Expatriate Canadians Investing in Singapore Find a Cheaper Option

 

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:

  • It’s the method endorsed by Warren Buffett 
  • It’s the method endorsed by a slew of Economic Noble Laureates 
  • It’s the method endorsed by Charles Schwab, (the owner of the world’s biggest brokerage)
  • It’s the method endorsed by a myriad of Ivy League Financial professors, ranging from Yale University’s David Swensen to Princeton’s Burton Malkiel

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.

So how can Canadians build a cheap indexed account in Singapore?

With DBS Vickers, you can own the same products that an investor would own in this Canadian “Couch potato” account.

As a beginner, you might enjoy Dan Bartolotti’s article on how he became an index investor.

 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
DBS Vickers. 

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. 

Here are the steps you’d need to take:

  • 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: 
    1. Transfer money to the account first
    2. 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:
    • VCE = Canadian index
    • VTI = U.S. Index
    • VEA = International Index
    • VSB = Canadian bond index

But how much in each?

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.

Here’s a sample for a 40 year old investor:

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.

Making the purchases

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.

Your order entry will look like this:

1.  The market you’d be choosing is “Canada”, as you can see by the second line.

2. You’d place an order to “buy” as you can see by the third line

3. The quantity is the number of shares you’re ordering

4. The symbol for the Canadian bond index is “XSB” (or VSB if you want a lower expense ratio)

5. And the order type is a “Market Order”

6. You’d then plug in your trading password and press submit.

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”.

Remember Warren Buffett’s Motto:  Be greedy when others are fearful.

And keep the greedy mitts of the international financial service operators away from your money.







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andrew hallam

andrew hallam

I’m a financial columnist for Canada’s national paper, The Globe and Mail, as well as for AssetBuilder, a financial service firm based in Texas. I’m also the author of Millionaire Teacher: The Nine Rules of Wealth You Should Have Learned in School (Wiley 2011) and The Global Expatriate’s Guide To Investing: From Millionaire Teacher to Millionaire Expat (Wiley 2015). My mission is to educate, motivate and inspire people on basic retirement planning and best practices for investing, using evidence-based strategies. I'm happy to comment on your questions. However, please read the Terms of Use.

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229 Responses

  1. kris says:

    Hey Andrew,

    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.

    Cheers,

    Kris.

  2. @kris

    Hey Kris,

    Dual nationality, right?

    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.

    Thanks Kris,

  3. Hi Andrew,

    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.

  4. peter says:

    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.

    Thanks

  5. Hey Peter,

    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.

  6. Peter says:

    Hi Andrew: thanks for the reply, I did mean XSB, or in fact any toronto bond etf.

    I believe Canada has changed the rules for amount required to be withheld. Take a look at this :

    .

    or at the CRA nonresident witholding tax calculator.
    http://www.cra-arc.gc.ca/esrvc-srvce/tx/prtxiii/m… (if you cant get this to work just do a search on non-resident withholding tax calculator) on the CRA website.

    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.

    As you probably know CLF is a claymore product.

    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.

    I would be curious to hear your thoughts on the above.

  7. 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.

  8. Hey Peter,

    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!

  9. Herb Chahal says:

    Hello Andrew

    looking forward to reading your book – Millionair Teacher and buying a copy for my kids as well

    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

    thanks

    Herb

  10. Hi Herb,

    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.

  11. Herb Chahal says:

    Hi Andrew

    thanks for the advise

    ref to your book , can we pre-order this in Singapore at the discounted price

    thansk

    • Hey Herb,

      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!

      • Chris says:

        Hi Andrew,

        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.

        Chris

        • 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?

  12. Paul says:

    Hey Andrew,

    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.

    Paul

  13. Hi Paul,

    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.

  14. Chris D says:

    Dear Andrew,

    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?

  15. Neil says:

    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.

    • Chris D says:

      Hi Neil,

      Glad to see I'm not the only one struggling to find information and make a good decision.

      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?

      • Hi Neil and Chris,

        What are the options with DBS Vickers in Hong Kong? Here's a link:

        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.

        • Chris says:

          Andrew,

          I wonder if you could help me to understand my statement from DBS Singapore below. I am a Canadian citizen non-resident of Canada.

