Savings and Investments in Bahrain

Hi all

Most of us never have enough to set something aside for rainy days (but being desi) almost all of us also strive to set a little something no matter what!

So the topic of discussion is:

What is your top saving/investment tips for an individual expat or couple in Bahrain wishing to set aside part of their monthly income towards future savings.

I will start with mine as a relatively low household income of BD 1,500 monthly. With the monthly restrained expenses of 1000-1200 - surplus would be about BD 300-500 only.

1- An education insurance plan for one of my two children - although something is being set aside  for their future, this is really a coverage plan and not a return plan because although there is insurance coverage there is no return on investment. Instead, I am ending up at an account of -10% of the actual contributions. Also this kind of plan restricts one from cashing it without penalties etc.  However, the upside is that something is being stashed away in the name of the child regardless.

2 - Gold Jewellery  - a basic stash of about BD 3-4K with an intention to add to it but haven't been able to do so far! Most desi women inherit this from their loving fathers!

3 - Bank savings in form of saving certificates which never really increase beyond another BD 1-2K due to the never ending 'unplanned' expenses which turn up around the corner.

So among all the strategies I have adopted I feel they aren't really clever ideas or one with a good return on investment basis. You may also recommend any specific plans or ideas which have seriously added to your equity over time - Bahrain specific examples will be great.

I would love to hear from any income levels - maybe we will learn better ways of really saving for the 'rainy days'!

Thanks for your patience to go through the long post...

TT  :)

~I have no special talents. I am passionately curious~ Albert Einstein

Well....this is a big topic.  What you have to understand: 

1) Your needs i.e. short term returns and cash payouts vs. long term capital appreciation
2) Your risk appetite
3) Types of products and the situations they apply to

This basically decides what you do - so it is not a one size fits all approach.

First of all, insurance products are basically good only for protection.  If you use this as an investment vehicle, you will ALWAYS end up at a return less than the market because of the high hidden costs & premium allocation to investment %ages.  On a whole of life policy, don't expect to see an annualized return beyond one to two percent per year and that too after 10 years.  What happens is that in the initial policy years, the premiums you pay, only a portion of them is invested in funds and then with the costs that are deducted, an even smaller portion finds it's way to the funds.  Mutual funds standalone are also a bad investment as they charge high fees and the total return over a period of time doesn't beat any index and is actually lower because of the fees (they are only good for one purpose and I will list that later).   So I am not surprised that you are -10% down.  It is quite common and a lot of these financial planning advisers lead people into this because they make higher commissions on these plans plus they know NOTHING about the markets - they are just glorified car salesmen.

Practically speaking, you lost as the inflation %age overtook your returns.   My advice?  only get insurance for the purpose it is good for i.e. protection.   This is a term policy for a limited number of years and costs a lot less than a whole of life / education plan items that the advisers pitch (because they make more money on those - not you).

I am not a believer in holding physical gold.  It is better to buy options vs. hold the physical commodity.  On top of that, this is not an investment that is going to deliver tremendous returns.  Since the last 5 years, Gold has been trading between 1200 to 1300 USD. 10 years ago, it was at a $1000 with a high in 2011-2013 with a price of $1700-$1800.  Assuming, you bought gold in 2009 at $1000 and wanted to sell it now for the price of $1200, your return is 20% from purchase price but return per year is two percent over the 10 years.  You were better off putting the money in a bank account or even property as liquidity is not a concern if you hold an item for this long :).

Practically speaking, if you want the highest amount of return, you have to re-evaluate the risk that you want to take.   For example, stock market is where you get the highest amount of returns and the highest amount of wipe-outs if you don't build a diversified portfolio.  Even if you don't do daily dealings of shares, good stocks have dividend yields of 3-6% on USD stocks which is much better than bank accounts.  And if the stock rises, you have capital appreciation.   As an example, I invested in a NYSE stock back in Oct 2018 and picked up 500 shares [at] $55.76 per share.  That share, today is around $71 and has been paying me monthly dividends of $110.  So just on the dividends, I made around 5% on the money invested.  If I were to sell the stock today, my total return would be thirty two percent on money invested in barely 8 months.  And this stock pick wasn't unique or even a risky bet.  And yes, you can open brokerage accounts while in Bahrain to trade in USD stocks.  We have discussed this topic elsewhere on the forums so use the search button.

