Hoxton Life

Moving to Dubai? Here’s Why Financial Planning is Essential! - with George Stainton

• Hoxton Wealth

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In this episode of Hoxton Life, we sit down with George Stainton, a financial planner at Hoxton Wealth, to explore why financial planning is crucial for expats. Based in Dubai, George advises both UK and US expats on cross-border financial strategies, tax planning, and wealth management. We discuss the dangers of delaying financial planning, the benefits of an international approach, and real-life success stories of expats who transformed their financial futures.

Key Takeaways:

  • Expats often underestimate their financial needs and delay planning - this can be costly.
  • Many UK expats don’t realise they can still contribute to their state pension from abroad.
  • The lack of structured pension schemes in the UAE means proactive planning is essential.
  • Behavioral coaching helps investors avoid emotional mistakes, like panic selling.
  • Hoxton Wealth’s borderless approach ensures expats have financial continuity no matter where they live.

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Speaker 1:

We're having the biggest net migration of wealth that history has ever seen. We have hopefully built a borderless financial services company by working in stockbroking does it transition across well into financial planning?

Speaker 1:

I know people that have been and gone in this country five, six, seven, eight, nine years with less than they came with, not even the same amount of less, because they've got caught. Financial planning is looking at everything. Is creating goals and objectives for our client if they've got court. Financial planning is looking at everything. Is creating goals and objectives for our client if they've not already got them. It's helping map out the future, not just for themselves but future generations as well. She was fuming with him, fuming with me. She was wanted to sell out of her portfolio. It took a lot of coaching and a lot of mentoring and a lot of reasoning to encourage her to stay invested and tell her that this will not last forever.

Speaker 2:

So, george, thanks so much for joining us today on the Hoxton Life podcast. How are you?

Speaker 1:

Yeah, very good, thank you. Thanks for having me.

Speaker 2:

Good, good man, fantastic. Well listen, let's just kick things off by just giving us a brief outline of your career history and what you do here at Hoxton wealth yeah, so I actually started my career in the police force I worked for kent police when I left school.

Speaker 1:

Um, this was post financial crisis, though, so very bad times working for the public sector with all the cuts. Um, I was in the investigations department, so essentially doing back office investigations looking at linked crime scenes, cctv stuff basically anything that could get the coppers on the streets and out the back office. But, as I said, it was a bad time. Lots of people were leaving and getting sacked, so I quickly realized that was not the best place to carve out a decent career. And then I'd always been good with numbers and was interested in financial services, so went up to the city of London as a very young 19 year old and became a junior stockbroker at the age of 19, and then went through my investment exams over a three-year period. I was given investment advice within SIPs in the UK and ISAs so self-invested personal pensions, which we still advise on today and ISAs. And then moved over to abu dhabi in 2017 and started working for a international advisory firm. Um worked for them about for about six months, then moved over to oxton at the very beginning in 2018. I think I was employee number seven back then. Um, since then did a lot of international exams. So UK qualified, european qualified, middle East qualified, australia qualified, us qualified. So help clients all over the world with their cross-border needs and their financial planning needs.

Speaker 1:

And then, moving forward to today, I guess so left Hoxton in 2022, went to a competitor for a few reasons essentially, went to a competitor. For a few reasons essentially, um were it was a little bit sold the dream by another company um, in terms in terms of what they were promising, and then hoxton. It was a bit of a difficult time in the industry so we was doing a lot of pensions business, a lot of focus around that market, and then it was a difficult, fairly difficult time. So when I was the competitor, realized that they didn't really come through on the promises, ultimately that they gave me, and then I saw Hoxton go in an upward trajectory whereas the company I was going with was heading in the other direction. So then came back in 2024 in April and have not looked back since. I've really enjoyed coming back and seeing what's happened to the company, to the technology and everything that they've put um, put the work in the background to build what they've created today. So that's me in a nutshell fantastic, great overview.

Speaker 2:

Yeah, thanks, um short stint in the police force into stockbroking. Stockbroking is. I've spoken to a lot of quite successful financial planners who started early on as a stockbroker. Do you feel? That there is a kind of an you know an education piece of a career, education piece by working in stockbroking. Does it transition across well into financial planning?

Speaker 1:

yeah, transitions very well in terms of your purse because essentially it's all about the clients and looking after the clients and giving them advice and, essentially, winning business as well. At the end of the day, you're not going to be a very successful stockbroker or financial advisor if you can't get any clients. So those skills are very transferable, but the day-to-day model and the advice is very, very different. So stockbroking I always felt was a bit of a dying breed because you made money, essentially on a commission from trading effectively. Um. So the business model at hoxton and as the modern world is within financial planning, it's an assets under management model. You're not encouraged to over trade. You charge a percentage of assets under management.

