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Table of Contents
The latest content, which I have copied below, focuses on:
- Is the Nasdaq’s recent falls significant? I speak about previous falls, including the huge one in 2000, and why corrections in stocks aren’t a big deal.
- What are the biggest mistakes I have ever made? What have I learned from those events and what would I do differently if I could go back in time?
- What are the biggest mistakes expats tend to make, especially financially? Having lived in six countries, I list all the major mistakes I have seen?
- What are some of the best places to retire as an expat? The comparisons I make are between good low and high-budget destinations, as well as for those with families compared to single people.
- How will the new UK taxes affect people? The indirect increases in income taxes, and direct hikes in corporation tax, show the government stimulus announced after the lockdown wasn’t a free lunch.
Financial markets news sub forum
Technology stocks are falling – is this significant?
The Nasdaq has fallen by about 10% from its peak is this significant?
Do you remember the 2000-2005 period? Tech stocks fell hard between 2000 and 2002 in particular. Tech wasn’t taking over our lives. Many people thought that technology was over hyped in the 1990s.
Some, including the Nobel Prize winning economist Paul Krugman, predicted that emails and the internet wouldn’t have a big impact on our lives. Many people agreed.
The Nasdaq took 14 years to recover from its 2000 height. 14 years. Yet somebody who bought at the peak would have made a lot. Anybody who bought in the middle as well, when valuations were low, would have made even more.
Just one year ago, the Nasdaq was about 33% lower than it was today, so a fall of 10% isn’t a big deal. In fact, stock market falls of 50% happen regularly.
Look at last year. Most major stock markets fell 40%-50% but it wasn’t a big deal for those who didn’t panic sell. The point is, I wouldn’t watch daily or weekly valuations.
Long-term technology is only going to play a bigger role in most people’s lives, if we like it or not. Will it be a one-way move? Probably not. I imagine there will be a 3-12 month period after the pandemic when there is a lot of “pent up demand” for face-to-face activities like events.
Long-term, that won’t affect the general trend. It is best to just hold assets, including the Nasdaq, long-term.
Saving and investment sub forum
How will the new taxes in the UK affect people?
The new UK taxes announced will affect most people because the most significant changes are:
1. Increases in taxes by the back door. The allowances for income tax will be frozen for years. Assuming that average earnings grow by 2%, an inflation is also running at 2%, that will drag millions into higher thresholds.
2. UK corporation tax will increase on businesses with profits over 50k a year, and especially 250k a year.
There were other measures as well. The point is, there is no such thing as a free lunch. The money that was taken out by Covid will be paid by inflation or taxes.
Now sure, not all debt needs to be paid back, as governments aren’t households. Yet to get the public finances on a sustainable footing will require more taxes and/or inflation to erode the debt.
There is no such thing as a free lunch.
Expat sub forum
What are the biggest mistakes you made as an expat?
The biggest financial mistakes I have seen are
1. Not saving to begin with. Back home, most people buy a property and pay automatically into a pension (government and sometimes private). That means that even people who are bad savers invest for retirement by default. Most expats have “front loaded benefits” – in other words they are paid more, but get fewer benefits. There is no point in having a bigger salary, housing allowance etc if some of that extra money isn’t used to fund retirement and saving goals.
2. Giving all the money to a local spouse. This often happens because expats can’t buy properties in their own names, at least in some countries.
3. Getting into a permanent negative lifestyle. We all need to enjoy ourselves. It is only natural, moreover, that you will want to experience as much as possible when you are new to a country. Yet it is easy to get into the habit of drinking too much, and eating a bad diet, when living overseas. This is especially the case in countries where it is cheap to drink and eat outside.
4. Only focusing on investing back in your home country or in the new host country. Few people consider investing in property in Thailand or Cambodia when they live in the US or UK. Many expats automatically think it is “the thing to do” because everybody else seems to be doing it. I have personally ran out of the number of people who have lost money in overseas property, or experienced disappointing gains.
5. No protecting yourself. Insurance isn’t sexy. It is also dead money if nothing happens to you. Yet just like pensions, this is something which isn’t usually provided when you move overseas.
What are the best places to live as an expat?
This depends on the following considerations:
– What you want to achieve. There is a big difference between career advancement and a good lifestyle.
– Your industry.
– The languages you speak
– If you are single or have a family
– Your personal preferences and many other considerations.
If you are looking for career advancement, then places like Singapore, various US activities and London can be good. In other words, big cities that have plenty of job opportunities.
