Outskirts of Shrewd'm / Living Abroad
No. of Recommendations: 2
As my emigration process moves along, I'm starting to think about where to keep assets. IBKR and Schwab are likely, but I would like to have some Euro-denominated (and EU law controlled) investments as well. Do folks have suggestions for how to start educating myself about this landscape?
Initially, I'd want to bring a significant amount of cash over and put it somewhere that is not losing ground to inflation. There are some EU banks that pay interest, though more modest rates than in the US. But assuming it's possible as someone on a long-term resident permit in PT to open a local brokerage account, I'm hoping there are funds / ETFs I will be able to purchase comparable to VUSXX or SPTS. Also hoping the account opening process will become less onerous once I'm actually resident there - getting a PT bank account opened from the US was quite a lot of hassle.
No. of Recommendations: 3
<< Initially, I'd want to bring a significant amount of cash over and put it
somewhere that is not losing ground to inflation. >>
Since inflation is what's under consideration, here's how I think about it for
myself. What are the areas that inflation will affect me, whether living abroad
or in the US?
1. Housing
2. Transportation
3. Food / Clothing
4. Medical Care
5. Travel / Entertainment
In my situation, housing will be my highest expense (either directly through
renting or opportunity cost). After living here for almost two years, I decided
to purchase an apartment in a neighborhood where I wish to permanently reside.
Contrary to friends who tell me that I've made a great investment, I'm aware
that it's an indulgence. ;-) But it's an indulgence with a nice side effect:
it's a localized hedge against currency/inflation risk for my future housing
costs. Utility costs will rise with inflation, but they're minor.
Since I don't own a car here (nor desire to), my transportation costs are
virtually nil. The cost of public transportation is negligible. Uber is cheap
and I can rent a car for special trips if necessary -- though I haven't had the
need to.
Food costs can be relatively high because I eat well, but it's an expense
that I have a fair degree of control over. Similarly with clothing. Being
retired and living in a warm climate means that only luxury items will have much
affect on my budget. (Grand Seiko Snowflake, maybe?)
Medical care is much less expensive than in the US, even if I didn't have
private insurance. It's obviously one expense that will rise with inflation, but
I don't expect it to rise to US levels in my lifetime. I could argue that what I
saved in COBRA medical insurance effectively paid for my rental housing during
my first year here.
I was almost about to say that travel and entertainment is discretionary, and
technically it is, but it wouldn't be much of a retirement if you couldn't enjoy
the perks of your free time. On the other hand, once you travel outside Europe,
your euro currency hedge won't matter as much.
So I basically keep the bulk of my funds in the US, transferring them to
replenish here periodically, 2 or 3 times per year. I'm not adverse to investing
internationally, but I don't have any compelling reasons to at this stage.
I should also say that this post is from the perspective of someone who might be
on a tight budget, which I'm thankfully not. I'm not sure what kind of event it
would take to price me out of living here, but my worst case scenario would be
simply moving back to the US.
Just one person's perspective.
-Rubic
No. of Recommendations: 3
I'm not on a tight budget either (trying to understand how the NHR 2.0 will or won't affect me is a big unknown, but at least healthcare and living expenses should drop significantly compared to Northern California). But I am very concerned about the, IMO recently greatly increased chance of a significantly weakened UDS, and much more difficulty in accessing them in the near future. Living in the EU and keeping everything I own in US-controlled investments feels like an increasingly unjustifiable risk, so putting say 20% of assets into EU institutions and assets feels like a good backup.
Your point about property as a hedge is well-taken, but it would be a couple of years before I could be ready for that. Right now I'm just working on finding a lease for the upcoming visa application.
No. of Recommendations: 1
way in my past but have you looked into banking in luxemburg ? they are more close mouthed than switzerland... used to be any EU could open an accont there.
No. of Recommendations: 1
I am in the process of moving to France. I have my house there already. However given that I also have US citizenship, andmust pay taxes here, I am actually more concerned about US economy, currency and stability.
I just need to get my properties sold in USA as I have no intention of renting them , even though that is untaxed passive income in France....1 lousy tenant and its Schitts Creek...
No. of Recommendations: 4
Just keep in mind while evaluating "inflation" that it refers to domestic costs of each currency, but frequently the international exchange rate between, say the USD and your host country's currency, may be more important to your international asset value. Eight months ago, the US dollar index was about 100 and now it is at 108. While US residents scream about their "high" rate of inflation, the international purchasing power of their cash has appreciated 8% over the past few months.
Jeff
No. of Recommendations: 9
"Just keep in mind while evaluating "inflation" that it refers to domestic costs of each currency, but frequently the international exchange rate between, say the USD and your host country's currency, may be more important to your international asset value. Eight months ago, the US dollar index was about 100 and now it is at 108. While US residents scream about their "high" rate of inflation, the international purchasing power of their cash has appreciated 8% over the past few months."
