The seasons of personal finance

I grew up loving the outdoors. I prefer untamed trees to those that are pruned. Watching constellations at night relaxes me like nothing else can. When I saw the smiley in the sky the other night, it was a real treat! (Photo courtesy of Willenwenf) Back when I was younger, I used to go up and down mountains in Camalig, Albay to help my family bring fruits, firewood, and other supplies from our small farm to our house in the city. We didn’t call it “hiking” back then. It was just an enjoyable chore. But my best experience so far was when we went up Mt. Mayon. Sometimes, we had to climb steep boulders as big as houses. Although it was a long, tiring hike, it didn’t feel like we had gone very far. It was only when we rested at night, when I realized how high up we were in the mountain! From where I sat, I could see the small, twinkling lights of Legazpi City within a small clearing of clouds. From up there, the city was breathtaking. Down in the city, life was more or less unremarkable. While interviewing Ralph Liew, chairman for the Philippines, of the International Association of Registered Financial Planners (IARFC), I had a similar change in perspective. Liew is past retirement age, but still has several business interests in the country. His work as the premier educator for financial planning in the Philippines is part of his volunteer work. Perhaps it was his age that made me think hard about what he said

“From the time you are born until you are 20 years old, you are a consumer. From 20 to 40, you are a producer. After 40, you start to decline. When you reach 60, your economic value as a human being has dropped. After you turn 60, you become a consumer again,” he said.

(Strictly speaking, we only have 20 years to be a “producer”???

“The prime of life is 40. After that, it is very hard to generate wealth. That’s the time when you are hit by a double whammy: your children need to go to university and your parents are falling ill. That’s why they say that at age 40, you have a midlife crisis. You begin to spend more than you earn,” he said.

(Man, I only have six more years to produce!!!) Makes you think twice about why you do the things you do. And how hard you are pushing yourself to live within your means and prepare more aggressively for the time when you can hardly put a slice of mango in your mouth. Of course, this is a generalization. And as with all generalizations, there will be exceptions to the rule—Liew being one of them. There are others: I have seen some people who started at 40 and still managed to generate wealth. It has been done. Having said that, of course, it would be easier to start early. We can all work till we drop dead, of course, as long as we remain healthy. But that’s a big if these days. Sure, people live longer, but the quality of life of those remaining years may not be as good as 30 years ago, what with pollution, preservatives in our food, and so on. Frugal Pinoy said in this comment that the teller in the bank laughed at her for squirreling money away for retirement at such a young age. Yes, you would be the one laughing in the end. Time stops for no one, not even the Pope.