Invested Expats

OFW - Heroes of the Philippine Economy

     Many of our Filipino friends and family leave the country to work abroad. The main reason is that higher wages are offered along with an enhanced lifestyle and improved working conditions. After years of working, some would even get citizenship to avail of better benefits from their government.

     Regardless of citizenship, OFWs still send money to their relatives back home. These remittances not only provides financial support to their families but also pumps up our macroscopic economy. Money transferred by Filipinos from all over the world makes up at least 10% of the Philippines’ GDP. This is from 5.4 million OFWs who sent $25.8 billion according to 2018 data.

     However, though these numbers are impressive, there are still a lot of OFWs who comes back home broke. Not surprisingly, it’s partly the same reason that the Philippine economy is booming, remittances. Some expats sends most if not all of their income back home with just a little left to spend for their own expenses. After years of working, they don’t have any investments or enough capital to start a business due to lack of knowledge and fear of losing money which may be due to rampant scams happening back home.

      As OFWs, it is our responsibility to not only provide for our families but also to prepare for our own retirement. To do this, we have to be diligent enough in learning about some of the ways we can invest our money to grow and replace our current income to eventually retire.

Available investment opportunities for OFWs

• Paper Assets 
• Real estate
• Business

Paper Assets

     There is a misconception that these investment vehicles are only for the rich and that you need to have a big capital in order for you to start investing. Nowadays, stock brokerage firms have established online platforms that makes investing accessible to everyone not just in the Philippines but also abroad. Stocks, Mutual funds, UITFs, and Bonds are all viable options to grow your paper assets instead of saving money in banks. However, due diligence is required since these are not risk-free investments especially stocks. Although the yields are potentially limitless, the risks are also unlimited. So, better study your risk appetite first and know what your goals are before investing.



Real estate

     Another viable option for investment is in real estate. Compared to paper assets (money market investments), real estate is a tangible and “real” asset. This is also one of the oldest forms of investment simply because there is a limited area of developable land, and as with the law of supply and demand implies, the lower the supply gets due to high demand, the higher the price of a piece of real estate goes.

     There are also 3 ways for OFWs to participate in the booming real estate industry of the Philippines. Owning and renting your property is one way of building wealth with a steady source of income. Flipping is another way of earning profits from real estate which involves capitalizing on the pre-selling period of a condominium project and selling it before the unit turnover period with the price of the unit greatly appreciating during this timeframe. Referring clients to brokers is another way of earning from the real estate industry without being directly involved in the selling process.


Business

     Last but not the least, setting up your own business is also an opportunity that all OFW’s should consider. Before retiring, you should have a steady source of passive income that can replace your current salary or at the very least provide you with a comfortable lifestyle in order to enjoy your retirement and not be a burden to your family.

     There are a lot of business opportunities available to everyone like a franchise business, loading station, remittance center, internet cafe, water refilling station and online business to name a few. But again, you have to align this with your retirement goals and make sure that you study your market first before starting any business.

Closing notes

      Financial illiteracy has been the most common cause of OFW failure until now but the good thing is that there is a cure. We have to arm ourselves with knowledge which is easily accessible online. There are no more excuses, only inaction. Remember kabayan, dreams without action is just wishful thinking, so wake up, stop dreaming and start doing!

     Before investing though, we have to make sure that we are financially protected. Set up your emergency fund so you’ll have a back up when things go south. And more importantly, make sure you and your family have health and life insurance because you can never say when you’ll pass away and having insurance gives you peace of mind that you won't pass on your financial responsibilities to your dependents.