A golden opportunity, squandered!

For many South Africans, their overseas contract is a golden opportunity to set themselves up financially for the rest of their lives.?

The contract usually comes with high earnings together with large living expenses such as housing being paid for by the company.?Taxes can also be significantly lower than back home.

However, many finish up their contracts with little or no savings and return home with almost nothing to show for their hard work except for the memories.

Why is that?

Of course, there are many possible reasons, but perhaps the most fundamental is the lack of a clear, actionable, long-term financial strategy.

I come across the following story with some variations only too often…..

Johan and Marietjie arrive in the Middle East and quickly get wrapped up in work - after all that’s why they are there.?At the same time, the busy and exciting expat social life draws them in with its expensive entertainment and Instagram worthy holidays in exotic places.?Very soon- without a clear financial plan, coupled with new, large but seemingly affordable expenses - a financially unhealthy pattern easily develops.

The higher the income - the higher the expenses - leaving little for savings or future plans such as retirement!

Inevitably they get calls from various financial companies offering to provide all kinds of planning and investment services with promises of big returns.?However, having heard horror stories about financial losses and unscrupulous advisors from other expats, Johan and Marietjie decline all approaches.?Trusting to their own common sense and the expat grapevine, they carry on earning and spending as before, hoping for the best.?However, it often happens that some years later, they find themselves back home with very little, besides memories, to show for their hard work.

The first lesson is - expats like you - do need financial advice.?You are away from your usual support network, in an unfamiliar legal environment and often unaware of the benefits - and pitfalls due to changing legislation - of being a non-tax resident in your home country.?Few people have the time or the up to date specialized knowledge to handle the commonly underestimated complications of long term financial needs.

The second lesson - choose your financial adviser carefully.?As in any field of operations, there are good and bad.?It’s important to choose a company that is established, provides highly specialized advice on all aspects of personal finance and that the advisors are properly qualified to give investment advice for your particular situation.

?A professional financial advisor has the knowledge and skills to take a detached, independent view of your financial situation, asking key questions that are vital in preparing a long-term, successful plan. ?

This plan may not only be about making investments, but also taking care of partners, children, or even elderly or disabled relatives.?It’s often shocking to find that high-ranking company executives have little in place to protect even their direct family, and sometimes don’t even have any sound retirement provision.

?The detailed and perhaps seemingly intrusive questions that a good financial advisor will ask are necessary to get a clear picture of your current financial situation, your financial aspirations, and how that might impact on you and your dependents in the future.?

Together with your input, a solid plan that you can follow and work towards can be formulated.?Critical parts of the plan could include regular savings, pension provisions, reducing debts, provision for emergency and unexpected contingencies, educational funds and, of course, investing for the future or a particular goal, but they all depend on your unique circumstances.

Once you and your financial advisor have agreed on a plan, you then have a financial framework that you can follow.?Having a monthly budget and a realistic and relatable savings target, informed and wise spending decisions are easier to see and make.?

?I specialize in helping South African expats in reaching both their short and long term financial goals.?I help them to make informed and educated financial decisions to grow their wealth, protecting it for their golden years and preserving it for future generations.

Meeting with me doesn’t have any financial obligation or cost.?I am always happy to sit down with you - literally in person, or figuratively via Zoom or WhatsApp - and formulate a plan.

Contact me today at [email protected], message me directly here or give me a call on +27 (0)66 310 4760