13th Month Pay

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I got my 13th month pay, now what? What should I buy with it? Do I put it in my savings or invest it in a business?

This is a common question employees ask during or after December. Before or after they get their 13th month pay. Pretty exciting times, specially when you are already thinking about how you will spend it.

First of all, what is a 13th month pay? By definition "All rank and file employees regardless of their designation or employment status who have worked at least one month during the calendar year are entitled to a 13th month pay. The 13th month pay shall be in the amount not less than 1/12 of the total basic salary earned by the employee within the Calendar day. "

There is a test for kids called "marshmallow test" wherein they place a single marshmallow in front of a kid and tell them that if they do not eat the marshmallow, they will get another one. The person will leave the kid within a period of time and the unsuspecting child does not know that he or she is being recorded on video.

For the results, most of the kids fail this test. Simply because, come on, it's a marshmallow, it's right in front of them and nobody said it was bad to eat it. There was just this promise that if they do not eat it, there will be another one given to them.

Data showed that the kids who did not eat the marshmallow became more successful in life compared to the ones who did. So by rule, any person who is patient enough to wait or invest something has more chances of getting something in return.



So what does it have to do with your 13th Month Salary or Bonus? A lot. Because if you invest it, you have a bigger chance of growing that money and buying more stuff in return. Of course investments have risks and most people will not leave their hard earned money to chance. And this is where money back guarantees and low risk investments come in. There are a lot of entrepreneurs offering this, you just need to know where to look.

A safer approach would be putting your money into savings. The only issue here is the value of money can also depreciate. Your buying power now might not be the same next year because of devaluation even if you still have the same amount. And banks are known to give low interest rates.

EPMPC

There are also Cooperatives or COOP that sells shares and issues dividends annually. The last cooperative that I joined has dividends as high as 20% to 25% per annum. The can also give you loans the same amount as your share. So if you have extra cash and don't know where to put it, a good cooperative is also a good choice.

For me if I have extra money lying around and paranoid about devaluation, I would buy something that appreciates in value, or atleast has a very high resale value. These are lots, gold, collectibles, etc. What I would not do is buy electronic items and the like unless they are very cheap.

Lastly and I almost forgot, you could be a silent partner and invest in a business (e,g, farming, bars, restaurants, IT, etc). There are a lot of entrepreneurs out there who are expanding their business and need funding. If you are interested you can fill up the form below and register so that you will be notified as soon as an investment opportunity comes.

http://www.moneyleaf.ml/p/i-want-to-invest.html

So have you decided already what to do with your 13th month pay? Good luck and hope it works out well for you.

Image credit: getty images