How to Manage Currency Risk in your Investment Portfolio

IntroductionTo some degree, currency risk is embedded in the portfolios of every international investor. So it’s surprising that such an important topic is often ignored, mismanaged, or misunderstood from both outside and inside the financial planning industry. Given that global currency movements are prominent in the headlines right now, it seems like good timing to have a quick review of currency risk, and safety-check that the currency exposure of our personal investment portfolio is in line with our objectives.
What Is Currency Risk and Where Does It Come From?Most people who live and work internationally have experienced first-hand the impact of positive or negative currency movements; this is currency risk (also called exchange rate risk). Maybe you’re sending money home each month to pay your mortgage, and payments are easier than before because you get paid in a stronger currency. Or maybe your child wants to attend university in a country whose currency has appreciated against…

I’ve Recently Arrived in Dubai. Will I Pay UK Tax on my UAE Income?

Please note. This article is a summary, for general information only.  It is not tax advice.Whether you pay UK tax depends on your residence. Non-UK residents will pay tax on their UK income, but not on their foreign income. So, if you live outside the UK, what counts is whether HMRC considers you to be non-residents for tax purposes.The Basics - UK Statutory Residence Test (SRT)A few years ago the UK introduced the Statutory Residence Test.You’re automatically UK resident if either:you spent 183 or more days in the UK in the tax year, oryour only home was in the UK - you must have owned, rented or lived in it for at least 91 days in total - and you spent at least 30 days there in the tax yearYou’re automatically non-resident if either:you spent fewer than 16 days in the UK (or 46 days if you haven’t been classed as UK resident for the 3 previous tax years), oryou work abroad full-time (averaging at least 35 hours a week) and spent fewer than 91 days in the UK, of which no more than 3…

Stroke Victim Trapped in UAE Four YEARS Because of Debts

Malcolm Munroe, from Manchester in UK, built a thriving construction company in Dubai. In 2013, he suffered a stroke, and was hospitalised at Rashid Hospital. He was immobile, and breathing through an oxygen tube. Because he couldn’t work, his business went bust owing debts. The Dubai courts sentenced him to a three-year jail sentence. He didn’t go to prison, because he needed around-the-clock care in hospital. But neither could he service his debt. He was trapped in Dubai.
Finally Home The kindness of others led to him finally coming home. A healthcare volunteer in Dubai spent over a year communicating with Mr Munroe’s debtors, to explain his situation and beg for his debts to be forgiven. Another medic from Manchester arranged for Mr Munroe’s return to the UK, and thousands of pounds was donated by well-wishers via a crowdfunding site to cover costs. His family finally welcomed him ‘home’ (the Salford Royal Hospital) in May 2018, where he remains (as at June 2018) under twenty-four…

Mobile Phone Screens Are Getting SMALLER!

If you bought a “6-inch” screen phone this year, it will have a SMALLER screen than the “6-inch” screen phone you bought two years ago.  Here’s why.
Call me old-fashioned (or just old), but I spend a lot of time reading stuff – articles, charts, and data – on my phone.  And I mean actually reading it – not ‘skimming’ through an article while my thumb is continually scrolling the page upwards.
A ‘Full HD’ screen is 1920 x 1080 pixels – which is nice for movies, and gives an eye-friendly ‘book page’ ratio of 16:9.   This has been the standard screen ratio of mobile phones for several years, up to the last year or so, when suddenly manufacturers have switched to a 18:9 ratio  (which is 2:1 by the way… no idea why they call it 18:9, duh).   For me, 16:9 is perfect for reading text.  2:1 isn’t – it’s too thin and narrow.   Supposedly, manufacturers have switched to this format because phones with skinnier screens fit into our pockets better, and are more easily used with one hand.   They hav…

What Can Bitcoin Teach Us About Retirement Planning?

So, you’re in the pub one evening, and a friend tells you about some fancy ‘investment’ called cryptocurrency. It all sounds a bit fishy. “I’ve been getting eight percent growth per month”, he says.You do the maths on your phone… $100 would become $108 after the first month. Then $117 after the second month. Then $126 the third. By the end of a year, it would be $252. That’s an annualised growth rate of 152% per annum. “Ok. Tell me more”, you say.You’re still a bit sceptical, but you drop $100 into the crypto. ~ ~ ~A month later, you’re back in the pub.“What do you think?”, says your friend.“Not bad, I’m up seventeen bucks”, you say.“Well, I’ve been putting in a thousand a month. I started ten months ago. My investment is now worth $15,650. Make hay while the sun shines, my friend!”~ ~ ~You get it. There’s an opportunity here. Your drinking buddy is onto something. That evening you go online and look through all those old bank accounts you’ve forgotten about. You manage to scrape toge…

Should UK Expats Pay National Insurance Contributions?

