Living abroad is terrific…except when it comes to growing our wealth.
As much as we love to integrate into our local communities, our unique international profiles make investing extra complicated.
(That’s on top of the fact that understanding finance and money is hard enough in its own right).
To help expats and remote workers living here in Barcelona, we created this short guide with The top 10 tips to make awesome investing decisions while living abroad.
Build your emergency fund
Before you do any investing, you need to ensure you have a stash of cash for emergencies. Generally, financial advisers recommend 3-6 months. For us living abroad, it’s better to have between 4-7. After all, we might need to take a last-minute flight halfway around the planet. Those aren’t cheap.
If you’re a freelancer, you should aim for at least 5 months of savings before investing. Savings accounts are perfect for your emergency fund (but not much else).
Pay yourself first
Want to make sure your money goes to work investing and doesn’t just sit around?
Then you need to pay yourself first! Paying yourself first means setting up an automatic direct transfer from your bank account to your investing one.
Ideally, you set the direct debit for the day you get your paycheck. That way, you can’t spend that money. Instead, it grows exponentially in your investment accounts.
50-30-20: the magic numbers for financial freedom
You might be asking: “paying myself first sounds like a wonderful idea. One problem, though: I have no idea how much I should save.” Thankfully, the 50-30-20 rule has you covered.
This concept makes budgeting and investing a snap. Take your monthly pay and budget:
- 50% to your essentials like rent & food
- 30% for fun activities & purchases (like traveling, clothes, workshops, etc.)
- 20% towards your savings & investing
Et voilà! Now you know what amount you should use to pay yourself first!

Know your risks
Efficient investing means getting the most return possible for the least risk.
To find the best investments for your goals, you need to know what level of risk you’re willing to take. The last thing you want to do is lose sleep at night because your financial decisions give you insomnia.
Once you know how much risk you’re comfortable with, you should make
investments that go right up to that limit, maximizing your returns.
Not sure about your risk limit?
We created this nifty tool to help you identify your investor risk profile.
Check it out here (it’s completely free!):
Find the right investments that work for your goals (whether in Barcelona or somewhere else).
Successful investors always define their objectives before committing to any strategy.
That way, they can find suitable investments for their needs, increasing their chances for success.
The objectives don’t have to be complex (you could even say “grow my wealth over the long run”). Generally, though, you’ll need to answer:
- What do I want to achieve?
- How far am I from this goal?
- What investments give me the best shot of reaching this goal with as little risk as possible?
Some people living abroad could also need to factor in different currencies, depending on where they want to be when they reach their goal.
Life insurance is nice, but not all plans are created equally.
Life insurance is a popular investment in the expat community, but maybe for the wrong reasons. On the one hand, whole life insurance gives us extra protection for our loved ones if we die unexpectedly.
On the other hand, many “advisers” try to sell life insurance as an investment. The problem is that these plans aren’t great investments because of:
- High fees
- Inflexible terms
- Lack of control
- lower return
- No consumer protection
Not all life insurance plans are created equally. Do your homework before purchasing one.
Find investments that can cross borders well for whenever you might leave Barcelona.
Investing in your (financial) future is probably the best thing you can do for yourself. However, as people living abroad, not all investments are good for us, especially if we move countries periodically.
Depending on what you invest in, you could run into significant issues down the road, including:
- Extra taxes
- More reporting
- The inability to continue to invest
- Being forced to sell your investments
When choosing an investment, look for ones that cross borders well, and have international registrations. (We love ETFs for that!)
Private Spanish pension plans can create global problems.
It’s tempting for us living in Spain to invest in one of the many pension plans offered by local banks. On the surface, it makes sense; there’s a tax benefit for purchasing one, and saving for retirement is essential.
However, unless your long-term goals involve living in Spain, these benefits can become a curse.
Spanish pension plans sold by banks are only authorized in Spain, meaning you can’t do much with them when you leave. What’s more is that your new country will treat it as foreign investment, opening the door to higher taxes.
The tax benefit also disappears when you go abroad. Since these funds overwhelmingly underperform the market (thanks in part to their high fees), they look even less attractive.
If that wasn’t enough, early getting out of the plan is complex, costly, and time-consuming.
In all, Spanish pension plans aren’t exactly a great fit for us expats with worldly aspirations.
Already invested in a Spanish pension plan? Don’t stress! There’s absolutely nothing wrong with investing. In fact, you’ve already made a fantastic decision. What’s important now is to continue investing, but with low-cost investments built to travel well.
Americans, we know your pain.
For Americans living abroad, we know investing is almost impossible. (Seriously. We’re a company founded by a couple of US expats). We have precariously few choices since we can’t access most investment funds (including ETFs and Mutual Funds).
One option is to invest directly in stocks via the US. Some brokers take us, which leaves that avenue open. Here, you would try to mimic an index like the S&P 500 by selecting shares that perform similarly. If you still have a (Roth) IRA, your best bet is to use this amazing tool to buy stocks. Outside of stocks, though, real estate is our only other mainstream option to grow our wealth. (For now)
Why investing as an expat in Barcelona no longer has to suck.
Figuring out how to find, make and manage investments is difficult for practically everyone. It’s almost as if you need to become an expert in finance before putting one cent to work.
For us living abroad, the problem is even more complicated since we might not know what country we’ll be living in in three years from now (let alone 30). Throw in the different taxes, cultural and linguistic barriers, and the intimidation of financial terminology.
We’re changing all of that.
abroaden is the first wealth-building platform made for people living abroad just like you.
Born in Barcelona, we’re creating the first automated, low-cost investing tool to take the fear out of making the financial future you deserve, regardless of where you call home.
Now, investing while living abroad no longer has to suck.
Sign up now on our early access waiting list and get a special Barcelona Expat Fair offer
for when we launch.