There, beyond the horizon, is your retirement.

retirement

It’s start as a soft whisper during your early working years, a gentle reminder when you started your family and slowly creeping dread when you reach middle age. Retirement comes for those who reached the age but you don’t have to dread it, it should be something that you look forward to; after decades of backbreaking work this is the time that you seat back and enjoy the fruits of your long labor. Well, that is, if you planted something.

It’s quite obvious but most of the time it’s needed to be said: the best time to prepare for retirement is when you’re still young and able.

You may ask “How much would I need for retirement?”

Get an estimate of your annual expenses, for example, if you spend for yourself 20,000 pesos a month, that equates to 240,000 a year.

Factor in the inflation and the number of years until your target retirement age. If you’re 30 years old now and you plan to retire by age 65, you still have 35 years to prepare. Let’s say the average inflation would be 3% per year, you could get your annual retirement expense at age 65 by this formula:

retirement annual expenses = present annual expense X (1 + inflation rate) ^ years until retirement

retirement annual expenses = 240000 (1 + 0.03) ^ 35

retirement annual expenses = Php675,327

and that’s only for 1 year! Nobody could tell how much long we shall live after retirement but say we prepare for 15 years of retirement. You could still factor in the inflation but to simplify let’s just multiply this number by 15. That’s about Php10,130,000.

Before we continue please note that you left your mouth opened in surprise. Pakisara muna, besh.

That’s only an estimate as your lifestyle may change as the years go by or you adjust your retirement age so it could be a constant changing value but why we’re doing this is because you need a target number, something you will aspire to achieve and I feel you if you’re shocked and overwhelmed but this should not deter you to start planning for this. Fortunately, there is a lot of ways you could prepare. You could build your retirement fund by regularly investing part what you earn now and in the future you’ll realise that 10M is very possible.

Now you know your “Magic Number”, how do you get there?

 

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Petsa De Peligro

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So it’s a few days before the next payday but you’re already broke. You look into the deepest parts of the pockets of your jeans: bus tickets, movie passes, receipt from last week’s coffee run. No loose change, nada. White chocolate mocha, dinner buffet, midnight screenings all seems so appetizing now but all of these are in the backseat, on top of your list is this all too familiar problem that not surprisingly appears once of twice a month – where to get enough change to afford a trip to work? What’s for lunch? Hangin, inhale exhale na lang. About your fare back home? That’s what office best friends are for, assuming he’s not stuck in the same rut.

Petsa De Peligro is here and you’re wishing it’s over.

Don’t blame it on your pay that it didn’t come more often or your pay’s too low for your needs.

Blame yourself.

If you don’t change your spending habits I’m sorry to tell you that Petsa De Peligro will haunt you back a few days before your next payday. Fortunately though it doesn’t really take a lot to totally avoid dark days like these. Just a few small tweaks here and there in your spending habits could totally erase Petsas de Peligro in your calendar… Forever.

Why don’t you give the following a try and be surprised how it’ll make your financial life better:

Wake Up Earlier Than Usual

Wake up 30 minutes earlier than usual and you have enough time to cook for yourself breakfast and lunch baon. This way you won’t have an excuse to splurge on fastfood meals just because you’re running late. Yes, even fastfood is splurging, anything that you’re unnecessarily spending on is splurging. An easy 100 pesos slashed from your breakfast and lunch spending by adjusting your alarm.

Wake up an hour earlier than usual and you’ll be able to leave your home earlier and skip the heavy traffic that comes with the morning rush. What could have been a 250 pesos cab ride is now just 20 pesos bus ride. You just saved 180 pesos, beshy.

That adds up to about 6000 pesos a month!

Mental Note: You Don’t Earn More During Paydays

Nope, check it with the payroll department and they will nod in agreement, you don’t get more because it’s payday. So why do spend more? Because you deserve it after a couple of weeks of hard work? That’s BS. You only feel the need to pamper yourself because during the days leading to this glorious payday, you’re struggling and you feel so undernourished because you spent all your money faster than you need to, with reckless abandon on the previous payday. Get it? It’s a vicious cycle that would only stop if you treat every single working day the same. If you really want to reward yourself I suggest that you save up for a vacation where you could exhale all the negativity and recharge your spirits for the work days ahead.

It Doesn’t Taste Better Because It’s Pricier

It’s all in the mind babe. Get your mug, run to the pantry and fix yourself a good cup of coffee. If you’re lucky enough coffee is free where you work but if it isn’t then buy yourself a nice 3in1 coffee, which would set you back less than 10 pesos. Coffee doesn’t have to be expensive to be tasty. If you’re wondering why coffee shops charge you more, it’s because of the ambience and not unless they let you bring a piece of furniture home it’s not really worth the pesos you’ve worked your butt off. If you really insist that coffee tastes better from them then buy their beans instead. Have the beans ground to your liking and make yourself a cup of coffee at home. Dim the lights in your living room, suot ka ng sweater tapos hawakan mo yung red mug with both your hands then look out the window while drinking your joe para may ambiance. Your bank account will thank you for this.

10 pesos instant coffee vs 150 pesos designer coffee – Instant coffee wins by about 3000 pesos a month; that’s 36000 pesos per year!

Same goes for a lot of things. If you could find cheaper alternatives to things you need and want without sacrificing quality then by all means buy them. Don’t pay someone big money for things you have time to do yourself, like making coffee; be practical.

In conclusion, the keyword to avoid Petsa De Peligro is discipline. You should adjust your spending lifestyle with how much you need not with how much earn. Financially free people spend way below their means so if you’re spending more than what you earn then you’ve got some work to do, buddy.