As a starry-eyed bride back in 19-something, I told my husband: “When we make our first million, what do you think about putting up a school for street children?”
The world was unraveling before us. I felt like I could conquer the world. You know the feeling :-). I admit there are still fleeting moments now when I still feel that I could.
Unfortunately, no one quite explained to me then exactly how I could make my first million. An article to be posted today (already posted. Click here to read the article) in INQUIRER.net’s Personal Finance section puts the strategy down pat. It details how much you need to save, with a few return-on-investment scenarios in mind. It talks about the science and art that is needed in making your first million.
Consider this:
Note: For lump sum contribution, the ROI is compounded annually. For periodic contributions, the number of compounding periods varies. For example, a monthly contribution at 5% per annum effectively earns 5.1162% per annum because of monthly compounding.
And this:
Note: For example, should you decide to contribute monthly over 7 years expecting to earn 5% per annum, a P9,967.24 monthly contribution for 7 years amounts to P837,248.36.
Millionaire habit tip: Begin with the end in mind.
When we do that, we can clearly see where to put our foot next so that we can step closer to our goals. This strategy also allows us to map out our journey and helps keep us out of potential investment mistakes.
Of course, many of you could use this strategy to make your second, third, fourth or gazillionth million. You may not use an off-the-shelf investment instrument. You could go for setting up your own business. Risky, true, but the returns would probably be high, too.
Whatever you do, building wealth also needs to be accompanied with the right attitude and the right financial habits. These include living a simple lifestyle, paying yourself first, among others. And don’t forget: sharing your wealth with others in a worthwhile cause.
November 13th, 2007 at 9:41 am
[...] confirms what one of the readers of this blog said in a comment on my post on The Science and Art of Making Your First Million. He said: “Making your first million is the hardest because you’re starting from scratch. The [...]
August 11th, 2007 at 2:38 pm
@Richardson, Meron na palang balanced fund ang First Metro? Ah… kaya pala di ko alam, di pa pala open to public.
@pinoy investor, 30s din po ako sir, at babae po ako.
August 11th, 2007 at 2:31 am
our 1M is currently invested in a savings and loan corporation which is earning 16% interest per annum. the thing is, everytime the interest goes over 30,000 per quarter, the excess gets bumped into a second account which earns only 4% interest. i need sound financial advice as to whether the returns of my current investment scheme can be improved, specifically the amount that gets transferred to a lesser ineterest account. advice please.
July 26th, 2007 at 2:25 pm
I don’t know if this has been posted here already but around 2 or 3 years ago, I encountered a pretty reader-friendly resource from a friend. Here’s a set of slides, How to Make a Million Dollars, by Marshall Brain. It largely aims to impart the entrepreneurial spirit through written language that’s very easy to understand.
A funny quote there went:
July 23rd, 2007 at 2:20 pm
@mzkuro:
bata pa po ako. 30s pa lang ako sir. I’d like to go into call center but I have no partner. My friend started 3 yrs. ago with 1 million pesos and 10 seats. He now has 300 seats each earning $100 per day. With all that money, he don’t need me anymore. We could have been partners 3 yrs ago.