6 tips to make you a little richer in 2016
[Estimated time to read: 3 minutes]
If you make just one little change, you could be richer this year.
Just a little adjustment which puts more cash in your pocket, pension or investment.
Here are six little tips to make you money in 2016.
#1 Buy an investment you can forget about
Living a busy life it’s easy to let some things slip.
Often it’s your pension or investment portfolio which pays the price. Neglected, it can begin to turn into a cash drain, rather than the cash cow it’s intended to become.
Our first tip – from our team of investment analysts – is to buy an investment you can forget about.
There are two ways to do this.
The first is to buy an index tracking or ‘passive’ fund. Given that the average fund manager underperforms the relevant index, choosing a passive fund can be a much better outcome and requires much less ongoing monitoring too.
The second is to invest in a high quality multi-asset fund. Pick a multi-asset fund with a good track record and with a properly diversified portfolio.
A good multi-asset fund should provide protection when the market falls and moderate returns on the way up. It won’t blow the lights out, but you should be able to forget about it.
#2 Review investment charges
The quickest way to boost returns is to reduce costs.
Changes in the way funds are sold have meant that costs are now less. This is a good thing.
If you have owned a fund for some time, review the charges you're paying and see if you can find an equivalent fund which charges less.
#3 Don’t discount the East in 2016
All of us know that it's important to be contrarian when we're investing – that is, we should be buying when everyone is selling, and vice versa. With that in mind, we are looking closely at equity markets in Europe and Asia, where lots of investors have seemingly given up. Valuations are attractive, and growth is still robust – even in China, where the tabloids would have you think the country has ground to a halt.
China remains the world's second-biggest economy. And it's growing at more than twice the rate of the US and the rest of the developed world. Japan, the world's third-biggest economy, is driving growth as hard as it can. We're convinced that, over time, selective offshore investments will reward expats who can take a considered view and put money to work.
#4 Make every month count
Don’t wait! Just save.
The biggest mistake most investors make is trying to time the market – that is waiting until it’s the “best time to buy”.
Those who do best are those who save regularly and consistently.
Not those who try to time the market.
#5 Count the cost of those beans…
That warm cuppa in the morning. That tasty pastry snack. It all adds up.
You may already have vowed to ditch the chocolate croissants in a bid to lose the spare tyre. But once you’ve given up on the diet – remember how much extra cash you had, just by cutting out the little things.
Small changes can really make a big difference. It’s estimated that the average person spends around £1,000 a year on coffee.
You don’t have to quit your morning rocket fuel – but maybe you could make it yourself? Or just have it twice a week?
#6 Call time on unfair charges and bad service
Each time your bank charges you a fortune for a transaction or some slight transgression you swear you’ll move.
But you never get round to it.
With online banking, switching accounts has never been easier.
And, as an expat, your needs are special. Make sure the bank you are using can provide you with all the services you need such as multi-currencies and foreign exchange, lending and access to investment services.
For more information on the banking for expatriates, download the guide below.
About Simon Danaher
Simon Danaher previously worked for AES International, in marketing and communications.