How To Make One Million Pesos By 30

Written by imoney

Lianne Laroya started thinking about how to grow her money at quite an early age — 19, to be exact. “After graduation, my parents gave me a lump sum as a graduation gift,” she tells iMoney Philippines in an interview. She then became interested in personal finance, searching for ways to beat the inflation rate and make the most out of her money.

But a death in the family in 2012 made her commit to become financially free — her grandfather had a stroke, and she couldn’t afford to send him to the nearest hospital. “I didn’t have the means to prevent it,” she says.

So then Laroya decided to make her first million pesos and have the financial freedom to pursue her interests. Starting in 2011 at age 19, she made her first million pesos this year, at age 23. “I couldn’t believe it! I haven’t actually told my parents yet,” she says. Her financial goal now is to be able to retire at age 35. “A lot of people think retirement means not working at all, but for me, it’s working while knowing that even if I quit working, I can still fund my lifestyle.”

So what can you learn from how Lianne Laroya made her first million pesos, and how can you make your first million by 30?

How To Make One Million Pesos By 30

1. Change your mindset. Laroya notes that in telenovelas, poor people are always good and kind, and rich people are always evil. And in the Filipino culture, there’s a sentiment that “it doesn’t matter if we don’t have money, as long as we’re happy.” “That’s why I always say at seminars, ‘money can’t buy you happiness, but poverty can’t buy you anything.’ I find that most Filipinos all want to be financially free but not committed because of the mindset that money is evil. So when we receive money we want to spend it because subconsciously we want to be good again. I had to change that mindset before I could do anything else,” Laroya says.
2. Set up your timeline. How old are you now, and how old do you want to be when you want to become a millionaire? Take into account your current budget, how much you’re able to set aside for future use. “Most young professionals think that being a millionaire can happen overnight, but it’s a long process,” Laroya says.
3. Protect yourself financially:
   • Get health insurance. “Your life savings could be wiped out by a medical emergency,” Laroya says. Health insurance will protect you in case that happens, so you can concentrate on growing your money. PhilHealth coverage will do, but if you can afford it, get the best health insurance you can afford. Compare rates and plans with our tool.
   • Shore up your emergency fund. If your family is not dependent on your income, 3 months’ worth of emergency funds is OK. If you’re the only breadwinner, you should probably extend this to 9 months. Start your emergency fund now.
   • Get life insurance. “Young professionals tell me they don’t want life insurance because they don’t have a family of their own yet. But what if they have a family in the future? Also, if you’re the only breadwinner and something happens to you, the income you give them will be depleted, and life insurance will help with that.”
4. Invest!. Once you’ve completed your protection steps, you can start growing your money. And the best way to do that is by investing, because it will give you much better returns than deposit accounts. Plus, it will speed you up on your way towards making your first million pesos. Depending on your age, you’ll have to set aside different amounts for investing if you want to be a millionaire by 30. Check out this handy chart:

Age	Amount to invest monthly to have P1 million by age 30 (9% annual return)
21	P6,042.91
22	P7,150.20
23	P8,589.08
24	P10,525.54
25	P13,258.36
26	P17,385.04
27	P24,299.73
28	P38,184.74
29	P79,951.48

As you can see, the sooner you start, the less you’ll have to put away every month to make your first million, so start investing ASAP!

But before you invest, remember these things:

1. Always have a goal. “A lot of Filipinos do ‘bahala na’ investing — when they just invest but they don’t know what for,” Laroya says. She’s made this mistake herself. “When I first started investing, I didn’t have a specific goal. When I found out that my investment had appreciated already, I immediately withdrew the earnings! If I’d known I wanted that money for retirement, I wouldn’t have touched it, and it would be worth much, much more today.” Know what you’re setting aside your money for so you can choose the right investment products, and you maximize your initial investment.
2. Know the investment products for you. Different people have different investing needs. Here are some options:
   • Direct stock trading. If you don’t mind putting in the time and effort to getting the knowledge needed to trade in stocks directly, then use them as your investment vehicle. You can start with peso-cost averaging. Then, once you’re more confident, increase your knowledge and level up..
   • Managed funds. Laroya invests in a mix of UITFs, variable universal life insurance, and mutual funds for her managed funds. “I love these three because they allow me to invest automatically,” she says. “Young professionals who don’t have that much knowledge about investing would do best starting out with these products, because a fund manager does the hard work for you.” Find a UITF for you with our guide to UITFs you can invest in for P1,000 and up.
3. Be consistent. Once you’ve set up your investments, don’t stop. “The key to making your first million pesos is consistently investing and also being emotionally attached to your goals, because it doesn’t matter how much you’re investing right now — if you’re not consistent, you won’t be committed.” To help you be consistent, automate as much of the process as you can: automatic deposits into your emergency fund, automatic investments via UITF, and more.

The Bottom Line

“Start now,” Laroya advises. “Now that you’re still young, unattached, with a lot of disposable income, what better time to start? And if you’re worried that you don’t have the funds to start, you can start small and gradually increase.”

While you’re in your 20s, time (and the power of compounding interest) is on your side. Start your journey to your first million pesos and fix your finances now.

Lianne Laroya is a licensed financial advisor who provides services and solutions to help people achieve their goals. She’s also a published author; her book is called OMG! Where Did Your Sweldo Go?: 9 Secret Sweldo Tips to be a 20-Something Millionaire. To learn more about her and her services, visit thewiseliving.com or follow her on Twitter @MsLianneLaroya.