Allianz Guru Series by Henry Yang: What I Love and Hate About the Filipino Mindset as an Investor

The best investors would say investing is 20% knowledge and an 80% mindset. A considerable part of our mindset is shaped by where and how we grew up and the culture that we were raised in. Let’s look back and explore typical Filipino culture to appreciate innate traits and values that will make us better investors and identify self-defeating traps that we need to overcome and be wary of. 

This tag-team of Filipino sayings falls under the Mañana attitude (also called “Hakuna Matata” in the Lion King). The terms #Procrastination and “Bahala na si Batman” may be more recognizable for the newer generations. In my younger days, I was even popularly known to say to my co-workers that I would outsource tasks to my future self.

The dark side of this attitude lies in its lack of preparation and ownership. There are a lot of reasons why we should prepare financially – we have financial needs that are unpredictable in timing and amount, and we have financial needs that are still sure to come. By neglecting to prepare as early as we can, we are not only missing out on the power of compounding, which will allow our money to get weaker. We are also practically leaving our finances vulnerable to chance. And in this world, no Batman will save us from financial distress.

To be free of care and worries, cultivate an attitude to properly prepare, plan, and execute your financial journey. A worry-free mindset can help you navigate today’s stressful and uncertain times. The point here is that you have to earn this worry-free mindset by crafting a financial plan that makes sense and not just by imagining all your financial needs away. If you’re unsure how to do that, one of the best starting points is to talk to someone already on that journey.

Chismis, or gossiping, is very prevalent in our country and takes up so much of Filipinos’ time. It happens everywhere: in your neighborhood, school, or workplace. It is also called “blind items” in various media types, passing on juicy stories via clickbait titles and utilizing the rumor mill. The narratives range from the innocent (“next week may be declared as a holiday”) to downright dirty and salacious stories about top business executives, celebrities, or politicians. In Binalonan, Pangasinan, several disputes fueled by gossiping became so severe that a local law was imposed on the town, making chismis illegal.

For Filipino Investors, one way to get sucked into chismis, especially in the financial markets, is via Facebook groups that talk about trading, investing, or economic freedom. In these groups, it’s straightforward to be sucked into the hype, especially with the allure of short-term profits. The meme trading in popular Reddit groups like r/wallstreetbets and r/robinhood is a blown-up version of this. What isn’t highlighted but experienced daily by traders and investors of various experience levels is that the risk of loss is always accurate. The winners are often celebrated and publicized because nobody wants to hear about the traders who lost their money and decided to quit. (In reality, just like there can only be so many Michael Jordans and Muhammad Alis, only a small percentage of traders make money consistently)

From the chismis culture (and indirectly the now popular term “social trading”), I admire having a continuous source of information, especially timely ones with powerful narratives. Expectations drive the market, and we can’t discount the power of stories, especially if they turn out to be the most popular ones that investors use actual money to bet on. I wouldn’t say I like basing your investment strategy mainly on rumors; it’s like being thrown out to the sea and pulled to wherever the waves are taking you. What we need to have is a ship anchored and built on basics. Key investing concepts to follow that are aligned ultimately with your financial goals may seem tedious and old-school, but viewing each opportunity using a disciplined lens allows you to assess whether it’s worth joining the bandwagon or taking the road less traveled. 

In the Philippines, it is very common to live in a compound, a group of houses like a small village where each family living there is related. Families are close-knit, even up to extended and distant relatives that are hard to define in terms of kinship. I can’t even draw my family tree as it seems too complicated!  Given these close relationships in the Filipino family, providing financial support is not just encouraged but expected, sometimes to the point that the burden of providing for the family in times of sickness, retirement, or other financial trouble is passed on to the more successful family members.

I would say that the first two Filipino mindsets we discussed earlier are easier to address since the actions for improvement are within our control. In this family-centric Filipino culture, it’s the whole family that should adopt change. My suggestion here is to learn as a family about financial literacy and the range of choices and solutions that we have at our disposal.

I’ve been doing this for my family for the past ten years (not without headaches), but it depends on how open and interested one is in learning. Learning a craft such as knitting or baking takes time – something you can use as an example to make them understand. Be prepared that many of your family members will resist learning about financial planning and investing from scratch. My advice is to be a living example and eventually guide those willing to join you in your journey. 

Fear of investing is a prevalent mindset among Filipinos—one that desperately needs a paradigm shift. It's a belief deeply ingrained in our culture, passed down from generation to generation like a cautionary tale. But I've come to realize that in the realm of finance, you can't gain if you don't risk.

One of the root causes of this fear stems from misconceptions about insurance in the Philippines. Many Filipinos see insurance as an extra expense rather than an investment in their future. They fail to grasp its true purpose, viewing it solely as a safety net for when the inevitable happens—death. It's a grim opinion that fails to recognize insurance as a tool for savings and investment, not just a payout for beneficiaries.

Moreover, there's a pervasive belief that investment is only for the affluent—that it's a game reserved for the wealthy elite. This misconception leads many to focus on get-rich-quick schemes, hoping for overnight success without understanding the inherent risks. Sadly, these schemes often result in greater losses, perpetuating the cycle of fear and mistrust in investment.

But the truth is, investment is not just for the rich. It's for anyone willing to take the leap of faith and commit to building a secure financial future. It's about making smart choices and strategic decisions that yield long-term benefits. And yes, it involves risk—but calculated risk, backed by research and sound financial planning.

Changing the Filipino attitude and mindset towards money and investments won't happen overnight. It requires education, awareness, and a shift in cultural attitudes towards finance. We need to start viewing investment not as a gamble, but as a strategic move towards financial security and prosperity.

So, let's challenge the status quo. Let's empower ourselves with knowledge and take control of our financial futures. Let's embrace insurance and investment not as a source of fear, but as a path to opportunity and growth. Together, we can break free from the shackles of fear and unlock the doors to a brighter, more prosperous tomorrow.

IMPORTANT NOTICE: This document is for general information purposes only. It is not an investment advice and does not constitute any offer, or a solicitation to buy or sell any investment product. Further, any opinion stated by the author does not necessarily reflect the position of Allianz PNB Life.
Head of Investments
Henry Yang is a Chartered Financial Analyst (CFA) holder and a graduate of the University of the Philippines with a degree in Electrical Engineering. He spent the initial years of his career in building maintenance, electrical design and installation of construction projects, and teaching engineering. Later, he pursued his Master's in Business Management from the University of the Philippines - Los Baños as well as held investment-related roles at a top local bank, a U.S.-based investment company, and a global insurance competitor. Currently, he serves as the Head of Investments at Allianz PNB Life Insurance, Inc.