No matter what we may all think about crazy Filipino drivers and crooked public officials, a lot of Filipinos who have lived most of their productive lives abroad still believe “there’s no place like home.”
The ultimate dream still seems to be coming home to the land of smiles. But how to prepare for it? That’s a common question we receive here at INQUIRER.net.
Should you invest here in the Philippines or in the country where you live? Which will give you better returns in the end? Should you convert your money into pesos now and invest here in the country or keep them in dollars/euros/yen etc. and convert when you are about to retire?
In part five of his series on investments, Dr. Johnny Noe Ravalo explains the pros and cons of different options. He answered the question of reader Ann, who said:
Hi my name is Ann and I work here in the US. I am now a US citizen and I would like to know if I could invest in mutual funds in the Philippines since I am looking forward to retiring there in the future. I am only 29 years old but I have saved enough to start a small investment. I would appreciate your help. — Ann
Read Noet’s reply here and find out how each seemingly tiny decision can make a million of a difference!
Noet says this is not just an issue of where to put your money, but also an issue of monitoring and conversion.
“You can opt for US investments but forego the opportunity to take advantage of a premium that the international market exacts on countries like the Philippines. On the other hand, taking advantage of the interest differential will mean monitoring the investment remotely, either engaging the services of a registered broker or going through a collective investment scheme.”
You won’t believe the horrendous stories I hear about having to deal with local brokers. I’ve heard good stories, too, mind you. Dr. Noet also points out that even with a good broker to help you, the burden of monitoring investments still rests on you.
Monitoring is a big job and requires full attention and at the end of the day, as Noet says, there are some surprises you would rather not have! And if you are already on the brink of retirement, those surprises can hurt more than you realize.
The decisions on where to invest, how, and when are all part of constant finetuning of investment strategies and different approaches are not necessarily wrong ones. It is possible to invest some here and some in the US as her investable funds grow bigger, and even perhaps try out some investments in other Asian economies for diversification.
Whichever route you decide, you are still going to encounter the intricacies Noet pointed out. But one thing everyone will most definitely agree to is that preparing early is definitely a good idea, to recover from mistakes that we all make from time to time.
Happy investing.
- November 2009 (2)
- October 2009 (1)
- September 2009 (4)
- August 2009 (5)
- July 2009 (2)
- June 2009 (4)
- May 2009 (1)
- April 2009 (5)
- March 2009 (15)
- February 2009 (19)
- January 2009 (19)
- December 2008 (23)
- November 2008 (19)
- October 2008 (24)
- September 2008 (23)
- August 2008 (13)
- July 2008 (21)
- June 2008 (16)
- May 2008 (15)
- April 2008 (23)
- March 2008 (16)
- February 2008 (26)
- January 2008 (15)
- December 2007 (12)
- November 2007 (20)
- October 2007 (23)
- September 2007 (20)
- August 2007 (27)
- July 2007 (28)
- June 2007 (15)
- May 2007 (22)
- April 2007 (21)
- March 2007 (15)
- alternative investments (2)
- banking (36)
- blog manners (3)
- blogging (3)
- bonds (10)
- books (2)
- budgeting (45)
- buying tips (23)
- career (12)
- charity (4)
- consumer issues (6)
- corporate governance (2)
- credit cards (32)
- customer service (1)
- debt (16)
- economy (38)
- education (3)
- Educational plan (1)
- emergency planning (3)
- entrepreneurship (8)
- estate planning (4)
- family finance (99)
- Financial Planning (84)
- food (4)
- forex (15)
- Frugality Week (23)
- Gifts (3)
- Government (2)
- Guest Posts (3)
- Holidays (12)
- insurance (22)
- Investing (143)
- kids and money (20)
- Lifestyle (5)
- Marriage (3)
- memorial plans (1)
- men and finance (1)
- Millionaires (75)
- Money Makeover (15)
- Money Myth Busters (23)
- MoneySense (4)
- Mutual Funds (8)
- network marketing (1)
- OFW (34)
- Plain Vanilla/CFA (3)
- poverty (6)
- Pre-Need (12)
- Pre-need industry (1)
- Quiz (1)
- Quotes (12)
- real estate (5)
- remittance (1)
- retirement (19)
- Saving money (67)
- scams (20)
- shopping (24)
- Smart Habits (8)
- So What Chocnut? (67)
- spending habits (57)
- SSS/GSIS (2)
- stock market (25)
- subprime (15)
- taxes (5)
- uitfs (1)
- Uncategorized (4)
- vacations (5)
- wala lang (6)
- weddings (1)
- weekly roundup (2)
- who's who in personal finance (1)
- women and finance (11)
- Word of the Week (4)
- Workplace (3)
12 Feedbacks on "The intricacies of investing for retirement in the Philippines"
tserilu
Thoughts Out Loud:
i hope this blog would also appeal to those who need it most (well, aside from those who seek dr.noet’s advice) because i’ve been hanging here for more than a couple of months and i believe most, if not all, of us currently active in this blog know that we need to take care of our finances here and now.
