I often write on Quora.com, where I am the most viewed writer on financial matters, with over 271.5 million views in recent years.
In the answers below I focused on the following topics and issues:
- Why do people buy non-dividend paying stocks like Amazon? Can there ever be a justification for doing this?
- Is Japan a lonely place to be as an expat, and how does it compare to somewhere more international like London in the UK?
- If you are moving overseas as an expat, what should you take into consideration?
- Given the weakness in the United States Dollar, should you change money into Euros or another currency?
- Is it possible to set up a company in the US, like an LLC, remotely and with banking? Do alternative options exist such as the UK or some offshore jurisdictions?
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Consider this. Amazon doesn’t pay dividends. Nor does Buffett’s BH:
So, the reason why people buy these stocks is they think the capital values will make up for the lack of dividend.
The fact that these firms can reinvest back into the business, rather than give shareholders dividends, does give them advantages.
With that being said, we do have to remember that dividend reinvestment is one of the key investment strategies out there.
The majority of the return of the S&P500 and FTSE is actually dividends.
Not every year or decade, but long-term that has been the case:
Yet everybody is obsessed with capital values. Look at how the media reports news of “markets hitting records”, or “the Japanese Nikkei hasn’t recovered”.
They are speaking about capital values only. Somebody who buys and holds often see’s their portfolio hit records many more times than somebody who just withdraws the dividends.
So, in the long-term, dividends have their place as well. It is a mistake to rely solely on capital appreciation.
Is Japan a lonely country to live in for a foreigner?
It depends on the following things:
- If you speak Japanese
- If you know people in the country
- Your personality
- What you are comparing it too
The later point is quite important. The UK, where I am from, isn’t an easy place to make new friends unless you make a big effort.
At least beyond a certain age. It is very easy to make new friends if you are in high school, university or even a young professional.
But if you are in your 30s, 40s or older, it gets tougher. You need to make an effort to go to events and places.
This is especially the case outside of big cities, which don’t have many expat events.
In comparison, when I lived in South East Asia for a short while, all you have to do to start meeting people is to go to events, like chamber events, or indeed expat cafes/bars etc.
Take a place like Singapore. English is widely spoken. A high percentage of the population is expats.
There are events on almost every day of the week, or at least there were before Covid.
In comparison, I would say Japan is more like the UK in some ways, but maybe a bit harder to meet people.
If you live in Tokyo, there are loads of events you can go to, despite your language ability.
There are business communities, social events etc. People are open to meeting foreigners.
In comparison, if you live in the countryside or even a smaller Japanese city, you will require some Japanese-language ability and indeed patience.
As a broad generalisation, friends are harder to lose in Japan than some Western countries, but harder to make in the first place!
This means that cultivating long-term relationships takes time. I think this is one reason why organisations like Internations list Japan as being one of the harder places to live for expats.
It isn’t like going to a laid-back beach resort in Cambodia or Mexico, or for that matter a majority English-language country.
I think this is another reason why even foreigners who love Japan don’t want to retire locally.
It is one thing to love working and doing business in Japan. It is another to not feel lonely in retirement.
Which city is better for expats, London or Tokyo, assuming salary is the same?
Overall, the taxation rates in Tokyo, and indeed rental costs, are lower than London for expats.
That does depend on exactly how much you make, and how you make it, because it gets complicated if you are paid via housing allowances and overseas, but the general point holds.
So, your disposable income will be higher in Tokyo.
There are other benefits of Japan including
- It is safer than London, including in Tokyo.
- You will get to learn another language if you don’t know Japanese. You might be taken out of your comfort zone in more ways than language, and that can lead to personal growth.
- Japan isn’t as expensive as people assume these days
- Unlike what the media implies, Japan, at least from a legal perspective, is open to expats. Getting a visa is easier than the UK, perhaps due to the ageing population.
- Expat packages, in certain industries, can be higher, because they struggle to get as many talented candidates as New York or London.
The negatives are
- It is less international. 45% of London’s population were born overseas. It has a British-born, Muslim mayor. That couldn’t happen in most countries, including Japan.
- As your English is almost for certain better than your Japanese, you will have more job and business opportunities
- For travelling, Europe in general is better and easier. You can take a 1-hour train ride into Paris, for example. Japan is also an island, but only three of four places are within a 2–3-hour plane journey. You can get to most European countries within 3 hours from the UK, and almost all within 4.5 hours.
