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Low Risk 2-3% Savings/Investment Options?

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  • #16
    Originally posted by MonkeyBrain View Post

    Is that Schwab, or another US one that can't be opened from overseas.
    I'm not looking to avoid taxes, i'd prefer to keep it legal. But it seems like the fees and fee structures for these kind of accounts can vary a huge amount and I don't want to get stuck with an account that costs me too much in fees.

    (on that note, as I'd be using UK funds, I assume using a US account would cost me currency exchange costs on every transaction? Anyone know?)

    PS/ I found some useful information on this site: http://the-international-investor.co...ck-broker-list (there's also a US list)
    it's aimed more at people investing in international markets, rather than expats - but it does have some info on which brokers accept non-residents.
    Well, I don't want to reveal that, so let's just say that you might be close (or not).

    You seem overly worried about fees and fee structures. Most of the the biggies have a few ETFs that have yearly expenses under .10%, and I think schwab has an ETF (or more?) that they charge .04% for (SCHB, trying to out-Vanguard, Vanguard). Schwab and fidelity have a range of ETFs on offer for commission-free trades, saving you the $8-9 when buying or selling. I think fidelity has a bigger range of such offerings.

    Please note that this is radically cheaper than those outfits offering offshore savings/investing. Do your math!!

    Recently I've seen some fidelity ads that are offering 200 free trades when setting up (funding) a new account, or adding to it. Seems like a deal.

    Currency exchange costs would not occur on every transaction. You would fund the account with dollars (so an exchange there), and until you would repatriate or add to the account, you could trade (or not) to your heart's delight and there would never be another currency exchange fee.

    As I do here in Japan, I have a chart that I give to the local tax office declaring my gains/losses for the year. If I buy XYZ on April 1st and then sell it on November 1st, I look up the exchange rates for those two days and make a calculation of profit/loss (excel makes it for me). Sometimes the exchange rate works in your favor, sometimes it does not.

    But you don't have to exchange currencies to do that, just show that your purchase on one day was valued at a certain yen value, and that on your date of sale, you can provide another yen value. You never switch currencies, you just show the profit/loss as if it were valued in yen.

    ***

    So it sounds like you're a UK person. I'm US, so I can't offer any advice experience on the other thing you may be thinking of as "fees"--taxes.

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    • #17
      PS/ I found some useful information on this site: http://the-international-investor.co...ck-broker-list (there's also a US list)
      it's aimed more at people investing in international markets, rather than expats - but it does have some info on which brokers accept non-residents.

      ***

      That's friggin' scary!! Especially that they don't tell you what a trade will cost--only that it might be "cost effective" at a certain threshold. How can you evaluate that journalist's view of that?!?!

      It looks like many of those brokerages may be making their money off of fx (in additional to trading fees). Rip-off.

      Fund your account in the currency you will be dealing in (and don't use that brokerage to do that exchange). After that, trade only in the currency that you have funded your account with. Fidelity and schwab offer you the world in dollars (ETFs/ADRs), it is totally senseless to have to bounce in and out of currencies. Yes, you'll get nicked, big time.

      Also, in anything mentioned in that article, focus on online trading, and its costs. "Broker-assisted" trades are to be avoided at all costs, because they will cost you an arm and a leg to to the same thing that you could have done far more cheaply online.

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