“How do you feel today? Which is your emotional number in this moment, if 1 is feeling very low and tired and 10 is feeling fantastic and amazing?”
Do you live your best life and are you fulfilling your potential or do you feel stuck and as if great lives are happening to other people and not you?
Think about it a little and share your thoughts with me in the comment section or private message me if you want me to help you dig deeper, give you tips on how to start changing it all around and turn your life in the direction you have always wanted.
Well, my life has changed tremendously in the last 5 years by implementing the concepts and principles I coach today, not only in my relationships but in general as well.
Your success and much higher quality of life is just a vibration away and learning how to lift yourself up to an emotionally higher vibe, and staying there, is where the key to your better life lies!
It is important to be aware that you don’t need to stay in that old state for a long time or surrender to it!
Let me write a bit about depression because today I worked with one lady who told me that she was depressed.
It is about refusing and not wanting to feel our feelings or understand what is really happening with us.
You have the power to change your state very quickly and here are 3 powerful tips that you can use when you feel unclear and confused and of course can be applied to any situation that you are in with a man where you don’t have clarity:
If it is low, that’s a RED LIGHT and a warning to change it straight away because you don’t want to feel stuck in that low emotional energy for too long!
When you don’t identify the root of your thoughts and allow yourself to engage with them, they continue to cycle and spiral around. When you journal in real time, as it is happening, YOU DISSOLVE THEM AND THEY WON’T GAIN POWER OVER YOU.
It will not serve you to be scared of your feelings, or resist them, because by doing so you will block the energy flow!
Pain is usually found in the resistance to a feeling and not in the feeling itself, so give up your resistance to it, and allow it to be!
Once you become aware of what is going on with you and you have processed it, moving your body is also one of the fastest ways to alter your emotional state.
Going for a nice walk somewhere in nature or engaging in physical activity at the gym on a daily basis or going for a sauna – all of these things are SO IMPORTANT for your emotional health.
When you shake and move your body fast, you are releasing negative energy and negative emotions so do it for at least 10 -15 minutes, especially when you feel low.
Your job is to never stay in a low vibe and negative emotional state longer than a few seconds or minutes at most! Trust me you have the power to change your state very quickly!
I hope these quick tips will inspire you to move and instantly shift that low energy vibe if you‘ve been feeling stuck!
Canadians in Singapore are finding a way to bi-pass expensive financial services. They’re figuring how to invest cheaply and simply with low cost index funds:
Every financial study done comparing the long term results of actively managed mutual funds (which most people are sold) to low cost index funds (which financial service companies dislike) reveals that over a lengthy period of time, the odds of success are far better with low cost indexes.
Sadly, despite overwhelming evidence, most financial advisors recommend actively managed mutual funds and unit trusts—because it helps them make their own Mercedes payments.
After sales fees and advisory costs, their long term odds of beating a diversified indexed account are slimmer than a goldfish’s odds in a tank of Piranhas.
There are loads of marketing tricks to get you swimming in the high cost tank, such as the local Singaporean trick outlined in MoneyTalk.sg‘s blog, but academics and smart journalists have cut through the rubbish. Now that Singapore’s DBS Vickers is allowing Canadians to invest in their low cost brokerage, Canucks can build a simple investment portfolio that sidesteps the financial service industry—allowing you to easily outperform more than 90% of the professionals. It also lets you keep your money here, in Singapore, while it compounds free of capital gains taxes.
Forget expensive options offered by offshore groups like Zurich which might convince you to buy heavily commissioned insurance packages wrapped with your investments—and then gouge you silly if you need some money for an emergency.
Singapore is already off shore. It’s a capital gains free zone for non Americans investing in stocks or indexes. Low cost indexing is the best investment advice you’ll probably never get from an advisor:
Following a balanced, diversified indexed approach would have allowed you to turn $10,000 in 1976, into roughly $300,000 by 2010.
With DBS Vickers, you can own the same products that an investor would own in this Canadian “Couch potato” account.
To follow Dan, and invest in a fashion recommended by Warren Buffett, a slew of Nobel Economic laureates, and every long term comparative study done that compares actively managed mutual funds (unit trusts) with indexes, then start by opening an account with
Probably the most important thing to remember is that the banks aren’t your friends—and nor are most of the people of the financial service industry. DBS Vickers would like nothing more than to get you into their more expensive products, so they aren’t exactly the knights in shining armor you might think.
That said, you can bi-pass their advice and invest in their low cost indexes through their discount brokerage.
Open a discount brokerage account at DBS Vickers, and tell them that you’d like the option to trade stocks from the Singapore, New York and Canadian stock markets. Don’t worry. You won’t have to become a stock trader. This is just the supermarket you’ll be buying your indexes from. You will have to take an online multiple choice test first, but they will give you study material for it and you can take it multiple times. It’s tedious and the questions are completely irrelevant, but it’s the hoop you’ll need to jump through.
When you make indexed purchases from this account (the products you’ll buy are actually called ETFs) you’ll need to do one of two things:
OR set the account up so that any purchase request sends money directly from your regular DBS account, straight to DBS Vickers, to cover the purchase.
These are the ticker symbols you’ll need if you want a diversified account of indexes, much like the global couch potato portfolio:
Long term, it’s better to be consistent, rather than trying to dance around, following market based news, and trying to figure out which index is going to do better over the short term. Studies show this to generally be a loser’s game. Establish your allocation, and stick to it.
30-40% of their money in the Canadian bond index (VSB) with the remaining money in their portfolio split evenly between the Canadian, U.S. and International indexes.
You’ll need to figure out what price each of these indexes (ETFs) is trading at so you’ll know how much to buy when you place your order.
Going with ETFs, you’ll want to make sure that you’re investing at least $3000 at a time. After all, it costs roughly $30 to make a single purchase, so it might as well be worthwhile.
If you were going to buy the Canadian bond index (ticker VSB) you would look up the price at yahoo finance.
Don’t forget that when searching for a price, each of the above indexes is represented by a .TO after it. For example, the International index is VEA.TO, the U.S. index is VTI.TO (You only need to do this when looking up the price.)
So if the price of the Canadian bond index is $29, and if you’re investing $3000, then you divide $3000 by $29 to see that you can buy 103 shares of the bond index. Just to be safe, when placing your order, make it out for 100 shares, in case the price goes up the next day. You need to have enough money for your purchase, and the price you pay could be higher or lower than what you see. It will be based on the market price at the time your order goes through.
Commissions for purchases and sales are 0.35% of your purchase, or 0.55% if you are buying off the Canadian market. If you make a single purchase of $100,000, you would pay $350 for the purchase commission off the U.S. market and a $550 commission if you purchased off the Canadian market. The minimum commission would be $29.
If you’re investing every quarter or every month, make sure that it’s at least $3000 at a time, so you don’t pay DBS too much in commissions, relative to your purchases.
And while you’re making your purchases each month, allow your purchases to rebalance your portfolio back to the originally desired allocation. For example, if your international index has underperformed the others, for that month, then buy the international index. If your U.S. index has underperformed for that month, then buy that one. Keeping an even allocation between your U.S., Canadian and International indexes will easily let you see (by simply looking at your statement) which index needs “bolstering”.
This feels like a simple question but I still don't know the answer. As a Canadian is there an advantage to buying index funds from the Canadian stock exchange as opposed to index funds from the US? I have been buying indexes from the US.
If you have an IRA, you can keep your money where it is, in the U.S. I'm assuming that you're invested with Vanguard, and if that's the case, and if you're in an IRA, then your money is going to be really tax efficient.
If you also have a taxable account, it's cheaper for most people to invest with Vanguard for that taxable money. Canadian dividend taxes for non residents amount to 25% (withholding tax) and if you're investing with Vanguard from the U.S., you'll pay less than that in dividend tax–and perhaps, eventually, less in capital gains as well. That said, the capital gains question can be an interesting one. If you're making huge amounts of money each year in the U.S., you might be liable to pay more than 25% on your eventual gains when you sell (indexes produce very few capital gain liabilities when held—only getting really triggered at the sale)
But my guess is that you're going to be better off with your taxable money in Vanguard, rather than bringing it north, into an indexed Canadian account.
Let me know if that makes sense. And if someone out there knows more about the tax laws in Canada and the U.S. than I do, please speak up. We'd like to hear what you have to say.
I'm catching up on your posts, and this one is very interesting. As a Canadian living in Canada, would there still be an advantage to investing in Singapore? Or, since I am living in Canada, I would have to pay capital gains taxes anyways?
I am confused by these points as I have never worked overseas nor opened a foreign brokerage account.
In Canada, there are many options for you to index your investments. But for Canadians wanting index funds in Singapore, this is the only option. They need to keep their money outside of Canada to maintain their non residency status.
Hi Andrew: Didnt realize that DBS allows you to buy Canadian stocks, its hard to find and offshore broker that can deal with the TSE. Thanks for that nugget of info. One question, I have been trying to figure out what the tax witheld would be on say something like XBS, is it 15% or something else for a Singapore resident? I see various sources, saying various things.
I looked up the symbol XBS, but I couldn't find it on the Toronto Stock Exchange. Do you mean XSB? If so, as with all Toronto stock exchange derived dividends and interest (for expats) the withholding tax is 25 percent, taken at source. No capital gains taxes though, so it's a better deal for equities than bonds.
From what I can gather from these and other sources; the with-holding tax on interest should be zero for interest and 15% for dividends. This is for Singapore residents. These rates are suddenly pretty good, however in the case of my brokerage they are with-holding 15% for my holdings in CLF which I am trying to get them to change.
In the case of claymore they classify the distributions as interest so it matches the CRA calculator so hopefully my brokerage can get it corrected. As there is big difference in yield depending on how much you lose to tax especially given how low interest rates are. In the case of XSB; Ishares is classifying the distributions as "other income" not sure why that is. Given the holdings of the fund it is clearly interest income.
That's really interesting Peter. Thanks for sharing it. I did read on the site you linked that the rate for interest would be 25% unless we were paying Singapore tax on the distribution (which I'm not). I haven't really looked at one of my investment statements for a few months, but the last time I checked, 25% was being taken from my XSB interest. Here's the quote below, seemingly clarifying that on the link you sent:
"The lower rate of 15 per cent (18 per cent in the case of Dominican Republic) is applied where the beneficial owner provides a letter or statement attesting that the income is being taxed in the country of residence. If this is not the case, then the statutory withholding rate of 25 per cent should be applied."
But you mentioned that you are paying just 15% withholding tax on your distributions. Is CLF a bond ETF or a stock ETF paying dividends? And which brokerage are you using?
I'm interested in working through this with you because a lower tax rate on my XSB interest could make a huge difference.
I tried the second link out, with the calculator, and after plugging in Singapore it also suggested 25% tax on interest. We must be looking at two different things, but I prefer what you have found out to what I'm seeing! Here it is, pasted below from that second link:
"Interest payments that a payer resident in Canada makes to a non-resident recipient with whom the payer deals at non arm's length will be taxed at the statutory Part XIII tax rate of 25% or the reduced rate of Part XIII tax eligible under a tax convention between Canada and the beneficial owner's country of residence, where applicable."
I tried to plug in "15" instead of "25" but then it suggested that I would owe money. Hmm. I hope you're onto something. Show me what you're seeing, if you can. It's worth a call to my Canadian accountant, perhaps, and definitely a very close look at my next DBS statement, to see if things have recently changed. Thanks!
question- i am a canadian citizen living and working in Singapore. How do i buy Canadian stocks and if i have to how do i open an brokerage account locally that will allow me to trade US and Canadian stocks
You can open a trading account with DBS Vickers. It will give you access to Canadian or U.S. stocks: $29 per trade transaction, no annual fee.
Unfortunately, you would have to pay U.S. shipping if you order via Amazon. I think the book will likely be in Kinokunia this weekend though!
As a Canadian teacher in China, I’ve been reading your blog for over a year. Having waited for about 8 months to find an opportunity to come to Singapore, I’m in town this week and I’ve already gone to open my online investment account with DBS. Feels good and hope to get confirmation that my application was successful in about two weeks time.
While I am on the island, are there any local books shops that carry your Millionaire Teacher book? I’d like to pick up a copy before I leave on Sunday.
Sorry for being late with the reply Chris. Were you able to find copies of the book? I think they’re in most of Singapore’s bookstores, with dozens of copies available in Kinokunyia. Did you have any luck?
O.K. – the stage is set – I now have a US$ DBS Vickers account in SIngapore and money has been deposited for ETF. After reading here and Couch Potato I have a few questions:
1) You point to TSE:XSB, Couch Potato points to TSE:XBB. Other than the time it takes for the bonds to mature and ~ 5% return vs. 3%, is there any hidden advantage of one over the other?
2) I'm a Canadian non-resident with an American wife, living in North Africa, but the funds reside in Singapore. Other than patriotism is there a compelling reason for me to buy index funds on the TSE vs. in the US? Are these the only two markets available through DBS VIckers trading?
3) You have also mentioned using market cap to determine percentages of investment along with age (for bond allotment). There are lots of conflicting stats about what those values are. Can you clarify those? Do you still recommend this approach?
I just bought the ebook version of "Millionaire…" – so I guess you are about $6 richer after Amazon takes its cut. I'm looking forward to wresting control of my finances away from my former "advisers" and coming out ahead.
Over the long term, I don't think it will make a lot of difference, whether you choose XSB or XBB. I personally own XSB because the maturity dates are shorter. With interest rates low, I think this is prudent. Many academics suggest going short term with bond indexes no matter what. Your odds of keeping pace with inflation are better, regardless of what interest rates do.
As for going with the Canadian or U.S. markets, it's up to you. Overall, there isn't a huge difference. Your Canadian expense ratios might be a tad higher, but the witholding dividend tax is slightly lower with the Canadian ETFs.
As far as market cap goes, I don't think you should sweat it. As long as you choose an allocation and stick to it, that's the most important thing. For instance, whether you choose 30% U.S. or 50% U.S. isn't likely going to make a huge difference over your lifetime. And it's your investment lifetime that we are most interested in.
I am a young, Canadian expatriate teacher living in China – this blog, recently discovered, is like a prayer answered for me. I've been looking for the best place to post my question and I think this is an appropriate spot.
Do you have any specific advice for those living in Mainlaind China? I wonder if I am eligible for DBS Vickers and how I would go about opening a bank account and an investment account there?
I am a Canadian teacher living and working in Mainland China. I have a been looking around for a brokerage, not in Canada or the US, that I can use to purchase stocks and funds. Would the brokerage you recommend be suitable for any expat teachers around the world or should I be looking at other places, like in Hong Kong?
Also, what do you think about offshore banks, like the ones in the Channel Islands? Is it worth getting an account with one of these and using their services? In a few years, I will have everything paid off in Canada and will have no use for my Canadian bank account.
Planning on picking up your book on Amazon Kindle shortly. Discovered this site today and your book looks like it would be very helpful since we are in similar situations. Thank you.
Since I made my comment above, I've received feedback from several brokerages. DBS Vickers in Singapore and TD Waterhouse have both said they would open investment accounts for me as a Canadian resident of China. I'm back and forth on which to choose…
TD is a big Canadian bank that I am comfortable with and if I go with them I will have access to their e-series index funds. That's a plus for me because I'm starting out with small amounts. Also, if I go with them I think it may be easier for my wife and I to resettle financially back in Canada if/when we decide to do so. On the downside, their fees are relatively high and there is always a risk of establishing residential ties to Canada, although I don't think that will happen. One thing that would really help me would be to know how my investments would be taxed (at source).
DBS is recommended by Andrew and that means a fair amount to me despite never having met him. They have no minimum balance and are located in Singapore which is much closer. From what I have read on this blog, dividends are taxed at 30% and there are no capital gains taxes. That seems to me like a fairly high dividend tax though Andrew suggests it's not a bad deal. On the downside, I don't think I'd have access to index funds, and the fees on ETFs for my initial trades at a few thousand dollars each would be higher.
I have a bit of time before I need to make a decision but I, like you, am also curious about Hong Kong. I think there are no investment taxes there whatsoever – wouldn't that make it an easy choice? How come I can't find much online about (Canadian) expatriates investing in Hong Kong?
