Big Mistakes Pre-Millennial and Millennial Overseas Filipino Workers (OFWs) Are Making
Overseas Filipino Workers (OFWs), Become Financially Literate
“I need help for my dialysis and maintenance medications,” pleads one of my friends through a group Messenger one morning. He was retrenched last year by his company due to old age and Saudization Program. He is now in the Philippines for good.
Jonathan, (not his real name) worked in Saudi Arabia for 32 years. When the unfortunate event of sending him home happened, he was cash-strapped. No emergency savings, no retirement savings, no life insurance, either. But yes, he has a modest house - the only living proof of his three decades of toiling in the Middle East.
The Pain of Being Financially Poor
I grew up in an impoverished family of ten! Cash was extremely scarce. The exiguous income from the farm my father owned was barely enough to make ends meet. We were broke but not broken. I was so blessed to have a mother who helped him with the responsibilities of putting up our home. Our economic situation was my sole motivation to strive hard in my studies and get a decent job later. (That is the Pinoys’ mindset). Nobody taught or advised, “Study hard and build your own business later.”
Being poor, we were deprived of so many things. We did not have new clothes during Christmas and no fancy foods on the table. Yet we survived. And the most important of all, we were happy.
And by the way, we only had few relatives then. Very, very few.
The Need to Educate Yourself Financially
Like Jonathan, I almost fell into the same trap of financial failure had I not immersed myself in money matters years later. Although, I still have some regrets of not knowing what I know now 20 years ago when I first set foot in Saudi Arabia and became an OFW. I would have been more financially free now had I learnt how to save and invest my hard-earned money.
But hey, it’s never too late to start. My interest in business and investment started when I met my ex-girlfriend and eventually got married. Our first merchandise were Kangkong (Water Spinach) and frozen Milk Fish which we sold to her colleagues, in the bus, as they leave for duty at 11pm! Yes, almost midnight in the cold city of Abha. We had our first daughter then. I was so ashamed that I argued with her to never do it again.
But I did, of course. We went on to sell recharge cards, perfumes, food meat, in addition to frozen fish.
Then I got interested in business and started reading books. The first of which was Robert Kiyosaki’s Rich Dad, Poor Dad and Francisco Colayco’s Pera Mo, Palaguin Mo. I went on to read several other books and learned about saving and investing. I also surrounded myself with friends who think alike.
The hardships I experienced growing up gave me the right perspective in handling my finances years later.
Applying What I’ve Learned
Your House and Car are not Assets but Liabilities
The most astounding principle I’ve learned in Rich Dad, Poor Dad is when he said that your house and lot and your car are not assets but liabilities. They can only become assets when they put money in your pocket. This runs diametrically counter to all what we believed it was – that house and car are assets. And this belief is heading all of us to the wrong direction. Like the mindset of majority of OFWs, having a house and a car is on their priority list only to find out later that they are cash-strapped. What happens next is everyone’s guess.
Pay Yourself First
Likewise, I have learned from Pera Mo, Palaguin Mo (Grow Your Money) that you have to pay yourself first. This means that 20% from your total earnings must be set aside for savings, which I practice until now. That savings can then be used to either put a business or invest it. (Beware of pyramiding scam).
So with our savings, my wife and I decided not to build a house. Instead, we first built 4-door studio-type apartment on the ground floor in succession. Soon, when funds were available, we started the construction of the second floor. The earnings are not that huge but enough to pay our utility bills and daily allowances for the kids.
Assess Your Priorities Now
Learn from the mistakes most OFWs make - buying unnecessary gadgets that do not have value later, not paying themselves first and prioritizing on building and buying assets that will not put money in their pockets.
The good news is, it is never too late to start. I encourage you to assess your priorities and renew your mindset. Read books and browse the Internet. It has a wealth of information about saving and investing where you can learn from. Attend seminars that offer financial literacy courses and be well-informed. Knowledge is power, so they say.