Viewing posts categorised under: Spain

Form D6, Modelo 720, Declaracion de la Renta and Wealth Tax reporting dates

By Chris Burke
This article is published on: 15th January 2021

15.01.21

Whether you have lived in Spain for a while, or are new and trying to understand when you need to submit to the various deadlines, including taxes and overseas assets, I have listed below in an easy to read format what you have to declare and when, to help make your life more simple. These have been the same for the last few years and so should remain moving forward. If you would like help in understanding, declaring and any other questions don’t hesitate to get in touch.

End of January 2021

FORM D6
Stocks, bonds and investment funds that are outside of Spain and are not Spanish compliant. (this is to compliment and not replace Modelo 720). Failure to comply with the obligation to submit this Form D6, can lead to a fine of up to 25% of the undeclared amount, with a minimum of €3000. Late declaration entails penalties ranging from €300 in the first 6 months to €600 after that deadline.

End of March 2021

MODELO 720
This is a declaration of assets outside of Spain value of €50,000 or more. Once declared you only need to do this again if the value of any asset (e.g. a bank account) has risen by more than €20,000). The authorities can fine you anywhere between 100 and 10,000 euro for failure to meet the requirements (as of 2019, the European Union considers Spain to be breaking EU law with these sanctions for people who file the Modelo 720 late).

End of June 2021

Declaración De La Renta
Your annual tax return, showing all assets and worldwide incomes, must be declared for assessment by this date. Not all assets will be taxable, depending on how they are structured. In Spain the financial year runs from January through to December, and in June you are declaring for the previous calendar year’s finances.

Wealth Tax declaration – Catalonia
Wealth tax is applied if your worldwide assets are more than 500,000€ with an additional allowance of up to 300,000€ for your main residence. The tax is based upon your net wealth: assets minus liabilities. In Catalonia the rates of tax start at 0.21% and rises to 2.75% depending on your wealth each year and is taken from the 31st December the previous year. There are ways of mitigating this tax by having your assets structured correctly.

What role do Chris and The Spectrum IFA Group perform?
I am a financial planner/Wealth Manager and we specialise in optimising clients’ assets, including strategies to minimise taxes both now and in the future. We manage clients’ savings, investments and pensions whilst understanding what these are and the role they will play in their lives. I do my best to continually keep clients informed of anything they need to know in respect of these topics.

Are you and your investments adapting to change?

By John Hayward
This article is published on: 11th January 2021

11.01.21

It is not the strongest of the species that survives, nor the most intelligent that survives. It is the one that is most adaptable to change

I didn’t write that and neither did Charles Darwin, even though many websites state that it is from Darwin´s Origin of Species. In a way, it doesn’t matter who wrote it. What is important is that it is not necessarily the strongest, or the most intelligent, who have survived this coronavirus. Many people have adapted their lives, with guidance, to avoid contracting the virus and/or passing it on in case they have it without knowing.

When lockdown took affect here on Friday 13th March 2020 panic was rife, which manifested itself through stockmarkets crashing across the world. If there is one thing that we have learnt about the human being, it is that he or she is likely to overreact in times of trouble. Toilet rolls, bleach, and selling off stocks and shares were the focus for many in March and April. Months later, it appears that we are not going to the loo so often, houses don´t need cleaning so regularly, and that the business world is in better shape than a lot of people realise.

I return to the “Darwin’s” theory, focusing on adaptation. Some companies were already struggling pre-Covid 19 (21st century companies with 20th century ideas), so the pandemic has accelerated their demise, whereas other companies have taken advantage of the online and digital world, made more prominent because of Covid-19, and have adapted to the demand created by Covid-19.

Brexit has gone (at last!). Boris Johnson has achieved what he wanted. We shall see where that leaves Britain and the consequences for those of us living in an EU country. We knew that there would be changes; deal or no deal. There will be more paperwork, more checks, more headaches, and less freedom. However, those with the desire to adapt, will. This adaptation should bring security, confidence, and an overall feeling of well-being.

