I have been doing this since January 2016 - and the result is superb. This strategy is a no-sweat technique for employees working in the government here in the Philippines. No worries, even if you are not a government employee this should not stop you to start building your wealth or adding another investment to your portfolio.
Using this technique, I have saved 6 digits and 5 digits dividends for the last five years. Started the scheme small at first and increases my savings as my salary increased. Building wealth is not an overnight process. We all probably want to become wealthy at some point in our lives. It takes a lot of dedication and discipline to be successful at it. And I admit, I am still working my way to financial independence because I started late and I wasn't financially literate then.
This January 2022, I have started contributing again but this time I started higher than my previous monthly contributions to my savings. For me, it's already a big amount considering my net take-home pay at the moment. With the government's program to encourage savings among Filipinos, Modified Pag-IBIG II Savings Program was born year 2010.
You may either do the same or get an idea of how you start building or adding another investment to your portfolio.
"NO PALYA" THRU MONTHLY PAYROLL DEDUCTION. I religiously save through monthly payroll deduction. This is to ensure that I will not skip from putting aside an amount for my savings or contributions to the program. Ask your employer if they can do that for you, if not, there are easy ways to pay your contributions even at the comfort of your home. Let's take advantage of the online platform for our payments.
While this is unfeasible for some, this should not be a hindrance for you to religiously save. You may check later on the Pag-IBIG Fund Website or you may also watch my vlog about the basics of the MP2 Savings Program thru https://www.youtube.com/watch?v=gCG3skAKUsc.
YOUR CONTRIBUTIONS / SAVINGS TURNS INTO INVESTMENT. Why does your "savings" turn into "investment"? Unlike the traditional savings mechanism using our bank accounts where we put our money into it, MP2 Savings contributions earn dividends yearly which are relatively higher than any bank's interest rate. This means that your money is working for you. This savings program is actually an investment. See the difference between your bank's interest rate compared to the average dividend rate of the MP2 Savings Program. And if you will not withdraw the annual dividends earned, this will be added to your savings and compounded to your next year's dividend. Ibig sabihin nadadagdag siya sa savings mo at yung dividend na naidadagdag ay kikita ulit ng dividend, and so on.
The program gained praise among investors because of its nature that it is a government-backed or guaranteed voluntary savings that provides tax-free dividends. While other banks require a higher initial deposit, Pag-IBIG Fund's MP2 requires only a minimal requirement of ₱500.00 to start without any maximum capital ceiling. Your contributions regardless of how much you put into it are government-guaranteed. Again, unlike banks, the money you invested in MP2 is safe. If you put it in the bank, the Philippine Deposit Insurance Corporation (PDIC) provides only a maximum deposit insurance coverage of ₱500,000.00 per depositor per bank. This means that if you have a million in your bank, they will not pay you back over the insurance coverage amount should the bank file insolvency or bankruptcy. It is the MP2 Savings Program of the Pag-IBIG Fund is the safest investment you could ever ask for.
You may play the video below to know more about the Modified Pag-IBIG II Savings program. It's a complete beginners guide that answers Frequently Asks Questions (FAQs) regarding Modified Pag-IBIG II Savings Program.
You will be surprised at how quickly your money can increase if you combine it with other strategies and investments you have at the moment.
Let me know your thoughts about this program or maybe you could share with us your savings or investment strategies, hacks, and tips too by leaving a message or comment below.
❤ Disclaimer: I am not a licensed financial advisor. I am not affiliated with the Home Development Mutual Fund (Pag-IBIG Fund). This video is for educational purposes only and should not be taken as professional/financial advice. Always practice due diligence in investing
❤Sources and Links:
MP2 Complete Beginners Guide:
Pag-IBIG Website:
Wikipedia: https://en.wikipedia.org/wiki/Pag-IBIG_Fund
Thank you for sharing your strategy.