Don´t bank on low charges
Wouldn’t it be great if every time you were paid your pension or other income, you were paid a commission for receiving it? Then, each time you pay a bill, you receive a commission for paying it? You could make commission twice on the same money! Of course, this is not possible for us. It is for the banks though.
Let’s take an example based on real charges of a well-known Spanish bank and a couple selling a property in Spain for €300,000 and then re-purchasing a smaller property for €200,000 and investing €100,000 in an income paying bond.
On sale, their purchaser pays them €300,000 through a transfer to their bank. The bank charges 0.2% for receiving the money (€600). They then transfer the money to buy the next property and get charged 0.4% on €200,000 (€800). Finally, they transfer €100,000 to a Spanish compliant company based in another part of Europe for their investment. They are charged a further €400.
In total they will have paid €1,800 in bank charges for transactions other banks may not have charged anything for. The main aim is to choose a bank that does not charge. If high charges are the default, perhaps one should move to another bank. We can recommend a bank with no, or low, transfer charges along with no annual account fees.
One must also be aware that banks will probably earn a healthy chunk on currency exchange, selling the benefit that they do not charge a fee. With GBP falling back against the Euro, it is even more important to obtain a competitive rate. Whether it is for regular income payments, or one off lump sums, we can help you get the best deal.
Cogs4Cancer 2015 – Barcelona to Antibes
The Finish Line
Just after 5pm the peloton arrived into the IYCA Quay in the port of Antibes. The 24 strong group of riders had completed 870km in five days – a momentous feat by any standard. As the riders approached the quay they were re-joined by approximately 80 riders riders that had joined them for the last 88km on the French Tribute Ride. The superyachts at berth along the quay hooted their horns in celebration with over 200 other people waiting to greet the riders at the finish line.
The Spectrum IFA Group had sponsored Lee Mutch and the Cote d’Azur team were on hand to congratulate Lee and the other riders on finishing the trip.
As of Saturday Cogs4Cancer 2015 has raised €252, 716.70[Gallery not found]
Day Five – the final stage
Cogs4 Cancer Tribute Ride – La Ciotat to Antibes
Friday 9th October, the final stage but one of the longest days ride with about 180km to covered. Saddle soar, battered and bruised, the riders will definitely be looking forwardt o today’s ride. After completing about 100km the main team of riders will be meeting the guys and girls in Cogolin for the Tribute Ride in to Antibes. With the extra 80 plus riders bring home the main team, the afternoon will be a little more relaxed and jovial!
The whole team of riders are expected to enter the IYCA Quay for the official finish line for about 17.00. So if your in the Antibes area Friday afternoon, join us all welcoming in the Cogs4Cancer riders.
Don’t forget to keep up to speed with the riders en-route with the live tracking here .
If you feel their efforts are worthy you can also donate here[Gallery not found] [Gallery not found]
Thursday 8th October, the penultimate day and the finish line in sight…well, almost! After yesterday’s ride, probably the most challenging yet, the team are certainly on the home straight. Leaving from Nimes, the team will ride south-east towards Aix-en-Provence which will be at their 110km mark. After taking in the delights of Aix and the stunning scenery…. they will sweep further south. The Cogs4Cancer team will head towards La Ciotat for teh Day four finish line, bringing the days total ride to over 170km. Arriving in La Ciotat will be a milestone and they will be met by many friends joining them for the final days Tribute Ride.
The French Tribute Ride will see upwards of 80 riders joining the main team of 24, to cycle either 82km from La Ciotat to Antibes or the shorter 33km from Col de Testanier into Antibes on Friday, the final day. Last years welcoming event was superb, with hundreds of family and friends at the IYCA Quay in Antibes to welcome in the saddle sore riders after their 2014 ride from Ancona in Italy. This years welcome celebrations are expected to be even bigger, so if you are in the Antibes area Friday 9th October at about 17.00 join in the festivities and welcoming back the riders after their 850km ride form Barcelona.[Gallery not found]
Wednesday 7th October will see the riders starting in Narbonne, traveling near the coast along to Agne, then moving up towards Montpellier which is at the 100km mark for day three. Staying inland the team of riders will be heading for the finish line in Nimes, about 169km for the days ride.