Speaker 1:

Um, we had there was always a big, big uh question that we had in the stop broken world of what's going to stop you from over trading me. If you only earn money if you trade and you can't argue with that can you effectively? So it's a it's, yeah, a dying business model, um, but the skills are very transferable. You learn a lot about financial services sector. You learn a lot about regulations, about how to analyze companies, how to look at markets, how to understand markets, um, and it's just very restricted. I think it's a very limited area of advice, whereas financial planning is a lot broader, much more involved in every part of the person's finances. When we were stockbrokers, we were just looking after one account and one part of their finances and weren't looking at the overall picture, whereas we do the complete opposite Now we look at everything.

Speaker 2:

Great, so you're working at Hoxton Wealth. We are an international financial planning company. Why is it important that you work at an international financial planning company? Why is it important that you work with work at an international financial planning company, as opposed to, say, just being based in the uk?

Speaker 1:

I think the world is so transient now I've mentioned it earlier but we're having the biggest net migration of wealth that the history has ever seen. So people come into the uae, people go into singapore, leaving places like the us, europe, the uk. You're very limited. If you're just focusing on the uk market, you're going to lose so many clients that leave and you're going to have your hands tied because you've not got the international expertise or qualifications or regulations.

Speaker 1:

So the idea behind hoxton and what we do is we have hopefully built a borderless financial services company and I say that to my clients that have worked in the uk and have left and they may go to asia or go to australia or go to the us is that you can deal with one person and you don't have to start that painful process again of trying to find a trusted advisor and go through meeting lots of different people and doing your research and due diligence if you've been working from one person that you started with you in the uk and then they went to with you into australia and then you came to dubai and then lots of people work in different locations.

Speaker 1:

So you are gonna lose a lot of clients if you focus on just one market. That's the thing, especially in the uk, because they're losing I think it's 17 of their millionaires over the next few years because of the current political situation. So you are, uh and you know, no matter how good the relationship is, you can't advise them if they're over here or if they're in australia, or if they've gone to singapore.

Speaker 2:

So and are you focusing purely on uk clients, those that have left the uk, moved around or do you deal with, like us, domestic as well? They're moving from the us? You've got qualifications in multiple jurisdictions. I mean that's fantastic within its own right. Doing those qualifications aren't easy, yeah, um, so having them in place is a um. It's evidence that you care a lot about the client journey, etc. So, but does it actually open you up to domestic clients moving around? So what's the what's the reality of that?

Speaker 1:

yeah, absolutely so. Um, in australia, for example, I've got quite a lot of australian clients that did have uk pensions migrating them over to the Australian market, which is really tax efficient. In the US there's US citizen clients that had UK pensions. And then I'd say the main area of advice that I concentrate on now is Brits abroad. So British people anywhere, especially in this region the tax planning is really really good here and then US citizens overseas, because there's so few people that can help them because of the lack of regulation and understanding and just being scared of the IRS and not upsetting their accountants and their reporting. So those are the two main focuses at the moment.

Speaker 2:

Do you deal with Brits domestic? Do you deal with Brits in the UK as well as abroad?

Speaker 1:

Yeah, yeah, look after the UK market. On the FSA register I've got UK qualifications and advice as well, so and that was where my advice started in the uk, so it's a full circle now that it's um given giving uk advice as well.

Speaker 2:

Still, what percentage of your clients, would you say, are still in the uk?

Speaker 1:

a small amount. Maybe five percent of my clients are in the uk, so you really are focusing on that international market, aren't you?

Speaker 2:

yeah, absolutely it's interesting because we have some advisors. I was speaking to mo and mo's got probably 65 percent. His clients are uk-based, yeah you know, but he he himself bases himself out here in in dubai, but he's focusing on mainly kind of tax planning for uk clients. He sees that as a big area and a big niche for him and his expertise of yeah what he's building, um, but positions himself out here in dubai.

Speaker 2:

Now anybody listening to this and maybe um a client, a potential client, perhaps someone's researched your name. They're going to find this podcast. It's important, I think, that we ensure that anybody that's looking to do to work with us for their financial planning work, work with you, understands that we are heavily regulated. We are sort of regulated in multiple jurisdictions across the world. Just give them a bit of confidence, like just the very fact that you're out here in the UAE and based here. How can we give them confidence that they can still continue to, they can trust the advisor that's sitting out here in the UAE, even if, say, for example, they're in the UK?

