Tuesday, March 3, 2009

How to prevent being/retiring poor


  • Start living a simple life. If you can live without a cable TV, do so. If you can eat lunch without softdrinks, do so. Living a simple life means living not in excess. It is still living healthy and living well. Most of the excess things or activities we do are not even healthy to our bodies. So start cutting all those expenses that you can live without until you reduce them significantly. Even the smallest thing like candies can mean a lot when accumulated. Don't worry, even if you cut your expenses, you can still be happy. There are far more things you can do that are less expensive but more meaningful and rewarding.
  • Start living within just 90% of your income monthly then start saving the other 10%. It's better if you can make it 20% or more. But if you have debts to pay, start cutting first all those debts until you eliminate them totally before starting your savings.
  • Start improving and developing new skills. At first, improve all the skills you need to enable you to perform better on your work. If you are good in programming, improve it further, improve your negotiation skills, relationship skills, communication skills etc. Then try to develop other skills not directly related to your job like selling skills, writing skills, presentation skill etc. The more skills you have and the better you perform them, the more valuable you become at your work and society and the more chances you have to find better jobs in case your company does not recognize your value or close down.
Let's stop a bit from here because many are not inclined to do the next steps. It may take a lot of brain power. Do you know that by just following the first 3 simple ways you can already prevent being poor? Let's say, you just began saving at the age of 25 and you earn P15,000 a month in a not-so-big company that only gives you P500 increase each year. Do you know that if you persistently save 10% of your monthly income in time deposit that will earn 5% a year, you can still prevent becoming poor when you get old, even if the value of your money depreciates because of inflation. Now let's continue on the next steps...
  • Start studying all available investment schemes in your area, then start investing your money. Just beware of scams. Always follow this simple rule of investment: "Investigate before you invest."
  • Start finding some other income sources (part-time business not part-time job) and put all the money you earn from there on your savings or investments. Don't be shy selling items. Never be tempted to get involved with any kind of illegal businesses. It may work temporarily but eventually it will fail and will ruin your reputation. When your credibility is ruined, people will no longer trust you and you're done. Don't let this happen to you.
  • Start finding your passion, something that you would really enjoy doing even without pay and willing to sacrifice a lot of time and effort. Then start building a business concept around that passion. It is just a matter of finding and providing the next big idea or serving that old idea in an excellent, high quality and exceptional way that every person or customer would like to have.
  • Start sharing your knowledge and ideas and connect with a lot of people who have the same interests and who can help you to better improve yourself and find better earning opportunities. Connect also with people who are just starting, whom will benefit from your idea. Exchange ideas with them, because when ideas are exchanged, they grow and produce far better ideas until one great concept is produced. It's just a matter of give and take. As what Brian Tracy said, "Nature is Neutral, it gives you back what you give, nothing more, nothing less."
There are just the basics, and now, you have to stop overspending and start saving, stop daydreaming and start writing your goals. Begin to plan your life backwards from age 65 to now. Draw a straight line and write all the possible obstacles that may come your way, and plan for all the possible actions necessary to prepare yourself surpass those obstacles. Let's ACT NOW and Stop procrastinating.

source: Michael Ela - Fujitsu Engineer

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