Category Archives: Secrets of the Rich

Don’t Put Your Retirement Fund in the Bank

A peso goes a long way now.
You can carry it around for days without finding a thing it will buy.
— Anonymous

Author: Bo Sanchez
When I was a kid, a bus ride cost 25 centavos.
Today, the same bus ride costs seven pesos.
What happened? In one word, inflation.
Overtime, your money loses its purchasing power.
How much? It loses around seven percent a year.

Do you now see how futile it is to put your savings in the bank? As of this writing, a savings account in a major bank promises you one percent interest, while a time deposit promises five percent interest.

These aren’t enough to fight inflation. At the end of the year, your money would still have decreased in purchasing power.

What should you do?
Here’s the key: Differentiate your emergency fund from your retirement fund. Put your emergency fund—around three to six months of your salary—in the bank. That’s for quick withdrawals.

But not your retirement fund.
When it comes to money, there are really only three kinds of people in this world: (1) Spender, (2) Saver, and (3) Investor. And sadly, only one of these three will win in the money game. Which one are you?

Let me introduce them to you by way of a story.
James, Jim and John were salesmen. The three of them landed a huge deal. And their company gave each of them a P100,000 commission check. They were totally blown away by their luck, but they used their money in very different ways. Because James was a Spender, Jim was a Saver, and John was an Investor.

1. Spender
James was the Spender.

Upon receiving his check, James encashed it, and went straight to a fancy restaurant and invited all his friends to celebrate his good fortune. Later that day, he bought himself a new hi-tech cell phone, nifty clothes and a brand new pair of designer shoes. The next day, he took a holiday trip to Boracay.
In three days, James had nothing left from the P100,000 commission.
This is the story of his life. After many years of working, he has no savings to show, but he has many credit card debts.
We see Spenders everywhere, and I hope you’re not one of them.

2. Saver
Jim was the Saver.

Jim walked straight to the bank with his P100,000 check. He approached the friendly bank teller with a smile and said, “Miss, I don’t plan to touch my money for a long time. It’s P100,000. How much interest will you give me?” She nodded and said, “Let’s put it at a time deposit account. We’ll give you five percent interest a year. That’s the highest we can give you, sir.” “Okay!” he agreed, signed the deposit slip, and walked out happy. Thirty-six years later, he was 65 years old. He retired at age 60, got his retirement package, spent it in five years, and was now totally broke. That was when he remembered his time deposit.
He visited his bank.
He saw the same friendly teller “Hi, I deposited P100,000 some 36 years ago,” he said, “and I’m finally withdrawing it. How much is it now?”
“Just a minute, sir,” she looked at her computer, and after a few minutes looked up and said, “Sir, you now have P400,000.” The retired salesman blinked hard. “After 36 years, it’s only grown to P400,000? Perhaps you’ve made a mistake, miss.” “I’m no longer a miss, sir. Lola na ako.1 And no, there’s no mistake…” I pity Savers. Savers are good, disciplined, honest people. But Savers still don’t win in the money game.

3. Investor
John was the Investor.

He doesn’t go straight to the bank. He goes to where the bank puts their money. In other words, he bypasses the bank. Out of the three salesmen, only John has raised his financial I.Q. He learned that the bank puts a part of their money in investment vehicles like mutual funds, bond funds, equity funds and stocks. So he thought, if it’s good for them, why not for me? So John takes a few days researching for the best mutual fund investments in the country and visits one of them. He approaches the lady behind the desk and says, “I’ve never done this before but I want to invest in mutual funds. How much interest will you give me?” The lady shook her head. “Unlike banks, we don’t guarantee our interest rates. They depend on the ups and downs of the market.” “Isn’t that scary?” John raised his eyebrow. “It is—if you plan to invest for only a short period of time. But if you plan to invest long term and ‘forget’ about it, it won’t be scary. Like for the past years, we’ve given our investors an average of nine percent to 12 percent growth.”
“Yes, I do plan to invest for the long term,” he says, “but do I have to invest millions to join your mutual fund? I don’t have millions.”

