OFW’s, Are You Ready To Come Home Anytime?

If at this very moment your amo or employer told you that this will be your last day of work and you will be sent back to the Philippines immediately the next day, what would be your reaction?

Are you ready to say to your amo and to yourself, “It’s fine, I’m ready to go home anytime.”?

Or will you hear yourself say any of the following:

“I’m not yet ready. Wala pa ‘kong ipon.”

 

“My child is still in Grade 3! Hindi sya pwedeng tumigil ng pag-aaral!”

“I just started paying for our house & lot amortization. Paano na ito?”

How Ready Are You To Come Back Home, fellow OFW?

I’ve been advocating personal financial literacy among OFW’s since year 2000 as part of an NGO called Tulong Pinoy and then later on in 2009 with Angat Pilipinas Coalition. Our studies showed that lack of knowledge about available business and investment opportunities is one of the most common reasons why most OFW’s come home without any savings. And even if they do save, most of the savings don’t last more than 5 months.

This is something that all OFW’s should reflect on. Working overseas isn’t forever. While it’s comforting to know that you’re receiving quite a good salary today, there’s no guarantee that you’ll be able to keep your job forever.

Saudization in Saudi Arabia, economic struggles in Europe and Americas, political conflicts between the Philippines and China/Taiwan, violence and unrest in Syria, Lebanon, Egypt, Bahrain, etc.

Your company may close up shop. Anything can happen anytime that may bring us back home for good.

Relying from the Philippine government to support us financially may not always be helpful. We need to stand up on our own and make a firm decision to alleviate and improve our respective financial conditions.

But you have to learn what you need to learn. You have to equip yourself with financial knowledge so that you will know what to do firsthand when the unexpected happens to you while working abroad.

Preparing Yourself for Re-integration Back Home

1) Pay yourself first. Upon receiving your salary, keep at least 20% as your monthly savings. Do this every month without excuse.

2) Pay all your debts. From the 20% of your monthly savings, keep 1/3 of that to pay off your debts. If possible, pay all of them at once.

3) Build up an emergency fund. Again, from the 20% of your monthly savings, take another 1/3 to keep as part of your emergency fund. The total emergency fund should be equal to at least 6 months of your monthly personal expenses and padala.

For example, if you are spending P5,000 worth of personal expenses every month, and you are sending to your family in the Philippines around P10,000 per month, then P5,000 + P10,000 = P15,000. That is your monthly expenses.

Multiply that P15,000 to 6 months (P15,000 x 6 = P90,000). That is the total emergency fund that you should slowly build up.

4) Get a life insurance. It doesn’t matter for now whether it’s a VUL (variable unit-linked) insurance or a term life insurance. Just get one that willcover at least 10x of your annual expenses. That should somehow help our family start over again in case you die. Consider also insuring your health. It’s one of the greatest wealth that you should take good care of.

5) Invest in better-performing financial instruments such as the stock market or equity/index funds. Most OFW’s only recognize savings accounts, time deposits, SSS or Pag-Ibig contributions, and paluwagan/pahulugan as investments. While these are either acceptable investments, they do not give maximum returns for the long-term. With the relatively small interests, an annual average inflation rate of 4% to 6% will only eat up what you will earn from these “investments”.

Others also invest in real estate. While this is a very good long-term investment option, it won’t give you liquidity. What does a liquid investment mean? It means you can easily convert it into cash when you immediately need the money. You can’t do that easily with real estate.

But there are other better means to make money from your property. You can check them out here.

Learn how to grow your money in investment vehicles such as mutual funds, UITFs (unit investment trust funds, stocks, retail bonds, and other paper assets. Among these financial instruments, I highly recommend investing in stocks, equity mutual funds, and UITF’s. Not only they are better options for beating the inflation, they also give bigger returns for your future.

Investing in these financial instruments are also affordable. Did you know that you can buy ten (10) Jollibee shares in stocks for less than P2,000? And that if you invested your P2,000 on Jollibee stocks in 2010, it would have grown up to around P4,000 today?

Secure your children’s education and your retirement today.
No one else can help you but yourself.

Oh sorry. Yes, I’m here to help you out how to start.

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