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Unlike many nations, the vast majority of Australian expatriates will more than likely return to Australia eventually, so it is a question of when, not if. Possibly triggered by the pandemic and associated events, we have seen an increase in the need for tax-led planning with clients considering the move back, whether it be imminent or “sometime in the future”. In Singapore, it can be very easy to forget how high the Australian tax rates are, so any steps taken to mitigate these in future, can be hugely beneficial.
Many planning and investment principles seem like common sense, but I have learned over the years that common sense is not that common. Planning is not the most exciting thing to do in your spare time but there are things that you can do now, and things you should not do now, that can make a real difference.
Focus on the plan and don’t leave things until the last minute
Starting can be the hardest part – don’t allow perfect to be the enemy of good and expect revisions to be made along the way. Starting earlier allows more things to be considered and the financial impact can be significant. Importantly, align investment decisions with the future anticipated requirements for capital as each bucket will require a different investment solution and risk profile.
Diversify: don’t put your eggs in one basket
The best performing asset class changes every year, so it is important to diversify across asset categories, number of holdings, geographies, and currencies to reduce volatility and derive the best long-term returns.
Don’t overstretch yourself
Be wary of taking on too much debt or not leaving yourself with a safety net. Excess debt can spell disaster and interest rates are only going one way. Make sure you plan for scenarios, as not everything works out the way you want. Model the worst case, and hope for the best.
Balance your priorities
In the words of David Allen, “you can do anything…but not everything.” Trade-offs are inevitable but a plan enables you to balance options and make educated, not reactionary, choices. Smart tax and investment planning is ultimately about having more control over how you want to live your life and giving yourself the maximum ability to make choices (as things will certainly change).
In conclusion
So there you have it – a few simple planning principles to follow to help you take more control of your financial future. It is easy to do and easy not to do. We have supported many clients with this and are happy to help if there is a need.
Steve Settle, Partner at Select Investors, works in tandem with Tristan Perry, Head of Tax at Select Investors Australia, to support expatriates with their financial wellbeing, through integrated tax and wealth planning during their time in Singapore and beyond. Click here to watch the most recent presentation on planning for a smooth and tax efficient move to Australia.
Contact Steve on steve.settle@sjpp.asia or +65 9776 0969 to arrange a consultation and discuss your planning needs for your financial future.
The ‘St. James’s Place Partnership’ and the titles ‘Partner’ and ‘Partner Practice’ are marketing terms used to describe St. James’s Place representatives.
Members of the St. James’s Place Partnership in Singapore represent St. James’s Place (Singapore) Private Limited, which is part of the St. James’s Place Wealth Management Group and it is regulated by the Monetary Authority of Singapore and is a member of the Investment Management Association of Singapore and Association of Financial Advisers (Singapore). Company Registration No. 200406398R. Capital Markets Services Licence No. CMS100851.
