Make Your Money Work for You

Make Your Money Work for You
Make Your Money Work for You


Welcome to the decade of the 2010’s where the world economy was brought back to life by the government and where people just can’t seem to trust other people with their own money.

Let’s take a common working class Filipino’s perspective. Miss Janet is currently running a successful Banana-Q business with her headquarters found in her humble cottage home made of bamboo. Day in and day out, the humble Miss Janet wakes up at 3 a.m. in the morning to peel the bananas she got from Mister Ramon’s little banana plantation on his backyard the other day. At 3:30 a.m. she’s packing these ripe bananas and piling them up inside her big plastic ware with handles and she’s fills it up ’til the last row touches the cover. She’s hoping that by the end of the afternoon, there will be nothing left but the container and cover. At 4 a.m. she takes a bath and dresses up. She brings her beloved umbrella to make sure a rainy day won’t ruin her returns. At 4:30 a.m. she waits for the bus and catches it just a few minutes from when she started waiting; and if she’s lucky enough she wouldn’t have to stand inside that reckless speedster, with left hand carrying her banana container (the bus will ruin them if she just places it on the floor which would then result in a debt pile to Mister Ramon) and right hand on the railing.

Long story short, at 6:30 p.m. she comes home with income and she pays her dues, allocates, appropriates, and realizes she’s got enough money left over to do something about.

From a Filipino perspective, what do you think Miss Janet will do?

Usually, hardworking people like Miss Janet opt for putting their money in a cooperative so that they could get a loan (and ensue more debt than they needed) and their next few earnings would go pay off that loan and then the cycle would continue – and people like Miss Janet would eventually realize that their business isn’t exactly growing as they’d want it to.

I’ll tell you what Miss Janet will most likely not do – invest her money under a financial institution, or at least save her money on an account that delivers a solid interest rate.

I think it’s very unfortunate that Filipinos like Miss Janet are more aware of interest rates on loans than interest rates on savings. It’s like you could sum it up in this statement: “Filipinos tend to borrow too much money, and invest way too less.” A shorter version of that statement would be: “Filipinos love spending money they don’t have.” There have been public campaigns raising the awareness of the common Filipino in terms of financial literacy, even far reaching enough to go to places off the grid; but the thing we need to change about financial literacy in the Philippines is public perception.

Public perception that investing in financial institutions can be practical, and won’t make you trust them just so they can take your money is the key to leveling up in financial literacy. There just have been too many cases of pyramiding scams and Ponzi schemes – Aman Life, EmGoldex, etc. – that have really battered the trust of the common Filipino in financial institutions.

Unless we learn to trust these institutions, we will never be able let our money get high returns. Sure, cooperatives offer 2 percent on their savings and 3 percent on time deposits; but that’s barely enough to stave off inflation (Although time deposits are a good way to start – at least your money’s not just sitting there doing nothing, right?). Will we ever be able to teach Miss Janet how to invest in mutual funds and trust funds? The stock market may be bullish right now, but it won’t stay that way forever. The stock market will eventually surge and the rich, financially literate people will get even richer.

How about Miss Janet?  When will she ever get rich? Let’s help spread the word on financial trust. Let’s help our common Filipino take more risks. Let’s help teach them not to make loans all the time. Let’s help them start trusting again.

For the person who’s too afraid to take any financial risks, your money is being eaten right now by inflation. Make your money work for you.