Perks and Perils of Greener Pastures

When billionaire Facebook co-founder Eduardo Saverin relinquished his U.S. citizenship in 2011, the media jumped.

Bloomberg news reported that there were 1,781 citizen-ship jumpers in 2011, up seven fold since 2008.   It’s a drop in the ocean, however, compared to the millions of Americans who work overseas—many for the lower tax incentives. 

Excluding military families, roughly six million U.S. citizens are expatriates, according to the American Association of Residents Overseas.  That equals the combined populations of Nashville, Seattle, Boston, Austin, Milwaukee, Sacramento and San Diego.

Are there greener foreign financial pastures?  Many people seem to think so.

Read the rest of the post at Assetbuilder





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 (2nd Ed. Wiley 2017) 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, Privacy Policy and the Comments Policy.

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5 Responses

  1. I sometimes wonder about this. Canada has high taxes, with the part where I live the highest taxes of all. However, Canada is also a great place to live, with one of the freest economies, and a good rule of law & order. There's corruption and mismanagement, but less than other countries. Other countries like Singapore are great as well, but small and expensive to get into if you don't have the means of Eduardo Saverin. 😉

    It would be great if there were more well-run countries. As you look around the world it seems that many places are taking a step backwards, and it could be like this for up to another decade.

  2. John says:

    Hello Andrew,

    Your book was both very entertaining and highly informative – not an easy feat. Congratulations and thank you.

    With respect to the Globe and Mail Investment Strategy Lab, it might also be helpful if you could speak to the following issues:

    – 70/30 equity/bond allocation in the model ETF portfolio.

    – Taxation impact on USA based ETFs (I am Canadian).

    – Risks associated with taking positions in low trading volume Vanguard Canada ETFS. As you know these are relatively new offerings in Canada.

    Keep up the excellent work.

    Regards, John

  3. Sam Devine says:

    Hey Mr. Hallam,

    This article was especially interesting to me as you talked about all the expatriates living abroad and even better, SAS teachers. I would have to agree with all the cheap services and us living like royalty. Also my Mom always talks about how inconvenient not having social security is, living in Singapore. I do have one question though, why would Vanguard not be available for expatriates when you say, "What’s worse, America’s largest low cost investment company, Vanguard, won’t open accounts for expatriates"?

    Thanks,

    Sam

  4. "What’s worse, America’s largest low cost investment company, Vanguard, won’t open accounts for expatriates. As a result, high cost investment salespeople hit the international road like bandits, selling products that slowly shred a quarter (or more) off a portfolio’s potential value."

    Wow, I had no idea?!

    Good post Andrew!

  5. Daniel says:

    I"m one of those who will consider relinquishing my U.S. citizenship at some point. I'm not an expat. I was born in Canada and live and work here most of my life. But I took U.S. citizenship when I was 18 through naturalization. . hoping for wider employment opportunities. However recently I've been informed that I am obligated to file taxes every year with IRS in addition to my Canadian tax filing. I have started doing so. The most critical factor to me considering renouncing is the fact that my Canadian Tax Free Savings Account will be taxed in USA. . making it not special or beneficial at all. For younger Canadians TFSA introduced in 2009 offers an incredible investment opportunity and the amount you can invest in it goes up each year. For some it is a good alternative to their RRSP. . or something in addition to that. Also the IRS is very controlling and intrusive and obligates you to file a paper identifying all your bank accounts you have in Canada and threatening to punish Canadian banks who do not reveal which of their clients are US dual citizens. Some major Swiss banks are now refusing to deal with U.S. expatriates for this very reason. They don't want the hassle from IRS.

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