How to make a million pesos by the time you're 30

 

1. Shift Laroya notes that in telenovelas, poor people are always good and kind and rich people are always evil. In Filipino culture, there’s this cheesy sentiment that “it doesn’t matter if we don’t have money, as long as we’re happy.” “That’s why I always say during seminars, ‘money can’t buy you happiness, but poverty can’t buy you anything.’ I find that most Filipinos want to be financially free, but are not committed because of the mindset that money is evil. So when we receive money we want to spend it, because subconsciously we want to be good again. I had to change that mindset before I could do anything else,” Laroya says.

2. Set your timeline How old are you now, and at what age do you want to be a millionaire? Take into account your current budget, how much you’re able to set aside for future use. “Most young professionals think that being a millionaire can happen overnight, but it’s a long process,” Laroya says. 

3. Protect yourself financially 
 

 

Get a health insurance “Your life savings could be wiped out by a medical emergency,” Laroya says. Health insurance can protect you in case an emergency happens, so you can concentrate on growing your money. PhilHealth coverage will do, but if you can afford it, get the best health insurance you can afford. Compare rates and plans with our tool.

Shore up your emergency fund If your family is not dependent on your income, three months’ worth of emergency funds is OK. In case you’re the sole breadwinner, you should probably extend the mount to nine months. Start your emergency fund now. 

Get a life insurance “Young professionals tell me they don’t want life insurance because they don’t have a family of their own yet. But what if they have a family in the future? Also, if you’re the only breadwinner and something happens to you, the income you give them will be depleted, and life insurance will help with that.”

4. Invest! Once you’ve completed your protection steps, you can start growing your money. And the best way to do that is by investing, because it will give you much better returns than savings accounts. Plus, it will speed you up on your way towards making your first million pesos. Depending on your age, you’ll have to set aside different amounts for investing if you want to be a millionaire by 30.

Before you invest, remember these things:

a.) Always have a goal “A lot of Filipinos do ‘bahala na’ investing when they just invest but they don’t know what for,” Laroya says, noting she made same mistake in the past. “When I first started investing, I didn’t have a specific goal. When I found out that my investment had appreciated already, I immediately withdrew the earnings! If I’d known I wanted that money for retirement, I wouldn’t have touched it, and it would be worth much, much more today.” Know what you’re setting aside your money for so you can choose the right investment products, and you maximize your initial investment.

b.) Know the right investment products for you Different people have different investing needs. Here are some options: 

Direct stock trading If you don’t mind putting in the time and effort to getting the right knowledge in direct stock trading, use them as your investment vehicle. You can start with peso-cost averaging. Once you’ve gained enough confidence, increase your knowledge and level up.   
 

Managed funds Laroya invests in a mix of UITFs, variable universal life insurance, and mutual funds for her managed funds. “I love these three because they allow me to invest automatically,” she says. “Young professionals who don’t have that much knowledge about investing would do best starting out with these products, because a fund manager does the hard work for you.” Find a UITF for you with our guide to UITFs in which you can invest for starting at P1,000.

c.) Stay consistent Once you’ve set up your investments, don’t stop. “The key to making your first million pesos is consistently investing and also being emotionally attached to your goals, because it doesn’t matter how much you’re investing right now.” Not being  consistent means you don’t have the kind of commitment required to succeed in investing To help you stay consistent, automate as much of the process as you can: automatically deposit money into your emergency fund and transfer investments into your UITF.