One of the great pleasures we have at Black Swan Capital is seeing the improvements in our clients’ lives from the application of good investment and financial advice. Whether our client is a newly arrived expat or they have been abroad for half a lifetime, there is much we can do to help.
What is also evident from our experience and is now being demonstrated in academic and commercial research, is the link between financial life improvements and physical and mental wellbeing.
The interesting point about these variables is that they have an active inter-relationship. That means it is not one way, but that each can and will exert influence on other aspects of your life.
Research has shown that when people feel financially more stable, they find it easier to tackle other goals, such as improving health, up to 80% in some studies. Similarly, research suggests when people feel healthier, they feel more alert, in control and better able to take on complex issues such as personal financial management. So, it appears there is a link and that one can benefit the other.
Furthermore, when people become healthier they often report feeling mentally stronger and in control, as they do when the finances are in control. Having the finances in control is not just about paying the bills. It is also about having your longer-term goals articulated and a plan in place so that you can achieve those goals.
This is especially true for expats and internationals. Moving countries can be as disruptive as it is exciting. Living in a different environment might make it impossible to follow what you did previously. Adapting to your new life may not be easy at first so it is critical that you get these important components under control, adapted for your changed situation and in place as soon as you can. Mentally, that can be very rewarding.
In a financial management context there are many factors to consider: tax in your new country of residence, double tax agreements with your home country, your new cost of living, adjustments in salary, working hours, commuting time, impacts on investments held in your home country or previous place of residence, pension laws, both locally and abroad, and any changes to your goals.
Like many goals, the hardest step is the first one. Getting fit, and setting good long-term financial plans in place are no different, Going to the gym that first morning or putting that investment plan in place may be met with inertia at first, however the benefits, both direct and indirect, are soon felt.
We recommend 5 steps to getting your financial life as an expat under control, whether you have just arrived or have been here ten years or more:
1) Get Independent Advice. We have written about this previously and you can see our other articles on what to ask and how to start. You should seek out the advice of an appropriately regulated, qualified, experienced and independent professional.
2) Adjust & Re-Assess. We often find that clients need to make adjustments to their financial life planning. Some of these are because the laws and taxes are different between their home country and where they are living. For others household cash flow has changed. It may have increased due to cost of living or employer support, or maybe decreased as you have gone from two incomes to one. Re-assess your budget and refer to point 1 to make sure you are on track.
3) Take a fresh look at your goals. This includes the short, medium and long-term goals. Assess your goals and the plans you have in place in the context of where and how you are living now. What other aspects could influence those goals? Perhaps there’s a different pension structure, the school fees are higher or lower, or your time abroad has made you question your long term and retirement goals altogether.
4) Contingency Management. In over 20 years of giving independent advice to international professionals one thing that is consistent is that things change, and often unexpectedly. Take time to think about what comes next and how that fits into your plans for the future.
5) Start Today. Take that first step. Just like the first morning back in the gym, the benefits can be felt immediately and set you up for a better future. Speak with us at Black Swan Capital about how we can help you to get your financial life into order, and, who knows? It might even spur you into getting into better physical shape!