6 Investment Options in the Philippines for OFWs
Investing is something that everyone should learn. It’s like saving cash but better in almost every way. And while it’s true that risks float alongside with it, the bounty surely is gratifying.
Don’t just save. Invest.
You might have heard this phrase several times over but only because it’s true. Storing your cash in a bank or in your closet (Go on, I won’t judge you for that) would only get beaten by inflation. Keep this in mind; Save for short-term. Invest for long-term. If you want to replace your iPhone with the newest one, then save up until you have enough cash. But if you’re saving up because you dream to travel the world after retirement, then boy you’re on the wrong track!
Now, how can OFWs invest?
Many people work hard to earn money only for it to last momentarily. This is not bad per se, especially if you have mouths to feed and mountain of bills to pay. OFWs are the best example of this. They send money to their families in the Philippines until nothing is left to save. That is why it’s very important that they learn how to invest because this doesn’t only help them budget their earnings better, but also secure their future.
So to assist our fellow Filipinos working abroad, we provide below some of the most sought-after investment options in the Philippines that OFWs can invest in:
1. Real Estate
Even with little knowledge, you can invest in Real Estate easily. You can barely run to some trouble as long as you have the money to pay for your property. What’s even better is that properties appreciate in value over time. So the longer you have it in your hands, the better ROI you’ll get once you find yourself a buyer .
Our Advice: Another option is to have your property rented out which will generate recurring income. Doing so would be like having someone pay the property for you while you still keep the ownership!
2. Stock
Contrary to Real Estate, Stock Investment requires a great deal of knowledge to get started with. It’s basically buying a portion of ownership from a company of choice which are expressed in “Stocks” or “Shares”. The trickiest part is that stock prices change dynamically. It’s important to be attentive to figure when to buy or sell stocks. The basic rule is to buy stocks when price is low, then sell at its peak. But this doesn’t always work since some companies never manage to increase value once they drop their price per share.
Our Advice: If you are not confident with your buying and selling skills, then you could opt to buy shares from a lucrative company and let it sit for a number of years. You’ll then receive cash (or stock) dividends periodically, provided that the company is financially gaining.
3. Mutual Funds
There is a way to invest in stocks even without knowledge on how the market behaves. Mutual Funds might be one the most accessible way to start investing since the fund managers will do most of the job for you. They basically pool certain sum of money from many other investors then use the collected funds to purchase stocks, bonds, and other highly liquid assets. Capital gains earned from those investments will be then distributed to the investors.
Our Advice: Most insurance companies offer life insurance with investment component. These kinds are win-win since it covers both life and financial security.
4. Unit Investment Trust Fund
Akin to Mutual Fund Investment, UITF or Unit Investment Trust Fund lets professional fund managers pool funds from various investors to form a trust fund. But instead of shares, you are actually buying units of investments. This means that you won’t own any part of the company. Another advantage of UITF is that it’s more accessible than Mutual Fund since you can easily open an account from any Philippine bank.
Our Advice: Investing in UIFT is ideal for people who do not have much time and knowledge to invest in individual stocks. Although risky, greater yield could still be expected.
5. Corporate Bonds
In stock investment, you buy a portion of a company. With Corporate Bonds, you lend your money to the company. This gives a fixed interest income (known as coupon) for a certain number of years. This is ideal for investors who are trying to preserve their money. Every year, the investor receives a fixed percentage of his investment then after maturity, the capital will be given back in full.
Our Advice: Corporate bond is similar to storing your money in a bank and earning interest along the way. But given that it is an investment rather than a bank saving, it is not covered by the same insurance you’ll get from banks. Your bond is only as safe as the company you are investing in. So keep this in mind: Higher interest almost always means higher risk.
6. Cryptocurrency
For starters, Cryptocurrency is a decentralized virtual money that functions similarly to cash, except no one controls it. Each type of cryptocurrency or token has its own value. Bitcoin, for example, can be used to buy things electronically. But instead of using it to purchase products or services, most people tend to stockpile and let their market value increase overtime. A year after its launch, Bitcoin was priced at $0.39. Each year since then, the price abruptly increased and in 2017, it topped at $4400! Due to its growing demand, the value of most cryptocurrencies are continuously increasing making it a good investment option.
Our Advice: Carefully observe the token market to see which token is in demand and has the most potential to increase in market value, then acquire a certain amount of that token. Remember to never use them for their intrinsic value especially if your goal is to invest.
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