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Financial advisors are often asked ‘what is a good investment for expats in the UAE?’. Unfortunately, there is no one-size-fits-all response which can satisfactorily answer this question. In fact, the response to this question will more than likely involve a collection of questions in the opposite direction. These are likely to include;
These five questions start to provide advisors with a good understanding of your current financial position and your longer-term objectives. Without understanding your circumstance, an advisor should not provide you with any form of advice, as the advice should always be constructed on the back of a complete understanding of the client.
You will often see headlines in the news and online like ‘Now is the time to invest in gold’, ‘Bitcoin can make you a millionaire’ and ‘How to create a passive income from trading FX’. It’s important to understand that firstly, the writers of these headlines may have zero interest in your long-term financial security and secondly, these articles are often written by people without financial qualifications.
1. What do you already have?
This question is extremely important. An advisor cannot suggest an investment for you without knowing what you already have in place. This question doesn’t only apply to your assets, it applies to your liabilities too.
2. What are your long term financial objectives?
Another question advisors must ask is what you would like to achieve in the long term. This may involve things such as saving your children’s education, your retirement nest egg, leaving money for your family or saving for a property. Everyone’s objectives are different and because of that, investment solutions must be bespoke to your situation.
The United Arab Emirates is home to many high-tax-free-salaries, it is not uncommon for people to leave the UAE and move on to a lower salary or lower amount of disposable income in another country. The right investment product for you must be suitable not only for the UAE, but also for where you’re going next.
4. What’s your next move?
Certain investment products have tax advantages which others don’t. If you are planning on moving to places such as the UK, South Africa or Australia a portfolio bond may be a suitable option for you due to the tax advantages. An advisor will need to understand your future intentions to suggest the most appropriate investment option for you.
5.Are you covered?
One of the most important parts of the financial planning process is protection. There is no point in an advisor helping you to create a portfolio of wealth if you do not take steps to cover yourself from life’s uncertainties. Without protection, you could spend years pouring your blood, sweat and tears into your investment portfolio. To have it completely stripped from you in the event of an emergency.
To conclude, there is no simple answer to this question. Everyone’s situation is different and requires bespoke advice.
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