Most people come to Korea for a bit of adventure, but there are also a lot of people who want to pay off debt, such as students loans. Once you’ve paid off your debts, what should you do next? Here are five steps for expats who want to start investing while in Korea.
Step 1: Save $10,000
I recommend saving $10,000 for three reasons: diversification, fees and the minimum required amounts to open a brokerage account.
Step 2: Research
You need to think about your investing strategy. Three resources to start with are: The Wealthy English Teacher, my recently published book; The Global Expatriate’s Guide to Investing, a book by Andrew Hallam; and Investopedia, an online resource where you can view a stock basics tutorial.
The two things I invest in are dividend-paying stocks in blue-chip companies and ETFs. Blue-chip companies are big and stable, with names that you know, like McDonald’s or Chevron. These companies pay dividends, which means that they give a portion of their earnings to shareholders.
The second option is investing in ETFs, which are a basket of stocks that are bought passively according to an index, as opposed to mutual funds which are managed actively. I always recommend ETFs because the fees are really low (Vanguard). For sample ETF portfolios, check out my book or Andrew Hallam’s.
Step 3: Open a Brokerage Account and Make Some Trades
Once you’ve decided on your strategy, it’s time open an account. For non-Americans, Andrew Hallam recommends TD Direct, DBS Vickers, Saxo Capital Markets and Interactive Brokers. For Americans, he recommends Schwab or Vanguard. To actually buy your stocks or ETFs, be sure to look at the company’s ‘help’ section or refer to Investopedia.
Step 4: Collect Dividends and Keep Investing
Here is the best part: collecting money from your stocks or ETFs without doing anything. Too good to be true? It’s not. The payments get sent automatically to your brokerage account, and you can reinvest them.
Step 5: Financial Freedom
It’s possible for the average expat in Korea to use his or her time here to set up financial success. It takes discipline and frugal living to pay off debts, save up money, and employ an investment strategy, consistently over time. Just picture yourself sitting on a beach in Thailand, sipping your mojito without a care in the world – if you need some motivation.
Jackie Bolen, from the blog My Life! Teaching in a Korean University, has recently started writing about personal finance for ESL teachers, including the book, The Wealthy English Teacher, which can be found on Amazon. When not teaching or writing, she can almost always be found hiking, biking, stand-up paddleboarding or searching for the most delicious kimchi. You can contact her at email@example.com.
The Latest Haps
The Busan International Ocean Marathon takes place on Sunday, October 2. Some streets on the marathon route will be closed.
The country’s top court has sentenced a South Korean man to 12 years in prison for attempting to murder the U.S. ambassador to South Korea Mark Lippert.
Busan will light up with K-Pop stars, food and culture for the month of October.
The tentative lineup for guests visiting the 21st Busan International Film Festival for the opening day on October 6th is near completion.
With the nation’s biggest shopping and cultural event “Korea Sale’s FESTA” beginning today, Busan’s distribution industries have begun participating in an all-out competition.
The Busan One Asia Festival is offering free admissions to Taste Busan and the Korean Wave Star & Beauty Collection for foreign guests at BEXCO.
BeFM’s “On the Road Busan” team invites you for a final FREE trip around the beautiful Busan Bay at the Wave Yacht Lounge Closing Party on Saturday, October 8th.
The Busan International Food Expo 2016 will be held in BEXCO from October 6th to the 9th.
The “2016 Jinju Namgang Lantern Festival” will begin on October 1st and end on the 16th at Jinju Namgang Ilwon.
A new survey by MasterCard shows that Seoul is once again the 10th most popular city for travel in the world.
Join forces for good and come participate in the 2016 Superhero Comic Dash! Presented by The H.U.G.S (Helping Us Grow to be Superheroes) Association.
Runners from around the world will gather at the 2016 Busan International Ocean Marathon on Oct. 2.