What is a hedge fund and is it worth investing in one? What is the difference between a hedge fund and a mutual fund? Richard Wilson, founder of the Family Offices Group, president of Richard Wilson Capital Partners, and author of The Hedge Fund Book: A Training Manual for Professionals and Capital-Raising Executives and The Family Office Book: Investing Capital for the Ultra-Affluent, answers these questions and more. Find out whether hedge funds and using a family office is for you by listening to this fascinating interview in the first part of this week’s Goldstein on Gelt podcast.
Posts Tagged ‘Finances’
How many times have you heard people say, “I could never make aliya. It’s too difficult financially”?
Well, now there is one less excuse.
There are the standard financial pluses of living in Israel: the Israeli unemployment rate is lower than in America, day school tuitions are cheaper, and you don’t need to use personal vacation days for the chaggim.
While there are many benefits to living in Israel, there are some financial challenges, particularly around tax-filing time. While Americans living in Israel have an obligation to file with the IRS, Israel and America have a tax treaty between them, according to which if you pay taxes in Israel and also owe them in America (since America taxes her citizens on worldwide income), you can take a tax credit on your American taxes for what you paid to Israel.
In addition to filing U.S. taxes, American olim must file FBAR forms and they also may be responsible for filing under new FATCA requirements.
Confused? You’re not alone. But if you used this confusion as an excuse not to make aliya, your excuse no longer holds water. A new book can help you.
The IRS recently implemented FATCA, and Uncle Sam wants you to file your American taxes (in addition to your Israeli taxes) and FBAR form, but before you start to get too worried, there are solutions. For starters, get a copy of my recent book, The Expatriate’s Guide to Handling Money and Taxes? As a financial adviser with more than two decades of experience helping Americans abroad handle their American brokerage accounts and deal with the problems that arise from living in dual currencies, I wrote the book with the help of various leading international tax lawyers and accountants.
Just as you would extensively research communities, ulpans, schools, and jobs before moving to Israel, learn what your tax obligations to the Old Country will be when you are offshore. This should make your transition easier, as you won’t have nightmares about the IRS demanding a share of your new salary.
On the first part of this week’s Goldstein on Gelt show, meet Eric Siegel, author of Predictive Analytics: The Power to Predict Who Will Click, Buy, Lie, or Die. Eric tells Doug about data mining and predictive analysis. What do these terms mean, and how accurate are they in determining peoples behavior? Find out how data mining affects marketing and customer profiling, as well as daily life, by listening to this weeks show.
For many people, money is a stressful subject. How can you lower your stress levels over handling money, and how can this make you more productive? Can you use this stress positively, or does it paralyze you? On this weeks Goldstein on Gelt show, David Allen, an author, consultant, lecturer, founder and CEO of the David Allen Company tells us more.
The American economy isn’t what it once was, and while some Americans are looking to move abroad to better their financial situation, Americans living abroad face specific financial challenges due to the fact that they are American citizens (which I discuss in depth in my new book, The Expatriate’s Guide to Handling Money and Taxes). While holding an American passport once was considered a great advantage, today it has broad ramifications for your finances. Any well-intentioned American parents or grandparents who are thinking of getting American citizenship for their Israeli-born children or grandchildren might want to think again when it comes to taking up this inherited privilege.
Below are six good reasons why financially, life has become more difficult for American citizens living overseas, regardless of how long they’ve been abroad, whether they’ve ever worked or lived in the States, or even whether they speak English:
(1) FBAR and FATCA. These terms refer to tax reporting requirements that U.S. citizens abroad must file if their assets reach certain minimum levels. Non-compliance can result in steep fines. These requirements have had a very serious effect on how foreign banks and investments view U.S. account holders, since FATCA requires foreign banks to report American accounts and assets to the American government.
The problems that follow are a direct consequence of FBAR and FATCA:
(2) Limits on buying mutual funds through an American brokerage account. You may think it’s O.K. if FATCA makes it difficult to open a foreign investment account, since after all, you can use your American brokerage account and continue with your familiar investments. But, beware: many American mutual funds are rejecting orders to buy if the address on the account is not a U.S. address. And I’ve been approached by clients of other brokerage houses whose mutual fund trades have retroactively been cancelled because of the foreign address issue. Not every brokerage firm in America is comfortable dealing with accounts of Americans living overseas.
There are also challenges in buying mutual funds through an overseas brokerage account. If your foreign investment house sells you a foreign mutual fund, not only will it report your assets to America (or else it risks facing steep taxes), but you may need to report the foreign mutual fund as a PFIC (Passive Foreign Investment Company).
(3) The current situation has made it very hard to transfer assets, as countries don’t automatically recognize notaries from other countries. This means if you live overseas and inherit an American brokerage account, you may need to fly into America to physically have your signature witnessed by an American company that can offer a “medallion guarantee.”
(4) It’s very difficult to get life insurance from a U.S. insurance company because they won’t recognize an address outside the United States.
