Have you ever wondered how to become rich in the Philippines? We have broken down the foundation of wealth in easily readable financial steps to help anyone start earning money in the Philippines, no matter their situation. Of course, how to be a millionaire in the Philippines is a different question; however, we will also be exploring this topic as both questions require the same skills.
Before we dive in, an essential task when looking at how to be rich in the Philippines is learning the essential saving skills. Savings build power, which can be placed into building wealth. If you are unable to save (no matter your income), you will have a hard time becoming rich in the Philippines
How To Become Rich Philippines
1. When Look At How To Become Rich In The Philippines Start To Increase Your Income & Decrease Expenses
The first step on how to become rich Philippines can be completed in 15 minutes. All this takes is a few simple things, either a pen, paper, or a computer. If you haven’t done this already, the first thing to do is to list your incoming and outgoing expenses.
There may be things you do not include in our weekly or monthly plan; however, these also need to be added. Here are some examples.
• Nights out
• Family Or Friend birthday gift
• Dental, Eye, and Hospital check-ups
When you write your list, try to write down everything that comes out of your bank, even if it’s only 1% of your expenses, because if you have a few different items which seem to be the low value, they can soon add up and your incoming/outgoing won’t match.
The next step in how to become rich in the Philippines is to try to increase income. There are a few ways to do this that we will investigate later, but we will look at your salary for now. Do you get paid commission or hourly? Could you do overtime? Could you work in a different way that would increase revenue? At this stage, we are only focused on building wealth in your current situation.
1. Essential: These are 100% needed to survive and live. These include your rent, food, and medical expenses. In other words, if an emergency happened and you had very little money, what areas of your life are essential for you to carry on surviving.
2. Not essential but necessary: These are not essential but needed for your everyday life. A few examples are car fuel, Clothing, Educational costs, etc. If your job required you to have a reliable internet connection and a laptop, this would also be in this category as this is needed for your daily life.
3. Unnecessary: These are products or services you don’t need and often kill your available monthly funds. These include beer, expensive shoes, Netflix, and other luxuries.
It’s time to cut through unnecessary expenses (and even the not essential but necessary expenses, too, if possible.) We are doing this to our budget because we need to increase the line between income and outgoings. Sadly far too many people live from paycheck to paycheck and never earn some serious wealth.
Many financial experts agree that expensive luxury items are unacceptable, and I second that motion. However, life is for living, and we are not suggesting cutting out everything if that means you won’t have a joyful life because living is more important than money. Instead, we suggest that you cut out the items you do not need or items that are a higher percentage of your expenses each month.
When I argued this point to a financial advisor over ten years ago (As I was young and naive), he said to me, “If you want something you have never had before, then you must be prepared to do something you had never done before” I knew that at some point I needed to share this advice.
Hence, I’m thrilled to share this on the road to how to be a millionaire in the Philippines. This advice has saved and made me a lot of money over the years, and I hope it does the same with you.
2. Clear (bad) Debt If Your Looking To Become A Millionaire In The Philippines
With financial step one being completed, we now have a more significant difference between our salary and expenses. This will lead us to our second stage, and that is Debt. Do you have any debt? If so, I felt your pain once when I was very young and foolish. I managed to get myself into a lot of Debt (around half a million pesos!) So, I know how tough and crushing it can be.
If you have several debts, the trick is to pay off the highest interest first. Start by working out how long it will take you to pay off each Debt, let’s say nine months. Then work out the total interest you will pay. After doing this, you can see what carries the highest interest and start to destroy this Debt, then move on to the next and the next until you are debt-free.
This step can be the longest depending on how much debt you have, and I will be honest, it won’t always be easy. Nevertheless, it is possible, and once you are debt-free, you can start to build the rest of the foundations of wealth. Sadly, this is a hoop you must flip through before moving on to the next stage because Debt is a wealth killer and needs to be deleted before you look into how to be a millionaire in the Philippines. (unless its good debt, more on this below)
On a side note, you may be saying… “what if I took out a loan so I can build a business so that I can build wealth? Surely that is okay to do on my financial steps?”
A great question to ask. This is referred to as Good Debt, which means Debt has been taken out to make more money. If you are successful in this, then great, but I would only advise you to do this if you have a solid foundation first.
When we spoke to people across the country, we often met people who were highly motivated to become rich, and they knew that their Debt was slowing them down, so they worked very long hours and put all available funds into their debt. As a result, many of them became debt-free quicker than they would usually have.
However, some people paid off more debt than they could afford each month and got themselves into more Debt, so I would strongly recommend you only pay what you can afford & also speak to an independent financial advisor about your situation if you are worried about your financial path and need help with financial steps.
3. Building An Basic Emergency Fund is essential Before You Start To Look At How To Become Rich in The Philippines
Even if you never had Debt in the first place, this position you are in now is a great place to be as this is where we start building and look at how to be a millionaire in the Philippines. However, we need a protection cushion if an emergency happens before we start investing and building wealth.
