This is a follow-on post to this one, which outlined the first five questions to ask yourself when getting your finances in shape. If you are a rookie when it comes to money management and you haven’t yet worked through that list, it’s best to go back and start at the beginning.
If you’ve already worked through that list, here are the next five questions to tackle:
1. If you got sick, would you have access to treatment?
You might be lucky enough to benefit from state-funded healthcare, in which case this may not be relevant, but for many expats that’s not the case. Even if you have cover through your employer or government you might choose a top up for treatment which falls outside their remit. Health is one of those things that you don’t appreciate until you no longer have it and healthcare costs are something you might not have thought too much about if you’ve never had any serious health issues. Here’s what you need to know: they can mount up unbelievably fast. You wouldn’t want to be in a situation where you can’t get the treatment you need because you can’t afford it – which is why health insurance is a priority to protect you and your family. Your financial adviser can talk through your needs and find the most appropriate policies and most competitive premiums.
2. Do you have life insurance?
Life insurance, like health insurance, is a wealth protection measure. You hope you are going to live a long life and have no need for it but if that proves not to be the case, your loved ones will be grateful that you had life insurance on your radar. It protects them by paying out a lump sum if you should die unexpectedly. This money will compensate for the loss of your income and help maintain your family’s standard of living so they can avoid having to make big changes at a time when they are grieving.
3. Are you putting away funds for your retirement?
Not everyone has the luxury of a state or work pension – but if you do, you’d be a fool not to make the most of it. If you contribute, so will your employer and that means that you are getting free money towards securing a good standard of living when you retire. If you have the option to pay into a work pension, do it. However, many expats in Asia live in countries where you are responsible for your own retirement planning. Don’t make the mistake of putting it off – you’ll regret it. It’s never too late to start either, so if you fall into the latter category then you should seek help from a financial planner as soon as possible.
4. Are you on the property ladder?
Once all the above points are sorted, perhaps it’s time to dip your toe into home ownership. Many expats are reluctant to invest in a property to live in due to their transient lifestyles but even if you continue to rent, property can still be a great way to diversify your investments. It can potentially provide both income and capital growth. There are companies who specialise in this field and can take the hassle out of finding and managing a buy-to-let property. This is definitely something to discuss with your financial adviser to see if it’s a good fit within your holistic financial plan.
5. Have you got a will?
So now you’ve building wealth with a portfolio of assets which is growing in value, it’s essential to ensure that you have a will that clearly states who should inherit those assets if you were to pass away. It’s the only way to be sure that the recipients of your estate are the people that you want them to be. Don’t make the common mistakes: thinking that your spouse and children will automatically inherit, that your assets are too insignificant OR that you have plenty of time to get a will sorted because you are in great health. We’ve heard all the excuses and we’ve also seen what can go wrong when clients put off making a will. It doesn’t have to be expensive so get it done and then you can rest easy.
So there you have it – ten simple questions. Granted, the answers may mean you have to put in a little effort but they do provide a straightforward framework to getting your finances in tip top condition. Once you can answer yes to all of them, you will be in great shape to sit back and feel confident about your financial future.
A leading provider of expat financial services and wealth management services across Asia.
