Is an Offshore Investment a Safe Option?
There are two groups of people who often consider starting to invest their savings offshore. They do this for a number of distinct reasons. Are you a member of one of these groups and would these common reasons be applying to you? And of course you also want to know if it is safe. Find out here what to pay attention to.
To start with, let us first see if this topic is for you. Offshore investing is not something that is for everyone. If you are only reading this here because you are fed up with paying your taxes, I’m afraid that there is not much we can do. I share your sentiment, but accept that taxes are part of living in a modern society that functions reasonably well.
Now, here are two good reasons why you may consider an offshore banking solution.
Working or Retiring Abroad
The two groups of people who are primarily interested in investing offshore are:
- People with an international career who move from country to country.
- People who consider retiring abroad.
Of course there could be an overlap between these two groups. If you have an international career and you consider retiring abroad, it is logical that you think about the offshore options.
Here are the most common considerations that people have when investing a part of their savings offshore:
- Managing currency risk
- Financial and investing advantages
Why Going Offshore
When you have all your savings in currency A and you want to retire in a country that has currency B, you may end up poor and lonely. The country with currency B looks that attractive now. But think of the possibility that in 20 years currency B may have become way much more expensive. How far could your savings in currency A get you then? When you prepare for such a situation, offshore accounts in multiple currencies may be a good solution.
When you are moving from country to country for your work, managing your money and investments via one and the same bank is convenient and secure. Even large international banks often operate as completely different entities in different countries. Of course you can open every time a new bank account in a new country. But those bank people don’t know you; they don’t know your history. Maintaining the same offshore banking relation throughout your international career addresses this issue.
And when you have an international career or mindset, you probably do not want to limit your investments within the borders of your home country. You have a more worldly vision for your money. Offshore banks are experts in the international aspect. When selecting offshore investments, there will be a wide range of options and personal advice available.
Safety of Investments
When you worry about the safety of your offshore investments, there are two aspects to take into account.
The first one is the general safety of investments. Every investment that provides a chance on certain returns carries a corresponding risk. There is no free lunch. All the disclaimers that you read for any normal stock market investment are just as applicable for offshore investments. Make sure that you understand in detail in what you invest your money.
The second aspect is that of the safety of going offshore. To avoid here any unnecessary risks, just go with one of the more well-known offshore banks. Don’t fall for any smooth talk of the first sales person that gives you a call. Do some homework on the reputation of the bank that you plan to use. There are enough good choices out there.
The world is great and large place. When you are working or planning to retire abroad, consider the offshore option for your investments. Do you have any experience in this field? Please share it as a comment below.