Top Four Approaches To Achieving Early Retirement In The Philippines
EARLY RETIREMENT – Here are the top four (4) methods for achieving early retirement in the Philippines.
Many people often contemplate the possibility of retiring early in the Philippines as they daydream about their future. But the question remains: How can you transform this dream into reality?
For most individuals, their largest financial obligations typically revolve around rent and food expenses. Therefore, if you are considering early retirement in the Philippines, these two areas should be your primary focus. For some, rent and food costs can consume as much as 60-70% of their income. Reducing these expenses can bring you 60 to 70% closer to achieving financial retirement.
Here are some strategies on how to retire early in the Philippines:
1.Build Your Real Estate Portfolio
As mentioned earlier, housing and food costs are significant expenses. One effective way to retire early is by building a real estate portfolio. There are two key advantages to this approach. Firstly, owning your real estate outright eliminates the need for monthly mortgage payments, resulting in substantial savings. Secondly, a real estate portfolio can generate long-term passive income, which is essential for early retirement. Real estate also provides the benefit of financial leverage and typically holds its value, especially in a growing economy.
2. Focus On Building Passive Income
Another critical aspect of early retirement in the Philippines is the creation of passive income streams. Passive income allows you to earn money without active involvement, whether it’s daily, weekly, or monthly. Some passive income sources are entirely passive, such as investments in the stock market, while others, like day trading, require some engagement. It’s worth noting that earning passive income in a highly developed country may yield more substantial financial rewards than in a developing country. Many Filipinos have successfully retired early by earning overseas income that exceeds their expenses in the Philippines. Owning income-generating assets is the key to this approach.
3. Start A Passive Business
In addition to building passive income, consider starting a passive business. Unlike traditional businesses, passive businesses are designed to run smoothly without your direct involvement. As your business grows, you can hire the right people to manage it, allowing you to step closer to retirement. Building systems and processes is essential for a successful passive business.
4. The 4% Rule
The 4% Rule, also known as the safe withdrawal rate, has gained popularity online in recent years. To apply this rule, calculate your yearly expenses and multiply them by 25 to determine your financial target. With this target, you can safely withdraw 4% annually for the rest of your life, assuming your investments generate sufficient returns. While the original study focused on the US, similar principles can be applied in the Philippines. However, it’s essential to consider the fluctuations in the economy and the ongoing debate surrounding the viability of the 4% rule.
In conclusion, achieving early retirement in the Philippines can be a complex endeavor influenced by various factors. Nonetheless, by focusing on reducing significant expenses like rent and food costs, as well as implementing strategies like building a real estate portfolio, creating passive income streams, and starting a passive business, you can move closer to making your retirement dreams a reality.
