Expats in the Middle East find investing hard because they often live in a state of flux.
The typical expat starts a placement in Qatar, Abu Dhabi or somewhere similar for six months and then finds that short stay becomes two years or even longer.
Living in a country where you are unfamiliar with how banking and investment work because the system is so different from home and where business is conducted in a foreign language means taking professional investment advice is a priority.
The rules of investing are generally the same wherever you live, but factoring in a foreign lifestyle means adding a few important points, says James Green, who heads up expat financial advisers deVere Group in Qatar.
Five tips about effective expat saving
He suggests breaking the task into a to-do list:
- Think about why you are investing. That means what the money is for, how long you can tie up the cash and what investment risk you are ready to take and how much you can afford to invest each month
- Put some spare money aside in a savings account to cover emergency spending
- Consider your tax liabilities. You need to work out your tax residence, because investing and saving generates income and you need to know where and how this income is taxed
- The currency you invest in as an expat is important. If you live in Qatar and invest in the riyal and move to another country you are exposed to foreign exchange fluctuations, but the value of the riyal is pegged to the US dollar.
Investing in US dollars is likely to be a better long-term option than the riyal if you intend to move.
- If you are not fluent in Arabic, the Middle East has plenty of British financial advisers, banks and other financial institutions. You may decide dealing with someone who speaks your language is better than battling with important paperwork written in a foreign language.
Green also argues that saving something is important, even if the amount is not huge.
“Starting to save and invest early in your career gives your money more time to grow and smooths out volatility in the markets,” he said.
“Saving small amounts over a long time is an effective way to make your money grow into a significant nest egg for retirement.”
