“Robert Reich, once observed ‘most minimum wage workers aren’t poor.’ He is right.” – Johny Isakson, U.S Senator
(Robert Reich is former U.S department of Labor Secretary)
Minimum wage earners keep complaining about their salary. They say they cannot retire rich. Most of them just go through their work and retire relying only on their small pension and the little retirement that their company will be giving them.
For most minimum wage earners, becoming a millionaire when they retire is quite an impossible dream. They contend that they can only be a millionaire if they receive a hefty sum of retirement money from their company.
Is it really possible to achieve millionaire status by your own efforts alone ? (Humanly speaking) Let us consider this actually scenario.
In the Philippines, Central Visayas Region, the current minimum wage is P 241.00. Multiply it by 26 days of work you get P 6,266.00.
Let’s just say that you are 30 years old and you faithfully saved that P 266.00 per month and spent the rest of the P 6,000.00, that would amount to P 3,192.00 per year
Do the math. If you put that P 3,192.00 in an investment vehicle that would give you 10 % interest per month in interest (compounded), do you know how much your money would become in 30 years, that would be P 1,052,001.00. If you started this kind of savings program when you were 30 years old you will retire a millionaire at 60 years old by your own savings program alone, add to that the retirement benefits from your company, your monthly pension from the SSS and your PAGIBIG “savings.”
What if you decided to add another P 500.00 in your monthly investment and invest P 766.00 instead? This would amount to P 9,192.00 per year and at the end of 30 years it would amount to a whopping amount of P 3,029,447.00 (At 10 % interest per year compounded)
Perhaps later on you would increase your savings to P 1,766.00 a month if you receive a salary increase. If you do that even on the 10th year after you start saving only P 266.00 a month, you will retire with P 4,472,777.00.
Not bad for a minimum wage earner.
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