Then if you really want to boost returns, there is something called leveraged investments or in other words, borrow someone else's money to invest :).  The way it works is, for individuals in Bahrain; you open an account with an offshore bank through a bank in Bahrain e.g. Citibank Bahrain offers this for it's branches in Singapore and Jersey but you MUST meet eligibility criteria for Citigold i.e. deposit or have relationship of $200K.   Then you invest in a monthly dividend international mutual fund and get the bank to leverage (or loan) that twice or thrice for you e.g. you put $100K into a mutual fund that pays monthly dividends in cash and ask the bank to put $200K into that fund in your name via a loan.  Now assume that the fund distributes 6-8% dividends (normal for funds of this type) annually which means you get a monthly payout of $2000 and after deducting interest of the loan, you end up with close to $1500 in cash per month.  So practically speaking, you stand to make $15K a year on $100 invested on your OWN money - this is a return of 15%.  Of course, the risk level is much higher when you are leveraged as if the funds fall beyond a certain %age, you get margin calls.   I am invested into this product as well and let me tell you, it was a nervous Nov/Dec 2018 when the stock markets were going down, I was in the hole for close to $30-40K and close to a margin call - so what did I do?  being a savvy investor, I actually held and looked to invest more to do dollar cost averaging.  Right now, I am still $10K down on value but made back $12K on dividends for this time period that I held it - so I didn't really lose!

I am just trying to give you a flavor of whats out there.   I can write on this topic for a 100 pages but just remember, it is all about the risk that you are willing to take.  There is NOTHING that will give you VERY HIGH returns without the RISK that you can LOSE IT ALL. 

If you can't take the risk, then the investments that you have done now, are perfect for you - except get a term policy instead of education plan to safeguard for your kids education in case you pass or adjust the plan to have a cash value at the end of a certain time period i.e. when your kids become of university going age.  Plus try to buy property off-plan and make payments - that should give you some value appreciation when it is ready and then save rent at the end of the day.   All of this is not very exciting or provides the most return but it is safe and secures you in the event of any issue.

Dear XTang,

I was certainly expecting the first response from you - being the 'Messiah' of the expat community on this forum    :)  - however, the speed of response has restored my faith in humanity where there are still people in the world to share their two cents without anything in return! (as per the look of it  :D)

Thanks so much and allow me to spend sometime on your valuable advice.

Meanwhile,

Happy Iftar

Hi XTang,

This discussion needs so much more discussion…

So, first, thanks for the insights provided on this, it’s surely food for thought! But I’d love you to enlighten me a bit more if not the 100 pages you mentioned..

I totally agree on the point about the glorified salesmen regarding the insurance scheme I opted for and although we as a couple had numerous meetings before we opted for the plan, most of was a lot of technical jargon which left us with a big promise of great returns…to-date I am bit confused about how the plan actually works, however, the idea at the time was to set something aside and so that was it…
I understand your point about going for just the protection bit, but when you say term plan…I believe you mean the one having a maturity date so there was like more then one plan, an education plan for 19 yrs and an income plan for 65 years. Now,  I believe the 19 yrs is more of a term plan and it mentions ‘account value’ which I assume is the cash value of the policy.

In the current scenario where approximately 7-8 years have elapsed for the 19 yr policy and I see the account value at -10% of the contributions, would u suggest I try and convert it into a shorter term policy etc? or better yet give it up, get my cash back (whatever value it stands at) and utilize the money for other protection policies say cheaper life insurance just providing coverage without any return on investment etc.

