Opzioni di investimento per gli espatriati italiani che vivono all'estero

I will compare some of the local, and international options for expats.

For any questions, or if you are looking to invest as an expat in a portable and seamless way, you can contact me using questo modulo, o tramite la funzione WhatsApp qui sotto.

Those individuals who are not into the topic of investment, are sure that it is worth investing only if you have a large amount of free funds. Since they do not have them, they are not even interested in this topic. However, there are many investment options that don’t require millions. Think how profitably invest your free funds, even if it is small, what myths confuse novice investors.

What you need to know about investing. 5 simple rules

In case you are used to living on your monthly salary and have never started your own business, the investment industry may seem a little confusing, challenging and expensive for you. But thanks to modern technology, any kind of information can be found very easily in a very comprehensive way. In any case, if you chose an investing industry as your profit source, you have to be aware of some simple rules that beginning investors have to follow.

• Decide on the amount of investment. Start-up capital – what should it be? As a rule, you can start investing with any amount you have. For example, buy shares for $30, but investing this amount will not bring any significant profit. It is recommended to start from at least $150-200 for these purposes. For sure, the bigger is the investment amount, the bigger your passive income will be.
• Risk and return are directly related. The immutable rule of the stock exchange, and indeed of the business in general, says: the more you risk, the higher the profitability. In the consequence, the best offers can quickly make you rich or completely deprive you of all your investments. So in fact you have to soberly understand whether you are ready to take such big risks, or your budget will withstand such losses.
• Invest only in areas that you are well versed in. Let’s say a realtor knows real estate, not agriculture or heavy industry. Therefore, it is more expedient for him to deal with residential or commercial real estate.
• Make deposits on a regular basis, because it will not be enough to make an investment once and follow the statistics. The received profit has to be reinvested, after the financial instrument will get compound interest. Note that even a small amount can turn into a good income.
• Diversify your money. Channel them to different assets. Usually, an investment portfolio have to include the equal shares of real estate, bonds and stocks. Making an investment in only a one financial instrument is too risky. This is perfectly stated in the famous English proverb: “Do not store all your eggs in one box.”

There are a lot of of investment options for Italian expats that are generally available to both residents and non-residents. There are many forms of foreign investment; they can be both onshore and offshore investments; however, expats prefer offshore investments because of the tax breaks they bring. There are also some issues that prevent some forms of investment from being readily available to those living outside Italy. We will try to help you by providing expat investment tips tailored just for you.

In recent years, expats’ interest in investing has grown steadily, which means it is in everyone’s best interest to have a qualified financial and investment advisor. If you find that you are not entirely sure about your next action or decision, then it might be better to find someone you can trust and get independent advice. Foreigners generally choose different types of the mentioned products, a good financial advisor can provide reliable and transparent financial advice to expatriates around the world.

Best options where to invest your money as an Italian expat

Usually beginning investors are confused where to invest their money in order to receive a guaranteed monthly income? You will find many financial instruments that can have significantly different risk levels. Here are a few assets that can generate a monthly profit, which are easy to manage, do not require a fixed minimum amount and are easily available for beginning investors with 0 experience.

Bank deposits (ISA)

If you are thinking about where to invest your free funds, you can easily consider bank  deposits or savings accounts. Indeed, this is the most popular type of investment, however, the annual rate in many countries has been decreasing in recent years.

Except for traditional deposits, banks also offer savings accounts for specific financial goals. They are convenient in that money can be withdrawn at any time without losing it at the interest rate. Note that such accounts charge a small fee. Taking into account inflation, the percentages become meaningless, they help, at best, to preserve their funds, and not to increase them.

Generally, for many expats and locals, ISA is the best option as it provides a safe, convenient and efficient investment product. However, if you are a foreigner or live abroad, it will be difficult to open an ISA but not impossible.

If you are planning to leave your country but want to get an ISA, it is in your best interest to study the tax incentives and regulations of the new country in which you will be living. For those expats who already obtained an ISA, it can be beneficial to find out the various options that would be good to you in the long run. So, this method, although it is safe, does not differ in good profitability and is only suitable for saving money.