          VCN (223 units): (VCN) DIV-C$0.163548 TAX-15% paid out 27.00
          VSB (164 units): (VSB) DIV-C$0.04575 TAX-15% paid out 2.37
          BND (39 units): (BND) DIV-U$0.161171 TAX-30% paid out 0.40 VTI (48 units):
          (VTI) DIV-U$0.465 TAX-30% paid out 11.62

          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?

          • Hi Chris,

            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

            Cheers,

  16. Mathew says:

    Hi Andrew.

    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?

    http://www.indexuniverse.com/sections/blog/7793-t….

    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?

    Thanks again, all the best,

    Mathew

    • 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.

  17. Neil says:

    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.

    • Chris D says:

      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.

      Send me an email – maybe we can exchange more info. My gmail account is chris.csdy.

  18. Ken Lewis says:

    Hi Andrew,

    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;

    Canadian vs. Offshore Accounts

    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).

    ETFs

    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.

    Anyhow just thought I would share and see if you had any thoughts…

    • Hi Ken,

      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!

      Thanks for sharing.

      Cheers,

      Andrew

  19. eduard says:

    hey andrew

    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?

    and when i went to check the index stocks on yahoo it dosent write share its ishare

    which confusse me alot what "i share" diffrent from share or it just the same thing written diffrently?

    thank you

  20. Roland says:

    Hi Andrew,

    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…

    Thanks!

    • Hi Roland,

      I'm glad you liked the book…and I'm really really happy that you averted Zurich!

      If you want a French index, the ticker symbol is EWQ. Here's a link: http://www.google.com/finance?cid=700266

      You could buy the following:

      ISHG (international bond index)

      EWQ (French stock market index)

      VT (world stock index)

      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.

  21. Michael Wilkins says:

    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.

  22. Curtis Mahler says:

    Hi Andrew, I just finished reading your book a few days ago and all I can say is wow!

    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?

    Many thanks.

    • Hi Curtis,

      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.

      Andrew

  23. Matthias Kauer says:

    Hi,

    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?

    Best Wishes,

    Matthias

    • Matthias,

      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.

      • Matthias Kauer says:

        Thanks for your answer Andrew.

        The account is indeed open. I haven't made any trades there yet, but I believe I am clear to trade local stocks.

        (The offer from Standard Chartered with no minimum commission seemed better all of a sudden)

        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.

  24. Shannon says:

    Hi Andrew,

    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!

    Shannon

    • Hi Shannon,

      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.

      Sample % of Allocation/Fund

      20%Vanguard MSCI Canada

      VCE

      40% Vanguard Canadian Short-Term Bond

      VSB

      20% Vanguard U.S.Total Stock Market

      VTI

      20% Vanguard MSCI EAFE (First world international stock market)

      VEA

  25. Shannono says:

    Andrew,

    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.

    Maybe I should talk to an accountant the next time I go back to Vancouver for a visit!

    Thanks again for your comments.

    Shannon

    • Hi Shannon,

      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

      Cheers,

      Andrew

  26. Shannon says:

    Hi Andrew,

    Thanks for the contact info. Yeah, I'll definitely have to start looking into it.

    Shannon

  27. Steve says:

    Hi Neil and Chris,

    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.

    Can you let me know what you think?

    Which do you feel is the best place to start a portfolio?

  28. Tammy says:

    Hi Andrew,

    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.

    So I have a few of questions:

    1. Is the easiest way to start to go through TD index funds on the web?

    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?

    3. How would this affect my taxes?

    4. Can I simply make a monthly contribution from my own financial institution?

    I'm hoping to bite the bullet and do this!

    Thanks Andrew.

    Tammy

    • Hi Tammy,

      To answer your questions:

      1. Is the easiest way to start to go through TD index funds on the web?

      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.

      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?

      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.

      3. How would this affect my taxes?

      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.

      4. Can I simply make a monthly contribution from my own financial institution?

      Yes, you should be able to set up a direct payment contribution

      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!

      • Tammy says:

        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!

        Tammy

        • Tammy,

          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.

          • Tammy says:

            Hi Andrew,

            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)

            For those amounts of money, what would you do?

            Tammy

          • Hi Tammy,

            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.

            Keep me posted!

  29. Steve says:

    Andrew,

    I should have addressed this message for you.

    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.

    Can you let me know what you think? Should I be using HSBC or DBS, or TD eSeries?

    Which do you feel is the best place to start a portfolio?

    Also, is it possible to have my broker place existing funds in his scheme into my new indexed portfolio of my choice?

