Author Topic: Dutch citizen, living abroad, earning USD, where to invest/save?  (Read 1895 times)

Pietje

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Hi All,

I have been lurking on these forums for a couple of months now and I only wish someone told me about ER 15 years ago ;) I think ER has always been on my mind, but I never realized it was achievable for mere mortals, so it always remained a distant dream.. not something that could actually happen to me. I hope this is about to change, but I need some help/advice.

My situation is as follows: I'm a 35 yro dutch citizen who moved to a 'banana republic' about 9 years ago, right after finishing my studies. Together with a friend I started a company and through the years we've done quite well. Right now I almost (small mortgages) own some real estate and have some savings. My COL is very low and I think I might be FI (bread-and-butter-barely) because of a rental property.
The local economy is in a downward spiral, but due to the nature of our customers I think we can hang on for at least a couple of years and continue making decent money.

Since the mortgages are almost paid off I'm looking for a place to save/invest the money I expect to make in the coming months and years. My experience with investing is zero and almost all online advice is targeted at US citizens. My primary income is in USD, maybe this makes things easier.

There are other things I need to consider, e.g. whether to keep or sell the real estate, but first I'd like to tackle the savings/investment issue.

So in short:

- Dutch citizen, living (permanently) abroad, looking for a place to save/invest money at a decent %
- primary income is USD
- should be easy/affordable to transfer money to the account on a regular basis
- eventually I'd like to make periodic withdrawals, but for now I plan on letting the money accumulate.

I'll try to answer any additional questions you might have.

Many thanks,

Piet

Seppia

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Re: Dutch citizen, living abroad, earning USD, where to invest/save?
« Reply #1 on: March 06, 2016, 01:27:11 PM »
Hello,
It might be relevant to know where you live, but when in doubt, I would say just go as diversified as possible.
So, regarding equities, go with the all-world index etfs available where you live.

Pietje

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Re: Dutch citizen, living abroad, earning USD, where to invest/save?
« Reply #2 on: March 06, 2016, 02:56:09 PM »
Hi Seppia,

I'd like to protect my privacy a bit, because the country in question is quite small and I plan on discussing a lot of financial information on these forums. I hope you understand.

I afraid you misunderstood me. I don't even know where to start. I'm just a guy with a (small) pile of USD in a local bank account who's trying to start investing that money somewhere reasonably save. This place should also be my main stache of the famous COL * 25 and I plan on adding a lot of money to in the course of the next couple of years.

Since I'm sure I'm not the only non-US investor here, I'm looking forward to hear where others have started. I don't mind reading, so even a few pointers in the right direction would already be of great help.

Seppia

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Re: Dutch citizen, living abroad, earning USD, where to invest/save?
« Reply #3 on: March 06, 2016, 03:36:28 PM »
Not a problem :)


Ok so:

1- find a brokerage account that works in your country and lets you invest around the world

2- find the correct asset allocation that works for you.
I would say minimum 50% stocks
I would also say try diversify internationally
Look on bogleheads or on the excellent site Tyler has put up (portfoliocharts.com) for specifics.

3- the best way to buy stocks and bond is through index ETFs, with fees as low as possible. Vanguard is a great provider, available around the world

zz_marcello

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Re: Dutch citizen, living abroad, earning USD, where to invest/save?
« Reply #4 on: March 06, 2016, 07:44:26 PM »
...
 I'm just a guy with a (small) pile of USD in a local bank account who's trying to start investing that money somewhere reasonably save. This place should also be my main stache of the famous COL * 25 and I plan on adding a lot of money to in the course of the next couple of years.
Since I'm sure I'm not the only non-US investor here, I'm looking forward to hear where others have started. I don't mind reading, so even a few pointers in the right direction would already be of great help.

Im a German expat, now living in the US. Im a Trader+Investor+Manager Automotive.

First you should look if you can open an Interactive Brokers account in your country of residence.
These brokerage accounts are great/low cost because you can open them completly online and fund them from nearly any place in the world without any fees. You can also transfer money worldwide between your checking accounts with zero fees in all currencies.

After your account is open you can buy nearly everything from every stock exchange in the world.
Because you are just starting I would invest in index funds.
Vanguard funds are great. As a non US citizen with residence outside the US you should not buy the US version of their funds but the European version (Irland).  With that, you reduce your withholding tax obligation to the US from 30% to 15% in Irland (you can look for tax treaties of your banana republic :-) country with the US) for everything US based and you avoid also a possible Estate tax that is very strict for non-US citizens investing in the US.

You find all Irland based Vanguard ETF in this post when you scroll down:
http://jlcollinsnh.com/2014/01/27/stocks-part-xxi-investing-with-vanguard-for-europeans/ (fees where further reduced in the meantime)
The Irish based Vanguard S&P500 ETF fund ticker name for example is VUSD https://global.vanguard.com/portal/site/loadPDF?country=lu&docId=2108.

The whole thing is 20-30 hours of work, but it will pay you back an crazy amount of money after you understand the topic.

Have a nice week!


« Last Edit: March 06, 2016, 07:54:34 PM by zz_marcello »

flipster

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Re: Dutch citizen, living abroad, earning USD, where to invest/save?
« Reply #5 on: March 06, 2016, 08:04:25 PM »
Hi there Piet. I'm (we) are in actually the same situation as you - Dutch mid-thirty couple, having mostly lived abroad during our working life, earning in other than EUR currencies we certainly face additional risks i.e. currency translation & and where exactly to RE.

The way we do it is by having several bank accounts, the most important one are ING/Binckbank in the Netherlands where the bulk of of our investments are located (ca. 65%).  Other bankaccounts are in Switzerland, Brazil and our current domicile, a HCOL tax haven metropole in Asia - so there is essentially always a bankaccount nearby. As we travel a lot we find it very beneficial to have a diverse set of accounts (and also at almost zero costs).

What I would do in your case, (just imho) is to find a reliable bank with good online access. And not just online access, but essentially paperless. For us the reason why we stick with ING/Binck as about anything can be arranged online, or else by phone once set-up.

Depending where you want to RE (I guess you're too young still to be sure, same for us as well), I would adjust your stache in that location accordingly (for us, likely EU or Switzerland). I any case I would watch out with FI in a LCOL area, you really might limit yourself in terms of future moves to a HCOL area.

Remember that you might invest USD in ETFs or if you dare in individual stock, most of the companies are highly diversified themselves anyway due to their global business reach, so even if you invest USD returns might be based on EUR, for example.

Also, depending on your investing horizon, given your age I would 100% invest in equity ETF, but that's just me, as I believe that this would be long term the best pay off anyway, provided you can handle the volatility.

« Last Edit: March 06, 2016, 08:10:00 PM by flipster »