Expat Investments: A Guide to Avoiding The Most Common Mistakes

If you are living as an expat, you should think differently and more wisely while making investments. This is because you run more risks while investing in a foreign country than you do in your home. Opportunities and outcomes vary and so do challenges. Hence, you should be doubly cautious while considering investment.

In this blog, we will cover the most common 4 expat investment mistakes that you should avoid while living in Singapore. It will not only help you reach your financial goals faster but also keep you away from any legal troubles.

No Diversification

Creating a diverse portfolio is the foundation brick for any successful investment, whether you are living as an expat or a resident. Many expats invest only in their native land. The downside of this approach is that if the market in their home takes nosedive, it will leave them financially ruined. A diverse investment portfolio that covers different geographies and asset classes can minimize these risks, increasing the chance of getting stable returns and subsequently reducing potential losses.

Ignoring Tax Implications

Not having a fair knowledge of tax systems in Singapore can adversely impact your return from investments. In fact, you must have clear knowledge of your tax obligations in both your host country and home country. If you don’t have proper tax planning, you may have to bear the burden of unexpected tax liabilities or double taxation.

Miscalculating Currency Exchange Risks

Ignore the reality of current exchange rates, which change dramatically, and you will find yourself in major problems. One of the most common mistakes that many expats make is they fail to hedge against currency fluctuations. This is truer if you earn in one currency and have to meet your financial goals in another. Managing the risks requires you to put the financial strategies and tools to the best usage. This way, you can shield your expat investments in Singapore against unfavourable currency movements.

Failing to Do Repatriation Planning

Many expats in Singapore don’t have adequate plans for their repatriation. Remember, it is not your home and a host can show you the door anytime. Therefore, you must prepare for the worst scenario. Repatriation requires you to do necessary financial planning in advance so that your investment is quickly convertible into liquid assets. If you are not prepared for adverse situations, your savings and investment may not benefit you or even may not be accessible after you get back home.