by: Kendrick Chua, CIS, the Wealth Warrior
First published in Money Sense March-April 2010 issue.
Ask anyone what trait defines Chinese the most and you’ll likely get one of these two answers—rich or cheap. To a certain extent, the answers are accurate. After all, despite accounting for only 2% of the total Philippine population, seven out of the ten richest Filipinos are of Chinese descent. Although most Chinese will not plead guilty, it has what defined this race based on the society’s perception. It has what defined me.
Society has identified Chinese as being cheap for the longest time. Having personally been ridiculed as one, I’d like to believe that the Chinese are above this stigma. We are frugal and if that’s a euphemism for the adjective then so be it. We look at the value of a commodity rather than its price. It is simply a trait we have been accustomed to.
Recently, I traveled with a group of Chinese Filipinos and in one of our shopping activities, several of them bought Rolex watches. They reasoned that the price was much cheaper compared to the ones being sold here. They certainly had the money but the same group is contented in flying economy class and seating in cramped seats hardly getting any sleep on the red eye flight home. They find value in the first and none in the second.
Perhaps this has its roots from our forefathers who came to the Philippines several decades back. Being in a foreign land, they just had to fend for themselves and saved whatever they can here to send back home, similar to our present-day OFWs. Thus, they had hardly any room for frivolous spending.
The Chinese persistent adherence to the idea of “saving” became the corner stone for their financial success. Long before financial planning was coined, the Chinese were already practicing it albeit informally. Present money management advises us to save 10-20% of our income. The Chinese would have none of it; saving at the very least 50% and living on the rest. In fact, my mom prodigiously saves 70% of her income—a practice she did for the past thirty years. She led by example, we, her children, learned by example.
And it is a not a wonder that the Chinese do not flash their wealth through material things. A lot are contented in driving boring vehicles and living in ordinary homes both which do not justify and reflect how much they are really worth. For them, their comforts and security lies in the fact that they have fat bank accounts.
A monk residing here once told me that the Chinese fear the uncertainty of the future and that is why they prepare very well for it. They know how to look at the bigger picture and anticipate problems long before they occur. It may well be a Confucian value we inherited as the great sage said, “In times of peace, prepare for war.” To put things in perspective, “in times of abundance, prepare for scarcity.”
While the Chinese may be experts in saving, they very well know that this alone won’t make them financially successful. They need to make it grow. This necessity has fired up the entrepreneurial spirits of the Chinese building businesses one after the other. Although majority of the business owners run dull businesses: auto-supply, hardware, printing, textile and garments, trading among others, these have proven to be great investments. Nothing really glamorous in them yet, these businesses are generally responsible for the wealth the Chinese now enjoy.
Yet those who may not be as entrepreneurial have not allowed themselves to be left behind. They looked for other viable investments to make their money grow. And this includes being highly meticulous about interest rates for their deposits, literally shopping from one bank to another. While interest rates may vary little, as small as 0.5%; this difference multiplied by the millions and millions each Chinese possesses becomes a significant number.
Aside from these, the Chinese pride themselves for being debt-free. They avoid it like plaque. Rarely will the Chinese borrow money from friends or even relatives. It is a shame to do so and to be in one. If the inevitable happen that they do need to borrow money, they’d pay the whole thing off as soon as possible. Failure to do so is even more shameful. They wouldn’t dare tarnish their good name.
From the time our ancestors first settled here up until this very moment, our money management philosophies remained unchanged. Even the consumption-mentality of the West did little to influence the quality that has defined us. Our identity held its own. We will continue to be perceived this way—“rich” and “cheap”. But behind all those admirations and labels, lies the dedication of the Chinese in pursuing financial success.
