How to Be Rich Even When Earning Low- As Advised by Finance Advocates

I will list down all the things I learned (for free over the internet) on how to be financially free.

This is basically what I am trying to follow when it comes to managing my savings. This is my step-by-step guide on what I have to do to make my money work for me and eventually for the ultimate goal of being financially free someday (be rich).

All these advises are all free and is given away to a lot of social media post by financial advocates or advisers, I may not be able to give credit to them because basically they pretty much talk the same thing, for the original person who created these step, I thank you even though I don’t know you are pretty much, but your technique is highly given attention by everybody which makes me think that somehow it works.

So..

Let’s begin.

Save Money

I think that there is not much discussion when it comes to saving. As a low-income earner, we know the importance of saving. Saving is the start of everything because with an end goal in mind to make your money work for you means you need to have money to work on, so that is where savings come in.

As a low-income earner, it is pretty obvious that saving a huge amount of money will require us a long time (this is pretty much the reason why we achieve financial freedom way slower than the others read the previous post here).

But don’t be discouraged, even if it takes at least 5 years of commitment to save and make your money work for you it can be done (not that I actually tried and tested all the formula out there to give you this statement as an absolute truth but I am just being positive and hey I think it is doable and achievable).

Emergency Fund

Every financial advocate/adviser I bump into thru an article or social media post always gives a substantial reason why we need to establish an emergency fund.

This serves as our safety net, so if something goes wrong (I hope not) you will have the ability to fix it right away. For example, you needed to switch job or you need to fix your car, or the plumbing in your bathroom went crazy and you need money to fix it, these are some of the things that need funding and need quite a sum of money.

Remember that emergency fund should be liquid (please see my post about emergency fund click here) which means it can be easily used without any restrictions. I learned that from a member of a group that I was in and I am so happy and will forever be grateful for that advice.

Health and Property Insurance Fund

I don’t usually put a priority on these but from one post I read, she made a valid point of view on why you should not skip investing on Health and Property insurance.

Of course, at some point in time, you might require medical attention, for example, giving birth or you just wanted to visit the doctor for an overall checkup just to make sure you are healthy. Most minimum-wage earners just like I do are pretty much covered by Philhealth. And Philhealth I should say is very helpful thanks to our government.

But you have to admit; sometimes going to public hospitals is not so convenient nowadays. And with medical clinics popping up on malls you sometimes prefer to go to one. Services like simple checkup in a private clinic are not covered under Philhealth (correct me if I am wrong), or if you want to have a room for yourself after giving birth you need to pay that with your own money. Giving birth is free but having a comfy room to stay inside the hospital is not (correct me if I am wrong again).

In these situations having health insurance is really handy. I have mine thanks God for my current employment. Some company even give free insurance for your dependents too, if you have that you are so blessed. Also on really tough medical emergency in the family, having a health insurance can really make a difference and convenience for the patient. Minimum wage earners like I am should really give a thought about health insurance; again having it for free because of employment will really make a difference.

Having a health insurance will help you to continue on your financial goal or let your savings be secure even when there are medical needs you have to deal with.

Next..

For us low-income earner, property insurance is far off our goal because, to begin with, we don’t have property just yet. Property insurance is great for business owners, so in the case of their property, for example, your supermarket catches a fire or any disaster (God Forbid) the insurance will cover for the damages.

Investment

There are many things that anyone can suggest in growing your money passively.

I am not going to suggest any of it because they all have a risk to consider and relying on what I have to comment on this post will not guarantee solid success. So please before you do passive income get your own hands on it, research about it, know if this kind of investment is right for you, don’t go with the flow and copy everything you see because there are a risk and some people already learned it the hard way. But to balance it out there are people who succeed in passive income as well.

Most common passive income investment is stock market, there are variations of it like mutual funds (indirectly investing on the stock market and letting a fund manager invest for you), FarmOn and much more.

This is the make or break deal of ending the payday after payday loop. Once you save and save enough for an emergency fund and the ones mentioned up, saving more for investment and actually involving yourself to a passive income will add to your take-home pay. Let us say you are earning minimum wage for 3 years now and with diligently saving money you now have the power to invest on a passive income, then after 3 years or so your passive income came to realize and bring you, for example, another P5,000 a month. So, let’s say you earn 12,000 pesos monthly and your passive income will add 5,000 pesos a month that will make your take-home pay a total of 17,000 pesos a month. Not bad right. That is an ideal model “mindset” of earning passively, but of course, that is not always the case because of the risk that I told you earlier.

Business

Other than earning passively, you can actually get your own hands to doing business and be a business owner yourself. On some occasion ROI in business is faster than passive income investments even with low capital, so if you have the skill to run a business and connect to the community go for it.

Retirement Fund

After accumulating wealth in your 30’s to 40’s now is the time to think about retirement. This is the last fund that you need to fill up and if you are pretty much successful in putting up passive income or a business of your own, filling up your retirement fund will be easy.

And that is it.

That is the step by step on how to reach financial freedom for low-income earners (or anyone really). You can customize this as well and add some funds that matters to you like Travel Fund etc.

This is actually my guide right now on how to be financially free. I am back to saving up and building my emergency fund because I kind of make some bad financial decisions before but it’s ok, I learned from my mistake and starting all over again is the best that I can do.

I just like to pull up one quote that is pinned in my Facebook Page and it says,

If you quit,

get the popcorn out

and watch those who didn’t…

I hope you’re as inspired as I am.

Godspeed!

Thanks for reading all the way!

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