Traveling overseas isn’t easy. From getting a visa, buying a flight ticket, and getting accommodation. It can be a complicated process, especially for first-time travelers.
The Covid-19 pandemic complicated it even further with the unprecedented travel restrictions. The best thing now is that those restrictions have been lifted in many countries. But, it still appears that some countries are still not safe to visit. This has caused people to ask new travel questions.
The other issue that complicates travel plans is finance. Moreover, the Covid-19 pandemic largely impacted people’s financial life. This makes it more difficult to justify traveling abroad.
The good news, however, is that finance is an issue that you have some degree of control over. You can make your travel plans easier by starting a savings plan. Begin hunting for bargains early enough. You can also choose to be enterprising about it. That can get done by putting together an investment plan that will work with your travel routine.
Traveling and Investing Overseas
Investors find the local market limited to investment opportunities that bring high returns. Investing in foreign countries brings opportunities for great diversity and extra earnings.
The Eastern Caribbean Island is one of the best regions to travel and invest in. Through investment, you can acquire a Saint Kitts and Nevis passport easily. This investment citizenship will enable you to make economic contributions to the country.
One of the best strategies for investing in foreign countries is doing so when your domestic currency is depreciating. That’s because it increases your chances of getting higher pre-tax returns. In this article, we tell you how you can travel and invest abroad.
Before settling on an investment strategy, think about your long-term living plans. If you plan to live overseas for some time, know that your investment strategy will be different. That’s if you compare it to the investment strategy you’ll need if you’re planning to retire overseas.
The main consideration would be how to manage currency risk. By currency risk, I mean the risk of losing money in an investment because of the rate of currency exchange.
The best strategy would be for you to invest in the currency against which you plan to use the funds. Assuming you plan to retire in Europe, invest in stocks or mutual funds based on the Euro. You can also invest in stocks, bonds, or mutual funds based on the U.S dollar if you intend to retire in the United States.
Investing Abroad Through Foreign Companies
If you’re interested in foreign-based companies, find out how the markets for international stocks operate. Usually, foreign stocks are traded on a home-country exchange known as ordinary shares. The ordinary shares are denominated in the home country’s currency.
There are two types of international investments. These two are portfolio investment and foreign direct investment. Portfolio investment is done in a company’s stock, assets, or bonds.
This investment isn’t meant to control a company’s management. Instead, what you’ll be looking for is a financial rate of return. You’ll also be looking to diversify investment risk through several markets.
Foreign direct investment is the purchase of foreign assets. The investor’s intention, in this case, is to control and manage the assets. You can make FDI in many ways. It can be through buying the assets of a company overseas.
You can also choose to invest in a new property or participate in a joint venture with a foreign company. This usually involves an investment of capital or technical know-how.
Investing in Gold Funds
There are two reasons why gold comes to mind for those intending to travel and invest overseas. For one, they can trade it from anywhere and at any time. This means that an investor can easily check in on the investment while overseas.
Two, gold is an asset that’s believed to gain value with time. The two reasons are strong enough to make you consider gold as an investment while traveling.
Some investors consider gold exchange-traded funds as a better option. The following are the reasons why some investors prefer gold ETFs to physical gold:
- Simple trading. An investor is required to purchase a minimum of one unit of gold to start trading in gold ETFs. Purchasing and selling the units works like equities. You can choose to trade through a stockbroker or ETF fund manager.
- Open trading. The cost of gold on the stock market is publicly available. You can inspect the gold prices without any confusion.
- Hedge against inflation. This investment can be used as protection against currency inflation and fluctuation. As such, it’s considered a safe investment.
- Easy transaction. You can purchase and sell Gold ETFs at any time you want. Also, you won’t get affected by local price differences in gold due to VAT or other taxes.
- Secure investment. Compared to gold, gold ETFs are an easier investment. That’s because there are no concerns over theft or secure storage as is the case with pure gold.
Investment in Property Rental
This has become one of the most sensible investment ideas for those who live overseas or travel often. Because unlike before, more services are making it easy to rent out your property.
Platforms like Airbnb and other similar counterparts allow you to list your property. They then schedule renters and turn your property into a temporary source of income.
With this type of investment, individuals have varying degrees of success. That’s because of the quality of the property, its location, and how it’s managed.
High-Yield Savings Accounts
This investment is a straightforward option for savings and earning money. With a high-yield account, you can leave the money saved for a certain period. Upon withdrawal, you’re able to earn more compared to an average savings account.
But, you’re expected to wait until the end of the agreed period. This lack of flexibility can be problematic for some people. But if you budget for your trip while traveling, you can afford to keep away some money in a savings account.
The money will be ready when you get back home from your trip. Moreover, the account will have yielded a return that will make up for some of your costs.
Constructing a Globally-Diversified Portfolio
Considering the global economy, you should develop a globally-diversified portfolio of investments. This is especially so for expats.
It’s advised that you work with a broker if you aren’t sure of where you plan to spend your investment funds. The broker will help you develop a portfolio based on different currencies. This minimizes the risks involved when it comes to cashing in your investment.
Final Take Away
While planning to travel overseas, you must understand the market before investing. You must also understand the political and economic conditions of the country. Because these are factors that can directly or indirectly impact your investment returns.