Helping Expats Help Themselves

A Revolution in expat finance

Expat Investment & Savings

investment

Investment is something that people are either interested in or not. Most people know that they should be more involved though often it holds no interest for them. The fact is that we are all investing whether we like it or not. on some level we all invest whether we are interested or not. It may only be paying into a company pension or putting money into a savings account. It will need some decision. making.
 
People can over complicate investment and make it confusing for any investor. This can be very offputting for someone who’s starting out or the less motivated of us.
 
Far too often people rely more than they should on other people to take charge of their assets. This can result in people having little understanding of their investments. They let someone else make these decisions for them only to find they’re not suitable for their needs.
 
They may not be clear on their reason for investing in the first place. This can result in them having something completely unsuitable for their objectives.
 
People may be too blinkered in their investment approach which can work for a time. At some point it will stop working for a period of time and they’re unprepared for the consequences.
 
We want to give you the tools to make investment simpler, less stressful and help you get things working for you.

make more of your money

Direct Expat has years of experience and knowledge of dealing with expats and their finances. We've published a clear and concise guide to help expats make the most of their money. It's yours free of charge when you sign up for Direct Expat's updates.

What's Your Reason?

Expat life can is a real opportunity to kick start you along the road to financial independence. Favourable tax regimes, accommodation costs and other benefits often means more disposable income. Which means that you’re better able to save than when you were back at home.
 
Being clear about your reason for saving means that you make better choices. Investing in the wrong type of asset can lead to disaterous results.
 
If you are looking to build an emergency fund or saving for a deposit on a house the best place is the bank. Your money won’t go up and down in value, it’s easy to access and you’ll make a bit of interest. Putting money away for a longer term objective requires a very different approach. Putting money away into a bank account to fund your pension won’t work.
Thinking about your reason to invest

Education Fee Planning

So you want to save for your kids education. What you need to know!

Wealth Creation

Smart saving to give you better choices!

retirement

Are you doing enough and are you doing it right?

Risk

Doing what's right for you!

What's going wrong?

The Life Assurance Savings Plan

There is nothing wrong with regular savings. If you do it right then it’s a great way build your assets over the long term.
 
However, what most expats get offered are expensive life assurance investments. They have minium contribution periods, set investment terms and big upfront commissions. Investors get told about all the flexibility that they’ll have. No one mentions that they’ve paid commission whether they make contributions or not. on contributions whether they make them or not.
 
Special offers are the nectar that lure unsuspecting victims into their clutches. In reality offering almost no reward for a ball and chain. Packaged for education, retirement and wealth creation offering tax free growth.
 
After a while when the fees eat up any growth, investors become disillusioned. It’s time to stop putting the money away. Charges now eat into our original capital and now it’s time to get out. We’ve got years to run to the end of the term and we want our money back.
 
Then when we get the surrender valuation we realise that this investment isn’t what we thought it was. We have to decide do we lose 50,60 or even 70% of the money we’ve put in? Or do we keep watching our capital get eroded away by charges year after year after year.
 
It’s an all too familiar story and one that you might have already experienced. We want to make it a thing of the past.

using the wrong assets

We’re talking about buying shares with money that you’re going to use soon. The other end of this is investing your pension in a cash account when you’re only 40. It’s common for people ignore how much time they have when choosing the type of asset that they use.
 
Investors with short time horizons are too aggressive and others with long term needs too conservative.
 
If you need to access capital within the next 2 years then you should only be using cash based assets. This means that you’ve got investments that won’t go down. You’re not going to make much though you won’t be risking anything either. You don’t have time to wait for assets to recover after they’ve fallen.
 
If you’ve got more than 10 years before you want to access your money you can be more aggressive. You need more growth potential to offset the impact of inflation. If markets fall then you’ve got time for them to recover. Do this and the investment will work for you.
 
All markets have ups and downs, equity, property commodity and even bonds. If you can’t afford to sit these fluctuations out then keep your money in a bank account. If you can then go ahead and don’t panic when markets fall.

Market timing

Barring the odd bit of blind luck frankly us human beings are terrible at making predictions. We like to think that we can forcast the future though statistically this isn’t the case. We see this all the time as governments and central banks revise growth figures.
 
When it comes to market predictions there are no exceptions. Even if we are sure something is going to happen, we never know when. Often what we think is a big market correction is only a blip and we soon see markets growing again. Investors in the early noughties got sucked into the tech bubble. They never thought the good times would end, they did with bang. Looking back it seems obvious though at the time, well you know the story.
 
Investors who try to time the markets sell when they start to fall and buy back in after they’ve started to climb.
 
They never pick the top or the bottom of the market. How could we it goes against our nature. People don’t invest when markets fall, when we can buy assets cheaper we do the complete opposite. I don’t know about you, I love a bargain.
When is the top of the market? If you’re looking at 1,5,10, 20 or 30 years the answer is going to be different.
 
Market timing leads to buying high and selling low.

expecting uniform growth

Many investors expect investment portfolios to behave like bank accounts. They expect them to keep going up and whilst they do they’re happy. They like predictable growth patterns and when markets fall they react badly.
 
In reality markets don’t behave in this way. Growth comes in chunks and spurts. They’re punctuated with flat periods and market corrections.
 
When there’s nothing happening then it’s tempting to tinker and chase the gains. DON’T DO IT!!
 
Leave things alone, messing around with your asset allocation will only hurt you in the long term.
 

underperforming assets

When you build an investment portfolio you’re looking to combine complimentary holdings. The aim is to the maximum amount of growth inline with the risk you’re prepared to take. Having assets that do different things in different conditions helps to reduce risk. This is diversification!
 
This also means that not everything that you have in your portfolio will increase in value at the same time. We’ve already mentioned that it’s impossible to time the markets. So holding these different assets in your portfolio permenantly is your best option.
 
Some investors hate to see any red on their investment statements. They view any holding that’s losing value as an “underperforming asset” and want to get rid of it. They don’t consider everything as being the same. Rather than looking at how an asset is performing relative to it’s peer group.
 
They look to dispose of the holding, they incurr trading fees and change the dynamic of the portfolio. They’re making their investment riskier. When market conditions change the holdings that are performing well now, may struggle. The asset that we’ve sold would have started doing it’s job. Providing some resistance to these negative market forces.