Skip to content

Is X Still an Unknown?

December 24, 2012

Is X still an unknown?

Category: Banking & Finance
Published on Monday, 22 October 2012 19:54
Written by Edmund Lao

IN high school, so many students feared the subject Algebra. It is because they find it hard to solve for X, an unknown in the given equation. Due to their fear, they failed to grasp the basic principle in solving such an equation. Maybe even before Algebra, they already feared Math.

In the school grading system, a check means correct and an X means wrong answer. We are always programmed to believe that X is not desirable.

Unknown to many, the letter X they fear or dislike will also be the letter that will have an important role in their lives; it is the X-Curve which is the basic of financial planning.

The figure above shows the relationship between accumulating wealth and minimizing a person’s financial responsibility. The average person has little or no savings after graduating from college. As he starts his quest for financial freedom, a hindrance is his responsibility which is at the peak since he has to provide for the needs of a growing family. Examples of basic needs are food, shelter, kids’ education, medicine, etc.

As one reaches retirement age, it is ideal that as he has already finished his job as provider for the family come his golden years, he should also have built his retirement fund that will give him passive income to sustain his needs at this point in time. His responsibilities will be at a minimum since his children have all grown up and have their own X-curve to attend to. He should already have met LOI (not the former First Lady), which means Living on Interest. Some retirees are sad to be Living on SSS (LOSS) because the meager pension they receive is not enough for their survival. Have you ever heard of a senior citizen who is now a burden to his children and another one who is still a blessing? Just imagine the scenario of these two and for sure, one will see the big difference.

Let us not forget that the X-CURVE shows us two kinds of risks. Remember the word “LIFE.” In between life is a big IF. It just means that as long as we live, risk will always be present. One just has to manage risk in order to minimize its effect once it comes.

There is the risk of dying too soon while the family is still growing. One needs to be protected to cushion the impact  of this risk.  When it occurs, the family will still live comfortably as if the provider is still around. The family will surely miss him but not his income.

Living too long is also a risk specially if there is no money to fund his needs. He will become a burden to the family he once provided for.

In both scenarios, one has to be prepared. Remember that it was not raining when Noah built the ark. The Chinese saying states it very clearly, “The best time to prepare for a calamity is when there is none.”

The question is where are you now in the X-curve? The earlier one goes to the right quadrant of the curve even while young, the better for him. Retirement is not a factor of age but net worth.

I was happy to have learned this nine years ago and just recently was shared a financial tool that solves the X-curve. The solution was flexible as one can increase or decrease his protection and investment for a fixed investment amount. This instrument was designed to solve the risks discussed above without the breadwinner having to go through processes just to get the maximum benefit. The reason why I know how it works is because I already owned one. It is called the Wealth Freedom Money Accumulator Plus. This is a financial instrument designed by Philam Life solely for their external distribution channel.

If you have any questions about the X-Curve or would like to be guided on how to be protected or what investment product best provides a solution that matches your X-Curve, please do not hesitate to contact  Susan Ariola at or 09199909973 and Roy Endriga at 09226164219.


Edmund Lao is a Registered Financial Planner of RFP Philippines. To know more about financial planning, attend our FREE personal finance talk on Oct. 24 and learn how to become Registered Financial Planner. Reserve now at or visit


From → Uncategorized

Leave a Comment

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s

%d bloggers like this: