Savings: currency?

[rbnexpat]

Dear all,

I am en European expat working in Singapore and living here with my wife.

My question is regarding our savings.

Should we exchange every month our monthly savings from Singapore Dollar to Euro? How do you keep your savings?

Please note that I am planing to move back to Europe in about 3 to 5 years.

Thanks.

[Beeroclock]

Dear all,

I am en European expat working in Singapore and living here with my wife.

My question is regarding our savings.

Should we exchange every month our monthly savings from Singapore Dollar to Euro? How do you keep your savings?

Please note that I am planing to move back to Europe in about 3 to 5 years.

Thanks.

Unless you want to be exposed to the exchange rate, it is safer to make regular conversions back to your home currency. Otherwise you will carry a large risk on the vagaries of the EUR/SGD and whatever it happens to be doing one fine day in 3-5 years time when you fly off.

You could do this by transferring money back to a home bank account, or you could you a multi-currency account in Singapore. If you are transferring, you might also consider the size of your monthly savings as the exchange rate commissions can be worse for small amounts, in which case it might be better to transfer every second month or something like that.

[Girl_Next_Door]

What kind of amount are you looking at? Hundreds/month? Thousands/month? Ten thousands/month?

For us, we saved $X every month in a Singapore account, once it hits ten thousands, we will transfer to our UK account. Similarly, when we received bonus, we will transfer the amount to UK as well. My husband banks with SCB, and he claims international transfer is not too expensive. I bank with Citibank and its free for international transfer.

[JR8]

Withdraw S$ cash from bank.
Go to Change Alley/Arcade, convert S$ to home currency
Take money home in cash, deposit in bank
Open (or have) stock-broking account
Buy a portfolio of reliable blue-chips yielding maybe 5+%*
Pretty much forget about it entirely (i.e. low maintenance), except ...
Reinvest all dividends, and after a few years watch it start really growing.
---
Another beauty of this is that SG only taxes on local income. So that portfolio 'back home' could be growing tax free. IF you're from a jurisdiction that taxes worldwide income (e.g. USA), then perhaps open the stock a/c from here in an offshore jurisdiction.


* Current examples (that most people may have heard of):
HSBC, at 5.2%
Royal Dutch Shell 4.8%
Tesco 4.9%
Vodafone 5.2%

[beppi]

Which currency (or asset) you store your savings in does not primarily depend on where you live or where you will live in future, but on what you believe will give you the best performance.
Ever heard of the Euro crisis?

[Wd40]

Which currency (or asset) you store your savings in does not primarily depend on where you live or where you will live in future, but on what you believe will give you the best performance.
Ever heard of the Euro crisis?

Depends on your risk profile. Not everyone can predict accurately. Most of us listen to what the analysts say and they themselves rarely get it right. I remember during the peak of the Euro crisis when the exchange rate was like 1.21 or something, everybody were so bearish and calling for parity and now its like 1.37. Similar case with the AUD. Currencies are more difficult to predict than equities or interest rates.

If you are looking at safe returns with minimal risk, then the 1st thing you would want to do is to hedge the currency risk.

[beppi]

That's why I used the word "believe", not "forecast" or similar!

[Beeroclock]

Which currency (or asset) you store your savings in does not primarily depend on where you live or where you will live in future, but on what you believe will give you the best performance.
Ever heard of the Euro crisis?

its a valid point but performance needs to be defined. For most people they are thinking of their net assets as measured in home currency, which eventually becomes a retirement pot. Therefore any "performance" is against this benchmark, and as wd40 says it is a safer starting point to hedge out currency risk, unless you really know what you're doing. You can still invest in an international shares fund, bonds or whatever you like to diversify asset mix and not be overexposed to EU.

[Beeroclock]

This is now twice I'm agreeing with you wd40 in the same week !

[aster]

Which currency (or asset) you store your savings in does not primarily depend on where you live or where you will live in future, but on what you believe will give you the best performance.
Ever heard of the Euro crisis?

