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Asset Protection, ETFs, Stock Trading

Ultimate Wealth Protection & Automated Trading for Expats Worldwide

Ultimate Investment Set Up for Expats

In this free guide, you will learn how to set up an asset protection structure which wealthy clients pay tens of thousands of dollars to family offices and boutique wealth managers.

You will learn how to protect your wealth for your family and organise everything in a tax efficient manner, so your heirs receive more of your hard earned income

Why Protect Your Assets?

When investing in the stock market, people usually forget how that wealth can be taken away from them in future, many times through no fault of their own. It isn’t until they have built up a substantial investment portfolio later in life that they suddenly realise they need to protect it. Start the right way, by setting up your investments in the correct fashion. If you haven’t already, you can roll your cash and investments into structures such as these.

Reasons to Protect Your Wealth

  • Divorce
  • Tax – you can set up a tax efficient structure to protect your wealth
  • Litigation – top professions where litigation can ruin not only your career, but your wealth – CEOs (employee lawsuits), doctors, surgeons, nurses, accountants, financial advisers, lawyers, real estate agents, celebrities, sports professionals, chefs, public servants, oil & gas employers, construction employers.
  • Protects from creditors – protects you and your heirs from creditors
  • Avoids compulsory inheritance – choose your heirs
  • Control Distributions – choose exactly who gets your assets and when
  • Privacy – protect yourself from being a target
  • Protect from probate – if you don’t have a will, upon death, your assets will go through a lengthy court process, possibly many years before your heirs can inherit your wealth
  • Charity – set up a foundation upon death

You can read more here about common lawsuits that companies face.

How to Protect Your Assets

For globetrotting expats, this is not an easy question, as each country has its own tax rules & regulations. Also, you may need to take into consideration the tax in your country of citizenship (i.e. where you were born) as well as the tax in your country of residence (i.e. where you live now).

But, here are some structures which can help protect your assets

  • Set up a corporation – either offshore or in your country of residence, e.g. LLC in the USA. You can set up a trading company to hold your investments.
  • Set up an offshore trust – Trustees run a trust. Trusts can avoid many taxes, primarily tax on death and growth. In order to receive the tax benefits, usually, the trust has to be set up as an irrevocable trust. This means that you will not be able to pull assets back out of the trust should you need to do so in the future.
  • Set up an offshore foundation – A council runs a foundation. As a concept it is neither a company nor a trust, although it has features of both. As there are no shareholders or ‘owners’ and there is no requirement to have beneficiaries, this is becoming the ultimate holding vehicle which separates underlying assets from an individual’s personal wealth and therefore falls outside his/her estate for inheritance tax purposes. Private foundations are often used by families seeking to establish a lasting charitable legacy, allowing for family members’ gifts to be pooled and then distributed to outside organizations or used in-house at the direction of the foundation.

Legal structure

Foundation

  • A foundation is a separate legal entity (similar to a company).
  • A foundation can contract and hold assets in its own name.
  • A foundation can sue and be sued in its own name.
  • The foundation holds the legal and beneficial title to the assets.

Trust

  • A trust is not a separate legal entity.
  • The legal rights and obligations sit with the trustees rather than the trust itself and the trustee therefore contracts in his/her or its own name on behalf of the trust.
  • Legal ownership of the trust fund sits with the trustees and beneficial ownership with the beneficiaries.
  • The trustees would sue and be sued in their own name, as opposed to action being taken by or against the trust.

Tax

  • Highly dependent on your citizenship, residency and location of trust or foundation. Seek advice.

How to Grow Your Assets

Hedge funds, asset managers and life insurance companies often take high fees when setting up investment portfolios. Often, you are locked into lengthy contracts of 10 – 25 years with high surrender penalties, hidden charges and it can take time to unwind your investments.

Whilst there is still a market for these insurance type products, there are now cheaper, more efficient ways to devise your investment portfolio set up.

Use a Roboadviser

A roboadviser is the digital wealth manager for the new millenium. Just fill out a few risk questions and a roboadviser can set up a risk strategy for you. The most modern roboadvisers can also place trades automatically on your behalf.

