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 will 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 the 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 financial literacy and saving money among OFW’s since year 2000 as part of an NGO. Lack of knowledge about financial instruments was one of the common reasons that I’ve observed back then why most OFW’s come home without any savings. And if they did, all their savings would surely go down the drain in less than a year. A couple of months at least.
This is something that all OFW’s should think over. 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 down shop. Anything can happen anytime that may bring us back home for good.
We can’t forever rely from the Philippine government to support us financially. We need to stand up and make our decision to lift our own financial conditions.
But we have to learn what we need to learn. We need to be financially-literate for us to be prepared for the the worst thing that could happen to any OFW.
Preparing Yourself for Re-integration Back Home
1) Pay yourself first. As early as now, upon receiving your salary, keep at least 20% as your monthly savings. Do this every month without excuse.
2) Pay all your debts slowly. From the 20% of your monthly savings, keep 1/3 of that to pay off little by little your debts.
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 from now on.
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 could cover at least 10x of your annual expenses. That should be enough to leave your family in peace and security 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 financial instruments. 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 vehicle, it won’t give you liquidity. What does a liquid investment mean? It means you can easily convert it into cash in times that you really need money. You can’t do that easily with real estate.
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 advocate investing in stocks, mutual funds, and UITF’s. Not only do they beat the inflation, they also give bigger returns for your future.
These financial instruments are also not expensive to start investing in. 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 by following the steps above that I humbly recommend to you.
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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Rock your way to abundance!