(hence the recent survey that pinoys hardly save for their future.)
still, it’s wonderful that we have this great place to share ideas with, compare/trade info and sometimes contradict (hihi!!)
tseri
Salina
My goodness! Ana: Thinking of investing in the Philippines she must be really out of her mind. Sorry! if I offended somebody, But investing in the Philippines it just like given the crooks your hard earn money and tell them they can spend it anyway they want it. There is no way I’m going to invest my hard earn money to the Philippines.
Yes, I agree there is no place like home, But Philippines is not a safe place for anybody anymore just look around you, There is more filipino people are starving then anything else. How can you make money in your investment.
robert
salina, i bet you are still a long way from retirement. For us who will soon be retiring, there is no better place than home. I am a Canadian and will retire at an earlier age to enjoy life NOT in canada BUT in our beloved country, the Philippines. It’s true, corruption is everywhere back home….but retirement has got nothing to do with it. Once retired, your money is not tax (or if it is, definitely a LOT less than where you are now!!). There is no retirement in countries like canada for example … UNLESS you have millions of dollars in your account. AND even then, you will still be tax… there’s no end to bill payments etc….. whereas back in PI, your money is multiplied 40X… so paying tax (if ever) is NOTHING. … when you reach the retirement age…. tell me what you think..
eman
Good luck to you Robert. I suggest you talk to those who have done it and check with their experiences. You might regret it.
Angelo
Dear Salve,
I would like to know if getting an education plan for my two young kids (age 2.5 & 1 yr old) could still and be considered a good idea and as an investment as well?
Salve
angelo, most people are trying to avoid pre-need plans as of now because of the bad raps it has been getting. a do-it-yourself approach to preparing for education is currently the vogue. however, if you are set on investing in pre-need education plans, make sure you do your due diligence properly on the company offering them. you might want to look at our previous articles on pre-need plans here:
http://blogs.inquirer.net/moneysmarts/category/pre-need/
Salve
dear robert, enjoying a 40x benefit on your savings is attractive and sensible to many Filipinos and even other nationalities. just look at all the retirement resorts currently mushrooming all over the country. good luck on your retirement!
Salve
tserilu, welcome and thanks for hanging out here in moneysmarts =)
RM
this is what am currently doing, while working here overseas, I have investments in real estate & mutual funds (minimum 5 years). I understand that MF are not doing well for the past few months, but with my horizon of 5 yrs, I hope it could bounce back…true indeed, there’s no place like home….. Most of my friends who have worked overseas for quite a while have their mortgages already, but I couldn’t just bear the thought of paying for the next 30 years, what I did though is just rent an apartment and invest part of my money in the Philippines while working overseas, in that way, in 30 years time instead of having one property (should I do mortgage here), I may have 5 or 6 properties instead in the country….my two cents…..
Salina
I would like to know if getting an education plan for my two young kids (age 2.5 & 1 yr old) could still and be considered a good idea and as an investment as well?
………………
If you asked me I think you better off saving it yourself its safer that way. Especially in the Philippines there is lots of corruption all over the place you can’t just trust anybody with your hard earn money.
Thats my two cents worth. (*.*)
Salina
robert Says:
April 3rd, 2008 at 5:43 am
salina, i bet you are still a long way from retirement. For us who will soon be retiring, there is no better place than home. I am a Canadian and will retire at an earlier age to enjoy life NOT in canada BUT in our beloved country, the Philippines. It’s true, corruption is everywhere back home….but retirement has got nothing to do with it. Once retired, your money is not tax (or if it is, definitely a LOT less than where you are now!!). There is no retirement in countries like canada for example … UNLESS you have millions of dollars in your account. AND even then, you will still be tax… there’s no end to bill payments etc….. whereas back in PI, your money is multiplied 40X… so paying tax (if ever) is NOTHING. … when you reach the retirement age…. tell me what you think..
………………..
Hi, Robert: If you really want to retired in the Philippines I guess you can. I don’t see anything wrong with that but remember one thing even though your money worth 40x in the Philippines Thats don’t meant its enough for you to live on. Because everything in the Philippines is more expensive compare here in the states, Or Canada in that matter. Do your home work before anything else. I know alot of people went home and retired but a year later they come back because you can’t take your health care with you in the Philippines which is very expensive. But some people I know live very happy, I guess its nothing like home.
But for me I will never go back home and retired I have everything I want here in the states I could never trade the way of life here compare the way of life in the Philippines. Don’t get me wrong I love Philippines in fact I miss it especially where I come from everything is fresh veggie, seafood, Ang simoy ng hangin!
robert
Salina,
retiring in the philipines is a desirable thing IF you are ready financially and emotionally. I believe i am ready for both. So, i don’t see any reason why i won’t enjoy life in the Philippines… i have all my family there… when the time comes for you to retire (in the US?) .. i wish you luck and for that health care you mentioned ?… Do your homework …. Have you seen the documentary film “Sicko” ? … revealing health care systems from different countries, including US, Canada, UK, France and even mentioning Cuba as better than the US health care? Do you know that hillary clinton at one time was trying to imitate/push for the same/similar health care system of canada because your health care (US) sucks? I am talking about Universal health care and not private ones..which will drain your pocket for limited coverage. I suggest you watch that film before you even mention health care … and by the way, i have done my homework about retirement in my beloved country.
Please Leave a Comment!