I often write on Quora.com, where I am the most viewed writer on financial matters, with over 295.9 million views in recent years.
Table of Contents
In the answers below I focused on the following topics and issues:
- What are the best places to live as a young American expat? I look at all the different factors, such as taxes, cost of living and internet speeds.
- How do people make over $100,000 online these days?
- As a stock investor, do I take calculated risks? Is there any alternative to taking such risks?
- What are the biggest reasons people worry about money and how can this be reduced or avoided?
- Should you keep investing with markets trading at record highs? Or are they trading at record highs to begin with?
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What are the best places to live as a young American expat?
It depends on what you want from life, but you haven’t come on here looking for people to sit on the fence.
Therefore, I will make the following list
Puerto Rico if you don’t want to renounce your US passport, which most people don’t, but an increasing number are.
If you do renounce, there are loads of options.
If you are a corporate expat, then usually places like Singapore, Switzerland, the UAE, and maybe even Hong Kong.
This depends on the industry though. In some industries, you will get paid more in “hardship” locations like Iraq if you are in oil&gas
In this case, some parts of Eastern Europe and Southeast Asia (especially Cambodia, Thailand, and Malaysia) are good
Somewhere few people speak English, like a small town in China or Japan
I would check out some of these countries:
This includes digital nomads, online business owners, and retirees. In this case, I would focus on:
- Ease of visa approval
- Cost of living relative to the quality of services. Even if you are earning a lot of money, it doesn’t usually make sense to live in the most expensive locations if you can live “anywhere”
- General lifestyle
- Wifi speeds
Good candidates here are:
- Some Eastern European countries like Bulgaria and Poland
- Cambodia, Malaysia, and Thailand
- Some parts of Mexico and Colombia
Finally, if your spouse or family is from a specific country, these places should be considered, as getting a visa is easier, and you might speak the language.
How do people earn $100,000 a year working online?
The easiest ways are these:
1. Get a job in an area that can be done remotely. Get good at that job. Then ask to go remote, or apply for remote jobs. Or retrain in those areas.
I can remember I met somebody in Cambodia in 2014. He was earning $90 an hour in the US.
He asked them if they would consider him working from abroad provided he got the job done.
They agreed. So, he moved overseas and works online. Not all employers will agree.
Recently some employers told their employees “don’t expect New York or London pay if you will be working remotely”.
Others are open. Find those opportunities.
2. Start an online business
Follow these steps
- Ideally, get a job in the services sector. That could be being a lawyer, an accountant, consultant, or whatever
- Get good at it for 5+ years
- Then consider starting your own online business in that area
Yes, there are other ways. You can make 100k+ on Patreon or doing Amazon dropshipping.
Yet it is much harder than the above options because most people want to do it these days, and the boundaries to entry are low.
In other words, anybody can “try” to become an affiliate. Not everybody can become a qualified medical doctor who becomes a star on YouTube for giving health videos.
Focus on what you are good at. Build up your name. Be in it for the long term.
Take sensible, calculated, risks.
As a stock investor, do you take calculated risks?
It depends on how you define calculated risks. Calculated risks don’t literally mean you “can calculate the risk” mathematically.
If you mean taking “sensible” risk, then yes, that makes sense. The biggest reason is this – there is no risk-free option.
The reason is simple. The past is not a guaranteed prediction of the future.
There are some investment portfolios that have always risen in value over a 30 year period.
Does that mean that that will always be the case? Of course not, it just means you would be extremely unlikely if you were part of the first generation ever where such portfolios didn’t work.
One of the single biggest mistakes that people make in investing is assuming that volatility is a risk.
Private equity is quite non-volatile but it is, in general, riskier than more volatile public stock markets.
Fixed return despots are non-volatile, as is cash in the bank, but billions of people lose to inflation every year.
What is more, there is always a more extreme case every year. It was Argentina and Venezuela last year.
It is Lebanon this year, and even some developed countries like Germany have been through these extreme inflationary situations.
The point is, there are only ever two options in investing (and probably life):
- Take loads of risks
- Take calculated and sensible risk
Doing nothing and inaction isn’t risk-free.
We saw this in business recently. All those “careful” traditional businesses like bars and restaurants probably thought that firms that went in the direction of online deliveries were taking a big risk in 2018 or 2019.
Fast forward to 2020 and this happened:
Lockdowns. Governments bans on hospitality. A black swan risk (an almost worldwide lockdown that has never happened before) came to pass.
Those businesses that joined the online trend in 2010, 2015, or 2019 weren’t being “risk-takers”.
Yes, they were taking themselves out of their comfort zone most likely, but they were actually reducing their risk by diversifying revenue streams and getting ahead of the game.
