Though many people tend to feel comfortable and somehow secure to continue using the same bank account they are used to after adopting the nomadic lifestyle, it is important to have a better international banking strategy. In this post, we demonstrate the best way you can build one.
Why you need an appropriate strategy ?
The main benefit of staying a lifestyle independent of a specific location is the ability to use the banks irrespective of your location. The most significant benefits include low fees, stability, and high-quality clients.
Stability: Many nomads often undervalue this quality. Top people rely on startups such as Revolut even when such companies do not have the history of top notch governance. Besides, top banks and banking system in the European Union suffers from crucial fundamentals that make their baseline shaky.
It is the same story with many other banking systems around the globe. When you rely on the top banks in the best countries, you can relax without wondering that a bank will collapse, regulations will change, or currency will devalue. Your cash is safe no matter what! That is very important.
The charges are low: The fee charged on your hard-earned cash is very important. However, if you work carefully on the right banking strategy, it is possible to completely remove the banking fees. Think of a situation where you never have to pay wire transfer charges, monthly fees, or currency conversion rates.
Bank deposits accessibility: Many nomads rarely think about how accessible their deposits will be thereafter. For example, to get access to your cash in more areas, it is advisable to consider top banks in locations such as Hong Kong. With the account, you can access your cash in China, Samoa, and other countries where top banks in Hong Kong have branches.
Quality customer support: Recently while enjoying life in a Malaysian beach, my ATM card got lost. I called my bank in Hong Kong and completed several security questions. Within 48 hours, another ATM was delivered to my hotel doorstep. The bank also arranged with a local bank where I could go and access cash to use. This is the customer support that you need.
The notion of taxes: The taxes you will be charged as a nomad depends on your tax resident. However, you have to appreciate that there is nothing wrong with having a bank account overseas.
To enjoy these benefits and more, start working on the strategy right away and get an expert to validate the content. Consider an expert who is familiar with tax matters.
Opening a bank account remotely
Now and then, the question of whether it is possible to open a bank account remotely keeps recurring. The answer is simple; you can open a bank account remotely. However, you should probably not try to do so. Good banks will never agree to open bank accounts remotely because they expose themselves to numerous risks. Why offer an account to someone who cannot afford air ticket to meet with your cashiers?
The only banks that agree to open bank accounts remotely are private ones. However, they have huge minimum deposits, and their operations are never good for daily operations.
Note that it does not imply there are no banking institutions that can open accounts remotely. It is possible to get one of two banks willing to agree to an offshore account. For example, if a major bank back at home has a branch abroad; it might be possible to open a bank account remotely.
Personal banking strategy
At this point, you must agree that there is no single fit all strategy when it comes to nomadic banking. Crafting the personal strategy based on personal needs is very important.
Besides, you must factor the prevailing circumstances and long-term objectives. In this post, we have created two key samples.
Strategy for consultants, freelancers, and self-employed people
This plan mainly focuses on 3 key accounts; (i) day-to-day operations (ii) savings (iii) investments. The key targets for this strategy include;
- Ensuring your payments are accepted
- Protection from fluctuation of currencies
- Cutting on total costs
- Improving personal investment opportunities
- Aligning personal operations with long-term objectives
- Enhancing access to credit
The three accounts help to isolate every section of the strategy, risk management, and enhancing efficiency.
The day to day account: It is important to ensure that this account operates in the currency of the state you take most of the time. This will keep costs associated with changing currencies low. You can also put the account in the currency that is most stable. For example, if you spend most of the time in the Far East, the best currency is Hong Kong Dollar.
It is also important to put the day-to-day account in credit cards to evade ATM fees or bank charges. Besides, you should get an appropriate mobile money application to ensure that you can get paid and receive funds. Think of PayPal or Moneybookers among others that operate independently of the country of choice.
The savings account: When living a nomad lifestyle, the long-term outlook is very important. For example, at some point, it will be necessary to settle in an area. Therefore, aligning your efforts there with an appropriate account will be very helpful. For example, if you plan to settle in Hong Kong, have the account in HKD.
In addition to picking the currencies well, you also need to factor the country’s stability, the stability of the selected bank, and interest rates. Ensure to remain careful with some countries especially OECD members. Some of the best nations include Hong Kong, U.A.E, Mauritius, and the Bahamas.
The investment account: Do not only pack all cash in the saving account. To get more returns and grow the savings, consider opening a brokerage account in any state that does not tax withholding entities. Then, consider the amount of the savings to commit after selecting the right brokerage account. Remember to have some cash around so that any investment opportunity that springs up can be grabbed immediately.
If you are an entrepreneur, a strategy such as the one in number (I) is necessary. However, you need to include a separate one for the enterprise.
The enterprise strategy should have all the considerations brought out in the personal strategy. However, it is better to work out in the country of registration.
Living a nomadic lifestyle can be enjoyable and really fulfilling. If you need help when crafting the strategy or want to make sure that it is the best, do not hesitate to hesitate to contact us.