How can an investment make it to my list of personal finance champions? Here’s why.

As a personal finance advocate, I and many other advocates have been teaching people on the power of regularly saving and investing. Many of us will use charts and illustrations showing the power of compounding especially if we are doing it on monthly basis. However, there is hardly any vehicle for us to do such investment on a monthly or semi-monthly basis; if there is, the minimum amounts required will marginalize many of us.

I have been writing and speaking about the advantages of pooled funds, especially for long term investing (please check my other blogs on pooled funds). Mutual Funds and UITFs are good investment vehicles for the average Pinoy and one can expect better capital growth in the long term for such instruments. However, Mutual Funds and UITFs have minimum amounts and although they are relatively low, many Pinoys still find it difficult to cough up the initial placement that ranges from P5,000 to P10,000. Further, many of us will start on investing on said pooled funds but will stop making additional placements because we find it inconvenient and we lack the discipline for force savings. To learn more about Pooled Funds visit my previously posted articles: Pooled Funds 1 & Pooled Funds 2

When I received a call from BDO’s Chief Investment Officer Marvin Fausto to have lunch, he said that he has something that he wants to show me that I will definitely find interesting. Since Marvin is a dear friend and one I respect and admire a lot, I agreed to meet him provided he pays for lunch (always a cheapskate I am). Mr. Fausto told me about a new product BDO will be launching, a UITF program that can be deducted from one’s savings account on a monthly or semi-monthly regimen. It was interesting but I didn’t think it was really anything new… besides, there are very few Pinoys who can afford a monthly debit of P10,000. What Marvin said after really caught my attention – he smiled and told me that the monthly deduction can be as low as P1,000 a month and the investor can chose among 3 funds BDO is offering: Bond, Balanced and Equities. My jaw dropped and asked him “really, you guys are willing to let people buy into your funds for P1,000? Wow!” Further, the convenience of auto deduction will be good for many of us who are not necessarily well disciplined in savings.  What I also like is that an investor just needs to go through the initial paperwork one time, no further documents, signatures, Know Your Client (KYC) questionnaires after.

Here’s the beauty of the EIP. If I am a conservative investor, I can opt to go for their Bond funds which are generally low risk investments. If I am aggressive and still have a lot of time before I need my funds, I can opt to be a risk taker and invest in their Equity funds. If I want to be in the middle of the ground when it comes to taking risks, I can opt for Balanced funds. While other banks can offer you UITF funds, I don’t think there is anyone that will let you invest for a small amount of P1,000 per month. Finally, there is a real product that is consistent with what we finance coaches teach, regular savings and investing over a long period of time and this time, even those with challenged incomes can now participate.

Truly, the BDO EIP is a Personal Finance Champion in my view. Pinoys should take advantage of investing through the EIP and other financial institutions should take queue from BDO. To Marvin Fausto, Ador Abrogena, Marily de Vera and the rest of the BDO Trust Department, mabuhay kayo!

Check out BDO’s EIP on their website