Before I give you a rundown of the reasons why I don’t have a million pesos in my name at the age of 39, let me give you a little bit of my work background.
I graduated from college at the age of 20 and jumped into the workforce a few months after. So basically, I have been in the labor force for 19 years, with less than 3 years of non-employment in between. That means, I had at least 16 years to build wealth and become a millionaire. Alas, it wasn’t the case, and here are the top reasons why:
I wasn’t saving enough or wasn’t even saving money at all
Though I initially had 2 work experiences under my belt prior to joining the BPO industry, the first time that I can say that I was earning good money was when I got hired as a Technical Support Representative at Convergys back in 2005. The pay was around 17K which is more than 3X of what minimum wage earners were getting at that time.
From 2005 to 2020 (before my current employer), I’ve been with different BPO companies and my monthly salary has increased to around 28K. And yet, it was only in 2018 that I actually started saving money. So 13 years have gone by without me saving a dime and worse, incurred a heavy debt.
Just imagine if I could have just at least deposited 2K per month even to a commercial bank account (with their relatively minimal annual interest) for those 13 years, I could have at least 312K and that’s without even considering the interests gained.
Spending more than what I’m actually earning
I would actually consider myself a frugal person since I don’t spend on gadgets or branded apparel. I also don’t have any vices that could drain my resources nor do I frequent expensive coffee shops. So saan napunta ang kaperahan ko?
Hmm… let’s see. I didn’t have a credit card until the year 2008, so I only spent money that I had in my ATM or in my wallet. But when I got my first credit card, that’s when all hell broke loose. I started buying things using my credit card without the actual cash to back it up until it piled up and the monthly payments I have to make became unbearable. Mind you, the bulk of my monthly credit card payments went to debt interests. Credit card pa more!
In fairness sa akin, di ko gawaing manghiram sa mga friends or relatives. And di ko rin gawaing magpahiram ng more than 500 pesos.
Didn’t have the guts to do “company hopping” in my earlier years
The sole source of income for most people (and that includes me) is salary. Now if your monthly salary can barely sustain your lifestyle and pay your debts, how much can you actually save each month then? Though it’s true that small savings are better than no savings, will that get you motivated to stay consistent?
In order to be able to save more, your income needs to go up. So ano ang mga options para tumaas ang sweldo?
- Performance-based annual increase
- Promotion
- Change career / company
In fairness sa mga companies na napuntahan ko, may mga annual increases naman (sometimes di pa required ang performance, tenure-based ang increase). The problem is, there’s a salary cap for a post wherein once you’ve hit that, your salary can’t go higher.
So obviously, promotion is the next option if you want to stay in the company. Pero paano kung ayaw mo ng higher post or walang opening (napakadalang magkaroon ng opening) dun sa gusto mo which has been the case for me dun sa first BPO company ko that I stayed for 5 years.
The 3rd one could have been my option: call center hopping. I’ve listened to stories from friends/colleagues wherein they’ve increased their monthly salary by 30% (and some even double) by moving to a different company every 2-3 years.
Take note, hindi lang to basta magresign sa current company dahil nastress ka tapos lipat sa iba for the same post or salary range. What most successful “hoppers” usually do is magpa-pirate sa iba. So while they’re working for a certain company, they check others that offer a higher salary (be that for a similar post or a different skill) then apply. Saka lang sila magreresign pag natanggap na sa kabila which gives them a bargaining power during interviews.
Failed to learn about GCash (specifically GSave) and similar digital banks early on
One of the reasons why people don’t save their money in banks is because of the measly interest they earn on their deposits.
Do you know how much interest you get from commercial banks these days? Not even 0.1% per year (the average is 0.065% pa). And then, out of that measly interest you’ve earned, there would be a 20% tax deduction. Also, don’t forget that the average yearly inflation rate is 3-4%. So lugi ka pa dahil kinain ng inflation ang savings mo sa bangko.
With that in mind, who will spend their precious time waiting for a bank teller to call their number so they can deposit 1-2K? That said, wag mo sabihing mas okay pa ang piggy banks. Mas masahol yan kasi wala kang makukuhang interest at all. Malas mo pa pag kinain ng bukbok or nalunod sa baha yang ipon mo.
Though I finally started saving money in 2018, I only learned about GSave nung December 2021. So meron pa lang mga digital banks that you can earn 4-6% annually.
Did not invest early
I’d say that this is a culmination of the first 3: high debt + no savings and not enough income to clear debts to free up some savings. It’s a domino effect.
It’s also good to point out that in the early years, it was not that easy to buy stocks / mutual funds. This time around, you can easily invest in mutual funds via GInvest of GCash, open a stock trading account with BPI or BDO, and even create an MP2 account online. Everything now is at the tip of your fingers or the click of your mouse. And you don’t need thousands of pesos to start investing even.
Ending on a high note
It may have taken (way too long) years for me to start turning the table around, but I will definitely hit that 1 million pesos soon enough.
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At sino na ang mga millionaire dyan? Share tips para sa lahat.