Spend Below Your Means; Invest Within Your Means

Spend below your means
source: http://www.mint.com

You might be spending below your means but such is not enough to fully achieve debt-free and financially free status.

The other half that you should focus on once you have mastered your spending is knowing how much to invest. Investing is something that is not equated to having your own business or running your own online store. Investing is making your hard earn money work for you. Investments should be the source of your passive income.

If that is the case the solution then is to have lots of money and invest it? This is so easy to those big honchos and born with a silver or golden spoon but such is not impossible to us salaried and savers.

A lot of people have this mistake of investing all their cash to stock, loan, or some investment company but eventually lost a lot because the stock market is bearish for the longest time and was forced to sell at  a loss, the borrower became bankrupt and can’t pay a single penny or worst run away with your money, and the worst is investing in a scam.

That is why you should only be investing within your means. Always remember the rule of only investing free cash.

Here is what you should do with the limited cash in order to put up a considerable fund as an investment.

1. Set aside a regular free cash every payday
2. Check investment vehicles, learn the ins and outs first, 
    and list down the best
3. Time is your ally
4. Invest when  such investment is down, sell at profit
5. Set aside a big portion of your profits for re-investing.



I have been telling and advising this for the longest time. In order for small funds to accumulate you have to do two things: set aside a fixed amount and at a regular interval. Always set this aside first before spending your paycheck. Its like dividing your cash and this gets its share first.

Others term this paying yourself first. This concept means setting aside to your personal investment fund first before paying your debts and spending for your wants. This also not only applies to your paycheck but also to any free cash that passes your hands.


After sometime you might have set aside a considerable sum of money and you finally decided to invest. You heard of this investment saying it guaranties a 12% per month return and you immediately put your money in. At first they pay what they promise until the time comes that they are delayed until one day you learn in the news that the company foiled up and its owners run away with your money. 

Checking and learning about the investment is a wiser idea than just jumping into a popularized investment scam. Also there is lots of good investment out there thus you got to make your list. Having this list will help you a lot in your investment picking. Sort them out based on how safe, how much return, and how much outlay is needed.


Time works both ways. At times opportunity comes and you got to seize it; other times patience is really needed.

There are investment out there that comes once in a while. This is the very reason why you should always have a ready set aside free cash to buy such investments. On the other side there are investments that will take longer to materialize. Real property like land don’t go up in  a day or a week at most it will take years before its price appreciates. Stocks of new and promising company will take time before their prices rise, they got to prove to the public their capability to generate returns.


As always follow the simple rule of “buy low, sell high.” But lets look at this just like what Robert Kiyosaki of Rich Dad, Poor Dad said: Buy to earn.

That is why time is your ally. Be always on the look out when prices go down. There are signs when such is already happening. Also always set your target. Investing without might lead you to endless expectations that disappoint. Once your investment its target make profits don’t wait and don’t regret selling it you might not know when will such profit level can be achieve again.


This is where many falters. After making a big profit they are happy and party and end up spending what they have earned. One should re-invest on top of the original  investment profits that you make.

But it does not necessarily mean all the profits, of course you need to celebrate your victory. Of the profits re-invest about 50-70% and the 30% for your personal wants. But  would it be greater if you share your profits? Why not share a part of that 30% to those who are less fortunate? I bet you will find more joy in that rather than spending it all in your unlimited wants.

Financial Freedom Advocate About the blogger

Louis Delos Angeles is a Certified Public Accountant, blogger behind Investing in Philippines, and author of Investing in Stocks: Preparing for the future small amount at a time. Learn more about Louis and his financial freedom advocacy here.

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4 comments for “Spend Below Your Means; Invest Within Your Means

  1. September 16, 2012 at 8:56 am

    very well said louis keep it up

  2. September 17, 2012 at 3:52 am

    great info, not to say some people even go take loans just to invest which i think is over leveraging

  3. September 26, 2012 at 12:39 pm

    Congratulations on your new blog :)

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