This was also Pong’s excuse when Ping encouraged him to invest as well. (Read their story again here: How to Use Time to Make Millions)
Let us take a look at why Pong never got to invest early.
Pong is such a social person. He never missed lunch-outs with his officemates where they bond at different restaurants. He spent around P200 a day for this.
It may seem small, but that P200 when multiplied by 5 working days is P1000 a week. P1000 multiplied by 4 weeks is P4000 a month which he can already use to save and invest. This is a classic example of a ninja expense we discussed here: Ninja Expenses
Because Pong never made a deliberate decision to invest and adjust his lifestyle, he started investing really late. What happened was whenever his income increased, his spending followed too!
What is the social cost investing?
Even though Pong wanted to start investing like Ping, he cannot say no to the bonding time with his officemates. He also cannot afford not to have the latest Apple gadget in its first week of release.
The feeling of being left out and not having the latest gadgets are some of the examples of what we call the social cost of investing.
When you already know what to do, have all the time and money to invest, this will prevent you from investing regularly.
We Filipinos are very social people like Pong. We love doing things together! Our social calendar never runs out of things to do – Valentine’s, vacations, birthdays, family reunions, and weekly get-togethers. Because of this, we also never run out of things to spend money on.
Can you not join the summer vacation in order to save and invest? Ping did!
If Ping can do it, so can you!
Ever since Ping started investing, he has lived a totally different lifestyle from Pong.
To adjust to investing lifestyle, Ping brought packed lunch to the office instead of eating out.
While Pong was having fun at the beach during summer, Ping stayed at home and continued his financial education by reading books and articles regarding personal finance and investments.
Whenever the latest Apple gadget came out, Ping did not replace his old phone just to be “in” and buy something that depreciates in value.
We all know how this story ended – all of Ping’s sacrifices paid off. Take a look at Ping’s retirement fund.
Ping’s retirement fund is thrice the amount of Pong’s!
We are not saying that spending on “fun” things is bad and we should deprive ourselves just to save and invest. We just like to remind everyone to keep things in moderation, because unless we make a deliberate decision to invest, we will never get started.
Question: What is that one thing that you always had the difficulty to say no to?
Share us your thoughts!