It would take long lines, a clean bill of health, early-morning appointments and lots of patience before one gets a chance to work in another country to earn better pay than that offered locally.
However, being an overseas Filipino worker (OFW) often makes one the automatic breadwinner expected to upgrade the lifestyle of their loved ones back home while toiling blood sweat and tears from afar. Lots of OFWs on finance forum pages ask which investment is best for optimizing return for their hard-earned money.
With this in mind, how does an OFW make more out of the money they make and maintain the lifestyle they set for their families?
Protection first more than anything else
Families usually save up most of the remittance sent by overseas relatives and that is a good foundation for building an emergency fund. However, one often forgets that an OFW far from his family faces a higher risk of sickness, accidents and untimely death than when they are working here in the Philippines.
One forgotten aspect is protecting their finances as they work abroad. This is why having a life-insurance policy is a primary need to alleviate contingent costs if the unthinkable happens. One could get a policy abroad but do not forget to get one also in the Philippines.
The critical illness plan, for example, would provide one with immediate cash once diagnosed with a life-threatening disease and usually disbursed upon diagnosis. In all cases, provide copies of the insurance plans to your beneficiaries and choose a life-insurance company abroad that has a Philippine office so that communication is addressed quickly should something unexpected happen.
Make sure that all debts have been paid off
An OFW application process entails a lot of costs. From transportation to documentary and medical requirements and sometimes, an expensive placement fee. Our modern-day heroes wallow in debt just to find higher pay outside the country.
A lot borrow money from relatives and financing agencies but a greater number fall for loan sharks that demand ridiculously high interest rates in exchange for immediate loan without the necessary documents and/or collateral.
Study several financial instruments available both locally and abroad
This would probably be the most boring thing that an OFW has to do. But this has to be done. One of the fastest ways to gain knowledge is to ask registered financial planners. A word of caution, some financial professionals abroad bill their clients by the hour.
Also, do not to be blinded by the rate of return of your investment. Always remember that a high rate of return entails higher risks. The lower the earnings, the lower the risk. Be on the lookout for people guaranteeing high returns. If something is too good to be true, it probably is. Always keep your emotions in check when investing.
Which financial instrument should be entered first aside from life insurance?
It depends entirely on your level of knowledge of financial instruments. Always go for low-risk investment first to get you going and then study the high-risk instruments along the way. With this, you not only get the most out of your money but you also have the advantage of having the know-how of financial instruments in and out of the Philippines.
Our OFW’s are seen as heroes and their remittances help underwrite the economy and our collective-spending power. The best investment OFWs can make depends on their habits and how they allocate their earnings to provide for emergencies, financial risks and wealth building.
To our OFWs, we salute you on your contributions to our country and may this help in providing more for you, your family and community.
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Don-Don Adolfo Crisostomo is a registered financial planner of RFP Philippines. To learn more about financial planning, join the 67th RFP program this January 2018.
To inquire, e-mail info@rfp.ph or text <name><e-mail> <RFP> at 0917-9689774.