(5) Say goodbye to your U.S. credit and debit cards. Some of them don’t work away from the United States, while many companies will refuse to mail your statements overseas. And if you have an existing account, now that your address has moved abroad, you won’t receive a new card when it becomes necessary.
(6) Don’t think you can solve your problems by opening a bank account in the United States. Without a U.S. address, forget about it. And if you receive a dollar check, it’s not a simple matter of depositing it in your bank account abroad, as the banks charge a fortune for conversions into local currency, and it’s not unusual to take up to three weeks for foreign checks (yes, outside the U.S. dollar checks are considered ‘foreign’) to clear.
So what are the solutions to these thorny problems?
You’ll find them in my new e-book, The Expatriate’s Guide to Handling Money and Taxes, which I wrote in order to help the many bewildered expats that I meet in my capacity as a financial adviser. As a reader of The Jewish Press, use the coupon code JPRESS to get the book at half price.
Filing taxes is complicated. The forms aren’t particularly user friendly, and if you’re not quite sure what you’re doing you can end up making quite a few errors. The problem with errors on tax forms is that they can be very costly. For people who have multiple citizenships and residences (think olim or folks who spend a portion of the year living in Israel), the challenges of tax reporting are even more complicated.
I spoke with international tax lawyer Dave Wolf (and fellow contributor to a book on tax guidelines for American expatriates) and asked him, “What’s the worst mistake you’ve seen an expat make?”
He said: “The biggest mistake that I’ve seen expats make is believing that once they move out of America, they no longer have to report their worldwide income or report the existence of foreign bank accounts or companies.” Indeed, when it comes to the IRS, out of sight is not out of mind. It’s also important to note that if you have American citizenship through a parent or grandparent, even if you’ve never lived in America and English isn’t your mother tongue, you’re still obliged to report to the American tax authorities.
Another common blunder that Dave mentioned was that people look for investment opportunities without taking into consideration the U.S. tax code. Specifically, complicated U.S. tax laws basically prevent American taxpayers from investing in overseas mutual funds. The IRS considers those investments “PFICs,” (passive foreign investment companies), and most Americans who understand how they work would not want to get involved with them or offshore mutual funds. When trying to invest smartly, lack of knowledge of international tax consequences can cost you a lot of money.
The third blunder people make, Dave said, is “They either go to the wrong adviser, one who has no overseas experience, or they just don’t get any professional help at all.” I asked how you can avoid these mistakes. He said, “Make sure to consult with your tax lawyer, accountant, and/or investment manager before you leave the States to avoid any adverse tax consequences of investing or moving money overseas.” Sadly, many people overlook this seemingly small detail before making what could be one of the biggest financial decisions of their lives.
Find out more about what Dave has to say about avoiding making major tax mistakes by reading The Expatriate Guide to Managing Money and Taxes. For Jewish Press readers, get half off the regular price of the book by using the discount code JPRESS. Go to www.ExpatGuideToMoney.com and order now. The discount will expire on tax day, April 15th.
Knowledge is power, and reading this easy-to-follow guide for U.S. expats you can stay in full compliance with the law.
As Pesach approaches, the themes of freedom and liberation from slavery are prominent in a Jew’s mind. Indeed, the message of Pesach is one of the most powerful Jewish experiences, and many otherwise non-religious Jews find their way to a Pesach Seder.
Slavery in Egypt may seem like a distant memory to many Jewish Press readers, but take a moment to consider whether you are truly free. After all, doesn’t modern slavery come in the form of debt, overdraft, and heavy bills?
How free can you be facing bills, debts, long work hours and/or demanding employers? Can you consider yourself free if you spend nights worrying about how you will make it through the end of the month?
Maybe you and your spouse are both working full time. But those bills just keep coming in. You’re not even wasting your money on fancy vacations or designer clothes. Yet there seems to be a permanent hole in your bank account. Bills and expenses seem to pursue you wherever you go. You can feel like a slave.
Although everyone has his own story, one common thread to many families’ financial woes is that they aren’t managing their money properly. Unfortunately, money management and budgeting skills don’t occupy the same place on the school curriculum as math or history. As a result, many people never learn how to properly take care of their money, and they stumble and struggle to meet their daily expenses. Budgeting and financial planning need to be learned, no matter how old you are or at what stage of life you find yourself.
Successful finances require keeping track of spending and income. Start by keeping your receipts and noting down your daily expenses.
Learning to budget and plan efficiently can help liberate you from the slavery of overspending, fiscal disorganization, and debt.
What are the treasures that authors throw away? Are they worth any money? If you are a budding author, will people be reading your rough scribbles in fifty years’ time? Ken Lopez specializes in helping living authors to sell their papers. He has stumbled on many interesting artifacts belonging to famous writers. Find out more about Ken and the interesting papers that he has bought and sold on this week’s episode of the Goldstein on Gelt show.