Author: Lara

Let’s say you won in the lottery and the jackpot prize is P50 million. What will you do with the money? Surely, you’ll buy your own house, car (or two!), pay off all your debts, and put up your own business.

What if we tell you that you don’t need millions to become an entrepreneur? Believe it or not, there are business ideas worth trying with only little money involved. Even if it didn’t turn out the way you hoped it would, at least you did not invest a big chunk of your savings on it.

If you are an OFW and looking for affordable business ideas that could help increase your family’s cash flow, then this one is for you. Check out this list and find out what could work for you:

1) Street food business

Many Filipinos love to eat fishballs, kikiam, pork barbecue, isaw, kwek-kwek, and any other street food you can find, especially for merienda. Take advantage of that by putting up your own street food business. All you need is a stall, which can even be in front of your home, griller, and food variants you will sell and you’re all set.

Tip: Aside from the staples, offer other foods like cheese sticks, french fries, hotdogs, and even hard-boiled eggs. Having a variety means you get to cater to different markets, both old and young. Don’t forget the drinks.

2) Cellphone loading 

Who doesn’t have or need a mobile phone? It doesn’t matter how much it costs, but many people need a phone to make communication easier and more convenient. Since not everyone can afford getting a post-paid plan, many Filipinos are still sticking to prepaid. This can be a perfect opportunity to make the most out of this demand by having your own cellphone loading station.

The capital to start this business plus the return may not be that big, but it could give you something extra for the rainy days.

Tip: Make sure that load is available anytime. The more consistent you are, the more customers you will have.

3) Eatery or Carinderia

Who doesn’t love food? If your spouse has the knack for cooking and serving delicious meals, then maximize that talent and put up your own carinderia.

Don’t be afraid to try this one. Target market is not an issue, but the key here is your location, so make sure to set up the carinderia in the right place.

Tip: Consider food delivery service in offices or any business establishments. Everyday, make a menu and deliver the food according to the number of orders. This will give your family extra cash, plus who knows, it could lead to something bigger, say your own restaurant.

4) Food Cart 

Let’s say you are drawn to the food business but not really into cooking. That’s fine. There are many franchisers offering food carts for as little as P20,000, which is ideal for starting entrepreneurs like you.

The good thing about this business is that you don’t have to worry about anything since everything is provided, except that you need the right location. Make sure you choose an area with high foot traffic to encourage more sales.

Tip: Take a risk and start your own food cart. With the right marketing techniques and product, you might soon be a franchisor with people wanting to franchise your business.

5) Online Selling

Online entrepreneurs are becoming popular these days. All you need is a laptop, a good camera, decent Internet connection, and products to sell, and you’re good to go. You can source your products from where you are working or if any of your family members is good at anything, say crafting or baking, then maximize on it.

For starters, you can advertise your products in e-commerce sites like Ebay Philippines and OLX. Facebook and Instagram are also popular channels with many users logging in everyday (who can be your potential customers too). Just make sure to update your page regularly and be nice to customers.

Tip: Choose a product that is not common to many online sellers. This will set you apart from the rest and you will be able to penetrate the market with lesser competition; hence higher sales.

Don’t just limit yourself with these business ideas. Explore your options, know what is required of that particular venture, and stick to it. It will take time before you see the results of your investment, so be patient.

Let’s say you have a five million pesos at your disposal. What will you buy first – a car or a house? Or both?

This is a common dilemma among many OFW families. You work hard overseas to give your family the best things in the world and that includes a house and a car you can call your own, Apparently, you can’t have both since both are major purchases that could affect your cash flow.

This leads you now to the next dilemma: what should you buy first between a car and a house? We hope this post will help to help you decide on which is worth investing first.

But first, evaluate your current situation 

Before you decide on what to buy, you need to assess your current financial standing first. Here are some questions you need to answer to help you evaluate your financial condition:

• How much money am I making?
• How much money do I have left after all expenses and savings?
• Can I pay the car or house in full?
• How much do I have to pay if I decide to get a car or a house?
• What expenses can I forego in order to accommodate the loan?
• Do I have extra money to accommodate the monthly amortization?
• Will the monthly amortization create a strain on my buying capacity?
• Do I have savings or emergency fund that could back me up in case of loss employment?

These simple questions can help you look into your financial standing and determine whether or not buying a new car or house is within your means.

Buying your dream car

Advantages

• Allows you to go from one place to another with ease and comfort since you and your family don’t have to ride public transport.
• Makes it easier for you to travel with your family, especially if you are going out of the city.
• If you avail of a loan, you can choose your loan term according to your capacity to pay, but up to five years only. This makes it faster for you to pay off your loan.

