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Investing your savings per month? (Americans)

 
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Dream_Seller



Joined: 01 Feb 2014
Posts: 38
Location: United States

PostPosted: Sat Feb 15, 2014 1:08 am    Post subject: Investing your savings per month? (Americans) Reply with quote

I have researched and can't find much on this forum about this. I'm American and am interested in understanding the best way to invest my savings I earn while working in Vietnam. How do you guys do it? Yes even if its only $100 a month I'm saving....where is the best place to put it?

Some of my research has indicated to invest in Vietnam, the country you are residing in. Others say to set up a brokerage account while in the US then transfer your savings via internet.

Thanks for your help. I will keep searching other forums.
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mark_in_saigon



Joined: 20 Sep 2009
Posts: 758

PostPosted: Sat Feb 15, 2014 4:31 am    Post subject: Reply with quote

I am not an expert on this topic (over here), but have been very fortunate over there in the U.S.

When you say invest IN VN, in my opinion, it depends on how you mean IN. If you invest money through normal investment vehicles that are sold and serviced in VN (NOT BASED ON VN BUSINESSES), there should be some safe and even acceptable choices. If you mean investing directly in "opportunities" that are based on the VN economy, it becomes a lot shakier. Just look at the businesses you see, the buildings never completed, redundant shops with help just hanging around doing nothing. Read the constant stories about scam after scam at all levels. This is not our sandbox, and we would do well to stay out of it. We are very fortunate to be able to earn the incomes we can, that should be enough, in my opinion. Don't push your luck.

My understanding is that most of the guys who get talked into some investment scheme over here lose their investments. The is especially true when supporting some "close friend", buying her family a business or whatever. In Thailand, it is epidemic proportions. Here, we are not quite the same kind of group, but those of us who fall for that usually end up with the same results.

Many wealthy Asians think it is very intelligent to invest in the west. Yeah, they buy the normal stuff here, cars, houses, businesses, but they see western investments as having greater stability. I agree. I know that rental incomes from houses in the U.S. are far higher than from here, though of course there is a lot of regional variation, and the bubbles can really skew this. Historically, you would get 1% of the value of a property per month in rent income. A $100,000 house would generate $1,000 per month. The bubble knocked that back to about .5%, then the crash pushed it back towards the historical number again. In parts of the U.S., the numbers are back to their bubble highs, mine have all surpassed their previous highs in the last 2 or 3 months. Over here, real estate has mostly stayed in this unreal zone. Prices are high, but rents you can expect to generate are low. Makes sense to rent, not to own, unless you are an Asian who is rich and cannot move his money out.

One of the most intelligent men I ever knew said "invest in yourself". This was a long time ago, when an education might really get you somewhere. Nowadays, it may not be so relevant, but it is something to consider. Doing the things you can do to upgrade your own income producing ability is not a bad idea. Very small examples over here that could make a difference would be buying very nice clothes instead of pouring on the booze, so that you look better than the other guys. Doing the CELTA even though you may already have something else.

The rich folks I have known, most of them had a pile handed to them, then they took care of it. However, I have also known people who were just very careful with their money and who RELIGIOUSLY saved some of it, every pay period. The magic of compounding did a lot for them. Some of them also made riskier investments, but lord knows, you should be diversified. I have seen well known companies create great wealth for their stockholders, then these same well known companies lose great wealth for those same people. Just depended on when they were in. Enron was the most admired company in the U.S., then they were wiped out. Dell took the most admired crown from them, then they knocked out about 2/3's of shareholder value. Both of these companies created millionaires and destitution. Just depended on when you were in and out. I always thought I would make my fortune in the equity markets, but in the end, it was properties that came through for me.

Diversify, and if you give money to an Asian girl in some investment scheme, understand you are almost surely not going to get that money back.
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Dream_Seller



Joined: 01 Feb 2014
Posts: 38
Location: United States

PostPosted: Sat Feb 15, 2014 6:57 am    Post subject: thanks... Reply with quote

Well there is a lot to be considered in your response. Building investments/wealth takes some years to accumulate.