    Tonnes of thanks,

    Steve (Say hi to Adam Miller!)

    • Hi Steve,

      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.

      Cheers,

      Andrew

      • steve says:

        Andrew and HK others:

        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.

        Before I buy Andrew, this was the response. Am I all set to go with the quoted ETF's?

        Email from Saxo below……

        Hi Steve,

        All the 4 ETFs you mentioned are now available for trading:

        Vanguard Total Stock Market ETF – VTI

        Vanguard MSCI Canada Index ETF – VCE

        Vanguard Europe Pacific ETF – VEA

        Vanguard Short-Term Bond Index ETF – VSB

        And here is the commissions we charge for your reference:
        http://hk.saxomarkets.com/en/trading-products/sto

        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.

        Apart from that we don’t have any other hidden cost/ charge.

        Will you be free to come to our office to open the account soon?

        • Steve says:

          Hi Andrew and for those in HK/China,

          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.

          Thanks for answering these.

          Steve

          • Neil says:

            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.

          • steve says:

            Neil,

            I think he said no minimum, but I've just emailed him now to confirm.

            I'll post tomorrow when I get the email.

            The guy at Saxo is Canadian as well.

            Funny.

            And his name is Boris.

            And he's Chinese.

            Steve

          • Neil says:

            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.

  30. Hi Chris,

    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.

    Cheers,

    Andrew

    • Neil says:

      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 Neil,

        What can you tell us about Saxobank?

        Commissions?

        Available markets to trade in?

        Currency exchange rates?

        Thanks so much for chiming in from HK. Your experience, comments and comments from HK are a huge help to others. Thanks!

  31. Hi Michael,

    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.

  32. Neil says:

    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).

    The web page is http://www.saxobank.com/ where you can find all the information about fees and such.

    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.

    http://www.hsbc.com.hk/1/2/hk/banking/sva

    Saxo Bank only seems to need your passport and proof of residency. Contact both before you go down.

    • This is awesome Neil. Thank you!

      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.

      • Steve says:

        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!!!!!!!!!!!''

        PS. I have told anyone who will listen to read your book…

        Steve

  33. steve says:

    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."

    What do you think?

    • Hey Steve,

      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: http://andrewhallam.com/2011/11/zurich-internatio

  34. steve says:

    Hi Andrew,

    Can you confirm these are the correct ETF's for a Canuck in HK?

    Vanguard Total Stock Market ETF – VTI

    Vanguard MSCI Canada Index ETF – VCE

    Vanguard Europe Pacific ETF – VEA

    Vanguard Short-Term Bond Index ETF – VSB

    Thank you for your guidance.

    Banking it Monday!

    Steve

    • 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!

    • 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.

      Andrew

      • Steve says:

        You are a star.

        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).

        So I'm almost 40 and I'm going to divide the 4 as follows:

        35% CAD Bonds (VSB) and the remaining 65% divided between VCE, VTI, and VEA

        If over 4 months, I can afford to invest, say $3000CAD a month.

        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).

        Then I repeat the cycle again. Is this correct?

        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?

        Thank you Andrew. I'm telling anyone that will listen about your book.

        Steve

        • Hey Steve,

          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!

          Cheers,

          Andrew

  35. Lindsay Rielly says:

    Hi Andrew,

    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?

    What should I split the other 70% in?

    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!

    I truly appreciate your help and you really do make it seem easy to become a smart investor!

    Thanks,

    Lindsay

    • Rob says:

      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:

      -how long it takes to set one up

      -paperwork needed

      -minimum amount

      -if future trips would be necessary

      Thanks Andrew for the great book!

      Rob

    • Hi Lindsay and Rob,

      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.

      Let me know if either of you have any other questions.

      Andrew

  36. Rob says:

    Thanks for the advice Andrew! A few follow-up questions:

    -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!

    -any reason why investing on the TSE instead of NYSE other than nationalism?

    -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?

    Thanks again!

    Rob

  37. Hi Rob,

    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.

    • Rob says:

      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?

      Thanks again,

      Rob

  38. Steve says:

    Andrew,

    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?

    Going today!

    Thanks Andrew,

    Steve

  39. Lindsay says:

    Hi Andrew,

    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.

    Thanks so much! I have spreading the word about your book here in Hanoi.

    Lindsay

  40. Steve says:

    Neil and Andrew,

    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."

    This is what I'm going to do.