Disadvantages

• You have to pay for after-sales costs such as insurance, car maintenance, and repairs in case the car breakdowns.
• It is advisable that you have a parking slot first to avoid causing hassle not just on your neighbors but also on other people who pass by your area.
• The price of the car depreciates over time and as soon as it stepped out of the dealer’s store. This means the P1 million car you bought now will only be less than that after a year.

Buying your dream house

Advantages

• Owning a house is a status symbol that signifies financial achievement.
• The price appreciates over time. If you buy a house worth P1 million today, there is a higher possibility that the value will be doubled or even tripled after 10 years, especially if you bought the right property in the right location.
• A type of investment that you can pass on to other generations.
• You can finally have a place you can call your own.

Disadvantages

• There are many developers who are offering sub-standard quality of houses. Before you make a purchase, make sure to check the developer to make sure you are getting your money’s worth.
• Higher monthly amortization with longer loan term.
• More costly to maintain compared to cars.

Whether you decide to go for the car or house is all up to you. We enumerated the pros and cons of buying a car or a house to help you decide on the best investment option. Use this as a guide and more importantly, consider your family’s needs to help you in making the right purchase.

You already identified the right instances on when to apply for a loan. Assuming you really need one, this doesn’t mean you should go to your preferred lender immediately and submit your loan application together with the other requirements. There are several factors you need to consider first to avoid getting yourself in a pool of debt.

Before you apply for a loan, here are eight questions you need to ask first: 

1) Am I qualified to apply for a loan?

This is the first question you need to ask before you apply for any kind of loan. Keep in mind that there are many factors lenders consider in applying for a loan. This includes your capacity to pay, asset that you are willing to offer as a security, and your credit score among many others. These factors will help you determine whether you are qualified for a loan or not.  

2) Where will I use the loan proceeds? 

Getting a loan to pay for your travel expenses or purchase of material things like a new iPhone are instances where loan is not highly recommended.

If you plan to apply for a loan, establish where you will use the proceeds, say to put up your own business or pursue higher education. If it is something personal and won’t benefit you in the long run, then it is best to hold that expense first and save for it instead of getting a loan.

3) How much do I need? 

One of the most common mistakes committed by OFWs is asking more than what they can really pay. This means if you are earning P40,000 every month with P100,000-worth of collateral to offer, don’t expect the bank to extend P500,000 credit to you.

Know how much you need while taking into consideration your monthly cash flow. Be realistic with your loan amount to improve your chances of approval.

4) How will I pay for the loan? 

Now that you have a realistic loan amount, the next thing you need to answer is how to pay for your loan.

Ideally, your monthly salary should cover for it, but keep in mind that you have other expenses such as remittances. Before you apply for a loan, take a look at your budget first and see if you can accommodate another expense. If you don’t have adequate amount of cash on hand, hold that loan first since there is a higher chance of getting denied.

5) Do I have to offer a security for the loan? 

There are two types of loan: secured and non-secured. Lenders would prefer secured loan since there is an assurance of payment in case of default. On the other hand, many OFWs have no asset to offer as a collateral, which is why you can opt for a non-collateral loan.

Here’s the catch: non-collateral loan means you will be charged with higher interest rate. This is the lender’s form of security since there is no asset they can recover from in case of non-payment of loan.

6) How long will I have to repay the loan? 

Loan term depends on the type of loan you are getting. Housing loan can go as much as 15 to 20 years while car loan is anytime between one and five years. For personal loans, it can go from one month to a year (or more).

When applying for a loan, make sure you’ll consider the loan term as well. The longer the term, the more interest you have to pay. Don’t forget to ask about pre-termination fee, if any, since some lenders charge a fee if you will pay off your loan before the due date.

7) What will happen if I missed a payment? 

This is another factor you need to look into. When you apply for a loan, don’t forget to ask the penalty fee in case you weren’t able to pay on time.

Tip: Some lenders may agree to waive penalty fee, depending on certain factors. Make sure you have consistent remittances and maintain a good credit standing to be able to enjoy this privilege.

8) Will the loan be beneficial for me? 

More importantly, do you really need to get a loan? The loan must be beneficial for you, say to help you grow your business. If getting a loan won’t help you in any way and you might end up swimming in a pool of debt, then it is best to hold off that application first.

Are you ready to get a loan? Balikbayad is here to help! Give us a call and let’s talk so we can see how we can help each other. 