Algorithmic Trading with The Money Pouch

The Money Pouch is a free wealth management app for the globetrotting expat and international employees.

The Money Pouch automatically buys & sells stock, bond and gold ETFs on your behalf and rebalances your holdings every month to optimise your returns whilst lowering risk. It also has the ability to just sit in cash if markets turn sour.

Their algorithmic trading team has set up over 400 successful trading systems.

Benefits of The Money pouch

  • Internationally portable – if you change jobs or countries, you can take your investment portfolio with you and continue to contribute
  • You decide when to top up – if you lose your job or between jobs for a year, you can stop payments.
  • You can cash out whenever you like – there are no entry or exit fees. No surrender fees. So, if you need cash to buy that new car or apartment or holiday, you can cash in your savings whenever you like. If you just came into an inheritance or earned a bonus, you can top up your investment portfolio whenever you like.
  • Trade on autopilot – The Money Pouch will automatically buy and sell shares on your behalf
  • Asset & tax protection – you can invest via an offshore trust, foundation or company

Watch This Short Video Explainer for The Money Pouch

 

ETFs, Stock Trading

Automated Stock Trading for Americans Living in Mexico

Americans Abroad Living in Mexico

In this article, you will learn how to set up an automated stock trading account for Americans resident in Mexico. You will learn why Americans are moving to live in Mexico and you will also discover some tax tips to protect your wealth and your heirs.

Why Americans are Moving to Mexico in Retirement

Americans are increasingly looking at options of where to live in retirement to make their pension pots & savings last longer. With healthcare costs ever increasing in the USA, Americans are considering retiring overseas to see out their retirement. Healthcare costs are much lower in Mexico and over 1,000,000 Americans are now thought to be living in Mexico as you can see in the video below.

Healthcare Costs in Mexico for Americans Living Abroad

Here is a statement from an American who just recently moved to Mexico.

“If you’re a legal resident in Mexico, you qualify for national healthcare insurance, which is about US $380 per year for an average retiree aged 55 to 65 years old. This health insurance only covers the public healthcare system in Mexico, but in essence, it is no different to any private clinic because every single doctor working in the national healthcare system also owns his own private office; usually they work at not just one but probably 2 or 3 other private high end clinics. Most doctors in Mexico also have their state job in order to guarantee their pension from the Mexican government. They usually have a private doctor’s office in addition to working in a public hospital or two. The only real difference you are getting with private insurance is the type of hospital where you get treated and the ability to get a private room”.

Even if you opt for private health insurance in Mexico, it is priced between $1,000 – $3,000 and visits to the doctor are very cheap. Many Mexican doctors in private healthcare have completed part of their medical studies abroad, usually in the U.S., Canada or Europe. Doctors’ visits usually run from only around 30 bucks a visit up to $45 or $50 for a specialist.

So, you can see why many Americans are retiring abroad.

Here is a video documenting foreigners using Mexican healthcare and explaining why so many American retirees are moving to Mexico.

Automated Stock Trading for Americans Living in Mexico

You can set up an Interactive Brokers account whilst living in Mexico and have your account managed automatically by The Money Pouch.

The Money Pouch uses an intelligent stock picking algorithm to protect your monies from wild stock market fluctuations, moving your investments into US treasuries, gold or cash in times of falling equity values.

Our momentum strategies will give your investment portfolio a degree of protection.

Click here to download our free stock trading app on iTunes or install our free wealth management app on Google Play.

You can see the latest performance of our strategies in USD here.

US Tax on Interactive Brokers Accounts in Mexico

If you are an American living in Mexico with an Interactive Brokers account or other online stock trading account and you are a resident in Mexico, you may still be liable for U.S. taxes, especially U.S. estate tax.

The U.S. Estate Tax on U.S. Stocks as a Resident in Mexico

Residents of Mexico are only allowed a maximum of 60,000 USD on US situs assets before a 40% estate tax is applied.

The average 55-60 year old American with a retirement account has over 100,000 USD in their account. Multi-million dollar US stock investment accounts aren’t unusual at this age either.