The next point about Gold, /!\ I AM A STUPID SPAMMER /!\ return over 10 year period is pretty disappointing but it seems that’s what its getting at given the history of Gold prices…this is good info as well…so if holding physical gold isn’t that a great an idea (unlike what’s fed to us as youngsters to invest in gold rather than buying the latest tech device!  :|) what did you mean by ‘It is better to buy options vs hold the physical commodity’?

The third point about the stock market…I am of the mindset that you need to be an investment banker to get into this game…or at least be good at Math!  :huh:

Having said that, this interests me a lot and have been looking at some courses/workshops to get around this but oh how much I wish I’d have listened to my dad telling me to stop procrastinating  :sleep ….there is simply no time now to learn new things! What in your opinion is  good start to learn more about this….

The stock example is surely something worth exploring given the kind of savings I discussed but the leveraged investments surely is too high a risk for someone like me, besides, the $200K  relationship maybe a dream come true if I make it big at the stock market!  :D

But, let me know if I'm getting you correct regarding the NYSE stock example: will it be correct if I were to say that you are making $110 monthly on the $27,800 ($55.76x500 shares) that you bought. 8 months into the investment you’ve made around $110x8 = $880

If you were to sell it today, you’d be getting $71x500=$35,500 and it all goes spiralling down if God forbid, the value of the shares was to fall down...Sorry, if the math seems too simplistic but I really would love to get the math behind it.

When you say, the stock pick wasn’t unique or risky – how do you gauge that on a beginner level (I know this involves a lot on expert level), do you read about the company? Follow its trend in the market??

As you said this is a big topic but I’m hoping something a bit different to pick your brains away from the visa and LMRA banter…………..like I want to go on about the property bit but that requires me to break my fast first!

Thanks for your time so far…much appreciated….

TT
~I have no special talents. I am passionately curious~ Albert Einstein

Not knowing which plan you have, I would guess that they told you that you have to pay premiums for 20 years and then the plan lasts 65 years?  This is a whole of life policy with fixed premium payments.  It will only last that amount of time if the cash value of premiums is able to sustain it.   What I meant is that if you want protection i.e. something for your family in case you die, then you get a term policy and pay a small premium every year.  If you die, your family gets the money but if you don't, you don't get anything back as there is no cash value.  But it is much cheaper i.e. differences in premiums vs. a WOL policy could be up to 10 times less for a term policy.

By option I meant, you can invest in a fund that holds gold or buy commodity options through a brokerage - this gives you the same return but without storing physical gold in your house which is a risk.

You can always google how stock markets work - it is important to learn the concept rather than the technicalities.

Yes, your math is correct.  And yes, you have to look at the company, its business model, historical trends to ensure that you don't get stuck.  If the whole market falls, it is ok to take a hit in the short term.  If the fundamentals are correct, then it will bounce back.

Agree with XTang (As it is obvious, you hardly can disagree with him :cool: ). Anyways I will add few points, though I am not an expert but have some self explored and self experienced things to share.
1) Read the book "Intelligent Investor". The book is for like beginners, not about how to select the stock, but how to stay invested and plan for yourself depending on your risk appetite. I started the book, read few chapters, unfortunately yet to finish it, but the basic concept of investing with due risk and discipline which one can afford is hammered so frequently in the book that you won't get it wrong by any means. By the way this book is by the Guru of Warren Buffet (you might be knowing it already though). And it is all about value investing.
2) Never get pulled away by advise of anyone showing or telling you about better returns on some stocks or by some methods of investing until you understand it yourself and have done minimum required study of that by yourself. I have lost much amount based on trust and advise of my well wishers. It's not that they did it deliberately, but it is because the people who may sound or look very smart in such things, will actually be like you only.
3) Looking historically, it will be good to save your portion of funds in USD (in any form, like funds, stocks or even Fixed deposit). No particular economy is always safe, though if you have to bet on, it must be on the lowest risk.