I live outside the UK - should I make voluntary National Insurance contributions?The decision on whether to make voluntary NI contributions depends on your own specific circumstances. National Insurance contributions for British expats?First a quick reminder. National Insurance (NI) contributions go principally to fund the National Health Service (NHS), the state pension, unemployment benefits, and sickness and disability allowances. Anyone employed in the UK will have an NI number, and make NI contributions via PAYE (pay-as-you-earn) deduction from salary. These are known Class 1 NI contributions (NICs).If you’re self-employed in the UK, you pay Class 2 NICs at a flat weekly rate, and annually Class 4 NICs based on taxable profits.If you are working abroad for up to two years and for a UK-based employer, you will likely be required to continue paying Class 1 NICs.  Alternatively, you can choose to pay voluntary contributions, Class 2 or Class 3. Depending on your circumstances, volun…

Roy Walker named winner Best Financial Planner (Financial Advisory Open Category) at the 2018 FPAS (Financial Planning Association of Singapore) awards.

It was my great privilege to be a finalist of the Financial Planning Awards run by the Financial Planning Association of Singapore (FPAS) this year.And a surprise and an honour to be awarded Winner of the Financial Advisory Open Category.The FPAS was established 20 years ago, with the aim of developing and promoting the financial planning industry in providing independent unbiased financial advice.  The FPAS award aims to recognise financial planners in Singapore who excel in their professional knowledge, demonstrate financial planning skills at the highest level and uphold best practices.  The competition assesses the financial planning acumen of practitioners from three major industry sectors in Singapore namely the Banking sector, the Insurance sector and the Financial Advisory (FA) sector. The award also aims to develop and maintain high ethical standards and increase high quality financial advice within the industry sectors.The highly esteemed panel of judges represents the pinna…

Investment Outlook For 2018

After a nervous start to 2017 for investors, growth continued and the year ended on a higher note than most expected.  As we enter 2018, it’s a good time to survey the global economy and decide if our asset allocation is still appropriate.In this article I aim to address these straightforward questions:
Will there be a recession in 2018?How cautious should I be in my investment approach?Where are the investment opportunities for the year ahead?What asset classes should I overweight or underweight in my portfolio?
I will also reveal why an ox weight-guessing competition, held in 1906 at the West of England Fat Stock and Poultry Exhibition, helps us derive more useful information than individual leading economists do about the risk of imminent recession.
This is good stuff, you really should read on!
Please share this article! >> Review of Key Economic Reports Remembering the First Law of Economists, it’s a good idea to conduct a broad survey of what the ‘experts’ have to say about t…

Why You Can’t ‘Beat The Markets’

Do take 2 minutes and watch this short video.In ‘The Wisdom of Crowds’, James Surowiecki explains how groups can be remarkably intelligent – often more so than the smartest people in them.  This is particularly relevant to the price of individual stocks, or indeed other financial assets that are efficiently traded in a broad open market.  Dimensional Fund Advisors call this ‘The Power of Markets’, and in the above video they elegantly explain why you can’t beat the market – because the price is already ‘right’ on the basis of known information and crowd wisdom.

British Expat? Here are the Huge UK Tax Benefits of an Offshore Investment Plan...

Would you like to maximise the tax planning benefits of being a British expat abroad? Read on for a summary of some key reliefs and allowances available from the HMRC tax man…(Note: this article is relevant to British expatriates working in Singapore and other overseas locations, as well as other nationalities who may be moving to UK in the future.)Click to download this information in PDF format.
Summary of Tax Benefits of an Offshore Investment PlanUnder HMRC tax rules for ‘foreign’ investment bonds and investment-linked life policies have additional tax planning benefits compared with their domestic equivalents. The purpose of this article is to briefly highlight the most important. The content is not intended to be specific tax advice of any kind, and rules can change at any time. Everyone’s tax situation is unique and you should consult a qualified tax accountant regarding your own circumstances.5% withdrawal allowance Time apportionment reduction Top slicing relief Clustering …