We all remember the old joke, “How do you become a millionaire in Israel? You come with two million!” While that used to be true, today Israel’s economy is flourishing and both economic and employment opportunities abound. Israel has gone from being just a tourist destination to one of the leading investment destinations anywhere in the world. Global giants like General Electric, Microsoft, IBM and Johnson and Johnson are only a few of the companies that have made large investments in Israel by buying local companies. In fact, Warren Buffet, perhaps the world’s most famous and successful investor, made his largest non-U.S. investment when he purchased Iscar, an Israeli company, for $4.4 billion. Buffett has since referred to the purchase as a “dream investment.”
It’s The Economy
Israel has successfully made it through the global economic crisis without so much as a scratch. The U.S. economy is still plagued by large levels of unemployment, a slumping real estate market and a general feeling that its’ days as the number one economic power are numbered. The situation is even worse in Europe, with certain European countries on the verge of bankruptcy. Compare this with an Israeli economy that is clicking on all cylinders and it makes sense why the foreign investment keeps pouring in. Israel posted 4.5% GDP growth in 2010 and the forecast for 2011 is to be strong as well. Unemployment is hovering down at just over 6%, a lot better than in U.S.
Starting in May 2010, Israel was re-classified as a developed country by the MSCI. For investors, this means that you get the stability of a developed country with the strong growth prospects of an emerging economy. Sounds like the best of both worlds. I mentioned the U.S. real estate slump; well Israel is enjoying a real estate boom. While prices have been moving up, there is still good value to be had for people looking to either by as an investment or to come and live. And to top it off, while Israel is lacking in natural resources, huge natural gas reserves have been found off the Haifa coast. This will turn Israel into a net exporter of natural gas! Israel’s economic prospects just keep getting better and better.
Aliyah by Choice
It’s this economic strength that has driven so many North Americans to make Aliyah. There is a plentitude of employment opportunities to be had in Israel, and I know many olim that have left the U.S. to come to Israel because they lost their job and they understood that there were more opportunities in Israel in their particular field. Israel is no longer a place that people go to because they have no other choice, rather it has turned into a sought after destination because of all the economic opportunity as well as quality of life.
Financial Aliyah Tips
For those seriously considering making Aliyah, here are some financial tips that will help you in your preparation:
1. Budget: While it may seem easier to wait until you are settled before practicing fiscal discipline, it is extremely important to make a budget as soon as possible. Chances are that you will blow through the limits of this budget with the various miscellaneous expenses that will arise at the beginning of your new life in Israel. Nevertheless, getting used to living within a framework is important.
As time goes by and you get more accustomed to your new life in Israel, your budget should be flexible enough to be able to accommodate your new lifestyle. Keep in mind that while certain things in Israel are much cheaper, such as your children’s education, other things may cost more (like appliances and cars).
2. Your IRA: New olim need to keep their IRAs (Individual Retirement Account) up to date. One of the most common issues I see when I meet with prospective clients is that they haven’t looked at their IRAs in years. I fully understand that tending to retirement accounts for a new immigrant is not at the top of the list of things that need to be done upon arrival. Finding a place to live, getting your children adjusted to their new surroundings and school are more urgent issues which need to be attended to. It’s just that I find that when it comes to both retirement accounts and investments abroad in general, inertia tends to sit in. Olim tend to forget about these accounts altogether, only to wake up in a decade or so to realize that the value of their account is the same as it was pre-Aliyah.
3. New Job: When job hunting, make sure that you get a fair compensation offer. When discussing compensation, it is important to know that there are many social benefits that salaried workers are entitled to and you should make it clear that you want them as well. In fact, in most cases, it is now the law that you receive certain pension plans. Savings plans, both short term (Keren Hishtalmut) and long term (Kupat Gemmel), can help you realize the goals that you have set forth for yourself. Such expenses are often covered by the money that the worker has put away over the years, which is matched by their employer according to the terms of the policy.
Now is the time to take advantage of the strong economic situation and consider moving to Israel. Take the time to speak with a professional in order to make sure, that financially, you are all set to have a successful Aliyah.
Aaron Katsman is a licensed financial professional both in the United States and Israel, and helps people who open investment accounts in the United States. Securities are offered through Portfolio Resources Group, Inc. a registered broker dealer, Member FINRA, SIPC, MSRB, NFA, SIFMA. For more information, call (02) 624-0995, visit www.aaronkatsman.com or email firstname.lastname@example.org.
“This article is part of a promotional Aliyah section.”