Truly Rich Club Stocks Update is my favorite newsletter. Why? Because of the SAM Stocks update and reviews. Mike Viñas, an Investment Trainer of COL Financial Group, updates the members of the club on what to do with their investments.
This version of Truly Rich Club Stocks Update is about the Magic of One Percent.
Use the Magic of One Percent
I know you understand the magic of compound interest. I know you understand the magic of Peso Cost Averaging, and especially our very own SAM (Strategic Averaging Method)—which has the potential of earning you more than Peso Cost Averaging.
Why? Peso Cost Averaging is buying stocks every month and never selling. SAM is buying stocks every month using our Buy Below Price (and thus guaranteeing that you buy cheap) and selling (rarely) when we hit the Target Price.
But today, I’d like to share with you the Magic of One Percent. If you don’t know about it, then a fair warning: It will astound you. Here it is…
Let’s say Bert is 30 years old and recently joined the TrulyRichClub and started investing P5000 a month in the stock market. He did so until he reached the age of 60. If it grew his investments by 12 percent each year, Bert will have an amazing P16.2 million in the stock market. But because Bert isn’t just doing Peso Cost Averaging but SAM (Strategic Averaging Method), his money doesn’t grow by 12 percent but by 13 percent a year. Do you know what that one percent difference will do?
Answer: Instead of P16.2 million, Bert will have P19.8 million. The difference of P3.6 million came from the Magic of One Percent.
Let me make this more graphic. If Bert retires at age 60 with P16.2 million, and decides to live on the interest of his money, withdrawing four percent, that will be P648,000 living expenses for his first year. But if Bert retires with P19.8 million and withdraws four percent, that will be P792,000. That’s 22 percent extra for his expenses and charity work as a happy retiree.
Can I challenge you?
Bert’s example is flawed. In other words, I want you to beat his numbers and earn much more than Bert. First, as your income increase, you should invest more. In my example, Bert invested P5000 from age 30 to age 60. You shouldn’t do that. Because as years go by, your income is expected to increase. So you should invest more too. If you do this, your money will grow exponentially too. If you do this, you’ll more likely end up with P25 million to
P30 million when you retire.
May your dreams come true,
One of the goal that I have is to increase my investment yearly. I started P5,000.00 per month and it grows to P10,000.00 per month. Thanks to the passive income generated by PinoyAndMoney.com, I was able to reach it.