Speaker 1:

Yeah, it's a good question because we come up against that a lot and what I would always say is if you're in the uk and you're working with an advisor in london, or unless they're around the corner from you, you're not going to meet them face to face every quarter. These days, people will do everything over zoom and teams and a lot of the conversations will be digital, but every bit of advice goes through the local regulator. So if we're looking after a 401k or an IRA, it goes through the US regulator. If we're looking after a UK SIP or an ISA, it goes to the UK regulator. It's exactly the same as if I was based there, and I do also travel and I'll see my clients face to face as well.

Speaker 1:

So that's not. It's not like we're never going to meet and they're always invited to come to London or New York or Miami or Dubai If they're in those countries, if they want to see the office. But it's not like we're regulating or giving regulated advice to clients from our Dubai office through our Dubai license. So obviously that would be extremely worrying and I definitely wouldn't sign off on that paperwork. So yeah, exactly.

Speaker 2:

So, for those that are now listening to this podcast episode and the word yeah, financial planning, right, the phrase financial planning. Let's just give a breakdown of exactly what that actually means. What can somebody expect when they sit down with a financial planner or use the services of a financial planning company?

Speaker 1:

I think a good we spoke about earlier. But the big difference between investment advice stock broken and financial planning. And financial planning is looking at everything, is creating goals and objectives for our client, if they've not already got them. It's helping map out the future, not just for themselves but future generations as well. It's looking at tax efficient strategies. It's looking at investment advice, which is included in that. It's looking at broader we'll call it lifestyle planning, I guess is looking at the bucket list for their retirement and digging deeper just beyond.

Speaker 1:

I want to retire at 65 and do a bit of travel, it's like. So why do you want to do that? Where do you want to travel? Creating those ideas for them? Um, and really just mapping out everything. A lot of people, especially when markets are performing well, it's easy to make money in the markets. You can just be tracking the S&P 500 for 40 years and you're going to make money. But when it comes to actually retiring and reaching your goals and objectives and protecting yourself, which is a real key, valuable facet of financial planning, that's where the key advice comes in and that's where the value of it is. But yeah, it's really just looking at absolutely everything, even down to putting a will in place and trust, and the amount of people I come across that don't even have a will when they're in their 40s or 50s and it's just yeah, that's financial planning as well great.

Speaker 2:

I love the fact you touched on lifestyle financial planning there and building those goals, those bucket lists of things that you can do and a lot of the time. I think people don't really sometimes understand just how close those opportunities are and sometimes people are continuing to work when actually they could stop and live the life that they actually want to live right yeah absolutely so. Lifestyle financial planning. Like for those that don't understand that, just go into a bit more, more detail, right?

Speaker 2:

so let's say um, clients come to you that they're interested in using your services. Why don't you just sort of talk through what the process of using you as a financial planner would be, and what part then? Does lifestyle financial planning come into it? And I think as well, why don't we talk about the charging structure? Because often people want this service but they don't quite understand how much it costs or how they are charged and why. So let's go through this process then.

Speaker 1:

So lifestyle planning it's very similar to financial planning, but it is more around building that bucket list and that lifestyle. So actually looking at where are you now, where do you want to be, where are you going to retire, where are you going to travel to, how are you going to migrate that wealth over to your kids and and building a proper picture for them, rather than just it being like you're going to give you four grand a month and that's it, without any you know, plan in the background, effectively and in terms of like charging, so different ways of doing it. Some people would come to us and just say I want you to put a lifestyle plan together for me and I don't want any help ongoing which I wouldn't advise, by the way but it can be done and for that we would charge a fee based on how much work goes into it effectively, an hourly rate. But the majority of our clients would use us on an ongoing basis, whether it's ongoing investment advice for their pensions accounts or brokerage accounts or stocks and shares, and that's what we I'd always say is a very cost efficient way to pay for your financial advice and your financial planning, because if we're looking after an IRA for you or a SIP, it's still tax deferred money.

Speaker 1:

At the end of the day, the fees are coming out of your, your pension assets. But that entitles you to putting the full cash flow planning together for you the lifestyle planning, looking at tax advice, looking at asset allocation, investment strategies, wills, power of attorneys, trusts, all that sort of stuff whereas if you paid for all of those services individually, one by one, it'd probably be in a very expensive bill that you have to pay for out your own back pocket. And that's the most popular charging model which clients love, because it's vested interest for us to continue doing a good job for our clients, because they don't have to continue paying us if they don't feel there's value in the service. They're not tied into us, they're not tied into anything we recommend. So if we're doing a good job for them and they are, they find value in the service then of course they'll continue to pay us through through their accounts.

