Fundamentals of financial literacy for OFWS
WHAT MATTERS MOST - Atty. Josephus B. Jimenez (The Freeman) - January 12, 2019 - 12:00am

The greatest tragedy that could befall a Filipino migrant worker is to have worked for 30 years and then come home to a broken marriage, a shattered family, and zero money to pay for medical and other basic needs of an ageing retiree. I cannot do something about the shattered family and broken marriage, but I can help on the matter of teaching, instilling, and guiding OFWs on the fundamentals of financial literacy. I can help guide our migrant workers to a retirement life with financial independence and freedom from uncertainty and difficulties. I did this for nine years as a labor attaché to Malaysia, Kuwait, and Taiwan,


My formula is simple: Teach OFWs to spend only fifty percent of their monthly net income, save twenty-five percent and invest the last twenty-five percent. I used to gather at least a hundred OFWs every Sunday in the embassy. Then I asked them if they wanted to have one million pesos in the bank by the age of 50. And when they say yes, here is my formula: Compute the difference between fifty years old and their current age. Assuming one is 25 years old, then he has 25 years to save one million pesos. That means, he has to save P40,000 every year or P3,340 a month. That is easy to achieve considering that each OFW earns no less than thirty thousand pesos a month.

If an OFW earns P30,000 a month, he must only send home P15,000. He should save the P7,500 a month and invest the P7,500. If he does this religiously, he will only take eleven years to have a million in the bank. That means that by the age of 36, instead of 50 years old, that OFW has a million pesos in his bank account, plus interests compounded annually less taxes. The investments should be earning more money. He can buy a pair of goats and let his cousins take care of these farm animals. In a matter of one year, the two goats can become six or even more. He can also invest in a barber shop or a dress shop to be managed by his spouse or sibling. By this, he will start to have multiple incomes.

The OFW must discipline his family members and relatives. They must cooperate in finances. They must learn to appreciate what is called postponed gratification, instead of instant satisfaction. The OFW has no retirement pension, unless he religiously maintained his SSS membership. Thus, with more reason, he should prepare for the sunset of his life. He cannot hope to depend on his children for his old age maintenance medicines and other medical needs. The OFW must prepare to grow old alone and independently. The tragedy of coming home with no savings and with shattered family and broken marriage is the worst that can happen to an OFW.

To avoid such a great misfortune, every OFW should learn the fundamentals of financial literacy. There is no other way.

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