Step 7 of 8
Is Juan ready to invest?
About a year after he started, Juan checks his progress against the levels below investing.
Step 5: Decide when to start investing
- Level 1: Positive cash flow every month, and his salary loan is now fully paid ✓
- Level 2: ₱46,500 in his emergency fund, or 3 months of expenses ✓
- Level 3: Health coverage through work and PhilHealth, plus his own term life plan ✓
With the loan paid off, he has ₱6,000 a month to work with
- Emergency fund, until it reaches 6 months
- ₱3,000
- Long-term investing
- ₱3,000
That's his ₱4,000 savings plus the ₱2,000 that used to go to the loan. Based on his balanced result, he splits his investing between Pag-IBIG MP2 for steady growth and a low-cost index fund for long-term growth. He sets both up as automatic monthly contributions.
Juan's first year
Month 0
Makes a budget and auto-saves ₱4,000 a month
Month 2½
Reaches his ₱10,000 starter fund
Month 5
Gets a ₱500,000 term life plan
Month 12
Has a 3-month fund of ₱46,500, and his salary loan is paid
Month 13
Starts investing ₱3,000 a month
- Why do I want to grow my money?
- What kind of life am I investing for?
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