Updated: February 25, 2022
Imagine that you have a magical money jar.
It’s magical because each day, money appears inside it.
More specifically, P1,000 worth of coins appear inside the money jar every 24 hours.
Yes, that’s P1,000 passive income every single day.
Wouldn’t it be great to have this kind of money jar at home?
I’m sure it is!
Now pause for a moment and ask yourself what you would do if you had this magical money jar.
Are you going to buy yourself a new smartphone? New clothes? A new bag? New shoes?
Or perhaps, you’ll use the money to travel? To eat in expensive restaurants?
Maybe, you’ve considered quitting your job, and just living off that P1,000 a day income?
I’m sure you’ve said, “Yes” to one or two of these suggestions and there’s nothing wrong with saying so. After all, it is possible given that you’re getting P30,000 a month for free.
But now imagine this…
Can you wait for 3 years and leave the money there, so you can have P1,095,000 later?
Can you wait for 10 years and not touch the money until you have P3,650,000?
What about not spending a single centavo in it for 20 years, so you can have P7,300,000?
Most of you would say “No” because it’s hard to imagine waiting that long to reach those numbers, and the temptation to spend the money would grow stronger every day.
So how do you prevent yourself from spending the money inside the magical jar for that long?
The answer is to put a specific goal into the amount.
The reason why most of you said “Yes” in the first part is that I suggested specific things you can do with the money in the short term – buy a new smartphone, a new bag, go for a travel vacation, etc.
But in the second part, you probably said “No” because I only gave you numbers – the total money you’ll get after years of waiting.
So let me rephrase the latter questions and see if your answers would change…
Can you wait for 3 years and leave the money there, so you can buy a new car?
Can you wait for 10 years and not touch the money until you have enough to send all your children to college?
What about not spending a single centavo in it for 20 years, so you can retire in your beautiful dream house?
Saying “Yes” to these questions is easier because you now have concrete goals attached to them.
A lot of people don’t have the patience to stay invested for many years, because every time they look at the value of their investment, all they see is the number…
“Wow, my stock market portfolio has grown 300% already and is now worth P1 million!”
And then they begin to imagine all the things they could buy now if they sell their stock market shares.
But if they had a specific goal, the commitment becomes stronger.
“My stock market portfolio is now worth P1 million. I need P3 million to buy my dream house, so I won’t sell my shares yet. Perhaps, I could add more to it, so it’ll grow faster.”
A person’s mindset changes when they’re investing towards a specific goal.
And that’s the secret to becoming a successful long-term investor, the one step you need to take to ensure that you’ll stay invested for many years.
Define your objective and attach it to the investment.
What to do next: Click here to subscribe to our FREE newsletter.
———
Photo credit: ignatius decky
It’s indeed just a ONE-STEP guide to longterm investment. But I personally think that it is just pretty easy to say or even imagine but quite hard to do especially in these days when we are surrounded with many “temptations”. Having a specific goal is great but being focused is also important.
Thank you for this, it’s another motivating and really timely post for me. 🙂
The post says that being focus and discipline pays in the future. If only there were financial education subjects on my school years maybe i could be better in terms of financial decisions since then. Anyway thanks for the post. I am always reminded of the goals that I have set in my life and made me revisit my long term plans.
Dear Fitz,
Your simple manner of explaining this topic shows your brilliancy.
Thank you for your generosity.
verywell said Sir Fitz,good job!
thank you and GOD BLESS.
Hi Fitz,
Thanks for this. just what I needed before we get our 14th month pay… should focus and reframe my perspective otherwise, it’ll be all gone too soon. haha
Also, just want to share this link I saw on FB.. really interesting and good advise too.
http://mirror.e27.co/li-ka-shing-teaches-buy-car-house-5-years/
A good reminder! Thank you & Good job fitz.
just always remember that, in the stock market, you have to invest on the right companies that make profits
A brilliant tip!!! Thanks a lot.
This important..message should shared with high school students to understand how to earn money in future
Thanks sir Fitz. Discipline and focusing on your long term goals is the key to achieving as many dreams as you want.
hi sir..what about if I wanted to achieve a goal of buying a dream house,can i rely on simply investing in mutual fund for a long period of time?am i guaranteed of a positive result?kindly give idea on the “guarantees of investing in mutual funds” ..salamat
@justbemitch
There are no guarantees in investing, that’s why you need to regularly monitor your investments and check their performance so you can take proper steps to ensure that you will achieve your goal.
For big purchases such as a house, most people will invest to be able to afford the downpayment, and then work on increasing their monthly income so they can afford to pay the housing loan.
[…] Define and save for goal. Reminding yourself what you’re saving your money for in the future will help you gain the […]