"Money can always be retrieved or recovered, but time cannot."
What could possibly affect your financial goals when you delay investing?
- RetirementLet us try to consider 3 people Aged 25, 35 and 45. All of them desired to retire at the age of 60 and will live until age 85 (25 years of retirement life)
Their current monthly expense is 15K a month.
Inflation Rate: 5% p.a.
Investment Return 10%
Age 25 | Age 35 | Age 45 | |
| Current Monthly Expense | 15K | 15K | 15K |
| Retirement Fund Needed (at age 60)* | 15.3M | 9.4M | 5.7M |
| Investment needed to reach desired Retirement Fund | 4.5K/month | 7.5K/month | 14K/month |
*Based on 5% inflation rate
Even though "Age 25" requires a larger retirement fund (due to inflation rate), he has the smallest investment monthly requirement among the three since he/she started early. It also shows that the later you start setting aside money for your retirement, the larger you need to invest monthly.
A lot of retirees who were unprepared always tell "I should have saved more".
2. Getting Life Insurance
There are two things you need to be concerned of when delaying your insurance.
a. Insurance cost
Take note that the insurance charge will be based on the age where you start your policy and will remain fixed throughout your life.
i.e.
Policy type = Variable Universal Life (Life Insurance with Mutual Fund component)
Insurance Coverage = 1 Million
Male
There are two things you need to be concerned of when delaying your insurance.
a. Insurance cost
Take note that the insurance charge will be based on the age where you start your policy and will remain fixed throughout your life.
i.e.
Policy type = Variable Universal Life (Life Insurance with Mutual Fund component)
Insurance Coverage = 1 Million
Male
Age 30 | Age 40 | Age 50 | |
Qtrly Contribution | 6,750.00 | 8,835.00 | 13,281.25 |
b. Health Uncertainty
Life insurance is a blessing and not all insurance application is being approved. Insurance is a risk sharing business. Why would the company insure you if you have a high probability of dying?
I have two prospects who applied insurance from me. Their age is below 35 years old. Even with their interest to apply for life insurance, they were declined by the insurance company due to their health condition. The sad part was they delayed their intention to get insurance for 7 years. Now that they are no longer healthy, they can no longer be insured.
For my last quote, I will share a classic one: "Asa huli and pagsisisi". Financial Ignorance can be tolerated, but not arrogance.
