I often write on Quora.com, where I am the most viewed writer on financial matters, with over 264.1 million views in recent years.
In the answers below I focused on the following topics and issues:
- Which is the most underrated financial advice? Is complex pieces of advice always the best?
- What are my favourite countries? I split the answer up into the countries I would most like to live in, visit and admire.
- Why do some Western people want to retire in the Philippines?
- For people living in Portugal, how can you invest in US stocks? Is it advisable to do so through a local broker or international one? I approach the answer from the point of view of expats and non-expats.
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Which is the most underrated financial advice?
- Firstly, keep it simple. A lot of the suggestions below are very simple. Getting the simple things right first is key. For example, studies that have been done have shown that how much you invest and for how long is the most important determinant of wealth at retirement. Not percentage returns, salary or level of financial knowledge.
- Get a job. Get good at it. Then start your own business.
- When you are young, or when you have accumulated enough money, change your residency to a low tax or cost of living country, if you can. In a digital world, this option will become easier for a greater number of people.
- Only control what you are able to control. Don’t worry about things like the markets falling or other things you can’t control
- Focus on emotional control. Often the biggest risks are emotional. For example, the markets falling aren’t a risk in and of themselves. They have always came back historically. What is a risk is the markets falling, and you panic
- Taking calculated risks is one of the keys to success. Taking those risks when you are young can be even more rational. You have less to lose.
- Focus on lifelong learning. School, or university, is the start of the learning process. The more you learn, the more you are likely to learn
- Focus on implementation and not ideas. Knowledge is important as per number 7. Knowledge is power. Yet implementing knowledge is what counts
- Cultivating personality traits like persistence is just as important as any of the above traits.
- Work hard, but working smart is just as vital in this day and age. Working really hard on irrelevant and pointless tasks isn’t important. We are also increasing in a digital age.
- Spend below what you earn and invest the surplus wisely
- Don’t just spend loads more as you earn a lot more. Many people do this in their 30s. More comes in, and just as much (sometimes more), comes out.
- Avoid most forms of debt.
- But the least property for your needs. Not the most. Renting isn’t always dead money. Therefore, do the maths before you buy.
- Production usually comes before perfection. 80% of success is just showing up as Woody Allen says. So, often, it makes sense to just get things started.
- Don’t rely on the media for impartial advice, as the business model is based on sensationalism
- Educate yourself about personal finances. If you are too busy for that, use an advisor.
- Once the above has been achieved, perhaps going beyond the basics and simple is a good idea.
What are your top 5 favorite countries?
It depends on for what purpose – living vs visiting vs admiring. It is possible, for example, to admire a way a country does things without wanting to live in it or visit it.
In no particular order
- Taiwan – was dirt poor in 1949, under a dictator. It has become a modern democracy, with high standards of living, a crime rate almost as low as Japan and did better than anywhere with COVID-19. Yes, there has been a spike now. The biggest reason was complacency. They were doing so well. What is more incredible is they did well whilst having some of the loosest restrictions in the world. Taiwan hasn’t locked down. The economy grew by more than the US and China last year, and even more than Taiwan’s economy grew in 2019! They did this without big debts and stimulus, and without huge deaths. By closing down the border and getting test and trace right, they avoided lockdowns, an economic fall and deaths! New Zealand, China and Australia avoided deaths and a huge falls by locking down and neither grew more last year than in 2019. As the historian Niall Ferguson said, if the world had followed the Republic Of China (Taiwan) and not the PRC, we would be in a better place. After the Wuhan lockdowns the wrong lessons were learned when South Korea, and especially Taiwan, had a better model.
2. The US – I wouldn’t want to live in the US. They make things too complicated now for expats in terms of tax and finances, especially after FATCA. Yet there is a reason why it is the number one economy in the world and one of the world’s longest running democracies. Once again, they have recovered more quickly than most other developed countries, just like in 2008.
3. The UK. If I was writing this article ten years ago, I wouldn’t have put my native country on the list. Living overseas for so long, however, has made me realize the good and bad about the country. The UK, despite the infuriating aspects, still does more good than bad.
4 + 5 Some mainland European countries like France, Switzerland Germany. For the same reason as the UK. For all the faults, they stick around as a developed country and complete crisis tends to get avoided.
In terms of visiting
In this list I wouldn’t put the countries which I have liked the most. From that point of view, somewhere like New Zealand would be in the list.
