Singapore - Expatriates who have been lured to overseas postings due to high salaries and low tax rates can sometimes find themselves poorer than before.

According to Mark Elding, vice president and licensed financial adviser representative of ipac financial planning Singapore, one common mistake expatriates often make it failing to plan and research prior to the move. Lured by the promise of a higher salary, low tax rates and great experience, many expats only find out much later that the cost of living erodes any increase in after-tax earnings.

Under a false sense of wealth, one of the most common mistakes expatriates make is the failure to plan for any savings and investments and retirement. "Many expatriates do have high incomes yet they find it difficult to save, putting lifestyle ahead of long term planning. Many repatriate to their native country in a similar, or in some cases, worse financial position than when they left. This is a wasted opportunity," Elding adds.

To assist expatriates, Elding says employers can look into providing employee retention plans, where an addition bonus is given after a period of delay. The company can also provide interest-free loans to employees for them to purchase shares in the company, whereby shares are held in trust until the loan is repaid. " An employer could consider providing adequate levels of life, disability, income protection and health insurance for their employees and which can be retained even after ceasing employment," he adds.

For expatriates looking to take some responsibility in their personal financial planning, Elding gives the following tips: 

• Treat your own personal finances like that of a company. Identify your fixed and variable costs; identify any ‘leakage’ and areas for improvement.
• Ensure you are always retaining profits (surplus cash flow) and invest in assets that offer quality, value, diversity and give consideration to your investment timelines.
• Have a written plan: write down your goals and when you would like to achieve them by.
• Put in place adequate risk control (personal and general insurance), and review your current assets to determine your risk appetite for investment.