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The question is related to this one, but I am more interested in investments than savings.

Here's my situation. I'm in my 20s and I'm currently in the US, but a EU citizen; I have saved up a bit of money in the past few years (about my current income for ~6months). In the summer I am planning on relocating back to Europe (not 100% sure exactly where as of right now, still looking for jobs and researching). I should mention that I also have about the same amount of money saved up in a deposit in Europe, in Euros and the deposit will mature before I move so I have easy access to that money when I go there.

I have been thinking what the best thing to do is with the money that I have in the US. By my calculations, I could start investing it here safely (as far as my own expenses are concerned), but is that a good idea since I will be moving, quite probably permanently? I don't feel that location matters at all, but maybe I'm wrong? I was even considering investing all the money I have here in the US rather than moving it around which I feel would be quite costly.

So again, to clarify: I have no debt, I do have enough saved up for the foreseeable future and I believe I am quite ready to start investing the money I will continue to save up in the following months. The only concern I have is if I should be investing it in the US or wait until I know where I'm moving to, take my money with me and invest it there.

Thanks! Let me know if you want more details about this in the comments.

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You have currency risk either way. The only question is deal with it now or later. No one can tell you which action is better until we look at it in hindsight. You could hedge and move some now, some later. Invest your USD in US equities and move some to EUR and invest that in EUR companies.

I'd suggest having your money in the same currency as where you are living, since for the most part, you'll be in the same boat as your peers and neighbors. If you have high inflation, so will your friends and neighbors and you won't feel so bad. And if your currency gets stronger, then so will the currency of the people you are hanging out with.

It's similar to betting on Don't Pass in craps. If you bet against the rest of the table, you could win when they lose, but then all your friends will be sad and you'll be happy. And vice versa, when your friends are high-fiving, you'll be in the dumps. I'd say it's better to be in the same boat as your peers since that's usually how we judge our happiness when we compare our situation to others.

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  • Thanks Mike! In other words the only potential "issue" here is with currency risk. Good to know.
    – Alex Florescu
    Jan 30, 2011 at 15:33
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The location does matter in the case where you introduce currency risk; by leaving you US savings in USD, you're basically working on the assumption that the USD will not lose value against the EUR - if it does and you live in the EUR-zone, you've just misplaced some of your capital. Of course that also works the other way around if the USD appreciates against the EUR, you gained some money.

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