Hello and thank you for visiting RA vs the World! For the past few months, I have been inactive in this blog because there were just a lot of things going on in my life. But now, I am back with a series of posts about mundane stuff in 500 words or less. (Well, some of them are mundane, some are not.)
Let’s start with savings! I thought of writing about savings while queueing at the Pag-ibig Fund to create my fourth Modified Pag-ibig 2 (MP2) account.
MP2 is Pag-ibig Fund’s voluntary savings scheme as opposed to their Pag-ibig 1, which, under the Home Development Mutual Fund Law of 2009 or Republic Act No. 9679, is mandatory to employees, employers, expatriates, household helpers, OFWS, and those working locally but whose bosses are foreign-based.
I opened my first MP2 account on April 2019, so it’ll mature next April. I originally intended to open a new account every year, but during the pandemic, I just didn’t care and put all my savings in crypto instead. Maybe I’ll write about cryptocurrencies in another post. Someday. Someday.
My original plan looked a little bit like this:
| Year 1: | 100% of my savings in my first account. |
| Year 2: | 60% of my savings in my second account. 40% of my savings in my first account. |
| Year 3: | 20% of my savings in my third account. 30% of my savings in my second account. 50% of my savings in my first account. |
| Year 4: | 40% of my savings in my fourth account. 30% of my savings in my third account. 20% of my savings in my second account. 10% of my savings in my first account. |
| Year 5: | 30% of my savings in my fifth account. 25% of my savings in my fourth account. 20% of my savings in my third account. 15% of my savings in my second account. 10% of my savings in my first account. |
| Year 6: | Withdraw the money in my first account. 30% of my savings in my sixth account. 25% of my savings in my fifth account. 20% of my savings in my fourth account. 15% of my savings in my third account. 10% of my savings in my second account. |
This way, I’ll have money to withdraw every year. But why do it this way? The dividends I get from each account compound every year, therefore it’s more beneficial if more of my savings are in an account that would still accumulate more dividends each year. Then again, why still put more money in the older accounts? I don’t know. I am an idiot like that.
MP2, compared to your regular savings gathering digital dust in bank accounts, beat the inflation. The annual dividend in MP2 reach 7.02 percent in 2022, 6 percent in 2021, 6.12 percent in 2020, 7.23 percent in 2019, and 7.41 percent in 2018. With an average dividend rate of 6.76 percent in the past five years, that’s impressive.
