Personal Financial Planning For Overseas Filipinos Tony V. Ranque Tony V. Ranque ERCOF Phils, Inc. ERCOF Phils, Inc. “ “ My My ^ ^ Life Story” Life Story” Financial Financial BSP Regional Financial Literacy Campaign Baguio City, February 27, 2007 Baguio City, February 27, 2007
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Personal Financial Planning
ForOverseas Filipinos
Tony V. RanqueTony V. RanqueERCOF Phils, Inc.ERCOF Phils, Inc.
““MyMy^̂
Life Life
Story”Story”
FinancialFinancial
BSP Regional Financial Literacy CampaignBaguio City, February 27, 2007Baguio City, February 27, 2007
INTRODUCTION
““Do you agree with me when Do you agree with me when I say that we, Filipinos, I say that we, Filipinos,
are a loving people?are a loving people?
““Yes, we are! For Yes, we are! For lovelove is the is the main reason why main reason why OFWsOFWs
are now working abroad” are now working abroad”
““OFWsOFWs want to give better want to give better future future
to their loved ones” to their loved ones”
INTRODUCTION
““But is it not ironic that But is it not ironic that OFWsOFWs and their families are now separatedand their families are now separated
physically because of this physically because of this love?love?
““How then can How then can OFWsOFWs come come home so that they are back home so that they are back together with their loved together with their loved
ones once more?” ones once more?” ““The key is through The key is through
reciprocal lovereciprocal love by the by the members of the members of the
family of the family of the OFWs”OFWs”
Map to Financial Freedom“Wealth is having the money to
fund one’s lifestyle at any given time”WORK!WORK!WORK!
ACTIVEINCOME
SAVE!
INVESTIN
ASSETS
PASSIVEINCOME
% SPEND!SPEND!SPEND!
Do OFWs and Families Do OFWs and Families Save?Save?
• Education of their Education of their childrenchildren• Buy house and lotBuy house and lot• Buy a vehicleBuy a vehicle• Buy home appliances Buy home appliances andand other personal items other personal items
YesYes, they do!, they do!
So, can So, can OFWsOFWs now go now go home?home?No, not yet!No, not yet!
Because most Because most OFWs OFWs do do not have enough funds not have enough funds yet to cover for their yet to cover for their
coming homecoming homePerhaps some of the Perhaps some of the OFWsOFWs are still paying are still paying
debtsdebts
Set Financial GoalsSet Financial Goals
• Put in WritingPut in Writing• State it in Positive State it in Positive TermsTerms• Set Specific TimeframeSet Specific Timeframe• Monitor ProgressMonitor ProgressExamples: Examples:
- To have P 2.4 Million at Age 50 - To have P 2.4 Million at Age 50 which which will earn P240,000 (10% interest) will earn P240,000 (10% interest) so so that I (an that I (an OFW)OFW) can come home. can come home.
Become Debt-Free• Eradicate Bad (unproductive) Eradicate Bad (unproductive)
DebtDebt• Say “No” to Credit Card Debt! Say “No” to Credit Card Debt!
Good DebtGood Debt
““A good debt is an instrument of A good debt is an instrument of growth” growth” Borrow money only to generate Borrow money only to generate
income when the earnings is income when the earnings is bigger than the interest of loanbigger than the interest of loan
Ca$hGolden Rule: Pay Ourselves Golden Rule: Pay Ourselves
First! First!
Income – Expense = Income – Expense = SavingsSavings
Income – Income – SavingsSavings = = ExpenseExpense X X XX X X
Remember: For an Remember: For an OFWOFW, savings is , savings is not an not an OPTIONOPTION, but an , but an OBLIGATION!OBLIGATION!
(Create a Savings Habit) (Create a Savings Habit)
Save10% Share
10%
Spend80%
Save Share Spend
Ca$h3S – Save, Share and Spend3S – Save, Share and Spend
Ca$h
When Spending, Always When Spending, Always Ask,Ask,
(Create a Savings Habit) (Create a Savings Habit)
Do I Do I need need it or just it or just want want it?it?NeedsNeeds
are are necessary necessary for survivalfor survival
WantsWants are things are things you desire you desire but can live but can live withoutwithout
Other Reasons why OFWs and families do not have
savings• Standard of Living is Standard of Living is raisedraised• Supporting Extended Supporting Extended FamilyFamily• Procrastination Procrastination (Mamaya na!)(Mamaya na!)• Instant GratificationInstant Gratification • Fear Factor (Risk Fear Factor (Risk Profile)Profile)• Poor Spending HabitsPoor Spending Habits
Invest $avingsWhere to Invest? Where to Invest?
• Real Estate (Apartments)Real Estate (Apartments)• Start Your Own Business Start Your Own Business • Pension Plans/Pre-Need Pension Plans/Pre-Need
PlansPlans• Banks: Time Deposits (5-Yr)Banks: Time Deposits (5-Yr)• BondsBonds