Bulgaria property news and articles

The Need to do Something

Most of us don’t like making investment decisions. They make our heads hurt. They make us face up to unpleasant things – like taxes and death. We don’t really understand what we are doing, what the options are and what is best. We don’t know who we should trust to give us advice. We know we ought to do something, but it will wait until next week-or maybe the week after. Until then our present arrangements will have to do. If you are moving to live overseas you must review your investments. Your current arrangements are likely to be financially disastrous – and may even be illegal.

What Are You Worth?

In financial terms, most of us are worth more than we think. When we come to move abroad and have to think about these things, it can come as a shock.

Take a pencil and list your actual and potential assets in the box below. This will give you an idea as to the amount you are worth now and, just as importantly, what you are likely to be worth in the future. Your investment plans should take into account both figures.

Current Assets                Value (leva)                 Value (€)                           Value (£)

Main home
Holiday home
Contents of main home
Contents of holiday home
Car
Boat
Bank accounts
Other cash-type investments
Bonds, etc.
Stocks and shares

Future Assets                  Value (leva)                     Value (€)                              Value (£)

Value of share options
Personal/company pension (likely lump sum)
Potential inheritances or other accretions
Value of endowment mortgages on maturity
Other
TOTAL

Who Should Look After Your Investments?

You may already have an investment adviser in the UK and you may be very happy with his or her experience and the quality of the service you have received, but this person is unlikely to be able to help you once you have moved to Bulgaria. Moreover, he or she will almost certainly not have the knowledge to do so. He or she will not know about Bulgarian investments that might be of interest to you. Even if he or she has some knowledge of these things, your investment adviser in the UK is likely to be thousands of miles from where you will be living.

Nor is it a simple question of selecting a new local (Bulgarian) adviser once you have moved. They will usually know little about the UK aspects of your case or about UK tax and inheritance rules that could still have some importance for you.

Choosing a financial adviser who is competent to deal with your needs once you are in Bulgaria is not easy. By all means seek guidance from your existing adviser and from others who have already made the move. Do some research. Meet the potential candidates. Are you comfortable with them? Do they share your approach to life? Do they have the necessary experience? Is their performance record good? How are they regulated? What security, bonding and guarantees can they offer you? How will they be paid for their work: fees or commission? If commission, what will that formula mean they are making from you in ‘real money’ rather than percentage?

Where Should You Invest?

For British people the big issue is whether they should keep their sterling investments. Many will have investments that are largely sterling-based. Even if they have investments in, for example, a Far Eastern fund, these will probably be denominated in pounds sterling and they will payout dividends in pounds.

You will be spending Bulgarian leva. As the value of the Bulgarian lev fluctuates against the pound sterling, the value of your investments will go up and down. That, in itself, isn’t too important because the value won’t crystallise unless you sell. What does matter is that the revenue you generate from those investments (rent, interest, dividends and so on) will be paid according to the fluctuations in value.

Take, for example, an investment that generated you £ 10,000 per annum. Rock steady. Then think of that income in spending power. Your income will vary as the difference between the sterling and the lev varies. If the lev increases in value compared with sterling your income will increase, but if it falls then you will have a drop in income. The same result follows when you look on it as sterling changing in value.