Post: #1

Sounds like every mans dream


Suppose you have savings of 200k USD and your goal is to invest it without going into business yourself then move to some cheap developing country.


I looked at a few options and none of them seem to give me ROI that is good enough to justify investment.
I would be quite pleased with $1500-$2 000 a month.

-Real Estate - return of about 3-5% in most Western countries
-Bank Deposits - at present 1-3% interest rate with reputable banks, 5-7% in some questionable places such as Azerbaijan and Georgia
-Stocks can be hit and miss, I read that investing in S&P500 index fund is the best thing if you are into stock market as most traders and gurus fail to beat the market anyway

Another option is to open some biz in the country I chose to live in in but that has its own issues.

Any comments are appreciated

Post: #2

I basically did this, though with a bit more saved. Check out my relocation thread in my signature.

So far in Gdansk, Poland, even paying double what locals do for rent (since I book on AirBnB for only a month at a time), $1,500 a month is more than enough.

That of course is eating in almost every meal (which as a lifter you should do anyway), and doing daygame instead of nightgame (which is generally recommended for Poland anyway).

If I committed to Gdansk for a year to pay what locals do for rent, $1,000 a month would probably be enough.

Unfortunately, to get even $1,000 a month off the S&P 500, you'd need $300k USD ($1,000/month x 12 months/year x 25 [4% safe withdrawal rate]).

Post: #3

(01-01-2016 09:45 AM)Bananaman711 Wrote:  Suppose you have savings of 200k USD and your goal is to invest it without going into business yourself then move to some cheap developing country.

I looked at a few options and none of them seem to give me ROI that is good enough to justify investment.
I would be quite pleased with $1500-$2 000 a month.

-Real Estate - return of about 3-5% in most Western countries
-Bank Deposits - at present 1-3% interest rate with reputable banks, 5-7% in some questionable places such as Azerbaijan and Georgia
-Stocks can be hit and miss, I read that investing in S&P500 index fund is the best thing if you are into stock market as most traders and gurus fail to beat the market anyway

Another option is to open some biz in the country I chose to live in in but that has its own issues.

Any comments are appreciated

This is something I've 'sort' of been working towards. I say sort of because it's a distant long-term goal that may change in the next 3-5 years but the intention right now is very much focused on saving, investing and learning.

I see your also from Australia. Right now ING is offering the best interest rate of 3.5% which is historically low and as your probably aware the RBA has made multiple cuts to interest rates in the last year and I expect more to come. The other issue is even if you parked a significant amount of money into a HISA to try an compensate for the lower interest rate's while ensuring a guaranteed return, to qualify for the higher rate you often need to be an AUS tax resident. As far as I know if your out of the country for more then two years you will be considered a non-resident.

This brings another problem to the table, If you own an investment property in AUS and are renting it out for let's say $1500 a month. This would put you at $18,000 a year, which is just below the tax-free threshold but as a non-resident for tax purposes.. you would be required to pay tax on that $18,000 while living abroad.

I don't know enough about the market to really comment, but from what I've read and been advised by friends who do know it, your right; Index Funds and ETF's are generally the safest option and average out to around 7-9% but it's a very long-term investment, and you would need serious money to get anywhere near $1500 a month.

I think the only way to really achieve this is to either run a location independent business as a source of income, or have an enormous amount of capital invested or earning interest which can negate the tax issues related to holding it in your home country.

After living in EE for a couple of years, I believe I could manage on $1,200 a month and be satisfied. I live quite simply and minimal.. but even reaching that monthly income through ROI is difficult.

Post: #4

You have to look out for where is a better deal to invest your money. The current global economy and the oil prices have a huge impact in oil producing countries, specially underdeveloped. This price decrease caused their currency to go down vs the USD. Look out for a stable underdeveloped country where your american money is worth more, thus have more adquisitive power. Latin america had it pretty bad. Venezuela is currently under a sort of dictatorship so it is not a safe bet to buy private property. I can give you the example of Colombia because I live here.

As of early 2016, the colombian peso has weakened by about 40% in comparison to the USD, within the last 6 months. Real state is pretty darn cheap and the prices are constantly going up, so you will have a good return on invested property.

Like Colombia, there must be a couple of other countries that have this same characteristics.

200k is a good amount in a developing country, however if you manage it poorly you will end up loosing very easily.

Post: #5

You'd be "quite pleased" with $1500-$2000 a month off of a passive $200k investment? That's a 9-12% annual return... I'm not familiar with Australian investments, but is that something that's even feasible there?