It was one of the best countries to visit in terms of natural scenery. However, I have learned that the best places to visit on those where you know the most people.
If you already know the place, you also can go back to some of your favourite restaurants and other places of interest.
Therefore, I would pick places like
- South Korea
- China (Shanghai and Hong Kong in particular)
- The UK
- Cambodia and a few other places I have spent a decent amount of time in many years ago.
- Malaysia. Relatively developed. Singapore-lite in many ways but at 30%-60% of the price. Easier to get in in the first place, if you are a private business owner who doesn’t want to get sponsored for a visa.
- Japan. One of the best places to live. Clean, orderly etc.
- South Korea. Japan-lite in many ways. Developed, clean, orderly, but at a lower cost with better English. Like Malaysia and Japan, it can be tax-efficient as well. Locally-sourced income is taxes. It is possible for expats to not pay taxes on overseas income for five years, just like in Japan. Malaysia is even better . There are no taxes on overseas income full stop with no time limits.
- Singapore or Hong Kong. Ten years ago I would have picked Hong Kong. It is liver than Singapore, with good English and an international vibe. Since the troubles, I would probably go for Singapore instead.
- Monaco . Or any other 0% tax places like the UAE. Of course, these places attract a lot of expats for a reason.
It really depends also on what stage of life you are in. In your 20s, a place like Bangkok or Shanghai is great.
If you get married and have kids, things change for most people.
People are different. Here are the main reasons I have seen, in no particular order.
- Getting married to a local. That makes life easier in most countries
- Having an expat assignment in the country – and then deciding to retire locally
- Tax and cost-efficient. The country doesn’t charge tax on overseas income in most situations.
- Language. Alongside Malaysia and Singapore, Philippines has the best English in the region. It is cheaper and easier to get in (visa-wise) compared to Singapore, which isn’t really a retirement destination. Malaysia has an easier life in some ways, but isn’t for everybody. Culturally speaking, especially for Americans, the Philippines seems culturally closer than some other Asian countries.
- Beauty. As per the picture, it is a beautiful country if you get out of Manila.
- Expat-friendly. Few expats have an issue in the country in terms of anti-expat sentiment.
With that being said, more Westerners retire in Thailand compared to the Philippines.
Even Malaysia probably competes with the Philippines in terms of expat retiree numbers.
That is because things like government bureaucracy, which is bad in all of those countries, is still a bit better in a place like Thailand and even safety can be superior.
So, it isn’t like the Philippines gets an especial number of Western expat retirees.
It just gets more than Laos, Cambodia, Brunei and many other places in the region.
I live in Portugal and I want to start investing and trading in the United States. Should I use a broker in my country or a U.S. broker?
In general, non-Americans should avoid US brokerages, at least for the lions share of the money.
That is because even though you can fill out a W8-ben form, which should reduce taxes, there are still some small risks like death taxes.
Therefore, it is better to invest in a non-US brokerage, regardless of whether that is in your home country or beyond.
If you are an expat, or a Portuguese who is planning to emigrate in the future, it usually makes sense to invest in providers which are portable.
Most local providers, in every country, don’t allow you to easily add new money and keep the account open when you move.
This can cause hassles, unexpected taxes if you need to liquidate and many other issues.
That often means that most sensible expats, and future expats, go for portable third-country options, which are in the niche of portable/cross-border.
As an aside as well, you don’t need to physically have money in the US to invest in the stock market.
Many index funds and ETFs which are focused on the US, are domiciled on the London Stock Exchange or the Irish and Canadian ones.
That is because many providers have understood the small tax risks that non-Americans face, and indeed the withholding tax issue.
These issues can be negated with a sensible strategy for non-Americans as the graphic from the online website Better Spider:
If you are American living in Portugal, there are some strong arguments in favour of using US brokerages.
Pained by financial indecision? Want to invest with Adam?
Adam is an internationally recognised author on financial matters, with over 264.1 million answers views on Quora.com and a widely sold book on Amazon
In the article below, taken from my online Quora answers, I spoke about the following issues and subjects:
- Why is investing in commodities or options more risky than investing in stocks? I look at the fundamental reasons why stocks tend to rise over time, whereas commodities are stagnant.
- What are the friendliest, and cheapest, countries for American expats?
- What are some high-income skills? Marketing, accounting, sales or something else? is it important to have soft and hard skills, or is having just one OK?
- Is it really possible to just buy assets and live from the capital gains, without getting a job? I look at the practicalities.
To read more click on the link below.