I hope this adds something in your enthusiasm.

1) Couldn't agree more.  One of the best advice WB gives is to only invest in things you know about e.g. stocks in companies whose business model you understand.
2) Exactly.  I have been playing around for decades but I still lose from time to time.  But I make sure to follow the basic principles i.e. diversify, take measured risk and get in early / leave early.....so never been wiped out
3) Yes, always keep your funds in stable hard currencies.  USD is a good bet.  So is EUR minus the blips nowadays.  And I will do you one better; safeguard against banking failure as well - never put all your eggs in one basket and never keep your money in places where you can't control what happens to it when you pass i.e. Shariah law in Islamic countries.  Keep it all offshore i.e .channel islands, Singapore etc.   This one applies if you have enough cash to be able to do that

If you are not a seasoned investor and don't understand market fundamentals, then don't do this:

1) Don't mess with FX trading or options or commodities
2) Don't trade on margin or leverage
3) Don't give into emotions i.e. sell when the price is falling or buy when the price is rising.  Most times, the exact opposite approach works if the fundamentals are correct

Hi Xtang  / Logical Indian

Thanks for all your input - its been insightful..

Xtang ….With the current 6 year high spike in gold rates, is it now a good time to sell gold (bought in  2013 [at] $1200) to make some profit...trading at almost $1400 and expected to reach $1500? :)

https://www.forbes.com/sites/naeemaslam … fa1666275b

Regards

Depends on your goals.

Right now, the markets are in a frenzy.  Capital is flying into safe haven currencies like CHF/JPY and Gold because of the geopolitical uncertainty as well as the Fed stance on interest rates.

So if you want to make profit, you can cash out now or alternatively, hold for a month or so to try and get a bit more.  But timing the market is always risky.

hmmmm...interesting...it seems holding on a bit more is a better bet given the predictions of gold going up further...

by the way, I am having a tough time with my insurance policies (the discussion started with this). I am shocked to learn that the account value of my policies is not really cash value. I have been thinking that the account value represents the encashment value of the policies at any given time and the amount which has been deducted as part of the service deductions is the only cut I will face, but the account manager (who only wakes up when I remind them of an upcoming payment and request for an account statement) tells me due to the current situation in the middle east, if I decide to encash my savings-cum-insurance policies, I might even have a 80% reduction in the account value and this is same as value of property falling down if things are bad in the country.

This is insane and what's the point of having an insurance policy which takes away all your savings when things go bad in the country.

What would be the best step ahead given the volatile political situation in the middle east currently for this matter.

So on gold, I would hold it if it was me but as I said, it is your risk appetite.  It can go up further or go down. No can predict the markets with certainty.

On the insurance policies, I think I need to explain a few things to you so it is clear for you.

There are two type of insurance policies and the third is an adaptation of the first two -  basically to keep it simple.

1) Term insurance (Life / Critical illness) : Cheap but no cash value.  Only used as protection in case you die or get critical illness
2) Whole of Life Policy or WOL (Life / Critical illness / income benefits and other riders) : These are WAY more expensive in terms of premium paid but the agents tell you that it is an investment and your money accumulates as a saving and you get it back.  However, the truth is slightly different
3) Hybrid plan like Education / investment  : This is what you have. These are basically insurance policies that last for a shorter period like a term policy and offer you protection of capital in case of death i.e. if you die now, you get the value of the policy even if cash value is less.  On the other hand, if cash value is higher, you may or may not get a higher payout depending on policy.  These policies have a BIG valuation issue in terms of cash and surrender value because of the fixed time period

Now read on in terms of how this all works:

WOL Policies
1) The premiums that you invest within the first 2 years for most policies, DO NOT go into your cash value but instead are used to pay charges and mortality costs for the insurance companies up front.
2) From the 3rd year onward, depending on most policies, a certain proportion of premium goes into investments into mutual funds (the price of mutual funds as at a certain date is what the cash value is).  This %age in the early years could be 80-90% of your premium AFTER deducting mortality and servicing charges
3) In the later years, and again depending on policy, 100% of your premium goes into cash value

