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Expat Investor : September 2008
QUOTE, UNQUOTE Journey to wealth Shelley Robertson, Head of Brand and Communications with Skandia International, maps out the essential route expats take to achieve their wealth ambition. As an expat it is likely that you are used to travelling frequently. Planning a journey and planning your finances have more in common than you think. Managing finances is often seen as complex and daunting, but drawing a few simple parallels with travelling can help you identify some simple principles. When we are focused on getting to a far-away destination, we’re more likely to get on a plane and fly straight there. When we want to have the flexibility to stop and start along the journey, we are likely to travel by road or rail. Both types of transport have their merits – the key thing is to select the right one for your particular circumstances. Below are five steps to successful travel and the same principles can be applied to managing your money. Step 1 – know where you are going Decide what financial goals you have – is it to be wealthy in retirement or family security? Is there something special you want to save for, such as a wedding, a second home, annual travel or a worry-free retirement? Determining your goals from the outset will help you arrive at your destination prepared and with everything in place. If you know you are travelling to the Caribbean you would leave your ski jacket at home and pack a bathing suit, just like if you decided to save for retirement the product you would choose would be very different than if you were saving for a deposit on a house. Step 2 – know when you want to get there Some trips are flexible and the timing is less important; others need to be timed to perfection. It’s the same for your money – you may be able to delay retirement by a year or so, but a wedding may not be so accommodating! If you know where you are going, you should be able to determine when you want to arrive and the savings you will need. Planning your finances for the future will put you in the best possible place when you finally arrive at your destination. Step 3 – decide how you want to travel When building wealth – a direct ‘non-stop’ route, a bit like flying, normally involves having a disciplined approach to saving over the long term. For example, when planning for retirement we are focused on building up a pot of money by a set date when we plan to stop working. For this, many of us sign up to save a set amount each month and have a contract such as a pension or bond which binds us to saving this exact amount every month until the end of the contracted period. So, like getting on a plane, we don’t plan to get off halfway or to change our mind about where we are going – we aim to stick with it until we land at our chosen destination. Alternatively, in terms of savings, the ‘go by road’ option means we can put in varying amounts of money at different times, decide to take money out and even stop saving if our circumstances change. This option is more suited to saving for a specific event such as a wedding, school fees or house purchase where you will need access to money at a certain time and so do not want to lock up your investment for a very long period. Depending on the country you live in there will be various savings * 2008 Winner Best International Private Bank Group Best International Wrap Provider 2007 Winner Best International Private Bank Best International Investment Platform Provider 2006 Winner Best Offshore Bank Best Commitment to Service 2005 Winner Best Offshore Bank Best Offshore Bank Product (FOCUS) Best Internet Service 2004 Winner Best Offshore Bank 2003 Winner Best Offshore Bank Best Offshore Bank Product (FOCUS) 2002 Winner Best Offshore Bank Best Offshore Bank Product (FOCUS) 2001 Winner Best Offshore Banking Product Range accounts or short term bonds, some of which will offer tax advantages, which can be used for this purpose. The key is to make sure the account you choose provides the flexibility to be able to access your money when you need it. Step 4 – be prepared Sometimes travel is delayed or a bit bumpy, and it can be the same for your finances. Any investment in equities or shares can fall in value as well as rise, so you need to make sure that your investments match your appetite to risk and that you adjust your risk profile throughout the lifetime of your investment. Being prepared will mean you are ready for the ride – blue skies often follow storms! To best prepare you must also know about the local market, laws and legislation that govern the country that you are travelling to. For example, if you travelled to Hong Kong with only US dollars in your wallet, you may find it difficult to get around. When planning your finances you need to consider the local laws and particularly the local tax regime to decide how these will affect your savings or investments. Step 5 – talk to the experts Most of us like to get advice before heading off to a new destination. It’s the same for finance – always talk to a professional financial adviser to make sure that your plans are sensible. Independent financial advisers offer a range of products and can make sure that your investments are tailored to suit your exact needs, goals and personal situation and you haven’t missed anything out of your plan. A great holiday is one that has been thought out, mapped out and anticipated and planning for your finances should be no different. Good planning with the help of a financial adviser can help you arrive at your financial destination, on time, with the money you require and ready to benefit from the careful planning you have put into the journey. Fast Facts 77160 The award-winning account that adapts to your needs. Focus * Best International Wrap Provider Focus from Fairbairn Private Bank is a fully integrated banking and investment service that can constantly change to meet your evolving requirements. With a multi-currency bank account, gold status Visa card, fixed term deposits, foreign exchange, share dealing services, investments, lending, structured products and pensions, this is truly a service for everyday life, throughout your life. So if you’re looking for the most adaptable, award-winning account from the Best International Wrap Provider, take a closer look at Fairbairn Private Bank. To find out more about our award-winning wealth management services, call us on+44 (0) 1624 645000 or visit www.fairbairnpb.com distinctly different Fairbairn Private Bank is a registered trade name of Fairbairn Private Bank (IOM) Limited and Fairbairn Private Bank Limited. Fairbairn Private Bank (IOM) Limited is licensed by the Isle of Man Financial Supervision Commission to take deposits and provide investment services. Registered office: St Mary’s Court 20 Hill Street Douglas Isle of Man. The London office is authorised and regulated in the UK by the Financial Services Authority. Fairbairn Private Bank Limited is regulated by the Jersey Financial Services Commission to carry on deposit-taking and investment business. Registered office: Fairbairn House 31 The Esplanade St Helier Jersey. Latest audited accounts are available on request. Authorised and regulated in the UK by the Financial Services Authority in respect of regulated mortgage contracts only. UK Financial Services Authority registration numbers: Fairbairn Private Bank (IOM) Limited 313189 Fairbairn Private Bank Limited 313187 (EXINV) Fast Facts 77004 September 2008 ? EXPAT INVESTOR 9
July August 2008