Life is a stage what's your curtain Part II

The Show (35-55)

The curtain's been raised. The audience, the world, your family now looks up to you. It's your time to shine. You have a stable, good paying job. You like what you're doing. You have most, if not all the material things you dreamed of having earlier.

This is the stage in your life where you are at the peak of your career. This person may or may not be married/have children at this point in life. At any rate, it is important to note that the highest absolute earning is happening at this stage.

However, living a better life at this stage means that you did well financially (i.e. saving) when you were still the Curtain Raiser.

Let's assume that you were able to save Php 1,500 every month (that's just Php 50.00 per day for crying out loud) since you started working at age 22. Let's posit a hypothesis. This hypothesis states that we are able to begin the habit of saving at age 25. Let's further that by saying that you are now saving Php 1,500 every month starting from that age up until you reach 35. That means an annual savings of Php 18,000 (I'm compounding it annually instead of monthly for simplicity's sake) for the next 10 years.

We were able to establish the computation of future value earlier. So the future value of Php 18,000 for the next 10 years of your life, invested on an instrument that yields you approximately 10% p.a., nets you -

Php 286,873.64

Not much huh? But that's about enough as down payment for the following:

Car
Modest Condo (assuming a 10% downpayment for a condo that's valued at Php 2.5M)

This is what we said earlier, that your life as a curtain raiser is crucial to your financial stability. Starbucks every weekend or after work? Maybe you should cut down on that. Eating at fancy restaurants? Try eating at less expensive restaurants. By the way, do you know that the biggest reason why your meal is expensive is because you ordered drinks? Maybe you could water (no pun intended) down your meal by getting service water instead.

I'm not advocating some kind of monk lifestyle. All I'm saying is that in certain aspects of our life, we do need to simplify. We can indulge once in a while. It just shouldn't be done a lot of times. The age old adage of "Live within your means" still rings true today.

This life stage is called "The Show" because you ARE (supposedly) running the show. In your career, you should be at a supervisory level already. In your personal life, you are out of the shadow of your parents, and should be living on your own. In your married life, you are the breadwinner and you carry a lot of (financial) responsibilities.

In any of these instances, your non-discretionary (i.e. fixed) expenses almost doubles from when you were a Curtain Raiser. It is also the stage of what I'd call, The Age of Irony.

As the person begins to become more mature about his outlook in life. He realizes the importance of having personal protection. He also realizes the mistakes he's done while he was younger. Mostly, these mistakes are financial in nature. At a time when your earnings are higher, it goes to payments made for rent, utilities, amortization, children's tuition, etc. Do you think this person will still have enough money for an insurance policy, a child's education plan, etc?

The early planner gets the rewards earlier. That's why I call it the Age of Irony. You earn more, but you can't afford to get some basic investment (yes personally I believe Insurance is an investment instrument) because you just have too many fixed expenses. And that idea of moving to a bigger house or dwelling? You just might have a difficult time because of all these expenses.

This is the time in your life when you try to start looking back and see if you've achieved all the goals you've set out to do. You review your past actions and decisions so that you can look beyond, confident and full of optimism.

This is the half time of your age. The first half should be spent on bulking up your assets (as Curtain Raiser). And unlike a sports game, if you haven't built up a large enough lead in the first half, even if you play catch up in the later stages of your life, you'll end up not having enough.