Now as you can see, if you have paid 1000 dollars for each year of the 7 years that you have held a WOL policy, the amount that would have been invested would only be around 3-5K.   Then, mutual fund prices are subject to market volatility - generally brokers push you to invest in higher risk funds so that they can price the policy at a higher return thus resulting in lower premiums for you.   However, this basically means that you take more risk on the cash value - up or down.   Generally speaking, if you hold the policy for 10-15 years, don't expect a return of more than one to two percent a year on average and that would be very good. 

HYBRID PLANS
This is even WORSE for hybrid plans as while they invest 100% of the premium in funds; they charge you fees ranging between 1-5% on an annual basis (management fees, fund switch fees as well as one-time investment fees).  So for example, if your investments return three percent only, all of these go to pay the fees and if there is a loss, you still pay fees which reduces the amount that you actually paid in.  For example, you invested $1000 and the funds held flat, this would be reduced by $1-$5 after a year......so your account value / cash value goes DOWN even if there is no negative movement in the market!!!.

Also, since the insurance company is NOT recovering all of their major costs and margin upfront like they would with a WOL policy, they institute something called a surrender value which is to discourage you to cash out early.  If you do cash out early, they recover all their associated costs.   

So your account value is the cash value and what your agent is quoting is the surrender value.   This will ALWAYS be lower than the cash value in the early years EVEN if the mutual funds are performing well (only way it will be positive if the funds have given unbelievable return in the very high double digits and are able to cover the difference between cash & surrender values.  But it never happens).  The difference between cash and surrender value starts reducing year over year (assuming mutual funds value remains constant).  In the final year, if mutual fund return is flat after covering all the fees in each year, theoretically speaking, this surrender value should be exactly the cash value in your account.  So your best bet is to keep paying and hope the funds do well - keep tracking and the moment, the fund value and surrender value are relatively close to each other (small loss), cash out.   Try and also see if you can reduce the premium amounts.....this might reduce the protection in case of death though. 

In my early investment days, I was bitten by this same sort of plan.  I was locked into a 10 year plan and managed to get out after 5 years.   I broke even but only because when I got out, it was boom market time.  This made the cash value higher and when I surrendered, I got 100% of what I actually invested but only about 80% of the cash value.   But I count it as a big loss as I tied up my capital for 5 years and didn't get any return.

So for ME, the only reason that you should EVER get the policies mentioned above are:

Term policy - Get this for protection during your wage earning years to protect the family.  In fact, I absolutely recommend it.
WOL - NEVER EVER get it UNLESS you have one of the three reasons:

a) Tax benefit in your tax jurisdiction - as the lump sum payout at the end through cashing out is generally tax free unlike other investments which are subject to capital gains tax
b) You want a cover on some elements for a longer term period than the term policy can afford.  For example, you have a 20 year term policy which covers you for critical illness till 60 years of age but you want that cover for a longer period or an income benefit or whatever
c) Regulatory / Devaluation / Currency repatriation risks - Primarily applicable to areas like the sub-continent wherein you bring in USD and get cash only in local currency.  Or the USD to rupee keeps fluctuating.  Or the tax authorities give you headache.  In this case, get a WOL policy back home for future benefits cheaply and keep all your hard earned dollars offshore

Hybrid Plans - NEVER EVER get these.  Period.  Bad bad bad protection and even worse investment.

Hope it's clear now?


On another note, to give you an idea how I am invested and the reasons for the same.