“How much do I need to save in my emergency fund?”
This all depends on your lifestyle and current situation. For example, if you live in Metro Manila, your emergency fund will likely be higher than someone living in Davao City. Experts agree a person should save 3-6 months of expenses; however, I would also add that it’s acceptable to aim for just one month at the start, then you can move your goal to 2 months and so on because breaking down the goals will help you meet your target by being easier on your wallet and your motivation.
Once you have saved this up, I would suggest putting this into a place where you can easily access the fund, perhaps, a very low-risk investment. Of course, you won’t earn much in returns, but you will earn something small, which we shall discuss again later in our financial steps.
4. Start A Side Hustle in Order To Increase Your Wealth
At this stage, on your steps to becoming a millionaire in the Philippines, you will have zero debts, and your emergency fund has been built, so now it’s the fun stage where we can start investing.
Many investments require a somewhat large investment capital and will pay you an individual return (for example, 5-10% ROI.) However, with a side hustle, you are in control of the cost and prices. There is more work involved than normal investments, but you have a lot more control. Therefore, it’s important to start a side business hustle as soon as your emergency fund is built.
If you want to be rich in the Philippines, never chase money. Instead, focus on needs and wants. Find out what people need & want and produce a solution for their burning desires.Filipino Wealth
We are building a side business before any other investment because this can be started with very little capital. So, for example, you will have more control over this than the philippine stock exchange (PSEi) or bitcoins. The second reason a side hustle is so important is that many skillful entrepreneurs can turn a small side hustle into a full-time career, resulting in extra income and fewer risks if an emergency happens.
We have put together a small list of unique side hustles that can be used in your steps to becoming wealthy in the Philippines.
- Drone Videographer
- Airbed Rental / Glamping
- Laundry Service / Pick Up Service
- Flipping Dominas(Blogschool.Ph/Dot.Ph)
- Car Parking Services
- Speaking Services
- Phone Repair Service
- Motobike Rental
- Social Media Manager
5. Begin Your Long-Term Investments Strategy (Important if you are looking at how to become a millionaire in the Philippines)
Long-term investments were one of the biggest secrets held by the world’s wealthiest people many years ago, but today we know the huge benefits. Long-term investments are a powerful tool when looking at how to be a millionaire in the Philippines. So, let’s look at one of the factors that turned normal people into super-rich investors, Compound Interest.
Compound interest is one of the most well knows types of benefits of long-term investment. This allows you to earn money on your interest. In other words, the interest you make from your investment earns more interest. This is a common feature when you reinvest your profits.
An example would be if you invested in Jollibee stocks. After 12 months as a loyal shareholder, Jollibee gave you 500 pesos in dividend payments (Bonus) at the end of the year (as they tend to do to their stakeholders when business is doing well). Then you decide to reinvest this into Jollibee stocks, and you now have more stocks with no extra financial investment. Twelve months pass, and you receive another bonus payment, but this time, you have more stocks than last year.
You receive 700 pesos, which is an increase of 200 pesos from the previous year. Also known as compound interest. If you do this year after year, your total portfolio will increase. In addition, if you invest in the philippine stock exchange (PSEi), you may also receive higher bonus payments each year if the company decides to reward its shareholders.
In this example, we are looking at the stock exchange because this is a straightforward way to see how compound interest works; however, we can apply this in other investments from real estate to cryptocurrencies.
6. Reinvest Your Profits and grow your net worth
It’s very tempting to take out the money you have accumulated to buy a new car or other luxury items during this time on your financial steps. Still, if your goal is to build wealth as quickly as possible, it’s most likely going to be from an increase in investments, and the quickest way to do this is to invest profit from your starter investments.
This section is similar to where we use compound interest; however, we are not investing our profits into the same investment in the section, but we are expanding our horizon and investing in other areas to minimize our risk of failure (important when looking at how to become rich Philippines).
A friend of mine who is extremely wealthy shared his investment-building techniques with me, which I’m going to share with you today as he used a similar method.
He had five primary investments that were high-risk investments. Nevertheless, he thoroughly researched these before investing, and he managed to make a good return on all 5 of his investments.
He then put this additional cash he made from the first five investments into five smaller investments. Now, he has ten investments, most of which are giving him a higher than average return. I called him a few weeks ago and told him about this blog. I also mentioned that I’m going to talk about his technique, and he informed me that this technique has been working great and now has a total of 14 investments!
Some people say that the first few investments you make are the most important as your results from these will make or break your next move whether this is factual or not is debatable, but, indeed, at this time in our financial steps, we should fully research all investment to the best of our ability.
The example above mentioned five investments at the start is a lot of investment for the average person, so don’t feel dishearted. You can get the same results with just one investment, which can turn into two and then into four wise investors.
