Despite of Hefty Bonuses, Why Most Employees Are Not Yet Rich?

It’s very obvious during Christmas season traffic conditions are worsening from 30% – 40%, due to left-right Christmas sale in malls and other market places.  And yes of course, most people received bonuses from their respective employers.  But did you realized, even we are receiving hefty bonuses ( 1 month to 2 months salary bonus), why most employees still are not yet rich?

We may know people are receiving fat bonuses every year for 20 plus years, still an employee and not yet owned a simple car or a house.  If we asked them about this issue, simply they answered “Dumaan lang sa palad.” (It’s just passed over my palm).

I was this kind of people many years ago.  Until I realized the answer is within our thinking about money.  Here are the three reasons why employed people are not yet rich despite of big bonuses received every year:

  1. Poor Money Management – this is the most reason why most employees are not able to save atleast 5% of their received bonuses.  In many cases, employees already “spent” before they actually received their bonuses using credit card.  They never considered investments such UITF, Mutual Funds, or VULs.
  2. Early Budgeting for Expenses – Most employees already do their budget few months away before they actually received their bonuses.  This should not be a problem.  But problem will start depending on the allocation in the budget, sadly most allocations are for gifts, new gadgets, vacation packages, and other personal stuff that they don’t really need.
  3. Not Having Enough Time to Fully Utilize Money – this is the sad truth for being an employee.  When a successful businessman received a big money due to his commissions or net income, he re-invest it thru increasing capitalization, property buying, and purchasing more assets that can give him more income in the future.  That separates between a successful employee and a successful business owner.

I hope these three simple reasons will realize most employees to manage their finances very carefully.  Consider to spend most of their bonuses but allocate for at least 20% to 35% for investments.

Think money as a seed.  A seed that can grow as a plant and a plant can grow as a tree.  We are blessed that we received bonuses without working for it.  It’s simply a “a goodwill” from our employers.

“Think our bonuses as a “goodwill” benefit from our employers.  We’re not actually worked for it.  Either we performed or not, we are still entitled for a bonus, that’s a blessing!”

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Eleison Cruz

Financial Consultant. Personal Finance and Investment advocate. Author of The Good Asset, a blog that educates people in investments, financial literacy, and life insurance. Visit www.thegoodasset.ph

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