Growing your money through Pag-IBIG MP2

Rule No. 1: Never lose money. Rule No. 2: Never forget rule No.1."– Warren BuffetIT's every investor's goal to earn from their investments. In fact, we don't only want to grow our money, but we also want the principal amount protected. It's the fear of losing that usually prevents most from investing.For retirees like me, the desire to protect our hard-earned money is a main consideration when making decisions about our finances. Since time is not much on our side, we cannot and should not go into high-yield-high-risk instruments anymore. That is why I am sharing about Pag-IBIG's MP2 Program. My son Paolo first brought the idea to me two years ago, but I just dismissed it. It was during my investment chat with my friend Rolan Enriquez last year that I fully appreciated MP2 and immediately went into it as part of my investment diversification. And it didn't disappoint because, for 2023, it's one of my investments with the highest returns.So, what is MP2 Savings? The MP2 Savings is a special savings facility with a five-year maturity, designed for Pag-IBIG Fund members who wish to save more and earn even higher dividends in addition to their Pag-IBIG regular savings. The good news, it's also open to pensioners and retirees, like me, who were former Pag-IBIG Fund members.For me, the MP2 savings is an investment option worth considering because of its features:It's a government-guaranteed savings program. As the Philippine government guarantees it, you won't lose your principal. But you can still participate in the upside depending on Pag-IBIG Fund's financial performance. Pag-IBIG Fund sets aside at least 70 percent of its annual net income and credits it proportionately to its members' Pag-IBIG Savings as dividends. Since its inception in 2010, the MP2 program has been paying annual dividends to its investors. Even if there will be no dividends, the best value you can get is the original amount of your accumulated investment. So, you can sleep soundly at night knowing that your principal is not only protected, but it can even grow. Isn't that what most of us want?It's a flexible and affordable investment. You can either invest monthly or choose to remit a one-time lump sum amount for the whole five-year period. As a retiree, I opted for the latter. But for those currently employed, you may opt for a salary deduction. For a minimum of P500 monthly, you can already invest in MP2. That's a treat for our minimum wage earners as this low amount allows them to participate in MP2. You also have two options on how to receive your dividends: receive them annually or reinvest to enjoy the beauty of compounding interest and receive them after the five-year period. Will you go for the monthly or one-time investment?It offers a high dividend rate. The MP2 returns are higher than that of the regular Pag-IBIG savings program and what you usually get from traditional bank products and other investment instruments. But MP2 may not pay out dividends, as it depends on the profit made by Pag-IBIG for the year. Fortunately, since it started, the program has consistently paid out dividends, with the lowest return at 4.58 percent in 2013 and the highest in 2017 at 8.11 percent. For 2023, it gave a return of 7.05 percent. During the pandemic, when almost all investment rates were down, its return was still in the 6 percent range. The best part of it all, you'll receive your MP2 dividends tax-free and with no fees, ensuring full retention of dividends. When do you want to receive your tax-free dividends?It can be created in multiple accounts. You can open as many MP2 accounts as you like and can afford. As each account has a five-year maturity period, this is good for different medium (and long) term goals. You can create an MP2 account for each specific goal, such as tuition, travel, graduation gift, birthdays, even retirement, etc. You can withdraw and enjoy the fruits of your investment after five years. Or upon maturity, you can reinvest the whole maturity amount for another five years. Those doing monthly can create one account for the lump sum maturity amount and another account to continue their monthly contributions. The more you save, the higher dividends you will earn. Now, that's your money growing. How many MP2 accounts are you starting with?The MP2 program makes saving and investing much easier, affordable and profitable for our workforce. Like in the case of Wilson, one of the food crew of my son Paolo. Wilson approached Paolo on how he could be helped to make his monthly MP2 contributions. Apparently, Wilson's brother, who is also a food chain crew, has been investing in MP2 and encouraging Wilson to invest. Wilson is now making a monthly contribution of P2,000. He was so happy to note that after only six months, he already earned around P1,000 in dividends and is super excited about his potential earnings after five years of compounded interest. He is now planning to increase his monthly contribution to P3,000 as soon as he can. It's heartwarming and inspiring that Wilson and his brother, who are both just receiving a little more than the minimum wage, are making this smart money move to take control of their finances and change their future. Again, it's not about how much you earn that matters; it's how much you save.Sadly, a large percentage of the workforce is not as aware of MP2 and as proactive as Wilson and his brother. I hope that both our government and our employers can actively promote the MP2 to our workforce. It's one of the best options in the market to protect and grow our employees' hard-earned money.It's my personal wish that this article will reach more people and increase awareness of how Pag-IIBIG Fund's MP2 program can help them grow their money and achieve financial independence. Let's create more Wilsons in our workforce.