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International Investment: 5 Ways to Find Lucrative Investments When Living Abroad 

Photo: Jamie Street / Unsplash

Whether you’ve been offered an off-shore account by an investment firm in Vietnam or an opportunity to get involved in commercial real estate in Melbourne, as an ex-pat, you’ve likely noticed that people are pretty enthusiastic about getting you to part with your money. The question is – where should you direct your money if you’re interested in investing while living abroad? 

The following five tips should help you avoid unscrupulous offerings and hone in on genuinely valuable investment opportunities. 

1. Never accept an offer on the spot

It’s crucial to take your time and think things through before putting money on the line. This is true whether it’s an investment company you approached or a friend of a friend you met at a group dinner who has an “unmissable opportunity.” It’s easy for well-intentioned people to make mistakes in the investment world, so even if you trust the person, it’s crucial to get a second opinion before committing. 

2. Consider your currency risk

The term “currency risk” refers to your risk of losing money, even with a sound investment, due to fluctuations in the currency exchange rate. This may not be a factor if you’re a retiree who never intends to move back home or move to another country. However, if you can see yourself returning to your home country or moving on to a new region, it’s crucial to consider the impact of currency exchange rates when selecting investment options. 

The general rule is this: If you know where you plan on retiring, focus on stocks, mutual funds, and other investment options based on that currency. 

3. Go for global diversity

If you’re still enjoying the nomadic lifestyle with no clue as to where you plan to retire, that doesn’t mean you can’t start investing now. The trick, in this case, is to develop a globally diverse portfolio. Indeed, this can be an excellent strategy for any ex-pat. 

Global diversity is a great way to protect your portfolio against the uncertainty of the geopolitical sphere. For example, if your US investments take a hit due to inflation or some kind of sequel to the subprime mortgage crisis, your Australian and European investments will keep you balanced. 

4. Consider home-based property investments

While you’re off galavanting around the world (as your dad calls it), a home-based property investment could be earning you a safe and steady income via rental returns. The benefit of this strategy is that you won’t have to worry about all the rules and red tape that apply to purchasing real estate overseas. This will also save you from the tax complications that often come with foreign investments. 

5. Learn about foreign investment and taxes

Speaking of taxes, it’s crucial to preload your brain with a deep understanding of the tax rules surrounding foreign investment long before you actually put any money on the line. If you’re not up for diving into this complex subject matter yourself, then it’s absolutely essential for you to hire a tax accountant who is well-versed in ex-pat finances and foreign investments. The last thing you want is to garner the attention of the IRS (or the equivalent institution in your country of residence). So, be sure you’re doing the right thing taxation-wise every step of the way. 

Keep these tips in mind, and you’ll be a few steps closer to finding the financial freedom you need to match your geographically free lifestyle. 

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