And Chris, if you invest in Canadian ETFs, via DBS Vickers (for example) the Canadian non resident witholding tax on dividends is 25%. You could buy the Vanguard ETFs on the Toronto stock exchange. With no capital gains to pay (ever!) and just 25% tax on dividends, and expense ratios of just 0.15% (ish) I don't think you could find a better deal than that, anywhere in Canada. Even a RSP is less efficient, once you withdraw the money and eventually pay the tax. You could literally amass a $2 million account and withdraw if totally free of tax. If you suggest that this tax rate is high on the dividends, you might get jumped by your fellow Canadians, who pay much higher overall costs in Canada, compared to those that you have the option of enjoying. If you choose to invest at TD, not only will your residency status be risked, but….. you will have to pay 25% tax on all profits—capital gains and dividends. That's the rate for non resident Canadians.
I wonder if you could help me to understand my statement from DBS Singapore below. I am a Canadian citizen non-resident of Canada.
All of these pay outs appear to be $4 short of what I calculate they should be (VTI and BND are USD; VSB and VCN are CAD). What could this be?
As I explained in my book, The Global Expatriates Guide To Investing (pages 175-176) DBS Vickers takes a minimum $4 dividend processing fee from each dividend payout. The maximum processing fee is $40. Those receiving a $1000 dividend would pay 1 percent of the $1000 dividend, totalling a $10 fee. On a more serious note, you should sell BND and VTI. They may attract U.S. estate taxes when you die. I explain this in detail, in my book, on pages 175,176,188,189,223,238,254,260 and 282. It’s nice to have the book’s index handy with me! Here’s the book’s link: http://bit.ly/globalexpat
Thrilled that my Vickers account is now set up and ready to start trading. I have both the Moneysense guide and your book – so I feel pretty comfortable with what I need to do and how to do it. I also have a view on the structure (30 years old – so a 70/30 stock/bond split).
The only question is with regards to selecting ETF's for the portfolio. I read this (slighly dated) article that searched out the absolute lowest costing ETF's per area. Is that the best idea – to find the cheapest possible, or are there other considerations that need to be taken into account (in other words is TOO cheap grounds for concern?
As an example – the Vanguard US Market (VTI) is .07% fees, FMU – Focus Morningstar US Market Index is .05%. Not much in it – but every little bit counts… no?
You're right Mathew, every little bit does count. But you'll find that other ETF options keep getting offered. At some point, you might have to say, "enough is enough, I'm sticking with what I have." Otherwise, you could end up moving to the perpetually better option, which could cost more money in transaction expenses than it's really worth.
I mentioned this in another comment on this site, but DBS Vickers Hong Kong told me that they do not open accounts for Canadian citizens. The only option I could find for a brokerage in HK that has access to Canadian markets is Saxo Bank. I contacted them and they told me that as long as I can prove that I actually live in China legally, I can open an account with them. I can also open an account online so I won't have to go down to set it up. I can also wire transfer money from my Bank of China account directly to them.
As well, I checked with HSBC Hong Kong and I can open an account with them in HK, in Canadian funds if I wish. Not a bad place to keep emergency cash in a bank.
Chris ,I would avoid opening a Canadian account, both for tax reasons and to maintain your non-residency status.
Thanks for the info! I haven't opened any account yet so I will look into Saxo this week. Not familiar with that bank but I do wish to avoid a trip to HK / Singapore unless I'm going anyway.
I hadn't followed up here but I have already decided against TDWH. DBS in HK and Singapore both require trips outside of Mainland China as you know. One option I have found is Internaxx, the offshore subsidiary of TD. Trading fees are high at CAD 37 per trade but it could work if you don't trade often or you go with funds instead and hold them 12 months to avoid an early exit fee. The advantage is you can open online and verify your identity by wiring money from an account in your name that is outside China. Subsequent wires can come from a China account.
I am a non-resident Canadian currently living in Indonesia and have spent the last 14 years overseas. During that time I have had the same concerns as other expat Canadians regarding how best to save, invest and try to avoid paying excessive offshore account fees and taxes. I thought I would share a couple thoughts on investment accounts and ETFs and see what others think;
Through many discussions with investment advisors and accountants I have settled on keeping my savings and investments in Canada. I know this is a concern regarding jeopardizing my non-resident status but my Canadian accountant whom has specialized in non-resident tax matters for +20 years advised me that if it is my only tie to Canada it would be considered an incidental one.
The benefits to maintaining your funds in Canada are low trading fees ($6.99 a trade with HSBC InvestDirect) and being able to keep funds in Canadian dollars. Additionally, there are no capital gains on publicly traded stock, no taxes on interest-derived income as of 2008 and only a 15% withholding tax on dividends (Indonesian tax treaty with Canada).
I am a “Couch Potato” investor with a 50/50 stock/bond ETF Index fund portfolio to keep the expenses low and I rebalance when the percentages in each ETF move by more than 2% adding in my cash savings at the same time to reduce transaction fees.
The stock portion of the portfolio is divided into Canadian, US, EAFE and Emerging Markets index funds. For the Canadian Index Fund I have been investing in Horizons BetaPro S&P/TSX 60 Index ETF (HXT) because the dividends are re-invested as return of capital so there is no dividend tax and no required fees to reinvest the dividends. As well the management expense ratio is a very low 0.07%.
If I ever do return to Canada I plan to trigger the capital gain on all the ETFs a few months before returning to avoid capital gains taxes.
It actually sounds great. It's a shame that the information on this is all so cloudy and conflicting. My tax accountant also deals with non residents as his specialty, and he recommends strongly keeping my money out of Canada. There's obviously so much grey area here. But if it works for you, awesome!
i'm a canedian resedent i just finished reading your book(i love it!) which gave me alot of knowlege and hunger for more, but some confussion as well.
i want to invest only once every 3 or 4 month with a free commisition online broker(just flat fee) what is the best website i can start trading for me?
which confusse me alot what "i share" diffrent from share or it just the same thing written diffrently?
I stumbled upon your website when looking for information about Friends Provident. In less than 5 minutes, I bought your book which I read over the weekend. There should be more people like you willing to share their knowledge and to open the layman's eyes to the tricks of the Sales/Marketing of large financial firms!
I am a French national, teaching in a university in Singapore. I have carefully read your advice for Americans, Canadians, Australians, British and Singaporeans and I am wondering what I should do being a French national in the Lion City…
You could put your age in ISHG (for example, if you are 40, you could put 30% to 40% in ISHG) and you could split the other two evenly. Or, if you want to lean more towards French equities, you could weigh it more heavily. As long as you rebalance (be greedy when others are fearful) the exact allocation won't be such a big deal. Just stick to the plan.
I'm a Canadian living in Japan rather than Singapore but it seems like you must be a resident to open an investment account in Singapore. Is that true.
Very clearly written that a novice such as myself could easily understand. I have read other books in the past, but just ended up being more confused then anything else.
I am currently on the hunt now to open an on-line brokerage account and you have mentioned DBS Vickers. I emailed them in Singapore and was informed that due to residing and working in Canada that they are not able to help me set-up an account with them. Do you know or have heard of any other way around this? If not, which brokerage in Canada would you recommend?
I'm glad you liked the book. As a Canadian residing in Canada, you could follow my instructions in the 6th chapter. If it isn't clear, please let me know. I presented a variety of options and "how to" instructions there. But again, your question indicates that my delivery wasn't as clear as it should have been. As a reader, please give me your feedback. It's very important to me that everyone who reads that "how to" section finds it very easy to follow and understand. Thanks Curtis.
I (German expat in Singapore) have just toyed a bit with the DBS order entry and it seems that they won't let me order VSB or XSB because they are structured investment products.
It seems that I need to be an accredited investor (= 2M SGD) to buy these products in Singapore. Is that also your experience?
You will need to take a multiple choice test online before you can open that account with DBS Vickers. They provide the online study material. If you fail the test, you can take it again later. I'm confused a bit, however, by your question. You mentioned that you toyed with buying two ETFs, but then alluded to the fact that you haven't opened your account yet. Once you open your account, you can buy the ETFs that you are interested in.
The account is indeed open. I haven't made any trades there yet, but I believe I am clear to trade local stocks.
Anyway, I guess I have to get back to them and inquire about this test. I don't think I have done anything in that direction back when I opened it a couple of months ago.
Regarding the test again, it doesn't take long to study for, and a number of teachers (with no background in money) have studied for it, taken the test within a week of receiving the online study guide, and passed it. That said, it's a very irrelevant test, unfortunately, filled with odd academic questions that won't relate (one bit) to what you will be doing with your money. Don't ask me how they came up with their required questions.
First, as an overseas teacher also working in Asia I want to thank you for sharing your ideas on investing and retirement here. I have found it very educational. I'm a Canadian EFL teacher in Japan and have been teaching English for 10 years on and off with a short break to go back to school and complete a master's in TESOL.
I use a Royal Bank Action Direct investing account, and so since I'm not in Singapore and won't be using DBS, could I simply create my own indexed portfolio with Canadian, USA index funds? The key here for me is to be somewhat conservative with my investing but yet to assume a little risk if required. I see that you've recommended indexed stocks a number of times on your website (sorry, have not read your book yet!). Maybe this is what I need to consider.
I'm sort of new to investing but would like to know what you recommend. I'm in my early 40s and have about $50, 000 CDN which I've saved in the last few years since finishing grad school.
Any ideas on what avenues I may want to consider exploring re. investments, would be much appreciated. Thanks!
If you would like to use RBC, then open a RBC action direct brokerage account. Then purchase exchange traded index funds. Here's a sample account you could build. For example, to buy the Canadian stock index, you could purchase Vanguard's MSCI Canadian stock index. The ticker symbol is VCE.
The last two ETFs below trade on the U.S. market, but you can buy them just as easily through a RBC brokerage. I'm assuming, of course, that you aren't afraid to risk your non residency status? It's not considered wise to have bank accounts in Canada if you're an overseas resident. Most expat Canadians certainly don't. But if you are comfortable taking the risk, this portfolio through RBC Action Direct would work well. And I think you will find my book very helpful…worth the read, I think.
Thank you for your comments. Yeah, I left Canada back in 1998. I have not worked in Canada since that time. Also, when I left Canada, there was no formal filing process for "non-resident" status.
Back in 2000 or 2001, when I was in Vancouver for a visit, I called Revenue Canada and the lady I spoke with explained primary and secondary ties to me and that if there were any serious issues that a court would determine my status. It did leave me with the feeling that it was all somewhat vague. At any rate, I haven't looked into it again since.
Right now, I only have my savings account, an Action Direct investing account with RBC and a Royal Bank VISA card. I don't own any property and also do not have any provincial health care coverage. I also have not filed any tax records since I left Canada. So, with the exception of my approx. $50,000 in savings, I don't have any other ties to Canada.
You have more residential ties than most non residency experts would likely be comfortable with—the credit card is a glaring example.
You may want to contact a non residency specialist. Kerry Blain, an accountant based in Victoria, deals with many expats. Here's his contact: kblainATkjb.bc.ca
I am in the exact situation and was hoping to learn from what you decided to do. I live in HK as a Canadian teacher at HKIS and am trying to decide between TD Canada Trust, DBS or HSBC. I don't plan going back to Canada soon, but I have a condo there so I don't know if its worth exchanging funds every month to feed the portfolio in Canada or to do it here in HK.
I got your book from my friend Karen who works in Singapore! I actually live and teach in Ontario, but due to the political and union situation these days, I'm a little worried about the future of my pension. After reading your book, I would like to invest in some index funds but am a little unsure and nervous, never having done anything like this on my own before. I have a financial advisor who directs my "RESPs and RRSPs", but they grow pretty slowly.
2. Is it simple and straightforward to buy and sell stocks and bonds in order to balance the funds in the way that you suggest and is it really enough to do this once a year?
Yes, this is the easiest way to start. Transfer your existing RRSP and RESP assets to RRSP and RESP accounts with TD Waterhouse, and you will be able to buy e-Series indexes.
Setting up the account itself is the hardest part. You'll find that an e-Series account isn't easy to establish. TD bank doesn't really want you setting up this account, so they don't make it easy. But insist that they help you open the account if you are having troubles. Once it's open, it's a breeze to manage. Yes, you can rebalance easily, just once a year.
Within tax sheltered accounts (like RESPs and RSPs) it wouldn't affect your taxes at all. Within taxable accounts, rebalancing indexes once a year would still be more tax efficient than owning actively managed funds and doing no rebalancing at all! Actively managed funds are traded, so capital gains are "realized" and the investor pays the taxes on the realized gains.
Remember that you will have to be very patient. Your indexed portfolio won't rise every year, and growth will be slow. Be patient. And above all, hope for the markets to stagnate for many years, rather than rise. You don't really want your money gaining value over the next five or ten years (not unless you are very near retirement). The shame, of course, is when you underperform baskets of indexes because you have chosen active management. For you, going forward, this will no longer be an issue…. because now you'll invest in indexes!
Thanks Andrew. So is my financial advisor obligated to help me if I ask? I have to get the money out of those accounts if I'm going to do this! Also, I'm "scheduled" to retire in 2025 — is it going to make a big difference for me to move my money from mutual funds to index funds at this time? You mentioned in the book that the e-series of funds are only available on-line….if I go to the bank, can they help me get set up? Can I go to the Royal or do I have to go to TD? Thanks Andrew!
How much money are we talking about? Depending on the size of your account, it could be worth setting up an account of exchange traded funds. If you bank with RBC, you could use RBC Action Direct.
You would set up an account with them (2 accounts, actually, one for RESPs and the other for RSPs). Then you could ask the folks at RBC to transfer your assets across. You won't likely even need to use your financial advisor. The money will be "registered" as RRSP/RESP money, so RBC could likely just swing it across. Then you could buy some exchange traded funds. They are index funds that you buy off the stock exchange. If that interests you, let me know. For larger accounts, it is cheaper to hold accounts of ETFs (exchange traded index funds) versus TD e-Series funds. And an ETF account would be easier to open.
The accounts are not what you'd consider high. The RESP is around $20 thousand and the RRSP is less that $10 thousand, as I was counting on a pension.
It sounds as though I really have to know what I'm doing (and I don't). Would I buy those exchange traded funds at the bank? Would I have to choose? Also, the RESP is only 4 years away from being used…is it worth moving it? Would there be a noticeable financial gain from moving the RRSP? (from mutual to index)
I do think it will be worth a switch. The RRSP doesn't suddenly get "used" because you won't be taking it out all at once. You will likely have some money in there for many years to come and expenses will continue to cost you money. If nothing else, do this: go into TD bank. Open a RRSP and RSP account with them. Put the money into their in house index funds. They are more expensive than the e-Series index funds, but they are still far cheaper than what you currently have. TD will try talking you into their more expensive products. But don't let them do that. Once they see that you want to create "couch potato indexing" portfolios, and when they see that you are strong, they WILL help you. I promise.
I am in the exact situation as Neil and Chris and was hoping to learn from what you decided to do. I live in HK as a Canadian teacher at HKIS and am trying to decide between TD Canada Trust, DBS or HSBC. I don’t plan going back to Canada soon, but I have a condo there so I don’t know if its worth exchanging funds every month to feed the portfolio in Canada or to do it here in HK.
Also, is it possible to have my broker place existing funds in his scheme into my new indexed portfolio of my choice?
If you look at my comment before this one, it was to a Canadian in HK who seems to have found a local platform. Let's see if he gets back to us.
I don't think opening a Canadian account directly is a good idea, considering the residency issue. My accountant suggested that I not take this option, and he specializes in Canadian expat taxes, so I took his advice and kept my money out of Canada.
Sure, if you can take a trip to Singapore, you could open an account with DBS Vickers, but there may be a local platform you could use which would be a lot more convenient.
I have contacted DBS and its true, you cannot open a trading account if you are Canadian or American. HSBC does, but they are so little help when you ask for non-managed ETF funds. They actually told me to google the funds and do it myself and get back to them. Saxo bank did do the search for me.
Please also note that we don't have Canadian Dollar CAD as the base currency so if you buy Canadian Shares or ETFs by using HKD or USD, there will be 0.5% concersion fee.
