The Global Expatriate's Guide to Investing: From Millionaire Teacher to Millionaire Expat

333 Pages·2014·2.78 MB·English

by  Andrew Hallam, Scott Burns

Additional Praise for
The Global Expatriate's Guide to Investing
“This book is a must-read for expatriates or anyone thinking of becoming
one. Whether you're an investor from Canada, the U.S., South America, Asia,
Europe, Great Britain, Australia or New Zealand, you'll find the advice well-
researched, useful, and easy to understand. Thanks to Andrew's wry sense of
humor, it's surprisingly easy to digest too.”
Duncan Hood, Editor-in-Chief, MoneySense magazine
“A brilliantly written uncommon common sense guide to protecting your nest
egg from both predators and yourself.”
Allan Roth, author of How a Second Grader Beat Wall Street
“Millionaire Teacher resonated with so many investors because Andrew
Hallam lives what he teaches. This new book has that same credibility, and it
fills a huge gap in the marketplace. Expats don't just need to overcome the
usual investment hurdles: they also face an extra logistical and tax burden
when building their portfolios. Hallam is the ideal guide, because he's been
there, and he's already cleared the trail.”
Dan Bortolotti, Investment advisor with PWL Capital (Toronto), author Canadian Couch
Potato blog
“This book is a must read by expats and their human resources departments if
they hope to get on the path for a successful retirement. It covers all the bases
including the egregious costs of the offshore pension schemes, country
specific information on how to set up a low cost index investment approach
and pitfalls expats need to avoid.”
Robert Wasilewski, RW Investment Strategies, author of DIY Investor Blog
“Employers of expatriates, whether they're businesses or international
schools, should give their employees a copy of this book. Hallam's
investment strategies are aligned with academic evidence, and not the sales
driven rhetoric to which so many naïve investors fall victim.”
Larry Swedroe, Author of Think, Act and Invest Like Warren Buffett, principal and Director of
Research for Buckingham Asset Management Alliance
“While Andrew Hallam's book is aimed at Expats, it's for anyone. It's a
wonderful and breezy how-to book which will help Expats and homebodies
alike to avoid the myriad financial landmines that can derail our plans. It is,
of course, must-read material for anyone thinking of moving or retiring in a
foreign land. One thing I love about the book is the way that Andrew
gleefully eviscerates sacred cows, whether they are widely accepted dogma or
powerful interest blocs. It's fun to read truth that's not wrapped in caution.”
Rob Arnott, Chairman and CEO, Research Affiliates; co-author, The Fundamental Index
“A good follow up book by Andrew Hallam, extoling the need to be self-
reliant in our investing for our retirement. Andrew writes with a clear and
logical thought process”
Jenny Chiam, Senior Vice President, Head of Securities—Singapore Exchange
“This is a great book for expatriates looking to grow and protect their hard-
earned money. This book will help you avoid many costly and risky pitfalls
with your life savings.”
Craig Rowland, co-author The Permanent Portfolio, Harry Browne's Long-Term Investment
Strategy
“In the opening lines of his book The Global Expatriate's Guide to Investing,
Andrew Hallam reveals that at the tender age of nineteen, “I planned how
much money I wanted to save, and why.” If you gain nothing else from this
book—and you will glean a great deal more—Hallam's reminder that saving
is a critical part of the long-term wealth creation equation is priceless. And,
the best part? Andrew will keep you laughing while you are learning–the
mark of a great teacher who knows the material cold. This book is a must-
read part of your investing library!”
Nancy Tengler, Author The Women's Guide to Successful Investing, investing columnist for
The Arizona Republic, former Chief Executive Officer and Chief Investment Officer, Fremont
Investment Advisors
The Global Expatriate's Guide to
Investing
From Millionaire Teacher to Millionaire Expat
Andrew Hallam
Cover image: © iStock.com/spfoto
Cover design: Wiley
Copyright © 2015 by Andrew Hallam. All rights reserved.
Published by John Wiley & Sons, Inc., Hoboken, New Jersey.
Published simultaneously in Canada.
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Library of Congress Cataloging-in-Publication Data:
Hallam, Andrew (Teacher)
The global expatriate's guide to investing : from millionaire teacher to millionaire expat/Andrew Hallam.
pages cm
Includes bibliographical references and index.
