I often write on Quora.com, where I am the most viewed writer on financial matters, with over 830 million views in recent years.
In the answers below I focused on the following topics and issues:
- How can I invest some money while living in Greece?
- Is the UK an easy place to live?
- Is it possible to live on a low budget in Tokyo, Japan?
- Can you trust stock trading platforms?
- If you buy numerous ETFs which are invested across loads of companies, potentially thousands globally, do you need bond ETFs as well?
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How can I invest some money while living in Greece?
Source: Quora
Basically, if somebody is going to be living in Greece “forever”, or at least the EU, then there are many options.
If you want to do-it-yourself invest, then countless firms such as Saxo can open up accounts.
I am sure there are also plenty of good local companies as well.
It is easy and straightforward. The only difficult thing is not the “how-to”, but how to do it productively.
Most DIY investors make much less than the market due to emotional reasons:
What becomes more complex is if somebody has very specific needs.
For instance, they are high-net-worth, an expat, or somebody who plans to become an expat in the future.
In these cases, it makes sense to seek advice, and have portable accounts.
In other words, the accounts don’t close down if you move from country to country.
Nutmeg became the latest company to close down accounts.
I am sure they also “ditched” Greek’s who were born in the US too.
I have also seen countless clients get into these issues when they have left the EU or even just the country of residence.
The point is, as soon as your situation becomes complex, like you were born in the US or you will move overseas in the future, often the complexities require advice.
In either case (DIY or advisor) the process is relatively similar and includes giving documents to verify your identity like proof of ID and address.
Everything can be done online as well of course.
People say living in the UK is much more difficult and also expensive than other countries. Is this true?
Source: Quora
It all depends on:
- Where you live, as there are huge differences in cost of living in different parts of the country.
- How much you earn
- How you earn (employed vs self employed)
- What you are comparing to too. Some countries are obviously cheaper, or lower tax.
The UK, apart from London and some other places, isn’t especially expensive compared to other developed countries these days, after the fall in the Pound Sterling.
What is true about the UK, and Europe as a whole, is that taxes form a part of the cost of living.
If you factor in indirect and direct taxes, the cost of living is high in the UK for many people.
The average UK expat living overseas has much more disposable income, and ability to build up wealth, compared to somebody living locally in the UK.
The reason is simple. If you live in a 0% income-tax country in the Middle East, like the UAE, or a low-tax country which doesn’t tax most forms of overseas income such as Singapore or Hong Kong, you can save and invest more.
That is assuming that are earning reasonably well, or very well. For average earners, the taxes in the UK aren’t that bad.
The biggest issue most people face in the UK, regardless of income, is disposable income.
That is because the whole welfare state is designed, in theory at least, to tax heavily and then give back when we are old and need healthcare and a pension.
For most people, after the rent/mortgage, bills and taxes/national insurance is taken out, they aren’t left with that much.
Even many high earners are like that, unless they are exceptionally high earners.
The difference between a doctor living in London and a middle-income family in Derby is big in terms of gross income. The difference is quite small once you adjust for cost of living and taxes.
However, the UK isn’t difficult from an admin point of view, apart from the visa.
I am from the UK, so I have never had to get a visa, but I have many friends who married overseas.
Bringing people into the country is now difficult as it can involve:
- English tests for the spouse
- Loads of paperwork
- Arbitrary decisions about whether to grant the via or not
Once you are inside, it isn’t a difficult place to live due to technology and good processes.
For example, let’s say you want to start a business in most countries. Typically it takes weeks.
In the UK you can register on Companies House and get (some) banks within the same day.
Even non-residents can get a TransferWise Borderless account + company within 24 hours, depending on the industry.
I remember speaking to a Bulgarian guy who lived overseas, many years ago.
He mentioned that when he opened up a business in the UK, he received information in Bulgarian, to make his life easier.
He commented that he has never experienced such things in any other country he has lived in.
He speaks English and yet the information was available to him in Bulgaria as well, provided by the local government.
So, in some ways, the UK can be a pro-business country, and can make people’s life easier.
Cost of living, if you factor in taxes, can be high though.