I did not get the impression that the OP was primarily concerned about US inflation, rather the national tremors that are causing many of us to question the over concentration of investments in the US, and is looking to diversify his holdings to other nations that, among other things, won't cause his assets to evaporate from rampant inflation. Rampant inflation is not the primary risk I see in the US.
The times seem to be a changing, to misquote a song. There are many dots just waiting to be connected, warning shots over the bow, but waiting until the ink is drying on legislation leaves no options. We are in the process of getting more nimble, not burning bridges, setting off intensely exploring alternatives and waiting until the 2026 elections to see if the voters snap out of it to recreate some checks and balances. Hopefully by then we will have bought/rented an international "vacation" home and diversified our investments away from primarily being in one country. I figure in the very least we will have an adventure. In the very worst, we will be prepared to offer refuge to our adult kids. 2026 will be time for action, with the research being done now.
Trust me when I say this is absolutely not what I had in mind when I pictured retirement, and are just now starting to be able to take advantage of some of the benefits we so richly have paid through the nose for. Ignore the not so subtle hints of pending change at your own risk.
IP
No. of Recommendations: 3
I did not get the impression that the OP was primarily concerned about US inflation, rather the national tremors that are causing many of us to question the over concentration of investments in the US, and is looking to diversify his holdings to other nations that, among other things, won't cause his assets to evaporate from rampant inflation. Rampant inflation is not the primary risk I see in the US.
Slight clarification, I am moving to the EU and looking for a place to put uninvested cash (in Euros) that will keep with Euro-zone inflation, much as my uninvested cash here has been primarily in SPTS / VUSXX. The diversification is not due to inflation fears as such, but due to much broader concerns about holding all my assets in what is now an unsafe and unstable place.
Best of luck in your emigration journey. I will just offer that 2026 is a long way away and IMO the risk of not being able to exit is rising by the day - and receptiveness to American immigrants is likely to drop rapidly in many countries that were allies a month ago and are now being mocked and excluded. I know people who are trying and failing to get their passports renewed right now, and there are many other parts of emigration that require a functioning federal government bureaucracy.
No. of Recommendations: 1
I will just offer that 2026 is a long way away and IMO the risk of not being able to exit is rising by the day - and receptiveness to American immigrants is likely to drop rapidly in many countries that were allies a month ago and are now being mocked and excluded.<i
Appreciated and heard. We are not waiting to do our research and should have one house on the market in a couple o weeks. The 2026 part is the point at which we decide if we should make the transition from global wanderer to permanent resident in pursuit of citizenship. By this summer I hope minimally to have cash and non-tax deferred investments offshore, perhaps in Canada which we hope to use as a flight free escape hatch if things get bad before we have found a new home. Thanks for the reminder to check expiration date on passports.
Because we have yet to narrow choice down to a specific location, things like banking and health insurance are complicated and not well understood. Ditto for taxes, which we are not looking to avoid. And this is a big ship to turn, given I had to convince DH to even go this far, as well as our adult children to consider the option.
Any input, particularly on but not limited to health insurance and banking/non-US brokerages would be very welcomed. Ideas on English speaking locations beyond Canada, New Zealand/Australia and Malta, which we are currently exploring, would be great. Concerned about exploding DH's head and compromising kids' professional options by considering need for locations with a foreign language, though my French and Spanish are pretty good. Prefer DH not go back to work to get us access to a country, but he has considerable expertise in petroleum refining, and boys are in cybersecurity and environmental, both categories that are wanted by NZ, a country that seems less inclined to let you in just because you have money. Emails welcome if that's preferred.
Frankly this is not what I expected while planning for an early retirement, but happy that we have the level of flexibility we have.
IP,
whose head is leaning towards exploding also and really hopes 2026 brings some sanity, whatever form that takes
No. of Recommendations: 1
@InParadise I did try sending email to the address your PM came from - please ping back if you see it. Happy to discuss my experience offline but it seems too detailed / specific for this group.
No. of Recommendations: 1
Thank you. I replied on email, but my reply could go to your junk box as did yours.
IP
No. of Recommendations: 4
I am looking at France. already have house there. easiest and best tax regime for US citoyens :-)
health care excellent. Visa's applications for 1 year easy (my nephew and fiancee just did it) I sponsored them in my house. avoid too rural as can be health care desert. I have chosen the herault region, excellent beaches, hills, wine, food, transport options and health care.
all I need now is :
sell my properties here (proving very difficult)
find good investment options there. France has "Livrets" but they ae pretty limited...will prob. leave most liquid assets in USA as default as US taxes will need to be paid
No. of Recommendations: 1
tried to email you.....received ?