Not forgetting the real purpose of this incredible ride. All proceeds, that means absolutely 100% of the money raised will go to charity. The Cogs4Cancer riders have completely self-funded the whole trip with the support, sustenance and medical assistance through out this week, generously given for free.
The four charities supported are: CANCER RESEARCH UK, L’ARCHET HOSPITAL NICE, CANCER SUPPORT GROUP 06 and ISIS CENTRE AZUREEN DE CANCEROLOGIE WELLBEING PROGRAMME.
Tuesday 6th October will take the riders from Figueres in Spain across the boarder into France with the day two finish line in Narbonne, just a little relaxing ride of about 170km! Only three more days in the saddle for team.
Keep up to speed with the riders on the following tracking app here.
In the image gallery below you can see images of the support vehicles supplying the Cogs4Cancer riders with welcome food breaks kindly supplied by the ladies from Gourmet Deliveries and EGP. Delicious food packed full of carbohydrates and protein to keep the guys and girls going.[Gallery not found] [Gallery not found]
On Sunday the Spectrum Barcelona office turned out to support about 40 riders who joined the Spanish tribute ride, beginning the route at OneOcean Port Vell Marina. The guest riders supporting Cogs4Cancer took the ‘Ronda Verda’ circular route, a circuit for cyclists crossing the natural scenery throughout the Barcelonès county. This route consisted of six main sections: Montjuïc, Llobregat, Riverside Park, Serralada de Marina Park and the Sea Front.
At 07.30 on Monday 5th October the 24 riders will embark from OneOcean Marina Port Vell, Barcelona on a ride that will take them 850km over the next five days with the finish line awaiting them in Antibes, France.
Day one will take the riders along the coast north to Tossa de Mar and then inland continuing north to the stage one finish in Figueres, covering roughly 165km. The Spectrum IFA are proud to be sponsoring Lee Mutch & Cogs4Cancer and will be in Antibes on Friday 9th October to welcome the whole team to the finish line.
As of Monday October 5th, Cogs4Cancer 2015 has raised €214.333,51. The four charities supported are: CANCER RESEARCH UK, L’ARCHET HOSPITAL NICE, CANCER SUPPORT GROUP 06 and ISIS CENTRE AZUREEN DE CANCEROLOGIE WELLBEING PROGRAMME.
At The Spectrum IFA Group we feel it is a very worthy cause and so we are proud to have sponsored a rider, Lee Mutch. We wish good luck to all the team.
[Gallery not found]
Cogs4Cancer 2015 – The new kit has arrived
The Spectrum IFA Group are for the second year running sponsoring Lee Mutch, Director at Inter-Nett Monaco.
Starting in 2013, Cogs4Cancer has grown year on year with over €563,000 raised so far. A truly spectacular event, this year is proving to be even bigger than last years ride with the total amount raised just for the 2015 event reaching €164,058.91 (as of 9th September).
Starting on Monday 5th October in Barcelona, the Spectrum team will be at the starting line to wish all the riders the very best of luck on their heroic journey covering 850KM in 5 days.
Why it Pays to Make a Spanish Will as an expat
While you are enjoying your new life and possibly a new home in Spain, it is understandable that you might not want to think too long or too hard about the future, particularly about matters pertaining to your Will and inheritance issues for your children and heirs. But this subject needs to be covered and fully understood sooner rather than later.
There are three central reasons for making a Spanish Will:
One – It avoids time-consuming and expensive legal issues that your family and heirs will have to resolve. You can – and should – make a separate Will to dispose of any assets located outside of Spain. A British Will, for example, has no bearing on your Spanish estate.
Two – Spaniards have to divide their assets equally among their family and heirs, and leave two-thirds of it all to their children. As an expat, you are exempt from this ruling and you can bequeath your assets to whomever you wish. Your estate will, however, be subject to Spanish inheritance tax, which is high when left by non-residents to non-relatives. In addition, expats resident in Spain are subject to the same taxes on any of their worldwide estate, too. Therefore, making a Will allows you to navigate these various taxes at your discretion.