Equities / Properties:
I currently have a 401k and although by working abroad I can claim the foreign earned income tax exclusion (earned income <90k), I am unable to invest in a 401k. So that leaves…
1.) Taxed brokerage accounts which I must open while in the US to manage online once abroad.
2.) Renting properties in the U.S (rental incomes taxed). I will not buy foreign investment properties.
3.) Some send money home and pay fees (currency exchanges, bank fees etc..)

Investing in Myself:
I have a BA and will get my CELTA. I want to teach 1 year before deciding on further education. Being professional, offering value and being able to sell myself I feel will serve me anywhere in the world.

I’m thinking the best way to avoid all the complicated taxes of the U.S is to buy U.S properties and pay them down.
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mark_in_saigon



Joined: 20 Sep 2009
Posts: 758

PostPosted: Sat Feb 15, 2014 7:26 am    Post subject: Reply with quote

Personally, I no longer invest, but I do not pull money out of my investments, and the real estate component is increasing dramatically. I spend every dollar I earn over here on my life. I do not go crazy, almost never drink, and do not throw crazy money on "others". Still, I have no problem spending it all. I do keep my rental house here in good shape. It is not mine, but I like to have it nice, and the rent payment is quite low. So, I have a house that should rent for twice as much, but do put some money into it that I will never get back. I just get a nicer place (at a lower price) to live in. Yeah, I could save some of my income if I wanted to stop eating at better restaurants, did not obsess over my classic motorbikes, wore old, worn out clothing, lived in a ratty place and did not take good care of my partner. But I would just be saving it up for someone else to spend when I am gone. Valuations are going up nicely in the states, so no need to be cheap over here.

I like the 401k program, it was a great investment for me, a tax shield, and also one can actively manage it. I managed mine pretty closely and it did fine, now it is just sitting in suspense, in case I need it someday. Mine was a big company that had a big run up in values, and I was 100% in that company. I moved to balanced funds before my company lost 3/4 of its value, was pretty easy to see what was happening at the time, but that was being there. No matter how much you read, it is hard to have the same feel for what is happening over there when you are over here.

I liked equities in the past, and still think they are part of diversified portfolio, but that game is not as straight as it used to be. As technology advances, the advantage goes to the inside players in the system, not the average investors. Equity funds are probably a better choice for the average guy nowadays.

Real estate was my savior, but looking back, that was mostly luck. The old location thing, ya know? We had a buying opportunity about 3 years ago, but mine are all back to their bubble prices now. I would not want to be a buyer at this time, but who knows what the morrow shall bring? Real estate prices are still going down in HCMC, according to my informal sources. My expertise here is very limited, but this is what I hear. In some of the smaller cities, they may be going up though. Hard to say anything for certain about this system, which is one of the reasons I do not recommend investing in it.
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spycatcher reincarnated



Joined: 19 May 2005
Posts: 229

PostPosted: Mon Feb 17, 2014 4:02 am    Post subject: Reply with quote

As you are not talking about large sums of money I would just keep it in a Vietnamese Bank as they pay relatively high interest rates.

If you try sending it home every month, I would assume that bank charges would eat a large hole in any sayings.

NB: it is not so easy to send your money home through the banking system unless your salary has been paid directly in to it.
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Tigerstyleone



Joined: 26 Mar 2010
Posts: 181

PostPosted: Mon Feb 17, 2014 4:32 am    Post subject: Reply with quote

@SR - Techcombank required a copy of my work permit, work visa and employment contract before sending an international wire transfer. They said one must be legally employed to send money overseas. They also charged me 800,000 vnd flat rate.... That is if I even live in Vietnam.
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montblanc20



Joined: 21 Jul 2013
Posts: 53

PostPosted: Mon Feb 17, 2014 5:01 am    Post subject: Reply with quote

Is it wise to keep money in a VN bank? I don't have a wp and I don't know if my employer is paying my taxes properly. I wouldn't want to an acct and then the govt takes my money one day because I didn't pay taxes.

For stocks the normal thing for low risk is to get an etf of an index. Like s and p 500 spyder.
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spycatcher reincarnated



Joined: 19 May 2005
Posts: 229

PostPosted: Mon Feb 17, 2014 5:34 am    Post subject: Reply with quote

I am not saying that keeping money in a bank, here, be it Vietnamese or foreign owned, is without difficulties. In fact I did point out the difficulties, but was unaware of the paperwork that Tiger mentioned.