She laughed. “Sir, the minimum is P5,000 per investment.” His eyes bulged. “What? That small? Then anyone can invest!” “Mutual funds are the great equalizer. Some call it the secret of the rich which is now available to the poor. Banks don’t treat people equally, but we do. Someone who puts P5 million in the bank gets a higher interest than someone who puts P5,000. But in mutual funds, it doesn’t matter how much you put in. Five million or P5,000, you earn the same interest.” “This is incredible,” he says. “Why don’t people know about this?” She said, “In the Philippines, less than one percent of Filipinos invest in mutual funds, while 99 percent invest in banks. But in America today, 70 percent already invest in mutual funds, while 30 percent invest in banks only. The Philippines is 30 years behind America, but we’re getting there…” So John invested his P100,000 and left happy.

Thirty-six years later, at the age of 65, John wanted his investment back. So he walked into the same mutual fund company and saw the same lady behind her desk. He asked her, “How did my investment fare the past 36 years?” The lady said, “To be honest, there were bad years and good years. There were years your money earned only seven percent but there were great years when your money earned 20 percent and more.

In the past 36 years, you averaged 12 percent a year.” “Is that good?” he asked. “According to my records,” she smiled, “your original P100,000 has now grown to P6.4 million. Now you tell me if that is good,” she winked. “That’s very good!” John grinned from ear to ear. Friends, now you know why banks have nice, tall, expensive buildings. They get your P100,000 and invest it in an investment vehicle where they earn P6.4 million, and then return to you the P400,000. How much did they earn? Six million. So next time your bank offers you a cup of coffee for depositing P100,000, realize that that cup cost you P6 million. Here’s my big question: At least for your retirement fund, why not bypass the banks? Why don’t you invest your money where banks invest their money? You can. Anyone can.

Here’s the table of earnings vis-à-vis interest rates.


For specific details of investment vehicles like bond funds, mutual funds, equity funds and stocks, I want you to do your own research. Check out for a listing of mutual funds in the Philippines. If you get stumped and don’t know where to go, you can email me at for more specific information and guidance.

Don’t put your retirement fund in the bank.

To your success,

Eric Espejo






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Read, Listen and Practice

We are not taught financial literacy in school. It takes a lot of work and time to change your thinking and to become financially literate.
— Robert Kiyosaki

How do you gain financial literacy?
Author: Bo Sanchez

1. Read Books and Attend Seminars on Money. I strongly recommend Think Rich, Pinoy! and Grow Rich, Pinoy! both written by my financial mentor, Larry Gamboa. I recommend Rich Dad, Poor Dad by Robert Kiyosaki, Millionaire Next Door by Thomas Stanley, Multiple Income Streams by Robert Allen, and the other books I placed in my references at the back of this book. Larry Gamboa also gives a Think Rich Pinoy Seminar, and I give seminars on How to Become Truly Rich (see page 205).

2. Read the Business Section of the Newspaper. I know. I used to skim through the headlines and go straight to the comics and movie section. I never opened the business section. Big mistake. Starting today, read every article in that section. Yep, even if you don’t understand 90 percent of what you’re reading. Underline words you don’t know—cashflow, portfolio, dividends, bull market, mortgage—and ask!

3. Volunteer in a Small Business. This may be my most important suggestion. There’s nothing like hands-on training! Instead of watching TV or playing with videogames during weekends, work at an export company, a retail store, a hardware, a trading firm. Tell them they don’t have to pay you! Just help around. But by working there, you’ll learn a ton of stuff you won’t learn elsewhere.

4. Get Financial Mentors. I mentioned this already but this is so important, I’ll say it again here. Look for people who are successful financially. Call them up. Ask them if you could treat them out for lunch. (Take them to a park and bring two sandwiches in a brown bag.) At that lunch, ask how they became rich. Ask their secrets to success. Finally, ask them if they can teach you some more by taking you into their businesses and learning the ropes.

