I’ve just read this guide again - I got a lot out of it the first time, even more the second time. Thanks again for a providing a great resource @tkrunning!
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Another thorough and detailed article, thank you.
I am a UK expat now living permanently in a country no one has ever heard of, with no CGT or income tax and without foreign income tax treaties, just property taxes and that’s it. (yes, I know, a rare combination). It’s tax inefficient for me to even consider shares or ETFs where dividends are taxed at source.
Even investing in an ETF domiciled in Ireland only reduces the US withholding tax on dividends from 30% to 15%. 15% is 15% more than I would pay if I invested in an ETF which ONLY bought into companies which reinvested such income into its future expansion or into share buybacks.
Over the longer term this would make a HUGE difference and is stopping me from investing anywhere but the UK which will not withhold anything at all, leaving me to sort taxes (there are none) in my very benign jurisdiction.
Sure the UK charge 0.5% stamp duty at the time of purchase, but if I wanted to avoid this there are many other exchange worldwide where this is not the case. It’s a relatively minor issue.
If I’m correct, then I should be able to find an ETF entitled something like (jokingly) “S&P 500 no dividends”.
I know my situation is rare, but am I missing something obvious here or am I on to something? It’s preventing me from spending anything at all in the US market.
I tried opening a Degiro account using my Revolut and transfer wise account numbers to no avail!
I even opened a GBP account in transfer wise but explicitly was told these accounts aren’t authorised with them. Any ideas?
I’m a dual citizen. British and Cypriot and I currently live in Bulgaria
Hi,
I would like to ask “In what case it is worth to invest in hedged ETFs and what are pros and cons for a long-time investment”
I’m a little surprised no one has mentioned FIRECalc It was created to answer the question “With what you have today, and what it costs you to live, can you retire and maintain the same lifestyle?”
At its simplest it’s just another generic retirement asset calculator. Its intended use is to take advantage of the many details of holding a portfolio over time. The home page explains it as follows.
“Without any other information, FIRECalc will assume you want to keep your annual spending about the same for as many years as you specify, you aren’t planning on receiving any Social Security or pension, and your retirement portfolio is invested in a “couch potato” portfolio of 75% stock index and 25% bond funds, with a 0.18% fee to the fund. But you can change any or all of those assumptions. You can refine the spending and investment assumptions, explore the impact of some of your decisions, factor in all sorts of exceptions, and/or let FIRECalc search for savings or spending levels that will let you meet your goals. Just click on any of the tabs at the top to enter the optional information.”
“Each tab will take you to a description as well as the place to enter the optional information, but in short: Start Here is this page, where you enter spending, portfolio balance, and years. Other Income/Spending is where you enter Social Security, pensions, and other yearly adjustments. Not Retired? is where you specify when the plan is to start, and how much you’ll add to your portfolio until then. Spending Models lets you select from several approaches to spending during retirement. Your Portfolio allows selection of different investments. Portfolio Changes lets you make lump sum changes to your portfolio at some future year. Investigate allows you to investigate the consequences of some of the other choices you can make in planning your retirement.”
There’s an active support forum.