In the small neighborhood that I live in, the homeowners are predominantly of 2 occupations-BPO office managers (of which I count about 7 including myself) and families of OCWs (of which I know if 12). A third subset are retirees from different walks of life with a few expats amongst them.
Interesting to my curious self iswhen I get to know these folks and gather impressions of their spending habits and how they are preparing for retirement (or not).
The BPO execs are mostly (since this is a blog, i will refrain from quantifying past mostly) very forward looking, stashing as much money into mutual funds and cash for future purposes. I know this may go against the current stereotype but these neighbors of mine seem to break the mold. 6 of the 7 drive second hand cars with 5 of 7 heavily invested in stocks. 3 of the 7 are paying for second properties with the intent of renting these out. All have some sort of emergency cash funds stashed. I would say thats pretty impressive financial savvy.
The second subset though, the OCWs, is a much more disappointing group in my book. Out of the 12, ALL bought their cars new with 9 owning SUVs that they leave to their wives and families to drive for most of the year. 3 of them have second cars with the overall new value coming close to their house values (who buys cars more expensive than their house?). I have seen 5 of them throw lavish parties across the year with a couple of live bands performing. I have visited some of their houses replete with 50 inch TVs and surround sound plus double door refrigerators. The wives, of course, all sport iPhone 6es and jewelry galore. The children have the latest electronic toys and game consoles.
In the midst of all this consumerism, i was initially happy that many of my neighbors were doing so well until I learned later on that it was all a farce.
The OCW subset pretty much were not invested, no stocks, bonds or time deposits. 8 were paying for life insurance and only one had rental property. All the cars were bought with loans no less than 3 years. Their appliances and electronics, purchased with credit cards. It doesnt take a rocket scientist to figure out which subsets had the higher net worth.
I was dumbfounded. How can neighbors living in the same area be so different in their financial behaviors? The demographics may be different but I would think that financial knowledge and literacy should even things out, right?
My hypothesis is that, the external and family pressures on OCWs are very different and drive them to much more aggresive consumerism than normal. The pasalubongs and investing in tangible assets such as cars so that they can say "may naipundar" kami may be what is driving the behavior. My hope is that they see how that that may be short sighted and look towards appreciating assets as a better investment. I hope that happens sooner rather than later.