So going back again to my blog last Sunday, bottom line, I will need 480,000S$ (estimated 15.84M Php) not taking in consideration inflation.
If I don’t invest, if I start at the age of 40 and if I want to retire at the age of 65, I need to save 1,600S$ (52.k Php) per month or 19,200S$ (633.6k Php) per year.
But the power of investing and compound interest can be seen in the wealth calculator below:
You may be wondering so what does this table show me?
1st column: Monthly investment in Php (1k, 5k, 10k, 15k, 20k, 30k, 40k, 50k & 100k)
2nd column: Different interest rates of 4%, 8%, 10%, 12%, 15% & 20% per each monthly investment
3rd column: Projection of your investment based on the number of years of investing (5, 10, 15, 20, 25, 30)
It may seem cluttered as I captured a lot of scenarios in terms of monthly investment (to excite you to keep on finding ways to save and cut on your expenses and diverting that money more in your investments) and in terms of interest rates (as we will have different risk tolerance and avenues for investing, e.g. government bonds vs equities).
So now, I have only highlighted the projected amount that is greater than 16MPhp.
1k monthly investment: I need to invest in an investment vehicle that will give me 20% interest for 30 years. Definitely this will mean that I will retire at 70 years old vs my initial target of 65 years old.
5k monthly investment: In order to retire at 65 y.o., I will need to invest at 15% interest.
But what if I can invest more, say 40k monthly investment:
- at 10% interest, I can achieve 16.7M in 15 years
- at 20% interest, I can achieve 15.2M in 10 years
This means I can shorten working and achieve financial freedom earlier. I can go back to Philippines earlier and I can pursue my passion and my heart’s desire, whatever that is :). Retirement will be passé, it will become a thing of the past. Retirement is over-rated, why retire later when you can retire early or even as early as now?