Three – Your estate can become eligible to a 95 per cent reduction in inheritance tax. This reduction only applies to the first €120,000, but is not available to non-residents, so bear this in mind when drawing up a Will.
The Spectrum IFA Group in Spain are delighted to be able offer their clients a 15% discount when using the services of ‘AvaLaw‘, who over the last years have assisted clients from almost 50 different countries.
The story you are about to read is true; only the names have been changed to protect the innocent…
Mr. Rainyday and Mr. Blueskies were catching up over a beer in Barcelona on a sunny Friday morning. Mr. Rainyday had barely taken a sip of his beer before he was on his pet topic — complaining about Spain, his and Mr. Blueskies’ adopted home as of a few years ago.
‘This time its dad’s flat in Andalucía. It’s over a year and a half since his funeral, and I’ve only just got it transferred to my name. Plus, it’s cost me a fortune. There’s no way it’d be such a hassle back home. It’s a total scam!’
‘That’s funny,’ said Mr. Blueskies, ‘My dad died around the same time, had an identical apartment in the same building as your dad, and it only took us four months to get the apartment registered in my and my mother’s name. And, if I remember correctly, it didn’t cost that much, either.’
‘Really?’ asked Mr. Rainyday, ‘How’d you manage that?’
‘I don’t know. It all seemed pretty straightforward. Our advisor took care of everything for my dad. Was there a problem with your father’s Spanish will or something?’
‘Will? What will? Dad didn’t have one, but I thought you didn’t even need one in Spain?’
‘You don’t need one, but having one makes things a lot easier and cheaper for your heirs,’ said Mr. Blueskies. ‘Since my father had a Spanish will, I did not have to sworn-translate and legalize tons of documents, there were no surprises regarding the applicable law, no need to get certificates regarding which testament is valid according to the foreign law applicable to the inheritance, no need to pay lawyers to deal with all the unnecessary bureaucracy in all the countries, and no need to wait for a year or two to get the title of the apartment…’
‘I see…’ said Mr. Rainyday. ‘Anyway, what outraged me even worse than the bureaucracy, was paying the 60.000 euros of inheritance tax for the property worth 300.000 euros.’
‘Wow’, exclaimed Mr. Blueskies, ‘You paid that much, did you! We did not pay any taxes for inheriting my dad’s flat, since Roser advised my father to leave in his will 50% of the flat to my mother and 50% to me, so that we both could take advantage of the personal tax exemption of 175.000 euros that Andalucía had for all of us who were residing over there at that moment. What a difference, eeh, with some simple inheritance planning?’ Since Mr. Rainyday looked really sour, Mr. Blueskies changed the topic and started to speculate whether Barça is going to bring home all the 3 titles this season…
Clients of The Spectrum IFA Group are eligible for up to a 15% discount
on making a Will with AvaLaw. Contact us now for further information
Le Tour de Finance, Denia, Spain
The Spectrum IFA Group has continued to support Le Tour de Finance 2015 with events in Spain throughout April. The recent events in Spain were held in Barcelona, Sitges and Denia.
These very successful events bring together a number of financial experts dedicated to helping expats understand and manage their finances when living in Spain.
Le Tour de Finance aims to reach expats where they live so that everyone can seek specific advice relevant to their local area. Tax advice, pensions/QROPS, mortgages, healthcare, schools, business advice and making the most of your assets are just some of the subjects that expats need to know more about when living as an expat.
Le Tour de Finance is the ideal opportunity to find answers to the most pressing questions facing British people living in France, Spain or Italy.
If you would like further information or would like to book a place, please contact us[Gallery not found]
Financial Independence: What’s your number?
What does financial independence mean to you? Are you on track for a future free from financial stress? Do you know what your number is?
