This article outlines a simple, effective system for anyone to begin their journey toward financial freedom.
Based on the book, "My Maid Invests in the Stock Market...And Why You Should, Too!" by Bo Sanchez, this article outlines a simple, effective system for anyone to begin their journey toward financial freedom.
A Vision for Wealth for All
Bo Sanchez, a bestselling author and spiritual leader, makes the bold claim that anyone can become a millionaire, even a domestic helper. To prove this, he recounts how he taught his own house helpers—who earn modest salaries and support their families—a simple, repeatable system for investing in the stock market. The core idea is that stock market investment doesn't require complex financial knowledge; it just requires a disciplined, long-term approach.
The Five-Envelope System
The book introduces the "Five-Envelope System" as a foundational step. Upon receiving their salary, individuals are advised to divide their money into five distinct funds:
- Tithe Fund: A portion dedicated to giving back, which also helps foster a mindset of abundance.
- Expense Fund: Money for daily and monthly personal needs.
- Support Fund: A fixed amount for supporting family members back home.
- Emergency Fund: A fund to handle unexpected family emergencies, preventing the use of savings.
- Retirement Fund: The most crucial envelope, where a fixed amount is saved and invested each month with the goal of retiring a millionaire.
For a person earning ₱7,000 a month, the system suggests a ₱2,000 monthly contribution to the Retirement Fund.
Investing vs. Trading: The Long-Term Approach
A key distinction made in the book is between "investing" and "trading." While trading involves frequent buying and selling of stocks, which can be risky and often leads to losses, investing is a long-term strategy. The author advocates for a "Money Cost Averaging" approach, which is a fancy term for consistently buying stocks of great, solid companies with a fixed amount of money each month, regardless of market fluctuations. This disciplined, long-term strategy, popularized by investors like Warren Buffet, ensures that you buy more shares when prices are low and fewer when they are high.
The vision is to hold onto these shares for 10, 20, or even more years. This approach removes the fear and panic associated with market downturns and allows the investor to see them as opportunities to acquire more shares at a discount.
Getting Started: Opening an Online Account
To make investing accessible to everyone, the book recommends using an online brokerage. The author specifically recommends Citiseconline (now known as COL Financial) for its user-friendly platform, including a program called the Easy Investment Program (EIP). This program allows small investors to start with a minimum of ₱5,000 and suggests a list of blue-chip companies to invest in for the long haul. The process is simplified into four steps: filling out an application, submitting the required documents, depositing money into the account, and then buying shares online from home.
By following this simple system, the book argues that anyone can take charge of their financial future and build a path to becoming a millionaire, proving that wealth is an achievable goal for all.
Note: This article is based on a book published in 2010. Some specific company names, prices, and programs mentioned may have changed since then. Please conduct your own research before making any investment decisions.
About the Writer
Jenny, the tech wiz behind Jenny's Online Blog, loves diving deep into the latest technology trends, uncovering hidden gems in the gaming world, and analyzing the newest movies. When she's not glued to her screen, you might find her tinkering with gadgets or obsessing over the latest sci-fi release.What do you think of this blog? Write down at the COMMENT section below.
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