A No-Nonsense Guide To Retiring Rich

Updated: March 15, 2022

Don’t waste your time trying to win the lottery, or looking for get-rich-quick schemes because the best way to become, and retire rich is to plan and work for it. In fact, this is the safest and the most practical way to get millions in your bank account.

Unfortunately, many do not know how to plan their finances properly. So they end up working their whole lives and eventually retire with very little money to show for during their golden years.

But the good news is… we will change all that today.

Simply follow these steps and I guarantee, you’ll cruise through your retirement years as a millionaire.

Step 1: Pay yourself first.

The rule is simple. When you receive your salary, immediately take away a portion of it as your savings, then disburse what’s left to pay for your bills and daily expenses.

Doing this takes away the emotional stress of scrimping on your spending just to save money. It is also the simplest way to budget.

Begin by paying yourself ten percent of your income, then slowly work your way up to 30%. With enough discipline and perseverance, you’ll see that it isn’t that hard to live comfortably with just 1/3 of your salary.


Step 2: Build your emergency fund.

Multiply your monthly salary by six and you’ll get the minimum required emergency fund that you should have.

Having an exact amount as your target savings will motivate you to keep that habit of paying yourself first. Don’t stop until you safely have that amount in a simple savings account.

Remember that this is an emergency fund, which means you can only use it for important medical expenses, necessary home repairs, or similar circumstances. And when you use it, don’t forget to replenish it as soon as you recover financially.

Lastly, creating additional sources of income can be a big help. Building a sideline business or simply doing freelance work can greatly help in completing your emergency fund faster.

Step 3: Manage your debts.

If you have existing credit card debts and personal loans, one practical way to manage them is to keep on saving and building that emergency fund while paying just a little over the minimum every month on the bills.

Doing this will keep those collection agencies off your back as you create a buffer of cash so you won’t need to borrow more money when a financial emergency occurs.

More importantly, cut up those credit cards and make sure you don’t incur any more debts during this time.

Now comes the challenging part – find ways to lower your current expenses, and look for extra income – then use all the surplus cash you’ll create to pay for the rest of your debts.

Of course, once you reach your emergency fund requirement (which is again, at least 6 months’ worth of your income), then it’s time to funnel ALL that money you’re paying yourself from Step 1 into those debts.

It will take time, but I guarantee, you’ll eventually get out of debt using this method.

Step 4: Protect your income.

Pat yourself on the back when you reach this step because you’re already done with the hard part of financial planning and the rest will be a breeze.

At this point, your priority is to protect your best source of income – yourself.

Get health insurance, if you don’t have one yet, but more importantly, live a healthy lifestyle and maintain a positive outlook on life.

If you’re the breadwinner, get term life insurance. This is the cheapest way to make sure your family won’t suffer financially in case you kick the bucket sooner than you expect.

How much coverage should you get? That totally depends on your family’s situation but to give you a starting figure – multiply your monthly salary by sixty. Your death benefit will give your dependents five years to get their act together.

Step 5: Invest for retirement.

Saving habit – check. Emergency fund – check. No bad debts – check. Health and term life insurance – check. When all these bases are covered, then it’s time for you to invest.

Contrary to popular belief, investing is not just about making your money work for you. It is also about “saving” for a financial objective.

Remember the money you’re paying yourself from Step 1? That portion now becomes your “investment fund” which you can use to “save” for big-ticket items such as a house or a car, and more importantly, your retirement.

Let’s say you’re earning P30,000 per month. If you’re paying yourself 30% of your income, then you have P9,000 every month as an investment fund.

If you want to buy a car with a P1M value, then you can’t just save that P9,000 in a bank account and wait for it to grow into a million. That will take too long and inflation will make things more difficult.

So what do you do? You invest that P9,000 in a product that will allow you to reach P1M in an acceptable period of time – let’s say five years.


With that financial objective in mind, you can now shop around for an investment product that will give you just that. Off the top of my head, a trust or mutual fund that invests in the stock market is a good candidate.

Equity investments can earn between 10% to 20% every year, more if the market is really doing good. At that rate, your P9,000 regular monthly investment can grow to a cool million in a little over 5 years – meeting your objective and helping you afford that new car, which by the way, you’ll pay in cash – how cool is that?

If you can’t wait 5 years, then simply invest until you reach at least 20% value of the car, then apply for an auto loan. The money you saved will take care of the downpayment, and then make sure your monthly amortization will not go over the 30% that you’re paying yourself.

What I’ve just given you is the most practical way to afford a big expense such as a house or a car without breaking your finances.

Of course, living in your own home or driving your dream car is just a few of the many things we want in life – and it’s important to always keep a good perspective of our priorities.

This means aside from saving up for that new car, for example, make sure that you’re also taking care of your family’s needs such as your child’s education, and more importantly, your own retirement fund.

The Ultimate Secret to Becoming Rich

Spend less than what you earn and invest the difference regularly over many years.

If you want to retire young, and retire rich – then that’s the ultimate rule you need to remember.

Finally, realize that the steps I’ve given above are not just about laying a good financial foundation for yourself and your family. It is, more than that, a practical way to develop a strong sense of mastery when it comes to money management.

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Photo credits: AAG and yoodz


  1. Hi Fritz! This article is a good read but I hope when organizing our financial matters is the subject, let us consider foremost on paying God first which is “Tithing”. Thank you! 🙂

  2. Great article as always. Thank you for teaching and inspiring a lot of people. God bless your good heart.

  3. To Abigail:

    I agree that tithing should be foremost for Catholic and Christians, BUT personal finance is important for everyone

    As a Buddhist, this is the reason why I love reading Fitz’ blog — his money lessons are secular and inclusive

    No bible quotes that can alienate people like us who have different spiritual beliefs; it’s all practical and universal

  4. Absolutely, I will forward this to Beautiful Bride to assist in patching up any holes in our plan. It is always a great idea to review, look for weak spots & go on to make a repair BEFORE an emergency strikes. This post is prophetic in nature, it was the past weekend that Beautiful Bride was lecturing her younger brother about planning for emergency financial issues and that the rest of the family MUST get their act together. Thank you Fitz for another great post.

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