Updated: May 16, 2020
Coming from a Chinese-Filipino family, I was always taught by my parents to save, save, save. But as I became an avid reader of economic and financial theories, I learned to look at money in a different light that made my decisions more financially rewarding than ever.
Money is your stored labor. Let it work hard as you do.
Money is more than just a piece of paper or a flat, round piece of metal with an assigned value.
Money is something you earn in exchange for your labor or service including all the stress, long commutes, and sleepless nights. It is all your hard work in the form of paper bills – your “STORED LABOR”, which you can choose to spend, save or invest."
If you choose to spend, it is the equivalent of exchanging the work you have done in the past – your stored labor, to buy anything you want for instant gratification. When you spend, you get exactly the value of goods and services as the value of your labor at the time it was rendered.
If you save, you choose to wait for a certain period of time to buy something or reward yourself for the hard work you’ve put in the past. In other words, saving is delayed gratification. While delayed gratification sounds more responsible, there is a culprit called inflation. With inflation, you will be getting less goods, services or experiences for the same amount of stored labor. I will talk more about inflation in my next article “Why a huge bank account should scare you.”
"If you choose to invest, you put your stored labor to work by generating profits for you at very minimal to no effort at all. Through your profits, you will be getting more value of goods, services, or experiences in exchange for the same amount of stored labor. Investing is getting the most out of your hard-earned money."
Then, there’s a way that money can work harder for you.
Investing wisely means choosing the right type of investment for your risk-reward appetite vis-à-vis the amount of time and effort you’re willing to put into. In my early 20s, I got into stocks but I didn’t really have the time to be an active trader for me to maximize the gains. I also got an insurance plan not because I expect it to earn exponentially but more of as a security blanket, as its name suggests.
Then, I learned that real estate is the right investment for me when I braved the anxiety of buying my first property. The value of that condo increased by more than Php3 million in less than 3 years. Then I went on for the second property, for the third one and so on.
In real estate, I can take advantage of the strong capital appreciation or market value increase while having a place I can call my own. I will never forget the exhilarating feeling of placing my first ever down payment and watching how quickly my investment grew. My only regret? Not starting earlier.
Make your money work harder for you, so start investing in real estate now.
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ABOUT THE AUTHOR
Edric Maguan is an avid real estate investor, an experienced and accredited Real Estate Broker of several top developers, and a Certified Public Accountant from University of the Philippines - Diliman. He found his passion in inspiring and empowering people to make the most out of their hard-earned money through real estate investment. Read full biography here.