The Philippines is among the best places to retire, for a lot of foreigners. The tropical weather seems to be suited for tired ageing bones, and the cost of living in these islands is far more affordable than that in first-world countries.
The average Pinoy dreams of working in foreign shores and then retiring here. Still other Pinoys dream and think about living and retiring in another country. It's sad, considering how fortunate we actually are in these shores.
I see your incredulous eyes widening in disbelief. With the state of the Philippine economy, could I dare say that this (seeming) hell-hole is actually a great place to retire?!
Well, let me debunk your mindsets with a few things worth noting:
- It is more affordable to buy and own real estate in the Philippines, especially if you compare it to the US Real Estate Market. (Read: Why I Am Never Going to Own a Home Again by James Altucher)
- If you were wise with your income as an employee, by the time you're 65, you'd already have a sizeable nest egg, especially if you invest in mutual funds.
- It's easier to get a college degree in the Philippines, which would allow you to find better career prospects, which would then allow you to be in a better position to save, invest and gather assets for your retirement.
Filipinos seem to have been conditioned that the only careers worth dreaming of are becoming an OFW or a movie/TV star. That is why Filipinos leave this country in droves. That is why star search contests are all the rage, and kids like Jan-Jan get exploited in crass shows like Willing Willie for the sake of entertainment.
But I digress.
My point is that if only a Filipino were wise with his resources, he would be able to create for himself a good nest egg by the time he turns 40.
How much is the average salary of a BPO worker? Php 20,000? Let's see how this could work out:
- Rent or Mortgage -- Php 5,000
- Food -- Php 7,000 (Php 75 a meal, for 3 meals a day, 30 days a month = Php 6,750)
- Transportation -- Php 3,000 (Php 100 a day)
- Forced Savings -- Php 5,000
Reality bites, however. This is pretty much a Spartan budget, with all the other expenditures of an average Filipino yuppie crossed out. In reality, the Filipino BPO worker most likely spends this much:
- Rent or Mortgage -- Php 10,000
- Food -- Php 10,800 (Php 300 a day for 16 days a month, Php 500 a day for 12 days a month; Filipinos love eating out)
- Transportation -- Php 9,000 (We added Php 6,000 for Taxi rides)
- Cellphone Load or Plan Bill -- Php 1,500
- DSL + Landline Phone Monthly Bill -- Php 1,200
- Credit Card Debt -- Php 5,000
- Grand Total: Php 37,500
And savings hasn't even been factored into that yet. Clearly, the problem of the Filipino worker is not that the money is too little; most Pinoys really just spend too much.
So, how does one deal, in order to be able to start building a nest egg for retirement?
- Get a "sideline" or a way to earn extra income.
- Pare down the budget to the bare essentials.
- Force savings first and then live on the rest of the income.
- Look for a job with better compensation.
- Become an OFW and save and invest like crazy.
And do all of these THE SOONEST POSSIBLE TIME. If you read this while you're still finishing up with College, congratulations. Start putting away money for your retirement today. If you read this in your 30's, no problem, it's never too late to start. The point is, the sooner you start, the better your chances of being able to set aside a good nest egg for retirement.
As you can see, it all boils down to strategy or prudence. Whether you like it or not, living in the Philippines is still a great thing. We have all the amenities needed, at a fraction of the cost. The only thing we have to do is to manage our resources properly, and we will be able to build a retirement that's comfy.
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