    Steve

    • Steve says:

      Hi Andrew,

      Another question has popped up.

      So, I am going to do the initial deposit of $10,000 to open the Saxo bank account.

      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?

      Should I be following each of these ETF's to see where they are currently at before buying?

      Thank you,

      Steve

  41. Rob says:

    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?

    Thanks again,

    Rob

    • Hi Rob,

      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.

      Cheers,

      Andrew

  42. John says:

    Hey Steve,

    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!

    Regards,

    John

  43. Adrian says:

    Hi Steve

    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?

    Thanks for sharing.

    Adrian

    • Steve says:

      Hi John and Adrian,

      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.

      Adrian, I think the following funds can be found under these codes:

      VSB – XTSE

      VEA – ARCX

      I hope this helps!

      Steve

      • John says:

        Hi Steve,

        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.

        John

        • Neil says:

          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.

          http://www.saxobank.com

          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.

          • John says:

            Hi Neil,

            Do you know if the HSBC SmartVantage account has the option of a Chinese RMB savings account?

            thanks!

          • Neil says:

            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.

            http://www.hsbc.com.hk/1/2/hk/banking/sva

            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.

      • Adrian says:

        Thanks a bunch for the information. I will try to contact Boris and investigate setting up an account.

  44. steve says:

    Hi John,

    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.

    Anyways, let me know how it goes.

    Steve

  45. Neil says:

    I am going to answer down here because the thread above is getting squished.

    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.

  46. Mark says:

    Hi Andrew,

    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?

  47. Chad says:

    Hi Andrew

    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?

    • Hi Chad,

      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.

  48. Harold says:

    Hey Andrew,

    I'm another Canuck who has been living in the UAE for the last 5 years.

    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.

    Sorry for the long preamble. Now a few questions.

    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.

    Thanks. Harold

    • Chris D says:

      Hi Harold,

      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:

      Quarterly holding fees of 0.05% minimum 15 Euro.

      Trades on stocks depend on size of the transaction, but generally in the $37-$45 range CAD.

      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.

      • Harold says:

        Thanks Chris. But I guess this route can't really fill the bill that Andrew prescribes if you can't access index funds.

    • Hi Harold,

      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

      • Harold says:

        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.

  49. 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.

  50. Hi Lindsay,

    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!

    Cheers,

    Andrew

  51. Harold says:

    Hi Andrew

    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.

    H

    • 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:

      1. It would be very helpful to many people looking for a guide

      2. I would have many firsthand stories I could tell about how people like you set things up.

      So thanks for that, and please keep me and the other readers posted.

      Cheers,

      Andrew

      • Harold says:

        Hi Andrew,

        So here's the summary of what I found out :

        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.

        So we'll see if this all pans out.

        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.

          So what you're saying is this:

          1. No savings accounts needed

          2. No test to take as long as applications are notarized

          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!!

        • Kelly says:

          Hi 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!

          Thanks for your help, and advice and all the stories you share!

          Kelly

          • 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!

            Cheers,

            Andrew

  52. Harold says:

    Hi Andrew,

    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?

    Thanks H

  53. Tim Gascoigne says:

    Hi Andrew,

    Great blog, great info…..

    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.

    Thanks!

  54. Chris says:

    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

    Chris

  55. Steve says:

    Chris,

    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.

    I'll let you know how it goes if anyone is interested.

    Steve

  56. Chris says:

    Hi Steve,

    Thanks for the info. Please do let me know how it all goes. My gmail is gooders68 if you need it.

    Thanks

    Chris

  57. Neil says:

    Steve, can you let me know how it goes as well? Still undecided as to opening an account in HK or online.

    nlindholm at gmail

  58. Dan says:

    Hey Harold,

    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.

    I'm excited to get set up with DBS Vickers, ASAP and begin the journey.

    Cheers,

    Dan

  59. Michael Wilkins says:

    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.

  60. Chris says:

    Hi Steve,

    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.

  61. Mark says:

    Hey Steve,

    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.

    What would be the charges each month for the 4 fund investment scheme mentioned above?

  62. steve says:

    Just made the $10K transfer boys.

    About to divert funds to the first ETF now. Feels good to get this going.

    I'll keep you posted.

  63. Mark says:

    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

  64. Mark says:

    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?

  65. Mark,

    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.

  66. Steve says:

    Well, Its done.

    Made my first ETF trade today, buying VTI Index first.