“Sigurado ako marami ka ng pera.” “Wow, dollars, pautang naman.” “Ang ginhawa na siguro ng buhay ng pamilya mo, noh?” 

How many times do you hear these from friends and relatives?

For most Filipinos, being an OFW is a promise of good life. You get to earn more than what you can earn here and you are now able to provide a better future for your family. On the other hand, not everyone is aware of the hard work and sacrifices you need to make to be able to give your family a comfortable life. In fact, below are some of the truths behind the OFW life:

1) No, OFWs are not rich. 

There will always be success stories and former OFWs who made it big either in the Philippines or abroad. Believe it or not, most OFWs are still not living the good life despite earning more and in dollars. Some even have an existing home or auto loan with banks that they are unable to pay.

Blame it on the lack of financial knowledge, poor money management, and never-ending family issues that keep majority of OFWs from becoming millionaires.

2) Setting aside money for savings is never easy. 

Did you know that only 35.8 percent of OFWs have savings? The number is increasing over the years, but it only shows that not everyone are setting aside enough money for the rainy days.

With the bills that need to be paid, a balikbayan box waiting to be filled, and everyday expenses abroad, there is little left for savings. This could be the reason why OFWs continuously work overseas to be able to finance the family’s everyday living.

3) Income is not as big as you imagined. 

You might think that since OFWs earn in dollars, it means they earn more than what you earn. That is true. Unfortunately, they get to spend in dollars too. The cost of living varies per country, but one thing is for sure: it is more expensive to live in other countries than to live in the Philippines.

Yes, OFWs earn bigger income, but the cost of living is higher, which explains why they take more than one job to make ends meet.

4) It takes time to fill up a balikbayan box. 

Contrary to popular belief, OFWs don’t spend an entire day shopping to send a box full of goodies back home (they would rather work since a no work day equates to money lost). Believe it or not, it will take time for them to complete their family’s bilin, to the point of scrimping or foregoing basic necessities for their family’s sake.

5) Multiple debts is the new normal. 

Many OFWs are swimming in a pool of debt, even to the point of borrowing money to pay for placement and documentation fees. To pay-off existing loans. some even borrow money, thereby adding another loan in the list. This is normal for most OFWs.

6) Life overseas is not as easy as it seems. 

Filipinos working overseas are not living the carefree life. Most of them have more than one job to make end meets and be able to send a bigger amount in their family back home. Many are letting go of their basic needs just to cover the expenses of their family. Even if you see them posting travel pictures on Facebook, most likely they availed of budget travel package or saved up for their much-deserved vacation for months.

In other words, being an OFW is not as easy as you think it looks. It entails a lo of hard work and sacrifice, which we all need to acknowledge.

How many years are you working abroad? In that, say two or three years, how much were you able to save? If you don’t have enough cash to last you for at least three to six months, then perhaps you are doing something wrong along the way, at least in the financial aspect.

Don’t worry. It’s not too late for you. You can still protect your hard-earned money (and have something for the rainy days) with the help of these tips:

1) Be wise with your investments. 

Admit it. You are saving up for your dream home or dream car for the family. Apart from setting aside a portion of your money for that, you also considered getting a loan to cover a big chunk of the purchase price. The problem with this is that being an OFW is not forever and there is a possibility that you might not be able to pay the amortization regularly.

This is where investments come in. Consider opening a time deposit account or try the stock market.  The more diverse your portfolio is, the better for you to grow your money.

2) Protect yourself against uncertainties. 

The future is and will always be uncertain. You will never know what could happen to you, which is why you need to prepare yourself for the worst. By worst, this could mean loss of employment, sudden sickness in the family that could deplete your savings, or even death.

This is why it is important to be prepared.

Start by creating your own emergency fund, which should be at least three to six months-worth of your current income. Getting an insurance can also be another option to prepare you for uncertainties (know more about OFW Compulsory Insurance here). Setting up a retirement fund can also help you start in case an unexpected event happens.

3) Always be wise with your spending. 

Working overseas means you have access to things you don’t normally find in the Philippines. Since you are earning more (and in dollars), you might be tempted to buy anything you could find and send it back home.

If you are serious about protecting your hard-earned money, then you need to be wise with your spending. Here’s what you can do:

• Always set aside a portion of your money according to your expenses.
• Avoid sending the biggest chunk of your money for remittance.
• Consider packed lunch instead of buying food from restaurants.
• Don’t focus on material things. Your family doesn’t need new shoes every month.
• Share a room with fellow Filipinos to save on rent (in case housing is not part of your benefits).

