Having worked hard for our money it is often the case that we forget to look after it with the same dedication as we put into our professions or businesses. We spend 40 hours plus a week (plus, plus if you run a business) working, but how much time do we spend on looking after the money we have spent all that time earning? The answer for most of us is “very little”.
Showing posts from tagged with: Moving to Spain
Working Life vs Life Savings When Living in Spain
By Barry Davys
This article is published on: 11th October 2021
11.10.21
Who’s this for?
This article is for all British people who live in Spain.
Overview
Work Life vs Life Savings. How we should apply our work life process to our life savings.
Why to read this article?
With a simple comparison between your work life and your “savings life” you will gain understanding on how to better look after your savings. The article even provides a solution at the end to help you implement these ideas.
Your commitment
Taking the time to read the article and requesting an initial telephone or Zoom meeting. if you want help for your specific situation.
The reasons are many fold from having a love of “things” instead of savings and security. Social and peer pressure adds to the need to buy the latest iPhone, for example. We might not understand investments so do not spend time exploring the options. We might think our savings are just put away for a rainy day and not realise that they can be used to provide us with a feeling of security because they can also provide us with lifelong income.
The reason for our lack of attention, in part, is that there is no structure in place to make sure we do give the right amount of time to our money and savings. When we are at work we have a structure, a place you go to, probably training for the job, a boss, a company mission, company values, a product line which is specific and customers who keep you on your toes. The better we get at the job the more likely we are to get a promotion.
Don’t worry. I am not suggesting you spend another 40 hours a week on top of working to look after your savings. What will make a difference, though, is if we apply these work elements to our savings.
Structure – perhaps as simple as saving regularly, or perhaps using savings type where tax is not paid whilst your money grows. Using a cashflow model to see what your financial future looks like.
A place to go – more difficult but if you have an adviser go to his/her office to discuss your situation and your requirements.
Training – there are many good books on looking after your savings. You will notice that the best concentrate on your approach to money and the process of making it grow. Not on an “investment product”. Always start with your plan and then fit the products into your plan. Do not buy a product and then wonder why you have it. This is not as easy as we might think because the adverts for financial services are mostly offering products.
A boss – if you have an adviser you become the boss and the adviser becomes your employee. If this is not the case, get a new adviser!
Mission and values – have a list of requirements for your savings, investments and pensions. It may be that you have chosen a set date to retire or how much to leave the children or many, many more objectives. Your values may include making your money grow without causing harm to the environment.
Product line – emotions guide what you want from your money but make your decisions on how to achieve that based on data. Recognise that you should build your planning on emotion and implement the plan based on data. Your work company has a limited number of products. In Europe alone we have 16,000 different possibilities in just one investment class. Even if you have a really good knowledge of how investments work you still need help with sorting the data on 16,000 options. Use an adviser with tools to analyse that data on your behalf and to give you guidance on what will best fit your plan.
Customers who keep you on your toes – the customers who will keep you on your toes for your savings are interest rates, markets, tax, rules and regulation. All of these “customers” change their minds. A very good recent example is in the markets, with the S&P 500 index of US shares from the start of Covid:
- 9th February 2020 – 3,380.16
- 15th March 2020 – 2304.92 (31.8% change)
- 12th April 2020 – 2874.56 (24.7% back up)
- 7th October 2021 – 4399.76%
*Source New York Stock Exchange
Of course this is an extreme example, but it does illustrate how you or your adviser needs to pay attention.
For those of us living in Spain we have to add in the additional issues of a tax system in the UK and a tax system in Spain. Exchange rates are another factor we need to consider.
If you would like to be the boss of your savings with an adviser who can guide you for building your plan and then use data to best work out how to implement your plan, myself and our team at the Spectrum IFA Group are here to help. With software systems for cashflow planning, an investment panel for reviewing investments, clear understanding of both UK and Spanish tax systems and ongoing support, all given in English by an adviser who lives in Spain.
For an initial call to find out more, choose a time for a phone call or Zoom meeting that is convenient for you with this link: initial telephone or Zoom meeting.
I look forward to converting our expertise and systems into easy to understand ways for you to make your plans become a reality.
External research
The better we get at the job the more likely we are to get a promotion.
Vanguard, the $7 trillion dollar fund management company, has conducted extensive analysis of the benefit of using a financial adviser. Here are some of the key findings:
People with financial advisers average a 3% better investment return.
Advisers often find ways of saving clients tax on their investments. View a case study here
Some of the best opportunities to add value occur during market duress or euphoria when clients are tempted to abandon their well thought out investment plans.
One of the most important benefits of having an adviser is to give clients peace of mind
https://advisors.vanguard.com/insights/article/IWE_ResPuttingAValueOnValue
Advice before you arrive in Spain
By John Hayward
This article is published on: 21st February 2020
For the majority of those who move to a Spain, speaking to a qualified financial planning adviser, who is regulated and licensed in Spain, is something which generally happens after you have moved to Spain. It makes sense to understand the implications of moving to Spain in relation to existing investments and the taxes that come with those. Positioning one´s wealth correctly prior to moving can save thousands in unnecessary taxes.
Therefore, by talking to an adviser, especially one that has lived in Spain for more than 15 years and has experienced the life with his own family, before you embark on the journey can help avoid some issues which expatriates can find themselves encountering:
Many UK based advisers are not fully regulated to offer advice for those in Spain.
They are almost certainly of the most current regulations or tax efficient solutions for your needs, especially as the rules differ from one autonomous region to another.
A Spanish regulated adviser can ensure you are financially prepared for your move, in terms of any investments, savings and taxes which can become due on both income and windfalls you may be expecting after your move.
Tax free and favoured investments such as ISA´s, lump sums from pension funds, and Premium Bonds, are not tax free in Spain.
For those planning on using a property as the main source of income, an understanding of the overall cost and the Spanish taxes that property attracts is essential.
Making a Spanish Will, even if one has an English Will, is vital in order to make certain that wealth is distributed correctly.
Organising a funeral in Spain is a much quicker process than in the UK. For many the funeral is very traumatic if only for what needs to be organised, in Spanish. We can help you arrange a plan for you and your children to escape this trauma.
People overpay when it comes to currency exchange, many using their bank. What appears to be a free deal actually can cost you a lot of money. The exchange rate banks give can be way off the commercial rate. We can save you potentially thousands on your currency especially when you purchase or sell a property.
Investing an hour of two of your time before you make the move to Spain can provide peace of mind and financial comfort when planning a new adventure. We can help with all of the above, and much more.
Please contact me today to find out how we can help you. We do not charge for reviews, reports, or recommendations we provide.