On Filipino Retirement Planning, Growing Economy and Where To Invest in 2013

Investing

Filipino old manYesterday I was invited to attend a seminar titled “Essential Guide in Money Wise Investments for 2013: A Money Forum & Economic Briefing” held in Vista Center, Upper Ground Floor, Worldwide Corporate Center, Shaw Blvd., Mandaluyong City hosted by School Talk. Although I haven’t heard the first speaker because I came late, I was lucky enough to hear Randell Tiongson and Marvin Fausto as the 2nd and 3rd speakers respectively. Mr. Tiongson is a respected financial planner who is behind the financial planning blog randelltiongson.com and Mr. Marvin Fausto is the Chief Investment Officer of BDO, father of the famous Fausto Boys and husband of the author of Raising Pinoy Boys.  I want to share with you some of the learning I gained in this seminar.

Randell Tiongson on Retirement

Mr. Tiongson highlighted the growing number of retirees and their lack of financial preparation for retirement. He said that by 2040, about 20 million Filipinos are retirees (60 years old and above) or about 16% of our population.Many of these retirees will depend on government pension (SSS, GSIS) which cannot even catch up with the inflation and sadly many of them will depend on relatives or children financially.

Even to our current society, we see many retired Filipinos who depend on their children for financial help because they could not work anymore or their pension is not enough to sustain their daily needs. He jokingly said, that some Filipino parents consider their children as their “retirement” or “investment” plan. In our culture, children are obligated to take care their aged parents in different aspects especially financial matters. But children have their future families of their own too and piles of bills to pay and it would be difficult to support their own families and parents at the same time. Therefore, it is important for parents to plan their retirement too which is as important as planning the education of their children.

Investing for retirement is one significant way to be financially independent in our retirement years. Don’t just depend on SSS or GSIS pension plans because I am pretty sure that these plans would not be enough to provide “comfortable” retirement in the future. Each of us should have a separate retirement savings invested in mutual funds or stocks. Saving/investing as little as 1000 pesos a month in your 20s or 30s can potentially make you a millionaire in your retirement years.

Mr. Tiongson also highlighted the great performance of the stock market but he was concerned why there are only few Filipinos who participate in the stock market. He mentioned the small number of Filipinos who have shares in companies listed in the Philippine Stock Exchange (PSE). There are even more foreigner accounts than Filipino accounts, he added. I began to think that maybe one of the reasons why many Filipinos don’t feel the impact of a booming economy is because too few of them actually participate on investing channels available to the public such as stocks, UITFs and mutual funds.

He also briefly discussed why there are investment scams in the Philippines. One reason is the lack of financial education among Filipinos. With our huge population, I am pretty sure that very few are at least knowledgeable on different investment instruments. I can count by hand who among my friends, relatives, office mates and acquaintances have actual experience or knowledge on investing. Majority of them just know bank savings account or credit cards. How I wish many of us are as investment-savvy as Singaporeans.

Scammers invest on the lack of financial knowledge of Filipinos to create systematic financial scams. They victimize farmers, government employees, small business owners, market vendors and other individuals who lack education on sound and legitimate investing channels. They promise and even guarantee big returns in just a short period of time. Just by hearing the word “guaranteed return on investment,” a knowledgeable investor should run away because in investing returns are not guaranteed.

Mr. Tiongson also said that there are three ways to get rich, one is to inherit money, second is to marry it, and third (perhaps our mutual favorite) is to spend less than what you earn and invest the difference. Many of us Filipinos would not be able to inherit money or marry a rich man/lady but we can get rich by having the discipline to invest and be frugal.

Marvin Fausto on Recommended Stocks for 2013

Mr. Marvin Fausto first caught my attention when I learned that he and his wife taught their children on how to invest early. Their teens are currently investors in the stock market. I was amazed with their unique style of parenting and I want to emulate them on how to raise my son and future children.

Mr. Fausto, currently the chief investment officer of BDO, recommended stocks to buy for 2013. I only copied the names of the companies from his presentation but unfortunately I have not copied the reason why he recommended those companies.  Here are the companies:

1. Meralco

2. BDO

3. First Gen.

4. Puregold

5. Metro Pacific

6. Ayala Corporation

7. JG Summit

8. SM Investment Corporation

9. Energy Development Corporation

So if you are planning to invest in the stock market, you already have ideas on where to invest your money. Make sure that before you begin to invest, you know what you are entering too and you understand the risks involved.

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Raymund F. Camat, CIS, REB, CWP®, CEPP® is a SEC-Certified Investment Solicitor (CIS), Certified Wealth Planner and Certified Estate Planner, Phils. He is also a licensed insurance and mutual fund advisor for Sun Life Financial. He wants to educate the Filipino public on the importance of financial planning, investment planning, wealth planning and estate planning. He offers Personal and Family Wealth Planning to Filipinos from different generations. He has a bachelor's degree from the University of the Philippines. You can reach him at 09179698062 (Globe/TM/ABS-CBN/Viber), 09392787408 (Smart/TalkNText/Sun Cellular), (02) 508-9025 (Landline) or email him at raymund.camat@moneytalkph.com. For OFWs, he also conduct online video consultation through Skype, Viber or FB Video Call. ________________________________________ DISCLAIMER: This website reflects only the views and opinions of Raymund F. Camat and is not part of any official communication tools of any life insurance and investment company. The views and opinions on this website do not necessarily reflect those of the company, the management, the advisors/agents and the employees of any life insurance or investment company.
1 comment… add one
  • Carlos Feb 23, 2013

    Thanks for sharing this!

    Retirement is definitely one of the most ignored events in out culture. We tend to bank on the knowledge that our children will take care of us.

    And there’s nothing wrong with taking of our parents or other relatives. I just hope that they realize that if they take the time to prepare for their old age, their also helping their children succeed, and helping them change the course of the next generations. In effect, if we could all take care of our retirements, the future generations won’t have to go abroad just to earn enough for the family. Investments and smart financial decisions offer us a way to actually change the future.

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