Month: July 2019

At this day and age, convenience is everything. You constantly find for things that will make your life easier and more enjoyable. Since you are working overseas, you also want to ensure that your family gets what they need even if you are miles away.

That being said, can you imagine transferring money or paying bills even without physically being in the Philippines? Believe it or not, you could do it now.

The best part is you could save more time and devote extra hours at work instead of waiting for your turn in banks or enduring a long commute just to deposit money because your family back home needs it. After all, when you are working overseas, time is everything.

This is what digital banking is all about. Unfortunately, only 14 percent of Filipinos are taking advantage of banks’ online capabilities. If you’re not one of them, then it’s time to consider looking closely into digital banking.

But first, what is digital banking?

Digital banking is an online facility that allows you to perform various bank transactions using your smartphone. All you need to do is to download the bank’s app on App Store or Google Play Store and you can do these, but not limited to:

• Opening a bank account
• Depositing money
• Paying bills

In other words, you can manage your account with just a few clicks and make banking transactions easier and more accessible.

What are the features of digital banking?

Many of you might be wondering why digital banking is the next big thing. The truth is there’s so much you could do. This includes:

• Opening of bank account without physically going to the bank.
• Depositing of money, although as of this writing, only check deposits are allowed. All you need to do is to take a picture of the check and it will be processed. Unfortunately and since digital banking is still on its infancy stage, cash deposit is not yet allowed since there is no program – yet – that could read paper money.
• Managing of bank account, whenever, wherever.
• Paperless transaction
• 24/7 customer service wherein you can call anytime
• Easy and secure banking

Hopefully, more features will be added but so far, these are sufficient reasons to entice you to try digital banking.

How is digital banking different from online banking?

This is a good question.

Online banking and digital banking are similar, except that the latter has more extensive features.

Online banking is limited. You could transfer money from one account to another or pay bills, but that’s it. In fact, you need to have an account with a particular bank first before you can access its app. Otherwise, even transferring money won’t happen.

How does digital banking benefit OFWs?

The answer is simple: convenience.

Being miles away from your family is not easy, more so managing finances. It is also important to have a bank account where you can deposit money because you’ll never know what could possibly happen in the future.

Don’t be afraid to try digital banking. It is understandable to be skeptical about it but if you don’t give it a try, then you’ll never know how much it could benefit you.

Where do you like to put your hard-earned money? Surely, you have a long list of investment options, which also includes real estate. By real estate, we mean not just your family home but also a property where you can earn additional income. This is a good form of passive income because you get to earn money without exerting too much effort.

“Pero mahal bumili ng lupa.”

“Kaya ba namin bumili ng lupa na pagkakakitaan?”

These are just some of the many concerns echoed by thousands of OFWs when confronted with the idea of investing in real estate. While these may be a cause of concern, these shouldn’t stop you from trying something outside of your comfort zone.

Check out these tips on how to invest in real estate:

Tip No. 1: Invest as early as possible.

If you want to make the most out of your investment, then you need to start as early as possible.

Make the most out of your hard-earned money by setting aside sufficient amount for your real estate investment. Minimize your spending, avoid buying unnecessary items, and prioritize your expenses. Now is the perfect time to establish your Emergency Fund, which you can use for your real estate purchase.

Plus, land value tends to appreciate, so if you don’t buy now, then you might have a hard time buying the same property after five years.

Tip No. 2: Location is key.

What’s the point of having a property you can earn from if it is not located in a prime location?

When it comes to real estate investment, location is everything. Imagine what the area might look like 10 years from now. You also want a location with high foot traffic or near commercial establishments so people will come to you.

Properties located in prime locations may be more expensive than usual, but think of this as an investment for your future.

This leads us to the next tip.

Tip No. 3: Don’t just settle for residential properties.

Real estate is not just for residential purposes. You can also invest in properties that are commercial in use.

Consider getting one if house is no longer an issue. Or, you can get a building, utilize the upper floor as your residential home, and the lower floors will be for business purpose. That’s hitting two birds with one stone.

Tip No. 4: Assign someone who can help you with the buying process.

This is important. As an OFW, you might not be able to process the sale personally since you are overseas.

That being said, you need to assign someone you can trust to transact on your behalf. There is money involved here, so make sure you get someone who is honest and trustworthy. Otherwise, you might end up losing large amount of money, no thanks to your attorney-in-fact.

Tip No. 5: Prepare the necessary fees and documents.

Investing in real estate requires not just time but also money and effort. You will be asked to prepare documents such as Deed of Sale and Special Power of Attorney in case you are unable to do business personally. You also need to prepare your employment documents like Certificate of Employment, employment contract, and valid working visa.