Speaker 2:

We're obviously very heavily invested in technology here at hoxton wealth and we've got the hoxton wealth app. What part? Does that play in the journey when it comes to keeping clients updated and informed on how their investments and pensions and everything else is performing.

Speaker 1:

It's funny. So I speak to a lot of people, um, on a regular basis and the one thing I ask them is how do you track your wealth? And 90 I'd even say 98, 99 of people still track their wealth on a spreadsheet, which is crazy, because that was invented in the 90s, wasn't it? So this is whether you're a client of Hoxton or not, you have the ability to link in your accounts from different providers. So you could have an IRA in the US, you could have a SIP in the UK, you could have an investment account in the Middle East, and it can link everything together through the providers that we work with. Then, off the back of that, if you're a client of hoxton, then we can sit down and work out automatically, link in your assets that you've linked into the hoxton wealth app.

Speaker 1:

Then we can put the plans together through what we call well flow, which is the technology we've built to help map out that lifestyle plan, to look at the growth rates of your current assets, your current savings capacity, what contributions are going where, what pensions do you have from different states, so social security in the us or the uk state pension and then, using your assets, then we can link in different scenarios as well. So I can show you the difference between retiring at 65 and 63 or 65 and 67. We can show you the difference between making four percent in your account or five percent on your account, um, and mapping out all these different scenarios, because plan A often doesn't work, plan B often doesn't work. It may be plan C, d or E that may work, but at least if you've mapped it out, you know what is going to happen if that is the plan that ends up being true.

Speaker 2:

So You've got a real life example, haven't you, of somebody that retired but didn't quite know when they could retire. Maybe they retired five years early, I think you said can you just run us through that? I always think a good case study gives people a bit more meat on the bones of how good financial planning can actually lead to um, good, good rewards at the end yeah.

Speaker 1:

So there was a couple in the uk that I, excuse me, look after and they have been very successful, worked for big corporations in the us and then the uk. They they're retiring very shortly in the UK, very, very good in their own field and their own expertise, but have never, ever, ever done any financial planning and never sat down with a financial planner. Not because they've not been interested in it, just because it's never been on their to-do list. And they're 65 now. Their plan was to retire at 69 because that's when they thought they could afford to retire. They were delaying their social security.

Speaker 1:

They're going to take their state pensions within the next year and we sat down and did proper cash flow planning with them. We worked out what they've got in the US, what they've got in the UK, all the various sources that are building up. They've never even used an ISA in the UK, even though they've been UK tax residents for many years. So we're looking to implement that as well. And after doing the planning and working out that they still want to leave some assets to their children as well, so building in a bit of a buffer towards the latter stages of life, we worked out that they actually don't need to be working at all and they're 65 and they're going to retire this year.

Speaker 1:

They're very happy with the planning. They're actually going to end up with still a fair bit of money left based on their current expected retirement expenditure. So I've encouraged them to spend more money than they're planning to, which is always a really nice conversation to have. But without having a conversation with them or without them meeting someone at hoxton, well for myself, they would probably still be working until 69 and would have wasted four years of their retirement. So that's a really, really good example of lifestyle planning helping people map out goals and objectives.

Speaker 2:

Yeah, there is clearly value in engaging with a financial planner. Why do you think people leave it so late?

Speaker 1:

I always get this from clients is that it's not a priority at the moment and it's not the top of my to-do list and it's a kicking down, a kicking the can down the road method, I think, because people are busy in life, they are working, um, they think that retirement is so far away. When you speak to people that are retired and they say it came around way too quick and they wish they'd done some some planning sooner. So it's very common to want to kick the can down the road and then, before you know it, you're 50 or you're 60 and you've not got a plan in place and you've not thought much about retirement because it's not top of the priority. But if it's not top of the priority, I always ask people so what's going to change between now and five years' time for it to be a priority? Nothing actually changes in your life. You're still doing the same job. You're still contributing to a pension scheme. You're just. You're just five years closer to retirement without a plan. Nothing's going to change, it's not. You're not going to magically wake up one day and be like oh, I need to sort this.

Speaker 1:

So the sooner you start the better, because then you can actually work out properly when you're going to retire and if you need to save more. It's a conversation can go three ways really. You can work out that you're on a really good track for retirement and that's a nice conversation to have and you don't need to do too much, just continue on the same plan. You can work out that you're just about to meet your goals and objectives and you may need to save a little bit more. Or it can be a bit of a kick up the backside and say you're actually way behind where you need to think you are going to be and you may be relying on this inheritance that may come in the next 10, 20 or 30 or 40 years, but actually it's a bit of a wake-up call and you need to do something about it you don't know what you don't know um, but when you do know, sometimes it sets you free yeah, absolutely, I found that especially around money.