I just got back from Saxo bank. I enquired about the funds you were talking about Andrew, theVCE (CAD Index- $25.94/share) VTI (US – $75/share) VEA (Int'l – $34.85/share) and the VSB (CAD Bonds – $24.92/share). These were the 4 you recommended. Expensive?
For buying, Saxo bank charges $25 minimum for VCE and VSB per purchase, which would mean $50/month for those 2 alone, while VTC and VSB are a minimum of $15 US a month each to purchase per month. That means $80 a month just to keep adding to the portfolio each month. I know this can't be right, can it? Am I getting this right? Are these guys just for big players?
My second question is that in your book, you mention the same funds with different ticker symbols. International being XIN, CAD tock is XIC, US is XSP and CAD Bonds is XBB. Are these different indexes or just because the provider may be different?
I really hope these questions are helping other Canadians in my area and Andrew, I really do appreciate your help with this. I thought I was ready to go, but now I'm more confused.
Steve, did they say anything about the minimum to open an account? The HK website says $10 000 USD but their main site says no minimum. I asked the main HQ and they confirmed this but I have been in China long enough to know that not everything is what someone says it is.
Also, did you open the account at HSBC? My plan was to do both, someplace to store cash and SaxoBank for investments. I don't want to keep any money in mainland China.
Like I mentioned before, I am going down at christmas to open an account. I tried to open one in HK but was turned down due to incorrect paperwork (even though I confirmed before I went down) and when I tried at another branch, there were so many mainlanders there the waiting time was two hours just to see a teller. Hopefully SaxoBank will be easier to deal with. I might even just open an account with them and use it for everything, even though it would be nice to have a place to store some cash.
Did you have any luck with that trading platform over there, using TD? I was just asked a question by another HK resident (Steve) and he is looking for an option. Were you able to open an account allowing you trades on the Canadian market for just $37. I use the word "just" $37 because brokerage costs in Asia can be a heck of a lot higher than that.
I currently live in China and will be going to HK at Christmas to open a bank account with HSBC (their SmartVantage account is pretty good) and a trading account with Saxo Bank. DBC Vickers in HK would not let me open an account because I am Canadian. Saxo Bank looks like the best choice due to their wide selections of investment options.
Thanks so much for chiming in from HK. Your experience, comments and comments from HK are a huge help to others. Thanks!
No, you don't have to be a resident of Singapore to open a trading account here. As long as you aren't American, you can do it.
I have not opened my account yet but I tried a demo account. Bit of a learning curve but it seems okay. For markets, it looks like they have everything. Lots of countries available. THe HK website says that there is a minimum of $10000 to open an account but when I contacted the head office, they told me that was incorrect and there is no minimum. They even allow deposits via credit card if you are from certain countries (China not being one of them).
As for a bank account, the HSBC SmartVantage looks good. You can actually do a lot with it, including some ETF and other funds. The minimum deposit is $10 000 HKD for no fees. To open it, you need proof of residence. I discovered to my disgust that my official Police document from China was not good enough since, and I quote, "we can't trust that document if is comes from China". I love this country. They need an utility bill with your residential address on it.
And their brokerage will allow you to access the Toronto Stock Market? If so, that's even better. To my knowledge, only one brokerage in Singapore allows you to do that (DBS Vickers). If a HK brokerage will allow you to do that, you should go "on tour" for all Hong Kong based Canadians, once you open the account. Of course, I'll shamelessly insist that you bring my book.
This is all great to hear this about HK. There are a lot of people talking about it now. Especially since I am so angry after reading this book. I mean, it almost seems like I should blames the school for enticing or insisting that teachers contribute a certain amount to receive the "carrot" of them matching your percentage, however you have to carry this burden for 25 years (in my case I just found out. I am so angry.
Andrew, My contract with my funds manager apparently is a 25 year one (shudder), I feel so used and stupid. Is there any way I can get my money out or stop contributing? I understand there are penalties involved, but in the long term, is it better to break my relationship as opposed to paying the minimum contribution of $250 USD a month? (I had been putting in $750 for past 5 years……) UGH!!!!!!!!!!!''
In case you care, this is the response from my manager when I told him I want to limit my contributions to the minimum without penalty:
"You can stop contributions at any time, without penalty, though it is better if you maintain contributions even at the lowest level for as long as you can to increase the number of accumulation units that you hold. These are the units that continue to attract dollar cost averaging, leverage down the initial unit charges and you can take them out at any time without charge or penalty.
The Terms & Conditions are attached and they can also be found in your T3 account by clicking on the ‘Documents’ icon and following the prompts.
Mate, can I ask the reason? Is this to do with your concerns about performance, because I thought we had had that out many times.
I just need to know for my own benefit. I can always call you to have a discussion about this if you think it necessary."
Unfortunately, the HR folks at your school were doing what they thought was right. If the administration had learned about this kind of thing in school themselves, however, they would not have endorsed this plan for their teachers. Find out what your withdraw penalty is going to be. From there, you can do some rough math. With a leaner investment option, you will average roughly 3% per year more than with this expensive provider. Over the duration of your investment time, will you catch up? I think you would, but find out what they would take from you first. If the math doesn't work out, then try your best to halt contributing. If you keep contributing, you'll compound the problem, of course. What company are you using? It sounds a lot like Zurich or Friends Provident. You might find this interesting, if you haven't read it already: https://andrewhallam.com/2011/11/zurich-internatio…
Absolutely perfect Steve. That's the exact same portfolio I suggested for the Globe and Mail's strategy lab. I'll link to my Globe and Mail articles on this blogsite so you can read them. Thanks for being so open with the HK strategy. Loads of people are going to benefit from your shared experience. Thanks so much Steve!
The prices you quoted for each ETF are market prices. In no way do they determine how cheap or expensive an index (or even a stock) is. Don't worry about the bank ripping you off here. They won't. These are market prices.
The commissions also sound very reasonable. But what you have to keep in mind is this: when buying exchange traded funds and paying a commission, it's best that you only buy one at a time. And when you do buy, do it with a reasonably large sum of money–perhaps $5000 at a time.
I only buy one ETF per month. Otherwise, commissions would kill me. You should do the same. Each month, buy a different one and build your money. After about a year of doing that, your portfolio will start falling into place, if you make your purchases with your allocation in mind. Then you can start buying the lagging index, to rebalance with purchases. When building your portfolio, naturally, you will end up with some scewed percentages for a while. Don't worry about that. Each month, just add to a different index and build the portfolio.
Since my book's publication, some cheaper ETF options have become available. The ETFs you quoted to me are the cheapest options available. Wonderful stuff.
Let me know if you have other questions. And thank you for providing such a stellar example from Hong Kong.
So to get this right and in simple terms so a index idiot like me can understand, I should buy the 4 you recommend (VCE, VTI, VEA, and VSB).
I'll set up the portfolio and in September, buy $650 worth of VCE. October, but $650 of VTI, November, buy $650 of VEA and December buy $1050 worth of Bonds (VSB).
Or do you think its better to save up, say $5000 over 6 months and invest it all at once, reducing commissions, but missing out on monthly growth?
and again are these the same funds as the XIN, XIC, XSP and the XBB as you quoted in the Canadian Chapter of your book?
Thanks for supporting my educational mission! There's only one reason I do this, and I'm thrilled that you're taking the torch as well. Thank you!
The ETFs you mentioned are exactly the same as those in my book, but the ones you mentioned have lower expense ratios. Check out my latest Globe and Mail article and you'll see that I mention them there. http://www.theglobeandmail.com/globe-investor/inv…
Wait until you have a few thousand dollars before making a purchase. If you buy with just $650, you'll be giving away too much in commissions. Remember, also, that the markets don't always march upward. You may find that the markets are lower six months from now. Try not to get psycholigically wrapped up with what levels the markets are at. Just stick to your game plan of buying low cost indexes (ETFs) in the most efficient manner possible. Remember that you are likely going to be doing this for the next twenty years, so small fluctations today won't really have a huge bearing on the big, long term picture. Stay dispassionate about the market movements. Only look at your statement every month or so (or even less). Thanks for helping me forge the educational platform. Soon, you will be able to present what you learn to your colleagues!
I read your book this past summer and felt so motivated to get my act together with investing. I am a Canadian teaching in Vietnam at an International school and am interested in opening a DSB Vickers account in Singapore so that I can start investing in ETFs.
I have read a lot of the comments on this thread and feel like I have most of the information that I need but just wanted some additional advice from you if you don't mind.
I am under the impression that I am allowed to open a DSB Vickers account even though I don't live in Singapore? If that's true then I would like to do this as soon as possible.
Will I need to take a trip to Singapore to do this? What will I need to take with me in terms of paper work and should I pass this "test" you are talking about before going? I just don't want to get there and realize I can't do it over the course of a couple of days and have wasted time and money.
Once I get this account opened what kind of portfolio do you reccommend? Since I am 27 years old I should probably put about 30% in bonds?
Another concern is about managing it over the next 40 years or so. Will I need to make trips to Singapore in the future for any reason? When I eventually want to take the money out how do I do that if I am living in Canada for example?
If you could help me sort out the details of making my move into investing that would be great! I am hoping to get to Singapore before Christmas to get this going!
Lindsay, I'm glad you asked many of these questions as I was about to do the same. My wife and I are Canadians living in Qatar, and I have been plowing through Andrew's book. I want to get started right away with my couch potato portfolio, and I would prefer to keep it out of Canada (we still have driver's licenses and credit cards there). We are actually heading to Singapore in October to visit a friend so I'd like to set up one of these DBS Vickers accounts if possible while we are there. I am curious about the same things:
You can open such an account with DBS or Standard Chartered. And you don't need to be a resident of Singapore.
Rob, you will only need to take one trip to Singapore to set it all up. Bring your passport to the bank, as well as any banking routing numbers. They may be helpful.
Truth be told, if you have traded stocks before, you can sign that you have traded in the past and avoid taking the test. I know a few people who did this and they had not traded before. They provided the name of a brokerage they used and they were then good to go. Of course, I'm not officially suggesting you do that.
You could open the account without any money (if you choose to) and then wire the money from your resident bank. Or, you could take a bank draft with you. It's up to you. Call the bank ahead of time to let them know what you are doing. Get the name of the person you speak to, and ensure that they give you instructions on everything you will need to bring. You will be able to open the account in a single day.
Lindsay, as a 27 year old, you could choose between 20% and 27% bonds. The cheapest bond index (ETF) on the Toronto stock exchange is VSB. It charges just 0.15% a year, which is slightly less than XSB, which was the bond ETF I mentioned in my book. VSB is fairly new.
If you are opening an account with Standard Chartered, you won't have access to the Toronto stock exchange, but you will have access to the U.S. market. You could opt for VTI (U.S. index); VEA (International index); and ISHG, an international bond index. You could also buy a Canadian equity index on the New York Stock market, but its expense ratio is about 0.5% (ish). If you are going to insist on a Canadian ETF, you might be better off with DBS Vickers. They will provide access to the Canadian market ETF (costing about 0.09%) but the commissions are higher. Overall, as Canadians, you could probably toss a coin.
You can see, in my recent post, that I complained about the new DBS Vickers commissions. The benefit to keeping that money with DBS is my access to the Toronto market. At this point, I may just leave the money I have where it is (I already have a very healthy Canadian bond portion sitting there) and I may open a second account with Standard Chartered. With that, I'll add an international bond ETF (ISHG) and pay lower commissions to make the purchases.
Having said all this about high commissions, part of me also needs to keep some things in perspective. Many of my colleagues pay 5.75% sales commissions to invest with Tie Care, a company that sells actively managed mutual funds. I'm complaining about paying sales commissions that are less than one tenth that rate.
-does investing on the TSE affect someone's non-residency status in Canada? My wife and I are non-residents and we'd like to keep it that way!
-If I have some investments with Franklin Templeton, is there are any reason to keep them there, or should I pull them out to invest with DBS or Standard Chartered?
Those Franklin Templeton funds are really expensive, costing you roughly 2.5% more than you should pay each year. Compound that over the next 30 years and you'll end up with half of what you deserve–perhaps even less than half.
As for investing in Canadian stocks/bonds, many people like to have a home country bias, especially considering that your future bills (if you retire in Canada) will be in Canadian dollars. That said, if you are globally diversified, it's not such a bid deal either.
Thanks Andrew. My (hopefully) last question is whether or not investing with DBS Vickers on the TSE will affect our non-residency status at all?
Not at all Rob. Investing in Canadian stocks via DBS Vickers does not affect your residency status. Feel free to keep the questions coming, if need be.
Thank you so much for helping all of us Canucks get our pucks in a row. I am ready to meet Saxo Bank and HSBC to gather all the information before my first investment month.
Can you please tell me what questions you would come to these guys as a Canadian to find out what the best package is? What would be your big burning questions?
Thanks so much for your advice. I have been looking around on the DBS website and in their list of ETFs I don't see any of the ones that you have suggested (VCE, VTI, VEA and VSB). Are they part of a larger group that maybe I'm not familiar with?
Also, do you mind explaining a little bit about how the dividends work? I'm just so new to all of this and don't understand all of the details yet.
To answer the question about the minumum deposit at Saxo, here is the response from my email conversation,
"Our minimum to open the account is $10,000USD. So you can deposit $10K and you can spread it anyway you like across the 4 ETFs and hold any remaining funds as cash.
Since the Saxo account allows you to buy not only ETFs, but stocks, and other investment products, you can spread the 10,000 USD however you want.
In fact, $10K is just the initial funding amount. In the future, if you feel like you need some money, you can withdraw the funds away without penalty. As long as you keep a minimum of 1000 USD in the account, your account will be active."
If I am going to start with $10,000 initial deposit, how will I know when is a good time to buy the ETF's?
Is it important to wait for a down time to put in my initial deposit, or does it really not matter, as long as I continuously contribute regularly over 20-25 years?
Thanks Andrew. My wife and I are going to Singapore in October, and we'd like to set up an account then. We'd like to make monthly contributions, so with the higher commissions, do you recommend Standard Chartered over DBS?
I do know that DBS Vickers will allow you to open the account as a non resident of Singapore. I made a call to Standard Chartered on your behalf to see if they would allow you to do the same, and the rep said no.
I was wondering what your experience with Saxo has been so far ? I know it's only been a month, but I want to start reinvesting soon. I am a Canadian teaching in Beijing and I'm trying to move all of my money out of Canada into international banks to avoid residency ties. I have UK citizenship and could open a DBS account in HK, but one of Andrew's recent blog entries says that they've substantially increased their fees. So, Saxo may be the better choice. This or interaxx, a subsidiary of TD based in Luxembourg, but they have higher commissions. Anyway, would be great to hear your experience!
I have been reading this thread and am wondering how you made out with Saxo? I just opened a trail account. It is a little tricky to navigate for a novice like myself. I can't seem to figure out how to buy VSB and VEA. I always get a message saying no results found. Any idea how to buy these two ETFs?
I went to Saxo Bank yesterday and dealt with Boris. John, I understand you talked with him as well. He's a young Canadian who seems very genuine about the approach and agrees with Andrews strategy over the long term.
I am very happy with the Bank/Broker. It is far better than HSBC. HSBC is more expensive and very little help. No one else in HK stands out. Saxo not only has the lowest trading fees, but he is asking the managers to even further reduce the trading fees for teachers, realizing the possible opportunity for a diversified clientele. He has been asked for 14 initial clients to bring it down, but its already the cheapest, so I'm doing it. He has read Andrews articles and agrees.
The $10K original opening deposit may be a stumbling block for some, but it is only required to open the account. You can spread out your money all you want, or promptly take it all out that same day, minus $1K that you need to stay in the account keeping it active.
For those living on the Mainland, you need to come in so he can give you a "chop" or whatever red tape is needed, but it's perfectly okay for you to invest with Saxo.
He also reassures me that all funds are protected under all circumstances (I was nervous that Saxo was small and not well known – He informed me that since they are a brokerage and not a bank, they don't advertise to public, but deal mainly with traders and advisors).
I have the info and installed the trading software and am going in to meet him so we can do my first trade together.
Thanks for the update! I have been in contact with Boris and he has been very forthcoming in all of his e-mails. I currently hold an HSBC Premier account in China. I'm planning to meet with them to discuss opening an HSBC HK account and perhaps negotiating fees.
