According to one of the most influential studies of expatriates globally, over two thirds of the world’s international citizens are able to save far more intensively once they have moved abroad, directly as a result of their expatriate status.
The HSBC Expat Explorer Survey reveals that 68% of expats are actively able to save and invest more than when they lived in their original home nation – and these international individuals are really taking the expatriate advantage by the horns and making the very most of their time abroad financially speaking.
So how do expats invest their money? Do they place it all offshore to grow in a savings account, do they invest in the stock market at home or overseas, or do they give it all to a financial adviser to manage for them? We thought we’d have a look into expatriate saving and investing habits to see how the increasingly wealthy are managing their money. For those of you who are moving abroad and for those of you who are already working overseas and in a position to save more wealth, the findings may well prove interesting and even inspirational.
The first thing to note from HSBC’s findings is that expats by and large favour a diversified approach to investing their wealth. This is to be encouraged – in terms of doing the best you can for your money, advisers always talk about the benefits of diversification and avoiding having all your eggs in one basket. The next thing to note is that whilst the vast majority of expatriate wealth is seemingly deposited in relatively straightforward bank or building society savings accounts, it seems to depend on where you live in the world as to what assets you prefer to invest in!
Around about 60% of the wealth of the expatriates who completed the HSBC Expat Explorer Survey is stashed away in a variety of offshore and onshore savings accounts – and for those resident in the likes of South Africa and the Middle East, property was a popular additional option as an investment strategy. Expats living and working in Germany and Brazil were far from impressed by property based investment offerings however…this could be because property in Germany is not generally thought of as an investment commodity, rather it is a lifelong asset on which once can have up to a 100 year mortgage that is then passed to future generations. Despite Brazil’s promotion as the next big thing for property investors seeking room for massive potential growth, expats living in Brazil seem to shy away from property as an investment strategy. This is interesting and potentially speaks volumes about the real state of the real estate market there?
Straight share investing comes in a close third after savings accounts and property, followed by the likes of managed funds and fixed term investments. If you had your own wealth spread well between such asset classes and methods of approach, you’d have a very well diversified and balanced portfolio! Perhaps expatriates are heeding our advice after all and they are seeking the services of an adviser well versed in the profitable potential options specifically available to expats as soon as they become non-resident in their old home nation.
If you’re wondering how and where to save and invest your wealth, you need to understand that you have to balance out what you save and invest where. This is because you are likely to need a certain amount of your wealth on hand for a rainy day, and then you are likely to have short, medium and long-term financial goals to work towards…so, seek personalised and professional advice from an expatriate financial adviser, and find the right method of approach for your future financial success. If you would like a free money makeover, complete our offshore advice form today.