Speaker 2:

It's one of those horrible things. It makes you feel uncomfortable and clench up when you talk about it and you think about the future and have I got enough? And when there's a lot of people that struggle to pay the bills. Right, it's like you look at the conversations in the newspapers. As you know, cost of living crisis is crisis across across the world, right? So there's a lot of negativity when it comes around money and I think sitting down with somebody and building a plan is a huge value add, but some people don't think it's value add. Yeah, what would you say to them?

Speaker 1:

I mean, if you just look at examples of people that have worked with advisors and people that haven't effectively and there was actually a study released in 2022 by v and consider that Vanguard were invented.

Speaker 1:

Their whole idea is low cost tracker funds low cost, low cost, low cost. The markets perform well enough. Track the S&P 500, track the GILTS market, track the Treasuries market. They released a study in 2022 called Vanguard's Advisor Alpha and they said that the average financial advisor, over a lifetime cycle of looking after a client, can add up to 3% a year in value through. It's not going to be 3% every year, but the value is where when it comes to things like behavioral coaching, when it comes to tax class allocation, when it comes to tax planning, which is massive, when we work with expats that have got multiple tax jurisdictions and needs a proper plan when it comes to drawing down tax jurisdictions, and needs a proper plan when it comes to drawing down um. So if you look at people that have had an advisor in the past and have not, I guarantee the results will be much better when you work with people that have, or if you look at people that have been working with an advisor right now you could probably.

Speaker 2:

you know you're working with 95% of Brits abroad, as you put it, yes. Us citizens as well and US so expats, expats, yeah, expats, 95% of them. Let's just kind of focus on the UK at the moment and state pension. What's a great tip right now? What's something that people who are living abroad might not be aware of, but should be?

Speaker 1:

That's actually something that I'm doing at the moment is that, um, there was a deadline to top up your missing national insurance contributions. It was, excuse me, to 2023, but they've extended it to the 5th of april 2025, so this year. So you've only got two months to implement that and effectively. I think the gap is from 2006 to 2015 or 2008 to 2015, but you can fill in any missing national insurance contributions.

Speaker 1:

We sit down and calculate whether it's worth doing that and I think the average contribution as an expat, which is class two, voluntary would be seven to eight hundred pounds a year. Don't get angry if it comes out much higher, but this is our previous experiences. And then when you actually sit down and work out how long you need to live to get that money back, it's about three years in retirement, so it's an absolute no-brainer. The return on that money is very, very good. The state pension is not going to change your life, but a husband and wife at the minute they would get 12 grand each if they've got a full state pension. 24 000 pounds a year is still a decent amount of money in your retirement to add to other assets and it's a guaranteed element that's always going to be there.

Speaker 2:

Uh, hopefully what percentage of expats are you talking to that?

Speaker 1:

just don't actually know that they can do that I would say way over half of the british expats probably don't even realize that. That's that's there. So some we're obviously actively encouraging our clients to do it. I'm doing it myself, my partner's doing it now I've got her on the, on the additional contribution, so it is uh, it's probably in terms of bang for your buck in the return on your capital, that's a great, great investment you touched on behavioral coaching.

Speaker 2:

That's a great, great investment. You touched on behavioral coaching earlier. That's an element of a good financial planner right. It's this behavioral coaching side. Just talk us through that. And why is behavioral coaching really, really important when it comes to investing, and have you got any case studies attached to that?

Speaker 1:

Yeah. So behavioral coaching, especially if you're working with an advisor, is taking a step back and ignoring the biases. So this is perfect at the moment when the S&P 500 has done more than 20% in the last two years is that it's a recency bias and people forget about the bad times. They forget about the COVID crash. They forget about 2022, when bonds and equities both went down around 20%. They forget about the financial crisis. They forget about the Eurozone debt crisis, where markets were very negative. So it's looking at people that in this particular example and I'll give a separate case study but people that are very heavily exposed to equity and they're close to their retirement I come across this a lot at the moment People in their 401ks or their SIBs that have got almost 100% equities because it's performing very well and they're close to their retirement. I come across this a lot of the moments people in their 401ks or their sips that have got almost 100 equities because it's performing very well and they don't want to miss out on gains, but they're so close to their retirement that if there's a market correction they are it's going to be very, very expensive for them, even to the point where they may need to work for a few more years in their into their retirement to recover the market gains. There's a statistic that if you're taking 5% out of your portfolio in retirement and the markets go down 20%, which happens every few years this happened twice in the last four and a half years the markets need to recover by 30% to get back to where it was because they'd taken money out in that time. So it becomes very expensive for them in retirement. And then another case study is so holding people's hands through tough times, when you have the herd mentality of wanting to sell and panic and getting out of everything when markets are not favorable.