As far as I am aware they have all the funds I am looking for VTI, VCE, VEA, VSB. However, as you say, they're very well hidden and so far have been reluctant to divulge much information. That being said, if I can just get started and learn how to buy/trade, I shouldn't really need any further advice or assistance.
The main reasons I want to stay with HSBC are that if I invest through Saxo then I won't have enough money in my HSBC account to keep my premier status and I'll have to start paying lots of fees regardless. The other reason is that HSBC is international while at the same time allowing me to keep funds in Chinese RMB. They also have thousands of branches all around the world. As Saxo does not have the option of a savings account and needs a third-party bank from which to purchase stocks, I'd be doing lots of currency juggling (and losing small percentages each time) rather than going straight from RMB to CND or US through HSBC.
In any event, I'll update you on my meeting with HSBC. I have a feeling though, that I'll be investing through Saxo in the end.
I talked to Saxo about the $10,000 minimum and they told me that if I sign up for an account online through their international site, I do not need to have a minimum. Their international account is not offered in HK (according to the HK office) but the HK account is the exact same as the international account. In fact, the international account is more flexible in its funding options.
Myself, I will open an account with Saxobank online soon and will be going to HK at Christmas to open a SmartVantage account for funding the Saxobank account.
Here is the link to the SmartVantage account. My understanding is that this is a pretty good banking package and the other accounts offered are not really worth it, given the minimum amount you need to leave in them.
I think there is something about not being able to hold RMB if you are a certain nationality but I couldn't find it in a quick glance. The link to the account is above.
Thanks a bunch for the information. I will try to contact Boris and investigate setting up an account.
I know that Boris has established a USD and Hong Kong Dollar account, so I can move between both. I'm sure I could open a Canadian Dollar account or RMB as well.
As far as branches, that shouldn't be an issue. Remember, first of all, you are only using $10K to open, you only need $1000 to maintain. Secondly, this isn't really to be used as a bank, but as a broker. I would be keeping HSBC as my main bank, and transferring my contributions as I needed to.
I still can't find anything that says you can't hold an RMB account as well as other currencies in the HK SmartVantage account. I find the SmartVantage account attractive because the minimum deposit is $10,000 HKD, which can be invested. It also offers many more options than a regular Western account. I can walk in with Canadian cash and deposit it at any branch in HK.
So, to summarize. My plan this Christmas is to open a SaxoBank account online, which will avoid the $10,000 minimum and allow me more funding options. I also need a bank so SaxoBank can send and receive funds and since I am in China, there is no way I will use my Chinese bank for this purpose so I will open a HSBC SmartVantage account when I visit in December. This way, I can go down to HK a couple times a year, bring with me a wad of Canadian cash and deposit it into the HSBC account and then transfer it to SaxoBank. Somewhat complex but that is how it is when you live in mainland China.
That sounds like a great setup. I just had a quick glance at the SmartVantage account and it does have a Chinese RMB savings account. So this seems like the best option for me. My school facilitates our bank transfers so they'll transfer directly from a Chinese account into HSBC all in Chinese RMB. I can then transfer to SaxoBank. Depending on the better exchange and fees, I may convert directly through HSBC or send to SaxoBank in RMB and have them convert to CND.
Thanks to everyone in this thread for laying the groundwork! I'm definitely feeling much more confident moving forward!
I know you cannot get a credit card in HK without being a resident. You need to cross all t's and dot all i's before coming.
BTW – Here's Boris' email. Tell him you talked with me and he;ll instantly recognize the same package we're all working towards. He may also add you to the list to hopefully get the extra discount through admin.
I had a problem last year with opening an account. Although I had everything correct paper-wise, they still turned me down because they didn't like my mailing address in China. Since where I live does not have home mail delivery, I have to use my school address as a mailing address and they would not accept that. Of course, this was not told to me before I flew down to HK, which was frustrating. I had the Bank of China change my mailing address so that it is now just a street address and this should be fine. A friend of mine opened an account last year by showing his utility bill from Shanghai (where they have home mail delivery) and there were no problems.
I talked to both the HK and the head office and they both confirmed the differences. The HK account has the $10,000 minimum and restrictions in funding while the online Saxobank account has no restrictions and can be funded with a credit or debit card. You can set up the online account just by mailing a copy of your identification to them so I would not have to go to the HK office in person.
I am an expat Canadian citizen (marrying an american citizen), living in Indonesia claiming non-resident status and looking for options to open an online brokerage accounts. The vast majority of sites will not let me open an account because I am either Canadian (not sure why) or do not reside in Canada for any of the TD series options through Canadian banks or brokerages. I tried DBS Vickers but same problem…I do not live in Singapore or HK.
I have been looking for months without any luck. There simply doesn't seem to be options at all for me and I am very frustrated. Any suggestions?
Also, I do have an expat HSBC account but the interest rates for any sort of investment scheme is incredibly low (less than 1% interest).
Thanks looking into it now. Trying to figure out their rates on trading. Have you used them before? Looks like they are based in Denmark so wondering what effect it will have on withholding income
I will be able to post their rates soon. I have the info, just not on me. Once I am certain, I'll put them up here. As far as I've heard, they are the lowest.
What do you do about the foreign exchange fees when converting from usd to cad? I am currently paying 1.4%. Is there anyway to avoid this?
This is partly unavoidable. But that does seem pretty high. You could try to find a better way of changing currencies perhaps. I know that DBS Vickers, in Singapore, offers better exchange than Standard Chartered. One way around this is to open a U.S. dollar account with DBS and transfer that money to SC Bank. You might not be in Singapore, but you might have a different alternative from where you are.
Just add me to the list of frustrated investors finally feeling like "finally some investment information that makes sense!!!" Thanks for your blog and book.
I stumbled upon your book because of an investment changing meeting I had the other day. Actually it was one of the best things that happened to me in my long sordid investment history. I went into my local HSBC bank for a meeting with my "Wealth Manager". Seeing as how I have this so call Premier Status I was able to avail myself of this "free" consultation with the "Wealth Manager". The long and short of it was my wife and I came out of there with a brochure for one of the Zurich Products. I was pretty leery about this and so I googled it and fortunately I came upon an article in which you quite elegantly dissected the product and it's ridiculous fees. Right after this I looked up your book and bought it through the iBookstore. Great read. Tore through it in one night and now I'm convinced your method is the only sane way to invest.
I'd be prepared to fly to Singapore and open an account with DBS Vickers however preferably I'd just like to set up and international trading account without having to leave home. I just googled this company Internaxx. I guess it's related to TD in Canada although it seems to be based in Luxembourg. Any thoughts on executing your plan with this international online Broker vs DBSV?
If I fly to Singapore I'd like to take you out for a coffee or a meal and have you sign my book before I bite the bullet and open an account.
I've made a few comments on this post and others. I'm based in China but I've also been looking at Internaxx for quite a while. I've waivered on it for quite some time, and tried to find better options that fit my circumstance, but I keep coming back and am leaning towards going with them. Key points with Internaxx:
They have investment funds but no index funds. No entry fees but if you leave the fund in the first 12 months there is a 50 Euro exit fee.
Also be careful that you do not non-chalantly select the "hold-mail" option as it incurs a fee of 55 Euro per year, whereas mail delivery is free.
Although I think holding fees are uncomfortable, the platform sees secure and reliable and I trust the TD group. They are also much easier for China based residents as you can verify your identity via wire transfer and there is no need to leave China to open the account.
Thanks Chris. But I guess this route can't really fill the bill that Andrew prescribes if you can't access index funds.
Just make sure you won't have to pay taxes from that country. They could be high. There are no capital gains taxes to pay in Singapore
Thanks Andrew. After I wrote the above post I did look into the capital gains tax issue in Luxembourg and you're right that it might not be that attractive for that specific reason. Not to mention what Chris wrote about this online brokerage not allowing trades with indexed ETFs. Guess I'll be taking that quiz soon.
Don't try to time the markets Steve. Just make the investment. Twenty years from now, none of the current movements of the market will mean much at all.
Through DBS Vickers, you can buy anything available on the New York Stock exchange or the Canadian or Singapore exchange. DBS does not offer these ETFs, the stock exchanges do. For that reason, you will never see a complete list of what you can buy. As for the indexes above, you can buy them. VTI is on the New York (U.S.) market, as is VEA. VSB is on the Canadian market. They're there. Go get em!
Just got of the phone with a DBS Vickers Rep. She told me I could fill in all the forms, get them notarized in my home country (UAE at present) and send them back to set up an online trading account. She said there is no need for the online quiz for expats not residing in Singapore. I guess the only rub is getting funds in and out of the trading account. When you suggested that one had to travel to Singapore to set up this account, was for setting up a DBS bank account which requires a personal visit?
I'm going to check with my HSBC manager and see if I can set up a HSBC Singapore account from here and move my funds through this and into and out of my trading account. Stay tuned.
This is great to hear Harold. Please keep me posted. It's interesting that you won't have to take the quiz. Bonus!
My publisher would like me to write a book about investing for expatriates. I'm not keen on the work it would take, but when I read stories like yours, I'm reminded of two things:
If you reside outside of Singapore AND OUTSIDE OF CANADA you can set up a DBS Vickers account WITHOUT having to travel to Singapore if you get the signatures on your application (downloadable online) notarized.
As an Expat Canadian you have to request a special declaration form (just call them and they'll send it to you by email) that confirms you are a permanent resident outside of Canada.
I spoke with them and they can accept telegraphic transfers from outside Singapore so I can electronically send money to DBS Vickers who will then credit my account with the appropriate funds. I suspect that it's best to convert your funds (which ever currency you're dealing with, in my case UAE dirhams) to the currency of the Stock Exchange you wish to trade in (CAD/USD/HK) before transferring so you don't pay conversion charges twice.
The only downside to this whole procedure is that without a Sing Bank Account (need to present in person for this) linked to your trading account you can't trade on the Sing Stock Exchange and hence buy a Singapore Index ETF.
P.S. You should do another book….I've got a bunch more questions but don't want to monopolize the space!
This is great stuff Harold! Thank you so much for sharing it. There's no reason that anyone other than a Singaporean should want to buy off the Singapore stock exchange anyway.
This is fabulous stuff! And when I get my butt in gear, it's definitely worth writing about. Please keep me posted on your progress and I (with your help) will put a blog post together describing what you do, and how it all worked out. This is going to help a lot of people. Thanks Harold!!
I am similar to you, I’ve lived in the UAE for almost 4 years now and nearly got trapped into the Friends Provident rubbish. I’ve called DBS Vickers a few times in the last few weeks and have been told I need to come in person to open a brokerage account. I did tell each rep that I knew people who had opened brokerage accounts the way you have, but they told me their policies have changed.
Anyway, never mind about that, I love Singapore and don’t mind to make a trip there to open an account (and enjoy the city and it’s cuisine!).
One of the things I would like to ask you is how have you been sending money to your account? I bank with Abu Dhabi Commercial Bank. You mentioned setting up an HSBC account in Singapore, is that what you did?
In the mean time I will continue to pester DBS Vickers and see if I can set up an account without making the trip. But any excuse for a holiday is a good one!
Please keep me posted on your progress Kelly. And yes, don’t stop those calls to DBS Vickers. At some point, you may get a rep on the phone who can help make it happen for you. If not, you’re right. Singapore is a fine city to visit!
Just about to set up the "couch potato" portfolio. I know I shouldn't be really watching the markets with this but do you think it really wise to apportion 30-40% in a Canadian Bond indexed ETF when the interest rates are soooo low or is this irrelevant?
I am a 31yr old Canadian teaching in Beijing but returning to Canada next year. I was about to sign up with a financial advisor who uses Friends Providence, but this sounds like a bad idea judging by your information.
As a Canadian currently in Beijing, but moving back to Canada for 1 year and then possibly setting off to another Asian country….what should I do? Should I find an advisor that is recommended through couch potato in Canada or do something in Singapore before I leave? What is the advantage to singapore and not something in China? SOrry, I'm a beginner at this and need advice.
Hi guys, I've spent the last couple of days investigating which account to go for. I independently came across Saxo and have exchanged emails with Boris; it's good to hear that I am not alone in thinking this seems like the best way forward. I'm a non-resident Brit teaching in the Philippines. I was in HK for years though so have my bank accounts there still with Standard Chartered. Can I just please check with you whether you found the fees/rates reasonable compared to DBS Vickers in Singapore? Thanks. Cheers
I am finally going in today to make deposit, get set up on the system and make my first contribution. I'm dealing with Boris.
John, Adrian and myself have been emailing about our thoughts and it sounds like we're all moving forward with Saxo.
Boris set up the system on my laptop and I'm going in for a run through beside him so I know exactly what I'm doing.
Steve, can you let me know how it goes as well? Still undecided as to opening an account in HK or online.
Great news that you were about to open up a DBS Vickers account without having to travel to Singapore. I am going to get on this right away now that I know it is possible.
I'm an expat Canadian living in Thailand. I have (well, -had- since they just closed up shop to personal banking here in Thailand) a HSBC Premier account and they (before they closed) were able to open up HSBC Premier accounts from me with HSBC Singapore in both CAD and Sing. Dollars. I am now able to move money from my HSBC Canada and HSBC Brazil account through Global View into Singapore.
Hi Andrew thanks for your reply. I bought your book and I love the idea. I'll plan a trip to Singapore next year and try it. I live in Japan and would rather have most of my money in Singapore than Canada or Japan.
Any further news on your Saxo HK account? I'm trying to decide now whether to go with Saxo HK or even TD Ameritrade. TDA seem to be about the cheapest option anywhere but they are in the US so I worry about tax. Saxo HK seem to have similar charges to DBS Vickers but one can open an account without visiting. I'm a Brit by the way but Saxo HK do seem interesting.
Any news on Saxo. I created an account online and that got a rather unexpected phone call from them today and said that they would be in Jakarta tomorrow if I wanted to come down and they would notarize my documents.
I have opened the account as well and investing 20k in the funds above. When I met with the Saxo rep, he said that you cannot buy bonds online and have to do it via phone. Also, when we looked on the demo account, we couldn't find the VCE (Can index) index funds. Let me know if you were able to find it. Thx
Also, you are taxed on any dividend funds at about 30% depending on the country. However, this only applies to dividend funds. Does anyone know if the index funds are capital gains or dividend funds?
All equity based products pay dividends. As a Canadian, if you bought an index that earned 10% in a year, roughly 8% of that would be from capital appreciation, with roughly 2% dividends. You would pay tax (taken at source) for 30% of the 2%. This would give you a net dividend of 1.4%.
Add that to the capital gain, and you would earn (after taxes) 9.4% if the market earned 10%. There may not be a better deal than that, anywhere. Even the pricey offshore investment products can't avoid withholding taxes.
On the Saxo platform. Buying is very easy and transferring cash to and from is one click, right to my other HSBC account. Its great considering Saxo itself uses HSBC so no interbank transfer charges.
Steve, I know that this would take a lot of time, so feel free to say no, but: I was wondering if you minded doing a guest post for my blog, explaining what you have done. Canadians in your area would then be able to find it online and it would likely help them a lot!
I'm glad to hear that it has worked out and that you were able to open the account. As for dividends, all equity indexes pay dividends.
Thanks to your post Steve and your website Andrew I met with Boris from Saxo in HK. I opened the account and everything seems pretty straight forward. He said I was the 4th person (teacher) to open an account with the goal of building a diversified portfolio of low cost index funds. If we have 10+ people the $15 commission on trading orders could go down. Spread the word!
Yup it's me! Saxo works out of Singapore and they called me the day after I registered and told me they were in town meeting clients for 2 days. Worked out great as now I have started my investments!
You can add me to the list although I'm investing through the Singapore branch. Opened my account a few days and have bought in ETFs (Can, Europe and US + Can bonds) and loving this. I started with an initial contribution of 20k to tested it out. Seems like a very easy interface once you figure out all the jargon. The fees were somewhat pricey (10-25USD) but as long as you doing lump sum contributions, it still amounts to less than 0.5%. I am going to invest the majority of my other savings this way as well and contribute 1-2 times a year. Why didn't I start this when I was 25?!
