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Wednesday, May 23, 2018

OFWs Must Save, Get Insurance And Have An Investment

According to the estimate of the Commission on Filipinos Overseas, there are around 10.2 million overseas Filipino workers (OFWs) deployed around the world. This number comprises roughly 10 percent of total population. Approximately 10 percent of GDP  comes from the remittances that OFWs send according to the World Bank. Having a clear financial goal is very important for every OFW. Achievement of this goal could be a determining factor for their success. Thus, every OFW must have a feasible plan. In this regard, the plan can have three key steps— savings, insurance, and investment.
After all, working abroad will not be forever. Eventually, every OFW will go back home and when that time comes, they should be ready.
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According to the estimate of the Commission on Filipinos Overseas, there are around 10.2 million overseas Filipino workers (OFWs) deployed around the world. This number comprises roughly 10 percent of total population. Approximately 10 percent of GDP  comes from the remittances that OFWs send according to the World Bank. Having a clear financial goal is very important for every OFW. Achievement of this goal could be a determining factor for their success. Thus, every OFW must have a feasible plan. In this regard, the plan can have three key steps— savings, insurance, and investment.  After all, working abroad will not be forever. Eventually, every OFW will go back home and when that time comes, they should be ready.  Advertisement        Sponsored Links   {EMBED VIDEO 1 HERE NOW!}  Savings  Saving is all about building the foundation for wealth. However, being a saver is not about being a miser. Every OFW has every right to enjoy the fruits of his or her labor. What is important, though, is to have balance in life. By developing a budget, the OFW will be able to identify priorities, review needs versus wants and, ultimately, be able to live within means. It takes two to tango in budgeting. Both the OFW and the OFW family must be committed and resilient in the implementation of the budget.  Part of saving is the establishment of an emergency fund. This fund will be handy in case of job loss, job status change, adverse health conditions or key asset damage. In the case of the OFW, this fund can be equivalent to six to 12 months of the total monthly family lifestyle expenses. Maintaining a separate liquid account as an emergency fund is recommended for better management.   Insurance The second step is to ensure. Ensuring is all about protecting wealth. The future is uncertain and there are many risks. Continuation of government programs like Social Security System, Pag-IBIG, and Philippine Health Insurance Corp. must be done, especially since these are very accessible in government offices and remittance centers abroad. However, the inflows generated from these government programs may not be enough. A comparison of protection needs versus protection sources will be essential in determining how much insurance cover will be needed for both human capital and valuable assets. Life insurance can help address concerns related to income replacement, illness, education, retirement, burial, debt payment and estate planning. Meanwhile, nonlife insurance can help protect valuable assets for better peace of mind.  Saving and insuring are important, but are often not enough due to inflation. Wealth is measured by money growth in relation to inflation. Therefore, the third step is to invest. Investing is all about growing wealth. OFWs must save and beat temptation, but after doing so, they need to invest to beat inflation. Investing must be based on the life purpose, financial goal, time horizon and risk profile of the OFW.  Investment There are a number of investment options available for OFWs. They can invest in pooled funds like mutual funds, unit investment trust funds and variable unit-linked funds. These funds have professional managers who can help grow fund values over time. For OFWs who have the knowledge and the time, they can also directly invest in the stock market. Different stocks have different strokes so they can diversify. The choice of fund or stock can be based on both current and past performance. They can invest in real estate to generate price appreciation and rental income. They can invest in businesses by either starting a business from scratch or buying an existing business. Hopefully, the business they pick has a defined target market and a resonating market position.   Every OFW must have a financial goal. This should be supported by a plan anchored on saving, ensuring and investing. A plan is only as good as its execution, so milestones have to be defined and tracked. With the continuous trek to success and with a dynamic world, there is a heightened need for continuous learning on the part of the OFWs so they are well-informed and decide wisely.   READ MORE: OFW Help Desks From TESDA Now Available at International Airports    Signs That You And Your Partner Have An Unhealthy Communication    It's More Deadly In The Philippines? Tourism Ad In New York, Vandalized    Earn While Helping Your Friends Get Their Loan    List of Philippine Embassies And Consulates Around The World    Deployment Ban In Kuwait To Be Lifted Only If OFWs Are 100% Protected —Cayetano    Why OFWs From Kuwait Afraid Of Coming Home?   How to Avail Auto, Salary And Home Loan From Union Bank

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Savings
Saving could be difficult to OFWs but it needs to be done. There are OFWs who worked abroad for years but coming home broke.
Maybe they do the common mistakes OFWs make leaving them without a penny saved. 
 By developing a budget, the OFW will be able to identify priorities, review needs versus wants and, ultimately, be able to live within means. Both the OFW and the OFW family must be committed and resilient in the implementation of the budget.
Part of saving is the establishment of an emergency fund. This fund will be handy in case of job loss, job status change, adverse health conditions or key asset damage. In the case of the OFW, this fund can be equivalent to six to 12 months of the total monthly family lifestyle expenses. Maintaining a separate liquid account as an emergency fund is recommended for better management.


Insurance
The second step is to have an insurance. It is all about protecting wealth. In this life full of risks and uncertain turn of events, the continuation of government programs like Social Security System (SSS), Pag-IBIG, and PhilHealth has to be done, especially since these are very accessible in government offices and remittance centers abroad.  Life insurance can help address concerns related to income replacement, illness, education, retirement, burial, debt payment and estate planning. Meanwhile, nonlife insurance can help protect valuable assets for better peace of mind.

Investment

There are a number of investment options available for OFWs. 
You can start a small business while you are still working abroad.
Many OFWs have found their luck in retail stores like flower shops, food cart business or even simply selling coin banks.
You can also consider investing in mutual funds, unit investment trust funds, and variable unit-linked funds. Or if you have the knowledge and the time, you can also directly invest in the stock market. You can invest in real estate to generate price appreciation and rental income. Even the government urges OFWs to invest in government projects.

It is easy to plan an investment, getting an insurance or even to start saving but it all depends on your will to faithfully commit in doing all of these. Retirement is certain and working abroad could definitely end sooner. All you got to have is the determination and will to start doing it now Or you might suffer the same fate as most of the OFWs did.

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