So whether it was Darwin, Mrs Miggins from the cake shop, or the bloke down the tavern, who spoke of adaptation all those years ago, the important thing is to look forward, act responsibly, and ignore all the horrible and, at times, unnecessary press reports and local gossip. Not only will all the negatives affect your mental health but they could also impact your wealth. We are not doctors but we can perhaps help your wealth make you healthier.

What’s the story with ESG investing and what can it do for your savings?

By Barry Davys
This article is published on: 7th January 2021

07.01.21

ESG investing is now a mainstream type of investing and a useful part of a portfolio. But what is it and why is it good for me?

A year ago, someone came to ask for advice on moving investments from UK investments to Spain investment. We discussed their position, their requirements, their reasoning behind moving the money to Spain. All the reasoning behind the thought process was very sound. However, there were some practical aspects that I highlighted that needed addressing before making the move. The issues were taxation in Spain and their requirement for sustainable and/or responsible investments.

These people were really pleased with their investments with returns over 120% in 8 years. The increase in value in these funds had been so spectacular that there was a large capital gains tax liability in Spain if they were to sell. Also, the funds also still meet their belief in ESG values.My advice was for them to keep their investments.

So what is ESG investing and why have the returns been so good? Why is it a good type of investing for the coming years? ESG is short for Environmental, Social and Governance. ESG investing is investing in the shares of companies that have good practices in these three areas.

An example of a company that would tick all three elements is a company that sells solar panels and a maintenance contract for them but does not charge for the electricity that the panels produce. Many of the established players in the market sell panels and then charge for the electricity in the same way as a normal electricity company.

This is my view, but charging for the electricity produced is wrong. The source of the power, sunlight, is free. Sunlight costs the seller of the solar panels nothing and should not therefore be charged to the panel buyer. Companies that sell solar panels without charging for the electricity meet the governance criteria. They also meet the environmental aspect because it is a renewable energy. These companies are now providing social benefit because they are setting up systems for communities, e.g. apartment blocks. They are a good example of a company that meets the ESG requirements.

Why is this good for your portfolio? When the “good” companies highlight that energy is free once you have bought their panels, sales will increase. We would all like free energy having bought the panels. Other recent ESG examples include Zoom and other companies that allow us to work from home (+400% share price increase in 12 months), Geely who owns Volvo, Lotus and other brands all converting to electric cars (+70.66%) and BlackRock Inc, the world’s largest asset manager who has just declared it is moving to ESG screening for every investment it makes (+41%).

BlackRock assets are $7.81 trillion as at 31st December 2020. They are joined, in varying degrees, by the following fund managers in ESG vetting of and investing in companies with ESG credentials.

Fidelity
JP Morgan Asset Management
Morgan Stanley
PIMCO (World’s biggest bond fund manager)
Vanguard $6 Trn fund manager

This is a small number of the fund managers that have declared their intentions to invest in ESG assets. Are they doing this because of a collective social consciousness? They may tell us that, but the reality is the companies that can be classed as ESG are often the companies of the future. This is where the growth is and with this much collective demand from the above managers and more the sector will be well supported.

At Spectrum we believe in the benefits of ESG investing; it goes alongside our support of a number of charities. However, we also believe in it as a method of adding future value to our clients’ investments.

If you have a question about ESG investing and would like to discover more, please feel welcome to get in touch. We are also happy to review your investments to see how you can incorporate ESG investing into your savings.

You can be an ESG investor today!

As individuals, you can join the ESG movement.

Spanish private pensions

By Chris Burke
This article is published on: 1st January 2021

01.01.21

Approximately 45% of people living in Spain contribute to a private pension. For someone who is from another Western, perhaps non-Latin country, this would seem remarkably low. Many years ago, in the UK pensions were almost guaranteed as part of an employer package, and a while back it became compulsory for anyone working in a company aged over 22 and earning more than £10,00 a year to contribute to one. But that figure of 45% in Spain could be about to get even lower…..why?

Spain has decided to lower the amount of private pension contributions you will receive tax relief on, from a low €8,000 per year (the UK has an amount you can contribute annually to of £40,000) to a measly €2,000 from 2021 onwards.

