The truth about Filipinos and investing is painful to hear: Only about 8% of Filipinos own investment products such as stocks, bonds, mutual funds, and life insurance plans. This unfortunate fact stems from the lack of financial literacy among the citizens of the Philippines, which makes many of them hesitant to believe the benefits of investing. There are people who think it’s only for the rich, but that couldn’t be further from the truth; you don’t need an immense fortune to start investing.
Reasons Many Filipinos Don’t Invest
Being a third world country, many Filipino families are poor, hence breadwinners tend not to have enough spare cash for investments. But 25.2% of the population that belongs to the middle-class category and the 0.1% in the upper-class category are also not as keen on investing. Some experts stated that it’s because many Filipinos are not used to delayed gratification, which occurs in investing since its benefits can be reaped after a certain period of time.
Business speaker and best-selling author Dodong Cacanando has something to add too that, too: Filipinos want to enjoy their money right away even while it’s still small instead of waiting to for it to prosper first so they can enjoy it even more.
BBC International news anchor Rico Hizon has pointed the lack of education about investments as the top reason Filipinos don’t invest. People are unwilling to put their hard-earned money into something they aren’t knowledgeable at. Francis Kong, an award-winning author and businessman, has also pointed the same reason.
Chinkee Tan, a well-known wealth coach and motivational speaker has said that Filipinos tend to prioritize their wants over their needs. Coupled by the reality that many Filipinos are also in debt, spend uncontrollably, and are the primary financial providers for their families, it’s no wonder why investing has been opted out of their budget plans.
Reasons Filipinos Should Invest
We may not be taught much about investing, but we’re certainly taught to save money. Typical Filipino kids start by keeping loose change in a piggy bank, or what we popularly know as the “alkansya.” When our piggy banks have grown heavy from the coins and bills we’ve collected over time, we can take them to the bank to unload them for the first time, and voila! We already have our first savings account. While not all families practice this, it still remains to be a common tradition.
Although the habit isn’t all that bad, considering you’re still saving money, the benefits are still minimal. A typical savings account will only increase your money by about 0.25% every year. Your earnings can be a tiny bit higher in a time deposit account, but still, it won’t go over 4% unless you invested millions of pesos in it.
If you invest your money instead in an insurance policy, stocks, bonds, or mutual funds, the interest earnings of your money will decidedly be higher. Investing actually multiplies your money instead of simply just adding it.
In life insurance, specifically, you and your family will be provided financial security in times of emergencies. While you might not like to think about accidentally passing away, it’s still better to have a plan than risk leaving your families financially deprived should anything happen to you. Insurance can also give you cash benefits if you or your beneficiaries get/s hospitalized or disabled.
When you decide to invest, take note that it isn’t wise to jump in right away with your actual money. Explore free virtual portfolios on the internet first to practice and know your way around the investments market. It would also help to read books or articles about various investment products. Just know that investing your money somewhere legitimate and profitable will always be a wise decision.