In other words, be disciplined with your money and spend it wisely.

4) Avoid the “I deserve this” mentality. 

You sacrificed a lot for your family, to the point of leaving them behind and work overseas. You forego your own happiness just to give them a better future. So if you see that watch you’ve been eyeing for years, it’s okay to buy them since you deserve to reward yourself for all the sacrifices you made.

Here’s the thing: sometimes, the “I deserve this” mentality could go out of control. You might end up spending too much on certain things since you deserve it for all the hard work you did. If this continues, you might find yourself going back home with little to no money on your pocket – and you surely don’t want that to happen.

The bottom line is this: working overseas is never going to be easy. Protect your money by investing on you and your family’s future and not on what will make everyone in the family happy – for now.

Working overseas is not forever. There will come a time when your contract will expire, or you’ll get sick and required to go home, or the country where you’re working will experience crisis, prompting you and the thousands of Filipinos to go home. Before that happens, you want to make sure that you are prepared – and by prepared, bear in mind that savings is not enough.

What’s your plan B? Put up your own business.

Here’s the thing: starting your own business can be tricky. Check out the most common business questions asked by OFWs and use this as a guide when you decide to start your own business too:

1) What is the best business for OFWs? 

It depends. There is no right or wrong idea when it comes to business. You can start with food carts, or sell your own tried-and-tested recipes, be an Uber or Grab driver, build your own poultry farm, or even star with a sari-sari store.

To help you determine the best business for you, it is imperative that you find out what you are most passionate about. The more you like what you’re doing, the higher the chances of sticking to your business, which equates to growth as well.

You may check this post for some business ideas you can do for additional income.

2) Can I avail of a loan even if I’m abroad? 

Yes and no.

If you are working abroad, you may still apply for a loan through a representative. This chosen representative must have a Special Power of Attorney (SPA) authorizing him/her to transact and process the loan on your behalf. This SPA must be executed and certified in the Philippine Embassy or Consulate where you are located to make it binding.

On the other hand, some lenders require physical appearance to allow you to avail of a loan. They will require you to sign certain documents as the principal lender. Still, it is best to raise this concern directly to your chosen lender to be sure.

3) What if we don’t have an asset we can use as a collateral, what can we do? 

Many lenders, especially banks, require any form of asset to guarantee the loan. It could be your land, house, car, or if allowed, the fruits of your existing business. By offering one of your assets as a collateral, it would give lenders a peace of mind, knowing that they can go after something in case you are unable to pay.

What if you don’t have any asset to offer? You can still avail of a loan by doing any of the two:

• Apply with a co-maker. A co-maker is someone who can help you pay off your loan in case of default, even if he does neither receive nor benefit from the loan. Check this link to know more about the role of a co-maker.
• Go for a non-collateral loan. This type of loan is not backed up by any form of security. Nonetheless, you might pay higher interest rate every month. Read this post  to learn more about this type of loan.

4) How much money can I borrow? 

This depends on your capacity to pay and the collateral you will offer. The higher your income and the higher the value of the assessed property, the higher the amount you can borrow.

Here’s the thing: many OFWs ask for more. For instance, if you are earning P50,000 every month and the assessed value of the property you are offering for collateral is only P300,000, then don’t expect you can get a P1 million loan. Be realistic with the loanable value, otherwise, your application can be rejected.

5) What are the requirements I need to submit? 

This one will depend on the lender. Each lender has its own set of requirements, which you need to comply with in order to proceed with your loan application. This includes:

• Duly accomplished application form provided by the lender
• At least one government-issued ID
• Latest Employment Contract, Certificate of Employment, or POEA Contract for land-based workers or Seaman’s Book for seafarers, whichever is applicable
• At least three months-worth of payslip or any other proof of income
• Marriage contract, if married

Make sure to ask your chosen lender about the requirements needed for your loan application. Submit them completely to speed up the processing of your loan application.

6) Can I use the Business Loan for other purpose? 

Ideally, no. The purpose of business loan is to help you with working capital, in case you are just starting out, or to finance business expansion or to provide additional working capital for those with existing business.

There are specific loan products available according to your needs. Take advantage of those products since lenders treat them differently.

7) I have an existing business. Can I still apply for a business loan? 

Yes. In fact, business loans recognize the possibility of expansion or the need for additional working capital. Even if you have an existing business, you may still apply for a business loan as long as you meet the requirements.

Got more questions? Let us know in the comments section below.