5. Start Your Small Business on the Side. I recommend that you start a small business. Sell sandwiches, sell lemonade, sell cell phone cards, sell anything! Or organize a concert, invest in a candy machine, rent out stuff… And don’t worry if you fail the first time. And the second time. And the third time. Because what’s important now is what you learn—not what you earn. Just keep on trying!

The greatest income reducer in your life right now may be
your TV set.

To your success,

Eric Espejo






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Build Your Retirement Fund Now

I have enough money to last me the rest of my life—
unless I buy something.
— Jackie Mason

Five million pesos. That’s a lot of moolah.

That was how much Manny was getting for his retirement—and he salivated every time he thought about it. He worked in the same company for 34 years and was looking forward to planting vegetables in his little garden and having quiet dates with his wife while sipping brewed coffee and doughnuts together—using their senior citizen cards for their 20 percent discount.

Of course, his P1 million debt to the company will get paid first.

Many years ago, he borrowed money to build his house and buy his car.

Manny’s heart raced with delight when he saw the P4 million deposited in his bank account. Wow, he could now do all the things he wanted to do.

First things first. He’ll restore his 17-year-old house. For the longest time, Manny wanted to fix the leaking roof, retile the bathrooms and replace the kitchen cabinets. He also added a veranda at the back (with a wooden swing set) and an extra recreation room. Cost: P1 million.

Next, buy his dream car. Cost: P1 million.

After one year, Manny had P2 million left in his bank account.

At first, he was spending P50,000 a month. Later on, as he saw his money shrinking, he began to panic. He downgraded his lifestyle and spent P30,000 a month, and later still, P20,000 a month.

Five years later, at the age of 65, he had nothing in the bank. He was forced to sell his house and move to a rented apartment. That money lasted for another five years.

When he reached 70, Manny had to totally depend on his children.

He hated the idea. But he had no choice. His children, though saddled with their own problems, had to fork out P15,000 a month for their parents.

Manny would live like this for the next 14 years, until he died at age 84.

In the previous chapter, I said that there were two problems in life: (1) dying too young, and (2) living too long. Manny had the problem of living too long.

For the first problem of dying too young, the solution is having protection or insurance. For the second problem of living too long, the solution is to build your own retirement fund now.

Friends, Manny is not one person. He’s a composite character. I created from the many retired people I’ve met through the years. Believe me, it’s a very painful sight to see, watching someone go down to poverty and dependence.

Simply because they didn’t prepare for their retirement.

According to many surveys on people above the age of 65 (rounded off figures)
1. Around 40 percent have to keep on working to survive.
I don’t mind working till I’m 90 years old—because I love working. But to have to keep on working at 70, or 80, or 90 so that I have something to eat? What if my health can’t keep up with my job? What will happen to me? But that’s the life of millions of old people.

2. Around 30 percent depend on their relatives to survive.

I think every parent I’ve talked to doesn’t want to be a burden to their children. And we want the freedom to have our own money—so that we can do what we want to do in our old age. Can you imagine having to call up your kids each month to ask for money? But that’s what millions of aging parents have to do to
live each day.

3. Around 20 percent depend only on their SSS or GSIS pension fund to survive.

My father worked for his company for 40 years. He retired as assistant vice president, so his SSS contributions were the maximum you could contribute. But to this day, he receives him each month. Thankfully, my father saved enough and doesn’t depend on his pension to survive.

4. Eight percent depend on charitable institutions to survive.
That’s why I built Anawim, our home for the abandoned elderly. You’d be surprised at the kind of people who end up in our care. We have retired laundry women, retired domestic helpers and retired farmers who grew old and penniless. That’s not surprising. But we also have retired teachers, retired school principals, retired book authors, retired mechanics, a retired TV director, even a retired dentist. After earning probably millions throughout their life, they found themselves without a home and starving to death.

