My semi-automatic S/I 1000

No, it’s not the latest gun model from UDMC or Armscor (Armscor and UDMC are local gun manufacturers, just to let you know). While we continue to support a gunless society, I still believe that guns are “necessary” to protect the people and secure the nation while moving forward to prosperity. Guns should only be possessed by responsible and authorized persons like policemen and soldiers.

Going back to Semi-Automatic S/I 1000, I’m actually referring to a semi-automatic habit of Saving and Investing. Thus the symbol or acronym S/I. And 1000, well, refers to the minimum amount that I’m actually “loading” in to that S/I program on a monthly basis which is Php1,000. Through money-cost averaging, your money will reap higher returns in the long run. With these programs, your hard-earned money will grow more than just leaving them in your drawers, vaults, or savings accounts.

(Note: Don’t ask for “Semi-Automatic S/I 1000″ in banks or elsewhere. Imbento ko lang po yan.)

Browsing all over the internet to see if there are available options for saving and investing at very affordable amounts, I found the following offers in the market:

1.) BDO’s EIP or Easy Investment Plan (UITF)

OFWs and locally-based income/salary earners can actually “semi-automatically” save a very minimal amount every payday or on a specified choice date in a month in BDO’s EIP or Easy Investment Plan. The EIP is invested in an instrument called UITF or unit investment trust fund. It is similar to a mutual fund only that the bank’s Treasury Department acts as your “fund manager”.

If you are an OFW, you actually have two options:

  • Look for any BDO Remit branch in your location and open a “Kabayan Savings” account. This is necessary for you to enroll into the  “semi-automatic S/I” of BDO’s EIP.
  • Ask your loved ones back home to open the “Kabayan Savings” account in a branch near them. They only need to deposit Php50.00 and then tell the branch officer that you want to enroll your Kabayan Savings to their EIP. They will have to fill out forms and questionnaires. And as always, don’t forget to tell them to bring two (2) valid ID’s and extra ID photos when transacting for new accounts with banks.

Personally, the Philippine banking system should be more flexible for OFWs, part-time workers, those “pakyawan” laborers, first-time employees, retail entrepreneurs, and those who could not read and write who simply want to open their first savings accounts. I really don’t understand why a lowly carpenter or street-sweeper is most often denied from opening a savings account just because they don’t have two (2) valid ID’s??!!! Come on!

Okay, back to BDO’s EIP. Once you’ve opened your bank account and enrolled it to the EIP, you will then choose from three options on where to invest your money.

  • Peso Fixed Income Fund – In this option, your money will be invested in short-term to long-term fixed income securities such as bonds, bills, and notes (we will discuss these types of investments in the near future).
  • Peso Balanced Fund – Primarily, your money will be invested in the stock market and some fixed income securities. In short, half of your money may be invested in stocks, and half in government bonds or similar types of securities.
  • Equity Fund - Money is invested in a selection of exchange-listed equities or “stocks”.

The minimum amount that can be automatically-debited every month from your savings account is Php1,000 or Php500 every 15th and 30th of the month.

For me and my child, I enrolled our Kabayan Savings account under the Equity Fund of EIP. Why? Because the stock (equity) market earns more than the fixed income or balance funds. However, these are not guaranteed because UITF’s are trust agreements and are not deposit accounts.

I highly recommend this semi-automatic savings and investing tool for those who can’t afford to invest big amount and those who do not have enough knowledge yet about capital market investing.

2.) BPI’s Regular Subscription Plan or RSP

Similar to BDO’s EIP, you have to nominate your bank account or existing investment/mutual fund account into the RSP.  A regular contribution amount is debited from your BPI/BPI Family Savings settlement account on a periodic basis, say on a monthly or quarterly basis, for the purchase of units/shares based on the prevailing price.

While the monthly subscription of Php1,000 may be affordable, the initial opening amount may be a bit staggering for ordinary people. To enroll in RSP’s Investment Funds, an initial Php10,000 is required before a monthly Php1,000 is debited from your savings account. For their mutual funds/index funds, the minimum initial is Php5,000.

To know more about BPI’s RSP, visit their website: https://www.bpiassetmanagement.com/pages/rsp-faqs

3) First Metro Asset Management, Inc. (FAMI)’s Monthly Investment Program or MIP

FAMI’s Metrobank’s investment unit which acts as an investment advisor for both individuals and companies.

With FAMI’s MIP/Save and Learn, individuals can save and invest their monthly earnings in mutual funds that have higher returns than regular savings accounts.

Just like BDO’s EIP, you need to enroll your Metrobank savings account in their Auto-Debit or through their online banking facility called Metrobank Direct. An initial investment of Php5,000 is needed and an additional monthly investment should be at least Php1,000.You will have to choose among three Save and Learn options. If your salary is debited by your local employer via Metrobank, you can ask your HR manager if they could arrange the auto-debit facility for your payroll account. For OFWs, you may directly remit your monthly savings to your Metrobank account with Metrobank Direct facility so you can fund your MIP yourself.

Check out their website for more details: http://fami.com.ph/?page_id=2837

Discipline: Not An Easy Game

Planning for your future and acting on those plans require a lot of discipline. These investment options were designed to help us build our dreams and to help us achieve our visions very easily. As small as Php1,000 every month is what you need to somehow help you secure your future. And then continue to learn more about investing….and putting in more as you go along.

Any Other Option?

While I am still scouring through the internet for other affordable saving and investing options, i suggest that you go for either of these three options so you can start your long-term investing in UITF/mutual funds right away. DO NOT WAIT for the “puting uwak” to come before you start preparing for your retirement age. DO IT NOW before it’s too late. Get yourself loaded with a “semi-automatic investment machine gun”!

On our next post, we will talk about affordable investing in the Philippine stock market. Watch out for it! Subscribe to BurnGutierrez.Com for FREE!

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