How to Legally Reduce Taxation on Investment Accounts as an American Abroad

  1. Set up a US company to hold your investment portfolio
  2. Set up an offshore trust or foundation to hold your investment portfolio

Neither of these are cheap options, so should only be considered for larger accounts. You could consider setting up an offshore trust to protect your assets from U.S. taxes on death.

How to Set Up a Panama Trust for a Resident in Mexico

As an American resident in Mexico, you could set up a Panama trust to hold your US assets, for example holding your stock portfolio of ETFs.

Why set up a Panama Trust?

Benefits

A Panama Trust provides the following benefits:

• Include Foreign Spouses/Partners: Foreigners can set up trusts with foreign beneficiaries and assets in other countries. For example, you can set up a Panama trust to hold an Interactive Brokers account to trade US ETFs with The Money Pouch’s automated trading system and upon death, the trust distributes assets tax-free to a spouse or partner.

• Confidential: The law penalizes anyone associated with a Panama trust who discloses confidential information without a court order and is punishable by 6 months imprisonment.

• Privacy: Since trusts are not registered with the government in Panama, the identity of the settlor, beneficiaries and assets are never included in public records.

• No Taxation: All assets located outside of Panama producing income or distributed to beneficiaries are completely tax-free. However, U.S. taxpayers and anyone paying taxes on global income must disclose all income to their governments.

• Estate Planning: Trusts can have perpetual life for generations of heirs to enjoy.

• Asset Protection: All assets are protected from the settlor’s creditors and beneficiaries’ creditors.

• Fast Formation: A trust can be formed in one day.

• English: While Panama is a Spanish speaking country, all trust documents can be prepared in English.

Automated Stock Trading Account for American Expats in Mexico

Watch the video below to learn how to set up an automated stock trading account trading US ETFs as a resident in Mexico.

How to Set Up an Account with The Money Pouch from Richard Malpass on Vimeo.

 

ETFs, Stock Trading

What is Automated Stock Trading?

Learn All About Automated Stock Trading

Automated stock trading is simply a computerised system of stock trading, where a computer algorithm placed buys & sell orders of shares on your behalf on a stock exchange.

An automated stock trading system is a computer program that creates buy & sell orders whilst automatically submitting these orders to a stock exchange. The computer program will automatically generate orders based on a predefined set of rules using trading strategies which are usually based on technical signals, but can also be based on input from other sources such as twitter feeds, fundamental economic data or other data inputs.

What is Algorithmic Trading?

These buy & sell orders which are sent to the market by computer programmes are known as algorithmic trading or algo trading or short. These algorithmic trading programmes were first created in the 1970s, but now it is thought that more than 80% of the stock market is traded by computers via algorithmic trading.

Automated stock trading are often used with electronic trading via automated stock market exchanges and utilise electronic communication networks, “dark pools” and automated exchanges. Automated stock trading and algorithmic trading platforms can execute repetitive tasks at speeds with orders of magnitude greater than any human equivalent. In other words, you have no chance to compete with algorithmic trading systems as they can trade in milliseconds. Most automated stock trading systems however are not that quick and do not trade that frequently.

Algorithmic trading is a method of executing large orders, orders that are too large to fill in one trade, using automated pre-programmed trading instructions accounting for variables such as time, price, and volume to send small slices of the order, sometimes known as child orders, out onto the stock market over a period of time. They were developed so that traders do not need to constantly watch a stock and repeatedly send those slices out manually. Popular algorithmic trading orders include Fill or Kill, Trailing Limit Orders, Percentage of Volume, Pegged orders, Volume Weighted Average Price (VWAP), Time Weighted Average Price (TWAP), Iceberg orders and Dark Ice orders, to name just a few. Some of the newer roboadvisers can place these orders on your behalf.

You can see an explanation of Algorithmic Trading in the video below

Automated Stock Trading Video

Algorithmic trading explained

What is High Frequency Trading?

High Frequency Trading (HFT) is undertaken usually by proprietary trading firms using technology that costs millions of dollars up.

