When you’re in your 20s, you’re probably just starting out in your first job and concerned with making a good impression. Even if you might still be living with your parents, buying a new wardrobe, going out to fit into your new environment, enjoying your independence will become paramount concerns, rightly or wrongly.
In your 30s, you are most likely raising a family, saving for your children’s education, taking out a home mortgage, paying for your first or second car, and some of you might be taking care of an aging parent.
If you are in the 40-something age group, you might have bigger salaries and bonuses, but will be dealing with health issues too and higher cost of living. At what point do you seriously start thinking about investing for retirement and how much do you set aside? With all these financial concerns at the back of your mind, it’s no surprise that retirement will be taking a backseat.
I read a rule of thumb in The Asian Wall Street Journal’s Lifetime Guide To Money (Dow Jones & Co., Inc.,) that to figure out how much to invest in the long haul, you should subtract your age from 100 and add a percentage sign.
Using that rule, I’m under-investing and spending too much on current concerns! That is, unless I count the money hubby and I are putting into our home.
How about you?
24 Responses to “How much to invest for the long haul”
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Pages: « 5 4 [3] 2 1 » Show All
September 4th, 2008 at 9:12 am
I’m 34, a mother of 6 kids, ages between 13 and 1 & 5 months. Working on and off, and fortunately just got regularized on my current job, American BPO employer. No specific financial plans yet but aiming to be debt-free by the end of 2008. After paying debts (around 20K in all, credit card and personal, for both of us, excluding encyclopedia for 24 months) that will be the time to save, aiming to do it one step up at a time, until we reach the maximum percentage of like 50%-75% of MY fixed income. Scouting a place now to open a business, which the kids can also take part in day to day operations specially during vacations. Btw, husband has minimum pay, but maximum chances for incentives, I have great pay, no incentives, great benefits like maximum health care coverage for all of us, but doing sidelines with rackets requiring no capital at all, like a credit card agent and ESL tutor. Have to work real hard, spend only on needs and work harder so we can start to save. And with 6 kids, that will definitely be very hard and saving a sizable amount of money would be next to impossible, but it’s a big challenge for us! With God’s help, of course. Currently exploring options abroad, to speed up saving for the children’s college funds.
And I copied most of the financial ideas from here, with certain twists to fit my current situation. Thanks a lot!
September 3rd, 2008 at 3:12 pm
“Using that rule, I’m under-investing and spending too much on current concerns! That is, unless I count the money hubby and I are putting into our home.”
Good way of investing in the Phils. Pay for your home first. The YTM is worth it.
In the Phils. to keep investing for the future one must make sure that gains must AVERAGE IN REAL TERMS AT LEAST A YTM* that above the inflation rate. Headline and an individuals personal rate.
Example:
One will need four million pesos to equal the purchase a representative basket of goods that would have cost only one million pesos twenty years ago.
You can thank the so called economic managers of the country for that.
So if you intend to live here permanently make sure your YTM (yield to maturity)
capital gain plus income is from 15 - 20 % on average per year.
Do not trust finance companies and banks in the Philippines. Learn finance on your own and become a mini bank or landlord yourself.
That is the only feasible business model in the Philippines under the renteir model of economics in the country
September 3rd, 2008 at 1:44 pm
Quite a tall order for me, 63%!! As of now i can only max out 35%. Maybe after 2 years paying off insurances, lot ammortization and loans i can play catching up with that.
But i think it’s not impossible once we get to manage putting into investment our savings and our hard asset/s made to earn profit as well.
Year 2008 is a tough ride financially, hope that 2009 will be for the better.
September 2nd, 2008 at 4:11 pm
i can sock away like 60%-70% of income (after taxes)
any spare cash i have goes to investments…i havent bought any new clothes since Uni…got the same phone since Uni…everything nice i’ve gotten i’ve gotten from prezzies lol.
so with that article in the Asian Wall Street Journal i should be investing 75% of what? annual income?
it also doesn’t state WHERE that 75% should be invested in….the results will vary greatly IMO dpending on the asset class invested in.
September 2nd, 2008 at 10:41 am
much of my salary is going to amortizations: a condo and vacant lot.
I computed how much money is “sinking” in my car and found out it’s not too much. I’m paying only 50% of it, the other half by my company. after five years, it’ll be mine i can sell at about half the original price. which means the actual cost on me is not about P6k/month i pay for it but just the interest at 7%/annum for using the vehicle. gas is free from my company, btw, and shoulders half of my annual insurance premium.
by next year, i will finish my condo payments. the excess funds will go straight first to my savings and probably allot some for investment