I often write answers on Quora, where I am the most viewed writer for investing, wealth and personal finance, with over 241 million views in the last few years.
On the answers below, taken from my online Quora answers, I focus on a range of topics including:
- How to buy US stocks from the Caribbean? I speak about the basic process.
- Could Joe Biden’s huge stimulus program result in a stock market boom?
- What’s the best way of earning, and saving, money at university?
- What would the world look like for the average person if stock markets didn’t exist, and are stock markets a bad thing for the average Brit, American or indeed world citizen?
- Is taking out student loans always a bad thing?
If you want me to answer any questions on Quora or YouTube, or you are looking to invest, don’t hesitate to contact me, email (advice@adamfayed.com) or use the WhatsApp function below.
How do foreign expats trade (buy and sell) US stocks from the Caribbean islands?
Source: Quora
When expats move to the Caribbean they expect sun, sea and less hassles.
Yet you are correct in saying that finding quality financial services, which are tailored to the needs of the expat market, is difficult.
It is possible though:
You need to:
- Find a broker or advisor who can accept for your country of residence. Some brokers and platforms might accept for some Caribbean Islands but not all. Ideally, find a broker who is specialised in the cross-border niche and therefore is likely to accept if you move to Europe, the US or beyond. The account needs to move with you when, and if, you change locations.
- Give your proof of ID and proof of address for international anti-money laundering requirements.
- Complete an online application form. Some firms still insist on old-fashioned paper application forms.
- Once the account is approved, fund the account by bank transfer or sometimes card payment
- Finally, make your trades once the money has arrived.
- If you want to buy US stocks you will also need to fill out a W8-Ben form. A quality advisor can also show you options to avoid this – in other words how you can invest in ETFs focusing on the US stock market without the money actually being domiciled in the US. This way negates US withholding taxes.
It is true that most companies aren’t as internationally minded as they should be.
Yet it is possible to have options from the Caribbean. It is much easier compared to several warn torn countries.
I once knew an NGO worker who got posted to Afghanistan for a few years.
Even though he worked for a multi-national and was paid outside the country in USD, he had all kinds of trouble getting financial institutions to accept him.
The bigger question is investing productively for the long-term, regardless of your location.
The “how” is therefore easy. “How to do it productively” is more the question.
How will Joe Biden’s $1.9 trillion COVID-19 relief plan affect the stock market?
Source: Quora
If I would have told you on January 1, 2020, that there would be a global pandemic which would have resulted in a lockdown even in democratic countries, you would have thought I was made.
If I would have predicted even as recently as September that the US economy is now predicted to increased by as much as 7%-8% this year, which is higher than China’s expected 6%-7% growth rate, you would have thought I was mad.
Few thought the recovery from Covid-19 would be as quick as it has been.
It took the US three years to recover from 2008–2009. This time, it seems the recovery will be this month (March 2021), with plenty of other developed countries going the same way in 2021.
The point is nobody can predict the future. To answer your question directly, it seems likely that the $1.9trillion stimulus will be good for stocks.
Besides, stocks usually go up anyway. They go up:
- Under most Presidents:
And for that matter:
- On most days
- Most quarters
- In most months
- In most years
- And the vast majority of decades:
It is very hard to find any kind of correlation, therefore, between different events and stock market performance.
It is true that the stock markets have tended to perform better under Democrats, yet again, that could be because of random reasons.
For example, stocks were due a period of stagnation after 18 strong years.
I am not convinced that the “lost decade” from 2000 until 2010 was due to politics.
So, I would expect markets to go higher, but I am unsure how much of a long-term effect this will have.
I guess if it pushes up inflation (a big if) that could result in more people wanting to own assets and not cash.
What is the best way of earing money and saving in University?
Source: Quora
There are loads of ways you can earn money whilst at university including:
- Traditional service-sector jobs. Yes, they don’t exist as much as before due to Covid, but they are out there
- Traditional office-based part-time roles as well
- Freelancer websites like upward and many others
- Sometimes online tutoring if you speak many languages.
- Doing surveys and countless other ways
Yet I will make one point. At university, or even before then, you have a unique advantage over older people.
Namely, you don’t need as much money if you are sensible about it.
You can therefore play the long game. A 30-year-old who has a mortgage and desperately needs funds can’t afford to build up an online audience via YouTube for five years before monetising.
If you are 18, you can afford to do that. You can also afford to take more calculated risks which is one of the keys to success, without worrying about your dependencies.
That opens up so many doors and opportunities which many older people don’t have.
If you focus on what you are good at, and what other people are also passionate about, you can play the long game.
