Tuesday 6 October 2015


What do you usually do when you get your pay? I've had a discussion with one of my colleagues about how long do we see ourselves working. I mean, the ultimate goal is to make money work for us. Let's admit it - as we grow older our income should be more stable and up to a point sustain our retirement and other plans. "But that's too far off!" you might think. However, this is one of those inevitable things we have to decide upon way before it happens. And trust me, this involves exciting stuff as well.

Let's put this first on the list, shall we? :) Most money talk shows suggest that you set aside 20% of your salary for fun fund. This, of course, is subjective. The idea is to establish a borderline between what's within your budget. In addition, it gives you a good feeling whenever you've spent below your threshold. 

This should be for your long term plans (you may call it retirement fund, if you like). Another 20% suggestion from most of the experts. You have the option to put this on a mutual fund, unit investment trust fund (UITF) or stock market. Goal is to beat inflation (which happens to be ~5% yearly in the PH), so you have to find an investment that yields more than 5% rate of return yearly. Factually, this happens to be the stock market if you'll look into the figures in detail.

Just as businesses have operating expenses, so should you. This involves necessary costs for your upkeep. Things like rent (or house amortisation), transportation fees and food. Whether to include your everyday coffee from your fave shop is your own call :P

You can substitute this to anything you like (it has a medium term horizon compared to your investment fund). Though it should have the same nature as that of your investment fund, you may want to have it as a separate entity. It's empowering to know that after 3 years, you have X number of amount to splurge on travel, cooking class, name it!

Last but never the least after the jump!

In my opinion, this is the most important fund. Most people get turned off by naming convention but you can call it tithes, offering, whatever you wish. Personally, I am a proponent of giving back a portion of my earnings to the Lord. You may have different take on things and that's okay. Take this as a suggestion, that's all.  

Ready to fill up those pockets this payday? -CMK


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