X CURVE

This Concept can be found in Chapter 1 Page 21 of our Best Selling Book called "The Secret To Saving and Building Your Future"

The Laws of Building Wealth and Decreasing Responsibility

The X-Curve shows the relationships between taking care of your of your responsibility while building your wealth. The Theory states that over time, a person's responsibility decreases and their wealth increases. It involves two curves that run to opposite directions during your lifetime.

The Wealth Curve (Blue Going Up)

When you're younger, you are still at the early stages of building wealth. Normally, you don't have money. Then times passes, you start to save and invest which increases your wealth and eventually your wealth curve is rising. The wealth curve is your investment. Hopefully, when you get older, you will have enough money set aside and invested so that you will still earn even when you need to stop working.

Start to save and invest today so that you will have money working for you in the future to take care of you.

The Responsibility Curve (Red Going Down)

When you are younger and starting a new family, the level of responsibility is high. You and your spouse have a big job roles to fulfill such as becoming parents and having babies, paying bills, among others. These are obligations that both of you must fulfill whether you live or die.

In the early stages of building a family, the need for insurance protection is quite high as well. But as your children grow up and your mortgage matures, you reduce your debts. The level of responsibility then decreases.

RULE OF 72

How to Get Rich Slowly?

A Solid Financial Foundation takes time to build. Trees don't grow big overnight. Please avoid get-rich-quick impulses. Hot stocks and rising real estate markets can sound appealing. But one wrong pick can set you back big time from your savings goal.

Investing is not gambling. You must understand how money works, have plan, and stay disciplined with your action plan until your reach your goal.

The Magic of Compound Interest

Albert Einstein called compound interest the 8th wonder of the world and man's greatest invention because it is the mightiest force ever unleashed to the amassing of wealth.

The Rule of 72

One of the best ways to illustrate the compound interest is the Rule of 72. It shows you how many years it would take to double your money. Here's the formula: 72/Rate of Return = Years to double to your money

 The rule of 72 unveils the powerful impact of compound interest on money. It also reveals to types of people.

1. People who don't understand how money works- they end up working for money.

2. People who understand how money works-they let money work for them.

Wealthy people tend to spend time learning and understanding how money works. They look for advice and solutions to get better returns for their money. A lot of people lack knowledge about personal finance. Some don't care to understand it at all. Many have no plan and little savings. What savings they have are usually put into accounts with a low rate of return. Their money doesn't work for them.

Compound interest works both ways. It can make you or break you. Let's work together and help each other to build our dreams.

SOLID FINANCIAL FOUNDATION

s A strong financial foundation will result to you having sturdier and resilient finances that can withstand any money-related storms, tornadoes and earthquakes. Following these five building blocks of a strong financial foundation will help and secure your financial future.

First, you must have proper healthcare coverage in the event of a serious health problem or sickness. Both of these can greatly affect or upset a person's financial stability, specially during old age. Statistics show that 90% of personal bankruptcies are due to unexpected and unforeseen illness. You should consider your healthcare and protection as a priority. Why? Even if you save a few hundred pesos a month, but have no healthcare and life insurance, it will not take you far. When you get sick, disabled, or die suddenly, your savings won't last long. Getting long-term healthcare and life insurance are the best investments.

Second, you and your dependents must have proper protection in the event of your premature death or disability. if this happens, then you have instant money to pay off any responsibilities and liabilities left behind.

Third, manage and pay off all your debts.

Fourth, set aside 3-6 month of your income to deal with sudden changes in the job or business. This is also to pay unforeseen accidents or repairs.

Fifth, save and make long-term investments.

ABUNDANCE FORMULA

Warren Buffet, one of the wealthiest men in the world, gives this advice;

"Don't save what is left after spending; spend what is left after saving." In other words, you pay yourself first.

SAVING THE RIGHT WAY FORMULA:

INCOME - SAVINGS = EXPENSES

Before you spend, you need to save first. But there is an even better formula.

THE ABUNDANCE FORMULA:

INCOME - TITHES - SAVING = EXPENSES

WEALTH FORMULA

The Wealth Formula

In understanding how money works and how to grow our wealth or money, we only need a simple formula.

You can grow wealth if you can make the positive (+) much bigger than the negative (-). If the minuses are higher than the pluses, then there's no wealth created.

COMPLETE FINANCIAL PLAN

1. Income Protection/Life Insurance - This will protect your family if you die too soon. Life Insurance Protection can replace your income, help finance your children's education, pay estate tax, pay debts, etc. instantly.

2. Investments - This is the answer if you live to long. This will generate continuing income for you when you retire. It is your money working for you.

3. Long-Term Healthcare - This is the answer to your healthcare needs when you retire or get old. How comfortable your healthcare situation will be after you turn 60 depends on the decision you make today.

EMERGENCY FUND

Building an Emergency Fund

No matter how much you plan in life, the unexpected things still happen.

To prepare for life's little "disasters," set up an emergency fund to help pay the unforeseen expenses.

Having extra source of funds can give your family peace of mind during the a stressful time.

A basic rule of thumb for determining how much you should set aside is 3 to 6 months of your total expenses.

DIME METHOD

One simple way to calculate the amount of life insurance protection need is by using the Dime Method.

DIME stands for Debts, Income, Mortgage and Education

Kindly note that the DIME Method is just one way of determining the amount of protection your family needs in the event that you pass away. To determine a more accurate amount, it is advisable that you consult your financial educator or advisor.

Computing for basic and minimum Income Protection, just use Annual Income x 10.

HIGH COST OF WAITING

Time is money. The sooner you save. the better for your future.

Procrastination is the enemy of saving. When People are young, they delay saving because they think they have lot of time.

Mr. Save Early Vs. Mr. Save Later

As you can see, Mr. Save Early and Mr. Save Later each invested P120,000 over a period of 6 years. However, because Mr. Save Early started 6 years earlier, he made P9,597,930. Meanwhile Mr. Save Later, who started to save the same amount of money 6 years later, made only P4,862,610 when they both reached at age 62. Mr. Save Early made P4,735,320 more than Mr. Save Later.