Welcome! We understand that as an expat, safeguarding your savings is paramount. In this comprehensive guide, we’re unveiling the Top 5 Expat Savings Options that can secure your financial future. We’ll dive into the nitty-gritty details, expat savings accounts, expat retirement options including tax implications, risk factors and expat financial security, to equip you with all the knowledge you need. Let’s jump in!
1. Understanding Expat Savings Options: The First Step
International Savings Account
One of the first steps we recommend is to set up an International Savings Account. These accounts often come with a wide variety of international fund options, which is perfect for expats.
Be sure to look for accounts with low fees and favourable interest rates. Some popular options include HSBC Expat and Investors Trust S&P 500.
The S&P 500 plan administered by “Investors Trust” is very attractive to international investors due to its low fees and its capital guarantee facility set at 140% over a 15-year term.
This plan is excellent for expatriate wealth preservation and should form a part of all expat financial planning.
This is the most popular expat savings savings options amongst our clients at Hampton Bridge and it is an excellent way of saving money while living abroad.
An account like this will help you hit your expat financial goals whilst giving you a guaranteed return on investment.
Expatriate money management and expat savings options can appear to be a little complicated at times.
Our advice is to always keep it simple and track indecises, by using index funds or ETFs and if you have a product that offers a guaranteed return on investment, then this should be seriously considered as one of your expat savings options.
Expat Money-Saving Tips: Look for jurisdictions with strong investor protection laws. Hong Kong, Malaysia and Singapore are often cited as excellent options for expats.
Caution: No single fund family has the best funds across all the asset classes. Meaning, if you buy an HSBC investment account and it comprises just HSBC funds, then you are missing out on higher-performing funds offered by other expat banking solutions.
Index investing is now becoming the savvy investor’s choice when it comes to expat savings options, although there are still hundreds of excellent mutual fund options with a strong history to choose from.
2. Portfolio Bonds/Investment Platform Expat savings options
A Portfolio Bond might just be the flexible friend you need. It’s an insurance bond that allows the holder to invest in a plethora of assets, including mutual funds, stocks, and bonds.
Why is this beneficial for expats?
Well, the main advantage is the tax-efficient growth, as we are all looking for tax-efficient expat savings.
In many jurisdictions, the investment can grow tax-free, allowing your wealth to compound over time.
Here is an example of an Investment Platform that Hampton Bridge provide.
This Bond, or Platform is known as “Open Architecture” meaning that you can literally hold any form of investment within it. With. your expat savings options, you should be aiming for a broad range of ETFs and Mutual Funds and something uncorrelated to the market such as a Hedge or Futures Fund.
Expat Money-Savins-Tip: Look for Bonds that offer a limitless investment choice with high-yield savings for expats.
Caution: The bond is just an account/wrapper that is empty when purchased. The choice of the expat investment opportunities that are put inside it will determine your success. Here is an excellent fund by Veritas and this is their Global Focus Fund.
3. Real Estate Investments: Building Assets with Tangibility
We cannot emphasize enough the importance of diversifying your investment portfolio. Real Estate Investments can provide a steady stream of income through rental yields and potential appreciation in property value and should be one of your expat savings options.
However, real estate can be capital-intensive. Therefore, we recommend conducting thorough market research. Key things to look for in a location when buying a property: Strong, growing economy, regular flow of immigration into the city, undervalued market with potential for growth and high employment.
Expat Money-saving tips: Berlin and Lisbon are often cited as the cities that offer the best value and tick all of the above criteria. If you would like to access the growth that Berlin offers then click here.
Caution: DO NOT buy off-plan property that guarantees a rental income. So many buildings fail to get completed by running out of money halfway through resulting in the early investors losing all of their money. This is certainly not one of your best expat savings options.
4. Crypto Currency: A very high risk/reward strategy
Many investors are now looking for new hi-tech expat savings strategies and investment options such as Crypto have entered the market.
This is something we urge all investors to approach with major caution. The potential gains have proven to be astronomical, but on the downside, the losses can be shattering.
Bitcoin is regarded as the “Gold Standard” of crypto, so if this is something that interests you, check the price of Bitcoin each day to see check its price movement.
Pro tip: Seek advice from a financial advisor who knows about Crypto, it is one of the highest-risk and most complicated investment spaces.
Caution: Do not listen to the many people on Youtube who will tell you that it will make you a millionaire overnight. Read here about the many ways you can invest in Crypto without actually having to hold the physical asset.
5. Pension Transfers to QROPS: Taking Control of Your Retirement
Finally, transferring your pension to a Qualifying Recognised Overseas Pension Scheme (QROPS) can be a game-changer. It allows expats to consolidate pensions into one pot.
This is not only efficient, with a far broader investment choice, but it can also offer significant tax benefits making a crucial part of expat savings options for retired Brits or people who have worked in the UK.
Pro tip: Speak to a pensions specialist who can advise on the complexities and regulations surrounding QROPS.
Caution: A QROPS can often be the wrong choice to make if your pension is offering you very high benefits already. Only speak with advisors who are very knowledgeable in this field.
Conclusion: Empower Your Expat Savings Options
There you have it – the Top 5 Expat Savings Options that can anchor your financial future. Each option comes with its own set of benefits and risks. We believe that knowledge is power. Equip yourself with financial wisdom, and may your expat journey be prosperous and fulfilling.
