Mutual Funds Philippines

Albert Einstein said that the most powerful force in the universe is compound interest. Which can be defined by a simple mathematical formula. It is true. And it is the only difference why the rich get richer (remember this phrase as you read on). But today, we are not learning about math. We are learning about investing. If you want to retire a multimillionaire as soon as possible and still have enough years left to enjoy life, then the younger you retire, the more you can enjoy life. And this post is about discovering that compound interest can make you a multimillionaire faster than anything else, you just need to plan and put on a lot of effort to get your first million for it to take effect.

Consider this table:

To go from P0 to P1 million:

From P1 million to P2 million:

From P2 million to P3 million:

P1,291.66 invested in a mutual fund that gives an annual return of at least 11% will make you P1 million pesos in more or less 20 years. (Mutual funds on average, gives at least 13% annual return). But consider that you still continue to invest P1,291.66 every month to your mutual fund, you make your next million in only 5 years! That 1 / 4 of the time it take your first million. And to go on further, say you still contributed P1,291.66 every month to your mutual fund, you make your next million (P3m) in 3 to 4 years.

But the P1,291.66 per month contribution is not there just for the sake of illustration. Millionaires think differently, P1,291.66 is not that hard to save. But if you still can’t, a millionaire does not think that way. He thinks “How can I make extra P1,291.66 so I can invest?”. Consider this, if he works harder enough, he might be able to save more than that amount, if you double your contributions every month, you can reach your first million faster. And once you built that first P1 million it all goes to the saying, the rich get richer. Because you have the most powerful force in the universe working for you, compound interest.

Given that mental attitude and a new frame of mind, how many years do you think it will take for you to make your P100 million? Its not that impossible now, isn’t it?

Happy investing.