Monday, October 19, 2015

5 Tips on how to Save and Invest for OFWs

Many Filipinos left their love ones to earn money abroad even if they don't want to leave. They do this because they have no choice. There is no job opportunities in the Philippines. Right now millions of Filipinos are in Middle East, United States of America and other countries to work. They are not there as tourist.

 I felt sad for some of these Filipinos who became victims of abuses and some of them even died without a fight. Maltreatment from their bosses and loneliness make them pathetic. I think it is just right that they should know where to put their money for savings and investments. Most of the OFWs went home without money and even poorer after many years working abroad because they don't know how to invest and start a business.

 For OFWs, the need to invest smartly is particularly urgent since your opportunity to raise funds is linked to the length of your contract. Once your contract of work is over, it is possible that you would find yourself without having a source of income, until you find a contract again. For this reason, you need to come up with the right investment choices that match your circumstances and make your money work harder for you. Essentially, OFWs should be guided by the same investment principles as Filipinos who are working and based at home, save for a few considerations to reflect your circumstances, in particular not being in the country.

 Here’s a simple five-step guide to help you in making your investment decisions: 

 1. Consider liquid and professionally managed investments. Shop for investment products that are easy to purchase and dispose off even if you are not in the Philippines. The nice thing with today’s technology is you can scan online, start by looking at the individual websites of financial institutions.

Your choices include the following:

Mutual funds – These are pooled funds invested in different types of assets to match your desired time frame and level of risk. Some may have the potential for high gains but will also come with higher risk. These are available to retail investors for a beginning account of as low as P5,000. ·

Unitary investment trust funds – These are also pooled funds invested in various assets to match your risk profile and investment horizon. These are available to retail investors for a beginning account of as low as P5,000.

Insurance-linked investments – This is an insurance product combined with an investment fund, fulfilling your need for protection and capital gains. Your monthly payment would depend on the amount of coverage you purchased, as well as the type of asset you chose to invest in.

Equities – These shares represent shareholdings in a company. You profit from the trading of these shares in the stock market. Online brokerages can facilitate your trades, with some of them requiring an opening balance beginning at P10,000.

Bonds – These represent debt taken by either the Philippine government or companies. They usually have a fixed return and are therefore safer. They may be purchased through most banks for as low as P5,000.

 2. Keep your papers in order. Ensure that you have proper documentation to open and maintain these accounts, either while you are visiting the Philippines, or from abroad. Download their online forms, then mail a clear copy of your required IDs. Before sending these documents over, it may be helpful to personally contact the financial institution through their emails so that they can review your signed forms and requirements before you send these. This will save you a lot of time and effort.

 3. Use safe and direct channels for sending money. Find a secure and cost-effective way to put money into your investment from where you are. Online banking services, which are now available to those with accounts in local banks, are among the safest channels you can use. You can also use bank-to-bank transfers. If you wish to go through remittance channels, consider companies with long track records and recommended for customer service if something should go wrong. Unsafe ways of sending money are physically through people, no matter how much you trust them; through other people’s bank accounts; or by sending the money in the mail.

 4. Make your payments or remittances regularly. If you send money to the Philippines, it would be good to do so following a schedule, so that you and your loved ones back home can plan your cash flows better. Have the discipline to send money on schedule so that your loved ones can make payments on time, letting you avoid penalties in the process. Luckily, major financial institutions all allow you to make payments or transfers online.

 5. Ensure the legality and integrity of your planned investment. OFWs are often the target of investment scams. Check out the site of the Commission of Filipinoshttp://www.cfo.gov.ph/to read the latest news and updates on legitimate and illegitimate business deals. You may also have relatives luring you into get-rich-schemes that offer nothing but false promises. While you may trust your loved ones, it is but prudent to check out everything about the proposed investment deal before you turn over your hard-earned money.

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