7. Look Into Short & Medium Term Investments
After you have started your long-term strategy and have started to think about investing in other areas…You can now look at whether your portfolio should be made of medium and short-term investments.
Short Investments. Short-term investments tend to range from 6 months to 24 months.
Medium Investments. Medium-term investments tend to range from 2 years to 5 years.
Short-term investments at this time on your journey to build wealth can be very beneficial as this will allow you to diversify your investment collection and earn on your investment very soon.
“What if I invest short term and my investment stays the same or worse, what if it decreases?”
In this situation, you have a few different options available to you.
1) You could leave your capital invested. If your investment is around the same value, and you feel that there is still much financial growth to come, it may be worth leaving your capital invested to see how it plays out.
2) You could withdraw your capital. If you feel that the investment is not on your side, it is recommended you set a specific amount you will withdraw your investment at. For instance, if you invested ₱10,000, you may set your withdrawal to ₱8500, which means if your investment falls to ₱8500, you will withdraw from the investment. The technical term for this is called a stop loss and is often used in the stock exchange.
3) You could seek a financial advisor. This step is most recommended as everyone’s situation can be different. For example, option two, aka the withdrawal of your funds, may not be possible if You are ‘locked in’ to an investment.
8. Protect Your Current Assets on Your Road To Become Rich
As we all know, an investment or a business won’t always be 100% in your favor. That is the fun part of making money, but at this time… you are in a place now with several money streams and backup cash. In other words, you have now experienced how to become rich Philippines.
So, we now need to protect our hard-earned money. You can protect your assets in many ways, and we will visit a few of these now. One of the most common ways to protect your money is through a business. For example, say you decided in your long-term financial strategy to invest in real estate.
After completing the property, you have two units in a brand-new condo complex, but how do you now protect these? That’s right through the business. If you are investing, you could turn this into a legal business. Of course, you will have different legal responsible but, in some cases, if some disaster hits, such as you owed money to the bank, they won’t be able to claim this as it’s on a business account. Please note this is not always a case used, for example, only to highlight the benefits of protecting your assets and capital.
Filipinos sometimes invest overseas in countries such as Singapore, Australia, the USA, Europe, and the UK, so there are also ways you can protect yourself in these countries too which we mentioned in previous articles.
We strongly recommend speaking to a lawyer or attorney. This is because if you register as a business to protect your assets, your tax and other responsibilities could also change, but registering a business for your investments is a wise step.
Another option would be trusted. If you were to die, your investment would go to your son, daughter, husband, wife, etc. this is the job of trust. Sometimes this is known under a different name.
Some insurances cover you for an unexpected death, but I prefer to invest in what I choose, such as stocks, real estate, and even bitcoin! Then put the capital I’ve earned in trusts rather than just with an insurance broker. This is because I prefer having more control of my investments; however, protecting your investments and capital depends on your circumstances.
The risk is we don’t always know when we will die, so if you have invested in a product such as bitcoin and you die, what happens then!? So, it’s essential you find out the rights and laws before
Signing any agreement and investing.
9. Diversify Your Investments
People tend to make one common mistake when looking at how to become rich in the Philippines, and that is to put all their money into one type of investment or in one industry. However, we are in a very uncertain financial world at the moment with cryptocurrency progression, trade wars, and emerging markets, to name a few; we must diversify our investment even overseas if we feel it’s right for us.
Look at our neighboring countries such as Thailand, Singapore, Indonesia, and others. Is there an investment opportunity that could bring in higher ROI with fewer investment costs?
10. Becoming Rich In The Philippines involves continuing, Stopping, Changing, And Repeating.
The last step to becoming rich in the Philippines is making the changes necessary to continue growing.
Continue: Look at all your current wealth. You potentially have an emergency fund, short & long-term investments, and capital in several different industries over potentially several countries. You are doing fantastic work, so this progress is to continue working well for you.
Stop: Look at the areas of wealth. What mistakes did you make? Did you invest too much in that one investment that didn’t pay off? Or did you invest in something which you knew very little about? This time we are looking at things we should stop doing. These are things that are damaging our financial wealth.
Change: So far, we can see what we should continue to do and what we should stop doing. So, the question now is, what should we change?! What areas do we need to work on & how do we improve our wealth?
Repeat: We have all the steps needed to build wealth. The plan is to revisit each stage and improve and repeat this to improve our overall cash flow.
How To Become Rich In The Philippines
To be financially rich in the Philippines, it’s essential to learn the basics of financial growth, such as saving and seeing undervalued investments. With these skills and knowledge, individuals will increase their buying power and make more informed decisions, leading to financial wealth.
How To Be A Millionaire In The Philippines
To become a self-made millionaire in the Philippines, individuals will either need to save, invest or grow a financial asset, leading to becoming a millionaire. Most individuals who become millionaires in the Philippines did so due to leverage. This leverage includes leveraging other people’s time, skills, and money.
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