This depends on your industry though. If you work for an NGO, oil &gas or some other companies, you might get paid more if you go to a “hardship location” where few others want to go.
Likewise, it is a changing world now. More people can work remotely and from home. In which case, you might not want to live in a big city, depending on your preferred lifestyle.
I will come off the fence though
1. If you are a remote worker and want to live in Asia. Kuala Lumpur in Malaysia. It isn’t the best party city but has a very good standard of living and it gets overlooked.
2. If you are a remote worker and are young and single. In which case I would go for certain places in Eastern Europe like Serbia, or somewhere like Cambodia. In the Americas Mexico and Colombia are safer than people expect.
3. Higher-range but still dynamic. Cities like Tokyo, Hong Kong, Seoul, Shanghai and maybe Taipei in Taiwan.
4. High-range but good for kids/families. Singapore ,Switzerland, Australia and New Zealand.
5. Adventurous and starting something new – Some African countries like Ghana and Ethiopia , or some places in South East Asia like Laos or Cambodia. This is ideal for somebody looking to start a business in some developing countries where competition is lower. Yet here again, the internet has changed the dynamics. You don’t need to be on the ground to do business.
For me personally, if I could live anywhere, I would pick either Singapore, Malaysia or Taiwan. Mainly due to having visited all three, but never living in one.
What are the best places to retire as an expat?
It depends on your budget, hobbies, languages spoken and many other things. I have noticed some commonalities though.
Firstly, for those who aren’t that adventurous but are still adventurous enough to live overseas, places closer to home work out better. In other words, Spain, Portugal and France for Brits and Costa Rica for Americans and Canadians.
Some of these places also have the benefits of offering health insurance for reasonable prices. People who want something slightly more adventurous and lower-cost, but still close to home, are increasingly looking at places like Bulgaria, Colombia etc.
If we look further afield, South East Asia is an obvious candidate due to:
1. Language in the case of Malaysia and the Philippines.
2. Lifestyle and weather
3. Cost of living outside of Singapore and a few other places.
4. Ease of getting a visa in the case of Cambodia and some other countries in the region.
5. The food for some people.
Yet there are plenty of negatives as well. Firstly, it isn’t as cheap as you might think, at least for quality. Second, health insurance gets expensive in your 70s and 80s.
Success habits sub forum
What are the biggest mistakes you have ever made?
This could be a long list. Firstly, I mistakes are just part of the learning process. The person who makes no mistakes, and takes no chances, is making a huge mistake!
You see that with some bitter and twisted people who have been let down by others in life (haven’t we all been), and then they just give up taking risks and therefore making as many mistakes.
The key thing is to learn from mistakes, rather than to always assume that it is “better to be safe than sorry”.
Some of the things I would do differently would be:
1. Learn more languages when I was young
2. Not wasted time. We all don’t value time as much when we are university students and get 3 months break. Time is the most important asset though.
3. Read more about personal finances from a younger age. In fact, read as much as possible outside my core subjects studied at university.
4. Learned more about the online world when I started my working career. When I started working, the world was at a crossroads. We were moving quickly to an online world in the 1990s and 2000s, yet most of the people making decisions were from the older generation. Most of the younger generation were being trained by the old guard. So, even as recently as 2010, 2013 or 2019 would you believe, some people honestly believed things like “business is best done face-to-face”.
5. Linked to the last point, I wouldn’t have taken, on face-value, the tips and suggestions of many of the old guard when I started out.
6. I would have started my own business sooner than I did.
7. Be more selective about who I associate myself with, to avoid toxic people.
8. Broken as many industry norms as possible. Normal actions lead to normal results. Extraordinary actions leads to extraordinary results. Almost all my best results have came from doing the opposite of what the majority do in my industry.
9. Taken even more calculated risks and doubled down on my choices.
But having said all of that, I am pretty satisfied with most of my choices. A rational person can only deal with the information they have at the time of making the decision.
Pained by financial indecision? Want to invest with Adam?
Adam is an internationally recognised author on financial matters, with over 234.6 million answers views on Quora.com and a widely sold book on Amazon
In the answers below, taken from my online Quora answers, I focused on answering the following questions:
- What things have I learned as I got wealthier in terms of health, risk or relationships? What becomes more, and less, important?
- What is one tip that every aspiring business owner should know? This one might surprise people who believe running your own business is glamorous.
- What could be the future UK retirement age, and how will this affect a 41-year-old in the UK? What actions should be taken now to afford needing to work until you drop?
- When was the moment when I realised that being a millionaire isn’t just a pipe dream? I explain the two things which influenced me the most on this answer.
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