Insurance policies

1) WOL policy back home with Education plans for the kids - I got these when I was younger and it is in rupees so very cheap.  I kept them because the purpose is to have protection & critical illness & income benefit cover in local currency (don't want to transfer USD back home in any circumstance due to devaluation and regulation risks).  After 11 years, I am about 1% up - I will cash these out in the next few years to buy property but not fully.  Partly only so as to keep the income and critical illness benefits alive
2) Two term policies, one with Zurich international and the other with Friends provident.  Cover me for 20-30 years with critical illness cover
3) One WOL policy with Zurich.  Protection amount is small but only got it for critical illness cover beyond 30 years and to get income benefit (i.e. family gets a certain amount a year if I die now, separate from protection benefits)

Excluding point 1, the other policies are incorporated offshore i.e. they will be in force even if I change countries and the payout in case of any issue is into a bank account of my choosing anywhere in the world.  Plus most importantly, these are subject to the the laws of Channel Islands i.e. international inheritance law standards and not Shariah law as most of the policies incorporated in GCC would be.

Stocks / Investments

1) Invested into the US stock market as mentioned before - to generate return from stock price appreciation and some monthly dividends.  Only care about stock price to increase my capital when I sell
2) Invested into leveraged funds and generating monthly cash in USD - leverage only to boost return %age as explained before so I get high monthly USD cash inflows.  Not at ALL concerned about fund price so long as it doesn't result in margin calls

Cash / Property

1) All cash in offshore bank accounts and in USD; don't keep much cash in GCC and try to keep a float of cash to cover my living expenses for at least 6 months on-hand offshore at all times.    Purpose is to have liquid resources in case of emergency and / or to make quick investments.
2) Property back home for own living only and buying apartment in Bahrain for visa.  Also exploring options for buy to let property in Europe (cheap student accommodation and parking lots at airports) for rental yields.

I am generally not too hot on property.  You should have your own home to live in if you lose job etc but beyond that, it is all a rental yield game on as low a cost as possible. 

Because:

1) Property is not very liquid - forget the market movements; just getting cash in an emergency is not very easy 
2) If you die, as a Muslim and even have a will, inheritance matters are a pain for your heirs in Muslim countries as Shariah law will always apply

Xtang, this is really valuable information. Thank you and thank you again for taking the time out to explain this in such simple terms and such detail.....and even divulge with information as to your own personal course of action on this...that's the thing..you know....people all around you give you tons of advice but hardly ever reveal their own strategies which have benefited them. So this really is a big deal. Lots of duas and well wishes for you!  :thanks:

I will go through this post in depth as some of it is still a bit technical for me…but it sure gives me the confidence that either protection plans, commodities, property or stocks   - a diversified and well researched investment portfolio will give the right returns and this can only be gained by experimenting and diving in the deep end. If I continue to only not take any risks…well the return will be small too. This also gives me hope that I’m not alone in getting my fingers burnt while experimenting.

And yes, what I understand with this discussion is that I have eventually picked a hybrid plan and I now need to see how to get out of it with maximum gain and it’s obvious at the current account values I shouldn’t touch it for some time more…

These are actually three policies taken in 2012:
1.    Education Protection Plan for elder child– 19 years (in my name) 
2.    Education Protection Plan also for elder child-19 years (in my husband’s name to distribute the risk between both parties apparently)
3.    Retirement income plan -  65 years plan

So far, we we are like almost like  -16% of our actual overall contributions and I haven’t yet done a year to year analysis to determine if this number is increasing or decreasing each year…

And finally you don’t seem to encourage Islamic banking and my polices are from a Sariah complaint institution so probably that’s another important point to consider…ironically enough the investment funds listed there show names like Alahli Europe Index, Alahli North America Index… :huh:

What is the retirement income plan?  is it similar structure to the above 2 or is it a WOL policy?

And you didn't need to get two plans to distribute risk.  You could have had a single plan as JOINT policy holders.  That way they guarantee two lives on EITHER / OR basis.  Would have been cheaper re: fees.