Speaker 1:

I've got uh clients in abu dhabi lachi friends, um, that were introduced to me and they wanted to just start, say, saving spot with their surplus capital. I've not been doing much of it and I've been in the in Abu Dhabi. Actually, friends that were introduced to me and they wanted to just start a savings pot with their surplus capital. I've not been doing much of it and I've been in the region for a while. The husband invested in about 2020, very early on. I guess he's been invested for five years now. He did very well up to 2022. And then in and around 2022, he introduced me to his partner, his wife, who had about $100,000 of savings the majority of her savings and also wanted to invest because they wanted to grow their money and eventually purchase a property.

Speaker 1:

A cautious portfolio in 2022, unfortunately performed very, very badly because interest rates flew up, the secondary market prices of bonds went down, equities also went down and she was not happy. She was fuming with him, fuming with me. She was wanted to sell out of her portfolio. She was adamant. She, although it was her, she had the final say and it was her decision. But it took a lot of coaching and a lot of mentoring and a lot of reasoning to encourage her to stay invested and tell her that this will not last forever.

Speaker 1:

We are going through a very unique market cycle.

Speaker 1:

It was the first time in 73 years when bonds and equities fell in the same year and that hurt.

Speaker 1:

The money will will recover and they will do well effectively and then fast forward to today. Markets have recovered. They've both made some really nice gains on their portfolio and they are now selling out and going into just a short-term liquidity fund option that we have because they're buying their dream home in Australia, and that would not have happened if they had sold out during that market crash. He was always going to stay invested, to be fair. But if the lady client had sold out during the bottom of the crash, she would have lost up to 20% of her portfolio during that time and would be too scared to get it back invested, so it would not have made those returns back. And we made those returns back and now they're buying their dream house with the money that they've invested with me and that took a lot of encouraging and hand-holdholding and just for her to believe in me. Thankfully she was a friend and a friend of a friend, so she had maybe a bit more trust, but that's a perfect example of where you can add value as an advisor.

Speaker 2:

Um yeah, also, when you think about, psychologically, the impact that that would have like not being able to regain that loss because you took it out is huge and that would live with you probably throughout your retirement as well. Yeah, so there is that trust in a financial planner. It goes back to that vanguard report. You know, when you engage with a financial planner, it can have a three percent improvement on your, your investments, and it's it's so true. Um, because all these biases that we are doing just on autopilot, right?

Speaker 2:

yeah, if we're gonna absolutely you know, if you're if you're risk averse and you're really, really worried, then you could pull that money out could be the worst thing that you could actually do. Yeah, and having somebody that you trust, that you can turn to, just to even have a conversation about it, I think it's important, you know, when you're sitting there on your own and you're on the sofa and you're freaking out and you're reading all the news coming through or somebody down the pub tells you something or whatever yeah, oh, you gotta get out, get out, get out.

Speaker 2:

You gotta sell now and it's like well, being able to turn your head and pick up the phone or just jump on the app or whatever and speak to you. That's value add. Yeah, you know, and you don't know when you might need that, but it's important. Yeah, what is the cost of waiting? Let's move in into that, because advice right as a whole. We're talking about financial planning, we're talking about financial advice. We're seeing, we're talking about some of the benefits here, but there is a cost associated with waiting. We talk about some people not coming to you until they're in the 60s. Let's talk about the cost then. What is the cost of waiting to actually get proper financial planning?

Speaker 1:

yeah, and this is what we discussed earlier about kicking the can down the road and waiting until it's too late, for example. Um, this, this is just an example I put together for a client, because I always think you need a financial plan as soon as you leave university or as soon as you leave school and as soon as you're earning a wage effectively. And the sooner that you start with a financial plan, the easier it will be to reach your goal. So if you had wanted a million dollars by the time you're 60, and let's say, you're drawing down 5% a year, which is pretty standard in retirement, so $50,000 per year. So if you were 20, I think you need to save $650 per month at 5% growth. If you were 30, you need to save just over $1,200, so it doubles. If you were 40, you need to save about $2,400, so it doubles again. If you were 40, you need to save about two, four, which is, with doubles. Again, if you were 50, you need to save over six thousand dollars, nearly six and a half thousand dollars, a month to reach that retirement goal. And that's when people think retirement's so far away. I don't need to start. Yeah, I don't need to make a plan yet because I've got maybe I've got an employer contribution going in or something like that. But you may find that that employer contribution, because you've started so late, is not enough and you do need to make more contributions. It's going to be so much easier if you, if you start sooner.

