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"Financial planning", in the western sense of the phrase (saving currency, investing in stocks, mutual funds, life insurance, 401(k), and various other pieces o
by tacostakohashi 10y ago
"Financial planning", in the western sense of the phrase (saving currency, investing in stocks, mutual funds, life insurance, 401(k), and various other pieces of paper that require trust and courts to be worth anything) isn't actually a rational thing to do in emerging Asia (or, to the extent that it is now, that's very recent).
We're talking about a country that was governed by a prolific kleptocrat (Ferdinand Marcos) for 20 years, and where the currency halved in value against the USD over the course of a few years during the asian financial crisis. Beyond that, there's generally a weak rule of law, and poor regulation of the financial sector.
In this environment, a more traditional Asian approach of spending money on housing, land, gifts to relatives to build up some social credit with them for times of need, makes a lot more sense.
- user5994461 10y agoIndex funds, 401k and some stocks exist only in the USA. They don't exist in most of the western world (e.g. Europe). Please don't call that "western financial planning"
- drpgq 10y agoEurope doesn't have index funds?
- user5994461 10y agoLong story short: no. Vanguard, which is the gold standard, almost exclusively operates in the USA. (even though it's registered as a UK company and based in the UK). As far as I could find in the UK, the closest local equivalent is L&G (Legal and General). In the rest of Europe, for the few countries I checked, there is nothing comparable whatsoever.
- allendoerfer 10y ago> Index funds, 401k and some stocks exist only in the USA. I am not sure whether you are European making fun of the financial system of the USA or an American thinking Europe somehow lives in the stone age. Of course we have those things. Also there are these things called stock exchanges, were even people from poor, underdeveloped nations like Norway, Switzerland, Denmark, Luxembourg, the Netherlands or Germany are allowed to buy stocks. Even fancy American ones.
- user5994461 10y agoNone of these. I am an European who is sad that Vanguard doesn't exist there, and there is no comparable local equivalent. And no, an European either cannot and/or should not buy American stock. 1) Some stocks are simply not available for trades by your local brokers 2) You cannot use some remote products/brokers because they require you to be an US citizen or resident 3) There are taxations and constraints that makes international stock worthless. For instance, American stocks are taxed by the USA (by USA law) then taxed again by your home EU country (local country law). P.S. I am sure there are loopholes to get it done if you have more than 10M€ to invest but that's not the case of the majority of people.
- allendoerfer 10y agoStill there are index funds in Europe, 401k equivalents and you can buy international stocks. What kind of stocks do you need for your personal financial planning, that you cannot get in Europe? I have heard nice things about Vanguard on HN, but so far have not had any troubles with iShares and the like.
- user5994461 10y agoDude, Vanguard is not available in Europe. THAT'S THE PROBLEM!
- mercutio2 10y agoEuropeans are much less likely to be retail investors, I'll buy. But there's very little stopping Europeans from buying Vanguard funds or ETFs, so this is a cultural phenomenon, not because of any legal barriers. http://jlcollinsnh.com/2014/01/27/stocks-part-xxi-investing-with-vanguard-for-europeans/ http://jlcollinsnh.com/2014/01/27/stocks-part-xxi-investing-...
- user5994461 10y agoYou must be kidding. Did you even read that article??? It confirm that you need 100k€ to deal with Vanguard Europe directly, that you get double taxation (USA tax then home country tax) on your returns, and you take all the risks on the currency exchange, and that's just the beginning of the article... So, I'll repeat it again, the USA investments are NOT available in Europe and the equivalents are mostly non existent or sub-par.
- fulafel 10y agoRetail investing into index funds in Europe is easy and common with domestic providers IME.