Review of Interactive Brokers for Expats in 2022 – what are the biggest problems?

Interactive Brokers are one of the better do it yourself (DIY) investment platforms.

What is my review of Interactive Brokers for Expats in 2022? In the video below, I deal with this issue.

They can be a great investment solution for some American expats.

Yet there are three big problems with the solution which I speak about here alongside a Vanguard study.

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Further Reading

My answers on Quora have received over 215 million views, making me one of the most popular writers on the platform.

In the answers below I focused on:

  1. Are tech stocks a good investment in 2021 given the great run they have had in recent years? What lessons can we learn from the last 20-30 years?
  2. What’s the best way of investing money in Uganda, or from Uganda? Is it really that much different to investing from other countries?
  3. Which stocks, stock markets and sectors have fully recovered from the coronavirus and which haven’t? 
  4. What are some of the more aggressive techniques people can use to retire more quickly?

Below is a highlight of one of my answers

If there was an easy way to be able to retire tomorrow, then everybody would do it.

Even people who love their jobs or businesses want to be able to afford to retire tomorrow, if their health goes.

It is about having more options, and everybody wants to have that.

So, most of the quicker ways of becoming financially independent more quickly still require people to get out of their comfort zone.

There is a saying that nothing good ever comes out of your comfort zone and I think it is true:

Examples of more aggressive approaches include:

  1. Emigrating. If you are lucky enough to be able to live and work anywhere in the world, you can move for lower taxes, cheaper costs of living etc. Sometimes you can even earn more in the process, especially if you work for an MNC and are sent to a country which is considered “a hardship”. Alternatively, people can retire overseas or in a cheaper place in their home country. $500,000 isn’t enough to retire in London or New York in most situations, or even close. It is enough in countless countries around the world.
  2. Take calculated risks.  A lot of the people I know who have achieved financial independence (defined as the ability to retire tomorrow even if they don’t take that choice) took big, calculated risks, at a young age. For some that meant emigration. For others that meant getting paid more on performance and less on salary.
  3. Making sacrifices with spending – spending less and working harder for a few years, for a longer retirement. You can also try to leverage your income in your spare time. Many people can’t afford to take a big risk and start their own venture if they have kids and a mortgage. I have known some people that have done it in their spare time, built it up and then quit the day job.
  4. Invest money – don’t save it. You can’t realistically save your way to retirement with 0% interest rates.
  5. Avoid the key mistakes – things like going off the rails due to vices, mid life crisis and so on. These things can put people back a decade or more.
  6. Read a lot – also associate with many different kinds of people via mastermind groups. Get different perspectives and ideas that you can implement. Don’t get stuck in a rut.

Really, it is a numbers game. Anything that can help improve your net income, ability to save and invest and investment performance will all add up and compound over time.

I will give you a simple example. Let’s say somebody is earning $70,000 now in a country in developed Europe.

Due to taxes and cost of living, they are only investing 10% per year ($7,000). It is going into a savings account paying close to 0%.

Then they make two changes. They move to a low-tax and cost of living country, as they are a remote worker.

This means they can now afford to invest $24,000 a year and they invest rather than save money.

Over a 20–30 year period, those two small changes are likely to compound to the millions.

Those options aren’t available to everybody, but for most people, small changes can make a huge difference. 

I will give you another example. Studies have shown that investing one day after you are paid is much more effective than investing what is left over at the end of the month.

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