| source: http://pozytek.ngo.pl |
No wonder lots of big listed corporations are owned by foreigners because that number.
That is why I came up with the idea why Pinoys don’t invest in the stock market (again this is just my idea if you agree leave a “yeah” in my comment box and if not we are more than willing to read your opinion also in the comment box). With our long history of colonialism, it seems that we develop this mentality of limited resources or scarcity. Since we think this is all that we have, we tend to instead of use such to gain more we hold on it tight and don’t use it well.
Also with that, since we think we are limited every time there is a chance of extra we tend to spend it so that at least we have a taste of the things that we don’t usually have. For example, you are a regular 8-5 employee with a salary of 10,000.00 pesos a month. When you get half of that in your “kinsenas”(salary is usually paid every 15th and 30th of the month) you first make sure to buy your groceries, then pay your rent, then allocate some for your fare and whatever is left is free to spend like watching movies or eating at Max’s Restaurant. That is a typical Pinoy employee. But when your employer suddenly announces a bonus of course your mind starts to plan where will you spend that bonus. The typical Pinoy employee will usually plan a Boracay or Baguio trip.
Since we think we are limited we first make sure our daily living is taken cared of thus we buy groceries and the stuff but not save. In addition, when we have a chance to have extra instead of saving it we would love to spend it in your dream getaway.
If you have followed the manga or anime Fullmetal Alchemist, you might have encountered the famous basis of the story: Equivalent Exchange.
I have discussed this topic in my previous post (click here if you haven’t read that post). The law of Equivalent Exchange means when you want to get something there should be an equal value, item, or sacrifice that you should give in exchange for such.(Sorry if I use a manga ideology but this is so real in real life).
Since Pinoys have this mentality of scarcity we are afraid to make an “Exchange” because we know that in order to have something that we don’t have we need to exchange it with something that we already have and that scares as the most.
The stock market is risky specially now but you are not looking at the other side of the story. It is scary for those who bought the stocks at a high price but what if you are on the buying side now. Isn’t it you are buying things at a bargain? Yes, the market is still at a bargain and yet you don’t want to part with your savings because you think deserve a getaway in Bora.
Besides the stock market, you have other choices to put those small savings. You can start a mobile loading service (its mobile because it’s your phone and your business is where you are). Alternatively, probably you can join a onetime bazaar selling some stuff, or maybe you can even setup an online store where you can ship goods within Metro Manila for free (but actually shipping is included in your pricing) and shipping for outside Metro Manila will be at buyer’s expense.
Yes I believe that is one of the reason why the simple Juan or Maria are afraid to invest in either stock, small business, or even an online business because they don’t want to lose the small savings that they have but are ready to spend an extra money to something they have been wishing for.
PS. ARE YOU INTERESTED IN ONLINE BUSINESS?
About the blogger
Louis Delos Angeles is a Certified Public Accountant, blogger behind Investing in Philippines, and author of Investing in Stocks: Preparing for the future small amount at a time. Learn more about Louis and his financial freedom advocacy here.
I cannot see how anyone can leave the purchasing of stocks completly out of your porfolio.
my teacher bought stocks during arroyo’s mid-term, it was really down. now, i think his money grew because of the new leadership. kaching kaching…withdraw withdraw.
nice blog pare. keep it up.
http://ohbite.blogspot.com
yeah this is so true just like when you’re trying to convince someone to save. there are people after putting a small fraction of their earnings in their piggy bank, they tend to complain “wala ng natira” without even realizing its benefits.
Salamat Spiky. That is the secret of stock investing: buy when a good company’s stock is down and wait till it comes back strong…and as you say
Ka-ching!
Sis rej its like GLoc 9 and Sheng Belmonte’s song
but it is true. Pinoys think it is expensive to start a business but they can buy the latest mobile phone 
I agree the views of the author. Here are some additional details why Filipinos are not into buying stocks.
1. Lack of education. I mean, in stock market, you have to know to interpret the details of economic statistics. You might say that an investor can hire and economist. YES and NO. Yes, if the investor can afford one. If NO, the investor has to drive his own boat.
2. Fear of not getting a better return of investments (ROI). Most of us always like to have win-win situation but this is not always the case in stock market community.
3. Culture and tradition. This is what we are and we’ve been for like this for many decades. Women were being portrayed as housewives and only need to be home and do the usual household chores. But study shows, women are critical thinkers and often they are willing to risk than men. Check why we have a lot of women going abroad than men.
4. Crab mentality. Your own business partner might even pull you down because he/she don’t like you to prosper.
etc.
Visit http://diversityhuman.com
There might be some topics that would catch your interest.
Very well said Marisse! Thanks!
Well the explanation for the Filipino about stock are always on long term plan, it will be more easier in the mind if they do it by every 4 month.
They always say in a year you will gain this etc etc, but if they say in 4 months they will get this much, then they would probably invest. Also, most capable workers are out of the country.
Another thing is, people tend to overcrowd the city for easier job, but that just prevents other places to prosper.
As for vocation, people just don’t see the beauty of less known locals, filipino always go to where foreigners tend to go.
Those places are intended for tourist, that’s why they are expensive. They would save more if they just relax in some local hotspot an hour or 2 away from their home.
Another reason they can’t save is because of family size, lots of Filipino have big family. With that size and salary, of course they can’t save, much less buy a stock. Ive seen a lot of family who has over 5 children, and the parents ain’t makin much.
Filipino are educated but sticks too tradition too much and keeps on trying to be on par with foreigner.
Thank you very much Dan for your great insights. I agree with you in regards to people overcrowding urban areas. I hope property companies and industrial companies will continue to push development outside Metro Manila. To date other areas being develop to CBD(Central Business Districts) or EUD(Emerging Urban Districts) are in the Southern Philippines. Cebu and Davao are already in the same level as Manila. I would like to see more development in Mindanao as well. Central Luzon already has its Clark, and I wish more development be made in Northern Philippines like my province Pangasinan and the Ilocos region.
As for the family size yes indeed such has a major factor in a family’s financial but I don’t completely agree. The issue will be the parents not making much but if such will be solved and if the gaps in the children’s ages are well planned I believe a family with 5 kids can survive and have a small savings to be invested. Parents has to start inculcating to their children the value of savings and investment for the future so that these children of theirs will contribute to the family’s income either through savings or when they are of age and gainfully employed and pool any savings which will be invested for an additional income source.
Yes the Filipinos are in a way slow but that is why I am writing and advocating investment in order to guide our countrymen to be open to possibilities. Let’s continue to educate the Filipino about passive income and investment so that we can all enjoy a robust economy.