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The Sandwich Generation

The Sandwich Generation

In Philippines, we are living in a sandwich generation. This is a generation wherein working individuals are supporting their children and their parents. I have previously blog about this topic wherein some people tend to consider their children as investment that will take care of their future. Check my post here.

There’s nothing wrong for children to take care of their old parents, it’s the same value I want my future children to have. What is wrong about this culture is that we never prepare for our future at all. We tend to rely on them for everything that we will need. This is good if your children have the means to support you financially. What if they don’t have and you become a burden to them?

In the Philippines, our retiring age is 60 years old. However, base on the statistics figures our lifespan is getting longer as years goes by. In 1980, the average lifespan was 61.6 years old. In 1990, it increased to 64.6 and in year 2000 it reached to 69. Last 2004, The Philippine Statistics Yearbook had predicted that longetivity rate of the Filipino males at 70.5 years and 72.8 in year 2005.

Imagine yourself if you retire at age 60, and you’ll live up to age 80. By this time, you don’t have a job and no income at all. If you didn’t save for it, you’ll end up dependent to your children in those retirement years.

Here’s a story from Bo Sanchez about 2 lola’s.

old-folks

The Story of Lola Penny

I have a friend who retired 7 years ago.Let’s call her Lola Penny.

Actually, her real name was Lola Penang. She took a vacation in America, when she came back, she was now called Lola Penny.

Lola Penny is a widow with 4 children and 6 grandkids. For 38 years, Penny worked as an accountant, crunching the numbers for her company. Because she was such a good accountant, she was promoted many times and became the manager of the entire department.

And she was earning very well. But Penny told me that even if she was earning very well, she was living from paycheck to paycheck.

Which brings me to a very important principle: Income does not equal Wealth. It’s not how much you earn that makes you wealthy. It’s how much you invest from what you earn that makes you wealthy.

Yes, she saved some money. But like most Filipinos, she saved only for the big expenses: She saved to buy a house. She saved to pay for the schooling of the kids. She even saved for the wedding of the kids. But she failed to save for the biggest expense of all: Retirement.

Like many, she totally depended on the retirement package from her company.When she retired 7 years ago, Penny got P3 million.

For the first year, it was heaven on earth. Every Sunday, she brought her grandchildren to the mall to buy them toys. And when her children needed money, they’d run to her.

“Mommy, can we borrow money to repair our car?”
“Mommy, we lack P20,000 for Junior’s tuition fee. Can you help?”
“Mommy, your apo (grandson) will compete in a swimming competition in Singapore. Can you pay for his plane fare?”

But very quickly, her money ran out. After 7 years in retirement, Lola Penny was penniless.

This Is Harsh Reality

Today, Lola Penny totally depends on her 4 children to give her money. But she knows that they have financial problems of their own.

One time, she overheard her daughter arguing with her Kuya (older brother) on the phone. What she heard tore her heart.

With anger in her voice, her daughter said, “Kuya, it’s your turn to give money to Mommy! I’m the one who takes care of her at home! I’m the one spending for her food everyday! And I’m the one buying her medicines. Last week, I spent P3000 for her meds! My husband is already complaining why we always don’t have money!”

When Lola Penny heard her daughter complaining, she began to cry.The painful words she heard that day were like many knives stabbing her chest. Lola Penny felt she was just a burden to her children.

And she wanted to die right there.

Here’s the irony: All her life, as an accountant, Penny was very good at managing the money of her company—but she never managed her own money.

This is not just a story. This is harsh reality: According to surveys, 98% of people aged 65 and above are just like Lola Penny. They depend on their kids, or they depend on their tiny pension, or they depend on charitable institutions, or they have to keep working—or they have nothing to eat.

Only 2% of people aged 65 and above are financially free. Like Lola Pilar.

The Story Of Lola Pilar

You can retire in two ways. You can retire like Lola Penny or you can retire like Lola Pilar. Penny is a pseudonym. That’s not her real name.

But Lola Pilar is no pseudonym. Pilar is my mother. She is 85-years old.

Today, I give my mother a nice monthly allowance.

I do it not because she needs it, but because I need it. I need to show my love to her. But in reality, my mother doesn’t need my money.

Let me tell you why.

Many moons ago, my mother worked in a small music store as a Cashier. Her salary was P120 a month. After working for 19 long years, she received a separation pay: A whopping P2000!

She invested that P2000 in the Stock Market. The year was 1966.

And whenever she had extra money, she’d invest in very well known companies. My parents bought the stocks of giant companies of their time: San Miguel. Ayala. Etcetera.

My father retired at the age of 65. He passed away at 88. For those 23 years, my parents sold a portion of their stocks–little by little—for their big expenses.

After Dad passed away, Mom announced, “I’m selling all my stocks.” I was surprised that she still had P1 Million from that last sale—even if they were already withdrawing their cash from there little by little.

I asked her, “Did you sell everything?”
Mom said, “Yes, I did. Well, I left the crumbs…”
Crumbs?
“What crumbs?” I asked.
She explained, “Oh, I left the very little investments scattered in various companies. They’re very tiny. Nothing much.”

That conversation took place three years ago.

Just two months ago, I told her, “Mom, you’re 85. You better sell whatever you have left in the Stock Market. Yes, I know they’re crumbs. But just collect them anyway.”

She agreed. She called up her stockbroker and said, “Can you sell all the tiny stocks I have left?”

She was expecting P10,000. At most, P20,000.

But she got the shock of her life. The stockbroker told her, “Mrs. Sanchez, your stocks are worth P1.2 Million.”

Mom turned to me and said, “Bo, I’m rich!”

I told her, “Mom, you’ve always been rich. You just think you’re poor.”

Forty-five years ago, my mother planted P2000 in the Stock Market. And through the years, she planted little seeds of P50, P100, and P200 in giant companies.

Because she planted in the spring, today, she isn’t begging in the fall.

In her whole life, my mother never received a huge amount of money. She never inherited money. She never won the Lotto. She only built her wealth slowly.

Remember this truth I heard from David Bach: Wealth is not built in days; Wealth is built in decades.

There are two ways of retiring in life: Are you going to be a Lola Penny or a Lola Pilar?

P.S. A year ago, I do not know anything about investment. Then I joined Truly Rich Club by Bo Sanchez. It was the best decision I ever made in my life. Brother Bo is a spiritual preacher and at the same time, financial literacy advocate whose purpose is to help people become rich in order to serve the LORD with the money that they have. He guided me along the way, explaining how I can manage my money and make it work hard for me. Now I’m investing in stocks and mutual funds and have a clear path for my future. Soon I’ll open UITF account as well. All are made possible by his guidance and teachings on every steps to become an investor. Being OFW isn’t forever, this is my EXIT PLAN. It’s amazing how his teachings change my life. I’m inviting you to join the club too, JOIN TRULY RICH CLUB. If you have any question, feel free to leave your comment below. CLICK HERE TO JOIN

About Richard Macalintal

Hi my name is Richard. I am a Registered Financial Services Consultant in Singapore. If you have any queries or you need help on your insurance policies and investment linked products, feel free to message me :-) We can have a cup of coffee while I do financial review and give advice with regards to your finances :-) Contact me thru email rlmacalintal(at)yahoo.com or SMS me +65 82235186. Disclosure: I am a Financial Consultant of AIA. The statements or opinions expressed on this site are my own and do not necessarily represent those of AIA.

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