Meet Steve Cronin.
Previously, he advised sovereign wealth funds in Dubai. Now he’s an expat financial independence coach and founder of DeadSimpleSaving.com (I’m an avid reader).
Today in 10 minutes or less, you’ll learn:
- 🏔️ Most common financial challenges for expats
- 🗺️ Steve’s 10 steps to financial independence
- ✈️ Why moving to a high-tax country is tricky
- 🏡 How to approach stock investing
- ❌ 4 mistakes & 5 pieces of advice for expats
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💀 Dead simple investing for expats | Steve Cronin
Steve Cronin is a financial independence coach for expats and the founder of DeadSimpleSaving.com. He studied Psychology at Cambridge, then for 10+ years advised sovereign wealth funds and banks globally as a strategy consultant. Settling in Dubai, an excess of financial sharks and lack of expat investing information inspired him to help others. Today, Steve provides private coaching, online courses & corporate workshops for expats around the world.
🧳 Tell us about your career journey from advising sovereign wealth funds to starting Dead Simple Saving.
Consulting was always interesting, but I didn’t love the constant traveling or the stress. What felt like the biggest step was to leave after 10 years and set up my own business. Don’t burn those bridges – I would still do interesting consulting projects as a contractor to my previous firm to raise funds.
My interest in expat personal finance started when I nearly got ripped off by a financial advisor in 2011. I realised I had to learn how to do it by myself. I was lucky to have a background in finance – what about all the other expats who didn’t?
Five years later I started a blog, once I really understood how expats could invest by themselves. After one last epic consulting project in Saudi, I dialled down the other business and helped people with their personal finances for free (or maybe lunch) for a whole year. Once I got good at it, I started charging for workshops and coaching. Covid forced me to move almost everything online and I’ve grown internationally from there.
I get to work from home, be my own boss and change people’s lives for the better, with some psychology, Excel and marketing creativity thrown in.
🏔️ What are the challenges that your clients have faced when investing as an expat? What are the financial and emotional costs of doing it wrong?
I find all my clients in the Middle East, Africa & Asia are facing similar issues:
- Lack of control over spending (despite living in low-tax countries!)
- Hard to access the best and cheapest investment platforms (e.g. Vanguard)
- Commission-driven financial advisors selling expensive and/or high-risk investment products, empowered by loose regulations
- Lack of trustworthy information sources, with disinformation from advisors
- Short-termism due to uncertainty around moving country and retirement location
🗺️ Many Money Abroad subscribers desire financial independence. How do you suggest expats can efficiently set up their investing process for this goal? What tools can help lower costs or expedite their progress?
Reaching financial independence requires more than investing.
Here’s my 10-step process:
Planning:
- Sort out your money mindset (amplify your good habits, control your bad habits
- Understand your current financial situation (net worth, monthly savings rate, cash, debt, investments)
- Set some clear goals to work backwards from: what will you do when financially independent & where, how much would be enough to live on, what mix of stocks/bonds vs real estate would you want to generate that income?
Saving:
- Find ways to boost your income and reduce your expenses without being miserable
- Pay down any expensive debt (that might stay over 5% for 2+ years)
- Build a cash buffer of 6 months’ total expenses (earning decent interest but accessible)
- Establish sinking funds for large expenditures in the next 5 years (property deposit, new car, MBA, wedding, kids’ university fees)
Investing:
- Select the right funds/ETFs for you in the right currency and domicile (hint: I think you only need one global stock ETF + one global government bond ETF)
- Choose the right platform (e.g. Interactive Brokers, Saxo, Swissquote, roboadvisors) and transfer approach
- Sort out your taxes, pensions and term life insurance
I like Interactive Brokers because it’s one of the cheapest places to buy ETFs and exchange currencies, while still being safe and efficient.
🇦🇪 You work with many expats in the UAE, while Money Abroad has subscribers in Singapore (+ US, UK, and Australia). What are the differences in how you would guide expats in the UAE vs Singapore (or elsewhere) to approach investing, if any?
