Are You Ready to Ride the TRAIN?

President Duterte enacted the TRAIN bill into law last December 2017.

This means that the take-home pay of employees will increase.

This article will focus on how much your income will increase (as an employee) and some tips on how to use it wisely.

The Ultimate Foundation of Wealth

The ultimate foundation of wealth is at the ability to generate profit.

As an employee, your monthly profit is what you keep after deducting all your expenses from your income.


With the decrease of income tax, your disposable income increases and it’s up to you whether you SAVE or SPEND more.

Your Net Income for 2018

So how much should you be receiving net of tax?

Below is a table comparing your net income before and after the TRAIN law:

Should I Spend More or Start Saving?

The answer is it depends on you.

I believe that the pursuit of wealth and happiness is one and the same.

If you are not happy, what is the point of having all the money?

If you don’t have enough money, it is also very hard to be happy.

CC Tip 1: Time to Check the Budget

Before the TRAIN law, do you already have a budget?

If yes, then you already know what to do.

If no, you should start with this first.

Why do you need to start a budget?

Because if you don’t have one, even if you are earning millions per day, your income will be never enough.

This is the link to my article about creating a budget.

The basic way of doing it is by using the 10-20-70 Rule:
• 10% goes to Giving Fund
• 20% goes to Savings and Investment Fund
• 70% goes to living expenses

CC Tip 2: Pay your Debts Fast!

The bible says that the borrower is always a slave to the lender.

Don’t increase your lifestyle yet.

Your previous net income can support your daily needs.

Use the extra cash to pay your debt. And pay it FAST!

Don’t invest first. Pay the debt and it is easier to invest later.

When your done paying your debts, that’s the time you enjoy the money and start saving.

This is the link to my article about breaking the shackles of debt.

CC Tip 3: Create an Emergency Fund

Start building an emergency fund.

An emergency fund is worth 3-6 months of your monthly expenses.

This should be enough for you to survive and look for a job for the next 3-6 months in case you lose one.

This is also where you get your funds for minor medical emergencies (major medical bills should be covered by HMO and insurance), car and house repairs, or other family emergencies.

Once you withdraw an amount from this fund, make sure to replace it.

This is the link to my article on how to set-up an emergency fund.

CC Tip 4: Buy Insurance

If someone is dependent on you (such as a spouse, children, or parents), you definitely need to have one.

This makes sure that your loved ones can continue living with dignity when your income stops.

If you are single, you should have a disability and critical illness insurance.

This will make sure that you can focus on recovering when a disability or critical illness strikes instead of thinking on where to get the money.

Most people who are sick or recovering from an accident lose the will to live due to the financial concerns they will leave to their family.

Here are links on why you should get covered:

CC Tip 5: Start Investing

Your bank account is not a savings account.

Why? It’s because of inflation.

How much does your bank gives you? Less than 1% in interest.

How much is inflation? Let’s say 3-4%.

Inflation is the increase of basic goods and services. Meaning, if your bank is giving you less than inflation, you money in your savings account is losing its value.

A savings account is for your emergency and revolving fund. Anything in excess should be invested.

The goal is to earn more than inflation in order to preserve your money’s worth.

But you should also make your money grow and make it work for you.

So you can do more things such as do what you truly love, spend time with your loved ones, and help people.

Here are links that can discuss more about investing and financial goals:

CC Tip 6: Start a Play Fund (Travel, Shopping, or Party Fund)

You deserve to enjoy life, travel the world, and experience luxury.

But you do this by saving for it and NOT through debt.

If you have read my article about budgeting, you should have already known what a play fund is: 3 Steps on How to Build your Play Fund.

So should I Spend or Save more?

The decision is yours.

There is nothing wrong in spending money and enjoying it.

Just spend it wisely and don’t drown in debt.

And before you go to a spending spree, don’t forget to save a portion of your income first.

Because again: the ultimate foundation of wealth is the ability to generate profit.

Your Millennial Wealth Planner,

Harold Q. Gardon, CWP, CEPP

How do you find the article? Do you have any questions? Please feel free to message me if you want me to discuss a particular topic or if you are seeking financial advice.

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