50 / 50 spreading between $ & Rupees for True Global Savings for R2I
Posted: Tue Feb 20, 2007 11:34 pm
** This is NOT meant as picture perfect AAP or maximum return investment approach but rather middle of the road Risk Definition & Predictability in Global Savings for R2I people **
Assumption - This approach will work best for USC R2I person and most probably for GC people also. H1B may have some operational problems but I am not sure.
The Approach is : As we all know the $ to rupee is fluctuating and will go either way based on what you believe ( India Shining or US making weak dollar or combination of both etc ). The question how about if we bring the predictability to our savings on truly Global Term. If we can keep 50% in USA as in dollar & remaining 50% brought in Indian rupees than no matter how the $ to Rupee fluctuate your Net asset will be same on global level.
let's for example take average savings as $200K money as R2I savings. This money is no string attached money means fully after-tax money with no 401K / IRA penalty attached to it. it is liquidable anywhere in the world.
so with this approach the 2 parts are
A) 50% i.e. $100K will be converted into Indian rupees once the person has R2Ied. This money will be used for R2I settlement expenses ( $20-$30K ) and rest can go in buying a residential property ( in 1-2 years timeframe ) & some emergency fund.
B) Remaining 50% i.e. $100K will remain in USA.
So the idea is survive with 50% Indian money and keep 50% US $ as long term investment / fallback option. doing that one is truly protected on global Savings level no matter the fluctuation of $ to rupee. Slight distortion of other currency will affect but in general the risk is minimized with true predictability.
The Scope of Discussion : - Now Everybody knows how the money will get spend in India like $20-30K initial settle down expenses, emergency fund & Real estate buy/ big down payment etc. so no need to discuss about it in detail BUT ...
The 50% $ money in USA is the real scope of discussion in terms
1) what is the best way to invest this money ? which option is better like CDs / short term govt bond / Index fund / mutual fund etc. Once again maximum return is not the only criteria here ..
2) The liquidity of money if required with minimum penalty is also given due importance.
3) The tax free or tax minimization of investment ( USC / GC status ) is also given value in consideration
4) Does the RNOR / ROR etc status for USC can affect this investment
Your overall feedback on total 50/50 global savings approach, your suggestion on investment tactics in USA for the criteria givens as in "good combination" / any red flags / problems you see is very much appreciated.
Assumption - This approach will work best for USC R2I person and most probably for GC people also. H1B may have some operational problems but I am not sure.
The Approach is : As we all know the $ to rupee is fluctuating and will go either way based on what you believe ( India Shining or US making weak dollar or combination of both etc ). The question how about if we bring the predictability to our savings on truly Global Term. If we can keep 50% in USA as in dollar & remaining 50% brought in Indian rupees than no matter how the $ to Rupee fluctuate your Net asset will be same on global level.
let's for example take average savings as $200K money as R2I savings. This money is no string attached money means fully after-tax money with no 401K / IRA penalty attached to it. it is liquidable anywhere in the world.
so with this approach the 2 parts are
A) 50% i.e. $100K will be converted into Indian rupees once the person has R2Ied. This money will be used for R2I settlement expenses ( $20-$30K ) and rest can go in buying a residential property ( in 1-2 years timeframe ) & some emergency fund.
B) Remaining 50% i.e. $100K will remain in USA.
So the idea is survive with 50% Indian money and keep 50% US $ as long term investment / fallback option. doing that one is truly protected on global Savings level no matter the fluctuation of $ to rupee. Slight distortion of other currency will affect but in general the risk is minimized with true predictability.
The Scope of Discussion : - Now Everybody knows how the money will get spend in India like $20-30K initial settle down expenses, emergency fund & Real estate buy/ big down payment etc. so no need to discuss about it in detail BUT ...
The 50% $ money in USA is the real scope of discussion in terms
1) what is the best way to invest this money ? which option is better like CDs / short term govt bond / Index fund / mutual fund etc. Once again maximum return is not the only criteria here ..
2) The liquidity of money if required with minimum penalty is also given due importance.
3) The tax free or tax minimization of investment ( USC / GC status ) is also given value in consideration
4) Does the RNOR / ROR etc status for USC can affect this investment
Your overall feedback on total 50/50 global savings approach, your suggestion on investment tactics in USA for the criteria givens as in "good combination" / any red flags / problems you see is very much appreciated.