Another problem I see that adds to poverty in the Philippines--people equate SAVING with getting wealthy. Wrong. It's not that simple. Saving is good for parking your money while thinking of where to invest it. Saving, in of itself, leads to ASSET EROSION due to INFLATION.
Here's an example:
You invest your savings of 100K at a locked in rate of 3%. The national average for inflation is 7% per year. You add P0 to it yearly. If compounded DAILY for 10 years, you get P134,984.22
Adjusted for inflation, this amounts to purchasing power of roughly 62K (based on the value of your money when you first invested your 100K)
Of course, this is offset by constant addition to your initial savings. Example: Same scenario above but you invest P10K every year and interest is compounded daily. Your 100K will be worth: 251,607.86 after 10 years.
Unfortunately, this is illusory since the same 4% inflation that your savings' growth doesn't match (7% inflation vs 3% interest rate on savings) nips away at your base investment and your additional deposits. So the net effect is slightly less inflation damage than if you didn't do follow on deposits. Regardless, your money will still be worth LESS than when you invested.
Of course, I'm not saying DON'T SAVE--just keep your eyes open when you're saving and get ready to INVEST your money.
Lesson: Invest with an eye towards beating inflation LONG TERM.
Money loses its value with time. So invest in items that increase in value--so you can then add on and reinvest