Tony Noto, Chartered Financial Analyst (CFA)

A native of New Jersey, Tony Noto started his career on the trading floor of the New York Stock Exchange. He was there to witness the peak of the Internet bubble, as well as the events of September 11, 2001, learning firsthand how fast things can change on Wall Street, and in the financial world generally. He went on to work as an institutional stock trader, during which time he earned the Chartered Financial Analyst (CFA) designation, and developed a growing fascination with China. In 2005, he moved to Shanghai with his girlfriend (now his wife) and spent a year studying Chinese full time (an experience he describes as “humbling”), followed by a year living and working in Hong Kong. Since passing the Certified Financial Planner (CFP) exam in 2008, he has offered fee-only financial advice to expatriates in Beijing. Jennifer Thomé asked Noto for help sorting out her finances, and received a veritable primer on expat money matters.

What is fee-only financial planning?

Fee-only means that I provide advice for a fee paid directly from my clients, and I don’t accept any commissions. Most financial advisors work for commissions associated with the sale of products—but the problem is that product providers offer the highest commissions for recommending their most expensive products. This has led to so much abuse that financial regulators in the UK, Australia, and the Netherlands are actually banning commissions.

What are your top financial tips for expats?

All expats need RMB to address currency risk. The longer you plan to be here, the more you should hold (and vice versa).

Accidents and emergencies can happen, and expats in China need health insurance. You can cut costs by using higher deductibles and excluding coverage in North America. If your family is financially dependent on your income, life insurance is a must (term life insurance is the most cost effective). Remember that living and working in China is a big investment in itself, and investing your savings in China on top of that may expose you to too much risk. Depending on your situation and how long you live in China, you may be able to invest in a tax advantaged manner; but avoid long term contracts, as tax treatment could change whenever you move.

Tony’s financial tips for young professionals:

• Be conscious about your spending, and try to have it reflect your values.
• Keep an eye on bank fees (and no interest while inflation is at 3% is effectively the same as paying a fee).
• If possible, maintain a credit card to keep building a good credit history.
• Before investing in stocks, you need a proper foundation of emergency funds and insurance.
• Once the foundation is set – get started. Someone that saves $5k per year for 10 years from age 20 to 30 and stops saving would still have more money at age 65 than someone saving $5k per year from age 30 to 65.

Does this vary depending on what stage of life you’re in?

Over time priorities can change, and some issues will feel more important than others; but these are generally things to think about regardless of age or stage in life.

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