Where Should An Australian Expat Investor Accrue Their Wealth?
When you’re living overseas where an Australian expat investor should accumulate their wealth is one of the most common questions we receive.
We have quite a simple response to this – You want to accumulate wealth in the country and currency that you intend to return to or retire to.
The reason for this is that one of the biggest financial risks for expats is currency risk.
How many times have you heard of someone getting burnt because the currency went in the wrong direction and they had to postpone their repatriation?
We have and it happens more often than you think.
Consider the case of an Aussie expat in the UK who held all of their wealth in Pounds Sterling and was about to repatriate back to Australia after the Brexit vote in 2016.
From the day of the vote until the end of that calendar year the Pound has fallen by over 13% against the Australian dollar. This meant that either they had to move back to Australia with less than they thought or delay their return to Australia.
By accumulating your wealth in the country that you intend to return to, when you make that decision to repatriate it is based on when you want to go rather than if the foreign exchange market suits you at the time.
When you move money back to your home country utilising a dollar cost averaging approach over the time that you are away, you will be able to try and smooth out the wild fluctuations of the foreign exchange market and your assets will be waiting for you, in your desired currency, when you return.
The financial advice that we provide to Australian expats is not only tailored to your citizenship but also where you are domiciled.