6 Investment Ideas for OFWs

Filipinos abroad are blessed with better financial windfall than back in the Philippines. But they’re also aware that being an OFW, as they’re more popularly known, working abroad has its finite time.

And while they receive better perks and take home pay, it is prudent to put them to use in an investment vehicle that will sustain them long after they return home.

The problem is that many OFWs, though willing to invest, are not well-equipped with the nuances of investment. Some might think a poultry farm is a good idea, until they become aware of the cost of feeds and vaccines and potential sanitation and environmental challenges their village might file against them. Or a taxi service that generates daily income, but owners could get floored by rising engine maintenance costs and lack or reliable drivers.

Understand the business

Indeed, a thorough understanding of an investment plan is key to success. Venturing into a business where you are unfamiliar means you’ll have to tap on someone else’s knowledge to steer ahead and move forward. It is important to weigh all options — not just the potential earning power — to get a better understanding on feasibility of the business. Is it easy to find skilled people? Do I have an ideal location to set up this business? Do I have reliable sources of products? Who are my competitors and does the business allow more players to operate profitably? Can the business operate even while I work abroad?

There are plenty of questions that need to be answered, many of which cannot be answered easily by an investing OFW.

Investing in people

When money is involved, there are many individuals claiming expertise and willing, but not necessarily able, to run the business. This could easily derail a wonderful opportunity and potentially squander precious funds. This is crucial to Filipinos abroad, who need to rely on someone who will manage the investment and run the business.

It is said that investing in modern machinery is good only if capable manpower will operate them. So when looking for managers or employees, consider the costs to find them, how much should they be paid enough to keep them happy at work, and minimize getting poached by rival businesses. They can be in the form of salesladies, waitresses or managers who keep the business afloat.

Popular Businesses by OFWs

There are plenty of ways OFWs can invest. With the right amount of funding, right mix of skills and location, the business can thrive and grow.

Food Businesses

This includes a wide range of investment options, from the humble carinderia located in the market or near schools and offices to mid-range catering services for parties to franchising popular restaurant chains which require a substantial amount of financial investment.

Why this is good: Food is staple to life, and people from all walks of life need to consume this commodity. What’s important is the quality of food, service and location of business. Never be tempted to try out short term fads and always look at the best location.

Retail Services

Retail services encompass a wide variety of goods from specialty products like water and LPG refilling stations to general merchandise like sari-sari stores or wholesalers. Research on what might be lacking in your neighborhood and look for tell-tale signs of products in demand (ex. people need to go to next barrio to buy the product). Partnering with established companies like Petron for LPG business helps set your mind at ease while the Department of Trade and Industry has guidelines on starting out a water refilling station.

Why this is good: Being the go-to merchant for specialty products or general merchandise would firmly establish your brand and will only bring more recurring loyal customers. Good quality products, competitive pricing and outstanding service (replacements, delivery, etc) should help you reach this status.

Manpower Services

Being an OFW, you may have a good idea on how to make money from operating an employment agency. Without being deceptive to applicants aiming to go abroad for a decent pay, a job placement agency can still operate with stable recurring income. What you need to do is establish links to destination countries such as partnerships with foreign counterparts and be licensed to operate by government agencies. Also, decide on jobs that are easy to find placement and quicker to deploy; would you like to go for domestic workers (low pay but faster deployment) or skilled workers (bigger pay but harder to find the right candidate).

Why this is good: Thanks to the continuous demand to find jobs abroad, there seems no shortage of applicants for jobs abroad. In this age where ‘recruiters’ are often in the same sentence as ‘illegal’ it is very important to build trust and trustworthiness; losing either could doom your business prospects.

Travel and Tourism

Being an OFW is synonymous to a traveler. Operating a travel agency offering tourist packages should be something to consider especially with growing demand for domestic and international flights. Partnerships with hotels, airlines and other tourism players is crucial in order to provide a comprehensive variety of choices for both luxury travelers and backpackers. DTI has a list of requirements to apply for travel agency business.

Why this is good: More Filipinos can now afford to travel, thanks to more affordable airfares and widely promoted destinations. Being a travel agent, one should have local knowledge and value added services, knowing that travelers can book tickets and hotels on their own.

Money Remittance

Imagine no longer the sender of money to family but more of a conduit to others, bringing joy to faces of recipients, and offering peace of mind to their OFW relatives abroad. Money remittance services make money from the cable rates paid by senders, recipients or both. With growing presence of Filipinos abroad, sending over US$23 billion to the Philippines last year, money remittance service is a growing industry in the country.

Why this is good: Money remittance services can also expand to bill collection, mobile phone reloading station, money changer and other related services without requiring additional floor space or extra manpower.

Real Estate

Owning a house is everyone’s dream. This is among many of OFWs’ wishlists. As the demand for real estate properties grow, so are developers trying to lure OFWs to conveniently buy condos or ready to occupy units. Overseas Filipinos can also buy farm lots, beachfront properties or housing offered by Pag-IBIG Fund. Working abroad may pose a challenge to look after property investment like homes as substandard materials and workmanship may ruin a dream house idea. Companies like Holcim HUB (Help U Build) provides assistance from planning to procurement of materials so families who lack expertise are not easily drawn to false promises by unscrupulous property agents and OFWs themselves don’t have to micromanage projects back home.

Why this is good: Real estate — especially tracts of land — often increase value over time and rarely depreciate. Therefore, including this in the investment plan is almost always a profitable venture.