Investing and the OFW Dream

I am Beverly and I am an OFW for more than 12 years now here in Dubai, living the Filipino expat life here with my two kids and husband. The kids had always been our drivers. Every move we make is about them, with their comfort being our priority. We’ve been through the good life of being an OFW as well as the struggles and challenges.

For the most part, we have only been working on our short term goals for our kids -- get them into school, get them to stay in a decent apartment, get them go to some of the places where they can play, among others.

Whenever our short term goals are met, we pat our backs for getting the comfort we desired --- AT THE MOMENT. This, until we were thrown into situations where we realized that despite the long years we were OFWs, we remain not ready for the LONG TERM. We are not ready to resettle back to the Philippines with the uncertainty of income back home to sustain our needs. We are not ready for the educational funds for kids. And the list goes on.

I lost my job in 2014 due to market conditions specific to the industry of the company I worked for. At that time, we had some savings, as well as a decent amount of gratuity and redundancy pay I received from my work. The first months were the best days I had for a long time, so I thought. For a while I had a break from working late in the office, for sleeping 2 to 4 hours a day at times, and a freedom from the tension of meeting work deadlines. It was heaven, to say. I got so used to this comfort that I decided being in control of my time is the best choice. Instead of getting employment, I engaged into a business, but one that I did not have previous knowledge or experience in. I just armed myself with the thought that my hardwork and dedication will lead me to succeed in business. But it turned out I was wrong as my first project plunged into a grand loss where I had to withdraw all our savings, borrow from friends and family, take out credit card loans -- just so to meet my contractual obligations urgently. In a matter of a week I wiped out our savings earned through many years, and incurred loans.

While we were managing the payment of our loans, we thought the easiest way was to resort to sell whatever we have to repay our obligations in the shortest time. But instead our selling whatever we had, we checked our cashflows and worked on cutting down on our family expenses while we try to earn additional income.

This point in our life was an eye-opener for us in terms of our capabilities in managing our resources:

1. We are capable to adjust our lifestyles, on spending less.

2. Savings in the bank or bond certificates are very liquid assets that can easily be taken out from the bank. Earn it in 10 years and withdraw it in a minute. It’s face value stays the same, not adjusting to catch up with inflation or investment returns over the years.

3. Credit standing and trust is essential to build and keep. I managed to lessen the cost of borrowing even with my credit card loans (approx 3% for six months term). I cannot also thank my friend enough for lending me without interest just so I meet my contractual obligations.

At this time, we also went back to assessing that for being an OFW for a decade we still did not have a house to call our own in the Philippines. Definitely, we are not ready at leaving our being OFWs and live back home as a family.

The small land we bought home in the Philippines is situated in a subdivision that has restrictions in terms of what we can build that includes (1) a bungalow 50 sqm small house is not allowed, (2) The place is purely residential that we cannot build a commercial or apartment type house so we can generate income from. If we are to build that house, we have to take out a sizeable amount of loan. The only way to turn it into investment is to realize it by property value appreciation. With the stability of our jobs being an issue few years back, we did not buy into the possible cash straps of taking huge loans with our salaries as collaterals to be able too build a house.

Then came the opportunity to be introduced to Manny Villar’s Vistaland project that has been launched in our home city. This is Brent Hill condominium in Baguio. We opened ourselves to understand how condominiums are investments. Ironically, at the time we were paying loans that I incurred from failing in business, we also at the same time signed up for two condominium units in Brenthill.

Why we signed for Brent Hill condo units:

1. We looked at it as our fixed forced-savings each month that we have to set aside before anything else. We cut down on our little luxuries to cover this.

2. It is a non-liquid saving mode, one that we cannot conveniently withdraw the moment we need cash. Convenience in converting assets to money is good, however, we discovered we are capable of finding other solutions when we needed it at less cost.

3. As the property is on a pre-selling stage, it gives us the opportunity to pay the downpayment in installments interest-free. Continuing this on a long term, it allows us to build a property in smaller monthly installments that we can eventually call our own without being overwhelmed with a one-time-big-time cash outlay.

4. We expect to generate rental income once it is turned over to us. Baguio is home to us and we understand the tourist and student market to rent it out. The rental income will then help us pay the monthly amortizations for the bank loan to pay towards ownership of the property. To our peace of mind, the condo unit itself becomes the collateral supported by rental income that would save us any tension of having to rely on our salaries for paying the related bank loan.

5. We expect property value appreciation especially with the strategic location. This appreciation mitigates the impact of inflation that doesn't happen if we just put our money in the bank. In contrast, money placed in the bank devalues over time due to inflation.

We may have missed early on to realize the importance of investing as an integral part of realizing our OFW goals, but we are optimistic that we just started to build the right mind set and to continue on the right path.

As I believe in Vistaland, I am now a Property Consultant for its real estate projects happy to share my thoughts and time to others who are looking for investments and also for houses they will call their home.

Follow my journey in exploring the investing and home-owning path as an OFW here in this blog.

Sincerely,