I don't encourage creating assets in jurisdictions which would be subject to Shariah law, in the event of your death, but ONLY IF YOU ARE MUSLIM.  These would be policies or items incorporated in the GCC or other Muslim countries.  It doesn't matter where the money is invested but where the vehicle (the bank or insurance company), through which the investments are made is located or incorporated, as it owns the investments (these investments into funds are in the name of the insurance company and not you).  For Non-Muslims, the provisions of your will hold true and Shariah law is only applied if there isn't a will in place.

As far as your funds go, these particular funds are apparently created by Al-Ahli bank in Bahrain i.e. money has been pooled into these funds from Bahrain investors and the fund itself invests in North America or Europe etc (and the insurance company has bought into the Ahli fund on behalf of it's policy holders who have chosen that option).  Truly international fund managers are people like Blackrock, Templeton etc.  The fund would read in that case "Blackrock Europe index".  However, you can invest in these funds too BUT be aware, as I have said before, it is the "investment vehicle" that matters and not the funds you choose.  For example, you can invest in Islamic funds through HSBC UK and it won't be subject to Shariah law as the holder of record in the Islamic fund is HSBC and not you (you are marked as beneficiary in HSBC systems only).   But invest in international funds through a local vehicle and it is subject to Shariah law.

Whoaa, XTang, you can mint money by charging these advises also......LOL..
BTW think-tankk,
some basics to revise
1)Must have good source of income to spare money for investments /savings.
2)Be a minimalist (I am not against luxury, but plan things according to your financial capacity and risk appetite)
3)Of your monthly budget, you must be allocating funds first to your savings/instruments, then whatever is left over- spend only that. Sounds erratic, but works in long run. You must first plan how much you are going to save/invest (be SMART with these figures, Specific,Measurable,Achievable,Relevant,Time bound)
4)Revise these plans though infrequently but regularly
5)Diversify...but not too much.
6)Take time for your own research before investing
7)Identify your type as an investor,( For example I know, I am bad at stocks, being attracted towards high returns promised by any agent/person/financial institute, I have burnt my hands in past, won't repeat it again).
8)Always decide your capacity to make losses, this is way similar to your risk appetite, though here I am talking about the money which will be kept on stake (you can decide by deducting the minimum requirement of yours with which you can sustain your life reasonably.)
9)Be grateful, as when we are talking about saving something, we know we belong to top few %ages of world population who have had enough that we can now spare.
10)Keep your fear,greed,haste aside when thinking or actually investing, but be more rational and oriented towards current scenario (Because future, no one can predict with surety).

Thanks guys for this fruitful discussion and sharing knowledge. I need to apply some techniques in order to achieve my two goals:

1- Investing my money rather than keeping it in a bank

2- Protecting my money against Currency weakening as USD and correlated currencies.

I'm still thinking of the strategy to follow based on your valuable information here.

Now, I have a question in my mind, why shouldn't I keep my money in GCC banks and is it better to transfer to my home country considering that it may lose value by local currency weakening too.

You can keep it in GCC.  The only downsides to that are:

1) Your bank account is valid only until your Iqama / residency is valid
2) If you die, for your heirs to access it; is a long process and requires succession under Shariah law

Thank you. So, the same apply to international banks regarding the long process despite Shariah laws.

As long as the bank is in a gcc country, shariah law and residency laws apply. That is why I suggested offshore banking.... But that is if you have enough money to be able to open an account there.

Hi XTang,

Could you please recommend some offshoring banks and what's the minimum deposit that they accept.

Listing the big reputed ones which you can open with while being in the GCC - no visit required. The amounts listed are the minimum required to open a relationship with them.

Hsbc expat - 60000 gbp. Channel Islands.
Barclays - 25000 gbp. Channel islands.
Lloyds - 25000 gbp. 100000 gbp if you don't want to be charged a monthly fee. Channel Islands.
Citibank - USD 200,000. Channel Islands or Singapore

You might be able to find smaller players with much lower requirements and in different jurisdictions but I can't recommend those.

Thank you XTang

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