Pinoy Fund Runners

This procedure or formula is often used to determine the fund needed for your retirement, children's education, or life insurance coverage.

Ingredients:

• 12 pcs. of "Monthly Expenses" = CurrentAnnualExpense
  
• 1 pc. of "Average Inflation Rate" = i
  
• Nth year you wish to know = n
  

Materials needed:

• sphygmomanometer or blood pressure meter (just in case your blood pressure rise up once you've known your future annual expenses)
  

Step #1 Mix all ingredients under one bowl using the following formula:

    FutureExpense on the nth year = CurrentAnnualExpense*(1+i)^n

    i.e. Calculate your annual expense 20 years from now given

        average inflation rate = 5.5%

        Current Annual Expense = 240,000

    Future Expense = 240,000(1+.055)^20

            = P700,261 a year

   

Step #2 Measure your blood pressure. If it went up, go to your nearest Financial Advisor and ask for recommendations on how they could help you plan for this.