Exhibitors and guests at the PhilSME Expo 2012 got an earful of personal finance realities from life and personal finance coach and Inquirer business columnist Randell Tiongson.
Speaking to a full crowd on the third day of the expo at the PICC Forum, Tiongson iterated the common financial motivations and woes of Filipinos who usually end up a sandwich generation –having to support the older (parents) and the younger (children) members of the family.
Tiongson started by sharing what must have been true among many in the room: that while most working people have no trouble making money, they find it difficult to use money wisely.
This realization is particularly important, according to Tiongson, given that more and more Filipinos today are retiring and roughly 8% of the total population is actually retired or at retirement age; life expectancy in this day and age has also increased. These numbers imply an increased necessity to save and prepare for retirement, especially among women who usually outlive their spouses.
Somewhat disheartening, however is the fact that Filipinos are the worst savers among their Asian neighbors. Statistics show that while people in India, Korea, Singapore, Taiwan, and even SEA neighbors Indonesia, Malaysia and Thailand save some 30-35% of their monthly income, Filipinos only get to save less than 20% of theirs. The Chinese and Hongkong nationals figured as the best savers in the region.
Interestingly, according to Tiongson, Filipinos spend with a first-world mentality – being willing consumers of designer coffee and the latest gadgets, ending up spending more than their wage allows them.
The solution to this, the columnist says, is the 70/30 rule: spending 70% of what you earn, and saving or investing the remaining 30%. Tiongson also encouraged the audience to remember that getting wealthy is a process, and that people should really spend less and consider putting money on worthy investments.
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by: Glorydee Magno