I have an open-minded view about pensions; I do not see them as essential, which may seem strange coming from a Financial Adviser. For me, a retirement plan does not need to include or solely be a pension, as long as there is planning in place. The only things I see as good value for the saver with a pension is that employees may contribute into this for you, and the potential tax savings received. I say potential tax savings here, because yes, you may receive tax relief when adding to these pensions, however, more often than not, unless you can mitigate your tax situation, will pay taxes when taking the money out, so more commonly they are a tax deferral system (which is still some kind of potential benefit).

So, if you take away employer contributions, for me private pensions, certainly as an international person living and working away from your country of residence, doesn’t seem all that attractive. If you ever leave that country the pension stays there, under that

country’s rules, and you cannot access this money until age 67 (in Spain) and invariably, in my opinion but seen through clients and performance charts, Spanish private pensions are generally not that good. Look at most Spanish banks’ pension funds and you will find high commissions, too much investment in the Spanish market, and not enough advice.

What should a retirement/pension plan look like? Well, it’s about having a plan/strategy, regularly reviewing and understanding it doesn’t have to be a ‘pension’. It can be property; indeed, one of the reasons private pension contributions are so low in Spain is because culturally they are property lovers, often not just one, but several. These are usually structured within a Spanish company and passed down through the generations, and can be a very attractive investment and also tax efficient. Buying property in Spain is expensive, approximately 13% in Catalunya for example, however if you rent this out as a long-term rental, up to 60% of that annual income is tax exempt.

What this doesn’t give you though is liquidity, so, if there is a property slow down, you could be stuck with that investment unless you want to take a loss on it, or you may have to leave it behind if you move on. It can also be a big hassle, with Okupas (a common problem in Spain of people unlawfully living in your property, and who are very difficult to get rid of, indeed sometimes it can take years to do so and cost a lot of money). Many people working now are almost in a ‘golden generation’ to think about their pension planning. Many of their parents have assets/properties that have grown very well, and will more often than not leave them a considerable amount of money (see my article on inheritance planning for a potential tax problems there!) They seem less worried about their retirement, than perhaps their parents were. Therefore, they don’t necessarily see the benefit of saving money into a pension when they might not need one, with the money being blocked until then and it restricting their current lifestyle.

A more popular and arguably better strategy for someone, perhaps like me for example, living away from my country of birth, is to make my money work by having it invested in a medium term strategy, say 5-10 years, but have more flexibility should I need it, say for school fees, or, in a few years time, buying a property, or anything else my plan entails (maybe even early retirement).

So, build your strategy on a mixture of property, investments and emergency funds where possible, and always review regularly to see which type of these suits you best at any given moment. Some people really don’t want the hassle of having property, so a well managed investment portfolio could be better for you.

I can help with all of this: the planning, helping set up a property investment structure, and organising savings that will be invested and work for you. Alongside this, we can set it up with access to the money should you need it, making sure you have a clear strategy and advice along your journey.

Are you a UK IFA with Clients Living in Europe ?

By Spectrum IFA
This article is published on: 17th November 2020

17.11.20

ARE YOU UNABLE TO SERVICE THESE CLIENTS POST BREXIT?

At The Spectrum IFA Group we can look after your clients long term as licensed and regulated financial advisers operating in France, Spain, Italy, Portugal, Malta, Luxembourg and Switzerland.

The things you should know before you contact us for our help:

We specialise in financial planning for English speaking expatriates across western Europe
We are locally authorised in all jurisdictions in which we operate and across the entire EU (and Switzerland). Our regulatory status is unaffected by Brexit
We hold financial services licenses for both insurance mediation (Insurance Distribution Directive compliant) and investment advice (MiFiD compliant)
Established in 2003, we have 50 advisers and 12 regional offices
We work only with large, well known asset managers including Blackrock, Jupiter, Fidelity and Prudential. For clients with higher value portfolios we also use discretionary investment managers such as Rathbones, Smith and Williamson and Quilter Cheviot
As part of our terms of business, clients of The Spectrum IFA Group receive ongoing, long term service and support. All advisers live within easy travel distance of their clients
We are not an offshore broker. We do not use products from UK dependant territories (such as the Isle of Man or Channel Islands) as they can produce adverse tax consequences for clients living in Europe. We advise that you don’t use any of these structures for your clients if they are EU resident
We use only locally compliant products which are designed specifically for the jurisdictions in which our clients are based
We work on a transparent charging structure with all clients. Charges are deducted directly from the products and solutions we recommend. We do not invoice separately

As the end of the transition period is rapidly approaching we ask that you contact us as soon possible to allow time for us to complete any necessary restructuring of client assets.

