Amongst the chaos of packing and planning a move overseas, there’s one question that might not be front of mind: how can you financially get ahead while you’re on an overseas posting?
DFAT is offering a $550 benefit to cover the cost of seeing a financial advisor before you head overseas.
With additional income from allowances and basic expenses like rent covered, diplomats are in an ideal position to set financial goals that previously seemed out of reach. And with DFAT paying for advice, you’ve got nothing to lose by seeing a financial advisor – and potentially a whole lot to gain.
In this blog I’ll help you understand this opportunity, and how to make the most of your overseas sojourn from a financial standpoint.
Before you go
This is the time for planning. Time to take advantage of that grant and work with an FPA qualified financial advisor to analyse your current financial position and plan out your goals. The adviser will help you set a savings plan, and consider options for property investments, shares, managing your mortgage, insurance and superannuation.
I recommend taking care of this before you go overseas, so you can meet in person and find someone you trust. Getting this sorted out now also sets you up with the right mindset, so you never develop bad habits you have to break a year into your posting. You’ll be in a position to make the most of your time in-country.
A financial opportunity like no other
Before we continue, let’s take a look at how your income could change on posting. We’ll use Amy as an example. She’s just accepted a 3-year posting to Brussels.
Her salary in Australia is $105,000. When she moves to Europe, her salary increases to $170,000. Not only does she receive a salary increase, her expenses go down even further because she doesn’t need to pay rent. While they would’ve been around $60,000, with rent paid, she could live comfortably on $40,000.
That leaves around $130,000 each year that Amy can use to build her wealth. The temptation to spend is always there. But with so much extra income it’d be a shame to waste the opportunity. Defining a strategy is so important, so Amy can make the most of the opportunity – without spending it all or paying too much tax.
With a bit of planning, Amy could pay her mortgage sooner, buy that investment property, or invest for her retirement.
The most common questions from diplomats heading overseas
Property is hands-down the most common topic when people are about to embark on an overseas posting. Many diplomats are facing the leap from owning the home they live in, to renting to tenants, without any previous experience managing an investment property.
A financial advisor works with you to devise strategies for paying down your loan, cash flow, or accumulating wealth (shares, investment funds, or buying property). Superannuation can be an effective way to invest extra income, depending on your family’s situation. Salary sacrificing can bump up your super and reduce the amount of tax you pay overall.
What to expect when you see a financial advisor
Most people who take up the DFAT grant are seeing a financial advisor for the first time. So let me cover a few items you can expect when you come to see me.
We’ll cover all the basics like insurance, superannuation, property and other investments. I’ll work with you to devise a strategy that includes tactics for disciplined saving, so you can avoid the pitfalls of spending and frittering away your extra income.
Strategies that have worked for my clients so far include:
- Automatic direct debits with ongoing accountability to meet your saving goals
- Regular contributions to managed funds
- Reducing your taxable income through salary sacrificing to superannuation
I regularly hold Skype consultations for overseas clients, making it easy to stay in touch.
Make the most of your financial advice grant
There’s a lot a financial advisor can do to help you grow your wealth. But it’s also important to speak to an accountant to ensure you’re on top of any tax implications, especially where property is concerned – capital gains tax, or negative gearing, for example.
That’s why I’m running a special offer. I’ll refer you to a trusted accountant, and pay their fee out of DFAT’s $550 grant. This way, you receive the broad-based, comprehensive advice you need to make informed decisions tailored to your financial needs.
With your advice paid for, there’s never been a better time to get your finances set up to ensure that when you return, you’re in a far better financial position than when you left.
Are you a diplomat heading overseas on a posting soon? Take advantage of DFAT’s offer to receive financial advice at no cost to you.
Call or email me to book your appointment today.