Speaker 1:

I'm guilty of it as well. In my 20s I probably didn't save nowhere near as much as I as I could have done. I came out to dubai at 24. I lived a pretty good life for a few years on, uh, champagne lifestyle and lemonade pockets and, yeah, thankfully I've learned from my own mistakes. But, um, yeah, that's a very good example of why waiting is a very bad idea when it comes to financial planning interesting because there's a lot of people that come to dubai and do exactly that right yeah, absolutely, let's, just let's just talk about that.

Speaker 2:

What are some of the common pitfalls that somebody moving out to dubai may be earning some real considerable money, um, what are the things they need to be aware of, because there are no pension plans out here if you're working for somebody, for example? So, yeah, let's just talk about some of the. Let's just look at, let's just look at, yeah, like the uae, um, gcc, let's isolate it, yeah, and look at some of the things that people really, really need to think about when it comes to their future financial planning and pensions and retirement and all of that kind of thing.

Speaker 1:

So what you said is accurate. There's no structure when it comes to pension contributions, like in the UK. You get your employer match contributions. You also contribute to your state pension through national insurance. So over here, everyone is left to their own devices to create their own retirement wealth and their own financial plan, which can be scary. Some people are very good at it and some people are very structured, but I say that's that is very rare. The vast majority of people do not have the structure in place, do not have the discipline in place to build their own financial plan.

Speaker 1:

So I would say a good thing to do if you are in the ua and you are fairly new is tax yourself before anything.

Speaker 1:

As soon as your salary comes in, minimum 20 of your salary should go into some sort of retirement plan or savings or uh investment to secure your future. If you're looking at how much you were on in the uk and how much you paid in tax, I guarantee it'd be a lot more than 20. So if that's a minimum, then that's a good place to start. And then actually, yeah, sit down with a financial planner and work out how much realistically, you do need to save If you are very young and you want a good package over here, you probably need to save nowhere near as much as you think and then build and diversify the portfolio as well. So put it into an investment account, put it into fixed deposits, put it into properties and, yeah, work on a proper plan. I know people that have been and gone in this country five, six, seven, eight, nine years with less than they came with not even the same amount less because they've got caught into the pitfalls of gcc lifestyle without a proper plan. So, yeah, don't fall into that trap.

Speaker 1:

Yeah, I've heard that a lot there's a lot of horror stories like that yeah, freaks me out a little bit actually um, but I've got a plan yes um.

Speaker 2:

So for those that you know don't don't have a plan right now, but perhaps, hearing this podcast, are quite keen to get one in place. What's the first steps? What should they do?

Speaker 1:

um, I would say the first step is actually just download the hoxton wealth app and have a play around with yourself. Plug in some figures. It's free to use, you can. You can have a play around with retirement ages how much you need in retirement, work out what that looks like and then, when you get stuck and you're unsure of exactly what to, what to do and where to go, then maybe reach out and we can sit down and put in some problem planning.

Speaker 1:

But that's the first thing and actually think about, because I speak to so many people and they say I don't know when I want to retire or I don't know how much I need in retirement. Just try and answer those two questions first of all, or three questions when, where and how much. Those are the three main questions and work backwards from there. So start to really think about that and then, as I said, you can put in plans a, b and c. You can look at retirement in the UK, retirement in the UAE, retirement in Asia all very different places with very different costs of living and we can work on those plans. So start to think about that and put in some goals and objectives and build your bucket list.

Speaker 2:

Is there a lot of people considering retiring abroad? Is that more and more popular?

Speaker 1:

Yeah, I mean no offence to anyone that's retiring in the UK, but why would you if you could retire in the sunshine or retire abroad? The UK is a lovely place and I do love it with all my friends and family there, but in my 60s or in my retirement I'd want to probably be chasing the sun a little bit more and retiring abroad. So if that is affordable, I'd encourage people to look at that, and I think it's very common these days for people to want to retire outside the UK or anywhere in the Northern Hemisphere.

Speaker 2:

One of the things I would probably end this on is that if you are retiring, you're getting older. Perhaps health becomes a bit more of an issue and more of a thought process. Right In the UK you've got the NHS. I'm not saying the NHS is absolutely fantastic, but do you ever get into conversations with people that are retiring abroad? Do they ever get into the conversation with you about healthcare? And what kind of conversations are you having and what do you talk about? What do you say?

