Our Portfolio Expenses as non-USA Investors

[galeno]

These are our TOTAL portfolio expenses. Assume a 4% AWR. Financial institutions and governments extract 30% of every USD of retirement income our portfolio generates. I assume paying the 13% VAT on all spending we do.


ER................. = 0.19%

L1WT + L2WT.. = 0.09%



Commissions... = 0.01%

Bid/Ask Spread = 0.04%

Wire Tx Fees.. . = 0.03%

USD 2 CRC...... = 0.09%

IBC................ = 0.20%



Sub Total........ = 0.66%



CR VAT............ = 0.52%



Total............... = 1.18%

[steadyeddy]

galeno - can you please turn your % numbers into plain English please?

I have no frigging idea what you are talking about.....

[galeno]

Dec 24, 2020 2:08:10 GMT steadyeddy said:

galeno - can you please turn your % numbers into plain English please?

I have no frigging idea what you are talking about.....

I'm just whining about our portfolio / income expenses that we, as non-USA investors in a small country with its own currency and a VAT tax, must pay to financial institutions and national governments. This and low bond yields are my two favorite pet peeves.

In terms of ANNUAL INCOME (4% of port) we pay 30 cents of every dollar in fin/gov costs.

In terms of PORTFOLIO EXPENSES it's 1.18% of port.

[Chahta]

Dec 24, 2020 23:43:27 GMT galeno said:

Dec 24, 2020 2:08:10 GMT steadyeddy said:

galeno - can you please turn your % numbers into plain English please?

I have no frigging idea what you are talking about.....

I'm just whining about our portfolio / income expenses that we, as non-USA investors in a small country with its own currency and a VAT tax, must pay to financial institutions and national governments. This and low bond yields are my two favorite pet peeves.

In terms of ANNUAL INCOME (4% of port) we pay 30 cents of every dollar in fin/gov costs.

In terms of PORTFOLIO EXPENSES it's 1.18% of port. 

Do you have tax deferred accounts in CR? Is that 30% due on those tax deferred accounts? That is quite a burden.

[FD1000]

Easy solution, move back to the US 
Or set up a US address and invest with a US discount broker

[Norbert]

Galeno,

Are you a US citizen? I also live overseas, but use a US address + 100% electronic communication with my brokerage company.

I wouldn't dream of exposing myself to French taxes & fees. Key point, however: the US and France have a tax treaty that excludes IRAs from French taxation ( along with pensions and SS).

[Chahta]

Dec 25, 2020 17:39:58 GMT Norbert said:

Galeno,

Are you a US citizen? I also live overseas, but use a US address + 100% electronic communication with my brokerage company.

I wouldn't dream of exposing myself to French taxes & fees. Key point, however: the US and France have a tax treaty that excludes IRAs from French taxation ( along with pensions and SS).

Being a socialist country I would think they want you to help pay for retirements and healthcare etc. or do you need to leave for a period of time each year?

[Norbert]

Dec 25, 2020 19:50:36 GMT Chahta said:

Dec 25, 2020 17:39:58 GMT Norbert said:

Galeno,

Are you a US citizen? I also live overseas, but use a US address + 100% electronic communication with my brokerage company.

I wouldn't dream of exposing myself to French taxes & fees. Key point, however: the US and France have a tax treaty that excludes IRAs from French taxation ( along with pensions and SS).

Being a socialist country I would think they want you to help pay for retirements and healthcare etc. or do you need to leave for a period of time each year?

No, I'm a permanent resident of France and have a EU passport. I do pay the very high VAT on all my purchases, as well as the remarkably low property tax. The tax treaty is very reasonable and protects American retirees. It's the employed French middle class that's getting killed by taxes.

[galeno]

We are NOT USA persons / investors. As non-USA investors using an USA broker (Schwab) we had two problems.

1. We are subject to horrible inheritance taxes. Non-USA investors at $60K. USA investors at $11M.
2. We are subject to 30+% withholding taxes on ALL interest and dividend income.

We solved #1 by opening a corporation in Panama 30 years ago and using a corporate account at Schwab.

We solved #2 by switching from Schwab to IBKR (Interactive Brokers) 5 years ago which allowed us access to Ireland domicled ETFs on the LSE. Since we already had a corporate account at Schwab it was easier to switch to a corporate account at IBKR.

The only way we can avoid the 2.1% currency bid/ask spread is to move to Panama which uses USD. Usually this spread is less than 1%. IMHO the extra spread is a sneaky tax on the rich.

Same with the 13% CR VAT tax. We would have to move OUT of CR. This is our biggest portfolio expense. 0.52% of port.

Regarding living in the USA. No way. Weather is too harsh. Oceans are too cold. There are better places for a CR couple like us in the Americas. Mexico is our favorite. By far.

We have considered creating a pass-thru entity (e.g. corporation LLP etc) in the USA and using USA domicled ETFs. The complexity of USA tax laws and our ignorance of them intimidate us.