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IF you have saved some money, what would you like to do with it? Do you go for a high-risk investment that offers the possibility of a generous return? Or do you forego a good interest rate in exchange for the knowledge that your capital is safe? Perhaps a mixed portfolio is the one for you.
What a lot of people in Cyprus like to do with their spare cash is to put it in a metal box. It’s not quite the proverbial biscuit tin under the bed – although, no doubt, there are still some who think that is the perfect banking solution.
These are special deposit boxes given out by banks for customers to stash their cash and valuables.
Bank of Cyprus and Hellenic Bank have 17,000 of these boxes leased to customers. According to a recent report in the Financial Mirror this is a hangover from the banking crisis of 2013 when Laiki went under and Bank of Cyprus had to recapitalise.
Overnight a lot of people lost savings above €100,000 and they remain suspicious of banks, especially at a time when the interest rate on savings is low.
Perhaps this strange addiction to metal-box banking explains why the OECD did not include Cyprus in a recent survey of which countries are best at saving. Of the 30 countries it did survey, Switzerland came out on top.
The survey, conducted in US dollars, balanced average household income against expenditure and found that, despite a high cost of living, the average Swiss household can save more than 19% of its income – $11.109 annually or $1.27 an hour.
Sweden, Norway, Australia and Germany, were, in that order, the next best savers.
Eight countries at the bottom of the list are spending more, on average, than they earn. They include the UK and Ireland. Households in both countries are managing to lose more than a cent per hour.
Greece was the worst saver of all the countries surveyed. Households there are running into the red at a rate of almost $12 a day.
Sky-high house prices are given as the reason Britain and Ireland rate so poorly on the saving survey.
‘Spending survey’ might be a more accurate description since what the OECD has researched is how much cash households have to spare when their regular outgoings have been totted up.
It is not clear that they actually do save that money. And there is certainly no indication that they save it wisely – although I think it’s a safe bet that few people in Switzerland are stashing their surplus away in a metal box!
Social media is full of advice to expats about which countries make it easiest to save. It is not a useful guide. By and large they are countries in which it is difficult to spend money, either because of a restrictive social life – Saudi Arabia being the obvious example – or because their low cost of living is matched by a low standard of living.
A website called GoAbroad.com lists Vietnam, Costa Rica and Bulgaria as the best countries to save money. Sadly, they are unlikely to top any expat list of dream destinations.
Although it doesn’t figure on many surveys, Cyprus is a very good country for expats. The climate is great, the scenery is beautiful, the pace of life is relaxed.
It’s hard to put a price on all that. In any case, the cost of living in Cyprus is not exorbitant and taxation is not outrageous. It is possible to live well here and to accumulate savings. But I don’t advise putting them in a metal box.
I always advise expats to look for a full lifestyle package, one that will secure their finances and match the income they have with the lifestyle they want.
Matching income to expectations is the secret and my company, the Woodbrook Group, an international firm of financial advisers with its headquarters in Cyprus, helps our clients do that, offering them peace of mind and a secure environment in which their money can grow.
We are not owned by any financial institution or life insurance company and can offer you unbiased and impartial advice to help you understand your options and how to address your income needs
