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Inflation – The Asset Eroding Thorn in your Low-risk Investment Strategy

Growth is key for an inflation busting investment strategy

A portfolio that overly emphasises fixed interest securities, annuities or cash savings may struggle to keep pace with inflation and could ultimately result in you needing to make unwanted adjustments to your lifestyle or, worse, could even cause you to run out of money.

With this in mind, it is unlikely that a conservative or “low-risk” expat wealth management strategy is going to provide sufficient income as you get older.

Before August this year interest rates in the UK had remained at or below 0.5% for nearly a decade. When you consider that the inflation rate in the Euro Area averaged 1.97% from 1991 until 2018, it is easy to understand how, even with the recent interest rate rise to 0.75%, relying on UK-based savings could leave you short of enjoying the expat retirement lifestyle you have always dreamed of.

The bottom line is, that while your savings are growing at one rate, the cost of living is rising at another – and if the two don’t match, or your growth rate is lower than the inflation rate, as time goes on, your savings will buy you less and less.

There is only one answer to this and other expat wealth management retirement planning problems: plan ahead and work to diversify your assets so that you can find the balance between growth and safety that is suitable for you and your goals.

Advice from Blacktower Financial Management

At Blacktower Financial Management our experts can help you develop a confident expat wealth management and retirement plan to give you the best chance of having sufficient assets to see out your retirement and any legacy plans you might have.

We are a specialist firm, with many years of experience and our team of international financial advisers understand all the important cross-jurisdictional issues affecting expats. We can help you protect and grow your wealth and provide you with the information and support to make investing choices that are right for you.

Contact us today for more information.

This communication is for informational purposes only and is not intended to constitute, and should not be construed as, investment advice, investment recommendations or investment research. You should seek advice from a professional adviser before embarking on any financial planning activity. Whilst every effort has been made to ensure the information contained in this communication is correct, we are not responsible for any errors or omissions.

Other News

Tax Return Deadlines for Expats in the Netherlands

StopwatchIf your expat financial adviser in the Netherlands has not alerted you to the fact already, you should be aware that the deadlines for Dutch tax returns are looming. Depending on your circumstances, these are as follows:

  • 30 April – This is the general deadline and applies to the majority of taxpayers in the Netherlands
  • 1 July – This is the deadline for most non-residents, including those who are newly arrived in the Netherlands as well as all other parties who qualify as M Form taxpayers (those who have only spent part of the tax year in the Netherlands due to immigration or emigration)
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Dividend Aristocrats

The Dividend Aristocrats are S&P 500 constituents that have increased their dividend payouts for 25 consecutive years.

The FTSE also has its own Aristocrats which many people who read this article will recognise and even have in their own portfolios, some of the dividend returns can make very interesting reading:

Read More

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