    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.

    Hard to believe I'll be doing this every 3 months for 25 years.

    Wow.

    Feels good to be done.

    Steve

  67. Hey Mark,

    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.

    Cheers,

    Andrew

  68. steve says:

    Ha Slim Shady!

    I didn't know that was you! Glad to see that Saxo worked through Jakarta!

    S

  69. François says:

    Hi Steve and Andrew,

    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!

    Thanks Andrew for a great website, a real tool for all of us!

  70. Mark says:

    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!

  71. Mark says:

    Hi Francois,

    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.

  72. Neil says:

    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.

  73. Adrian says:

    I am off to HK today to meet Boris and open my account.

  74. Mark says:

    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.

    • Neil says:

      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.

  75. Mark says:

    Pretty sure it is for the international one as I opened mine up via the Singapore one. See here: http://goo.gl/sCh2c

  76. Rob in Qatar says:

    Hi Andrew and fellow expats

    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.

    Anyway, I am looking to get the passive investing going already, and despite:

    – working for a Canadian employer overseas

    – having a Canadian bank account

    – having a Canadian credit card

    – having a Canadian Drivers License

    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.

    Thoughts? Advice?

    Thanks for the great book and website, Andrew, and the help and sharing from everyone else who posts here as well!

    Rob

    • Vig Lacera says:

      Hi Rob,

      I too am a Canadian non-resident for tax purposes, living in South Asia. Did you ever get a response to your questions?

  77. Kevin says:

    Hi Andrew,

    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?

    2) At 31 years of age, do you suggest that I invest 30% into bonds?

    3) What percentages do you recommend for investing/saving/spending?

    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.

    Thanks for your help.

    Kevin

  78. Kevin Brooks says:

    Hi Andrew,

    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?

    Cheers,

    Kevin

  79. Hi Kevin,

    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.

  80. Michael says:

    Andrew… Greetings from Saudi Arabia!

    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.

    Thanks again!

    Michael

    • Marie says:

      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.

  81. Crystal says:

    Hi Andrew,
    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!

    Crystal

  82. Danielle says:

    Do you have any tips for Canadians living in Europe and where we can invest cheaply? I’m in Finland.

    • Hi Danielle,

      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.

      Andrew

      • Mark says:

        Hey Andrew,

        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!

        • Hi Mark,

          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.

          Cheers,
          Andrew

  83. Vicki Shang says:

    Hello Andrew,

    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?

    Thank you so much,

    Vicki

  84. Ali says:

    Hi Andrew:

    thanks for all the invaluable advice. I just wish I could follow it!

    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…

    Any suggestions?

    Thank you

    • Michael says:

      Ali,
      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.

      • Ali says:

        Hi Michael:

        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).

        Will start self-investing!

        Cheers

        • Matt says:

          Hi Ali,

          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.

          Cheers,
          Matt.

        • Ali says:

          Hi Michael:

          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?

          Thanks

  85. Matt says:

    Hi Ali,

    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.

    Cheers,
    Matt.

  86. Ali says:

    Hi Matt:

    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.

    Cheers

  87. Chris Phinney says:

    Hi 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?
    Pls advise.
    Many Thanks,
    Chris

    • Hi Chris,

      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.

      Cheers,
      Andrew

  88. Darren says:

    Hi Andrew and others,

    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”.

    So my questions are:

    1. Are these the appropriate forms for me to be filling out regarding my situation?
    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!

    Thanks,

    Darren

  89. Scott says:

    Hi Andrew,

    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.

    Any suggestions would be much appreciated! Thanks for your time Andrew!

    • Hi Scott,

      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.

      Cheers,
      Andrew

  90. Scott says:

    Hi Andrew,

    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?

    Thanks very much Andrew.

    Scott.

  91. Gina says:

    Hi Andrew (and everyone),

    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!

    Have a great weekend!

  92. Michelle says:

    Hi Andrew

    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?

    My portfolio…
    30% VT I
    29% VEA
    40% BSV

    Thanks!
    Michelle

    PS, just found out the book has arrived in our office at ISB, can’t wait to read through it!

    • Hi Michelle,

      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.

      Cheers,
      Andrew

      • Michelle says:

        Thanks Andrew!

        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.

        Picking up my book today!

        Michelle

        • Hi Michelle,

          I didn’t know that you were Canadian.

