Where should I invest my savings?
money. When you borrow money against future salaries, and the money borrowed is spent on consumption, there is a high risk that you will borrow again in order to repay your loan because you will most likely use your salaries somewhere else either for personal or family needs. Many OFWS are poorly advised on how to use borrowings wisely.”
Another mistake, Ong adds, is prioritizing expenses first before savings. “One would normally look at what to spend first and leaving whatever is left to savings,” he says.
Ong, who writes a personal finance column for Entrepreneur Philippines, says the habit of saving depends largely on the lifestyle of the person. While some people may find it hard to save, others may find it easy.
“The first thing to do is change your mindset,” he says. “Understand and embrace the reason why you need to save. Come up with a savings plan, perhaps, start with 20 percent and increase it slowly until your disciplined spending has adjusted to your new lifestyle in order to achieve a higher savings percentage.”
Paras seems to be doing it right. He says he has already bought property in Minnesota and participates in the US government’s 401K, a retirement program. He says his company also matches a certain percentage of his contribution.
“Outside of that, I have a monthly savings goal,” Paras explains. “I take that out of my account and place it in a higher yield savings account even before I start paying off bills. I also invest in the company I work for through an ESPP (Employee Stock Purchase Plan) program. I dabble in cryptocurrency (Bitcoin, Ethereum) but very casually. I don’t put money in it that I’d be scared to lose at the casino—because it’s really a form of gambling at this point. We’re starting to talk to a few investment managers to put our savings to work, but nothing concrete on that yet. I have property in the Philippines, but don’t really invest in anything else there.”