"I only have ₱500. It's a small amount. Is there a way where I can invest it?"
Hell yeah. Pag-IBIG MP2 got your back! 😉
But before we start, if you want to know what kind of investor you are, I wrote about it. Feel free to figure it out here: Kinds of Investors: Determine Your Risk Tolerance
Days ago, I wrote my first article under the category of "investing". It is this article: Invest in Mutual Fund: What, Why and How I Did It. In that article, I got amazing feedbacks and because of that, I am motivated to write more articles about investing. I also mentioned there that there are many other option and different types of mutual funds that you can choose from. Personally, the mutual fund that I chose to invest in is FAMI's SALEF (Save and Learn Equity Fund) which is an aggressive type of an investment, meaning it is high risk.
And in the world of investing, I already said as well that there are two principles:
high risk = high reward
low risk = low reward
Reminder: Be careful, guys. Don't fall in the trap of high risk = high reward! I can see your eyes glittering over there. 🤩 Stop it! Haha.
High risk = high reward investing principle: Invested money has a potential to gain higher profits, and also has a strong chance to lose a substantial amount or all of your invested money.
In tagalog, malaki ang pag-asang kumita ng malaki at malaki rin ang pag-asang bumawas o mawala ang pera na in-invest mo.
Well, for this article we're going to discuss all about Pag-IBIG MP2. It's one of the easiest, safest (to the point that your money will not decrease nor lose), yet underrated form of investment for the Filipinos.
What is a Pag-IBIG?
Pag-IBIG is a corporation controlled by the government that primarily provide affordable housing loans to Filipinos. The income that they gain from loaning out the funds is what they pay back to their members as dividends.
dividend - a sum of money paid regularly by a company to its shareholders out of its profits
What is a Pag-IBIG Regular Savings Program?
Before you can invest in MP2, you are required to be a Regular Pag-IBIG Member first. It is what most of the Filipinos are familiar with. Every employed Filipinos are required to become a Pag-IBIG member. Usually, the employed Filipinos have a monthly deduction from their salary that goes to their Pag-IBIG contribution.
It gives back high dividend annually. The savings or contributions in the fund has a maturity period of 20 years. Therefore, after 20 years or when an employee retire, they will get back the money along with the interest and the dividends that they earned during that period of time.
Republic Act or R.A. 9679 dictates that the minimum monthly contribution for Filipinos is only P100 (but as far as I know, they increase it this 2021 and made it P200 instead). An employee is allowed to contribute more if he wants to.
If you are an employee, your employee matches the amount of your contribution that you deposit. For example, you contribute P200, your employer is also going to match that amount. It is an instant double contribution! Free money!
For the OFWs, students, unemployed, or self-employed, you can register as a voluntary Pag-IBIG member through one of their physical branches or online in their website. I suggest to open one online to avoid physical interactions during this times of pandemic, and the process is much faster and easier also.
If ever unexpected things occurs, you can withdraw your savings.
What is a Pag-ibig Modified Savings Program or MP2?
After we discuss the Pag-IBIG Regular Savings Program, they have an extra savings program which is the Modified Savings Program or MP2. It is Pag-IBIG's initiative to give opportunities for their members to let their money grow even more. MP2 earns higher dividends than the regular savings program but it's voluntary, unlike the regular savings program.
2016-2020 Average Interest: ~7.26%
The regular savings program has a maturity period of 20 years, while MP2 only have 5 years.
If you are curious on how Pag-IBIG computes their interest, here's a formula from several blog posts.
Average monthly balance × Dividend Rate = Annual Dividend
Example Deposits:
Jan - P500
Feb - P1000
Mar - P1500
Apr - P1000
May - P1000
Total Deposit: P5000
P5000 / 12 × 7.26% = ~P30.25
Well, the larger the amount you deposit, the larger the dividend you earn.
This is my part 1 article all about Pag-IBIG MP2 answering the "what".
Read the part 2 here: Invest in Pag-IBIG MP2: Why you should?
Read the part 3 here: Invest in Pag-IBIG MP2: How to get started Online? & My Own Experience
Take note: I only share investing information where I have experience with and I am familiar with. I personally invest in MP2 so I am confident sharing it to others. As much as possible, I don't want to misinform anyone.
Thank you for reading and I hope you learn a thing or two! ❤️
I extend my warmest gratitude to my new sponsor today, @LykeLyca ✨ Kindly check out her amazing articles too!
I would also like to thanks everyone who read my articles because yesterday, July 10, my articles reached more than 500 views! I also reached 50 subscribers! 🥳 Halfway through 100 subscribers. I will always be grateful to all of my readers, subscribers, and sponsors. You all motivate me to keep on writing quality contents.
I also want to share that this is my first article that I wrote using my phone and it's such a struggle. Sakit na ng likod ko at masakit na din kamay ko sa pag-type. But I'm sure that this article is worth the struggle. 😆
Previous Articles:
Get to know me more on my noise.cash: CrazyRichFilipina
Date Published: July 11, 2021
I want to invest in mp2, but I'm too lazy to know more about it. Really, it's 7.26% as of present. Did you join MP2? Can I join on September and pay 12k and that will be my contribution for this year? I will read more of your articles about this.