OFW on How to Avoid These Investing Mistakes

Overseas Filipino Workers (OFWs), often known as the modern-day heroes of the Philippines, are well-known for being highly hard-working people who made sacrifices to aid their families and contribute to the economy with their high-level remittances. Going abroad, however, does not automatically ensure financial success. We will discuss several financial errors that OFWs should avoid in this article.

Mins to Read: 12 minutes

Age: 21 – 41 years old

Numerous Filipino overseas workers (OFWs) are fighting the odds in today’s world with the hope of providing a better future for their families. Almost every family in the Philippines has at least one relative who works abroad. Professionals were looking to relocate overseas to advance their professions.

However, you also have to deal with the repercussions of being far from home and away from your loved ones. It could be a pretty uncomfortable condition, and it can drain your emotional reserves over time.

Many Filipinos leave the Philippines for various reasons, including the desire for financial prosperity, professional advancement, job opportunities, and political stability.

Most frequently, it’s due to budgetary considerations. Many Filipinos who work abroad have noted that, by doing the same job they do at home, they can make more money doing it there.

And yet, one in ten OFWs suffers from financial hardship, according to a 2011 survey conducted by Social Enterprise Development Partnerships Inc. In addition, eight out of ten individuals returning to the Philippines have zero savings. Few people can successfully accumulate a sizeable sum despite years of working abroad. It’s a huge sacrifice that could positively and negatively affect your intimate connections and financial circumstances. Some OFWs are unaware of the effects of their bad financial choices.

How come this is the case? Here are some financial blunders that OFWs who desire to achieve financially might want to avoid:

1. Playing the Financial Hero

The right mindset is the first step toward achieving financial independence, not just for people living abroad but also for those who are left behind. The family of the OFW should be committed to helping them make wise financial decisions that are just and reasonable for all parties concerned.

There is nothing wrong with wanting to help your friends, family, and especially your own families, but it’s also crucial for OFWs to learn how to say no when family members become overly dependent on you. As a result, they are less likely to look for other income sources, making it much harder to save money for themselves.

How would you be able to save in such a circumstance? Since the majority of everyone’s income is spent on remittances to support their families and, as I’ve already indicated, extended relatives, it’s tough for everyone to save money. Most OFWs would leave behind enough cash to pay for food, rent, transportation, and a few other costs. Due to the high cost of living and the difficulties of making ends meet, many Filipinos who live overseas have tried to stretch their budget and generally turn to canned or dry fish.

On the other side, people receiving aid should have realistic expectations for the kind of support they might receive from a relative working abroad. Never should we undervalue the value of discipline and budgeting. Counseling our family members and close friends is an excellent place to start. Dispel the myth that if someone obtains employment abroad, they will become the family’s primary provider, and the rest of the family will begin to rely on them. They were only stealing cash from the streets.

How do you avoid it?

Maintain a balance between supporting your family and saving for the future. Instead of using up all your funds and starting over, why not save money first and then spend the rest? If you form this wise financial practice, you’ll have more than enough cash for emergencies.

2. No Limitation on Family Spending

A balikbayan box represents love. These large care packages from Filipino overseas workers (OFWs) typically include gifts and a variety of commodities for family and friends back home, including everything from children’s clothing to soap boxes, the newest pair of basketball shoes to cans of processed meat, and so on.

Another way to look at a balikbayan box is as a representation of sacrifice. OFWs routinely transfer sizable quantities of money and send balikbayan packages to their relatives back home as a sign of affection. This kind of offering is common in modern Filipino households. On the other hand, saving for a bright financial future is a better sign of love. They can tell you care about the future by seeing that you have long-term financial goals planned. That is the primary goal of Pag-IBIG, which also strives to help common Filipinos become homeowners by providing loans for reasonably priced Pag-IBIG houses.

Spending is less of an issue for people without children or families. There are, however, good debts and bad debts. A good debt is an investment you can count on in the future to pay off, while a poor debt is one that you pay but don’t expect to get back.

The same is true for assets and liabilities. What distinguishes a purchase from a penalty? An asset’s value frequently increases over time, or it often has the potential to create revenue in the future. A dead end is a liability or poor debt.

The most typical illustration of such is spending money or qualifying for a loan to buy pleasures or pricey equipment. In contrast, its values tend to decrease over time, forcing you to sell it for less money. Purchasing a house and lot or a real estate condominium with the cash you have obtained through a Pag-IBIG loan, on the other hand, is an excellent OFW investment. You can turn it into an RFO house and lot or a rental company in an emergency. And recoup all the cash you’ve previously invested in that home.

How do you avoid it?

It would be best if you learned not to rely solely on your salary. Try to set aside a certain amount of money each month. Some would advise 20 to 25% depending on your preferences, but be sure you won’t lose your savings. Keep in mind that it is always best to save money before spending it.

3. Investing in Scam

OFWs frequently commit the mistake of investing their hard-earned money in the wrong kinds of investments when it comes to investing. Sure, you’ve seen a chance online or heard of a fantastic program from a buddy that you might join in the future. You can start making money by signing up 2-3 people for the program, teaching them how to sign up others for the same scheme, and eventually, you’ll have hundreds or thousands of people in your downline. You may have seen some users proudly show off pictures of their houses and sports cars or smile while waving a dollar bill in the shape of a fan.

