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?

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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.

Follow my posts about saving, investing, and frugal living by subscribing to RockToRiches|burngutierrez.com.

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17 thoughts on “OFW’s, Are You Ready To Come Home Anytime?”

  1. If my employer says that it’s my last day today and I will be sent home, I can proudly say “Sure”

    I don’t have tons of money to be able to go home and sit all day BUT I am frugal and saved enough to start my own business. I’m going home for good next year!

    Great blog!

    1. Cheers and congrats to you for taking that decision to be financially independent back home. Hope to meet you for a possible stint to inspire OFW’s and would-be-OFW’s to save up and live frugal lifestyles.

  2. Sheryl Magallanes says:

    very nice article Burn. Good luck and more more blogs to go!!!!

  3. LandOfTheUnexpected says:

    My bond investments gives me a fixed income of about $2K a month. So if my employer asks me to go back to the Philippines the next day, I’ll will gladly comply.

  4. Hi burn,
    It is possible to invest in mutual fund though I’m here in abroad? If it is, could you help me how?

  5. Thanks Burn, very inspiring article. I’ve been doing the UITF and Life insurance with investment at present and planning to start PSE this year..

  6. Jay Rada Rafol says:

    If in case I’d be the employee being told by my “amo” or employer that I’d be going home for good the next day – may it be because of company shutdown or other reasons – I’d be stunned if the year was 2010 – I don’t have enough savings that time. But now, I won’t shiver thinking where am I going to get my usual monthly salary – that is because I have slowly learned proper handling of finances and somehow had saved already and is continuing the routine of saving monthly. I hope more people may read this post especially those who aren’t financially literate. It pays to be one. Great article as always!

  7. paano po ba mag avail ng bond? monthly contribution po ba ito? pacnsya na I am totally no Idea about all this stuff..:(

    1. Hi Jhe, makakapaginvest ka sa bonds by going to your commercial bank. Isang bigayan lang ito at meron fixed interest at maturity period.

  8. Nestor Reyes says:

    Hello Sir, I would like to buy shares from Jollibee. Can you help me on how to do it. And also I would like to invest at the Truly Rich Club by Bo Sanchez. Thank you. I will wait for your prompt response.

  9. Paano po ba mag avail?

  10. Hi Mary Ann, follow mo lang yung steps na binigay ko sa taas and you will be fine. Unang una mong gawin ay magipon ng emergency fund. Meron ka na bang naipon?

    Kung meron ka pang ibang concerns, email mo lang ako sa burngutierrezblog@gmail.com

  11. Roy Adrian says:

    My answer is yes… I can go home right away… 8yrs here in Abu Dhabi, with the cooperation of my wife in Pinas, we managed to save our hard earned money the way you described it in your article above…

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