If your clients are resident in the EU or Switzerland, or intending becoming resident, please feel free to contact us for a no obligation discussion to determine if we can look after your clients post Brexit.

You can contact us at info@spectrum-ifa.com

Or speak to the specific country managers in France, Spain or Italy

Click the relevant flag below

Est-il préférable de rembourser votre prêt ou d’investir?

By Cedric Privat
This article is published on: 13th November 2020

13.11.20

Vous avez reçu un don, un héritage, un bonus ou avez accumulé de l’épargne sur vos comptes et vous vous demandez comment utiliser cette somme au mieux.Nous allons analyser ensemble les différents points à prendre en compte dans cette prise de décision.

Épargne de précaution :
La première règle sera de ne pas mobiliser toutes vos liquidités et de garder un capital libre.L’immobilier n’est pas un capital disponible rapidement; un bien peut prendre du temps à se vendre et le transfert de placements prendra plusieurs semaines avant d’être transféré sur votre compte bancaire.

Cette somme de précaution devra plutôt être disponible sur un compte courant pour vous permettre de couvrir vos frais réguliers (fond de roulement) et de faire face à un possible imprévu. Pour plus de sécurité, elle devra être équivalente de trois à six mois de salaire, surtout si vous avez des enfants.

Frais de remboursement anticipé :
Si vous choisissez de rembourser votre prêt, la première démarche sera de vérifier votre contrat (ou de contacter votre agence bancaire). Si le montant des frais du remboursement anticipé (ou pénalités de remboursement anticipé) est trop élevé, s’acquitter de cette dette pourrait s’avérer trop onéreux (en moyenne , les frais s’élèvent à 3 % du capital restant dû).

En revanche si vous aviez négocié des frais 0 à la signature du prêt, vous devrez alors confronter le taux de votre prêt et celui de vos placements.

Comparer les taux :
Si le taux de votre crédit est bas, il est surement intéressant de ne pas toucher à cet emprunt ; on peut alors le qualifier comme une bonne dette.

Néanmoins, le taux de rémunération de vos produits d’épargne se devra d’être supérieur à ce taux de crédit. Mais avec un Livret A ayant un taux de 0.75 % depuis 2015 et le rendement du fonds en euros de l’assurance-vie qui ne cesse de baisser depuis les années 2000 (placement 100 % fixe garanti), même surpasser l’inflation (évolution des prix à la consommation) peut s’avérer difficile.

Même les investisseurs les plus prudents se doivent désormais de choisir des placements avec (au moins) une partie variable, tout en s’adaptant à leur profil de risque, afin d’obtenir des rendements supérieurs qui couvriront les taux d’intérêts de l’emprunt et permettront de gagner de l’argent. (assurance-vie en unités de compte/SCPI/obligations/actions/fonds d’investissement, etc.)

Les avantages du crédit immobilier :
Un crédit immobilier peut vous permettre de développer votre patrimoine via un effet de levier.

Continuer de payer vos mensualités pourrait vous permettre de diversifier votre patrimoine vers des placements ou d’effectuer un nouveau prêt pour un nouvel achat immobilier (si possible locatif et avec des loyers égaux ou supérieurs à vos nouvelles mensualités).

Il est aussi possible de réduire son imposition grâce à la dette, notamment dans le cadre d’un investissement locatif ou dans le cas d’une succession.

Comme souvent on ne peut pas établir de règle générale pour répondre à ce type de question. Tout dépendra de votre situation, votre contrat bancaire, vos rendements de placement ou même de l’ancienneté de votre prêt (car vous remboursez beaucoup plus d’intérêt bancaire les premières années).

Se libérer de vos dettes peut psychologiquement être satisfaisant, mais dans de nombreux cas de figure, ce remboursement anticipé ne s’avèrera pas financièrement intéressant. Il sera important de ne pas prendre de décision rapide et émotionnelle mais de planifier et calculer ces décisions.