Mercato azionario

A very popular option is to invest money in stock market – securities that are traded on the stock exchange. According to the law, to start investing, you must first open a brokerage account, through what the shares can be managed. You can get your income in the following ways:

• in the form of dividends (the profit from shares will be fixed, which will depend on the meeting of shareholders, and dividends);
• in the form of buying and selling shares (as the prices of shares can vary, you can find the proper moment to purchase them at a low price, and after sell them when the prices goes up – in fact this is the investor’s profit).

It is pretty obvious that maintaining a brokerage account is paid, and a fixed commission is charged for it. To withdraw your funds, conversion, depository services, you will also have to pay commissions. Plus to this, the government will require tax on profits from shares. It is 13%. Moreover, you can avoid additional taxes if you open an individual investment account (IIA).

In the investment industry, stock markets are important for that they do not have a fixed profit amount and can be a really great source of passive income. The only downside of this investing option is that the market is unpredictable and highly volatile.

Stock bonds

Bonds have a significant advantage over stocks: a more stable and predictable price, which means that this financial industry comes with lower risk levels. When we compare the stock bonds with bank deposits, then the bonds are considered as more profitable by an average of 20%.

The money you invest will return and arise with a high level of probability. Bonds are highly liquid (which means they can be sold at any time). However, the only risk you ave to consider is that the company in which your funds are invested can go bankrupt.

Metalli preziosi

Precious metals are considered classic, traditional assets. You can have a few options – invest in silver, platinum, gold and palladium. However, investors usually choose silver or gold. To invest in metals you can have several possibilities:

• purchase investment coins;
• buy ingots;
• open an impersonal metal account.

The greatest benefit of this investment is that precious metals are physical objects, not virtual, and even if your investment career lives a crisis, they will remain in value. Anyways, note that the cost of precious metals are slowly, but going up.

Also this type of investment will not be a good option for those who want to make a short-term investment. This investment is long-term, and a quick profit will not come from this.

Immobili

It is believed that the real estate market is the best and stable among other investment markets. No doubt in a stable economic environment, property and housing costs are increasing, especially in more developed countries. Moreover, in case a rental service is in a high demand, there are chances you can receive good monthly income.

A downside can be a high entry capital, relatively low profitability and dependence on the economy in the country. Housing requires constant attention and investment.

Sublease

A sublease is a real estate transaction: it is leased to be rented out to another person for the benefit of oneself. This can be a great investment option for those who do not have enough free funds to purchase an investment apartment. Recommended in a resort area or in large cities, where excursions often come and daily rental housing is in demand.

Sublease does not carry the risk of damage to property, because the damage relates to the owner of the home (of course, if this does not contradict the contract). Anyways, this is an enough risky way to get income, as it requires to constantly keep track of tenants.

Commercial real estate

Commercial real estate is more profitable when we compare it with private real estate market. It is very important to make a right choice of an object – in a busy place, in a well-developed area.

Popular property on the lower floors of a residential building in a new building, which can be rented out as a shop or beauty salon. No matter if this investment comes with stable monthly rental income, profits can go down during a crisis.

Piccole imprese

Is a promising idea the key to success? Of course. Competent management and marketing is important. Small business dividends are not passive, but you will have to invest a lot of time and funds to develop it.

How do you find a good idea? You have to think about the goods or services that are lacking in your country’s market and can be necessary for the residents of your region, and form a unique selling proposition.

Online projects

The risk levels of the online projects depend on the chosen type of activity and the investment amount. Today, a lot of investors prefer to start a business on the Internet without providing physical services.

During the COVID-19 pandemic, almost all the institutions including educational ones were quarantined. It became clear that the future lay with online learning via Skype and Zoom.

This type of earnings requires minimal investment. Anyways, the risk level here is high enough: the project can live a crisis or don’t bring any profit due to high competition in the market. Moreover to promote your business online will require a lot of money.

Offshore

Many expats use local large banks to accumulate savings. This may sound like a reasonable economy, but at record, low-interest rates, adjusted for inflation and rising cost of living, the future purchasing power of these hard-earned savings is actually greatly depreciated.

If you are not a resident or expat, you will also have easy access to offshore bonds. A bond is essentially life insurance that includes a different number of investment funds. For expats, this is a tax-efficient option as the bond won’t be an issue when it comes to capital gains tax and deferred income tax. This means that the value of the investment itself will go up because it will not be taxed even if the expat returns to their country. However, in some situations, offshore bonds will still have to account for withholding tax that cannot be refunded. The rules for income tax and bond income will depend on the country in which the investor lives.