That’s not all. Money is involved when buying real estate. Fees such as Documentary Stamp Tax, Capital Gains Tax, and Transfer Tax are some of the expenses you have to shoulder when buying a real estate property.

In case money is a cause of concern, there are home loans available and offered by banks and government agencies. Take advantage of those so you can start with your real estate venture.

They say that if you want your child to be successful in life, you need to start teaching them as early as now. After all, childhood is the best way to instill values and skills that they could carry with them as they get older.

Surely, as a parent, you want to ensure that their future is bright and that they will be ready even when you’re gone. You might even dream that they will be the next business tycoon in spite of your humble beginnings.

Don’t worry. You can do that. With the right amount of push and encouragement, plus these tips, your child could be the next Henry Sy or John Gokongwei:

Tip No. 1: Guide them, but don’t do things for them.

As a parent, it is understandable that you want to make things easier for your kids. If you really want them to succeed in life, then you need to stop doing things for them and let them be.

Spoon-feeding your kids teaches them to be dependent on you, which is something you need to avoid. Show them how to do it and let them do it on their own. Later on, encourage them to do it by themselves.

Make sure you also ask follow-up questions like, “Can you think of another way to do it?” or “What happens if you do this instead of that?” This encourages them to think outside the box and develop critical thinking skills.

Tip No. 2: Encourage your kids to try new things.

This is important. Many businesses start with an idea that could change people’s lives and makes things easier.

Let your child explore and discover things on their own. If they want to experiment on something or showed interested about a certain activity, then go ahead and let them do it. Make sure to support their wants and never discourage them to think outside the box.

Who knows, their idea is the next big thing in the market.

Tip No. 3: Saving is a priority.

Saving is one of the most important skills everyone should know, regardless of age. As early as now, you need to stress the importance of saving for future.

That being said, teach your kids about the importance of money and having an Emergency Fund. Let them know the difference between needs and wants. Encourage them to invest more. Educate them about the importance of spending what they are earning.

More importantly, be a good role model. If they see that you are being wise in handling money, then your kids will most likely follow.

Tip No. 4: Avoid punishing them for their mistakes.

Everybody makes mistakes, including you and your kids. When your kid made a mistake or failed on a particular subject, avoid punishing them. Instead of encouraging them, you could create a culture of fear. This could hinder their plans if and when they decide to start their business in the future.

Instead of getting mad, tell them that failure is part of life. In fact, they shouldn’t be afraid because it will teach them valuable lessons.

The same goes with business. As an entrepreneur, your kid will face tons of challenges and failure, but these shouldn’t stop them from pursuing their dream.

Tip No. 5: Don’t underestimate the importance of social skills.

A lot could happen in a single conversation with a person you just met. This is why it is important for kids to learn social skills early on. It is a good opportunity to meet someone who could potentially help them in their future endeavors.

Bring your kids out to play, enroll them in classes if budget permits, or schedule play dates with your friends. There are tons of skills your child could learn and at the same time, helps build their confidence, too.

Tip No. 6: Teach your kids how to sell.

Business is also about selling. Even if your child has a great product that could change the world, this is useless if he doesn’t know how to sell it.

This could be tricky since not everyone are born to have good selling skills. Still, start small. It could be introducing a product first to your friends or allowing them to manage the social media page. The point is your kid will learn a certain skill through simple acts, so make the most out of it.

Are you ready to hone your future Bill Gates?

Starting your own business is not easy. Even if you have a brilliant idea that could change the world, you still need reinforcements to carry out that idea and make it happen.

By reinforcement, we mean capital.

Let’s face it. Not all of us have millions in the bank. Even if you are earning dollars and working three jobs everyday, your money doesn’t seem to be enough to cover all expenses back home. Surely, you would set aside the money left for emergency instead of funding your own business.

Who do you turn to? Lenders like banks or private financial institutions to apply for a business loan.

Did you know that business loans come in many types?

Read this post to find out the right type of business loan for you:

Term Loan

Term loan is a type of loan, either short or long-term, that helps business owners get necessary funding without using personal funds. This is also ideal for starting entrepreneurs because payment scheme is equally distributed every month. If you plan to get into franchising business, then this type of loan is recommended as well.

You can use term loan for immediate purchases and expenses such as expansion of business, additional working capital, inventory, or construction of your business place among others.

