Saving and investing money can be a complicated process for anybody, but for expats looking to invest abroad or offshore, matters can be even more complex. Generally speaking, it just isn't alwaysas clear whe
re you'll want to put your money or how you can best grow your funds.
This article will not provide absolute solutions or guaranteed methods, because really, there are no such things. But the following tips will at least provide expats with ideas for how to manage their finances in a way that can save incom
e and potentially grow income over time.
1. Shop Around For Rates
This is a general investing and saving strategy that carries amplified significance for expats. Simply put, you need to look around and see who's offering the best rates, terms and conditions on an account when you're looking to invest, whether with a regular savings plan, a single lump sum, or whatever else you're ready to commit. There can be a tendency among people operating away from home to go with the first option available, because it simplifies things. But shopping for the best rates is always prudent and could end up helping you to grow your finances most effectively.
2. Consider A U.S. Brokerage Account
For any stock investments you may want to make, a U.S. brokerage can often offer some of the best options and benefits—particularly if you're setting up a multi-currency account with money from both home and abroad. U.S. brokerages typically offer superior access to global investments, thus making them more convenient and effective for many investors operating offshore or in a global sense. Granted, this is truer for U.S. citizens operating outside of the States than for others, but it's also something to consider for expats from any country in general.
3. Exchange Currencies As A Means Of Investment
There are some who believe that the exchange of currencies (aka forex trading) is an ineffective investment strategy because broad inflation often catches up to any would-be gains that are made through exchange. That is to say, if you exchange dollars for euros with the hope of re-exchanging those euros for more dollars (which would happen if the euro increased in value while you held your euros), the extra dollars you make may not be worth a whole lot more than what you started with, due to inflation. This is a fair point, but it doesn't address the convenience of forex trading for expats. For one thing, you can access the market for longer than stock exchange operating hours, which can be very convenient for offshore investors who aren't dealing with a particular country or exchange. Forex trading can also be done independently and securely online, helping expat investors to avoid tricky tax and regulation issues that come with stock trading from abroad.
4. Broaden Your Perspective
This is more of a vague suggestion, but one that can nevertheless open your mind to a more worldwide style of investment. In a way, operating offshore can help you to take notice of how investment opportunities differ around the world, and through this understanding you can open your mind to new sources of investment. One example is that earlier this year an American investing in the U.S. might limit himself to NYSE listings without realizing that Japan was continuing its stimulus program and could offer a favorable investing environment as a result. Again, this is a vague concept, but an important mental step to take if you're managing finances abroad: consider all of the world's markets, instead of only your own.
Beyond these tips, the most important thing is to be cautious with your financial dealings as an expat. Offshore investments have long been used by many to exploit tax loopholes, and it's important to ensure that you're not accidentally straying into questionable territory. To be clear, there are perfectly legal, regulated ways of investing offshore—just approach the process with care and discipline
.