Yesterday's intimate lunch with Financial Planner and television host Rowena Cuyco-Suarez at Chef's Quarter is one of the best I had for I learned more about the best way to save and invest for my children's future and for retirement.
Ms. Suarez said that only five percent of Filipinos have planned for retirement, “that’s because many of them believe that their kids will take care of them when they grow old. But this is a cycle we have to break. Because by the time you do retire, your kids will have their expenses to think of.” Saving for the far-off future is probably a stretch for many Filipinos, and Suarez argues for a change in mindset. “Savings and investments are independent of each other. These two create wealth that covers the things that you will need. From the day you were born to the time after you join your creator; you will need money. It’s not being morbid or materialistic. It's just being practical.” she added.
She also debunks the myth that only millionaires can invest. It all starts by setting aside 20 percent of one’s income, which could mean a modest amount of 4,000 monthly. This amount may not earn a lot of interest in the bank but managed properly in the right financial institution, a regular Php 4,000-a-month savings can accumulate enough wealth to create a payload of Php 4 million in one or two decades. “In every investment, you have to have a goal,” Suarez says. “We ask about goals, dreams, and aspirations. We also update ourselves in what’s happening to our client’s life. Like if he’s sending a new kid to college or got a new job, how will that development affect his finances?”
6 Pillars of Wealth Creation:
1. Income replacement. This is the insurance to cover the family’s welfare should the main breadwinner pass away. Suarez gives an example of one form of financial planning. “If the family spends Php 500,000 a year, to survive the loss of their breadwinner, they’d have to multiply this annual income by, say, 10 years. Their protection amount”- or the monies that would serve them in good stead at the death of a parent-“would be Php 5 million.”
2. Health protection. This is the available income for the inevitable sickness or hospitalization .Suarez says that current research shows 48 percent of Filipino families contending with the illness of a loved one will take the out-of-pocket expenses from their daily budget. Neither do they have a substitute for the lost (or temporarily disabled) generator of revenue. She advises, “If you have protection for health, you will get the money you need for hospitalization and medical expenses from a fund that you have set aside for that. The money for your monthly expenses will not get touched at all.”
3. Education funding. Setting aside funds for the kind of education that will help children develop a bright future.
4. Retirement, which marks its time after the last child has graduated from college.
5. Long term care or post-retirement life of their senior citizen.
6. Savings and investment.
Suarez added that having an entrepreneurial mindset is another pillar of wealth creation. Start with a small amount, but make the effort to start at all, Suarez urges. The key to cultivating the pillars of life are “discipline and commitment. Forget the jackpot mentality of enjoying all the money you have right now. What happens when all of it is gone?”
Protect yourself and have a more secure future by following Rowena Cuyco-Suarez's "Six Pillars of Wealth Creation". For more information, visit www.RowenaSuarez.com and watch her at "Just Ask Ro" on Channel 8 of Destiny Cable every Wednesdays at 11 a.m.
i need this :-)
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