Le groupe Spectrum à Barcelone se propose d’étudier gratuitement votre situation afin de vous aider, de vous conseiller, de vous orienter ou de vous guider dans vos démarches patrimoniales.
De plus, en Espagne comme en France, Spectrum possède une section “courtier en prêt immobilier” pour vous aider à bénéficier des taux les plus avantageux.
N’hésitez pas à nous contacter afin d’obtenir les réponses d’un professionnel aux questions que vous vous posez.

The recovery of stock markets cannot be ignored

By John Hayward
This article is published on: 15th October 2020

15.10.20

Apart from the uncertainty of whether or not you will still be able to use your UK bank account after 31st December 2020, there are plenty of other things going on to mess around with our lives such as Brexit, the US elections, coronavirus with its lockdown, and other global disasters. With all of these things happening, it is hardly surprising that people think that investing money in stocks and shares (equities) at a time like this is crazy.

However, we have what appears to be an illogical movement upwards in equities, especially noticeable in the USA. How can this be? They have Donald Trump! In the rest of the world, there have also been sharp upward movements since the coronavirus led crash in March 2020 (other than the UK and I will return to this later). The fact is that billions have been pumped into the global financial system to fend off another financial crisis. Some companies have fallen anyway but others have developed, or sprung up, which has led to a much prettier picture than the press would lead us, or even want us, to believe. Coronavirus and Trump seem to be the only stories pushed our way.
When there is financial stimulus, there are opportunities; not only to survive but to develop. Robert Walker of Rathbone Investment Management has this investment outlook.

“We can expect more monetary stimulus and support from central banks that have an enormous amount of unused capacity available for alleviating any renewed stress in financial conditions which is positive for equity markets. This should keep corporate borrowing costs low.

We do not believe therefore that this is a good time to reduce our long-term equity exposure, but economic and political uncertainty warrants cautious positioning and a bias towards high quality companies where we believe that earnings growth is still possible. We believe it is sensible to remain broadly invested but with a continued preference for growth and only high-quality cyclical companies that can benefit from a shift to a digital and more sustainable economy.

We believe high valuations of growth businesses are underpinned by the increasing scarcity of growth opportunities while interest rates and the returns on low risk assets are expected to stay low into the foreseeable future.”

It is important to note Robert´s last few words regarding interest rates. They are not likely to increase in the short term, or possibly long term, if companies, at all levels, are trying to succeed to keep the economy in good shape. At the same time, inflation could increase which means any money “safely” on deposit in the bank is losing its spending power each year.

Let´s go back to my comments about the UK. Rather than me put my words to this, I will use Robert Walker´s more eloquent script.

“The difference in returns in the third quarter are stark, with US equities seeing a strong performance especially in the big technology companies while the UK’s FTSE 100 was -5% lower on a combination of Brexit and Covid-19 fears.”

“The poor performance of the UK since the referendum is well known, as is the high likelihood that leaving the EU with or without Prime Minister Boris Johnson’s deal will make the UK relatively worse off. Most independent economic researchers forecast that UK GDP, relative to current arrangements, will be between 3% and 6% worse off in seven to 10 years if the UK and EU sign a free trade agreement, the faltering prospect of which has seen the pound fall by 15-20% since 2015. As we write the likelihood of a ‘no deal’ Brexit is still too close to call.”

The knock on effect of this lack of confidence in the UK is reduced investment in that area and, therefore, from what we have seen, investing in the UK has not been top of investment managers’ agendas. My point here is that, when you look at the performance of the global economy, do not necessarily base it on the movement of the FTSE100. This could be, and ultimately has been, the undoing of many people who have been waiting for Brexit to go through before investing. Some now are even waiting for Covid-19 to go away, but I believe that they could be waiting a long time.

Here are a couple of graphs to illustrate my point. One is from 23rd June 2016, the date of the Brexit referendum, and the other is from the start of 2020. They include two of the funds that we use and compare them to the FTSE100 and an inflation index. Remember interest rates would be little more than a flat line on these charts.

