I often write on Quora.com, where I am the most viewed writer on financial matters, with over 422.4 million views in recent years.
In the answers below I focused on the following topics and issues:
- What are the investing options for British expats living overseas and should we continue paying National Insurance?
- What’s the best country in Europe to work as freelance from a tax & pension perspective?
- Can a loner be successful?
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Source for all answers – Adam Fayed’s Quora page.
What are the investing options for British expats living overseas, and should we continue paying National Insurance?
I was reading an article in the Telegraph over the weekend, warning about the UK facing the threat of a devaluation of Sterling and bankruptcy –We are on track for a currency crisis – and bankruptcyOur leaders fail to grasp that taking back control also means taking back responsibilityhttps://www.telegraph.co.uk/business/2022/07/02/track-currency-crisis-bankruptcy/
This would be a “back to the future” moment, as it has happened before.
I am not saying this devaluation will happen, but I am certain that the GBP is riskier than ever in our lifetime – even adjusted for the fall from 2:1 against the USD to 1.20 in fifteen years.
So, the first thing to do is ensure that cash balances aren’t overly high, given that inflation is also running hot.
After you have decided to invest, make sure that you are long-term. It is less risky as per this graph:
And it is also more profitable due to compounded returns.
Finally, decide whether you want to DIY invest or use an advisor. DIY investment only works if you have the time to research what you want and need, and more importantly, have the balls to see it through to the end.
That is easier said than done due to human emotions such as panicking during crashes, which explains results like these:
I wrote about national insurance here –Do expats get a UK state pension?https://www.quora.com/Do-expats-get-a-UK-state-pension
National insurance shouldn’t be a priority. The state pension isn’t enough to live on for most people anyway, and the government doesn’t increase the benefit in line with inflation when you emigrate.
What makes more sense is a long-term investment plan, which is favourable to the expat lifestyle of moving around a lot – i.e. investment platforms which will keep your account open if you move numerous times.
What’s the best country in Europe to work as freelance from a tax & pension perspective?
In general, countries with lower taxes have fewer pension benefits, but actually, pensions aren’t that good anyway, at least if you rely on the state pension only.
In the UK it only pays about 7k-8k Sterling a year, and taxes are high. The benefit “terms and conditions” can always be changed as well, as governments push up the retirement age.
We saw that with the “WASPI women” who protested after the retirement age was pushed back.
What makes much more sense is to emigrate to lower cost of living or tax countries, and use the savings to invest more into a personal investment plan, which is indirectly a more flexible pension.
Simple example. Let’s say you have a remote income, living in a high-tax country. You could emigrate to a place like Bulgaria and pay around 10% corporation and 10% income taxes.
Alternatively, if you are already established and don’t mind the high cost of living, a place like Monaco can be ideal, as it is tax-free if structured correctly.
Like always though, the devil is in the detail. Your home country, and receiving one, can have different rules.
Monaco isn’t tax-free for Americans earning a lot of money, unless they renounce their citizenship, nor for French citizens.
The UK also has a “ties test” – it is no longer enough to not live in the country for a certain number of days per year and automatically be deemed a non-taxpayer.
Good structuring is essential, especially if you are a business owner who plans to emirate long-term, rather than short-term.
I would also look for countries with formal freelancer or nomad visas, so you aren’t working in the grey zone, and seek advice from accountants and others in some situations.
With governments needing more revenue, they might crackdown at any time.
Can a loner be successful?
I was watching a great interview with the founder of Brewdog, James Watt, a few days ago.
Brewdog has been one of the fastest-growing UK firms in the last decade or so. You can see the interview here.
He mentioned in the video that breaking industry norms is important for small and medium-sized operators if they want to compete with the big boys.
That is obvious, and I have made that point in many of my answers before. You can’t expect abnormal success without doing abnormal things or being slightly abnormal.
If you aren’t doing that you are doing what everybody else is doing and should therefore expect normal results.
However, what was interesting about his analysis is that he said that outsiders and even loners are better at breaking industry and social norms.
If you think about it, it makes sense. People who have loads of friends or business acquittances will be even more influenced by the opinions of general society, and their industry, than the average person.
In comparison, somebody who is an outsider, like him, is less likely to be influenced by those considerations.
They are also more likely to have a childhood or other, trauma which pushes them on and motivates them to prove others wrong.
We can observe similar occurrences in science, where people like Einstein were considered strange, or in politics.
These aren’t just extreme outsider examples either. In my network, I can see that outsiders (and even loners) are much more likely to achieve outsized success or failure.
With my business ideas as well, the “normal” ones have seldom had outsized (or any) success.
The ones that make me uncomfortable and are considered “unacceptable” in my industry have accounted for the majority of the success.
You can’t achieve outsized, abnormal, success by being completely normal…….unless Daddy is a multi-millionaire or you just get very lucky!
Even simple strategies for building wealth aren’t “socially acceptable” in some circles.
For example, almost everybody knows that investing from a young age is a good idea as it compounds your returns, yet it isn’t always socially acceptable for 20-year-olds to try to do that, even with modest sums of money.
It goes against the grain of “you only live once”, and “you are only young once”.
Things are changing though. With shows like Dragons Den, and social media illustrating the benefits of investing, it has become “cooler” to make sacrifices and be different.
The problem is, you only get rewarded for being different if you run your own business, or have a supportive boss.
If you are a salaried employee, or at school, you are seldom rewarded for coming up with abnormal ideas or being different.
So, I would say being an outsider is more helpful than being a loner, as it is good to collaborate with people in business, and can also be preferable to being an insider
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Adam is an internationally recognised author on financial matters, with over 739.2 million answer views on Quora.com, a widely sold book on Amazon, and a contributor on Forbes.