How to earn big money from small discounts

Posted at 02/15/14 1:12 PM

MANILA, Philippines – Discounts given in wet markets and gas stations are often taken for granted because of the small amounts, but a financial advisor said these small discounts amount to a lot of money over time.

ANC’s resident financial advisor Salve Duplito said if invested correctly, these discounts as well as credit card cash back benefits, may amount to more than P200,000 in 10 years.

A monthly saving of P500 from cash back benefits, for example, amounts to annual savings of P6,000.

With an investment return of 8 percent per year, the P500 monthly saving grows to P70,800 after 10 years.

But Duplito warned that you have to be consistent when setting a goal to save up.

“Consistency is the mother of all budgets and investment portfolios. If you keep thinking that you will start investing when you finally get this huge sum of money, chances are, you’ll never get to that point,” she said on ANC’s “On The Money.”

Weekly discounts at wet markets can also reach the P100,000 mark in 10 years if invested properly.

“If you know how to use them wisely, you can save quite a lot of money from these discounts,” said Duplito.

She said that for P200 weekly savings at the wet market, the annual savings amount to P10,400.

If invested with a return of 8 percent, that amount becomes P122,720 in 10 years.

Even a P50 gift check given in gas stations for every P2,000 worth of gas can be saved and invested, Duplito said.

If you gas up every 10 days worth P2,000, the P50 gift check adds up to P1,825 per year.

For 10 years with an 8 percent investment return, the amount grows to P21,692.

Earning big money from small discounts requires a tremendous amount of patience and consistency, but Duplito said it is doable by practicing the system of recording the small discounts and monetizing them by investing the corresponding amount.

“If being smart about money is already a lifestyle and you consistently set aside small amounts of money, you’ll be surprised one day, just how wealthy you are already,” said Duplito.