Personally, I come across sob stories like these quite often, and surprisingly, from people who you think should have known better.
The biggest problem is that OFW employment is not guaranteed – you can easily lose your job without warning. And when that happens, your source of income dries up.
As an OFW, you should set aside a portion of your money for the future. By this, I don’t mean just putting it in a bank, but putting your money in investments that can make it grow.
You don’t have to invest a large amount of money all at once. In fact, it’s probably a good idea to start small to help you get your feet wet.
1. Real EstateGiven the nature of an OFW’s employment, real estate is a very popular option for long term investment. In fact, the current property boom we see in Metro Manila is largely fueled by OFWs, who buy real estate as preparation for future homes and as money-making vehicles.
The downside of real estate is that it requires a large amount of funds and its low liquidity means that it might take a while before you find a buyer should you ever decide to sell your property.
2. Mutual FundsA mutual fund is essentially a pool of funds taken from different investors that are then placed into different securities such as stocks, government bonds and other instruments.
One advantage of mutual funds is that they are handled by expert money managers, so you don’t have to do the investing yourself. Mutual funds are a good choice as a user-friendly and diversified investment.
3. Unit Investment Trust Funds (UITF)A UITF is similar to mutual funds in that it is also a pooled fund handled by fund managers. UITF investments are often offered by banks as a higher return alternative to traditional time deposits. Many first time investors invest in UITF because of its easy availability and its relatively low risk compared to other investment vehicles.
4. Stocks/EquitiesWhen you purchase stocks, you’re essentially purchasing a share of ownership in a company, thus you will have to do research on which companies are worth “owning”. This makes stocks a good investment for OFWs who have high risk appetites and are willing to be more “hands-on” with their investments.
5. Foreign ExchangeForeign exchange trading or forex is the ultimate high risk-high reward investment. The advantage of investing in forex is that it is highly profitable for those are successful in it.
However, the downside is that it is also easy to lose large amounts of money through bad decisions. This makes forex trading ideal for OFWs with the highest risk appetite and who are willing to study the strategies and intricacies of this market.
Before you jump into an investment, take the time to determine your needs, your risk appetite and your timeframe. Make sure that the investment you choose is the best one for your needs.
About the Author:
Bwayan Jordison is a contributor and Forex Trader at Metisetrade Inc., he writes articles to help and educate everyone about the benefits of investing to Foreign Exchange in the Philippines.