On top of that, I read MoneySense's issue on the "Guide to the Perfect Portfolio" and HIGHLY recommend it. I read Hallam's book too but this was nice to hear from a different perspective and I believe Andrew wrote a few articles within it. It is 10 chapters and a very step by step approach.
I talked to Boris last year and I am still undecided as to opening it internationally or opening it in HK. It was mentioned here somewhere that there were no fees to transfer from HSBC in HK to Saxo. That could definitely be an advantage over opening one overseas. I am going down to HK at Christmas to open an account at HSBC and if it wasnt for the initial deposit at Saxo in HK, I would open an account there at the same time. I might wait and open it next spring when I have the free money but I can start by funnelling some money to my new HSBC account. Probably better to build a six month next egg before dumping everything into the market.
So did anyone else see the recent email from Saxo? They are now going to charge a 0.29% p.a on all stocks in which the trader doesn't make more than 5 trades per month. Also, a 0.20% flat fee on bonds. This will kick in on Feb 1st. What do you guys think of this? So this is in addition to the trading fees charged by Saxo.
Don't see anything on the webpage. I wonder if that is for the HK account only or the international account? If it is for the HK account only, I will probably change my mind about using the HK branch and open my account internationally.
Pretty sure it is for the international one as I opened mine up via the Singapore one. See here: http://goo.gl/sCh2c
I've been an non-resident Canadian, very nervous about ever losing the non-res status. I'm not sure if it's not paying the taxes or not having to file the returns that I like best.
I have been assured by a Canadian financial planner and by a tax accountant (both of whom specialize in non-res clients) that so long as my family and I live overseas and do not move home, we will not add to our likelihood of losing non-res status by making investments back home.
Also, in order for my current employer to not automatically take taxes off my salary, I had to get a recent adjudication from CRA stating I was considered non-res for tax purposes. The statement from CRA includes:
"As a non-resident, you may be subject to a non-resident witholding tax on interest, dividend, rental, and pension income received from a Canadian source. The Canadian payer is responsible for witholding 25% of the gross amounts of these kinds of incomes."
So, my quandry now is, do I trust that opening a brokerage/investment account and getting going with passive investing in Canada will not jeapordize my tax free status? And (this might seem silly to some, but I consider time and peace of mind far more valuable than money), if I do invest in Canada, does this mean I have to start filing tax returns again? Yuck!
Or, do I try to go the Vickers or Saxo route and invest through an offshore account, just to be safe?
Part of me says I have my bases covered with the tax status and should go the route that reduces the wire transfers, currency conversions, account fees, etc. by just going through Canada. The other part says don't risk the tax status, open an HSBC account in Canada and Singapore or HK to reduce the wiring fees and conversion losses, and go that route.
Thanks for the great book and website, Andrew, and the help and sharing from everyone else who posts here as well!
I too am a Canadian non-resident for tax purposes, living in South Asia. Did you ever get a response to your questions?
I have read through quite a bit of your blog and I still have a couple of questions about investing as a Canadian expat here in Singapore.
1) Do you recommend opening up an American and Canadian foreign currency account or just allow the bank to take their cut on the exchange when buying and selling?
I am currently reading your book and may stumble upon the answers to my own questions. However I recently applied for a brokerage account I am I hope to start investing ASAP.
I am trying to decide on a Canadian equities index fund. Would you recommend XIU or VCE? Are there any disadvantages to having your dividends reinvested automatically?
Buy VCE because it has a lower expense ratio. There are no disadvantages to having money reinvested.
The bank will still take a bite out of your money if you convert SGD into a USD account here in Singapore. But the exchange rate will be friendlier, so yes, if you want to do that, go ahead.
First, thanks for writing the book! I was a complete investment moron before reading and re-reading your book. I think I’m slowly catching on. I’m from BC, as are a number of your friends and former colleagues who I work with here. A few of them tell me you’re writing a new addition to the book. True or not? I plan to buy a copy of Millionaire teacher for each of my sons for Christmas. I’m starting to invest far too late. I don’t want them to make the same mistake!
Second, as a resident of Saudi Arabia (which is a tax-free zone), would you say that my best option is to use DBS Vickers in Singapore as my brokerage. I understand that I can’t use a Canadian firm as it would affect my non-residency and would have significant tax implications. There’s a number of us getting together as a group this week to chat about your book and look at what our best options are.
Have you found any information about investments. I am also working in a tax free country and interested in information on how to save for retirement.
I am Crystal, who lives in Hong Kong. I have just read your book and it is really amazing. However, I wonder how I can apply your theory into HK markets as Hk doesn’t have much choices on ETF and bonds. Would you mind giving me some suggestions? Thanks a lot!
Do you have any tips for Canadians living in Europe and where we can invest cheaply? I’m in Finland.
I don’t know how much you know about investing, but if you’re familiar with building a portfolio of index funds, you could use TD International, based in Luxembourg. The firm will allow you to buy exchange traded index funds and will not charge capital gains taxes. Best of all, it’s low cost, unlike the offshore pensions that are prolifically sold to expats. If I can help with any other questions, feel free to ask.
Great book! I do have a question though. I’m currently teaching in Europe but will be moving to Asia after next school year. Do you think I should go through TD international here in Europe or Vickers in Signapore? I would be able to do the couch potatoe strategy on both but is one more cost effective then the other? Thanks a bunch for any advice!
I believe TD Direct International (even with you living in Singapore) would be cheaper than DBS Vickers. TD recently dropped their commission costs and took out their account wrap fees. Now it’s a much better deal than it was.
I read your book about half an year ago and really love it! Thank you for sharing such important info with everyone.
I am right now in my 20s, and have been working for two years after graduation. I live in Canada and have a RBC RRSP and a TFSA accounts. I saw in the comments you mentioned that we can buy vanguard index funds through RBC brokage, and some of the funds I saw you recommending are VCE, VSB, VTI, and VEA. Sorry for asking some stupid questions, but I am very new to investment products. Should I go to RBC bank and tell them the codes and set up the account? Another thing I find is that Vanguard seems to have a Canadian version: https://www.vanguardcanada.ca . Will it be easier if I just open account with Vanguard directly and buy the index funds there? However, I can only find VCE and VSB there, both Canadiam market. Is there any US index funds provided there that you can recommend?
As a Canadian expat living in the middle east, I have yet to find a way to self-invest in index funds. It seems most brokers require residency in Singapore, the US, Europe etc…
I’m not sure if Andrew would agree, but there are a number of us Canadians who live in Saudi who are at various stages in the process of connecting with TD International in Luxembourg. It’s proving to be somewhat onerous getting an account verified as passport copies need to be notarized by specific lawyers and other things approved. I’ll post more here once we start having some success. When we’re completely set-up, I’ll be looking for suggestions on which index funds to purchase.
thanks a lot for the tip, will give it a look. Coincidentally, on the same day that I made that post, I was told about TradeStation.com. I managed to open an account with them in 24 hours (the main thing they require is proof of residence in wherever country you are).
It sounds like you are all sorted but as I just posted to some people in the British expat part of this site, Saxo has a Dubai/Middle East branch as well.
I might be about to jump on the TD international bandwagon just so I can avoid US taxes! Have you considered this issue? As a non-European, do you expect to pay any European taxes on your gain?
Does tradestation.com allow you to invest on the Canadian market? I couldn’t find any info on their website as to which markets you can access.
thanks for the tip about Saxo, will check it out. I don’t think TradeStation allows you to invest on the Canadian market. In any case, I have given up on them to avoid the estate tax issue, as advised by Andrew.
I am a Canadian and Singapore PR (although I am currently on a work posting in China for the next 2-3 years). I have read your book and followed your advice with the DBS Vickers account and ETF allocations. I am wondering what your view is on the STI ETF ES3?? Are there any advantages/disadvantages that I should be aware of?
It’s an excellent ETF choice. But because Singapore’s market is so small, as a percentage of global capitalization, minimize your exposure to this ETF.
Andrew I wrote to you in October 2012 on a different page regarding our Friends Provident investment. My wife and I are Canadian teachers living in the middle east. We have stopped payments on our policy and are simply leaving it sit for the time being. We hope to soon be deciding if we are going to surrender the plan, take our losses and move on or just leave it with FPI until it’s finished. It has simply made no money in the last two years and I think it would be better off in ETFs.
I thought I should write here in case it is helpful to people. I have just recently opened a TD Direct International account in Luxembourg. I am just waiting for the final papers to arrive to log in to my account. The process was actually surprisingly easy. Once I can do so I am hoping to take the coach potato route described above on this blog post. I do have a couple of questions that I was hoping you or someone else on here might be able to answer for me as I really do want to do things right with our investments this time around.
For clarity we are Canadian citizens with non residency status in Canada. We do not pay taxes in Canada or in our home country of Oman.
For our application I had to fill out a W-8BEN form “Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding and Reporting” I believe I needed to fill this out in order to purchase or trade U.S. funds.
Since I have told them that I would also be buying Canadian funds they have sent me two forms to fill out. One is from TD Direct titled “Declaration of Eligibility for Benefits Under a Tax Treaty for a non-Canadian Resident Taxpayer”. The second form is the Canada Revenue Agency form “NR301” which is also called “Declaration of Eligibility for Benefits Under a Tax Treaty for a non-Canadian Resident Taxpayer”.
2. What implications could these have on my investments, as far as taxes are concerned, if we chose to move to a different country or decided to repatriate to Canada.
Thanks to anyone willing to share their insight on these questions. I am excited to start taking my investments into my own hands…the index fund way!
Your book was incredible and a great asset to not only the international teaching community, but to other investors wanting some straight-forward advice on how to manage their money. Can’t wait to get your new book from Mr. Dalziel since I see from his comments he ordered us all one! Have subsequently read many of the books you’ve recommended.
My question is not dissimilar to many other questions that have been posed to you previously (which you’ve amazingly taken the time to answer in detail — my respects, and don’t fret if you have no time for this one). I’m Canadian, my wife is Mexican, we are both pretty young and have all our money in a POSB account here (no assets anywhere else). The plan is to follow your advice and open a DBS Vickers account in the next week. The plan is to work internationally for a good long time. We might hope to buy a house in Mexico soon as an investment but have no designs to live in Canada in the future.
The question for us becomes, in looking at ETF offerings, what would you recommend? I have spent a long time looking at the Vanguard offerings and have been contemplating a mix between International, Canadian, and US indexes. Would you recommend this or devise something different considering we really have no idea where we might land — but unlikely it would be in Canada.
There’s too much to tell you in a simple forum such as this. I wish my book were available now. I could then easily refer you to the relevant sections. Here are the key points. Ensure your ETFs aren’t domiciled in the U.S. Even if you use a Singapore brokerage, you need to know which are U.S. domiciled and which aren’t. If you won’t be living in Canada (or retiring there) you may want to build a portfolio like this: 30% Canadian bonds; 70% global stocks. In time, a Canadian domiciled international bond index will become available. At that point, you could perhaps split your bond index money between that one, and the Canadian bond index. Or, if you really think you will never ever step foot in Canada to live again, stick with the international bond index. My apologies, again, for not having enough space or time to answer your question in the manner you deserve. As mentioned, these details are in my book. And be sure to thank James. He has your staff’s best interest at heart. It’s fantastic that he ordered copies for his entire staff.
Thanks for your response! It certainly helps us in crafting a course. It seems like it might be prudent to open a account and read your book for more info on on the key points you laid out in your response! I suppose two quick questions (feel free to tell me it’s laid out in your book and to have patience!) –how do I go about finding out where a EFT is domiciled; and when you say “global stocks,” does this exclude everything from the US? If I’m looking at Vanguard ETFs would be VXUS or VT be examples?
When something is domiciled in Canada, it means it trades on the Canadian market. Seach ishares Canada and Vanguard Canada. Every ETF you find under either banner would be fair game for you.
Scott, this post should help you a lot: https://andrewhallam.com/2014/01/expat-index-investors-should-duck-u-s-estate-taxes/
Thank you for making so much information available. I am an expat in Thailand and while I have recently begun my investment adventure in real estate, I plan to diversify in July when I get my yearly “pension money” to investing in index funds.
After reading the four pages of posts in this forum, I am getting a little concerned about my non-res status. When I left 3 years ago, I declared the following: credit card, bank account, and driver’s license. Nonetheless, my non-residency status was granted. Then last year, I bought a small and truly seasonal home (not winterized in Newfoundland) as well as a home in Thailand with my partner who is Thai. Regarding the NL place, I figured as it was seasonal, then it was not a root. Now I am a bit worried.
I am usually not a procrastinator, but I have put off submitting the form because I wanted to discuss this with an account and lawyer in the know. (Not to swindle the law, but to figure out how to use it in my favor.) After meeting with a few different people, all I learned was that no one had experience with this. Then I called the government for myself and the lady told me that as an expat who has firmly established roots in Thailand (full-time house, Thai partner) that this should solidify my roots in Thailand, thus my non-residence status, despite the seasonal NL property. Still, I procrastinate.
This is my story, but does anyone else have any other insight? After this post, I plan on contacting Kerry Blain for a consultation. And eventually I will file. But I would like to do so once I have looked into every possibility. It would cripple me to lose the nr status.
I know you must get a lot of emails and posts every day, but any insight you may have to offer would be greatly appreciated!
You mentioned in a previous post that you only buy one ETF a month to cut down on fees… I don’t quite understand how that works if your trying to maintain a 60/40 spit between stocks and bonds…
I have a TD international account that I opened at the beginning of the year but haven’t put money in there regularly due to fees and local banking difficulties… I just transfer a lump sum into TD then buy the necessary shares to balance out. Does that work?
Also I’m a little worried but I know it’s still early in the game and I just started in January… but one of my etf s is doing well, but not enough to offset the losses on the other two… I’m pretty much breaking even. Is 5 his normal in the first year? I expected a little more return based on your books… am I doing something wrong?
To answer your first question last: nothing in my books suggest that you will make money every year with this approach. In fact, you could even lose money for two or three years in a row. The markets have averaged more than 9% annually over the past 20, 40, 60, 80, and 100 years. But individual years are usually all over the place. At one point, in my new book, I address this. I show a yearly return chart of the S&P 500. Notice how few years there are that fell within the 9-11% annual returns. Sometimes, returns are far higher. Other times, you’ll lose money. You need to be very patient. Some years will be excellent. Others will be awful. Welcome to investing. But if you stick to your solid game plan for 20 years+, you will earn very very good returns.
As for buying ETFs, one per month, don’t get too carried away about keeping a perfect allocation every month. When you first start out, a single purchase will swing your allocation dramatically. That’s OK. Until your account hits at least $100,000, you could find yourself buying one of the ETFs one month, the other the following month, while continuing to build your portfolio base. At some point, you’ll notice some of your ETFs are lagging. Those are the ones you want to target purchases with because those allocations will be falling behind. After reading the book carefully, if you have any questions, please ask me.
I was pretty sure that it was first time investor panic…. I know you didn’t say that it would be returns every year but it is all about the long term. Saying that… because I am not getting much of a return with my VEA should I switch to another ETF that is similar? I don’t have any Canadian stocks because we don’t know if we’ll head back to Canada, but I might think about diversifying a little more by adding another stock, and since I am still building my portfolio it wouldn’t be hard to add another one in.
Thanks for also clarifying how you buy your ETF and build your portfolio. I missed the part about hitting 100K total investment, or I didn’t quite understand it… so thanks for taking the time to clarify.
As an expat Canadian, one thing you need to be aware of is the fact that you shouldn’t own U.S. domiciled funds. The funds you listed are U.S. domiciled. You should switch them to non U.S. domiciled funds, so you don’t get hit with U.S. estate taxes when you die. I know that sounds complicated. It isn’t. My book explains this all. As does the following post. Although the book does a better job of it: https://andrewhallam.com/2014/01/expat-index-investors-should-duck-u-s-estate-taxes/
DOH! Okay, I am glad I am asking the questions… will make the changes ASAP. For some reason I thought to stay away from Cdn ETF’s because of withholding tax situation – but like you said since I am in a tax friendly place like Luxembourg with TD Direct Investing, I’m good.
I have read both your books and am trying to turn my finances around after too many bad experiences with the “professional” advisers.. I have a Vickers account set up and am buying stock and bond index funds from Canada, US and Singapore.