Being in the market before the vaccine is introduced

Timing the market (knowing exactly when to buy in and when to sell out) is nigh on impossible. Even experts do not get it right 100% of the time. However, one of the uncertain certainties is that there will be a vaccine for this coronavirus. The uncertain part is when. The important thing is that you are invested before it happens, because it is likely that financial markets will rise sharply when it is available.

Of course, we know that there are other problems around the corner, as there always have been in the past. We make decisions based on our own experiences, calculating whether something is safe to do or it carries a higher risk. History has shown us on many occasions, including through world wars, that in times of low confidence, or even panic, stockmarkets have gone against the negative thought trend.

Staying invested through the last 6 months has been really important. For those who have money in the bank, earning little or nothing, now is the time to consider making your money work for you and your family. With careful investment planning, through trusted and experienced investment managers, we can help make your future wealth more secure. We can evidence how people have “survived” this latest scary time with the opportunity to benefit in the future by the willingness to stay invested.

Invest when you have the money and disinvest when you need it
My final comment on this is actually one from another investment manager I spoke to recently. It is to do with why we have money and try to accumulate it. His extremely simple tip is to invest when you have the money and disinvest when you need it.

Contact me today to find out how I can help you make more from your money, protecting your income streams against inflation and low interest rates, or for any other financial and tax planning information, at john.hayward@spectrum-ifa.com or call or WhatsApp (+34) 618 204 731.

New registration procedure for residents (TIE)

By Chris Webb
This article is published on: 6th October 2020

06.10.20

Well, summer is well and truly over. After a scorching few months, which at times was unbearable, we´re now being treated to what I always tell the kids is good old English weather. The heavens opened, the sky turned a miserable shade of grey and the temperature dropped from the mid 30´s to around 16 degrees in the space of 48 hours.

We had a little respite and it warmed up a bit, but as I´m writing this the rain is steadily falling again.

So far 2020 has been a strange year. We started off with Brexit at the forefront of our minds, but that quickly turned into a Covid 19 panic. Summer seemed more relaxed and it appeared we were through the worst but now Madrid is heading back into a type of lockdown, although not as severe as in March.

So what´s new? Well, the latest shock news to hit the front pages is the threat of UK banks closing down accounts for EU residents. On top of that there is the new registration procedure for residents (TIE) which came into force in July.

Do you have a bank account in the UK but live in Spain?

By now, I am sure you have all seen the headline news saying that a number of UK banks are writing to their clients living in the EU to close down their UK banks accounts.

The news is true, we have had clients that have already received notification, but this change affects different banks and different EU countries. You probably already know that the blame for this decision lies purely with Brexit!

Looking at the information available it seems that Spain may get off lightly with this as it doesn’t get a mention, but only time will tell whether we face the same issue.

Brexit has put these banks in a difficult position, leaving them to calculate the cost and inconvenience of managing EU resident clients. Once Britain is out of the EU marketplace, the banks will be forced to adhere to individual regulations which differ from country to country. If they want to continue to service clients in any EU state, they will need the relevant licences to do so. But if it is not viable for them to arrange this, it will lead to account closures.

This is going to cause all manner of problems for those that still rely on a UK bank account. It could be for rental income to be received, bills to be paid or just a spending account for when you visit family and friends. If you are affected by these closures there are no other UK options available to you, as you can´t open a new bank account if you´re not a resident there.

They may offer you an international bank account, but that is yet to be determined. If you find yourself in this position then get in touch; The Spectrum IFA Group have a great working relationship with Standard Bank who offer an international account in multiple currencies, which may be the ideal solution to your predicament.

There is a great article on Money Saving Expert that also has a useful graphic detailing the latest info from a number of banks. Click on this link to see more:
www.moneysavingexpert.com/news/2020/09/thousands-of-british-expats-face-uk-account-closures/

The second “new thing” for us is the registration procedure for a residence card in Spain. We are all used to the green A4 or credit card sized document, but now we have the new TIE for British national’s post Brexit. We are being advised that making the change is optional and the green cards remain valid, but in my opinion it is only a matter of time before it becomes mandatory.

