Retirement Planning Part 3: Grow Your Money Thru Stock Market Investment

Did you know that stock market investment had been an instrument in the Philippines since 1927?  The very first stock trading floor was in Manila Stock Exchange in Binondo and it’s sister bourse is in Makati Stock Exchange that have been around since then.

According to COL Financial, the largest online stock brokerage firm in the country, there are 500,000 estimated number of retail investors that are currently actively investing and trading.  That number is very minimal comparing to current population of the Philippines of 100.8 million based on CIA World Factbook .

But why I include stock market as one of recommended plans for fruitful retirement?  Remember the first stock market trading hall was in Binondo, Manila.  Most Filipino-Chinese were already engaged in trading their assets, before World War 2.  That is the main reason why Chinese businessmen are mostly richer and got richer everyday, because they know how to increase their wealth.

Common Misconceptions About Stock Market

Lots of my friends, officemates, classmates, and other related to me believe that stock investing is:

  1. Is a form of gambling and by chances;
  2. Complicated;
  3. Just for the rich and oldies;
  4. Very risky;

Is it a Gambling?

If it is a gambling, it would be handled and operated by PACGOR and other mafias.  It was already around before Japanese occupancy in the country.  Many Chinese businessmen managed and accumulated true wealth because of stock market investment  True business acumen and fundamentals of fund management are simple keys in winning in the stock market.

Is it Complicated?

Complication of one subject matter is depending on your perspective.  Stock market investment is simply a buying a piece of property of a company then sell it to others in higher prices.  Buy low sell high.  But before you made a purchase, you will need a broker (a middleman) between you and the company you wanted to buy a share.   A broker will collect a small amount of fees for their services.  The broker is in real application is the COL Financial.

It would be look complicated if you focused in some jargons such blue chips, bear market, bull market, bull-run, black swan, board lot, cost-averaging, leverages, and other nose-bleeding words that you will heard somewhere.  These terms are important, but you will definitely understand these along the way.

It’s Just for the Rich and Oldies

One best example to eradicate this poor  mentality is a story of a security guard.  James is a 24 year old bachelor.  He’s occupation is a typical security guard in a reputable bank.  He was a discipline saver.  He saved atleast 20% of his measly salary every month to sustain his dream to have a bigger house on his 40th birthday.  He shared to me his dreams.  I taught him on how to invest in the stock market thru COL Financial.

I advised him to invest atleast 20% of his salary, then the remaining will be his daily expenses such for foods, clothing, and utilities.  That was happened 3 years ago.  Today, James is already having a total equity of PhP 200,000.00.  I told him not to withdraw and continue until he reached age 40.

This simple story inspired me until this date.  If a security guard managed to disciplined himself for a bigger dream, why not a you in a higher ground able to save for a better purpose.

Very Risky

Yes.  Absolutely.  Mostly if you do not know about stock market.  Ignorance can be a blessing but mostly can cost you dearly.  COL Financial offers free seminars about stock market investment.  I assume you’ll never invest your money in something you don’t understand.

But Why for Retirement?

Let’s do some actual demonstration.  Suppose you prepare P60,000.00 investment for your retirement.  You let hold it for about 30 years at an average 10% growth per year.  At 30th year of holding that investment, your P60,000.00 grew into a million pesos!    Take a look in the table.

Start P60,000 P0 P60,000
1 P60,000 P6,000 P66,000
2 P66,000 P6,600 P72,600
3 P72,600 P7,260 P79,860
4 P79,860 P7,986 P87,846
5 P87,846 P8,785 P96,631
6 P96,631 P9,663 P106,294
7 P106,294 P10,629 P116,923
8 P116,923 P11,692 P128,615
9 P128,615 P12,862 P141,477
10 P141,477 P14,148 P155,625
11 P155,625 P15,562 P171,187
12 P171,187 P17,119 P188,306
13 P188,306 P18,831 P207,136
14 P207,136 P20,714 P227,850
15 P227,850 P22,785 P250,635
16 P250,635 P25,063 P275,698
17 P275,698 P27,570 P303,268
18 P303,268 P30,327 P333,595
19 P333,595 P33,360 P366,955
20 P366,955 P36,695 P403,650
21 P403,650 P40,365 P444,015
22 P444,015 P44,401 P488,416
23 P488,416 P48,842 P537,258
24 P537,258 P53,726 P590,984
25 P590,984 P59,098 P650,082
26 P650,082 P65,008 P715,091
27 P715,091 P71,509 P786,600
28 P786,600 P78,660 P865,260
29 P865,260 P86,526 P951,786
30 P951,786 P95,179 P1,046,964
Totals P986,964 P1,046,964

If a million pesos is enough for your retirement, then I’ll not blame you.  But let see the succeeding table first if invested a P5,000.00 every month (a total of P60,000.00 per year), an average annual growth of 10%, and consistently doing investment for 15 years only.  Suppose you are a 30 years old, married, and having 2 children.

Year Beg. Balance Top Ups Gain End Balance
1                      60,000.00                              –                6,000.00                          66,000.00
2                      66,000.00              60,000.00            12,600.00                        138,600.00
3                  138,600.00              60,000.00            19,860.00                        218,460.00
4                  218,460.00              60,000.00            27,846.00                        306,306.00
5                  306,306.00              60,000.00            36,630.60                        402,936.60
6                  402,936.60              60,000.00            46,293.66                        509,230.26
7                  509,230.26              60,000.00            56,923.03                        626,153.29
8                  626,153.29              60,000.00            68,615.33                        754,768.61
9                  754,768.61              60,000.00            81,476.86                        896,245.48
10                  896,245.48              60,000.00            95,624.55                    1,051,870.02
11                1,051,870.02              60,000.00          111,187.00                    1,223,057.03
12                1,223,057.03              60,000.00          128,305.70                    1,411,362.73
13                1,411,362.73              60,000.00          147,136.27                    1,618,499.00
14                1,618,499.00              60,000.00          167,849.90                    1,846,348.90
15                1,846,348.90              60,000.00          190,634.89                    2,096,983.79

See the difference?  In 2 years disciplined investment, you can earn two million pesos in 15 years time!  That’s the power of compound interests.

Choose Your Retirement plan… Why Not Do All?!!

Can you define now which retirement method you will choose? Personally, I’m doing all of these options.  I have my life insurance for my coverage, investing in the stock market, and dealing some small businesses while keeping my day job.  These decisions we had made with my wife is one of our best decision in our life, securing first our retirement.

“While planning for your retirement, do it together with your spouse.  Together, you can plan and execute well.  It’s very lonely to be retired alone.”


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Eleison Cruz

Financial Consultant. Personal Finance and Investment advocate. Author of The Good Asset, a blog that educates people in investments, financial literacy, and life insurance. Visit

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