There are many ways expatriates can benefit from the living abroad experience, aside from the enriching experience of exposure to another culture.
From a financial standpoint expatriates enjoy a very convenient position of being able to seize local opportunities, be it buying properties or investing in the financial markets having direct understanding of the local economy.
Were you sent to a far-flung location and after spending the first day or two in a state of shock, you realise you have landed in paradise and wish to secure a portion of it for yourself and your family?
Or in one of your business wanderings you have realised that real estate opportunities are waiting for you? Checking out the real estate market in places you end up living in or travelling to, actually may be a smart way to multitask. Ask yourself a few questions:
- Do you want to buy a house for investment purposes and if so are you willing to take a short-term loss in rental? Are you interested in this area enough to retire there eventually or simply think this would make a nice area for a vacation home?
- How will this impact my tax position in the country of residence and in my home country? (this evaluation is affected also by the way you intend to use it)
Whatever the reason... you want to buy a house abroad!
How? Depending on the country where you are trying to buy it, it could be simple and straightforward, outrageously complicated and time-consuming or downright impossible (no land or property sold to foreigners!), but whatever the legal climate, you should make a sort of market research by talking to locals (yes, learning the local language is back on the spot again!) about the various areas and the reasonable market prices in different parts of the location of your choice.
If you are really committed, there is always a solution that can eventually bring you the house or land of your wish.
Property Abroad - A website proposing overseas property bargains as well as buyers' guides by country to help you find your ideal home abroad. Site in English only
Foreign currency exchange - A service to help buying properties abroad, transfer money and exchange currencies.
Property - Listing of properties for sale or rent
HSBC - Service dedicated to expats who are looking for a mortgage.
Guide books - A list of books on how to buy or restore a property abroad
In the world of financial investment, everyone would like a crystal ball, but that is never going to happen. Yet it is clear that out of all the people investing in the global financial market today, where the ease of investing in foreign stocks is providing investors the opportunity for diversified portfolio, expatriates have an edge.
Expatriates, unlike their peers at home, breathe and live situations in foreign markets first hand, gaining a lot of insights on what is happening in the world.
Having a global exposure adds value to a portfolio, giving advantages like performance (given by growth opportunities in other economies), diversification (which can help offset losses) and protection against market risk (when the stock or bond market in one country is weak, the comparable market in another country may be strong).
All is made simple thanks to the internet, where, trading stocks globally is possible with one mouse click and investors can buy and sell stocks in markets ranging from Tokyo to France.
Investing worldwide is easily done, but has a few catches:
- It can be more complicated buying stocks
- Foreign companies may have different rules and may be under less investigation than companies in your country
- The foreign exchange rate can fluctuate dangerously, adding this risk to the investment risk
- Volatility, some markets could bring high performances but also high losses
Foreign markets ' performance depends on various factors (including currency fluctuations, company profitability, trends in economic growth, political stability and interest rates), but they generally don't march in step with your home country performance. While some markets may be more volatile than developed markets, they can provide periods of rapid growth.
That means that adding some global exposure to a domestic-focussed portfolio can help reduce risk, as well as potentially providing a better performance.
If you are willing to go ahead and have a more global investment, then analyse your portfolio and verify if you already have any international exposure. Check carefully, because even if you have invested exclusively in 'domestic' funds, you might have more foreign exposure than you expect.
Decide what percentage of your investment you want to allocate to foreign investments, and then choose the funds for your portfolio. Initially it seems more obvious to start out with a broadly diversified funds that focus on bigger stocks, but if you have local knowledge of the market you may also want to place part of your portfolio in small- to mid-cap foreign funds you have personal knowledge of. DO NOT forget that when you're investing overseas, you also have to look at currency exposure as part of the picture.
Monitor your foreign holdings. To do it you can sign up for free e-mail alerts with your bank, broker or online services.
Global Investor - Global-Investor provides information and resources to the worldwide financial communityand that includes you if you are keen to get knee-deep into financial operations.
Financial Gurus - Do you want to take a look at who is who in the world of finance? Here is a good way to do it.
Globe Investor - A resource for financial related news
Global Investment House - The first investment house in Kuwait which publishes full-fledged research reports on the listed stocks in Kuwait, similar to those issued by the international investment banks & brokerage houses.
Site-by-site - International investment portal and research center, where you can find daily market data, news, economics, research, as well as analysis and commentary
Yahoo Finance - Portal with news, reports, data. Interesting reading comments in the bulletin boards.