1. I recently purchased a condo in Florida (future retirement) and I am renting it out so I have applied for and received a ITIN from the IRS. DBS Visckers have subsequently advised that I must sell my US index funds before the end of the year as I cannot hold them due to my status with the ITIN.
I read in your book that I can get US index funds through another broker/country?? How does this work? Can I still go through Vickers? What would the fund code be? Pls advise.
2. I currently have funds in my CPF account – any idea if/how (or should I) do anything with the CPF funds?
4. Despite my bad experiences with the professional advisers – I am still hoping to retire in the next 3-5 years. I have a rough plan of where and what I would like to do in my retirement but I would like to run this by a professional who knows the ins and outs of residency and tax laws etc. However, I am reluctant to get more professional advise… Where would you recommend looking for a reputable consultant/adviser who can guide me on this stuff but won’t fleece me?
I am a Canadian expat in Singapore. I just finished reading your latest book….truly a lot of great additions to Millionaire Teacher which was already a fantastic resource. Please accept my congratulations. Your book answered a lot of questions but still had a few open:
1) Both cap weighted and RAFI index funds (I believe) are still heavily weighted towards large cap. What are your thoughts about keeping an even split between small, mid & large cap index funds for a longer-term investment. Past results are no guide to future performance as you’ve pointed out many times in the book, but I believe over the past 30+ years small/mid cap returns have been higher to large cap, more risky than small cap but certainly help diversify portfolio
2) Thoughts on being more heavily weighted towards value index funds vs. growth. I believe there is a mountain of literature on “value premium” and over long-term value has been at least 1 % higher return than growth
4) Real estate investment is the single biggest purchase we do over our lifetime. I am unclear with questions such as “Are we always throwing up money with renting”. Basically, trying to understand if it’s a no brainer to save for a downpayment and take a mortgage or utilise those savings for stock/bond investments and not rush towards buying.
You could certainly weight your indexes any way you choose. Just remember to always be consistent. For example, during most of your investment lifetime, small cap stocks may under-perform large caps. If that happens over the next 20 years (as it did from during the 18 years from 1982-1999) you might bail on your strategy with small caps. Don’t. If you do, you will be doing what everybody else does (buying the asset class de jour) If you do that, you will under-perform both large and small cap stocks. Always remember, also, that small cap stocks aren’t a silver bullet. Probably the best small cap fund manager in the world is a guy named Ted Aronson. This is what he says: “Small-caps don’t outperform over time. When all is said and done, the returns [of small and large stocks] are very similar. Sure, the long-run numbers show small stocks returning roughly 1.2 percentage points more than large stocks. But those historical averages are a crock. The costs of buying and selling small stocks are a lot higher, and the averages don’t reflect that. The extra trading costs easily eat up the entire extra return — and then some! So over the long term, small stocks may even underperform.”
As for the value tilt, go for it. However, keep the same premise of consistency in mind. You could go a decade or two where growth stocks beat value. Stick to your guns, or you will under-perform both growth and value, if you abandon one strategy after a decade because you “think it no longer works.” The media will be helping you do that, also. Smart investing has little to do with what products you pick, and more to do with your emotional equanimity and consistency.
I really enjoyed reading your new book! We are US expats, and are thinking about applying for teaching jobs in India. The only problem is the retirement contributions from the the big schools (12% school and 12% employee contribution) have to be put into the India Provident Fund/Pension Fund. That worries me. We don’t plan on being in India forever, maybe just 4-6 years. I’m a Vanguard guy, and would prefer the school give me the 12% so I can put in my own accounts, put that doesn’t seem to be an option. Is forced contribution in the India Provident Fund/Pension Fund a deal breaker?
I don’t know much about the India Provident fund. But it may not be such a bad thing. Some Malaysian and Thai international schools invest in a local government fund which works much like a bond fund. Just make sure you can pull your money out, without penalty, when you leave. Even if you choose to leave after just two years. If you can’t, that should be your deal breaker.
I’ll be sure to ask those kind of questions if we are offered an interview. My general internet search leads me to believe the money has to sit in India until we are 58 years old (India retirement age). That seems like a bad thing to me, however, there are many US expats working in India and paying into the India Provident Fund, so maybe I’m miss reading the situation. If the $$ has to sit until 58, would that be a red flag in your book?
It definitely would be a red flag in my book Mike. Just because hundreds of expats are doing it, that doesn’t mean it’s smart. You will find that most international schools are affiliated with groups like Friends Provident, Zurich International, London 360, Alexander Beard and Generali. And they provide products that would make your toes curl. Thousands of expats, however, are invested in them. Again, that doesn’t make these investment schemes any less awful. Anything that ties up your money should raise a red flag.
TD Luxembourg came up in this conversation a while ago but as a expat Canadian what options are available for trading platforms? Why is Vickers on the forefront of this conversation, are there any other platforms you would suggest? I find this topic very informative just struggling to find the best place to start. Thanks in advance
I did a very thorough comparison of each available brokerage in my new book, The Global Expatriate’s Guide To Investing. http://bit.ly/globalexpat
There are so many ways to measure the different fees. And I did so, with side by side models of many brokerages. DBS Vickers charges high trade commissions. But they are cheaper than TD International overall, based on the account wrap fee. Saxo Capital Markets is also a good option. Again, there’s too much to write about it here. But I think the book would be very useful to you, if you’re an expat investor.
Awesome books and big congrats on a successful second career. I’m a fellow British Columbian that teaches in Singapore and just opened an account with DBS Vickers today. Most of our money is with an advisor from Canada who isn’t malaria but is likely a common cold.
Just thought you’d like to see some of his responses to my questions about fees, index funds etc. I’m guessing he is giving us the sales pitch you mentioned in your recent book?
Unfortunately there is a lot of misinformation that abounds in the “free” literature that is available through websites, and a lot of it is slanted in favour of the index fund industry. When you purchase an index fund, there is no active management in fund selection – assuming this is the panacea it is purported to be, why is it that most institutional investors and high net worth individuals use active stock selection. Why do major pension funds / university endowment funds employ money managers to manage their investments instead of selecting low cost index funds ? How is it that Warren Buffet, the quintessential active fund manager, has beaten the US stock market index over the years ?
(As for fees)… No trailer fees, which means that the fund / ETF is at a bare-bone management fee. In such cases a separate wrap fee is negotiated at a number which is 1% p.a. or higher. Typically for your size of account, the fee in Canada would be about 1.5%.
2. Trailer fees that are embedded in the management fee, that are typically 1% for equity funds and lower for bond funds.
Your advisor is hoping you remain in the dark. Many pension funds and endowment funds are indexed. Washington state’s government pensions, for example, are 100% indexed. California’s is 60% indexed. And as you can see from the following article, California is ready to increase that because it’s active managers have been under-performing for years. http://www.forbes.com/sites/rickferri/2013/03/21/nations-largest-pension-considers-more-indexing/
According to FutureMetrics, of the pension funds that aren’t indexed, a full 70% are under-performing (over the past two decades) a balance of 60% stock, 40% bond index. What’s striking is this. Pensions don’t get hung with expensive albatrosses, like those charged by the actively managed funds your advisor wants to buy you. Pensions are actively managed, for about 0.25% per year. Your money (in Canadian actively managed funds) would be managed for a cost 10 times greater. The average Canadian equity fund charges about 2.4% per year.
Warren Buffett’s wife’s money is going into index funds when the Oracle of Omaha dies. He has no faith in finding a money manager who will beat the market. http://money.usnews.com/money/blogs/on-retirement/2014/03/14/the-warren-buffett-guide-to-retirement-investing
If you want to pay a financial advisor in Canada to build you a portfolio of index funds, then yes, you would pay about 1.5%. But if you want to do it on your own (and it is very simple) you would not have to pay such a fee. And there would be NO trailer fees.
Owen, your advisor is either very uneducated. Or he is not a person with integrity. I hope it’s the former.
Thanks Andrew. I’ve been back with and forth with my advisor the past few days and while I won’t post it all, there is definitely the theme of keeping me in the dark and using big words and charts. Interesting that he also uses Warren Buffett as an example on why not to use Index Funds or ETFs.
Just waiting for the paperwork for DBS Vickers to go through and will get started. My wife is American so we are looking at Vanguard or Charles Schwab for her and for us to diversify slightly. Will let you know how it goes.
Interestingly, your advisor used Warren Buffett without realizing that Buffett despises actively managed mutual funds. He says they are far too expensive, and that investors should build portfolios of index funds instead of using them. Perhaps your advisor doesn’t understand all of the big words that he uses!
Since my last post, I’ve signed up to DBS Vickers and started buying ETF’s on TSX. A surprisingly simple process – even got 18/20 on the SGX Quiz on the first try! (More of a Reading Comprehension test than anything else!) Our first two purchases were XWD and VUN and waiting for some Canadian dollars to come through to buy bonds. We’ll probably leave it as equal distribution among those for now, being in our early 30s. I’ve just been looking at your post on Horizon’s ETF and will need to go back into your book to look it up and decide between that and XSB. Our financial advisor from Vancouver keeps giving us the spiel so we are working through that – he’s coming through Singapore in a few months time and wants to meet face to face before we do anything ‘drastic.’
Sorry we missed you at the book signings while you were in Singapore. A friend from SAS shared your talk from there – looking forward to watching it.
Mr Hallam, what do you make of this recent news about Vanguard beefing up its credit lines in case there’s a huge run of investor cash-ins during a market meltdown?
Thanks for the info, I’ll be opening a TD international account soon. I have two more questions if you don’t mind.
1) You say to invest at least 3000 because of the 30 dollar fee so is a max fee of 1% a fair rule to go by?
I am a Canadian working in SG. Your articles and books have been extremely insightful, thank you so much.
I have reached a stage of purchasing my home or condo as they call in Singapore. I dont have any emotional connect with “owning a home” but see it merely as a way to build equity instead of paying rent. However, as I see it a home mortgage is just another way to add leverage to your personal balance sheet. Albeit, it is not a diversified asset (one home), you may get unlucky….I still have friends in the US whose mortgages are under-water and I have heard stories about what happened to many Japanese in the 80’s. Long-term capital appreciation for Singapore residential property I believe has been close to GDP growth.
I have read and agree with comments that buying etf’s (even the low cost diversified ones) with margin (or as I understand it by borrowing or leverage) is not advisable and extremely risky. But at the same time, it is considered the norm worldwide to make the biggest single investment in your life of adding leverage by taking a home loan on a non-diversified asset called home. Why is that? Please Andrew can you provide some guidance or point me to some literature so I can think this through. I do not want to make the biggest investment decision of my life based on “conventional and accepted logic” on home ownership that I am not yet fully convinced is right. I would have greater peace of mind on long-term appreciation and return on a diversified etf than a single condo. So how does buying etf on margin compare to home loan for someone who is not weighing home ownership emotionally?
The “rent versus buy” question should be a business decision. Too many people make it a question of the heart.
Returns all compete with each other. Divide the expected annual rent by the home price. This gives you something called the “yield”
Our rented condo in Singapore had a market value of $1.8 million. It currently rents for $3000 per month. That’s $36,000 per year. That’s a yield of 2%. Based on comparative global real estate prices and yields, Singapore rents are cheap. Singapore home prices are high.
If you do want to buy an investment property, choose a place like Atlanta, Georgia. You could collect $36,000 in rent per year on an investment that’s a full 1/5th cheaper than that you would pay in Singapore. It’s something to think about.
You are right, that makes perfect sense. My only comment is it feels to me buying and managing overseas property is a significantly consuming exercise, please let me know what your experience has been.
Also, besides rental yield one may also look at longer-term appreciation potential? As a comparison to stock, today AT&T has a dividend yield of 5.2% which I guess is solid for such a blue chip stock. But would you necessarily recommend AT&T stock vs. S&P 500 index?
I guess I am trying to understand if an investment property with good rental yields today is still worthwhile to consider in comparison to etf’s and reits which have all the advantages of diversification.
I expect there to be far greater capital appreciation in Atlanta properties because the price to earnings rate is far lower. Remember, properties are like stocks, in this respect. Yes, you would have to hire a management company, from afar. But the profit potential is much much greater.
Thanks Andrew. I completely agree with you, properties are like stocks in some ways and hence maybe diversification is as important?
That’s why my question was: How would you compare a single investment property in an undervalued city like Atlanta vs. an S&P ETF vs. an REIT investment?
Secondly, any suggestions on credible management companies who can help with overseas property purchases?
Just got off the phone with TD international and they gave me the following information. Thought it could be useful for your readers.
Also, the person I talked to said if you are living in Japan, Vietnam, Indonesia, Myanmar or Sri Lanka then you can’t trade through them.
There are no account fees with DBS Vickers. But the overall cost of DBS Vickers is higher. Commission costs are much higher.
Helpful info, thanks. I’d like to add that if you’re an expat living in Bangladesh you’ll also be barred from trading with TD International.
I’m in the middle east and have recently become an account holder in TD International and have been investing for about 4 months. I have exclusively used your suggestions of the XIC and ZFL funds to start my portfolio and will add a few different funds in the next few months. I am trading on the TSE alone. I’m working hard, trying to ignore my investments and their up and down behavior – which is hard for me as a rookie investor.
1)	In addition to your books, I’ve also recently read a number of Moneysense and Canadian Couch Potatoe blogs that refer to index funds and ETF’s. They’ve suggested a number of funds on the TSE including VAB, VXC, ZCN, CLU. Would you suggest staying away from any of these?
2)	I’ve read your article in the G&Mail that you seem to love the Tangerine funds. This Couch Potatoe (CP) article also speaks highly of them http://canadiancouchpotato.com/2015/01/15/couch-potato-model-portfolios-for-2015/. Is there a way for expats to buy these funds? Also, do you agree with the 3 CPotatoe investment packages suggested in this article?
3)	Last one… oil is down very low and you always suggest buying funds when they’re down. Are there index funds that are weighted in oil stocks that would be a good bargain at this time?
There are multiple options you could choose, when investing in ETFs. Whatever options you choose, ensure these factors:
The rest is going to be behavioural. In other words, you need to rebalance, instead of trying to speculate.
Your question about oil is a speculation. Unless it’s a standard part of your portfolio, don’t jump into it just because you think it’s cheap. If you want to make an oil ETF a standard part of your portfolio set aside 5% of your portfolio towards an oil ETF. Then rebalance it each year, as you would anything else. And always keep it as part of your portfolio. But keep this in mind: Canada’s index is affected by oil prices. That’s why, over the past year, it’s the worst performing first world index. When you buy Canada, you buy oil.
Yesterday I read the MoneySense article “The best ETFs for 2015” http://www.moneysense.ca/invest/etfs/the-best-etfs-for-2015/. There are a number of ETFs suggested. First, where do I go to find the management expense ratios (MER) for those not listed in your books? Second, if I remember correctly, you refer to MoneySense as a good source of information on index-based portfolios… am I right in using it as a valid, unbiased resource?
MoneySense is good. If you want to look up expense ratios, go to the company websites. For example, if you are keen to see Vanguard’s lineup of Canadian ETFs, here’s the link: https://www.vanguardcanada.ca/individual/etfs/etfs.htm
Do you know if any banks allow Dependent Pass holders to open investment accounts in Singapore? My husband (the EP holder) and I would open a joint account, but he is a US citizen. I’m Canadian which is why we’re considering opening it in my name alone. The information on the DBS Vickers page doesn’t explicitly mention anything about DP holders – but I know when we first moved here I wasn’t able to open my own savings account with DBS. It may be different now that I’m working on a Letter of Consent.
If your husband is American, you won’t be able to open a joint account with a Singapore investment firm.
I’m a 34-year-old long-term Canadian expat in China, married to an American. Based on the advice of a financial adviser who recommended your first book, I currently have a two-fund portfolio in a Saxo Bank account — a fairly aggressive 85% stock /15% bond mix of VWRD and VSB (it’s not been the most encouraging year, but still… Stay The Course!)
Do you think it’s a good idea to hold on to Canadian bonds on the off-chance that we end up there, considering that the majority of my portfolio is in USD? If so, would it make more sense to switch into a CAD-denominated stock ETF (or two) to match the VSB? Or should I move everything into USD for ease of rebalancing?