Offshore bonds can also be viewed as a return on capital, rather than income that can be withdrawn each year up to 5% of the investment. The money will be taxed as income in the country of residence at the time of withdrawal. It is important to note all the technical aspects associated with investment bonds, from fees to commissions. It is imperative to seek financial advice before making any decision about your offshore investment bond.

Today the number of professionals opting for a perpetually transient lifestyle is growing, and the need to invest in offshore has become really common. There is no need to consider the highly volatile world of cryptocurrencies; instead, manage your investments offshore. Offshore investments can offer several benefits to expats living and working abroad, and hence, they are increasingly viewed by expats as a viable investment solution to match their international mobility as well as a portable retirement planning solution.

Benefits of offshore investments for expats

A key factor in the popularity of offshore investments is that many foreigners want to avoid scattering investments around the world. They lose control over where they invest and often face logistical challenges when trying to access or manage investments after they leave that particular location. They can also be unintentionally influenced by political events, currency devaluation or rapid economic changes. Offshore investing relieves many of these annoyances.

In addition, the tax efficiency of international investment centers is often seen as an added bonus for those using these investment areas.

First, let’s see what the term “offshore” does not mean. This does not mean investing in a small, shady, semi-legal island nation somewhere where the rules are informal at best, and they may be here one day and disappear tomorrow. Not at all. Today’s offshore centers represent the best in international gestione patrimoniale:

• High level of legislative consumer protection.
• Investments are geographically mobile and manageable no matter where you move or from where.
• They often offer a much wider selection of investment funds and other investment choices.

Why invest in offshore?

When someone decides to use an international investment center for their financial needs, they must get the capital they already have, work harder for it and thus make a profit. Or it’s about redirecting a portion of their income each month to work to create a fund of money for the future to meet future financial needs, such as retirement or the cost of teaching children at university. Since inflation is over 3% and banks only return 2%, it is imperative that your money works effectively for you.

Common mistakes novice investors make

In general, we have already talked about investments. And what are the mistakes of people who have just started investing? Here are the most common examples:

• Invest all available savings. This is an unreasonable path, because in case of failure, funds must be set aside. They will be needed for the minimum necessities of life. This “egg-box” must be inviolable. And you can only invest additional funds, the loss of which will not become critical for the budget.
• Investments of other people’s funds. The same principle: you can only risk safe amounts, so as not to remain in the red. Therefore, you cannot borrow to engage in investments.
• Act without sufficient financial knowledge. A minimal knowledge of the securities market, precious metals, real estate and the economy in general will help to avoid failure. A clear and well-grounded action plan is always needed.
• You can’t give in to emotions. Of course, in a volatile stock market, it is easy to get lost and discouraged if profits are not yet coming. You can sell shares without waiting for their growth, and then bitterly regret it. Therefore, a cool head is the best helper. Better yet, rely on the help of a wise financial advisor, investment specialist.
• Promises of sky-high returns cannot be trusted. There is no way to get a guaranteed 500% profit. Only scammers can talk about this.

Where you should not invest your money

Unfortunately, there are many unscrupulous people on the Internet who want to drag you into fraudulent schemes and take your money. Even famous people, for example, show business stars, become their victims. It is difficult to protect yourself in advance, but you need to be aware of the most common cheating schemes.

You shouldn’t react to intrusive and aggressive ads that promise to make millions in a week. Miracles do not happen, and you cannot grow a money tree on an empty field.

Don’t trust the authors of numerous finance courses. Usually, they talk about their high income and promise that they will teach you how to get easy money. As a rule, these are empty promises, and the earnings of financial gurus are precisely built on gullible students who buy courses.

A common fraudulent scheme is the construction of a financial pyramid. These are network companies based on attracting new customers. In them, you need to constantly sell something, for example, cashback cards, and due to this, make a profit through the referral program. If a friend persistently talks about his own business and offers it to you, check to see if it is a pyramid scheme.

Sports betting is a similar scheme. In bookmakers, it is mainly the founders themselves and a tiny percentage of players who earn money. The rest remain in the red.

As an expat you may ned to get reliable investment advice for expats. Always look for reliable advice when it comes to any financial investment. If you are an expat looking to invest, make sure you research all your options before making an informed decision. Contact me to discuss your financial investment needs.

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