I store mine in the currency I am planning on investing in when the next stock market crash happens. In my case it's USD.

What Euro crisis? Yeah, papers had their party with this but overall where are we today? You have the world's best economy (Germany) as the powerhouse behind the Euro, so IMO you should be more worried about EVERY other currency in the world before you even give the Euro a negative thought. The Euro is here to stay, stronger then ever after these years, though this doesn't mean that this is your best investment choice...

[JR8]

What Euro crisis?

Er, Greece (40% adult unemployment, caused directly by Franco-German economic hegemony), Cyprus, Portugal and Spain. Ooh-hoo great success!!

Yeah, papers had their party with this but overall where are we today? You have the world's best economy (Germany)

By what measure? And if so why are the population apparently either gay or so dour? [/irony]

The Euro is here to stay, stronger then ever after these years, though this doesn't mean that this is your best investment choice...

The same was envisioned for the Reichsmark http://en.wikipedia.org/wiki/Reichsmark and look where that ended, wheel-barrows full of billion Mark banknotes worth a total 20 cents.

History tells us that putting the Germans in charge, rarely bodes well.

[aster]

Er, Greece (40% adult unemployment, caused directly by Franco-German economic hegemony)

Dunno about that. Greeks' "allergy" to work in general, not paying taxes, thinking they can retire earlier than anyone else in Europe (having not worked much anyway). I can think of 20 reasons why Greece is a mess without having to blame it on others.

I do trust the Germans with one thing though: running a currency properly. And their economy is #1 IMO, I don't think any other country could bear such a strong social system and yet still be such a powerhouse in economic terms.

[JR8]

You don't know, because you choose to overlook it. Right?
Don't you see, the Greeks do not want to be like the Germans. They cannot be, it is not their culture, and neither do they wish it.

Why do you wish the Greeks to be like Germans?

It's like demanding that the Malaysians be like Singaporeans. It's just not going to happen. Sure, pay all Malaysian politicians e1mm to sit in some expensed-up ASEAN 'upper-house', and they'll sign up for it. But the people are not behind it.

p.s. I have no idea what this 'German social system' is that you mention, despite 3 years there. The Germans really need to understand (after a century and more) that the rest of the world DOES NOT WANT TO BE LIKE YOU. When will they accept that? Not yet it seems.

[aster]

I simply refuse to blame Greeks' financial issues on others, when they themselves - due to their lifestyle or general laziness towards work - are the main culprits in all of this.

Avoiding work and overspending cannot be blamed on others. Period. End of story.

Germans have a good social setup and a strong economy regardless. And it's not like they're working 24/7 to achieve all this - they actually have a very decent balance in terms of work vs free time, not to mention the whole social safety net and public medicare scene which are maintained at a high level.

Nobody has to be like them, but you make the comparison seem like they're achieving all this at some great sacrifice, which they are clearly not. In fact they have a much more relaxed lifestyle than any other major economy, so in most cases people would want to be part of such a setup rather than one where you work way harder, have no medical coverage, and have much less time off each year.

[JR8]

I simply refuse to blame Greeks' financial issues on others, when they themselves - due to their lifestyle or general laziness towards work - are the main culprits in all of this.

Avoiding work and overspending cannot be blamed on others. Period. End of story.

Germans have a good social setup and a strong economy regardless. And it's not like they're working 24/7 to achieve all this - they actually have a very decent balance in terms of work vs free time, not to mention the whole social safety net and public medicare scene which are maintained at a high level.

Nobody has to be like them, but you make the comparison seem like they're achieving all this at some great sacrifice, which they are clearly not. In fact they have a much more relaxed lifestyle than any other major economy, so in most cases people would want to be part of such a setup rather than one where you work way harder, have no medical coverage, and have much less time off each year.

Oh freak off. You want to torch the Greeks, simply bercause they dont wa to be like your puritanical housewives up in Hamburg.