One thing that I’ve noticed about VSB is that, as a non-resident, I can’t automatically reinvest dividends. Do you consider that a problem?
Or is it possible that I’m overthinking all of this, and should just leave my portfolio alone except for contributions and rebalancing?
I am at Changi now waiting for my flight home and thought i should let others know how my 25 hours in Singapore just went.
I set up the account in March and built my diversified low cost index portfolio and put in some money to get it all running and see how it went.
So far I am about 1% down for the year, so that is not encouraging – but i think many are finding the same this year due to global market conditions?? My portfolio seems sound based on the reading i did.
This trip to Singapore has been a disaster. I sold my house in Canada last month and had them send me the proceeds via a bank draft and i traveled to Singapore overnight to deposit it today.
Bottom line (time to board) they would not take the draft as the name on it did not match the name in my passport EXACTLY. Instead of my full name XXXXXX, it had the short version XXXX, so they would not process the draft, saying the amount is large and it has to be a match. They are very very cautious. I did finally get them to agree to do it, but i would need a leter from my lawyer verifying that the cheque is for me and then the fees they were going to charge amounted to 10X (roughly) what a TT transfer will cost, so I said no.
So I am heading back to Thailand now with the draft. Will have to cancel it and send it back and do a TT transfer.
I am obviouslt really upset, the time and money I took to travel here just to do this, and the fact that my money is on limbo doing nothing – really disappointing.
So for those planning to use a draft as their method of bringing money to DBS Singapore – beware and cover everything with them in advance in terms of requirements or you could end up the same.
I am a Canadian in Singapore. I was looking at the Vanguard ETF VXC as one of the constituents for my portfolio because it had a nice mix of mid cap and small cap too. Its daily traded volume is 3K (I was looking to invest in more than 3K) with total assets 368 million.Please advise if I should be concerned about it’s liquidity?
It should be fine Raghu. There are no liquidity issues with that ETF. The posted information you saw, on trading volume, was likely incorrect.
I am a Canadian in South Korea. Can this method work for expats in Korea? Do you have any tips for Canadian expats in Korea?
You could build a portfolio of low cost index funds. I suggest TD Direct International. But they won’t hold your hand. This book will show you all you need to know. Find a friend who owns it. Borrow it and read it. I promise you’ll understand it. http://bit.ly/globalexpat
Quick question on your book. In chapters 17-20, you switch between SAAA and IGLO for global government bond funds. Is there a reason for this or are these two ETFs interchangeable? I have IGLO in my global nomad couch potato but am a bit concerned about the long maturities on some of the constituent bonds. Are there any better alternatives out there? Perhaps you found some others during the process of updating your book?
I’m going to tease you for skimming that book. IGLO was only suggested for the Permanent Portfolio. I listed a Global Permanent Portfolio model on table 20.4. That’s the only place where I listed IGLO.
You can read about the Permanent Portfolio, and why the terms are so long for this bond index, in chapter 10.
Thanks and noted. It looks like I made a mistake when setting up my global nomad portfolio. I used 25% IGLO and 10% CORP instead of 35% SAAA ( the rest is 40% VWRD, 15% VHYD, 10% IDWP). The total pot is quite large. Should I now switch out of IGLO and CORP into SAAA?
I’m already in IGLO. Stay there or move to SAAA? I couldn’t see much difference between the two in terms of the weighted average maturity of their bonds – they looked to be similar.
Looks like SAAA has shifted a bit. Pick a short term U.S. bond index and a short term European bond index. Check out iShares UK.
Hello Andrew. I was wondering what you think of P2P investing as a part of one’s portfolio? I’m quite interested in learning more about various types of passive investing. I live in Singapore. I found this website: https://fundingsocieties.com which seems to be what I’m looking for. But I want to hear different perspectives before I invest. Thanks.
Tyler Cowen reviews a new book calling into question Scandinavian welfare states as a model for the world, and working out its implications for immigration policy:
Nima Sanandaji, a Swedish policy analyst and president of European Centre for Entrepreneurship and Policy Reform, has recently published a book called "Debunking Utopia: Exposing the Myth of Nordic Socialism." And while the title may be overstated, his best facts and figures are persuasive.
It is difficult, after seeing those figures, to conclude that the U.S. ought to be copying the policies of the Nordic nations wholesale. It is instead more plausible to think that Americans might learn something from the cultural practices of Nordic-Americans. Sanandaji says those norms include hard work, honesty, a strong civil society and an ethic of cooperation and volunteerism….
For one thing, Nordic immigrants to the United States probably came from the better trained, more literate and more ambitious segments of the population. For instance, data on Danish migrants from 1868 to 1900 show that laborers were underrepresented in the group and artisans and craftsmen were overrepresented by a factor of two. It is perhaps no wonder that the ethnic Danes in the U.S. are relatively high earners, because they are the results of a process of positive selection. And there is a growing literature showing that the cultural traits of migrants can persist to some degree for generations in their new countries….
Most of all we should consider the option of greater freedom of choice for residence decisions. For all the anti-immigrant sentiment that is circulating at the moment, would it hurt the U.S. to have fully open borders with Denmark? It would boost American gross domestic product and probably also improve American education. History teaches that serious assimilation problems would be unlikely, especially since many Danes already speak English.
Open borders wouldn't attract Danes who want to live off welfare because the benefits are so generous at home.
How's this for a simple rule: Open borders for the residents of any democratic country with more generous transfer payments than Uncle Sam's.
A few observations: Simple one-to-one comparisons of Danish to American living standards are not very meaningful, because even if Americans make more money, they have higher living expenses. They have to pay for (or do without) many things a Scandinavian welfare state provides for free or subsidized. How exactly do you calculate the effect on living standards of guaranteed paid parental leave, health insurance, pre-school education, and public transportation so effective that nobody has to buy a car?
That aside, though, notice the argument Cowen is making. Cowen is a professor of economics, a centrist with libertarian tendencies, and an interesting blogger. Being libertarian, he tends to be in favor of immigration in general. Economists tend to like many kinds of immigration, because it fosters economic growth and comparative advantage and those sorts of things.
But since Cowen is a pragmatic American, he accepts two arguments as so obvious as to need no elaboration. First, that immigration should favor the talented and intelligent. The Danes America got are doing well in America because they come from a successful culture, and because they were some of the most enterprising people in that culture. Second, he notes that immigration policy should obviously not attract people "who want to live off welfare". (Also, note that he uses the word "selection" in reference to getting better Danes. The German version of this word, Selektion, is thermonuclear-level verboten in Germany because it was the term used for the process of determining which new arrivals at Nazi death camps would be selected for immediate death, and which would be put to work).
Both of these arguments will immediately be disputed in European Urban Haute Bourgeois circles. Trust me, I know from personal experience. European urban elites who have liberal-arts educations are educated in hothouses of deontological thinking, in which experiences and policies should be evaluated according to abstract universal principles of humanism. In this view, selecting immigrants is denounced as elitist, as ignoring the "sacred principle" of human equality, as treating some persons as more inherently valuable than others, and as implicitly asserting the supposed "superiority" of Western culture.
Discouraging welfare tourism is denounced for similar reasons. Also, you often encounter the notion that Europeans have no "right" to live in comparative safety and prosperity, and therefore have no legitimate objection to foreigners coming to their country and living off state assistance their entire lives. What are you trying to say, that Joseph from Cameroon somehow has less right to live off German welfare than Josef from Dibbersen? Both are human beings, both have the same entitlement to inviolable human dignity, and therefore both must be treated equally by the welfare state. You didn't choose which country you were born in, so how is it fair for you to reap the incalculable privileges of being born in a place like Germany as opposed to, say, Zimbabwe?
To which the average Brit or American (but not Peter Singer) responds: What's all this bosh? These arguments may have abstract appeal in a seminar room, but as guides for formulating policy in a Western democracy, they're useless, not even wrong. Principles are all well and good, but they're hardly a guide to practical policy-making. Favoring skilled immigrants is legal, proper, does not violate any mutual obligations we may owe to others, and benefits us. Same with making sure foreign welfare cases don't burden our system, which is designed for our people. And no, we think the notion that making sure our welfare system helps our people is not only proper, but that it's the only remotely sane approach. And we feel no need to justify or explain these views. As Disraeli said, "Never complain, never explain."
This, gentle readers, is one of the most fascinating and enduring differences between the mindset of the educated elites of the English-speaking world and those of continental Europe.
The Economist looks at why the most high-middlebrow shows and books about Germany are written by Brits:
This popularity of Anglo-Saxon storytellers “really is astonishing”, says Hermann Parzinger. He is a German archaeologist (best known for his work on the Scythians) and president of the Prussian Cultural Heritage Foundation, which owns museums, libraries and archives in Berlin. He is working with MacGregor in dreaming up how to curate the Humboldt Forum’s exhibits.
German academics, Parzinger says, write books to impress the five most important experts in their field. Popularity is suspect in German academia. The German word unseriös, etymologically the same as “unserious”, in fact means “lacking credibility”. But Anglo-Saxons, Parzinger thinks, “have it in their blood to make these things suspenseful and interesting even for lay people”. In particular, they know how to integrate into their storytelling “both the high and the low, without anything being banal”. Thus MacGregor effortlessly mixes Luther and Goethe with sausages and garden gnomes into one analysis that makes Germans feel they’ve understood something about themselves.
The Anglos also come across as likeable rather than belehrend, says Parzinger. That German word means “lecturing”, and is often used by Germans of Germans. The greatest fear of intellectuals in Germany and other continental countries is to appear shallow. The greatest fear of Britons is to seem pompous, says MacGregor. So they enliven their knowledge with good delivery and showmanship….
But even among outsiders the Anglos have the edge in Germany over, say, French, Polish, Dutch or Danish intellectuals. These neighbours were often part of German history – as enemies, victims or collaborators. German audiences expect them to reflect that perspective. A French historian talking about the 1940s, say, should probably also expound on Vichy and French collaboration.
The Brits, however, were always “geographically more outside”, says Parzinger, which makes them appear credible. Since the 1960s, for example, it has been all but taboo for German writers to argue anything other than that Germany bears sole responsibility for starting the first world war. Clark gleefully ignored that taboo in “The Sleepwalkers” – and outsold all the Germans, even in Germany. Clark can say the question of guilt is complicated, says Parzinger, but hearing it “from a German would have been more difficult”.
This goes back to a fundamental cultural difference which virtually every Anglo-Saxon picks up on quickly in Germany: Most Germans just aren't funny in ways Anglo-Saxons recognize, and a substantial minority aren't funny at all. Free-floating, value-neutral absurdity; obscene wordplay; sarcasm and irony; casual teasing insults among friends — these styles of communication are much rarer in Germany than in the Anglo-Saxon world. Unless you know someone fairly well, the safest mode of communication is straightforward communication about mundane details of everyday life or anodyne remarks about current affairs which do not reveal a controversial personal opinion.
This is not to say there ain't no funny Germans, etc. etc. As with everything in life, this is a matter of probability distributions and bell curves, not of absolutes. Behold this scientific-looking graph:
The more to the left you are on this graph, the more sincere and loyal. You become more entertaining as you move to the right. Germany is the bell curve with the peak of 52. England with the peak of 76. The separation is too wide, but it still makes the point. There's plenty of overlap (i.e. decent and funny people) in both directions, but the average Brit you meet is likely to be more entertaining than the average German.
The canon of values the average German has been raised with tend toward sincerity, honesty, credibility, punctuality, and loyalty. You can be a worthy, admirable person on this scale while being crushingly boring. In fact, being crushingly boring can actually be a helpful strategy, since humor, used inappropriately or at the wrong time, can undermine your reputation. Leave humor to the professionals. Or if you are called upon to be funny yourself, have a few memorized jokes or sayings on tap, just in case. Even if they're crushingly unfunny, people will laugh. Out of politeness.
Maybe I can't make you laugh, says the German, but I will take time out of my busy schedule to visit you in the hospital, and bring a thoughtful gift. Which is more important?
Growing up in the Anglo-Saxon world, there's a premium on being entertaining. Your cultural heroes are likely to be comedians rather than violinists or human-rights activists. You're likely to spend hours each day consuming humor. Dull people are ostracized. Unlike in Germany, where you might bring them along even though you know they'll just sit there silently, in England and the USA you will simply avoid them and mock them.
In this atmosphere, even renowned historians often learn to be decent storytellers and amusing chaps, because everyone is expected to be a decent storyteller and an amusing chap. In Germany, you can live a life that you and others would consider rich and full without ever (1) intentionally provoking (2) sincere laughter in another human being.
Why do some societies not encourage casual smiling? I got my answer, or at least part of one, when I stumbled across a new paper by Kuba Krys [Kuba Krys? Didn't he lay down a smokin' freestyle on that Kendrick Lamar album? – ed.], a psychologist at the Polish Academy of Sciences [Oh, that Kuba Krys – ed.]. In some countries, smiling might not be a sign of warmth or even respect. It’s evidence that you’re a fool—a tricky fool.
Krys focused on a cultural phenomenon called “uncertainty avoidance.” Cultures that are low on this scale tend to have social systems—courts, health-care systems, safety nets, and so forth—that are unstable. Therefore, people there view the future as unpredictable and uncontrollable.
Smiling is a sign of certainty and confidence, so when people in those countries smile, they might seem odd. Why would you smile when fate is an invisible wolf waiting to shred you? You might, in those “low-UA” countries, even be considered stupid for smiling.
Krys also hypothesized that smiling in corrupt countries would be, um, frowned upon. When everyone’s trying to pull one over on each other, you don’t know if someone’s smiling with good intentions, or because they’re trying to trick you….
He found that in countries like Germany, Switzerland, China, and Malaysia, smiling faces were rated as significantly more intelligent than non-smiling people. But in Japan, India, Iran, South Korea, and—you guessed it—Russia, the smiling faces were considered significantly less intelligent. Even after controlling for other factors, like the economy, there was a strong correlation between how unpredictable a society was and the likelihood they would consider smiling unintelligent.
In countries such as India, Argentina, and the Maldives, meanwhile, smiling was associated with dishonesty—something Krys found to be correlated to their corruption rankings.
I've lived here in Tschermany long enough to witness a change or two. One is the increase in smiles on websites. Just anecdotally, I think the percentage of people smiling in websites about firms and universities has risen steadily. At one point, smiling too much in German would get you the reputation of being 'unseriös', but that seems to be fading these days. Also, cosmetic dentistry is becoming mainstream and affordable here. With the standard delay — about 20 years after this happened in the USA.
I'd give her a solid 'B' in English, about comparable to the German '2'. Like many Germans, she seems to have learned her English from someone in the UK, so she has a German-English accent, which I always find amusing. Germans, for their part, find it amusing when I speak with a Rhineland accent.
Professor Funke and other leading political scientists are doubtful her success will last. But the immediate impact of the migrant crisis is undeniable, cutting across age, education, class, region and political persuasion….
Apparently the New York Times hasn't gotten the memo that any article about Frauke Petry must be liberally salted with phrases like 'rabble-rouser', 'liar', 'cynical', and 'inhuman'.
How big is the cultural gap between Germany and the nations many migrants are coming from? One useful document is this State Department guide for American women who are contemplating marrying Saudi nationals. It was later retracted, for reasons that will probably become obvious as you read it. Now, Saudi is a more conservative place than most Arab countries (and also a lot richer), but at least half of the customs described in this document apply in some form to most Arab countries, I would wager. And as you'll see, there are quite a lot of them.
[The] American citizen spouse of a Saudi national is with a handful of exceptions always female. Saudi women are prohibited from marrying non-Arabs except with a special dispensation from the King. (A dispensation is also required before a Saudi woman may marry an Arab who is not a citizen of the Gulf Cooperation Council—i.e., Qatar, Kuwait, Bahrain, Oman, and the United Arab Emirates.) The Embassy is only aware of four American men who are married to Saudis. A few daughters of Saudi diplomats, raised and educated abroad, are also known to have received Kingly dispensation for marriage to Europeans. Most Saudi women who are married to Westerners tend to reside abroad with their husbands.