Is it possible to budget on a low income living in Tokyo?
Source: Quora
Of course, it depends on how you define low. If you are coming from some of the most expensive cities in America and Europe, the answer is yes.
If you are coming from some very cheap countries, then the answer is probably no.
In either case, you can live reasonably well in Japan on a low budget.
If you look at the map above, Tokyo is surrounded by places like Saitama and Chiba.
Tokyo Narita airport is actually in Chiba. These places are typically an hour away by subway or car from central Tokyo.
In these locations, you can live very cheaply when it comes to renting.
I know some people who live in a house for less than $1,000 a month, and an apartment for $400-$500 a month.
It, of course, depends on where you live in such locations, the quality, etc.
Restaurants and some other basic services are also quite reasonable.
Food in convenience shops, supermarkets, and some other basics are the same though.
Even in Central Tokyo, you can live more cheaply than in London and New York.
This is particularly the case if you are single and don’t mind living in a tiny place.
Japan becomes very expensive when:
- You are earning a lot because the taxes are higher than many places. There are some exceptions to this though, like where your income is sourced from (local vs overseas income is treated differently I believe)
- You are focused on luxury living
- Children come along and you want to put them through an international school.
- You drive in the Tokyo area
In a nutshell, a transient expat lifestyle has a different cost associated with it compared to living a localized life.
That is the case in most parts of the world though.
Can you trust stock trading platforms?
Source: Quora
Can you remember in the 1990s when people were afraid to put their card details in on a website!
Now, few people prefer writing their details on a form versus doing it online.
I know this question was asked five years ago, but I am surprised that there is anybody left who thinks it is possible for a firm to defraud just because they are online.
Online is far safer because:
- There is traceability. An Uber is safer than a regular taxi as you can trace it. The same with online investing.
- Online firms have lower fixed costs. Therefore, they can be more profitable and are less likely to go out of business. Bricks and mortar firms with high fixed costs are more vulnerable.
- As more business is going online by the day, this makes traditional firms more vulnerable.
- Regardless of the last point, all online stock brokers are abiding by the same regulations as brick and mortar firms. So, an online stockbroker in the UK will have the same checks and balances as a traditional firm. Usually, they can’t touch the money themselves and if they go out of business, the money is held separately to the companies balance sheet, which in human terms means you won’t lose the money if they go out of business.
The only time when online is “dangerous” is if you engage with a firm that is clearly dodgy/illegal.
Usually, they are doing some obvious things though, like offering unrealistic returns and the money is usually being sent to bank accounts in far-flung places.
A provider which is regulated and online will be just as good, if not better, than one which is offline. If people use their common sense, then they will be fine.
It is almost like asking if email is less safe than a letter! Sooner or later, almost everything will be online.
We are already getting there in some countries, in certain specific industries, and online stock brokers are already bigger than traditional ones.
If by having a portfolio of, say, 4 (stock) ETFs one is already diversified across hundreds of companies, does it make sense to also include bonds ETF to the portfolio? Isn’t the portfolio already pretty much diversified only with stock ETFs?
Source: Quora
It is a great question, especially with bonds paying so little now.
The bottom line is you don’t need bonds…..when you are young or even when you are in early middle age.
If you are 100% in stock ETFs from investing tiny amounts at 18 until 50, and then rebalance into bonds until you retire at 65 or 70, you will do fine.
Stocks are merely more volatile than bonds. That doesn’t mean they are less safe, especially if you hold a diversified basket.
With that being said, it only works if people don’t panic sell when there is a stock market crash.
People who are 60% in stocks and 40% in bonds are less likely to panic when there is a crash, because the portfolio itself doesn’t fall as hard.
Nobody knows how they will react to a crash until they have been through one or two.
It also has to be remembered that whilst bonds don’t pay much now, that doesn’t mean they will always be like that.
Countless people have predicted the demise of bonds before.
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Adam è un autore riconosciuto a livello internazionale in materia finanziaria con oltre 830 milioni di visualizzazioni di risposte su Quora, un libro molto venduto su Amazon e un contributo su Forbes.
