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Learning, Sharing, and Teaching => Investor Alley => Topic started by: irishexile on April 05, 2014, 02:20:26 PM

Title: Fresh Start
Post by: irishexile on April 05, 2014, 02:20:26 PM
Hi All,

I'm fairly new to this game but committed to making some radical changes in order to get FI as soon as possible and generate more choices about how I spend my time...

Firstly, I'm emigrating to San Francisco from Scotland this summer - and before I get punched in the face for moving to the most expensive city in US, we (wife and three kids) are renting a one bedroom apartment owned by my sister in order to start small and live within our means. This means first port of call is a serious customisation of the space but that's a different post!

Secondly, by emigrating we will have no debts and a clean slate with the odded bonus of about $30k hard-saved cash. This will be the first time in 8 years that we are debt free and have any savings to speak of.

This is where I need advice - as an Irishman and someone with little knowledge of the American financial system, I could use some pointers on the best way to invest this cash in order for it to start making me money. My goal is to get a regular job and implement the plan of saving 50-75% and absorb as much of the excellent advice and support on MMM as possible!

Thanks in advance :)
Title: Re: Fresh Start
Post by: nereo on April 05, 2014, 02:58:04 PM
Welcome Irishexile!

SF is a great city, albeit an expensive one. But, there's plenty of stuff around that is free or nearly free if you care to seek it out. 
As for where to put your long-term savings, a popular choice is Vanguard's low-cost index funds, particularly the SP500 and Total market funds.  I don't know if there's any special restrictions for a foreign worker, but I'd start there ( 

Other tips - keep an eye on and freecycle for anything you might need to buy.  It's very easy to furnish an entire apartment with good quality stuff at about 1/4 the original price if you are willing to spend the time looking.  If you are looking for "functional but ugly" stuff (e.g. bookcases with its laminate peeling off) you can get most of that for free or nearly free

Title: Re: Fresh Start
Post by: AlmstRtrd on April 05, 2014, 09:46:29 PM
Welcome to the US, irishexile. Just my opinion but I would keep that cash liquid until you get a good read on your actual expenses. It's always good to have several months of living expenses handy. When you get settled in and have a pretty fair idea what your income/outflows are from month to month, then would be the time to start investing. Good luck to you and your family!
Title: Re: Fresh Start
Post by: irishexile on April 06, 2014, 01:30:58 AM
Thanks for the advice. Vanguard definitely seems to be a good starter given some of the other info available on here.

@AlmstRtrd - my initial plan was to keep some of the cash liquid in a decent bank account/credit union but look to invest the rest. Employment status will probably determine the exact figures but essentially we will not need to pay rent until I get a job (thanks sis!).

Title: Re: Fresh Start
Post by: NearlyThere on April 06, 2014, 03:48:36 AM
Also, have you fully emigrated? As in citizenship? If not, I don't believe you can open vanguard accounts etc. In that case you would have to open them back in the Uk or Ireland, which would incur forex fees.

In later life I hope to do the same jump across the pond
Title: Re: Fresh Start
Post by: irishexile on April 06, 2014, 05:28:17 AM
I qualify through my wife who is American. All kids have dual nationality and I have previously lived in California for about 6 years through a green card. I plan to close all accounts here in UK before moving, so I'll check the Vanguard situation, although I would assume that it is based on residency rather than citizenship? Maybe I'm wrong...
Title: Re: Fresh Start
Post by: AlmstRtrd on April 06, 2014, 08:55:26 AM
My wife had a Fidelity account when she just had a green card. I think you are good to go as long as you have a Social Security number but obviously ask the experts. In general, we Americans like to make it easy on people who are trying to park money with us!
Title: Re: Fresh Start
Post by: webguy on April 06, 2014, 10:27:32 AM
I moved from England to the US about 5 years ago and can verify that you don't need to be a citizen in order to open retirement accounts. If you have a Social Security Number, which you can get shortly after moving here, then you can open accounts with any bank or brokerage firm. I personally have both a 401k and several IRAs with Vanguard.

In regards to what to invest in that would depend on your investment strategy, how long you plan to invest for, the amount of risk you want to take on etc. I'm investing for the long haul (I'm 28) and so have a mix of US and international broad market mutual funds (VTSAX and VGTSX) along with a few other funds and individual dividend paying stocks. When I first opened an IRA here I thought it was like an ISA and could just put my money in it and it would just give me 2-4% interest, but quickly found out that I had to choose my investments within the account. This series of posts really helped me out a lot in understanding the American system:

Hope that helps!
Title: Re: Fresh Start
Post by: irishexile on April 06, 2014, 11:31:04 AM
Brilliant, cheers webguy! I already have a social security number from previous residency so that box is ticked.
Title: Re: Fresh Start
Post by: FrugalZony on April 06, 2014, 11:43:25 AM
Yep, you don't need to be a citizen to hold Vanguard accounts or have a 401K or anything of that nature.
You do need a SSN, which obviously you have, as you have been living here before.

Do you or your wife, or both have a job lined up? Because if you don't that cold hard cash will be needed to buffer your landing, until you are settled. Depending on if you have a credit score, you may have to put deposits down to turn on utilities and such, so you may want to have some cash buffer to get you started. You can still decided where and how to invest, once everything is coming together after the move!

Also, I'd recommend (if viable) selling or transferring to a US account any stocks or funds you have invested in Europe, as the reporting requirements for both you and your bank, due to FACTA are a PITA and your European bank may actually force you to close your investment account because of that (happened to me)!!

I think it's great that you are planning to start real small, albeit in an expensive city. It's also good to have a support network, which you seem to have, as you are renting from family.

I believe it's extremely important to get a job (or some sort of income) lined up ASAP so you don't have to dip too much into your savings.
I have seen many Europeans give up here in the US, as they came over with high expectations of their experience and skills being recognized and ended up doing odd jobs instead just to keep afloat.
One of my friends will be going back next month, because she could not make it work and realized she was better of in her home country.

That said, as you have lived here before, you are probably very aware of all that.

There's something exciting about every new beginning!! I wish you and your family the best of luck!!

Title: Re: Fresh Start
Post by: irishexile on April 06, 2014, 01:36:51 PM
Thanks for the support FZ! I've been working on employment prospects for the past few months using networks here and new contacts in States. I work in the non-profit sector so the downside is that salaries are never huge but we're used to that. Also, my wife is a CrossFit certified coach and would love to eventually open her own box, but until then the plan is to find employment in this field (which is gaining increasing popularity all the time).

Unfortunately I never had any stocks/investments here to transfer!