American spouses fall into two broad categories: those who are married to well-off, westernized Saudis, and those who are married to not-well-off and non-westernized Saudis. Both meet their husbands when they are students in the U.S. The former tend to maintain homes in the Kingdom and in the West, they socialize with other dual-national couples, they send their children abroad for college education (sometimes high school), travel frequently, and while in the Kingdom have the luxuries of drivers, servants, and villas separate from where the Saudi in-laws reside. Their husbands permit them to appear before men to whom they are not related, accept—if not encourage—their desire to find employment and generally do not require them to veil fully (i.e., cover the face with one or more layers of cloth) while in public. The women are allowed to travel separately with the dual-national children. The women may or may not have converted to Islam; their conversion may or may not be sincere. These represent the minority of dual-national marriages.
Most American women fall in love with westernized Muslim traditionalists, leery of the West and its corrosive ways, and eager to prove their wives' conformity to Saudi standards. The husbands are not "Arab princes" of western folklore; rather, they are part of the vast majority of Saudis who "get along" with the help of extended family members and marginal expectations. Their American citizen wives are often from the South/Southwest (where many Saudis prefer to study), they have virtually no knowledge of Saudi Arabia other than what their fiancés have told them, and do not speak Arabic. When they arrive in the Kingdom, they take up residence in the family's home where family members greet them with varying degrees of enthusiasm and little English. Typically, their only driver will be their husband (or another male family member), their social circle with be the extended family, and they will not be permitted to work or appear uncovered among men to whom their husband is not related. Initially, the American citizen spouse will be almost entirely isolated from the large western community that resides in the Kingdom. Gradually, the spouses who survive form a network with other American citizen women married to Saudis. The majority of American citizen spouses fall into this category.
Inevitably, American citizen spouses characterize their Saudi husbands during their school days in the United States as being completely "westernized"; drinking beer with the best of them, chasing after women and generally celebrating all the diversities and decadence of a secular society. Women married to Saudis who did not fit the stereotype of the partying, or playboy/prince, are careful to point out that their spouses nevertheless displayed a tolerance toward all of these diversions and, particularly, toward them. In other words, the Saudi-American relationship virtually always blossoms in the States, in a climate that allows dating, cohabitation, children out of wedlock, religious diversity, and a multitude of other Islamic sins which go unnoticed by Saudi relatives and religious leaders thousands of miles away.
American citizen wives swear that the transformation in their Saudi husbands occurs during the transatlantic flight to the Kingdom. There is the universal recollection of approaching Riyadh and witnessing the donning of the black abayas and face veils by the fashionably dressed Saudi women. For many women, the Saudi airport is the first time they see their husband in Arab dress (i.e., the thobe and ghutra). For those American women reluctant to wear an abaya (the all-encompassing black cloak) and for those Saudi husbands who did not make an issue of the abaya prior to arriving, the intense public scrutiny that starts at the airport—given to a western woman who is accompanying a Saudi male—is usually the catalyst for the eventual covering up. Since the overwhelming majority of American citizen wives never travel to the Kingdom prior to their marriage, they are abruptly catapulted into Saudi society. When they arrive, their husband's traditional dress, speech, and responsibilities to his family re-emerge and the American citizen wife is left to cope with a new country, a new language, a new family, and a new husband. Whether a Saudi has spent one year or eight studying in the United States, each must return to the fold—grudgingly or with relief—to get along in Saudi society and within the family hierarchy that structures most social and business relations.
Social pressures on even the most liberal Saudi are daunting. Shame is brought upon the entire family for the acts of an American citizen wife who does not dress modestly (e.g., cover) in public, who is not Muslim, who associates with men other than her extended relatives. Silent disapprobation from family and friends is matched by virulent public disapproval by the Kingdom's religious proctors (Mutawwaiin) and vigilante enforcers of the faith. Several American wives, fearing the latest round of religious harassment, have started fully veiling; not to do so, they discovered, meant public squabbles with the Mutawwaiin who vociferously oppose dual-national marriages. The experience of all dual-national couples is that voluntary and involuntary compromises are made or simply evolve. The sum of these compromises is quite often a life very different than the one imagined and speculated upon in the safety of the United States.
Quality of Life. Life in a desert kingdom that prides itself on its conservative interpretation and application of the Qur'an (Koran) requires that couples talk about very basic lifestyle issues.
How cosmopolitan is the Saudi husband's family? All American wives encourage prospective brides to meet the Saudi family before arriving in the Kingdom as a married woman. (Most Saudi families will travel to the U.S. during the course of their sons' studies, if only to attend graduation.) While it is no guarantee of acceptance, a family that regularly travels abroad or one in which the father has been stationed abroad is generally more broad-minded when it comes to their son marrying a Westerner. It is the parents who can be the greatest source of pressure on a dual-national marriage, and it is important to divine their opinions on what an American wife can and cannot do while living in the Kingdom.
With whom will you live? Many newly married couples move in with the groom's parents, in a sprawling villa which may house several other siblings and their wives and families. Privacy is elusive and tensions with family members who for one reason or another resent the presence of an American wife often make this living arrangement difficult. In a more affluent family, a couple may inhabit one of several homes that comprise a small family compound. Some Saudis live separately in villas or apartments. While that resolves the issue of privacy, many American wives find themselves completely isolated during the day, surrounded by neighbors who only speak Arabic, with no access to public or private transportation.
One tolerably married American citizen wife is not permitted to step out on the apartment porch since the risk is too great that an unrelated male would be able to see her.
The most western, but least common, housing arrangement would be an apartment or villa located in a western compound or on the Diplomatic Quarter. There, a semblance of western suburban life goes on behind high walls or, in the case of the Diplomatic Quarter, under the protective gaze of a multitude of Saudi police officers. However, most Saudi owners of western style compounds ban Saudi tenants since they fear western inhabitants would object. The very rare Saudi male who endorses this living arrangement is generally a naturalized Saudi, of Lebanese or Palestinian origin. For the average Saudi family, residence in a western compound would be an unnatural renunciation of Saudi culture and would make one culturally "suspect."
With whom will you socialize? Saudis socialize within the family. Expatriates who have lived and worked for years in the Kingdom may never meet the wife of a close Saudi friend and, according to custom, should never so much as inquire about her health. For an American wife, a social life confined to her husband's family can be stultifying, particularly since few American wives speak, or learn to speak, Arabic. Whether the Saudi husband permits his wife to socialize with men to whom they are not related determines how "normal" (i.e. how western) a social life they will enjoy. Several American wives have difficulty even visiting the American Embassy for routine passport renewals since their husbands are opposed to their speaking to a male Foreign Service Officer. Because of the segregated society, Saudi men naturally spend much of their time together, separate from wives and family. (Even Saudi weddings are segregated affairs, often held on different evenings and in different locations.) Only the most westernized Saudi will commit to socializing with other dual-national couples.
What freedom of movement will you enjoy? Women are prohibited from driving, riding a motorcycle, pedaling a bicycle, or traveling by taxi, train, or plane without an escort. All American wives were aware that they would not be able to drive while in the Kingdom, but few comprehended just how restricted their movements would be. Only the relatively affluent Saudi family will have a driver on staff; most American women depend entirely upon their husbands and male relatives for transportation. While most expatriate western women routinely use taxis, an American spouse will be expected to have an escort—either another female relative or children—before entering the taxi of an unrelated male.
Will you be permitted to travel separately from your husband? Travel by train or plane inside the Kingdom requires the permission of the male spouse and the presence of a male family escort. Travel outside the Kingdom is even more restricted. Everyone leaving the Kingdom must have an exit visa. For an American spouse, this visa must be obtained by her Saudi husband. The Saudi spouse must accompany his wife to the airport to assure airport officials that he has given his permission for his wife to travel alone or with the children.
One American's marriage contract specified that "she stated that she shall never request to travel from Saudi Arabia with any one of her children unless with his prior consent."…
Will you be permitted to work? There are two hurdles an American wife must overcome before finding work outside the home: the disapproval of the family and the paucity of employment opportunities.
Most husbands will not approve of a wife working outside the home if it entails contact with unrelated men. One American wife, who was a teacher in the U.S. during the entire five years of her courtship with her husband, was shocked when her husband threatened her with divorce when she requested to return to the U.S. to finish up one quarter of classes in order to qualify for a state pension. Now that she was married, the Saudi husband could not tolerate her being in the presence of other men. However, even if the husband is willing, the jobs are few. Employment is generally restricted to the fields of education (teaching women only) and medicine. Unfortunately, there is a tremendous social bias against the nursing profession and Saudi husbands would not approve of a wife working with patients, except in the position of a physician.
Will your husband take a second wife? Among the younger generation, it is rare for a Saudi to have a second wife but it does occur. A man is legally entitled up to four wives, with the proviso that he is able to financially and emotionally accord them equal status. One American wife discovered that her Saudi husband had married her best friend, also an American, while he was on vacation in the U.S.
In principle, all Saudi men must marry Muslims or converts to Islam. In practice, many American women blur the issue, participating in a Sharia wedding ceremony but never actually converting.
The pressure to become a Muslim, or to be come a sincere Muslim, is enormous and never-ending. There is no separation of church and state in Saudi Arabia, and at the popular level there is simply no comprehension of religious freedom, of the desire to remain Christian or undecided. One American wife, approaching her tenth wedding anniversary, has been terrorized by relatives who insist that the King has ordered that all women who don't see the light after ten years must be divorced and deported. For another, the pressure comes mainly from her children who are mercilessly teased at school for having a foreign, non-Muslim mother. (Half-hearted converts to Islam find that their children are ridiculed for having mothers who pray awkwardly or not at all.) One Saudi teacher informed the children of an American citizen mother, who has sincerely converted to Islam, that their mother could never be a Muslim since "only Arabs can be Muslim." Women who don't convert must accept that their children, through hours of Islamic education a day at school and under the tutelage of the family, will be Muslim. Women who do convert must understand that their conversion, particularly in the aftermath of a divorce, will be suspect and their fidelity to Islam perceived to be less than their husband's.
Saudi Arabia has one of the highest birthrates in the world and families with five or more children are the norm. The family is the basic unit of Saudi life and family members have much closer relations than in the United States. Every family member feels free to give an opinion on any facet of another family member's life. Siblings—particularly an older brother—are expected to financially aid each other, and males must band together to guard the honor of their female relations. Children are not expected or encouraged to leave the nest; rather, extended adolescence can occur well into a man's early thirties.
What are the differences in child raising? To a much greater degree than in the West, Saudi children are indulged. Little girls are dressed in miniature prom dresses; little boys wear the latest in western sport togs. Both wreak havoc. American wives must suffer silently when the children of various relations run riot through the house. One wife related the story of a brother-in-law's child who carefully doled out chocolate pudding on the brand new furniture. When she scolded the child, she was in turn scolded for making a fuss about something that could be cleaned.
On the other hand, the Saudi family is replete with babysitters and children always have young and old playmates with whom to mix. Because foreign labor is so cheap in Saudi Arabia, even lower middle class families will have an Indonesian or Filipino housemaid to help with the chores. Among the very affluent Saudi families and particularly within the royal family, each child will generate its own servant.
Many American mothers are frustrated by the dearth of things to do with their children. Absent a driver, mothers are cooped up at home with the children and, even with a driver, there are few venues to visit.
What will it be like to raise a daughter? Cultural differences are never greater than when it comes to the role of women, and raising a daughter is a challenge in any Saudi-American marriage. Growing up in the Kingdom, a young girl will naturally look forward to the day when she comes of age and can wear the abaya and cover her hair. She will naturally be very devout. She may be expected to marry a first cousin. While playing a central role in the family, a girl is nevertheless a statutory second-class citizen who needs to be protected and whose word is worth only half of a man's.
For a Saudi girl, this is the natural state of affairs; for an American mother of a Saudi girl, it can be unsettling. Not surprisingly, most of our child custody cases in which a child has been kidnapped from the United States involve a Saudi father "saving" his daughter from a "sinful" society and her "decadent" mother.
Since Saudi women are prohibited from marrying western men, an American mother must expect her daughter to integrate more tightly into Saudi society. This is not necessarily the case with sons who might be encouraged to study in the U.S. (Saudi girls are permitted to study in the U.S. only if they are chaperoned by a family member), who could freely travel to the West, whose business might facilitate travel between the two countries, and who might elect to marry an American woman. Several very liberal Saudi fathers and their American wives have been embarrassed by their more conservative daughters' decisions not to attend school in the United States in deference to the disapproval of their culture.
In the worst scenario, an American wife can find herself summarily divorced, deported, and deprived of any right of visitation with her dual-national children. Sharia law decidedly favors men in the dissolution of marriage. And the laws of Saudi Arabia require that all individuals be sponsored by a Saudi citizen in order to receive a visa, resident or otherwise. Therefore, once a marriage breaks up, the ex-wife must leave the Kingdom and may only return with the explicit permission and sponsorship of her ex-husband. (In cases where the Saudi husband attempts to prevent his spouse from leaving, the Embassy can call upon Saudi authorities to facilitate the American wife's departure. The Embassy cannot force a Saudi husband to relinquish the children.)
As Adam Curtis points out, the mainstream media ignore context and nuance, preferring to split the world into simple dichotomies. And since the media focus relentlessly on war, chaos, oppression, violence, and disaster, you're left with a feeling of learned helplessness, like living in the mind of a 'depressed hippie', in Curtis' memorable phrase.
The German variant of this tendency is to call all recent migrants 'refugees', and to assume that the only relevant aspect of their existence is that they all desperately fled from various forms of war and oppression, which are rarely described or analyzed in any depth. Germans are just reminded that (1) there are many conflicts and despotic rulers in the world today; and (2) therefore Germany must open its borders. The fact that there are several logical gaps between (1) and (2) is rarely mentioned.
And so Germans, in their sentimental naiveté, fail to understand that many migrants have prehistoric attitudes on a host of social issues.
In other words, many of the people 'fleeing war and oppression' enthusiastically support war and oppression when their side is winning.
Which brings us to this interesting story from the Tagesspiegel (g, paywalled). A reporter visited a migrant shelter and began quizzing a few randomly-chosen people about their attitudes. The beginning paragraph pretty much sums it up (my translation):
Jews? Control the media. In the West, but also in Russia and Iran. Says Ahmed, wiry, 20 years old, from Syria.
Blacks? Some 'apes' are nice, most are a menace. Says Mohammed, well-nourished, in his early 20s, from Egypt.
Homosexuals? Disgusting. God wills that they should not live. Says Abdul, gaunt, 30, from Afghanistan.
In calm, friendly, soothing tones, all three men explain: Women obey the man. It's permissible to hit them, but unnecessary. After all, women want to obey.
To sum up, the attitudes of uneducated young Arab males — the majority of the people whom Germany has allowed to stream across its borders — are a septic tank of prejudices so nauseating they make Donald Trump look like Albert Schweitzer.
Now, the typical response to this fact from liberal Germans is either uncomfortable silence or the insistence that 'the only solution is education'. We must explain our values to the new arrivals and gently insist that they take them on board.
But of course, this 'solution' also betrays the sentimental naiveté of liberal Germans. They seem to believe that benighted natives of Third World countries (1) are interested in learning German values; (2) will understand them; and (3) will discard their old beliefs and accept new ones.
Now, the millions of educated and intelligent people from Syria, Afghanistan, and Iraq are in a position to do all three things. In fact, the question barely arises, since they generally have beliefs about racism, women's rights, and homosexuality that are notably more progressive than their less-educated countrymen, and quite compatible with life in Germany.
But alas, when Germany threw open its borders, it gave up all control of who entered its territory. A massive number of new arrivals share the beliefs of the three young men quoted in the Tagesspiegel.
And the idea that they care about learning about and accepting modern Western European values is silly. Consider the following thought experiment: You are a middle-of-the-road German who is forced by circumstance to relocate to Egypt and try to integrate into Egyptian society. Well-meaning Egyptians, eager to help you adjust to a different culture, explain what ordinary Egyptians think about Jews, blacks, women, and the Holocaust. They urge you to adopt that way of thinking, to make your adjustment to Egypt more smooth.
Will you do it? Or will you cling to your existing beliefs? And why should your answer to this question be any different than the answer Mohammed gives about 'German values'?