You can apply for the new TIE by following these three links:
EX23 – TIE Application Form
http://extranjeros.mitramiss.gob.es/es/ModelosSolicitudes/Mod_solicitudes2/index.html

Modelo 790-12 – Payment Form
https://sede.policia.gob.es/Tasa790_012/

Cita Previa
https://sede.administracionespublicas.gob.es/icpplus/index.html

I have already been through the process of changing to the TIE and I am happy to say it was the easiest piece of Spanish administration I have ever dealt with in nearly 8 years. If you want further information, I have a great article I can send on which was put together by CAB Spain and explains the exchange process as well as applying as a new resident.

Comment prendre sa retraite à 50 ans?

By Cedric Privat
This article is published on: 30th September 2020

30.09.20

Qui n’a pas rêvé un jour de pouvoir arrêter de travailler avant l’âge légal de la retraite? 50, 40, 30 ans? Et si ce rêve était réalisable?

La question peut faire sourire, surtout si vous résidez comme moi en Espagne à Barcelone, avec un prix de l’immobilier exorbitant et des salaires souvent moins élevés qu’en France.
Pourtant, de plus en plus de personnes y arrivent, alors pourquoi pas vous?

Le Frugalisme :
Le mouvement FIRE (Financial Independance, Retire Early), né aux Etats-Unis dans les années 2000, défend le principe de vivre simplement et de faire fructifier son argent pour pouvoir vivre de ses rentes.
Il s’inscrit dans un mouvement économiste du Frugalisme “Qui se nourrit de peu, qui vit d’une manière simple.” (Larousse)
Pourquoi ne pas s’en inspirer?

Comment?
• Économiser : s’acquitter de toute dette (surtout celle de votre bien immobilier), réduire son train de vie, éliminer les frais superflus, supprimer certains loisirs, épargner davantage dès le 1er du mois.
• Définir un budget : il sera indispensable de bien calculer vos besoins mensuels afin de définir votre patrimoine retraite et ainsi fixer votre objectif.
• Investir : en plus de votre résidence principale vous devrez investir judicieusement l’argent épargné dans des placements financiers, des actions ou de l’immobilier.

Les frugalistes suivent une « règle d’or » dite des 4% : disposer d’un patrimoine au moins 25 fois supérieurs au montant de ses dépenses annuelles. Si elles s’élèvent à 2.000 euros par mois, il faudra par exemple un patrimoine de 600.000 euros, permettant de vivre des 4% de rendement généré.

Quand commencer?
Bien évidemment, le plus tôt possible. Une retraite anticipée deviendra vite un rêve oublié si on débute trop tard, mais tout dépendra également de votre implication à la cause.
Les nouvelles générations se soucient de plus en plus tôt de leur retraite et pour cause; les prévisions des pensions publiques de retraite sont à la baisse et l’âge légal de départ à la retraite ne fait qu’augmenter.
Le frugalisme demandera une forte réduction de vos dépenses, il est souvent accompagné par une conscience écologique afin de se tourner vers un mode de vie décent et responsable.
Nos sociétés capitalistes amènent de plus en plus les individus à se poser des questions sur le rapport qu’ils ont à l’argent et au travail.

Qui peut appliquer cette méthode ?
Bien évidemment, toute retraite anticipée sera plus facilement accessible aux classes moyennes et supérieures. Pour beaucoup, il est déjà suffisamment compliqué de mettre un peu d’argent de côté.
Une recherche Google rapide vous permettra de lire les expériences de nombreux “jeunes retraités” à travers le globe.
Les méthodes divergent, mais la discipline est de rigueur. Certains retournent vivre chez leurs parents quelques années et économisent 70 % de leur salaire, d’autres travaillent pendant 10 ou 15 ans à un rythme à la limite du soutenable, certains vont compter des années chaque centime possible et enfin les plus privilégiés qui reçoivent un salaire confortable vont tout simplement faire plus attention, s’organiser et investir malin.

Cette méthode vous intéresse mais vous vous posez des questions ?

N’hésitez pas à prendre conseil auprès de professionnels à votre écoute.

Le groupe Spectrum à Barcelone vous propose d’effectuer un audit sans frais ni engagement afin de mieux vous organiser dans la préparation de votre retraite, anticipée ou non.

Nous vous aiderons ensuite à comparer et choisir le placement financier le mieux adapté à votre situation et préférence.

