We all want the peace of mind to live comfortably by the time we retire and after we die, our loved ones are taken care of financially. To achieve it we must first deal with the 2 big bad wolves against building wealth.
Wolf #1: INFLATION
Inflation is defined as a general increase in prices and fall in the purchasing value of money.
For example, 20 years ago your 500 pesos could buy you bags and bags of groceries. Now, it can just buy you 2 cups of Starbucks Caramel Macchiato and 1 cheese croissant.
Winning a million pesos now is no longer as grand or as impressive as winning it 20 years ago.
Truly, the value of money has depreciated so much so that I dread how much a cup of Starbucks skinny latte will cost me by the time I retire. A thousand pesos perhaps?!?
Just to stress this point, the average inflation rate in the Philippines is 4%. So next year the prices of goods will increase by 4%. Hence you must take this into consideration when you save up for the future.
Wolf #2: IGNORANCE
The biggest financial mistake that anyone can commit is ignorance. Not only it is a mistake, it is very expensive.
Not having the correct financial knowledge may lead you to jump into financial ventures disastrous enough to wipe off your current savings and bury you in debt.
Whatever is your career, whether a doctor, engineer, software developer, nurse or accountant, it took you years to go to school and get the degree. No one can be good at something without studying and preparing for it. Thus, to grow your wealth you must study how money works.
Learn the lesson of the 3 Little Pigs. If you build your financial house using just straw or wood, the 2 Big Bad Wolves (Inflation and Ignorance) can easily huff, puff and blow it into smithereens.
But if you build a strong, solid financial fortress - no matter how much the 2 big bad wolves try to huff, puff and blow it away, they cannot bring it down.