How Do Expats Invest Their Money?
Published on Tuesday, November 03rd, 2009
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 Isle of Man as a jurisdiction has taken a battering in recent months because of the collapse of the offshore arm of the Icelandic bank, Kaupthing Singer & Friedlander on the island. The investor protection scheme in place in the Isle of Man has been criticised for not offering enough protection to those who choose to place their money with institutions within the jurisdiction for example.
The pound is going through a period of wallowing at an all time low in the face of major currencies around the world, and so for expatriate Britons, going to live and work abroad can be an escape not only from the gloom of the Great British winter, but an escape from the weakened pound as well.
A recent survey by Halifax International reveals that over 60% of expats have seen the value of their investments and savings pots fall over the past year to eighteen months – which is really unsurprising given the fact that stock markets have suffered, property prices have dwindled and interest rates have dropped to record low levels during that period of time.
No one knows which way economies and stock markets are going to go at the moment, history is writing itself with no help from analysts and those who predict the market for a living. Interest rates are at an all time low in the UK for example, and people’s savings and investments have all taken a battering of late.
According to the Sunday Times there has been a significant increase in demand from those seeking to leave the UK and take their pension abroad with them – in part they put this down to the impending 50% tax hike in Britain, but in part we would say it has a great deal more to do with people being prepared to turn their backs on the UK for good.
The wonderful world of offshore really isn’t so complex, and in many fundamental and important ways it isn’t so different to saving, investing or banking onshore. Having said that, and before going any further, of course it has to be said that the argument between onshore and offshore for your own personal finances is one that you and only you can decide upon with the help and advice of a qualified adviser!
Did you know that you’re not taxed immediately on an income of up to 5% that you can draw down from an offshore bond? It’s true – and that’s just the first reason why offshore bonds are so tax attractive for expatriates.
Do you know what the best thing is about being British? It’s having a British passport that you can use to vacate the nation! Okay, so that’s a little harsh – I am proud of my heritage but I am also incredibly grateful for the freedom that I am allowed because of the rights I am afforded because I live in a democratic nation and have such a flexible friend in the form of my little dark red passport.
