Saturday, January 15, 2011

Rich in India, Tight-fisted in USA - should you revisit your global portfolio?

This posting mostly applies to Non Resident Indians but parts of it may be applicable to readers migrated from other places as well.

Rich or not so rich, could be defined as a state of mind, heart, social outlook but lets simply keep to something quantitative and that is money. Its odd how many NRIs in the US spend years and decades earning, saving and investing but always restrict their financial planning to just US or just India and not as one global portfolio.

is that really optimal? lets explore this.

know your portfolio....your financial portfolio is everything you own, globally, not just that has your immediate attention or is easily accessible to you. It should include bank accounts, credit union accounts, 401k accounts, brokerage accounts, stocks, bonds, insurance, annuity and all real estate - land, home, rentals etc. Lot of folks never put this portfolio together and really get a full realization of their global assets and its net worth. Ofcourse, you know about it and occasionally think about it but rarely do you consolidate it all in a financial tool and take it in. Your overseas bank account ...put it in. Your overseas investments in some stocks, mutual funds, put it in. Your overseas investments in real estate, put it in. has some nice tools that will allow you to input and track all the above.

be fair....true market valuations of your assets and their future growth or appreciation potentials is essential. Do not value them on what you think their value is or what you think you should get for them, but a frank down to earth assessment of what the market will bear. I would even advocate that you factor a reduction of 5% to the final assessment to account for minor fluctuations or brokerage costs if you were to liquidate them all at the time of assessment.

evaluate your future....lots of folks hold on to offshore assets presuming they will use it some day? really? will you? will your kids? if this presumption does not really hold strong, then your ability to manage the asset remotely, being on top of ever changing laws in the country of investment, differing inheritance and estate planning laws, guarantee of your asset being safe, counting on your friends/relatives' support, inheritance laws of the country of investment or the ability of your kids to go there and sort it all out become primary considerations. Remember, you are not getting any younger and your most reliable connections will become stretched and thin over time.

What if scenarios? would be prudent to run through some What if scenarios for your portfolio. Should you liquidate offshore investments and bring it together in your adopted country where you might have better control. Can you invest it better here, get better loans, get better rates on reduced loans, pay off some debt and increase your standard of living or lifestyle.

Taxation....There will be tax implications, both in the investment country and again in the USA. USA has tax treaties with some countries. This is where having the right tax professional with international tax laws helps best. This is also where the wonderful foreign tax deduction or tax credit provision in US tax laws helps big time. You can read more at:,,id=183263,00.html

Money Trail....keep records. If you made investments via your NRE/NRO accounts, kudos!!! you have records that your CA or Tax professional can use to calculate your cost basis and subsequent taxes based on the sales receipt. If via any other account or any other means, as long as you have receipts and you can show proof of your cost basis, you should be ok. Depositing sales proceeds in the same accounts as the one you want to use to repatriate funds in USD would be a good idea. This will allow your bank to provide all money trail paperwork, even guide you towards a CA or Tax professional they work with who could validate payment of taxes on the profits, thus clearing your funds to be repatriated. Repatriation via wire transfer or certified check deposits is most recommended, again, so you have a complete trail if ever audited.

Know your bank and relationship manager....NRI departments in banks have relationship executives and managers that are experts in this field and its important to know yours well. They can really do wonders in terms of evaluating your situation and recommending the fastest way to reach your goal. Ofcourse, no bank likes to lose deposits and funds, so keep pushing aggressively for your timelines. only live once and there are limited golden years you will get with your kids before they go off to college and on with their lives. Its worth considering if being rich on paper with limited access to offshore investments is really an optimal lifestyle. Thats what this is all about, isn't it?

Additional Info:


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