I follow the early retirement bloggers out there, and it seems like unless you want to live a VERY minimalist lifestyle, you basically need upwards of $1m liquid invested in tax-advantaged accounts to make the "passively invest and geo-arbitrage in another country" plan a reality. Maybe your expectations aren't in line with what is actually available out there?

Post: #6

Echoing some of the thoughts here: 200K is generally going to be too little to cover the vast majority of places in the world even with a minimalistic lifestyle using passive and lower risk investments. You will need to likely become active in your investments to generate a return rate high enough to be living off of. Now, if you can work location independent and supplement that with interest from say bank deposits, you should find that is doable.

Post: #7

(01-01-2016 11:39 AM)262 Wrote:  I basically did this, though with a bit more saved. Check out my relocation thread in my signature.

So far in Gdansk, Poland, even paying double what locals do for rent (since I book on AirBnB for only a month at a time), $1,500 a month is more than enough.

That of course is eating in almost every meal (which as a lifter you should do anyway), and doing daygame instead of nightgame (which is generally recommended for Poland anyway).

If I committed to Gdansk for a year to pay what locals do for rent, $1,000 a month would probably be enough.

Unfortunately, to get even $1,000 a month off the S&P 500, you'd need $300k USD ($1,000/month x 12 months/year x 25 [4% safe withdrawal rate]).

Why do you rent trough AirBnB? Is there any impediment that doesn't allow you to do a normal lease? Does it has to do that you are not a resident or a citizen, Or does it have to do with your plans to leave Poland soon?

Post: #8

You would be better off investing in a business either in your home country or the one your moving to, as this is an easy way to make 2000 a month if you have 200k to invest.

Post: #9

You need to push yourself more and ask this question when the number is 2 million. It's too small of an amount to normally have access to passive investments that pay the kind of return you are seeking.

Take it to that country and invest it where 200K is a lot of money. Start a factory and hire 5 people. Buy a gas station. Buy real estate where 200K gets you something. Build something. etc.

If you are young don't be afraid to lose it trying things.

Post: #10

^ this is your best bet. but for what your looking for would definelty be stock market investments. risky for yourself but theres not much other way .

Post: #11

I agree with 262. $200k is not nearly enough to live off passive income.

If I were you, I would read his investment posts and then look for investment advice on personal finance forums like Mr money moustache and bogleheads rather than here. Suggestions such as "make more active investments" and "make 2 mil" are not particularly helpful to put it mildly.

Post: #12

(01-03-2016 07:56 AM)Brodiaga Wrote:  Suggestions such as "make more active investments" and "make 2 mil" are not particularly helpful to put it mildly.

There are lessons you can't get in any school that come from doing and trying.

Now, explain to me how it is not helpful to encourage someone with 200K to not stop there and set the bar at 2 mil? Rather than speculate I would like to just ask you.

OP If you made the 200K you already have a skill most don't so keep up the good work, keep pushing yourself for more. If you inherited it, congratulations and use it as a seed to take your life to new levels.

Post: #13

(01-02-2016 08:26 PM)Phil619sd Wrote:  Why do you rent trough AirBnB? Is there any impediment that doesn't allow you to do a normal lease? Does it has to do that you are not a resident or a citizen, Or does it have to do with your plans to leave Poland soon?

I rent though AirBnB because my location itself is a plate I'm still spinning

But if I wanted to stay and rent like a local, it doesn't seem like a problem. I'm actually typing this in Gdansk from an apartment that my American buddy rents as a local, since he works here. My AirBnB won't be ready for another hour.

Post: #14

I think the real issue here especially among the younger guys in the trades or with student loan debt or trying to just survive in the Walmart Plantation Labor economy and also cover living expenses and paying absurd Obamanation payroll deductions and Obamacare expenses is getting to the holy grail of $200K to $2M in invest-able capital....

Now that would be a more useful effort for most RVF readers - for those with some answers could break out some concise WWWWWH Who What When Where Why and How Data Sheets.

Post: #15

As of now I do cook regularly. However, when the school semester starts I eat a lot of Fast Food because I live with my parents, and I live 20 minutes off campus. The opportunity cost of me driving me back and forth to my home to cook and eat prepared meals is too low with the limited time I have (work 30 hours a week, commute time to internship is three times a week is 3 hours round trip, taking 16 hrs of school, etc.)