- Surveys done by expat organizations like InterNations show that the average expat isn’t that happy in Japan. In the UK it isn’t one of the best, unlike Taiwan, but it is slightly better.
- If you have kids, international school is better in Japan, which adds to the costs.
So, it just depends on what you want. London is probably better career wise, but Japan would be superior for a lucrative short-term contract or for an experience.
If you are a remote worker or run your own online business, it doesn’t make much difference.
Both places have good internet connections.
What must I take into consideration when being offered a job to work abroad in a foreign company?
First and foremost, I would consider why you want to work and live overseas.
If it is career-path and/or financially motivated, I would consider the following points:
- How easy is it for you to move on once your contract ends? Many expat contracts are short-term, typically two or three years in duration. Once that period is over, you usually need to go on a local contract, move home or find another short-term expat position.
- Adjusted for the cost of living and taxes, are you better off compared to back home? Many people just care about the gross salary, but the amount you can save adjusted for the save lifestyle is more important. Therefore, it is important to consider things like the housing allowance, payments for insurance, local tax rates etc.
- Are you being offered what other expats are in similar positions? Some online firms similar to Glassdoor can help, and recruiters often have a good idea. Take it with a pinch of salt though, as people who have had a bad experience will be the ones to contribute.
- Is the job that you will be doing interesting compared to what you do now? Sometimes expats without advanced language skills are limited in terms of which projects they can engage in.
- Are you likely to like the city/country you are being sent to? You can’t know this for sure by doing research beforehand, but you can get some ideas.
- How much hassles are involved in terms of visas, property, taxes etc and will HR help with this?
- How will the company pay you? In some countries, only locally sourced income or money remitted into the company is taxed. This will affect the tax rates in some cases.
I would also reach out to some people on LinkedIn or beyond, and hear about their own personal experiences.
It might be more accurate compared to something like Glassdoor, if they speak off the record.
Observing expat staff turnover on LinkedIn is another decent measurement.
If many quit within a few months, that isn’t a good sign.
If somebody is moving for lifestyle reasons, then it is different. Many people will move to get a better work/life balance, or to get a new experience.
That’s fine but only if expectations are realistic.
The following answers were on the adamfayed.com Quora space.
Do you think it’s smart to turn all my dollars into euros given the weak state of the dollar right now?
The short answer is no unless you live in the Eurozone or plan to retire there.
The reasons are:
- These things go in cycles. If you look at the USD in the long-term, it is still trading at historically high levels. It is 1:41 against the Pound and the historical average has been 1:50 or 1:60. Against emerging market currencies it has done better. It has merely given up a lot of the gains made between 2010 and March 2020. The USD had a decade of strength. It wasn’t going to last forever.
- It is better to just invest the money. If you do that, it is irrelevant if the USD weakens it strengthens. If the USD gets weaker against the Euro, the funds will just do better. When people invest in ETFs or other investments they aren’t investing in the currency after all. Most countries banks pay 0% now including in the euro zone, so investing is better. If you have a globally diversified portfolio for the long-term, currency weakness or strength becomes irrelevant.
What are the ways to register a company in the US and open a US business bank account without visiting the USA?
I am not an expert in this area but I believe you can do this.
I know Wyoming, Delaware, and Nevada make it easier for non-residents to open LLC.
You can google firms that will hell with incorporation. I think digital institutions like transferwise would be a good bet for banking.
Otherwise you can try the U.K. Non-residents don’t pay income tax, only corporate taxes.
You can register easily on Companies House and some banks will grant you a business account.
Of course if you are engaging in a ‘high risk’ industry like gambling, the requirements can be more severe, if money laundering risks are perceived to be high.
Pained by financial indecision? Want to invest with Adam?
Adam is an internationally recognised author on financial matters, with over 271.5 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:
- How do people get rich in gambling? I explain why trying to get rich “by gambling” isn’t very productive.
- Is somebody with a property worth $1m, Euros or Pounds really a millionaire?
- What are the pros and cons associated with emerging market stocks?
- If the stock market is doing badly, does that mean the economy is too?
- Which sectors will likely boom in the near future?
To read more click on the link below.