Don’t we all want to be able to live the best possible life? To give our children the financial head-start we had or wished we had? To get our money working for us?

We’re quite sure the answer to that is yes! But the more important question is how do you get there? And that answer is rather simple: Forget all about saving, investing is the most efficient and clever way to achieve these goals.

Well, you might think… “Investing means living in fear that I bet on the wrong horse”, “I need a lot of money to be able to invest”, and in times of Corona isn’t it “the most reckless thing to do”? Or is it?

We at HORBACH Expats are here to tell you that it is time to distinguish these half-truths from reality. And that expats should no longer miss out on any opportunities just because they lack information on both stock market-dependent and independent possibilities. The best part is that you can invest even if your life might lead you across the world. These financial instruments help you build up wealth – if you know how to use them properly.

By saving your money in the bank it is losing its value due to the extremely low or even negative interest rates, whereas by investing your money, it actively starts to increase over time. Investing is the new saving and the sooner one gets on board the higher the chances of a bigger profit. What is more, investing during times like this could be a once in a lifetime shot at some investments. 

Our guidelines for getting investments right – for those of you new to it and a reminder for everyone else who is already at it:

The basics

A solid and detailed financial plan is key to ensure the money you plan on investing is not money you need. Wealth management and accumulation come after the basics are covered and you are 100% certain that all elemental risks have been assessed and covered. Investing borrowed money or liquidity you do not actually have is a no-go. What is more, for long-term successful investment of any kind, a slow and steady but also very well-monitored approach reaps the juiciest fruits in the end.

Once that foundation has been properly tended to and you have the means and wish to invest then we recommend you to:

Define an investment period.
The kinds of investment portfolios we prepare for our clients to start at 5 years-time (excluding real estate) and span out to even over 50 years. A recommended span for mid-term investment lies between 5-15 years, depending on the financial instruments chosen.

To make sure you choose the right one…

Make a plan!
How does your investment fit into your life-plan? What are your personal goals in the next years? When do you need capital to fulfil them? Are we discussing short (0-5 years), mid (6-15 years), or long term (>15 years)? 

Empirically assess your investment mentality!
Only after you get a proper assessment you can be assured that your investment really fits your demands. Furthermore, it will help you to realistically forecast what you might expect from your investment in all scenarios. 

Decide on frequency.
Once? Monthly? Mix and match? Inform yourself which options require a monthly investment and for which ones a one-time payment suffices to achieve your goals.

Ask yourself: Am I afraid of fluctuation?
Putting all eggs in one basket is one of the most common mistakes when investing. Diversification can be achieved through different strategies, too, so it is not only about integrating different financial tools into the portfolio. 

Define what flexibility means for you.
How important is it for you that your money can be easily accessible? Are you willing to accept the risk of potential losses for the prospect of much higher returns? How involved do you want to be and how often do you plan on checking it? Do you wish to reinvest your gains?

Our job as financial consultants at HORBACH Munich Expats Team is to aid you in these matters and provide you with professional advice and tailored solutions. We are also very happy to work together with those of you who have investments world-wide to help you fit those into the new portfolio. Our investment specialists help you step by step.

Should you be investing? What could it look like for you?

Regardless of your age, your profession, and your plans – there is an opportunity to support every expat, including you! What matters is your personal situation.

– Your risk mentality defines which options fit you: are you looking for high profit, safety or both?

– Your personal plans determine the investment period: are you planning on building a house or do you want to travel the world with your soon-to-be reserve funds?

– Your country of origin determines which investments are accessible to you. 

To illustrate what is possible for you we have created a few scenarios to help you figure out which kind of investments suit you best. 

Did you know that to start with investing you don’t have to venture onto the stock market (yet)? There are stock-market independent options available for you. In fact, there is not just one, but three main stock-market independent financial instruments that will help you increase your wealth.

Option 1

Alternative Investment Funds (AIFs):
Small sums going long ways

Suitable for: Anyone wanting to take part in unique world-wide projects for 5 to 14 years looking to maximize their profits. You appreciate having an experienced guiding hand while still benefitting from exclusive opportunities and extraordinary returns. 

Why it is profitable: a plethora of worldwide real estate and infrastructure projects are bought, renovated, indexed and sold by large investment groups. This cycle is repeated twice or thrice to guarantee a maximum return. Though you cannot access your money during that period, the investments are protected. 

