This client has been an expat for many years, will soon be moving back to the UK very soon. This was their financial summary:
Please note, all names and any personal identification have been removed and this forms part of a bigger report that was given to the client. The report comprises a risk profile, multiple options of platforms and investments so they can choose the one that suits them most.
I will also show the questions that were asked and write the answers I gave to the client.
Financial Summary
- GBP 20,000 premium bonds
- 580,000 GBP value in Property, no mortgage, great tenants (no voids in 10 years)
- Income from property 27,000 take home 21,000
- Can comfortably save 3-4 k per month
- Financially single
- No pension
- One year’s expenses in an emergency fund
- No other investments
What should I do to diversify my portfolio and prepare for FIRE?
Pension (I know I can’t access till late 50’s) investments?
Your property income and weight of your portfolio is great.
I would personally weigh more of your overall portfolio in equities as you are in your 50s and in a good situation, you are earning 6-7k a month (most likely clean if you are in the middle east). This is a good situation to be in.
If you could get the average growth of 6%, the S&P historically 8.64% this will be enough for your requirements.
If you were to save half the income (3000) over a 10 year period would equate to 489,930. With 129,930 coming by interest.
This with the income of your house would give you sufficient income to retire in a number of locations as you have no mortgage.
Personally, I would look at retiring somewhere cheaper. I like SEA, Malaysia and Thailand as they have some good retirement options also they have a more frontier market in Cambodia.
The cost of living in these places would be comfortable on your current income of your rental properties and the first two locations have great health care systems. Other options, are Costa Rica and Mexico.
A slight caveat is that it does depend on the lifestyle you want to live, you can live a very high end lifestyle, however, the cost also rises and we would need to adjust the numbers accordingly to meet this.
If you want a break down of the cost of living in these areas a good website is Numbero
https://www.numbeo.com/cost-of-living/
In the websites you can break down the cost of living in each city.
Low-Cost Platforms
For you looking at a low-cost option platform might be of some use to start investing as an expat. You do not have all the options that you do in the U.K., however, there are some good options available to expats.
Some are IBKR and keep it simple, if you want a passive portfolio you can go into Ishares or Vanguard MSCI world index 70% and 30% in a passive developed market bond or for higher returns and risk 30% in developing markets Ishares Asia Pacific ex-Japan is one that I use. But, as you are in your 50s with no other investments it might be worth opting a percentage towards the fixed interest percentage in order to make sure that you don’t lose capital.
For, platforms here are a few options I have blogged about. In here, I have some options and my opinions on those options as an expat.
Many have their own personal preference which is absolutely fine, I just want to make you aware of the full cost, it’s good points and the points that might hold you back!