There is more to (investment) life than the FTSE100

By John Hayward
This article is published on: 2nd September 2020

02.09.20

Dependence on the UK stockmarket has damaged wealth

In the last 5 months, life has not been easy. We have all had to change our lifestyles to one extent or another and we don´t know exactly what lengths we will need to go to in order to remain safe. Hopefully the worst has passed and we can get back to thinking about our future in a positive way and not have to constantly worry about coronavirus.

Aside from the pain of having to wear a mask, in the last 5 months I have had concerns about work, I have learned new words and phrases linked to coronavirus, and I have obtained a new Spanish residence card. Certain things have not changed during this time. People read the same newspapers, watch the same television programmes, express their disdain for Donald Trump, and base their investment decisions on the performance of the FTSE100.

New investment trends

Whilst certain business sectors have suffered over the last few months, others have prospered and have a positive outlook. Technology has come to the fore, both in terms of purchasing goods and communication.

Investments and the FTSE100

Aside from the investment vehicle and the tax structure your investments and pension funds are held within, it is important that the investments themselves are well managed. Some people have held off investing through fear of coronavirus. There are also those who had previously delayed investment decisions until Brexit had been sorted out. The consequence of this has been that they have missed out on growth over the last 5 years, even with the downturn in March/April, as well as suffering from the real loss through inflation if they have left their cash in the bank.

Most UK nationals refer to the FTSE100 to find out what is happening with stockmarkets. This is mainly due to it being the one we, as followers of British financial news, are most familiar with. The FTSE100 has been lagging behind global stockmarkets in the last few months. However, the FTSE100, the index of the top 100 companies in the UK, only represents a small percentage of global stockmarkets. Almost 40% of the 100 are banks/financial, oil/energy and consumer staples which include retailers. All of these sectors have been hit by coronavirus. It is overweight in certain sectors and, although they are all big companies, their recent losses are reflected in the movement of the index. Banks especially have had a rough time. Therefore, it is far from being a stockmarket index which represents all global markets and sectors. I appreciate that it is an indicator, but it shouldn´t be used as a decision maker.

You will see from the chart below that by referring to, or even relying upon, the performance of the FTSE100 in order to make investment decisions could have been a mistake. It compares the FTSE100 with the US S&P500 and Nasdaq, and Japan´s Nikkei. The chart runs from the start of 2020. The FTSE100 is D, the blue line.

Not only has it been important to be aware of global stockmarket performance, but there are other sectors and assets to invest in. For example, gold, that was not immune to the panic in March, has shown itself to be in demand as a safe haven.

Well managed investment portfolios

I am pleased to say that all my invested clients are better off now than they were at the end of March. The most pleasing thing is that not only did they suffer relatively low falls in March but now many have made a complete recovery. We do not push people towards FTSE100 tracker funds. They may be cheaper but that is because there is little or no management. As is often the case, cheapest is not the best.

Conclusion

Active investment management has proven itself to be the best approach, certainly in problematic times. We recommend investment managers who are able to access global shares and other assets. They can buy and sell on a daily basis and not commit you to funds that can become restricted or illiquid. Many of my clients have been pleasantly surprised by the “bounce” of their investment value since March. The FTSE100 has struggled and it has been assumed that this is the case generally. They are also surprised how the United States stockmarkets, with all of the Trump and election issues, have done so well. At times there seems little or no correlation between day to day life and stockmarket performance. In fact, history has taught us that when there is panic and depression, stockmarkets tend to do well.

Over the next few weeks I shall be publishing more articles, so stay tuned:
• The expense of using your bank for insurances
• Life insurance for general living expenses and Spanish inheritance tax
• Currency exchange – your ‘free’ facility could be costing you thousands
• Applying for the new TIE – not compulsory for some but could be beneficial

With investments, there are plans that I can recommend that are clear to understand and tax efficient, and I explain the full details before you commit. The Spectrum IFA Group is not tied to any one company and I can offer you independent, impartial advice and guidance.

Contact me today to find out how I can help you make more from your money, protecting your income streams against inflation and low interest rates, or for any other financial and tax planning information, at john.hayward@spectrum-ifa.com or call or WhatsApp (+34) 618 204 731.