          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: http://andrewhallam.com/2014/01/expat-index-investors-should-duck-u-s-estate-taxes/

          Cheers,
          Andrew

          • Michelle says:

            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.

            Thanks again!
            Michelle

  93. Chris Phinney says:

    Hi Andrew,
    I am a Canadian, Singapore PR and currently on a 2 year work assignment in Southern China.
    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.
    I do have a couple of questions;
    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?
    3. Is there a HK broker (similar to DBS Vickers) that I could use? Pros/Cons?
    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?

    Many Thanks,

    Chris

  94. Raghu says:

    Hi Andrew-

    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

    3) Any thoughts on category of funds which equally weight index constituents

    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.

    Thanks Andrew,
    Raghu.

    • Hi Raghu,

      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.

      Cheers,
      Andrew

  95. Mike says:

    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?

    • Mike,

      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.

      Cheers,
      Andrew

      • Mike says:

        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.

  96. Craig says:

    WhyDBSVickers?

    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

    • Hi Craig,

      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.

      Cheers,
      Andrew

  97. Owen says:

    Hi Andrew,

    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.

    Keep up the good work and thanks for the good reads over these last holdays.

    Cheers
    Owen

    • Hi Owen,

      I’m glad you are dealing with a common cold, and not investment malaria.

      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.

      Cheers,
      Andrew

      • Owen says:

        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.

        Cheers
        Owen

        • Good luck Owen.

          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!

          Cheers,
          Andrew

  98. Owen says:

    Hi Andrew,

    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.

    All the best,
    Owen

  99. Vig Lacera says:

    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?

    Regards,

  100. Mark says:

    Hey Andrew,

    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?

    2) more importantly can you still stomach clams after having so many as a young man? ????

    Thanks!

    Mark

  101. Raghu says:

    Andrew-

    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?

    Thanks!
    Raghu.

    • Raghu,

      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.

      I suggest you rent.

      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.

      Cheers,
      Andrew

      • Raghu says:

        Thanks Andrew.

        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.

        regards,
        Raghu.

        • Raghu,

          You are comparing a single stock with an index. The risk of a single stock is higher.

          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.

          Cheers,
          Andrew

          • Raghu says:

            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?

            regards,
            Raghu.

          • Hi Raghu,

            Sorry, I can’t help on either front. Every property is different. And nobody can see the future.

            Cheers,
            Andrew

  102. Mark says:

    Hey Andrew,

    Just got off the phone with TD international and they gave me the following information. Thought it could be useful for your readers.

    Flat rate of 14.95€ per trade.

    If you don’t trade within three months then you pay 45€

    If you trade every three months then you pay 25€.

    If you trade 12 or more times per three months then there’s no charge.

    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.

    Hope this helps some of your readers.

    Does vickers have quarterly charges as well?

    • Thanks Mark,

      There are no account fees with DBS Vickers. But the overall cost of DBS Vickers is higher. Commission costs are much higher.

    • Vig Lacera says:

      Mark,
      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.

  103. Michael says:

    Greetings Andrew!
    Your new book (as the first) is fantastic. Thanks!
    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.

    A few questions for you or other readers:

    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?

    Thanks Andrew!
    Michael

    • Michael,

      As an expat, you can’t buy the Tangerine funds.

      There are multiple options you could choose, when investing in ETFs. Whatever options you choose, ensure these factors:
      1. They have low costs
      2. They are diversified across a wide variety of markets
      3. They have a bond component.

      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.

      Cheers,
      Andrew

  104. Molly says:

    Hello,

    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.

    Thank you!

  105. Andrew G says:

    Hi Andrew H,
    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?

    Many thanks for your advice and wisdom — I’ve recommended your book to all of my colleagues!

    Andrew

  106. Phil says:

    Good day Andrew

    Fan and owner of your books and a DBS account holder in Singapore – but living in Thailand

    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.

    Thanks

  107. Raghu says:

    Hi Andrew-

    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?

    Thanks!
    Raghu.

  108. Jan Borkowski says:

    Hi Andrew-

    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?

    Thanks!
    Jan

  109. Index says:

    Hi Andrew,

    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?

    Cheers – Index

    • Index,

      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.

      For the global nomad’s Couch Potato portfolio on tabel 17.4, you’ll see SAAA.

      Cheers,
      Andrew

  110. Index says:

    Andrew,

    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?

    Cheers – Index

  111. Rick Bisset says:

    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.

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