Reader Mail #15: On Finding Work, Investing and Family Finances

Welcome to the fifteenth edition of Reader Mail.

This is where I post the questions I receive from my readers and share with you the answers and advise I gave to them.

For today, we’ll discuss the topics of finding work, investing and family finances.

Note that the names of the senders have been made anonymous to protect their privacy.

Also some details of the letters have been edited for purposes of clarity and brevity.

Lastly, kindly consider that the answers I provided were solely based on my opinion and personal beliefs and should not be taken as a professional financial advise.

Let’s now get to the first letter…

I have been out of work for several months now and no matter how much I try, it seems that I can’t get full time employment.

I tried going freelance but still, projects were small and few. Now, my funds are really starting to shrink. My family is also depending on my support.

Any advise from you to help my situation will be highly appreciated. Thanks.

Hi. I guess the best advise that I could say to you is to don’t give up and stay strong. Opportunities are always there and sometimes, all you have to do is to look harder. That new job may be just around the corner.

But if finances are already a burden, then I suggest you find an alternative means of income that may not be related to your original line of work. The good thing about this is that you might realize a new passion or discover a new career path for you.

I have a friend who was once a radio technician but was relieved from work due to company downsizing. Not able to find work for around four months, he decided to enroll in Negoskwela to study t-shirt printing so he can start a sideline business.

A year later, he didn’t only have a small t-shirt printing business, he also didn’t want to work in broadcasting anymore. If you ask him now, he’ll say that getting fired was one of the best things that happened to his life.

I hope this short anecdote was able to inspire you to just hang on there and be hopeful that things will eventually turn around for the better.

Hi. I’d like to know how do you lose money in mutual funds? Why do you say that they’re medium to long-term investments? I’m just new to investing and I’m currently trying to learn about mutual funds. Thank you.

I’ve already written a primer about mutual funds, I hope you were able to read it, if not then here it is: Investing in Mutual Funds

So again in essence, a mutual fund is a pool of money from different people, which you entrust to a mutual fund company. Your mutual fund manager will then invest that money in different instruments (stocks, bonds, forex, etc).

So for example, you invested P5,000 in a mutual fund and the manager invested all the fund money to the dollar-peso foreign exchange. (This is just an example. In reality, the money is invested in many instruments)

So currently, let’s say the exchange rate of USD to PHP is $1 = P46. So you’re P5,000 will be valued at $108.6956.

After a few months, you encountered a financial emergency and needed money, so you decide to cash out your mutual fund investment. Unfortunately, the Forex at this time is $1 = P45. So when you cash out your $108.6956, you’ll only get P4,891.30. You lost around P109.

Of course, the story is different if the Forex is at $1 = P47. You would have actually earned money.

So that’s how you lose money in mutual funds – when you decide to cash out and the rate is lower than the rate at the time when you invested.

So why not just wait for the rate to go up and then cash out?

Yes, that’s right but that could take time. That’s why it’s a medium to long term investment, it means you can afford to take the daily to monthly fluctuations of the price and wait until the rate is at a satisfactory level for you to cash out.

Hello. I’m an OFW and I would like to invest in mutual funds or UITF’s in the Philippines.

My problem is that there are a lot of mutual funds and UITF products out there and I don’t know which to pick. My parents at home are not very familiar with these kind of investments too.

Can you give me a mutual fund or a UITF product where I can invest?

There are now many investment products in the country that cater to OFWs like you. If you can ask your family to approach a wealth management officer of any commercial bank, I’m sure they will be more than willing to help you decide where to invest.

The officer would normally give out a “risk assessment” or “client suitability test” which your family can send you to answer. After giving that back to the bank, the officer will then give you investment options to choose from.

Commercial banks are typically conservative when it comes to these investment advise, that’s why you can be assured that if you choose to follow their recommendations, your money will not be at high risk and has the optimum chance to grow.

Lastly, you might also want to consider PERA which the Philippine government will hopefully offer within the year. You can learn more about that here: Personal Equity Retirement Account Philippines

How much money or percentage of my salary should I give my parents? I just started working in a BPO company. My salary is not that high and I still don’t have any savings.

In my opinion, being financially independent is already a big help for your parents. So for now, I suggest that you concentrate first on your own finances, get the habit of making a monthly budget and build up an emergency fund through a savings account

But still, you can allot a portion of your income to give to your parents. There is no set rule on the percentage or how much, what’s important is that the amount of money you give is something you can personally afford.

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That concludes our Reader Mail for today. I hope you were able to pick a few pointers for yourself. If you have any advise to give to these people, do give them by leaving a comment below.

Finally, I would like to take this opportunity to invite you to please become a member of the Ready To Be Rich community by subscribing to my blog. Thank you!

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