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Overcome the Frustrations Of Expat Investing

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Expat Planning, Saving & Investing: our new A-Z interactive online course – learn everything you need to know to take control of your finances and never rely on others again.

“Every attendee that I’ve spoken to has loved Steve’s course.” – Andrew Hallam, author of Millionaire Expat
“Incredibly helpful, this is exactly what I needed.” – Julia, UAE
“The best course on investing for expats. I sincerely recommend it to everyone.” – Elena, UAE

 

There is no easier place to invest than for US citizens living in the US. There are lots of great investing platforms, cheap diversified funds, well-regulated advisors and more blogs/videos/podcasts/articles than you could ever read. Every aspect of investing is so much easier than for expats.

And yet…

Dalbar, which has been studying investor behaviour since 1984, finds that the average equity fund investor based in the US still massively underperforms the market.

2000-2019:

Global index fund, annualised return: 8.0%
S&P 500 (US) index fund, annualised return: 6.0%

[You may spit out your coffee in surprise, but yes the world is quite capable of beating the US stock market over the long term!]

Average equity fund investor, annualised return: 4.25%

What’s going wrong?

Ouch. What is the average US investor doing wrong, despite having everything in their favour?

They are:
1) Trying to time the market, jumping in and out (clearly at the wrong times…)
2) Picking sectors and geographies based on greed, FOMO, personal bias or bad advice.
3) High fees from actively managed funds, too much trading etc.

What should you do instead?

If you follow the three guidelines below, you will do stupendously well over the long term:
1) Invest regularly every month or quarter like a machine, no distractions
2) Invest in a globally diversified index fund, no distractions (see a theme here?)
3) Keep fees low by selecting low-cost index funds and not trading too frequently

These, my friends, make up the secret sauce of investing.

But for expats…

Forget the sauce, when it comes to expat investing it’s hard enough just trying to order the burger and fries. There is very limited and often conflicting information available to us on how to invest. There are commission-hungry financial advisors trying to push us down the wrong path. And there are few decent investing platforms that will even accept us.

So not only do we have to figure out how to invest as an expat, we then have to avoid all the pitfalls that screw up investors in other countries.

We need to:
– Find the right funds in the right currencies
– Avoid US taxes (40% of your portfolio anyone?)
– Find the right platform that will actually accept us
– Exchange and transfer our money without getting ripped off
– Then diversify properly, invest regularly and keep fees low

This is why I’m so passionate about teaching expats how to invest, because it is so hard to start, but so tax-free and transformative, and even simple, once you do get started. And of course when I say expats, I also include anyone that doesn’t live in the US/Canada/UK/Europe/Australia/New Zealand/South Africa.

Do you have any questions or comments? Share your thoughts in the Comments section below..

Expat Planning, Saving & Investing: our new A-Z interactive online course – learn everything you need to know to take control of your finances and never rely on others again.

“Every attendee that I’ve spoken to has loved Steve’s course.” – Andrew Hallam, author of Millionaire Expat
“Incredibly helpful, this is exactly what I needed.” – Julia, UAE
“The best course on investing for expats. I sincerely recommend it to everyone.” – Elena, UAE

 

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