I have money! Where do I put it?

NOT having money is a serious problem. Having money but not knowing how to properly handle them is an equally serious problem. Of course, between the two, we will all choose the latter. It is a positive problem that we can all wish for. But sad to say, a number of people who have money either fail to let it grow or worst, lose them faster than how they earned it. This happens when we’re not able to manage and put them in the right instruments.  

Unlike our ancestors, we now have more and better options where to put our money. However, despite the overflowing of information and the availability of different financial instruments, many Filipinos are still old-fashioned and conservative when it comes to their money matters. They still prefer to put their money where they are most used to and where they think it's the safest. For instance, we still have some older family friends who still choose to keep their money under their pillows or in their “bauls” (wooden chests) rather than put it in a savings instrument. They just feel safer having their money within their reach and where they can check on it anytime.  

For a typical Filipino, a bank is the most common savings haven. More often than not, they will put most of their money in the bank. It’s no surprise that based on the latest BSP data, bank deposits hit near 15T last year. Again, it is where most Filipinos are comfortable with, even if it means earning very minimal interest rates, which is now at an average of less than 1% per annum. 

There’s nothing wrong with being safe. It’s just that when using only the above methods, one is certain to lose from inflation. Even without spending it, they are bound to lose money because its value or purchasing power decreases over time. As financial experts would say, when your money is growing faster than the inflation rate, then your savings/investment plan is making sense. Otherwise, it might be wiser to just spend it at its current value.    

As the old saying goes, “Never put your eggs in one basket… no matter how few the eggs are.” We are always taught to diversify, no matter how much we have. It is by diversifying and knowing the right instruments that some people are able to build their wealth and others to grow their wealth even more. It is not true that we already have to be rich to become rich. That we need thousands to start investing. We can always start small. We started small with our investments.  

How lucky our generations are because we now have the different savings and investment baskets to choose from depending on our requirements and our available funds.  In our case, we chose the instruments based on our short to long-term financial needs. 

We use the bank for our short-term savings and for our emergency funds, where it is easily accessible. Despite the small interest, it’s still better to keep our money for this purpose in the bank, instead of keeping them under our mattress. Banks now offer different products that can earn you better interest rates.  

We buy insurance products basically to protect our income and preserve assets against life’s risks. Life insurance will ensure that our money goals for our family are realized even when my husband and I are no longer in the picture. It’s a bonus that some insurance products now have investment and medical features included, so one gets to enjoy both protection (from death and sickness) while having the opportunity to grow their money. 

The extra money we have after savings and insurance, we put in investment instruments where it can grow for our mid to long-term needs.  These are mutual funds, stocks, and equity investments. Even when choosing from among the different instruments available in the market, we have to diversify. We have to consider our investment goals, our time horizon, our available funds, and our risk appetite. Younger people can go into more aggressive but riskier instruments as they have the luxury of time ahead of them. Those in middle age can still go for a combination of aggressive and conservative instruments. While those in the older age bracket can go for more stable and low yield instruments. We were doing a lot of fund allocation switching as we grew older and as our lifestyle changed.  We take advantage of the fund switch feature of our investments. 

Again, we don’t have to be rich to start investing. One can start investing for as low as P50 (with Gcash). I know someone whose Gcash investment has grown by 48% since he started last year. Now, who said that you cannot grow your P50?  With a regular P50 investment plus the compounding interest, you can just imagine the potential of your GCash fund. Not everyone will have 5000 or 500 start-up funds. But I believe that majority of the Filipinos can have that P50!   How about for those who can spare P100?

There are many reasons why despite all the information and the above instruments accessible to them, most Filipinos still prefer to keep their money in the traditional way.  It's either they have not bothered to learn about them, or they are confused with all those information, data, or articles they see and read on the internet, or they are intimidated by those investment terminologies they come across, or they have read or heard horror stories on investment scams. 

Whatever the reasons may be, they should not cause us to miss the opportunities that these instruments have to offer. We just have to access the right source of information, consult the professionals/experts for better understanding, and partner with reputable companies. A lot of Filipinos have successfully done this, so can you. 

Let’s always be mindful that being born poor or moneyless is not our fault.  But to die still poor and moneyless despite the opportunities around us is already our fault. Let’s not make that mistake! It’s within our power to empower ourselves!