Insider tip: While private investors usually need a sum of 250.000 € to participate, you can already invest in AIFs with small contributions via the cooperation between HORBACH Munich and the investor groups. Our high-end portfolio grants our clients the exclusive possibilities otherwise inaccessible for private persons.

Types of Investments: Alternative Investments and Exclusivity

Ever been to a store or experienced a company and thought wow how cool I love this brand? 

Well, here’s a tip for the entrepreneurs among you: You also get a chance to invest in well-known companies that have not yet been launched into the market! You get to support them in growing even bigger and expanding their concept even further. 

Option 2

Real estate
A place to call home… or a source of tangible passive income

Regarding availability and creditworthiness: Objects can be very scarce. On top of that, you need to prove that you own enough capital to afford real estate. And that means (rule of thumb) owning 10 % of the purchasing price in case you plan on renting it out, 20 % if you want to settle down.

If your fixed costs eat away at your income, this can be a serious obstacle. To make sure that you get to purchase your home right on time, get to know the Bausparer below!

Insider tip: If it is your intent to buy a place, you can get a spot in our exclusive waiting list. If your intent is to use it as a source of passive income, we make sure you do not have to play custodian.

Option 3

Bausparer (building society saver)
How to finance costly goals

For whom: everyone seeking to gather equity for your own real estate or other costly goals as soon as possible and who do not have the financial means to do so.

How does it work: Supported by certified banks, you agree on the sum you need by the desired date to achieve your goal. While you provide half of the desired sum in the first half of the period, the bank provides you with a loan in the other half. 

With the support of the loan, you get to buy your dream house faster! And up to 60.000 € you are free to use this money for anything you like, not only real estate.

Insider tip: Your investment in the Bausparer grows very little due to the current low-interest rate. Why do it then? Its appeal lies in the repayment phase: You get to keep these low-interest conditions for the repayment, which serve for amazing loan conditions! 

Fair enough, but what if you don’t have solid plans and are looking for even more flexibility?

Then stock-market dependent options might be the solution for you! 

Funds – and what to look out for 

For whom: if you have at least three years at hand, if you want to profit from the capital market, and want to have access to your investment right away, this is the right choice for you. 

Why it is profitable: Right now, Corona has corroded the market, which means it is the time to buy and not to sell. You can now take up market shares at very low cost and profit once the economy boosts again. Also, you can quickly access the money when needed. 

Reminder: There are heaps of options out there. Make sure to put together a diversified portfolio comprising different assets that support your investment mentality. Regardless of whether you want a professional opinion on your desired portfolio or whether you are a beginner, it is highly advisable to get in touch with a consultant on this topic!

Insider tip: opening a portfolio within a depot bank can simplify the managing process of your funds! Also, keep in mind that a long investment period counteracts volatility.

Managed funds – comfort and more expertise 

For whom: you want to profit from the capital market, but you also want maximum safety and someone to watch over your investment daily? Go for managed funds!

How it works: a fund manager supervises your portfolio – and reacts to market fluctuations to ensure the highest refund and safety! This means you get to profit from the financial market’s opportunities. But this time, someone takes the weight off your shoulders and supervises your chosen funds. Investing directly into managed funds allows you to profit from automated asset allocation. Same as in a football team, where players have different strengths, and some switches are necessary as well as if the trainer notices that they are underperforming one season and bring other players into the game, an asset manager acts as a coach for the funds in order to make sure your investment is stable and profitable. 

We as consultants act as coaches for your portfolio as a whole while keeping your personal holistic goals behind your financial plan in sight at all times. 

Going green and investing! What about sustainability?

You will be happy to know that especially during the past few years there has been a significant increase in sustainable financial instruments, committed to the UN sustainability goals and/or aiming at socially responsible uses of the capital funds they come across. The palette is quite broad and varied so that we can cater to a wide audience.

If you already are in the privileged position of being able to invest now you get the chance to also be an agent of change and make a difference in the long-term, beyond your individual profit. More and more people have been asking themselves what their money is being used for and if this is being done in an ethically, environmentally, and socially responsible way.

Exactly this is what we check in detail to make sure we provide you with a portfolio that supports building a better tomorrow, it this is something pivotal for you. 

Have we piqued your interest, unveiled new possibilities or simply caught your attention? Good. Want to get started and learn more about how you personally can fit this into your own financial plan? Want to know which financial instruments suit you best?

Get in touch and we will schedule a session with the investment specialist best suited for your individual needs. Looking forward to consulting you!