Knowing the answers to these questions could help determine how soon and how well you could retire, yet many of us don’t…
If you are financially independent you have amassed enough wealth to generate a passive income sufficient for meeting all financial obligations, without the need to work. Your potential for financial independence is dependent on your current net worth, your target net worth and the years remaining before retirement, as well as how much you spend. The more money you spend now and going forward, the more you will need to accumulate to support your lifestyle.
So how do you calculate exactly when you could comfortably retire?
The first step towards financial independence is to calculate how much you’d need to save. A simple formula can tell you not only how much you will need, but also how close you are now to getting where you want to be:
- Study your statements and determine how much you require annually in order to meet all your financial obligations. Could this number be reduced? Are there any unnecessary expenses? Could home and car insurance premiums be reduced? Is downsizing your home an option?
- Determine what return you could get on your investments. As intimidating as the stock market may seem at first glance, it’s possible to assemble a portfolio that pays you 3-5% in dividends annually. This dividend income is cash paid to you monthly, quarterly, or annually and doesn’t erode your investment.
- Calculate what nest-egg you need to build to generate the annual income you require. Annual income required divided by the percentage return you expect to get. Calculations should include cash only, not property or assets.
- This calculation does not account for inflation or taxes.
- This calculation only covers essential expenses. Determine how much spending money you need monthly, then calculate the annual amount and add it into your figure.
- Your life could change in the next few years, which means you’d have to recalculate. If you decide to upgrade your home or have a family, you’ll need a bigger number.
What’s Your Number?
Smart Ways to Make the Most of Your Finances
The year 2015 is picking up speed, and now is the perfect time to stop and re-evaluate our finances before we slip back into our old comfortable routines. A time to review the past year and determine those areas with potential for improvement, to make sure we are getting the most out of our investments and reaching all our financial goals.
Do you know where your money goes each month? Could you be making more if you invested elsewhere? Is your credit rating a true reflection of your financial situation, and are there things you could be doing to improve your standing?
Follow these smart ways to make the most of your finances and put you and your family on the right track for a wealthier future.
Study your Credit Report
Have you ever seen a copy of your credit report? Most people haven’t and it may surprise you to hear that they very often contain errors. Research online and get access to your report and make sure there aren’t any mistakes which could be having a negative impact on your rating. If you don’t, you could be at risk from undiscovered inaccuracies.
Study your Cash Flow
Set some time aside to study your cash flow. Go over all your statements from the past year and crunch those numbers to gain a true understanding of where your money goes each month. How much are you spending? Where is it all going? Where can you make cuts to your monthly outgoings?
Credit Cards & Banks
Check the Terms and Conditions of all your credit cards and compare terms, rates and fees with those of other cards. Are you getting the best deal or are you just renewing cards out of habit? Get rid of credit cards which don’t give anything back, and compare rewards and cash back with other offers. If your current bank is letting you down and not providing the service you need, change.
Most of us don’t fully understand investments. Be the minority. Do your research and find out as much as you can about viable investment options. Use the Internet and its many free tools, and study the market to assess how to make the most of your finances.
Seek Professional Advice
Ultimately, the best advice is professional advice. The Spectrum IFA Group can assist you in reviewing your financial situation and advise you on smart ways to make the most of your finances. For more information or to contact one of our Financial Advisers please use the contact form below.
The Financial Implications of Moving Abroad
Moving abroad can be a stressful and confusing experience and starting from scratch in a new location can often be overwhelming.
If you have recently decided to up sticks and move to Barcelona, or if you’re a recent arrival in the sunny Catalan capital, then you will have many choices to make. Aside from the immediate practicalities of moving to a new country, such as choosing schools, buying or renting property, and setting up residency for you and your family, there are many other (often overlooked) factors to take into consideration:
Unlike the UK, most companies in Spain don’t provide a private pension scheme or private health insurance. However, as an Expat, you may have unique opportunities available to you. An adviser will be able to discuss each of the options enabling you to make a decision.
Having the right banking arrangements is a key part of life overseas. It’s best to sort your finances out before you go, as local banks usually require a credit history and proof of address to set up an account – which you won’t have when you arrive.
Dual-Country financial arrangements are complex and should not be taken lightly, as even the most innocent transaction can be costly if not well planned.
