I have finally saved enough money to start investing. What company gives good, diversified access to stock, ETFs and mutual funds? Does it make sense to use company like Vanguard or Fidelity for that? I’m a EU/Poland citizen, how would I transfer my money back and forth without incurring significant fees?
I use Vanguard for most of my investments but I’m a US citizen. You might do better to open with an EU brokerage company. Just watch out for trading fees.
I would stay away from mutual funds unless you really do your research. Vanguard on the other hand has some incredible ETFs. VTI is great.
The more I think about it, the more I believe that my original question should have been “how to transfer money around the world without paying ridiculous fees”
Here are some portals that list some offshore brokers…
TD Direct Luxembourg might work for you, since it’s geared towards expats & cross-border investing.
- They don’t take US citizens/persons. But since you’re a EU/Poland citizen, you should be fine.
- They provide one of the few ways non-US persons can invest in Vanguard index funds (domiciled in Ireland), as well as ETFs.
- They have multi-currency accounts, so you can wire funds in a variety of currencies (USD, GBP, EUR, HKD, etc)
- When changing currencies, the fx premium over spot is usually 0.50% or lower (if changing 15,000 GBP or more)
Keep in mind that if you’re a non-US person (no US citizenship, no US permanent residency), then you should stay completely out of the US market (for reason stated below). Stick to non-US based accounts, and only invest in NON-US-domiciled funds (like the Vanguard index funds domiciled in Ireland) and NON-US-domiciled ETFs (like the ones listed in London, domiciled in Ireland).
If a non-US citizen / non-US person invests in US-domiciled funds & ETFs (like BND, VTI, VEU/VXUS), then if they die, the US government will impose a brutal estate tax of up to 40% on amounts over $60,000.
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The more I think about it, the more I believe that my original question should have been “how to transfer money around the world without paying ridiculous fees”[/quote]
Currency transfer companies may charge 0.50% - 1.00% premium over spot rate. Some of the bigger ones are…
Thank you @normaldude. That’s an excellent starting point for the information I’ve been looking for!
Investing is still important. Low-cost ETFs in a jurisdiction without capital gains tax or withholding tax are the best starting point. Some geographic diversification and a small emergency fund in gold coins also helps.
Vanguard is usually the cheapest, but it’s not available everywhere.
Why? I’m curious to know your reasoning for this considering that most ETFs are very similar to MFs. For example, VTI and VTSMX. The most significant is that ETFs are traded like stocks which can either be an advantage or disadvantage depending on your investment style and needs.
There is this http://www.etoro.com/ thing, which seem to allow making investments quite easily. But I not yet tested it on real money, so cannot say anything more precise yet.
I use Interactive brokers, they are by far the cheapest and most flexible online solution. You also get patched into an incredible forex market and the fees are very low because their fees are mostly structured for huge fund houses but they don’t have separate tiers for small fry like me. Thus my fees per big trade end up being very less.
I also use Saxo Capital Markets from the UK just for not having all my money with one broker. Their fees are higher and the available number of symbols is smaller.
But with both you can trade on a wide array of markets (US, Amsterdam, London, Hong Kong, Singapore, etc.). And you can also convert currencies.
Account opening is pretty easy and can be done remotely.
I mostly own Vanguard ETFs in Europe (Amsterdam and London stock markets) through them. This is to avoid issues with the US Estate Tax in the future (investments above $60k) and trading through Vanguard Ireland gives me just 15% dividend withhold vs the 30% I would normally get. (The US IRS does this to everyone =/)
You’re already a nomad, why not consider making international investments?
Being from Poland, there are great real estate investment opportunities in your own country and if you’re open to traveling, countries like Cambodia and Colombia offer great property returns as well.
Even just opening a bank account in a country like Mongolia can give you 10% returns.
A little off topic, but thought I’d mention a couple books that nomads interested in international investing might find interesting: Investment Biker and Adventure Capitalist by Jim Rogers.
Basically he rides a motorcycle around the world (then drives a car) and it’s a combination of travel and his investment analysis of the countries he travels through.
The books are very dated now, but the interesting part is the thought process anyway. He hasn’t been right about everything, but he retired from fund management at 39 as a billionaire, so he must have been doing something right.
Hey! I’m also a legal resident of Poland and have been looking into ETF solutions lately. Was wandering which fund did you go with in the end?
Personally only own some stocks in US company (bought it directly as it was my employer) and went with AirBnB setup in Krakow. But now looking into something else then property investment, as that tends to take up time even when outsourcing management to somebody else.
For non-US citizens, open a brokerage account with Firstrade or Charles Schwab and invest in global targets ETFs (like VT, SCHF) or US targets ETFs (like VTI, SCHB)