by: Arthur Noel B. Ladaga

Twenty four hours ago, the entire country was in grave shock regarding a huge financial scam. Aman Futures Trading Group, a fraudulent investment company that operated in Pagadian City, was reported to have gotten away with P12 billion and left the country. The proper authorities are continuously tracking down the culprits hoping to bring them to justice. Department of Justice Secretary Leila de Lima recently ordered the Bureau of Investigation to continue its search for the culprits, especially its leader Manuel Amalilo.

Ever since August of this year, the people of Pagadian City had been clamoring to have their money return to them. Blinded by a false promise that their money will double in a couple of days, most people “took the opportunity” immediately without properly assessing the investment as a whole. After just a few days, all of their money just vanished like thin smoke. Some are still hoping that it will be returned and the culprits be brought to justice. Others have locked themselves into deep hopelessness and despair.

Armand Q. Bengco, the Executive Director of the Colayco Foundation for Education, shares his thoughts behind the recent “financial tragedy.” According to him, the tragedy can be explained in two words: FINANCIAL IGNORANCE. One of the basics of investing is that an investment opportunity that is “too good to be true” should be avoided AT ALL COSTS. If it promises returns that are beyond the normal, it is often too good to be true.

He also highlighted the real definition of investing. “Investing is a commitment to use money to expect, hope, or pray to make more money based on a long term goal,” he said. Investing also involves knowing one’s purpose, target, and time even before starting. Knowing one’s financial objectives gives direction to any investing endeavor. Without it, any investing effort is likened to blind spending!

The most important thing to remember, according to Mr. Bengco, is becoming a risk-focused investor. What ultimately determines an investment’s success is not the return it gives but how it is managed. People nowadays are blinded with false promises of high returns that they do not concern themselves with the risks. If something unfortunate happens to their investment, they suffer greatly. Managing the risks helps achieve a higher average of returns in the long run. It also mitigates the possible risks that might occur.

Just a few hours ago, the Philippine Daily Inquirer reported that a retired teacher from Pagadian City committed suicide. Burdened with the realization that he lost so much money, he decided to end everything in an instant. Poverty has a strong grip in the hearts and minds of many people. They are willing to sacrifice almost anything just to get away from it. When a “promising opportunity” comes to them, they grab it immediately without proper assessment. And when they realized that it was a false promise, they end up worse than before.

Poverty may be the torturer to most people, but it is FINANCIAL IGNORANCE that ultimately kills. FINANCIAL LITERACY is the primary remedy to combat FINANCIAL IGNORANCE and prevent such a financial tragedy from happening again!

FIGHT FINANCIAL IGNORANCE NOW! Want to have a financial seminar to your community or work place? Call 637-3731 or 637-3741. Look for Mr. James Gonzales for more details.

Sources:
Alipala, J., & Umel, R. (2012). Teacher kills self after losing all his money in scam. Inquirer Global Nation. Retrieved from http://globalnation.inquirer.net/56146/teacher-kills-self-after-losing-all-his-money-in-scam?ModPagespeed=noscript

Carvajal, N. C. (2012). Thousands duped in P12-billion scam. Inquirer Global Nation. Retrieved from http://globalnation.inquirer.net/56132/thousands-gypped-in-p12-billion-scam?ModPagespeed=noscript

Arthur Noel B. Ladaga is the current Programs Officer of Colayco Foundation for Education Inc.