Expats can still Invest with These Basic Financial Principles
How to invest when you don't know where you'll live?
Schools don’t teach the power of money.
Most people don’t know that you can travel, live ad-hoc in beautiful countries worldwide, and still be financially responsible and safe.
My personal journey of trial-and-error across 20+ countries can shine a bit of light on how to budget and build your finances. You don’t need Wall Street knowledge and Kayman-financial skills to start building your financial future. Traveling adds a challenging layer of complexity, but you have to pay for the thrills, and disentangling your budget is not a bad tradeoff for freedom.
You don’t have to lose on good times to have a positive financial future, but putting effort into understanding how money works is essential.
When you spend money, you can spend it on two things: assets and liabilities. Assets can make you money. Stocks are usually an asset. And liabilities cost you money. Think of cars, expensive dinners, and all that gusto.
Build assets, and cut on liabilities. Assets will grow over time, and your liabilities won’t destroy your sanity.
Don’t move until you have 3 months of cash on hand. Keep this in solid cash or your Savings bank. If you spend $2000 each month, have at least $6000 on the side before you even start thinking about other investments. I had a financial hiccup moving to a new place the other day, and cash on hand solved the issue.
Start to think about mobile low-risk assets. The low risk means stable index funds like DOW JONES, NASDAQ and S&P500. US Treasury bills, notes, and bonds are generally considered the safest forms of investment. They mature in different time-spans, but once they reach maturity, they pay out more than original investments (reaching maturity anywhere between 4weeks to 30years).
Invest part of your income to high-risk assets like cryptocurrencies, forex, or and disruptive companies. Have some fun when you’re comfortable with your financial outlook, but don’t gamble your money. Check out the Trading Game to learn how to deal with high-risk assets. Here’s a list of cool trading apps for beginners.
Eventually, save enough money to buy real estate in a familiar city or town. You don’t need to pay the full sum upfront. Show the bank that you have enough financial responsibility and ask for a mortgage. Aim to get a property in an up-and-coming city and then sell it for double a few years down the road. Repay the mortgage, and buy a better property.
I’m somewhere in the middle of this path. My company in London is growing, and my asset column is bigger by the day. I have fewer liabilities today than when I was in my early 20s.
You can take responsibility for your finances and build a dream life.
You only need faith and effort to start.