Loan Features:

• Borrow between P100,000 to P20 million, depending on the lender and the security you can offer to guarantee the loan
• Payable in one year to 15 years, depending on your chosen term. Some lenders have a maximum 10-year loan.
• Payment includes both principal AND interest, divided in equal monthly amortizations
• Average interest rate is 7%, although this could go higher or lower, depending on the loan provider

Credit Line

Let’s say the need is not immediate, but you simply want to be prepared just in case you need the money. If that’s the case, then this type of loan is recommended.

Credit line is a type of short-term business loan that you can access whenever there is a demand. The interest, which depends on the prevailing market rate, you pay will also depend on how much you will get from the credit line. You can also borrow up to P20 million.

For instance, you will be given a P5 million credit line, which you can use within one year. On the first month, you’ll get P200K, which will be your Loan 1. The interest you have to pay will be based on the P200K amount. On the third month, you get P500K. This is Loan 2 and the interest charged will be based on the amount you borrowed.

You may or may not use the entire credit line within the year. If you do, then make sure you have enough to cover for the monthly fees. You also have the option to pay off the loan without waiting for the maturity date, making credit line more flexible than term loan.

Depending on your lender, you could also renew your credit line for another year just in case.

Secured vs. Unsecured Business Loan

Both Term Loan and Credit Line can either be Secured or Unsecured.

From the name itself, secured loan means there is a guarantee or security that will serve as collateral for your business loan. This means lower interest rate and you could negotiate a better deal since the loan is secured.

On the other hand, it is a must that you pay your loan regularly. Otherwise, the collateral may be taken from you to pay off the loan.

Unsecured loan does not jeopardize any of your assets. The drawback is that interest rate is typically higher since the rate will serve as your collateral.

Talk to you preferred lender as to the best type of loan for your business. Just in case, Balikbayad is also here to assist you in your financing needs.

It’s not easy to start your own business, especially if you don’t have much experience and business background. In fact, this could be the reason why many are not ready and willing to take the risks.

The good news is you don’t have to take a business course to be able to start your entrepreneurial dream. Stick around and read this post since you could use this as your guide on what to do and how to start your small business.

Step 1: It all starts with an idea.

Every business starts with that lightbulb moment or an inspiration. But if you truly want to succeed in this path, then you need to do either offer something new in the market or innovate a product or service already in the market.

There are tons of small businesses in the market today. Find something that is unique and will make you stand out from the rest.

Once you found your business idea, validate it. Check if the market truly needs it and is willing to pay for the price you offered. This way, you can see if your idea is worth risking or not.

Step 2: Choose a business name.

Choosing a business name is crucial and one of the difficult tasks you need to do as a business owner. The name represents your brand. It’s what people will refer to in case they want to go and try your product or service.

Make sure your chosen name is short, catchy, and easy to remember. Recall is very important in the success of your business.

Once you established your business name, make sure you register it with the DTI if you are a sole proprietor. This way, you have the first dibs on the name.

Step 3: Plan and establish your finances.

It’s not enough that you have a brilliant business idea or a catchy name. Unfortunately, you need capital to make that idea happen.

Now that you identified your business, it’s time to start planning on how and where to get the funds to put it up. Your savings may be a good source, but make sure you won’t consume all in case you’ll be needing some during emergencies.

Borrowing from family could also be a good idea. Pitch your business idea as a form of “investment” where they will earn. Borrowing from lenders like Balikbayad is also a good way to finance your business. Balikbayad offers loan facility for OFWs like you to help you jumpstart your entrepreneurial success.

You also have to make a list of your expenses. This includes but not limited to:

• Permits and license
• Initial inventory
• Market research
• Research and development
• Rent
• Taxes

Keep in mind that your business may not earn during the first two or three years. Having a back-up savings – probably in the form of Emergency Fund – could help you get through until you are able to see the fruits of your hard work.

Step 4: Apply for licenses and permits.

This is a MUST. In fact, one must never operate a business without the necessary permits and licenses. This will prevent you from facing legal obstacles later on.

That being said, what are the permits and licenses you should apply for:

• DTI business registration
• Barangay clearance
• Mayor’s permit or business permit
• Registration with the BIR for the business’ Tax Identification Number
• Other special permits needed based on the nature of your business such as FDA approval, NMIS, or BSP

Step 5: Maximize social media.

This is the easiest, cheapest, and most effective way to advertise your business. Create a Facebook page or sign up on Instagram, and ask friends and family to like and share.

Do you have to be on all social media platforms available? Not necessarily. You need to know where your target market is and focus on that platform. Sticking to one or two platforms is recommended and will make your business more manageable, too.

Following these steps won’t immediately guarantee success. Keep in mind that running a business is not a walk in the park. You will have bumps and challenges along the way, but you can surely weather them all. Good luck!