iSavta | 29.08.2022

Managing and investing your money wisely has its unique considerations and opportunities when you are working abroad. If your income is higher and living costs are lower, you might be able to save more than what you managed to when you were back home.

Whether you are taking on a long-term view of your retirement plans or you are trying to save for something you wish to achieve in the not-so-distant future, investing offers an amazing opportunity to protect and grow your wealth.

Here are a few practical tips on how to invest your money wisely while working abroad:

 

Don’t Hold Too Much Wealth in Cash

If a big chunk of your wealth is in cash, you might have a hard time keeping up with inflation. It will lower your purchasing power and make it more difficult to reach your goals. 

However, it is still necessary for a part of your savings to be kept in an accessible account that you can withdraw and deposit at any time. 

 

Think of What to Do with Your Current Assets 

If you are working abroad and you think you will stay there for some time, you can also consider transferring some or even all of the assets you have left in your home country. Due to the differences in tax regimes, you have to be careful when managing and disposing of assets. 

You also have to consider exchange rate fluctuations. If you move your assets at the wrong time, it can erode your wealth and jeopardize your long-term goals.

 

Have a Solid Plan in Place 

A sound and solid financial plan will help you unlock your wealth potential. You can feel more reassured and have peace of mind that your finances are right on track if you plan for both long- and short-term objectives and goals. 

It doesn’t matter what you wish to achieve in life, whether it is a comfortable retirement in the next few years, saving for education expenses, or a dream vacation, having a plan can help you reach your dreams. 

 

Have a Long-Term Investment Perspective 

You always need to stick to a long-term approach when investing your money. Ideally, you need to expect to tie up your funds for five or more years. When you invest longer, you will also likely enjoy more compound growth. 

 

Keep an Emergency Fund Handy 

Try to hold living costs for a minimum of three months in an emergency fund to pay for unexpected expenses. The amount you have on hand depends on your specific circumstances. Generally speaking, it is recommended to hold enough cash for covering your living expenses for between 3 to 6 months. 

 

Secure Cash Savings 

To save yourself from the adverse effects of exchange rates and currency fluctuations, see to it you have a dedicated savings account in the currency you use often. Aside from being easily accessible, these savings accounts can serve as a secure place for storing your capital and earning a fixed interest rate at the same time. 

 

Working abroad can make investing your money more complex but as long as you follow the tips above, you can grow your wealth in no time.