An 18yo American Citizen in U.K.- Looking for a brokerage app

yying

New member
Hi guys, I was born in the USA but never lived there (just the time of 3 years). I now live in England and just turned 18. I have only the American nationality and therefore am an American citizen. I'm looking to start investing but can't find any application/site allowing me to invest in the market as an American expatriate. Do you have a classic Robinhood style brokerage app? That allows us the access, especially in the UK? Intuitive, easy to get started, I wish to invest and not trade.

Thanks for your reading, I also take any advice in order to train myself financially: book, podcast, training (free on possible), your own advices or any r/ to follow
 
@yying You really don't want anything that is "Robinhood style" - while they have no commissions, they do have a spread that isn't advertised. And their orders take longer to execute so you need to use a limit every time.

Schwab is your best option as an American expat. They have international accounts and since you're in the UK, you fall under the jurisdiction. You won't have any commissions and will have access to all their research and features. As far as a quality discount broker goes, Schwab is the best (and they're the only one that offers brokerage services to Americans outside the US).

Interactive Brokers is also an option but you'll have to pay commissions with them so unless you're a high volume trader, I don't see it being worth it. A lot of people like Degiro, but even though you've never lived in the US, as a US citizen you are still under FATCA which means a lot of banks or brokers won't take you on as a client, Degiro being one of them.

As for training, I would learn some basic macro and micro concepts and focus more on fundamental analysis rather than technical (technical isn't as good in the market we're in right now). Investopedia is a great place to familiarize yourself early on. Schwab also has some training for beginner investors that teaches you how to invest properly (timing, valuation, strategies, etc.), but you'll need to open an account with them for access to all that I believe. You can also start reading financial newspapers/publications. I like The Wall Street Journal but that can be expensive if you're not getting it through an organization (my uni pays for mine). CNBC's articles are mostly free and can give you a bit of an overview on individual companies and sectors. And while you've probably heard of Bloomberg (their subscriptions are also expensive), most people don't know that you can watch Bloomberg TV live for free online and get a great financial overview there. If you have a Firestick or any type of streaming device, you can download their app and watch it. Otherwise, you'll need to go to the livestream online (not sure if you need a VPN to change your location to US or not).

Good luck! And for an early tip, take a look at ERIC (Ericsson) - I think there's some great growth potential there!
 
@resjudicata Unbelievable, I was expecting answers but not as complete as this one. This social network is great as much as you are. Thank you for this more than complete answer. Shwab would allow me to invest from England (Does it require a minimum invest?)?. I plan to start from £2,000 is this worthy knowing that I will have to take an accountant to fill out my tax form for the first time? Is there anything else I should know about taxes in my case: being an expatriate student investing in the market? Before venturing into this vast world..
 
@yying I'm glad I could help! I personally started with even less than that and know others who only started with $200 in their account so 2k GBP is more than enough to get you started. Keep in mind that you're going to be investing over a period of time so you'll always have extra cash in your account (liquidity is key). With any broker, you get access to your tax forms around tax season. For the US, we need to file taxes by mid-April. It really simplifies things because when you go to your regular accountant to file your taxes (e.g. income), you can just include the Schwab tax documents and won't have to go to another accountant since it will all be part of the same service. I'm sure you're already aware, but as a US citizen (even though you've never lived there), you still need to report your income to the IRS. Your investments with Schwab will fall under this category and since it is US-domiciled, you might have to pay US taxes on capital gains instead of UK taxes (only for your investments through Schwab, everything else will be subject to UK tax law). Make sure your accountant is familiar with US tax filing (if he/she is not, I would switch so you don't have to use multiple accountants) and any income you earn will be subject to Foreign Earned Income Exclusion (you basically just report it to the IRS as a US citizen but don't have to pay tax on it since you're living and working abroad). Many expats who don't have good accountants don't file for this (along with a tax credit you might qualify for as an American abroad) and end up losing money to the IRS they never should have paid.

As for using it to save your money, I would speak with Schwab directly before opening up your account since they could advise you better. Schwab has many product offerings, including a checking and savings account, and you can link your brokerage account to one of their other products for seamless transfers. You can open a high-yield savings account with them (you'll get paid much better interest than elsewhere) and link that to your brokerage account so you'll only move over the money you need to invest and keep the rest collecting interest in the savings. You can also then get a debit card through them which has no foreign transaction fees and credits you for ATM withdrawals worldwide (no more paying those annoying ATM fees). Being that you're also located in the UK, Schwab probably has a few offices there and at least in the US, I know they set up training sessions for their clients where you can reserve a seat (for free) and go in person to learn about different investment strategies, like options.
 
@resjudicata Thank you for those valuable advices, really. Investing in stock markets does not fit into the capital gains box rather than income? Which is therefore taxable even with the FEIE? I sometimes thought I'd take pleasure in withdrawing some money in case I'm lucky enough to make a profit. These profits would not be taxable with the FEIE, is that what you’re saying? I have no fixed income, being a student and living with my parents I thought I would start to learn about this passive income and make it the only until I find a student job. As for the accountant, this will be my first time, thank you for the advice I will try to get one specialized in both
Really? I thought I was going to end up paying the winnings for both countries. Since it's Shwab, I'll just have to pay the benefit of those winnings just to the US, what a good news !

Are you an expat or a former? You are very knowledgeable on this subject
 
@yying You would likely only have to report it, not sure of the tax laws in the UK, but in the US capital gains taxes are paid. You're accountant will know more, but since Schwab is US-domiciled you'll probably have to pay a small amount of tax on capital gains through Schwab.

I just became an expat a few months ago and am living in Greece right now. Unfortunately, the US makes things complicated for any Americans abroad. Even trying to open up a bank account is a headache!
 
Schwab rejected me.. Still looking for a brokerage app and some advice to know from where to start my journey: courses, books on how to invest
 

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