ISBN 978-1-119-02098-1 (cloth); ISBN 978-1-119-02100-1 (ebk); ISBN 978-1-119-02099-8 (ebk)
1. Finance, Personal. 2. Investments. 3. Retirement income—Planning. I. Title.
HG179.H238 2015
332.6—dc23
2014030762
This book is dedicated to the millions of people who have
taken the global road less traveled.
And to those who have purchased inflexible,
expensive offshore pensions: May the cold calls stop ringing.
And may global employers get wise to the investment foxes
so many have invited into their own henhouses.
CONTENTS
Foreword
Acknowledgments
Introduction
Notes
Chapter 1: Setting Your Bull's-Eye
What's This Ailment Expatitis?
Cheating Conventional Retirement Rules
Cooking Up the Road Less Traveled
The Earthquake and the Epiphany
Jujitsu Junkie Taps Out for Home
Now It's Your Turn
Notes
Chapter 2: Building Your Pension
How to Never Run Out of Money
The Man with Nothing But a Backpack
The Couple with Swedish-American Dreams
A Front-End-Loaded Tale of Success
Notes
Chapter 3: The Truth about Stocks and Bonds
Halloween Grab Bag Treats Investors
Why Average Returns Aren't Normal
Stocks Pound Inflation
What Has the Stock Market Done for You Lately?
Undressing Stocks with 50 Shades of Gray
The Stock Market Stars as the Great Humiliator
Fast-Growing Economies Can Produce Weak Returns
Bonds Are Protective Nets for Jumpers
Can You Lose Money with Bonds?
Notes
Chapter 4: Don't Start a Fight with an Escalator
Yes, the Financial District Loves You!
Global Investors Getting Fleeced
Notes
Chapter 5: Where Are the Customers’ Yachts?
Global Investors Bleed by the Same Sword
American Expatriates Run Naked
Why Brokers Want to Muzzle Warren Buffett
Financial Advisors Touting “The World Is Flat!”
Hedge Fund Money Spanked for Its Con
Why Most Investors Underperform Their Funds
Notes
Chapter 6: Don't Climb into Bed with a Silver-Tongued Player
Featuring the Rip-Offers
The Ten Habits of Successful Financial Advisors . . . Really?
When Your Advisor Is a Sales Commando
Welcoming Sharks into the Seal Pool
Misled Investors Pay the Price
A Canadian Investor Gets Bled
Would You Like a Band-Aid for That Bleeding Gash?
Masters of the Insured Death Benefit Illusion
Free Fund Switching Isn't a Perk
Making Millions off the General Public
Fooling the Masses with Numbers
Regulators Making an Effort
Can Squeaky Wheels Gain Redemption?
If Investors Can't Reclaim Their Losses
When High Fees Meet Gunslingers
A Son's Inheritance Gets Plundered
British Teacher Learns a Costly Lesson
Playing Soccer Like Wasps around Honey
Most Investors Are Crazy
Notes
Chapter 7: Self-Appointed Gurus and Neanderthal Brains
Why Most Investors Should Hope for Falling Markets
It's Not Timing the Market That Matters; It's Time in the Market
High Unemployment and High Stock Returns
What Can You Miss by Guessing Wrong?
When Investors and Advisors Sabotage Their Rides
Popular Stocks Underperform
How About the Next Big Thing?
When Genius Fails
Notes
Chapter 8: An Employer's Greatest Challenge
Fees—How Much Is Too Much?
So What's the Solution for Global Employers?
Notes
Chapter 9: Couch Potato Investing
Don't Bonds Tie You Down?
Is It More of a Fling Than a Real Relationship?
Potatoes Growing Globally
Bonds Relative to Age and Risk
What If You're Falling Behind?
Profiting from Panic—Stock Market Crash 2008–2009
Owning the World
Where Do You Plan to Retire?
Are You Retiring in an Emerging Market Country?
Does This Sound Too Good to Be True?
Chapter 10: The Permanent Portfolio: Growth without Risk
Gold in Isolation Is a Total Loser
A Disco-Era Brainchild from a Twentieth-Century Socrates
This Great Portfolio Will Never Be Popular (But It Should Be!)
Why Does It Work?
What Has It Done for Me Lately?
Notes
Chapter 11: Fundamental Indexing: Can We Build a Better Index Portfolio?
Like Top Basketball Players Getting the Most Court Time
Index Funds That Appear to Beat the Market
Investment Legend Likens Them to Witchcraft
Global Fundamental Indexes Might Shelter Us from Bubbles
Emerging Markets Show the Greatest Difference
Aren't These Just Actively Managed Products?
Notes
Chapter 12: Capable Investment Advisors with a Conscience
Do You Have a Ninja's Discipline?
Qualities of a Great Financial Advisor
Investment Professionals worth Considering
Notes
Chapter 13: Choosing Your Offshore Brokerage—For Non-Americans
DBS Vickers Securities Opens the Door to Everyone
Why You Should Avoid E*Trade Financial
TD Direct Investing International
Saxo Capital Markets—A Jewel with Distractions
Comparing Fees with International Brokerages
Is Interactive Brokers the Dark Horse Winner?
Notes
Chapter 14: The 16 Questions Do-It-Yourself Investors Ask
Let's Go!
Notes