The majority of people today question the legitimacy of this system. Simply searching for the firm name on Google would likely reveal that it is a pyramid scheme.

Filipinos are frequently attracted by the system’s large profits that are promised if you can adhere to their rules and get the rewards. A rapid return on investment with significant returns? When an offer appears to be too good to be true. Since it is probably untrue, they were forced to do so because they wanted to invest their hard-earned money. As a result, they are more vulnerable to fraud, which could lead to losses in cash. Keep your passion from impairing your judgment.

How do you avoid it?

The most effective defense against these frauds and scams is financial literacy. Be wary and resist the urge to believe promises that seem too good to be true. Remember that a wise investment pays off in the long run despite taking time.

4. No Investment Experience or Too Afraid to Invest

Although not the only one, real estate is an excellent investment. Why not invest in stocks and learn about the stock market? The bank’s financial advisor can get information about mutual funds and treasury securities. You might even start your franchise as an alternative. Think about investing in a pension plan or earning a life insurance policy.

Let’s return to real estate and/or buying properties, though. Affordable house and lot alternatives are available from Bria Homes in well-located, easily accessible neighborhoods. One of the first stages to reaching your financial objectives can be owning a home at Bria houses and land. Of course, our modern-day heroes, the OFWs, will benefit significantly from this investment. These are a few instances of how investing may help your money work for you. The present is the ideal time to invest. However, many overseas Filipino workers desire to invest but are unsure of where or how to do so.

How do you avoid it?

At that point, financial literacy is helpful. Knowing how your money works and having the knowledge and skills necessary to make wise financial decisions are all signs that you are financially literate. Just keep in mind that there are numerous approaches to boost your financial situation.

5. Not in the Mindset of Preparing for Retirement

Financial education ought to be a priority for any OFW. People can wisely invest their hard-earned money if they have the correct information. Because, regrettably, having a job won’t make you rich. It’s a little direct and unpleasant, but it’s still true. Contrary to appearances, reality hurts, and we must be open and honest with you about it.

Your vitality, strength, and talents will deteriorate as you age, and working will eventually become impossible. Even if you only set aside a little portion of your income for savings, there is no such thing as too much money saved. Does it satisfy you? You must become aware and make changes in your life before you encounter any of these terrible circumstances.

Aside from that, nothing lasts forever. Yes, you are an OFW if you have a job offer from a company that will let you work for them. The world is still filled with many mysteries. You might have a job loss, financial difficulty, illness, or accident.

An OFW is thought of as having transitory work. Your agreement may be canceled anytime and without cause, if you haven’t given this any thought. They are compelled to borrow money from coworkers and even take out a loan from their employers because they lack emergency funds to pay their bills. The high-interest rates harm their financial status.

How do you avoid it?

Set aside a separate fund for your retirement, a fraction of your monthly salary could make a big difference. It doesn’t have to be as big as your savings, as it will eventually add up because of compounding. This will significantly help you when your retirement comes.

6. Reckless Spending/”Gastador”

Some OFWs can’t seem to stop spending money foolishly. That’s because they can now, for the first time, produce more than they require. Some Filipino OFWs think that eating out and going to the coffee shop are forms of treatment that could help with the illnesses that afflict so many Filipinos abroad. This could be a result of prejudice, workplace stress, or homesickness.

Despite understanding that they deserve a little pampering now and then for all the effort they have put in over the years, they also have a tendency to splurge. Spending haphazardly will quickly bring about financial ruin for them. They quickly realize they have spent more money than they have received. There will soon be a mountain of debt from credit cards and loans.

While mistakes can sometimes be prevented, once they’ve been made, they cannot be reversed. While you still have the chance, try to change your bad habits and keep the end goal in mind. What motivates us to keep going down this path of financial success is the desire for a brighter future for our family and for ourselves. Don’t blow the chance to get chosen and hired in a foreign nation. Don’t let your sacrifices go to waste; make the most of your hard-earned money.

How do you avoid it?

Find out what your family needs, not what they desire. Send the amount of money necessary to cover all the essentials. To grow your money or produce more earnings in the long run, save a portion of your hard-earned cash in a bank or investment. Make a list of your priorities and make a note of your needs. You can also get what you desire but do it responsibly. Don’t you want to avoid wasting the money you’ve worked so hard for?

Conclusion

If OFWs have a basic understanding of financial concepts, they can help them increase and preserve their financial resources. When they have the necessary information, they can choose the best investment vehicles while working abroad and make informed decisions about saving more money. People can avoid frauds that promise large profits quickly by being financially literate.

Having a clear financial goal while working overseas is especially important for OFWs since it will help them stay focused and prevent overstaying.

OFWs who intend to retire in the Philippines should also research options that could help them increase their retirement savings and provide extra cash in the event of a severe illness.

For OFWs returning to the Philippines who don’t intend to work as employees anymore, investing in real estate and buying a house and lot is significant; fortunately, Bria is here. Bria Homes cater to regular Filipinos who want to own a high-quality and affordable home. Start a business renting out houses, known as RFO houses and lots, as another option.

Which of these errors you are accustomed to? OFWs must be mindful of their flaws and inadequacies regarding financial issues. Acting on it and fixing our shortcomings can help us overcome hardship, deal with problems, and live a more progressive life.