Speaker 1:

yes, there's an interesting thing called the retirement spending curve.

Speaker 1:

This is released by the us, but it applies to the majority of places as well.

Speaker 1:

So, effectively, you're spending in the early years of retirement is quite high because you're newly retired and you're enjoying and you're traveling more, and then it goes or lulls in the maybe the 70s, but actually towards the end of life it becomes very expensive because of health care costs and it's actually probably more common than not for people to spend a lot of their retirement outside the uk and then go back to the uk for more end of life because they do have a lot of help from the state and the nhs, which is a fantastic service, and a lot of people do take that for granted.

Speaker 1:

It is very expensive to be in the late, latter stages of your life abroad because you do have to pay for everything yourself. Unless you, unless you've got sufficient wealth, then it's going to be very difficult to do that. So that is very common and a lot of people do go back to the uk eventually to for the support. Um, there's people in the us that would have millions when they're 60s but end up with next to nothing. Uh, because of the health care costs when they uh, when they unfortunately pass, which is quite sad.

Speaker 2:

So we are very lucky to have that in the uk another one because it's fresh in my mind and I've been speaking to my parents about it. So they're both 70 years old and, um, they're considering actually selling their property in the uk and then choosing to rent as opposed to to buy again. It does that happen a lot, you know? Do you find that people of a certain age would prefer to rent and go abroad? So go abroad and rent, for example.

Speaker 2:

Right, yeah or are you seeing that they're buying abroad? What's the kind of trend, or I?

Speaker 1:

thought people. For some reason, people love to own property and when you look at it as a financial asset, rather than the emotional connection that you have of a property, it seems silly later in life to still be sitting on equity in a property when you could release that, especially if your kids are fairly well looked after and they don't need the money to be passed down. If you release the equity from a property, you can invest into some fixed deposits to our investments, give you a relatively steady income and then still have that capital to spend in your retirement. Personally, I think that's a much better way to use your money rather than be sitting, especially with inheritance tax.

Speaker 1:

In the uk as well, so many people are going to be paying inheritance tax on their property. Why not sell it, put it into fixed deposits and then spend the capital in your lifetime, rather than passing on a property that your kids are probably going to sell anyway? They're not, they may not want to live in it and they're going to sell it and probably pay inheritance tax. So it's not. It's nowhere near as common as it should be and I think that's a really useful tool to use in your retirement sell, rent overseas and then spend. Spend the money because you've got so much cash in. A lot of people have built up a lot of cash in property and it doesn't make too much sense to keep it because it's at the end of that, it's a financial asset.

Speaker 2:

So so, when it comes to actually sitting down with you, George, and building out a financial plan, these are the types of conversations that you're having right.

Speaker 1:

Absolutely. I'm going through that exact case study at the minute with a guy in the US that's got a property that's rented out. Excuse me, we've worked out his yield on the property Annual yield is 3%, whereas you can get 4.5% 5% in a fixed deposit at the minute. So we're having that conversation about is it worth selling the property and releasing it into something else, and at the minute it makes a lot of sense to use the cash and invest it elsewhere.

Speaker 2:

And obviously of course the inheritance tax side of things as well is a big one.

Speaker 1:

Absolutely. In the UK it's becoming worse and worse. In the US it's not a massive issue. The estate taxes start about $11.5 million, so not many people fall into that, but certainly in the uk it's a big problem.

Speaker 2:

um, because house prices have only been going one way, but inheritance taxes stayed the same for a very long period of time. And finally I've got a friend in the uk who's selling um, a recruitment business. He's really keen on dubai to live in dubai. What's the benefit of him moving to dubai and his business? Is there a tax benefit involved here? Is there something that he should be aware of? Could he avoid paying quite large sums of tax on the sale of his business?

Speaker 1:

Without getting into proper tax advice, but there are benefits if you live outside the UK for more than five tax years where you effectively would get relief on any gains that you've made in the UK. Plus, if you are in recruitment. I imagine a lot of that work is done remotely, so you can still recruit out of a business in Dubai. You can set yourself up as a freelancer. You can set a company up and just invoice UK businesses to a UAE account.

Speaker 2:

So, george, thanks so much for sharing your Hoxton life and also just giving us some real basic information of why financial planning is just so important and why people should really reach out to a financial planner at really any stage of their journey, but really preferably at the start. Yeah so, george, thanks so much for your time mate yeah, thank you very much.

Speaker 1:

Thanks for having me. Cheers, cheers, sam.