The Australian Dollar has weakened by more than 20% over the last 12 month’s compared to both the US and Singapore Dollar. When I first moved to Singapore nearly 3 years ago, the Australian Dollar was worth approximately 1.3 Singapore Dollars and now it hovers around parity.
How can Australian expats take advantage of a weak Australian Dollar?
- Invest in Australian Property
As Australian Expats, we are particularly known for our love of ‘bricks and mortar’. Whether you have ‘lazy equity’ in your rental property in Australia, or you’re looking to get started with your first investment property, this can provide an avenue for you to utilise the weaker Australian dollar, allowing your deposit to go further than it would have just a year ago.
You can read my article on whether property or shares are a better investment here – https://singapore.feebasedfinancialadvice.com/property-vs-shares-which-is-the-smarter-investment/
- Invest in Australian Bonds or Shares
You could also start investing in Australian Dollar-denominated shares or bonds giving you exposure to the weak Australian Dollar. It’s important that you also consider the safety and relative value of these investments. You could also add to these investments inside your Australian superannuation fund.
- Reduce your Australian Debt or Add to Your Offset Account
If you have excess cash, it could be a worthwhile strategy to pay down your non-deductible debt (such as credit cards or other personal loans – what we consider BAD debt) or add to your offset account. Your offset account allows you to add cash and reduce the interest payable on your mortgage. Importantly, this cash remains accessible providing you with greater flexibility. It’s important that you also consider the tax liabilities of such a strategy.
These are three of the opportunities you have at your disposal to take advantage of a weaker Australian Dollar. I hope you find them useful.
To Your Financial Success!
Jarrad Brown is an Australian-trained and qualified Fee-Based Financial Adviser with Australian Expatriate Group of Global Financial Consultants Pte Ltd providing specialist financial advice and portfolio management services to international and local professionals in Singapore.
Book a complimentary consultation here.