Savings and Investments:
There are many factors that go into determining the best country in which to locate your investments. Bear in mind that you may have access to, and potentially benefit from, onshore and offshore savings and investment assets.
If you currently have an ISA and are planning to move abroad, they are not tax efficient in Spain. You also need to be fiscally resident in the UK to pay into one.
Will & Testimony:
Your Will (and those of your family members) will need to be updated so that it is compliant in Spain
The complexities in managing currency risk, an investment portfolio, and dual-nation tax reporting are many. It is important for expats to have a trusted adviser who understands the financial nuances of living an international lifestyle.
Smoothing: Reduce Volatility and Increase Growth
Investment Smoothing is a process used in pension fund accounting by which unusually high returns in a given year are spread over a multi-year period. By taking an average of all the different values, smoothing can deliver a constant figure for shorter time periods.
Instead of simply sharing out what the fund makes or loses each year, a smoothed growth fund aims to even out some of the variations in performance. This process is what we call ‘smoothing’.
How Smoothing Mitigates Volatility
The logic behind smoothing is that it lowers the volatility of profit and loss credit from pension fund returns. During positive markets, some profits are retained by the underlying fund manager as reserves to be paid out during market downturns. This process dampens the volatility typically seen when investing in other types of long term mutual funds.
Smoothing from the Pru
The PruFund funds are designed to deliver smoothed growth by investing in many different investment areas. By investing in a range of assets the fund is less exposed to significant changes in the values of individual assets.
Prudential’s investment specialists will constantly look for the best opportunities for growth within a wide range of investment areas. Prudential apply a unique smoothing process to these funds to provide a more stable return, than if you were directly exposed to daily changes in the fund’s performance.
Prudential Smoothing: Reduce investment volatility, but keep the potential for growth.
Risk – Simply a Box of Chocolates?
What is financial risk, and is it all down to chance?
Whether you are investing for your retirement or for more immediate financial needs, there are three factors that could keep you from achieving your goals: inflation, taxes, and risk. It is easy to plan for inflation and to reduce taxes, but risk is another matter as it is so unpredictable.
Types of financial risk to watch out for include:
Investment Specific Risk:
Risk that affects a very small number of assets.
Risk of one country’s foreign policy unduly influencing or upsetting domestic political and social stability in another country or region.
Risk that a borrower will default on any type of debt by failing to make required payments.
Interest Rate Risk:
Risk that arises for bond owners from fluctuating interest rates. How much interest rate risk a bond has depends on how sensitive its price is to interest rate changes in the market.
The possibility that the value of assets or income will decrease as inflation shrinks the purchasing power of a currency.
Risk that stems from the changes in the valuation of currency exchanges. Fluctuations result from unpredictable gains and losses incurred when profits from foreign investments are converted from foreign currencies.
Risk of a change of price of a portfolio as a result of changes in the volatility of a risk factor. Usually applies to portfolios of derivatives instruments, where volatility is a major influencer of prices.
Risk that a given security or asset cannot be traded quickly enough in the market to prevent a loss (or make the required profit).
Allocation of proportional risk to all parties to a contract, usually through a risk premium.
The use of various financial instruments or borrowed capital, such as margin, to increase the potential return of an investment.
The risk to each party of a contract that the counterparty will not live up to its contractual obligations.
Overcoming Risk: Prudential & Smoothing
Prudential Multi-Asset funds work by spreading your money across a number of different types of assets. Funds are designed to deliver smoothed growth through a number of investment options, such as company shares, fixed interest bonds, cash and property, balancing the risk being taken. So if one asset is falling in value, another may be increasing.
Risk: Simply a Box of Chocolates?
Understanding the importance of risk is a central pillar of financial planning. Risk can be measured and assessed; it can be managed. Learning how to do this is an invaluable aspect of becoming a successful investor.
Risk may be uncertain but it’s no box of chocolates. If you prepare for the uncertainty – do your research and seek relevant and informed advice – you can be fairly confident of what you’re going to get. It’s not all down to chance.