I feel that montblanc's concerned are unjustified, but by the sound of his situation then I doubt he would be able to get and use a bank account fully anyway.

Going back to the OP. I have made assumptions, such as he is legally paid in to a bank account,but if he is paid in cash the. Surely his options are even worse? How do you purchase foreign stocks if you are paid in cash?

In my opinion, primarily based on what I have previously seen, it is Vietnamese banks that may flout rules, not foreign owned banks.
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Tigerstyleone



Joined: 26 Mar 2010
Posts: 181

PostPosted: Mon Feb 17, 2014 5:47 am    Post subject: Reply with quote

The OP doesn't even live or work in Vietnam. He's getting way ahead of himself here. He has so much more to do than worry about where to invest a $100.
You should know better than to ask and accept financial advise from an internet forum where EFL teachers meet.

@SR-when sending an overseas wire transfer the tellers couldn't assist me either. I was sent upstairs to the financial offices where a senior specialist did all the paperwork.

That is, if I even live in Vietnam and not just trolling the forums because I have nothing better to do with my time than make posts on a vietnam teaching forum, as this would be a great place to troll.
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Dream_Seller



Joined: 01 Feb 2014
Posts: 38
Location: United States

PostPosted: Mon Feb 17, 2014 1:54 pm    Post subject: Reply with quote

Working overseas as an american means you cannot contribute to a 401k.

I would hope some of the EFL teachers here somehow are investing in their future. That is why I am asking here. I am not asking which stock to pick. Amidst all the negativity, I am finding the answers I'm looking for. Thanks
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Riding One



Joined: 25 Jul 2006
Posts: 61

PostPosted: Tue Feb 18, 2014 1:49 am    Post subject: Reply with quote

Dream_Seller wrote:
Working overseas as an american means you cannot contribute to a 401k.


I've had 401Ks in the past in the US. If offered one again, I am not sure I would accept it. It's limited, tied to the dubious financial markets and we all know what happened to Enron employees.

There are also hidden fees in 401Ks that silently and steadily eat your savings and growth.

Quote:
I would hope some of the EFL teachers here somehow are investing in their future. That is why I am asking here. I am not asking which stock to pick. Amidst all the negativity, I am finding the answers I'm looking for. Thanks


Some EFL teachers work a lot and save. Some invest.

Some work a lot and spend it.

Some don't work a lot.

Good on your for thinking of the future. We all need to.

That old saying goes, "you don't need money when your young or middle-aged, but you'll need money when you're old." Quite true.

I agree with Spy here. Interest rates on term accounts in Vietnam are decent, and the US rate is 0%. If you add inflation - the real inflation rate - you're money is actually devaluing in a US bank account.

There are also mutual funds of many kinds. I tend to go with the International.

Equity markets are due for a correction or worse. Some of the bigger individuals and hedge funds are doing "puts" on the stock market at the moment.
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Tigerstyleone



Joined: 26 Mar 2010
Posts: 181

PostPosted: Tue Feb 18, 2014 10:03 am    Post subject: Reply with quote

So no one has any specific advice. Teachers.
Per your question:

Dragon Capital
The Ethical Investment Group
Total Wealth Management
Vinacapital

Even Techcombank has a time deposit paying 7%, that is if I even live in Vietnam and not wasting my time trolling boards because I don't have a life and just like to be negative.
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spycatcher reincarnated



Joined: 19 May 2005
Posts: 229

PostPosted: Tue Feb 18, 2014 10:53 pm    Post subject: Reply with quote

Quote:
If you add inflation - the real inflation rate - you're money is actually devaluing in a US.


If you are planning on leaving the country with this money then the Vietnamese rate of inflation is not relevant in this scenario. You need to deduct the depreciation (or add the appreciation) of the VND against the USD from the interest rate you receive here, to get a better picture. Historically, over the mid term, earning interest from Vietnamese banks has provided very good returns.
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Dream_Seller



Joined: 01 Feb 2014
Posts: 38
Location: United States

PostPosted: Wed Feb 26, 2014 7:07 am    Post subject: Thanks too all... Reply with quote

I believe I will invest in my property back in the U.S as well as time investments in a Viet bank.

Getting a rate of return of 7% at a local bank in Vietnam sounds great. Thanks for all the responses and your patience. I really appreaciate it.
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