Why another book on personal finance
After some years in the speaking and training arena, writing hundreds of articles, columns and blogs for magazines, newspapers and websites, and quite a number of TV and radio appearances, many assumed that I started my advocacy of educating Filipinos with a book I have written. It is quite strange that this book is being written 5 years after I became an independent personal finance coach.
To be honest, I never really saw myself writing a book because there are so many good personal finance books out there, some written by my good friends. My wife, family, pastors, colleagues, friends and quite a number of people I do not even know have been encouraging me to write my book—some to the point of pressuring me. Whenever I am asked if I have written a book, I always politely say “soon.” Well, months eventually turned into years before I finally started to write my book.
Did I give in to the pressure of coming out with a book? Not really. I was reminded of why I got into personal-finance advocacy to begin with—to see more individuals free from the bondage of financial difficulties and financial errors and, given the liberty to experience their full potentials, are able to achieve the purpose they were created for.
In the many talks I have given, the numerous communications I have received, and the many places I have visited, one thing was common—many of our brothers and sisters are living a life of stress, of worry, of being lost. In many instances, I have personally met people for financial counseling, and I experienced firsthand their anguish and hopelessness.
I also realized that many are in a state of financial disarray because of wrong behaviors like ignorance, misplaced priorities, and sometimes greed. While I hear stories of victories, those are exceptions rather than a rule. The bulk of the stories I get are those that evoke strong emotions and even a tear.
Let’s face some facts. In 2011, the central bank came out with some data that I found really interesting. In the report, they claim that there are about 36 million Filipinos who own a bank account. With a population of about 90 million, that’s a pretty good number because we can assume that if one third of the population will be considered family heads, then nearly everyone who should have a bank account would have one.
In another positive data, the central bank says that the 36 million account holders would have an aggregate amount of 5 trillion pesos. The amount of money in our banking system is enormous, as I remember it being just over a trillion pesos not too long ago. No wonder we always hear reports claiming that our economy has liquidity issues—too much cash! The phenomenon of the overseas Filipino workers, business process outsourcing, and a growing economy has facilitated an influx of money coming to Philippine shores.
When I was still a student of economics, I thought the problems of this country were largely because of economics—lack of infrastructure, capital flight, monetary and fiscal policies, inequitable distribution of wealth, and the like. As I got older, I began to think that our problems were political in nature—no level playing field, peace and order situation, inconsistent government policies, corruption, ineffective regulations, etc. After many years, I agree that our problems are brought about by things that are both economic and political in nature. But I slowly realized that there was a third factor involved—our problems are largely social in nature.
Many of us, myself included, spend more than what we should, borrow unnecessarily, save inadequately, hardly prepare for the long term—the list goes on and on. It is not just perception that drew me into such a conclusion; data and studies can actually substantiate my theory.
A study published by Citibank states that the Philippines has one of the lowest levels of financial quotient (FQ) among Asia. The same study by Citibank also claims that only one of 10 Filipinos actually prepare for retirement.
In 2008, I conducted an informal survey about Filipinos and retirement for a piece I was writing for Moneysense Magazine, and the results were consistent with those of Citibank. Here are more facts: Less than half of a percent (0.5 percent) of the population is invested in our stock market; less than 20 percent of family heads carry any form of life insurance; and, very few of the households actually own their own homes. The national savings rate of the Philippines is also alarming as it hovers around 16 to 20 percent. By comparison, countries like Indonesia, Thailand, Malaysia and Hong Kong are above 30 percent while Singapore and China are between 40 to 50 percent as per studies published by the World Bank and other institutions.
Doing my rounds in many companies and in quite a number of counseling revealed another disturbing trend, a ballooning consumer debt problem.
With the book, which I hope to finish sooner than later, I mean to do my share in helping our brothers avoid the many problems I had gone through. It is my desire and my prayer to see a financially enabled Pinoy in this lifetime.
(Catch me and my friends Efren Cruz, Marvin Germo, Dennis Sy & Chinkee Tan this June 22 at the SMX for iCon 2013: The No Nonsense Investments Conference. Check out https://www.randelltiongson.com/i-con2013/ for details. For my personal finance blogs, visit www.randelltiongson.com.)