For example, if you speak many languages and would love to tutor or start a language school after graduation, spends years creating free content and monetise later.
I would, therefore, focus more on answering this question:
What can I do as an 18, 19 or 20 year old to ensure I have a better chance of making more money at 25 and especially 30, and have more fun in the process too?
That traditional part-time job might look OK on the CV, but it won’t allow you (in most situations at least) to keep building on a skill.
So many people also make the same mistake at 22, 23 or 25. How much you can make in your first job isn’t that important.
What matters is how much you are likely to make at 30, and how much life satisfaction you will have too.
As an aside, beyond honing your skills, I would also read a lot when you are at university.
Part of that reading should be outside of your core subject. I would read about personal finances, including saving, investing and budgeting.
All of those things will help you earn more long-term, and indeed save more.
Is the stock market bad for Americans? How would the US economy look with no public stock market?
Source: Quora
This isn’t a US-specific answer. This is globally relevant.
Look around your home now. Also think about all the activities you do.
That could be flying, taking your car to work, traveling, typing on your iPhone etc.
It is highly likely most of these activities wouldn’t have been possible without global stock markets.
The reason is simple. Stock markets are a way for private companies to raise more capital to invest into projects.
Unless a company is state-owned by a really rich royal family, it is highly unlikely that most of the innovations we have seen would have came to pass.
Even the computer or phone you are reading this on probably wouldn’t exist.
Apple, Amazon et al simply couldn’t have been done as a private company or state-owned enterprise.
It is true that a lot of innovations were originally started by government financing, often when projects were too risky for private investors.
The internet is such an example. Yet if you don’t have private capital provided by the stock market, many of these innovations wouldn’t have resulted in the kinds of conveniences we take for granted.
Added to that, most of the people who partake in the markets are middle-income.
The majority of people now own stocks in most developed countries.
As the book below shows, moreover, most wealthy people started out as young people investing small amounts of capital and building up:
A hundred years ago it may have been the case that “stocks were for the rich”.
Yet that is a hugely outdated view today. Added to that, even if that was the case, stock price rises don’t usually result in higher consumer inflation unlike house price increases.
A rising housing market can push up rents and prices for everybody.
As the last 12–13 years show, a rising stock market doesn’t push up the price of bread or watching Netflix for that matter!
So, to answer your question, I suspect the American and indeed global economy would be much weaker without stock markets.
Normal, everyday, aspiring people would also find it harder to build up wealth.
This would therefore result in property and other bubbles, as there is less competition for capital.
Is there ever a good reason to take out student loans?
Source: Quora
In large parts of Europe, including the UK, student loans have historically been more akin to a graduate tax.
In other words, you don’t have to start paying back the loan until you earn a certain amount of money.
Above that threshold, you will start to pay back a portion of your income.
When student loan started in the UK, the threshold was 15,000GBP.
Above that threshold you needed to pay 9% of your earnings. So, for example, you would pay back 9% of 1,000 if you earned 16,000 but 9% of 100,000 if you earned 115,000.
That system incentivised taking out loans, because the interest rate used to only be inflation.
In which case there was a clear logical reason to take out the loans.
If you went to university and didn’t get a job which would allow you to repay, you would never need to pay back the loan.
Indeed the majority of students never pay back the loans in full under this system.
If you earn a lot of money, you would need to pay back the loan, but the loan would only rise in pace with inflation.
In recent times the system has changed, however, and interest rates are much higher on student loans in the UK.
It hasn’t yet got to the stage of US student loans, which are more akin to commercial loans in many ways.
If you have the later loans, it becomes even more important to know:
- Why you are going to university in the first place? There are plenty of job opportunities that require a degree. Likewise, if you want to emigrate, getting a degree will open up more doors. I have been asked to provide evidence of a college degree when getting work permits in various countries.
- What could be your earning potential going to university.
- Beyond what you study, will the other things apart from what you study make it worthwhile?
- Are there good alternatives to going to university?
- Is going to a normal community college better than a “prestigious” one.
So, yes, there are good reasons to take out student loans, but increasingly they aren’t a good deal unlike before.
Pained by financial indecision? Want to invest with Adam?
Adam is an internationally recognised author on financial matters, with over 241 million answers views on Quora.com and a widely sold book on Amazon
Further Reading
In the answers below, taken from my online Quora answers, I speak about:
- Are tech stocks in free fall? I discuss why that is wrong, and the Nasdaq has actually risen this year.
- What is the biggest indication of business success?
- Is investing really only for richer people? I tackle that misconception.
- How can you look wealthy without spending much money?
- What are some of the most undervalued investments right now?
To read more click on the link below:
