Small “Change”, Big “Difference”

I was thinking of something good to write about when this popped into my mind. I remembered one of the things that I always tell my friends every time they tell me that they don’t have any money to invest. I find it really funny to know that they have enough money to buy a new gadget or to go on trips and that they can’t save a small amount of money for their future. Well I couldn’t blame them, after all most of them are still students and thinking about their future is probably out of their dictionary. 

However, in instances like this I always tell them that a “small change can make a difference”. So what do I mean by this. Figuratively speaking, I mean that by making slight changes in their spending habits, they can save up a good amount of money that eventually they could use to start investing for their future. Literally speaking, the small “changes” in their pockets that they usually take for granted can sum up large enough given the right money management techniques that can eventually make a big difference in their lives. So what are these “changes” that I am talking about? Below is a table where I got from our company that illustrates how much money can we save by just cutting costs on these unnecessary expenses.

ITEM	COST		MONTHLY COST	ANNUAL COST
SOFTDRINKS	P20/can	2 cans per day	1,200	14,400
Coffee Shops	P30/cup	2 cups per day	1,800	21,600
Dining Outside	P1,000/meal	4 per month	4,000	48,000
Snacks	P100	1 per day	3,000	36,000
Ice cream, chocolate, sweets, junk foods	P100	1 per day	3,000	36,000
Extra cellphone load	P1,000	1 per month	1,000	12,000
Gimmicks, eating out, partying, etc.	P500 per session	1 per week	2,000	24,000
Cigarette	P40/pack	1 pack per day	1,200	14,400
Hair rebond, relax, color, straight, curl	P2,000 per session	1 / month	P2,000	24,000
ATM Fees	Ave.=P12 per transaction	20 transactions per month	240	2,880
Credit Card Renewal Fee	P2,000/year	3 cards	---	6,000
Expenses for Convenience	P100	1 per day	3,000	36,000
Video games, CD rental	P500	1 per week	2,000	24,000
Magazine, comics	P100	1 per week	400	4,800
Lotto Tickets	P20/ticket	1 ticket per day	600	7,200
Movie Tickets	P100/ticket	10 tickets/mo.	1,000	12,000
Buying “sale” items	P1,000	1 per month	1,000	12,000
Feet pedicure, foot spa	P200/session	1 per month	200	2,400
Diet pills	P1,000/bottle	1 per month	1,000	12,000
Others
TOTAL			25,520	312,240

There you see the table. I know that it is not quiet impressive to see but the next table I will show you will summarize the reason why your small change can make a big difference. Based on the amount of money you can save by cutting on those unnecessary expenses, Here is a table that will show you how much your money can grow if it is placed in a right investment vehicle.

Daily Savings	Monthly Savings	ROR	10 Years	20 Years	30 Years	35 Years
33	1,000	4%	147,250	366,770	694,050	913,730
		12%	247,855	980,385	3,255,511	5,813,557
67	2,000	4%	294,500	733,550	1,388,100	1,827,460
		12%	495,710	1,960,770	6,511,023	11,627,115
100	3,000	4%	441,750	1,100,320	2,082,150	2,741,190
		12%	743,565	2,941,154	9,766,534	17,440,672
167	5,000	4%	736,250	1,833,870	3,470,250	4,568,650
		12%	1,239,275	4,901,924	16,277,556	29,067,787
233	7,000	4%	1,030,750	2,567,420	4,858,350	6,396,120
		12%	1,734,985	6,862,694	22,788,579	40,694,902
267	8,000	4%	1,178,000	2,934,200	5,552,400	7,309,840
		12%	1,982,840	7,843,078	26,044,090	46,508,460
300	9,000	4%	1,325,250	3,300,960	6,246,450	8,223,570
		12%	2,230,695	8,823,462	29,299,602	52,322,016
333	10,000	4%	1,472,500	3,667,750	6,940,490	9,137,310
		12%	2,478,550	9,803,848	32,555,113	58,135,574
500	15,000	4%	2,208,750	5,501,610	10,410,750	13,705,950
		12%	3,717,825	14,705,772	48,832,668	87,203,361
667	20,000	4%	2,945,000	7,335,500	13,880,980	18,274,620
		12%	4,957,100	19,607,697	65,110,226	116,271,148

I’m sure your quiet amazed. That is the power of compounding interest. Maybe some of you are wondering is that possible? Or, is this realistic? Then watch out for my next blog post to show you some real results on the power of investments.