5. Two percent are financially independent.
Friends, I want you to be totally committed to be part of this two percent when you reach 65. And I know of only one way to be part of this small group: Build your retirement fund now. I don’t care if you’re 30 years old, 25 years old, or even 18 years old. You’ve got to start building your retirement fund now. Not tomorrow, not next week, not next year, but now.

Build your retirement fund now.
Truly Rich Principle:
You’ve got to start building your retirement fund now.
Not tomorrow, not next week, not next year, but now.

Author: Bo Sanchez


Automatically Save 20 Percent of Your Monthly Income

A part of all you earn is yours to keep, and if you cannot save money,
the seeds of greatness are not in you. — W. Clement Stone

Do you know the common habit of a permanently poor person?

After receiving his salary, he pays his bills right away. Wrong move.

Here’s what rich people (and potentially-rich people) do: After receiving their salary, they save first—and then pay their bills second.

I recommend that you give your first 10 percent to God (more on this later), give your next 20 percent for yourself as your retirement fund, and live on 70 percent of your income.

I know what you’re thinking: “Bo, are you nuts? How can I live on 70 percent? I now live on 110 percent of my income!”

Here’s my answer: If there’s a will, there’s a way. If you really want something bad enough, nothing is impossible. Do you want to be part of that two percent of people above 65 who are financially independent? Then do it. (If you want more ideas on how to do this, you can read my two previous books, Simplify and Live the Good Life.

Create Abundance. Go to your nearest bookstore or log on to and click on books and magazines.)

Besides, in the later chapters, I’ll teach you how to increase your income, so living on 70 percent of your income will be easy.

But right now, I want you to sit down and write down how much 20 percent of your income is. Make it automatic. Write down postdated checks to yourself if you have to. Month after month, make it happen.

Every time you receive your salary, get 20 percent and put it into your retirement fund.

My idea of saving 20 percent of your monthly income comes from the Bible. When Joseph was overseer of Egypt, he prepared for famine by saving a “fifth of the produce.” So when famine came, Egypt was the only country that had food—and the peoples of other nations came to them to buy grain.

Let Pharaoh proceed to appoint overseers over the land, and take the fifth part of the produce of the land of Egypt during the seven plenteous years. And let them gather all the food of these good years that are coming, and lay up grain under the authority of Pharaoh for food in the cities, and let them keep it. That food shall be a reserve for the land against the seven years of famine which are to befall the land of Egypt, so that the land may not perish through the famine.
— Genesis 41:34-36

Famine will always happen.

How do you protect yourself from famine—which would be the future decades of your life when you’re no longer earning?

By saving 20 percent of your income now while you are earning.

In the next chapter, I’ll explain why doing this early will create a huge retirement fund that will bless your life.

Automatically save 20 percent of your monthly income.

Famine will always come. So prepare for it.

Author: Bo Sanchez


Create Passive Income

Did you know that there are 2 types of income in this world?

The first type of income is the Active Income also known as Linear Income. This type of income is common to the 97% of the people in our economy. These are employees working in companies and usually they have boss. The amount of income in this is very limited. Usually you trade your time to earn money and if you want to earn more you need to work more. When you stop WORKING your INCOME will also stop.

The second type of income which I really like is Passive Income. The reason why I really like this type is you can earn money while you are sleeping. Common passive income usually come from rental / real estate income, copyright, business, membership fees, investments, and network marketing opportunities. “Network marketing is a great profession today because you teach people how they can achieve their dreams in life and experience the financial independence they wanted”. You can also leverage the internet by doing Internet Marketing Business and earn exponential income. All of these you can achieve if you have the proper knowledge and skills.

In this type of income you are also trading time to earn money but thru the efforts of other people and this is the common secret of the wealthy people in the Philippines like Henry Sy, Lucio Tan, Manny Villa and many more. This type of income is also known as Leveraging or Residual Income or Lifetime Income.

As much as possible learn to have Passive Income if you want Financial Freedom.