When you think of one million pesos, ways to earn it always come to mind. We have this mindset that we need to work hard to make a certain amount of money. But we don’t often discuss what we’d do once we finally have a million pesos.
It’s more important to think about how to spend your money than how to make that money. There are numerous ways to earn: you can work, start a business, join a multi-level marketing organization, or win the lottery. If you’re motivated enough, you can always find a source of income. But how are you going to proceed once you’ve reached your goal?
We’ve all heard of stories about Filipinos who won the lottery, only to fall back into poverty after a short time. That’s because financial literacy in our country is still low. People are only taught to work for money, not to make money work for them.
As a result, many people feel overwhelmed when they get their hands on a large amount of money. They’d either spend it impulsively or deposit it in a bank, where it would earn some interest over time. Both practices waste a million pesos. But these ventures will maximize its potential:
Securities, a.k.a. investments, can double your million pesos over time. But if you’ve never invested money before, it’s best to start with low-risk securities, though they won’t yield high returns.
Examples of low-risk securities are a savings account, certificate of deposit (time deposit), treasury bills (T-Bills), and money market accounts. People usually start with a savings account. But by the time you get your first million, chances are you already have one. In this case, you may create another savings account to keep your money secure. Then you can withdraw a portion of it to invest it in other low-risk securities.
If you’re going to invest in a time deposit account, note that you can’t withdraw your investment before its maturity. And when it matures, it will not have likely earned much interest. T-Bills and money market accounts may yield higher returns, but not by much either. If you’re willing to take a bit more risk, consider a Unit Investment Trust Fund (UITF).
Metro Unit Paying Fund is one example of a UITF. It’s moderate-risk security that yields return every February, May, August, and November. As such, you can rely on it for passive income. You don’t even need to visit a branch to claim your earnings.
Investments like this are perfect for first-time millionaires, as its minimum subscription amount is Ã¢Â±500,000. That amount will be invested in a diverse portfolio of high-grade fixed income securities and preferred shares. That’s how it yields returns multiple times a year.
2. A House
Buying a house for Ã¢Â±1 million may sound unrealistic, but it’s possible. It can even buy you a place in Metro Manila. There are low-cost townhouses and condos around the area that may fit your lifestyle, especially if you need a home closer to your workplace.
Foreclosed properties may also sell for around a million. If you’re a young professional who wants to live independently, consider mid-rise condos around Quezon City. You may find a 13-16 square-meter studio unit that’s just right for you. If you’d live with a spouse or significant other, Quezon City also has two-bedroom units around 30 square meters, which can be an excellent place to start a family.
3. Charitable Contributions
If you want to make a tithe, don’t hesitate to prioritize that when you earn your first million. You can also donate to nonprofit organizations that support the same causes as you do. One of the best things about earning a huge windfall is that it increases your ability to give. If sharing your blessings feels like the most meaningful way to spend your million, give back as much as you want to.
When you have already saved, invested, and donated, you can finally enjoy the rest of your earnings. But again, be careful; don’t be tempted to buy things you don’t need. Prioritize the essentials or things that will make your life easier. For example, if you’ve been struggling with working from home because of your limited space, consider expanding your home so that you can have a home office. If your work requires a better tablet or laptop, buy the gadget.
You may be free to spend your own money however you want to, but if you’re poorly informed about wise financial decision-making, you’ll fall back to financial shortages. Break that cycle by learning how to invest, save, and spend correctly.