The previous blog was aimed at those who are contemplating life as an expat. This blog is dedicated to those well-heeled (hopefully) veterans of the suitcase, airport waiting lounge, visa hang-ups and dodgy taxi drivers. What is an expat veteran? For me, he/she has to have at least 15 years of experience as an expatriate under the belt. So, bearing that in mind, we’re talking people who have built up a palpable nest egg over the years. They have money to spend, perhaps who’ve gone on lavish vacations, aren’t afraid to invest in a decent wardrobe of accoutrements, and change out the automobile every couple of years. But underlying much of this ostentatiousness can be a fear of investing.The fear of losing money is the main reason a huge percentage of the public struggles financially. But fear isn’t the real problem. It’s how people handle fear that matters. The much-celebrated investor, Robert Kiyosaki, tells us that the primary difference between rich people and poor people is how they handle the fear of losing money. Some people, when hit with a financial loss, give up. Others transform the loss into a win. As John D. Rockefeller said, “I always tried to turn every disaster into an opportunity.” Losers are defeated by failure. Winners are inspired by it. And I must confess to having come across many winners in my travels abroad. It’s very much like a game of chess; it’s 95% in the mind and 5% in making the move!
As mentioned above, many expats do tend to go over the top with buying big houses and posh cars rather than big investments. This is down partly to the fact that the vast majority of expats are contract workers who work from one job to the next - they enjoy the money so much that they get caught up in the ‘expat trap.’ Their overheads (and debts) force them into working abroad chasing the higher salaries to keep their ‘heads above water’.
Kiyosaki goes on to say that, “The primary difference between rich people and poor people is how they handle fear.” From my own point of view, the best way out of this fear of investments and, to a certain extent, the fear of money, is to diversify. Having a financial plan for security and comfort first are important. But if you have any desire to become rich, or just simply better off, then diversify. Better you put a lot of eggs in a few baskets rather than putting a few eggs in many.
As a one-time successful sports trader, I took the attitude that if the prospect of failure inspires you to fight and win, maybe you should challenge yourself to change your financial habits. Educate yourself and take some financial risks. The more education you have, the less risk there will be. It’s all down to market research. People in general are just too lazy to be bothered with investment diversification tending to keep their money in banks and building societies. I should point out that as I write this blog the Bank of England interest rate is stagnating at 0.5%. Nothing is going to fall onto your lap. You’ve got to work for it and when you do, the burden of fear will disappear by itself. The fact that the banks are paying such a low rate should be enough to strip off the vest of fear and invest prudently and diligently.
One should start with investing in mutual funds and unit investment trust funds (check it out here: http://fitzvillafuerte.com/mutual-funds-and-unit-investment-trust-funds-whats-the-difference.html) and then move on to a riskier type of investment – the stock market. If you start buying and selling stocks, then you might want to progress into Forex (foreign exchange) trading. And for those who are approaching retirement, and assuming you are of that ilk, you might want to contemplate moving into the hospitality industries: pubs, bars, restaurants, eateries, small hotels/motels or guest houses.
But, as I hopefully have explained clearly, it is all about overcoming one’s fears of investing your hard-earned cash to secure one’s future security and lifestyle.
You can be young without money but you can't be old without it.
Tennessee Williams
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