Do you have a policy to invest a set amount each year with an insurance company like Nanshan for better interest rates than the bank?
Do you invest in the local stock market?
Trade stocks overseas?
Invest in a local business?
Invest in crypto?
For us we have majority of our money in the bank as an emergency fund, a large portion in one of those investment policies with Nanshan, and the rest in the US stock market. Ideally I wouldn’t want most of my savings in the bank, but since we aren’t rich, and believe we need an emergency fund in cash, most of our savings are still in the bank. Going forward we won’t increase that amount. Our plan for the future is to put any extra savings into the stock market, primarily S&P 500 and a couple tech stocks that I believe will do well in the long term.
similar to you.
I also have a small pension plan back home that I continue to contribute to independently, it has less fees compared to the TW insurance plans.
I keep ~1 month paycheck in the bank here, ~2 months paycheck in a US bank.
I figure “emergency” will be most likely to involve needing to escape quickly to the US via last minute flight purchase to get the hell outta dodge, so I make sure my credit cards have sufficiently high enough limits for a flight that’s going to be way “out of my budget” normally. There’s labor insurance in this country, so if I lose my job, I can finally get some money from the system I’ve been paying into for the past seven years and haven’t really been able to benefit from (not that you get very much, maybe 40k/mo? Enough to cover food and rent for one in Taipei)
The rest is in index funds and target retirement funds. It would be stupid to get whatever 0.003% interest the bank is giving when the stock market has been doing so well this past decade. Even with the recent crashes/corrections, I’ve gotten 18% returns over the past five years. When I need money (like paying for tuition), I draw from the index fund. If I need to pay for a 12k USD flight out of Taiwan because Xinnie thinks now is the time to attack, even if the stock market isn’t doing too great, I have that money available for me to sell from my index funds to pay off a credit card bill in full. (Just make sure you don’t put everything into an IRA, then you’ll have tax penalties if you withdraw before retirement age)
If I had kids I would be a lot more careful, but “not having money” to invest is one of the key ways the rich get richer and the poor stay poor. If you invest 25k USD in whole-market index funds when you’re 25 and never touch the money until you’re 65, you’ll be fine for retirement. You wait til you’re 30 and you’re basically screwed.
The best deal from the US if you can pull it off, is investing in index funds in the States. Vanguard is the best for fees. If you’re back in the US for any length of time and have taxable income, you should put it into Roth accounts.
Bogleheads is a good crowd-sourced place to ask questions. They’re very rational and can give feedback on pretty esoteric questions.
We also keep “too much” money in bank accounts, but it gives us peace of mind.
The old adage is “don’t invest in anything that you don’t understand,” so for me I’ve stayed away from Taiwanese insurance plans, etc., etc.
This… the last couple years I’ve been thinking about my child’s college fund - and thinking a college fund is stupid. Save money, let it compound for 20 years, and… right when it starts to get powerful for making real money, withdraw it and spend it? Now I’m thinking more along the lines of throwing in, say $50k into an account for the child, and let it ride. When the child is 30 or so, man, that’s a nice nest egg and gives them some options. Also (hopefully) gets them thinking about what taking out a loan means, and how they’re going to handle their finances.
To quote my Principles of American Democracy teacher in high school
“As soon as you get a job, regardless of how much money you are making, put $50 of each paycheck straight into retirement investments and don’t touch them until you’re 65”.
The sad things are 1) I internalized what he said but waited almost a decade to take action and 2) too many people can’t afford to put aside $50 every two weeks, which says a lot about pay and how people are taught to handle their money generally. (and also, that was 50 bucks almost 20 years ago, so adjusting for inflation means you need something closer to $130 probably)
I first started making any real money right after the 2008 crisis, and ended up letting way too much just sit in the bank because all I had ever heard about stocks was that they’re risky and you’ll probably lose your money and they’re only for millionaires. All of which couldn’t be more wrong.
Yeah, I started putting a little in in 2010, but sitting on most my cash like an idiot. Did that for years. I talked to a financial advisor at the bank and told them I wasn’t sure the crappy market was over yet, and they apparently didn’t explain that it was still best to get in than to wait for a better market… Buy at a low and all that…
I know a lot now, but was ignorant back then. Cost me a lot
“Dollar-cost averaging” is difficult to understand until you’ve realized how much money you missed out on by not investing early and often (I know how you feel, I was there too). All I can do is keep investing now and post about what now seems like common sense to share with the world.
Pick up a book on investing psychology. Not investing cost you nothing. You also lost nothing. You are experiencing the fear or missing out, FOMO.
I started with 5k that we’d saved up. DCA every month, like clockwork. Every once in a while, I dump a large sum on something I thought would do very well over the long term, 10+ years. I was right.
you can open a brokerage account with a local TW firm,or with an online broker like Interactive Brokers (IB). you then transfer money from your TW account to the brokerage account and can start buying what ever you want.
IB has low fees, wide reach and English interface, so it is popular with many foreigners who dont want to deal with Chinese apps.
My.biggest gains were from TSMC over the last few years.
It’s been very easy to make big gains in the US stock market if you started a few years ago , it’s an exceptional period due to money printing mostly. Facebook and Microsoft went up 10x in a few years for instance. 10x!!
Most stock markets don’t usually do that and the US stock markets don’t usually do that either.
Still US stock market seems to be the most robust over the long term.
I use IB it’s pretty good. Wired the money as mentioned or you can transfer directly to their network of banks accounts worldwide . I think they charge 10usd a month or something. You can hold your cash in the account when not trading.