The differences are really quite small. The UAE doesn’t tax income or capital gains, while Singapore doesn’t tax income earned overseas. Interactive Brokers now accepts AED and SGD, so transfers have become much cheaper and simpler. Both AED-earners and SGD-earners might as well invest in USD-denominated ETFs, as there is a better choice. AED is pegged and SGD is very stable against USD.
A bigger difference occurs when moving (back) to the US, Canada, Europe, Australia, New Zealand etc. When moving back to a high-tax country, you have to prepare your portfolio in advance and maximise use of tax shelters (pensions, savings accounts) when back. Moving is a one-way street for tax.
For example, you should always sell any ETFs showing capital gains before you move back to the UK. Otherwise you will be paying tax on gains from the day you bought the asset, not the day you moved home.
🏡 Many expats are curious about investing in residential real estate and alternatives. What guidance would you offer to expats interested in exploring these asset classes?
Personally, I dislike real estate as an investment class, but it’s a valid one. The return on hassle (agents, tenants, exploding boilers, contracts, solicitors, maintenance, regulations, tax etc.) isn’t high enough. With a globally-diversified stock ETF, you make your return by not panicking when the market crashes. That’s your hassle.
If you want to invest in real estate:
- The house you live in doesn’t count
- Beware of rising mortgage rates and volatile markets right now
- Property is illiquid (hard to turn into cash) and concentrated
- Buying several small properties may be easier than one large one – prices can be less volatile, void periods are staggered and it’s easier to release some cash
- You don’t need a property back home now to have one in the future – a cash buffer and investment portfolio will give you more security
Alternatives are called that for a reason – they can be illiquid, volatile and complex: wine, watches, timber, crypto, art, peer-to-peer lending, venture capital, private equity, hedge funds, crowd-sourced property. These are all firmly in the fun money category, as they can blow a hole in your retirement portfolio. I’d cap them at a total 10% of the size of your sensible stock & bond ETF retirement portfolio (or not even in that portfolio).
❌ What mistakes have you (or your clients) made when investing as an expat? What would you have done differently?
I never pretend to be some perfect investing guru – I have made all the mistakes over time:
- I had no direction for my money when I was younger. My cash hadn’t all been allocated a purpose. I didn’t realise you should invest as much as you possibly can. Discovering financial independence changed all that.
- Buying into long-term savings plans. I reckon 50% of expat professionals get trapped into long-term savings plans or whole life insurance. My friend warned me off them in 2011, leading to my business today. Warn others too!
- Investing in costly actively-managed funds. I was invested in actively-managed stock funds and individual stocks when I learned about passive index investing (also 2011). Expats’ savings plans are packed full of these, plus awful structured notes. Get rid of them all – ideally surrender the plan and invest by yourself. I sold everything and bought a couple of global funds instead – never looked back.
- The biggest mental mistake is thinking investing is complex and time-consuming. Buying the same global stock ETF and government bond ETF each month is really easy. It takes 5 minutes. I spend zero time thinking about which stocks to buy. But I still find it hard not to time the market a bit. I always regret it. Just invest today.
🫶 What counterintuitive or lesser-known advice would you give for expats looking to grow their investments?
- With a 7% expected return, 1% in fees means 14% of your annual profit lost – keep fees low
- Non-US citizens must avoid US-domiciled ETFs, go for Irish-domiciled UCITS ETFs
- Keep your brain out of investing and stay humble – you cannot beat the market, so you’ll only waste time, money & stress trying
- If you feel you’re starting late, don’t go high risk to make up for lost time – save aggressively instead, then invest the money sensibly
- It doesn’t matter which currency you buy a global stock fund in (it’s primarily driven by USD) – avoid home country bias also
🧑💻Where can we go to learn more about you?
My website has lots of free info, as well as paid services to accelerate your progress.
You can also find me on social media:
🌐 Beyond your borders
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💼 McKinsey study suggests remote work trend may wipe out $800B of office real estate value (link)
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🧑💻 Learn how ambitious professionals "go remote.” Our friends at The Connection publish a weekly newsletter with tips on how to land a remote job and move abroad while accelerating your career. Sign up here → (link)
