The instruction set for building wealth in your 20s is one of those things. It sounds so tedious you’re likely to file it as a ‘future me’ problem and never quite get around to it. You’re already navigating adulting, transitioning into the workforce, and finding yourself. So when someone hands you a list that says: Start early. Save consistently. Invest for the long term. Give compounding as many years as you can.
You’ve likely thought something along the lines of, “Great! I’ll get right on that.” Then accidentally filed it away in the same box as paying off your student loans, and making regular pension contributions.
Super important. Not necessarily practically doable right now.
Part of the problem is the generic nature of the advice itself. Plus, embarking on an exciting new adventure as an expat comes with a lot to think about. So the thing you already filed under ‘deal with it later’ is an easy thing to bump to the bottom of a very long, slightly overwhelming list.
But before you refile your whole financial future under ‘future me’s issue’, there are a few ways being an expat complicates wealth building in your 20s.
And they make the whole topic a little more obviously interesting…
The Invisible Cost Of Going On A Grand Adventure
The non-globetrotting advice on how to build wealth in your 20s carries an underlying assumption: you’ll still be roughly where you started on the globe when your financial plan matures.
Crossing borders negates that assumption.
Moving to another country can drastically change things that seem innocuous, or create small fluctuations that don’t seem like much, but stack up over a lifetime.
The pension contributions your employer makes, the entitlements you accumulate, the treatment of accounts you already hold, what you choose when opening new accounts or moving money and assets, and whether the structures you pick now will still work later.
Wherever you land.
Even something straightforward to solve can bite you later, like the currency your future is being funded in. Convert it to another currency, problem solved. But conversion can cost you, value doesn’t always translate, and none of that accounts for the direction your future unfolds in, what you need the money to do for you, and where you need it doing.
Which leaves you with a rather different question to the one your brain keeps kicking down the track:
How much are you willing to let what you invest in now shape the decisions you’re able to make about lifestyle and location later?
Because the expatriate spirit is indelible. And you can’t be expected to predict at twenty-something where fate will take you.
In the absence of a crystal ball, a plan that accounts for your wanderlusting is quite definitely in order.
Nobody Invoices You For What You Left Behind
A move abroad can feel rather monumental. So much so you might not notice things that stopped happening. Your salary may have gone up. Your cost of living might have gone down. You could find you’ve more left at month end. And your new job may not even exist back home.
All new, exciting, and tangible.
But a decent chunk of your old life’s progress didn’t run through your bank account. An employer topping up your pension on top of your salary. A social-security system adding years towards something you’re not likely to think about for another three decades.
Cross the border and you’ll carry some of that with you, but some of it will change, and some will simply stop.
Then there’s the stuff that doesn’t stop so much as change job. Go non-resident and you can normally keep a UK ISA and its tax advantages, and move it between providers, but you can’t keep paying in.
That reassigns it from somewhere you build wealth to somewhere you hold it.
And how your old country treats your account doesn’t help you understand how your new one will. They’re not flagging it for you on arrival, which means you’re likely to only notice later, when an accountant or financial adviser points it out.
So the maths here is deceptive. If your income rises but you’re buying things that used to turn up for free, some of what appears to be a hike is actually a bill nobody’s sent you yet.
Salary is the easiest part of an overseas offer to compare, which is why everyone compares it. It’s also the least complete, because it doesn’t cover things like pension contributions, social-security accrual, insurance, healthcare, housing, or end-of-service entitlements. There’s a huge gulf between employers and countries, and none of that generally comes up in the conversation you have that convinces you to sign.
Some moves genuinely leave people with far more disposable income. Plenty don’t. Becoming an expat can have tax benefits, but tax-efficiency isn’t an automatic bonus that kicks in when you leave the country.
It’s an easy gap to lose. And more problematic because the second you become responsible for a benefit, postponing it is an option.
And you won’t feel the effect of a missed pension contribution this month.
You’ll feel it in about fifteen years.
Which means you need to think a bit less about old vs new salary, and more around old vs new position.
Which is far less satisfying, and considerably more useful.
So What Does Building Wealth Abroad Actually Look Like?
The fundamentals of wealth building in your 20s don’t change at the border. Spend less than you earn, invest the difference, leave it alone.
What changes is the shape your decisions take when you might be living somewhere else in four years. And somewhere else again a few years after that.
Fortunately, you can break it down into four things:
- Cash you can actually reach, in a currency you can spend where you are. Most of the financial trouble expats run into isn’t investment issues, but liquidity trouble. A visa falls through, a contract ends early, someone at home gets ill. Cash that’s in the wrong country when you need access isn’t much use.
- Anything your employer is matching. Matched contributions are usually the surest return available to you, and the thing most likely to vanish if you leave before it vests. So, it‘s well worth reading your terms in month one, instead of waiting until the month you want to exit.
- Investments that survive a move. Not every provider will keep servicing you once you’re non-resident, and an account sold on the strength of where it’s held is no exception. Some will restrict, others will close, and unwinding one every time you move will cost you in both charges and time out of the market.
- The ability to stop. Expats get sold long-term savings plans with fixed contribution commitments more than most people do, and it’s the charges and surrender terms that cause the damage. Both belong on the list of things to ask an adviser. A plan you can pause when a contract ends may beat one you can’t leave for two decades.
None of which requires knowing where you’ll be at forty.
And that’s entirely the point.
How To Build Wealth In Your 20s
The greatest takeaway here is that portability isn’t free, but it is freeing. It can cost you access, simplicity, and sometimes returns. But it’s well worth ensuring you have it, even if it costs something, particularly if you’re investing early as an expat. The alternative is robbing yourself of the space to change your mind (or location) later. A little planning now, and future you will thank you for it; it’s tough enough navigating what changes in your thirties without adding problems that could have been avoided with better planning in your twenties.
So, before committing to anything long-term, remember that the real question isn’t what it might return. It’s how many things have to stay true for the decision to still make sense in future.
Because life as an expat is, indeed, a grand adventure. And you really have no idea where you’re going to end up.
If you’re building wealth as an expat and want to know what your move changed, get in touch and we’ll help you weigh what stopped when you left, what your money may need to fund, and how much of the plan rests on you staying put.
