THE Faustos is a family on a mission. They want to save the Filipino millennials from a potential debt trap by teaching the development of a “financial quotient”.
“Our objective is spread financial literacy and improve financial well-being. We want to go beyond just teaching because there is a big gap on what we already know and what we do,” Rose Fausto, a former investment banker, said in a recent interview with the BusinessMirror. “As a family, that is what we want to achieve.”
According to the Manulife Investor Sentiment Index, Filipino millennials face the threat of being debt-strapped. More than four in 10 Filipino investors carry debt, with the mean debt level incurred by millennials below the age of 35 is P291,582 higher than the debt levels of those in the 35 to 49 age bracket (P207,428) or those over 50 (P143,958).
“With the way they are doing, 63 percent of the 25-year-olds will be broke when they retire because they are not saving and investing,” Fund Managers Association of the Philippines (FMAP) Founding President Marvin Fausto said. For Rose, the turning point to become financial wellness advocates was when she realized she had to give more time to the family. As an investment banker, Rose knew it would be hard for her to manage the family affairs while working in a numbers-crunching job.
Marvin said he realized his former post as senior vice president and chief investment officer of BDO Trust Group can be a great source of sharing his knowledge in teaching financial awareness to young Filipinos.
Family first
AS a family, Marvin is tapping his children Martin, Enrique and Anton to serve as sort of a bridge to the young people in sharing the values of saving and investing. The Fausto children join their parents in giving talks to people from different social class.
Rose said she and Marvin taught their sons that money and values are not mutually exclusive. With dinner conversations usually revolving around saving and investing, all three boys were exposed to the investing world early on.
The Faustos have conducted Family Financial Quotient (FQ) workshop sessions in Manila, Cebu, Balesin, Iriga and Singapore, among others. It is their hope to impart their knowledge and inspire families to make investing part of their conversations and traditions. Teaching the value and importance of saving to their children started after they were born, Rose said citing as example immediately opening a savings account for their children.
“We deposit [to the bank] the gifts they received during baptism and birthday celebrations,” said Rose, author of Raising Pinoy Boys and The Retelling of The Richest Man in Babylon.
Even their household helpers are given the basic of financial quotient upon working with them.
“I tell them to save for emergency and retirements funds,” Rose said. “Whatever they put, we provide counterpart funding in the form of equities and stocks.”
Martin’s tack
GROWING up, Martin, 25 and the eldest of the three boys, recalls his parents inculcated to him and his siblings the value of savings “in a fun and cool way” by giving them treasure boxes and the ubiquitous piggy bank. Later, we discarded the piggy bank because they have to break it when they need to get some money.
“When our own treasure boxes got filled up, we asked Papa to deposit it to our savings account,” said Martin, a business management graduate from the Ateneo de Manila University.
The children were required to submit their notebook reflecting the balance sheet of their savings for the week to ensure they will get their allowance for the following week.
After a three-year marketing stint in Del Monte Philippines Inc., Martin decided to put up Brand’eM, the brand and management consultancy arm of IFE Management Advisers Inc. He is also a Gallup-certified “strengths coach”.
The financial discipline imparted by Marvin and Rose enabled Martin and his siblings to spend their allowance wisely.
“At that time, I only shopped during my birthday and Christmas,” Martin said.
Furthermore, he said he also learned to wisely spend the load for his mobile phone.
Rose said Martin had to familiarize himself all the promos offered by the telcos to ensure he can get maximum saving.
“Looking back, that served as a cost-benefit analysis program for us,” Martin said.
He said the savings regimen taught by his parents gave him the extra push to study harder. Martin said he was able to use good grades as leverage whenever he needs some extra expenses in his school and extracurricular activities.
Dinner talks
MARVIN, currently a COL financial consultant, said conversations during family dinner exposed the children on topics about saving and investing.
These talks made it easy for them to understand stocks using cash they saved from their allowance and other cash gifts from godparents and relatives, he said.
Rose concurs with her better half. “They’ve seen market movements for two decades now. They have empirical data in their respective balance sheet archives,” she explained. “Although they’re not as extensive as Jeremy Siegel’s two centuries of data, they are their personal data, enough proof for them to stay the course.”
Rose said they hope to impart their knowledge and inspire families to make investing part of their conversations and traditions regardless of what lifestyle and career one chooses.
We want to stay true to FMAP’s commitment in helping improve the country’s financial literacy as well as encouraging the younger generation to invest, she added.
Image credits: Paul Soriano