There is a saying that “Money makes the world go round.” This means money is essential in life as a commodity. Some may even connect money with happiness. Without a doubt, money can dictate every aspect of life, whether as power, love, or materials.
However, money is simply an assurance that I can live life comfortably with my family and loved ones. My goal is to reach financial independence or have sufficient money to pay off expenses for the rest of my life without having to depend on others. At the top of my mind, I can list thousands of ways to achieve this goal, such as setting life goals, creating monthly budgets, avoiding debts, and many more. However, this is hard to achieve, especially in the current situation in the Philippines.
With unemployment increasing and the cost of living exponentially growing, living and surviving in this competitive country will be difficult. At this point, working corporate, even at a high position, will not significantly improve the chances of achieving financial independence. I am also considering the fact that inflation will continue to hit the country. As I want to start a family in the future, it will significantly affect my decision-making to ensure good lives for my loved ones.
Last Oct. 13, my Integral Human Development class had Sandy Gilles as our guest speaker. At first glance, I already felt his presence and confidence in teaching his expertise in investment and personal finance. Unlike any other financial advisor, his knowledge was beyond the usual. He could grab the audience’s attention by citing multiple examples and life hacks.
He started by explaining four types of savings. First, here-and-now savings are budgeting to be able to pay off the expenses while setting aside for your pleasure. Second, medium-term savings are meant for expenses during events such as owning a car, buying a house, and spending on tuition. Third, long-term savings for the known future cover retirement and additional support for the next generations. Fourth, long-term savings for the unknown future are unexpected scenarios that may occur, such as accidents, deaths, or disabilities.
Among these, he focused on the importance of long-term investments. As someone who never showed interest in finance, it opened my eyes to the world of investment. He was able to share definitions and options for investments such as stocks, time deposits, corporate bonds, mutual funds, and unit investment trust funds (UITFs). All of these are very familiar to me as I have heard them one way or another. However, it is hard to act and commit to these investments without confidence.
With this, I brought up a question on cryptocurrency and his thoughts on it being an investment for the future. I have worked in a company that provides customers with a platform for this kind of trade. I multiplied my initial capital by a lot through valuable tips and analytics. Despite this, it was nice to hear a financial expert’s perspective, especially from someone who trades stocks for a living. He did not encourage the option of cryptocurrency as a long-term investment because it is very volatile and hard to predict. Even though digitalization has been one of the critical changes in technology, the risk is too high to gamble on everything. Money guaranteed long-term is better than the uncertainty short-term.
My biggest takeaway from this session is patience. There is no doubt that hard work contributes to being financially stable. However, people often overlook the quality of being patient. In 20 to 30 years, he assured us that the small investment in stocks or UITF would yield enough to provide for the future generation. He mentioned a simple P30,000 investment can change the life of a loved one in the future as long as we invest smartly now. Therefore, invest while you are young and capable of working, because money grows over time. If money is just left in the bank, earning a measly 0.1 percent, then it is similar to throwing money away, as more lucrative opportunities are wasted.
To conclude, there are three types of people in this world. One will spend all the money earned. One will leave all the money in the bank. One will invest a part of the earnings. As much as there are risks in every decision and external factors that may randomly affect the value of money, the odds and chances of it multiplying are big since it is what happened to successful and financially independent people at present. I will continue to set goals and targets in every age bracket and appreciate every milestone to ensure a happy and prosperous life for my family and me.
The author is an MBA student at the Ramon V. del Rosario College of Business, DLSU. He can be reached at [email protected].
The views expressed above are the author’s and do not necessarily reflect the official position of DLSU, its faculty, and its administrators.