,666.67 every pay day if you receive your salary twice a month. Then you can proceed on increasing the amount next year and the years thereafter.

When is the best time to start?

Start now. Time is your greatest ally so use it wisely.

What are some of the challenges you may encounter?

First, this strategy requires you to follow a boring, monotonous routine. You have to keep on setting aside your money every month or twice a month.

Second, it is tempting to spend that money you planned to set aside because you may not reap the rewards immediately. Just focus on your goal to keep the fire burning. “Pay now, play later.” Just imagine how much you would have saved 6 years from now!

Lastly, if you do have some financial setbacks, it is easy to get discouraged. But don’t be. As soon as you get back on track on your finances, continue where you left off. It may have extended your time to reach your goal but you will get there. 🙂

Keep the positive attitude. Write down, break down and focus on your goals. 🙂

If you found this article helpful, please share with friends and in your social media accounts. 😀

Disclaimer: I’m not the richest person in the entire planet. You may be wealthier than me. I, like most of you, am also struggling towards financial freedom, and to be a millionaire. I do not claim to be an expert too. You can call me that but I do not claim to be. 😉  I am just zealous, passionate and uberly fascinated about financial literacy so I want to share what I learned.

P.S 1 Do you have questions? Feel free to ask in the comment section.

P.S. 2 I have written a book that discusses about saving and investing. I have also written in more detail some strategies you can employ to reach your financial goals. You can get your copy here. 🙂 Happy saving and investing!

Photo: courtesy of freedigitalphotos.net

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