The same is true in terms of investing. It is better to be proactive than reactive.
Why do everyone worry so much about money?
Not everybody worries about money. Some don’t at all. However, you are right to say that many people do worry about money.
One of the main reasons is lack of financial planning or financial insecurity
Financial insecurity is obvious. If you have lost your job as a new, 22-year-old, graduate, it is only rational to worry about money.
If you are very low-income, it is only rational to worry about money. However, financial planning is another big issue.
The vast majority of people earn much more money in their late 20s, 30s, and 40s compared to their early 20s.
Yet the average medium wealth of people doesn’t always increase that much. There is a small percentage of people who get much wealthier.
These tend to be people who invest for the future, even if they are middle-income professionals.
The majority just spend more as they earn more. I personally know several people with six-figure, or even high six-figure, incomes who are broke.
I am speaking about 45-year-old doctors and 52-year-old corporate lawyers. They are broke as they think:
- My house is my pension (bad idea)
- I could die tomorrow so why save or invest?
- I love my job so I can work until I die (for some people – this is risky)
Or they don’t think like that and have just got into bad habits, like overspending.
So, there are “good”, rational, and understandable reasons to worry about money.
There are also “bad” reasons to worry, like not planning properly.
The best things people can do to reduce worry is:
- Invest early due to compounding
- Don’t just rely on one income source. Diversify even when you are doing well.
- To marry the right person, with the correct values, as can be one of the biggest reasons people become materialistic with age. They are partially “forced” into it by a partner.
- Be careful with big-ticket items like houses and cars.
- Educate yourself, or use people who are experts in finance.
Should you keep investing with markets at all-time highs?
I once met a self-made, multimillionaire, who invested in stock markets decades ago.
He admitted to me that, quote, “he is glad that he didn’t know that stocks were at a record high when he invested, otherwise he never would have invested”.
The biggest reason why people invest in stocks markets is, especially adjusted for dividends, stock markets have always hit all-time highs.
So, by definition, there is a good chance you will be investing at record highs, as it happens a lot.
It can happen tens of times per year:
It doesn’t happen like that every year, but it is normal historically as the link below shows.
Nobody can time the market. It makes no sense to wait for falls and then invest in.
You might get lucky once or twice, but you won’t “win” over a life time doing it that way.
Look at the last fifteen years or so. So many people didn’t want to invest:
- Before 2007–2008
- In 2009 despite markets being so low (it is better to wait and see)
- 2012 – markets have been doing well. Better to play it safe.
- 2013 – markets have been doing well for years now. Are they too high
- 2014 – same as 2013
- 2015 – even more worries now about markets being too high
- 2016 – markets have been too high for years and Trump might get elected!
- 2017 – markets have been too high now
- 2018 – markets have been too high, for too long now
- 2019 – start of the year. Markets have finally fallen. Still, best to wait and see
- Start of 2020. Markets have been high for too many years now and we have this Covid business
- November 2020. Best to wait after the election and markets have recovered too fast from Covid
- 2021 – Markets have been too high for too long now!
See the pattern? The same people worried about Trump getting elected in 2016, were worried about the 2020 election.
The same people worried about Covid, were also concerned about 2008. All time, the patient buy and hold investor beat them all.
If I would have gone back to the 1970s, 1980s and 1990s you would have seen a similar trend.
People always worry about this event or that, this crash or that, and all the while markets march higher, especially adjusted for dividends.
As a final point, it isn’t true that markets are at records globally. At least in capital value terms (not including dividends), the FTSE 100 and many emerging markets are below all time peaks.
In fact, Mainland European, UK and Emerging Market stocks are incredible cheap compared to US stocks on a CAPE and P/E ratio despite 0% interest rates and QE.
That doesn’t mean they will beat US stocks for sure, but remember, on a global basis, stocks look cheap.
As Buffett said recently as well, even US Stocks look quite cheap IF interest rates stay low for long.
Pained by financial indecision? Want to invest with Adam?
Adam is an internationally recognised author on financial matters, with over 295.9 million answers views on Quora.com and a widely sold book on Amazon
In the article below, taken directly from my online Quora answers, I spoke about the following issues and subjects:
- Given the current real estate market with property selling at such a high price do you think there will be a crash like in 2008? I explain why this isn’t yet 2008 for housing.
- What has made Jeff Bezos, and Amazon, so successful?
- Is the future looking bright for the global economy?
- What is a “sure” way to never lose money in the stock markets? Could the obsession with avoiding losses, ironically, result in more chances of losses in the long-term?
To read more click on the link below.