High Frequency Trading (HFT) provides liquidity to the market. In 2017, Aldridge and Krawciw estimated that in 2016 HFT on average initiated 10 – 40% of the trading volume of equity markets and 10 – 15% of the volume of foreign exchange & commodity markets. Intraday, however, the proportion of HFT can vary from 0% to 100% of the short-term trading volume. Previous estimates which reported that HFT accounted for 60–73% of all US equity trading volume, with that number falling to approximately 50% in 2012 were highly inaccurate speculative guesses.

High-frequency traders move in and out of short-term positions at high volumes and high speeds aiming to capture sometimes a fraction of a cent in profit on every trade. HFT traders are scalpers in other words.

In fact, High Frequency Trading (HFT) is so fast, that we are reaching the peak limits. A network switch made by the firm Metamako allowed a trade order to be placed in the time it takes for a photon to travel 90 feet.

Australian company Metamako’s network switch is able to route incoming information through to trading servers in just 4 nanoseconds and can lower the time it takes to execute a full trade, from the time it receives market information from a stock exchange to the time it sends out a buy or sell order, to just 85 nanoseconds. This is nearly 3 times faster than Cisco’s general-purpose networking switch.

Traditional risk controls and safeguards that relied on human judgment are not appropriate for automated trading and this has caused issues such as the Flash Crash in 2010. New controls such as trading curbs or circuit breakers have now been installed in some electronic markets to deal with automated stock trading systems.

For the average investor on the street, you won’t have access to a High Frequency Trading programme. You would need several million dollars. However, there are plenty of Business to Consumer (B2C) roboadvisers which can provide clients with automated trading systems. In 2018, you can even download free automated stock trading apps (see below).

Automated Stock Trading App

There are now many roboadvisers which offer automated stock trading. In the USA, Betterment, Wealthfront and Future Advisor lead the way with automated stock trading apps. In the UK, scalable capital have a great automated stock trading app solution For Asia and the rest of the world, The Money Pouch has smart automated stock trading strategies for beating the stock market.

Click here to learn more about automated stock trading and download the free automated stock trading app.

ETFs, Stock Trading

How to Set Up an Automated Stock Trading Account in 10 Minutes

“The Money Pouch is a free wealth management app which will help you to organise your personal finances”

1 in 6 millenials have saved absolutely nothing for retirement.

Even amongst older millenials, only 60% have saved over $1,000.

How much should you save for retirement?

You should save around 25% of your annual salary in order to prepare for your retirement.

You will need to have saved $1,000,000 in retirement to give you a $50,000 per year annual salary in retirement. Actually, you will need to save almost triple this amount depending on your age, thanks to inflation eroding the value of what $1,000,000 can buy in the future.

Are You Behind on Saving for Retirement?

Let’s see where you stack up compared to your peers in the guide below…

By age 40: You should have already saved 3 x your annual salary

By age 45: You should have already saved 4 x your annual salary

By age 50: You should have already saved 5 x your annual salary

By age 55: You should have already saved 6 x your annual salary

By age 60: You should have already saved 7 x your annual salary

By age 65: You should have already saved 8 x your annual salary

If you haven’t hit these targets, you need to increase the amount you are saving today.

“People are living much longer, your retirement monies may have to last you up to 40 years and also pay for all your medical bills and old age care in retirement”

What Will Your Retirement Look Like?

 

retirement

Do you want to live a comfortable retirement and be able to afford the small luxuries in life? Many people who didn’t save the right way will struggle in retirement.

Today, about 12.4 percent of the population aged 65 or older in the USA is still in the workforce, up from 3 percent in 2000. I expect this percentage to grow as people live longer and saving becomes more difficult.

The safest way to invest for the long run is to allow a roboadviser to automatically invest your cash among stock and bond ETFs.

Watch this video to discover how to set up an automated stock trading account in only 10 minutes

Click here to download the free Money Pouch app on iTunes or Google Play.

Then just follow the instructions to set up a new account.

Once you have filled out all your information and uploaded your passport and utility bill documents, your account will need to be checked with compliance.

Usually, your new account can be set up in just a few days if all your documentation is correct.

Start saving earlier in life for an easier retirement. The later you leave it to save, the more money you have to put in every month to achieve the same pension pot in retirement. So, it pays to start saving at a young age.