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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

My Financial Life Story (Bsp)

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Page 1: My Financial Life Story (Bsp)

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

Page 2: My Financial Life Story (Bsp)

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”

Page 3: My Financial Life Story (Bsp)

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”

Page 4: My Financial Life Story (Bsp)

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!

Page 5: My Financial Life Story (Bsp)

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!

Page 6: My Financial Life Story (Bsp)

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

Page 7: My Financial Life Story (Bsp)

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.

Page 8: My Financial Life Story (Bsp)

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

Page 9: My Financial Life Story (Bsp)

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

(WRONG FORMULA)(WRONG FORMULA)(CORRECT FORMULA)(CORRECT FORMULA)

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)

Page 10: My Financial Life Story (Bsp)

Save10% Share

10%

Spend80%

Save Share Spend

Ca$h3S – Save, Share and Spend3S – Save, Share and Spend

Page 11: My Financial Life Story (Bsp)

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

Page 12: My Financial Life Story (Bsp)

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

Page 13: My Financial Life Story (Bsp)

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

• Government, Corporate, Government, Corporate, LGULGU

• Stock Market Stock Market • Mutual Fund/UITFMutual Fund/UITF

Page 14: My Financial Life Story (Bsp)

Invest $avings Evaluate Investment as to:Evaluate Investment as to:

““The higher the return, the higher The higher the return, the higher the risk!” the risk!”

INVESTMENTEVALUATION

RETURN/YIELD

SAFETY/RISKLIQUIDITY

Page 15: My Financial Life Story (Bsp)

How to do it?

““Start saving even with small Start saving even with small amounts and do it regularly”amounts and do it regularly”

In the event we succeed, In the event we succeed, let’s share our success with let’s share our success with

others.others.

Form Savings and Form Savings and Investment GroupsInvestment Groups

Among members of the family, Among members of the family, friends, neighbors, OFW Assns.friends, neighbors, OFW Assns.

Page 16: My Financial Life Story (Bsp)

“The time to start is NOW!!!”

Tony V. RanqueERCOF Phils, Inc.celfone: 0927-916-2592email: [email protected]

“Let’s do it, folks!”

“Kaya natin ito!”

BSP Regional Financial Literacy Campaign

Baguio City, February 27, Baguio City, February 27, 20072007