DBS Vickers

[Lisafuller]

If he is a US citizen, there is currently an $11+ million exemption, that exemption is not available if you are a nonresident alien.

I see, he is a citizen.

The tax trap is this.. let’s say your dad is a US person but your mom is not, his US situated assets will pass to your mom tax free if they are within the allowable exemptions, but if she doesn’t liquidate those US situated assets and they eventually pass to her children... then her estate tax will very likely owe as much as 40% estate tax on anything above $60,000.

Interesting, I haven’t looked into this too much. Does this still apply if the child is a US citizen?

[malcontent]

I see, he is a citizen.

The tax trap is this.. let’s say your dad is a US person but your mom is not, his US situated assets will pass to your mom tax free if they are within the allowable exemptions, but if she doesn’t liquidate those US situated assets and they eventually pass to her children... then her estate tax will very likely owe as much as 40% estate tax on anything above $60,000.

Interesting, I haven’t looked into this too much. Does this still apply if the child is a US citizen?

Yes! That is the crazy thing. US situated assets held by a nonresident alien only get the $60k exemption unless it is going to a spouse who is a US citizen - in that particular case, the unlimited marital deduction applies.

There is an interesting loophole for an ultra wealthy parent in this situation - as long as the inherited assets are not US situated, the exemption is *unlimited* to any children, even if they are US citizens!

There is a complex rulebook on what is US situated (situs) and what is not. US bank deposits and US government securities are a few examples that are explicitly exempt from being considered US situs. However, cash and domestic stock sitting in a US brokerage is considered US situs.

[MOCHS]

I feel one shouldn’t be too myopic about roboadvisors and crypto.

Sure, they’re newer/foreign and maybe that’s why you want to shut the door on them ASAP but no harm getting some knowledge about them instead of ignoring/eschewing them totally.

What works for you may not work for others. You may think this asset is not worth it but others could see the value in it. If one has the capital and are willing to take the risk without it being detrimental to themselves, they can go for it. No need to keep poo-pooing on it and discouraging others who have done their research and know what they’re getting into.

If robos and crypto were that terrible, interest and use of them would have fizzled out long ago. But nope, people are still using/buying them.

[Rocketboy]

If robos and crypto were that terrible, interest and use of them would have fizzled out long ago. But nope, people are still using/buying them.

Why even put crypto and robos into a same sentence?

I wouldn't mash crypto and robo together at all. Robo is just a package for a stock market based investment / trading. Crypto is an asset class. There is probably a robo solution for crypto as well.

In most cases robo advisory is still stock market and is basically same as parking your cash with an actively managed fund with a crazy commission on their side - so we are talking about semi flexible medium to high risk, medium to low reward but an easy to pick up public market products.

Where is crypto is a specific asset class that offers crypto specific opportunities, like - Defi and compound interest products / leveraged derivatives trading (with far less requirement to enter vs same in stocks) / common trading / mining / participation as validator or node etc depending on the chain list goes on.

[smoulder]

If robos and crypto were that terrible, interest and use of them would have fizzled out long ago. But nope, people are still using/buying them.

Why even put crypto and robos into a same sentence?

I wouldn't mash crypto and robo together at all. Robo is just a package for a stock market based investment / trading. Crypto is an asset class. There is probably a robo solution for crypto as well.

In most cases robo advisory is still stock market and is basically same as parking your cash with an actively managed fund with a crazy commission on their side - so we are talking about semi flexible medium to high risk, medium to low reward but an easy to pick up public market products.

Where is crypto is a specific asset class that offers crypto specific opportunities, like - Defi and compound interest products / leveraged derivatives trading (with far less requirement to enter vs same in stocks) / common trading / mining / participation as validator or node etc depending on the chain list goes on.

Yea I'm curious about his statement as well. Robos is usually into equity. At least the ones I'm aware of. Equities are a "safe" asset class versus crypto which is based on pure demand and with a very uncertain future.

[Lisafuller]

The tax trap is this.. let’s say your dad is a US person but your mom is not, his US situated assets will pass to your mom tax free if they are within the allowable exemptions, but if she doesn’t liquidate those US situated assets and they eventually pass to her children... then her estate tax will very likely owe as much as 40% estate tax on anything above $60,000.

Interesting, I haven’t looked into this too much. Does this still apply if the child is a US citizen?

Yes! That is the crazy thing. US situated assets held by a nonresident alien only get the $60k exemption unless it is going to a spouse who is a US citizen - in that particular case, the unlimited marital deduction applies.

There is an interesting loophole for an ultra wealthy parent in this situation - as long as the inherited assets are not US situated, the exemption is *unlimited* to any children, even if they are US citizens!

There is a complex rulebook on what is US situated (situs) and what is not. US bank deposits and US government securities are a few examples that are explicitly exempt from being considered US situs. However, cash and domestic stock sitting in a US brokerage is considered US situs.

Wow! I had no idea. I’ll look more into this, thanks for sharing.

[MOCHS]

Why even put crypto and robos into a same sentence?

Didn’t want to make separate posts as one claimed to not trust robos and rather pick stocks themselves. Another claimed to never touch cryptos at all. Just killing two birds with one stone in one post. I am aware they are different.

[Rocketboy]

Why even put crypto and robos into a same sentence?

Didn’t want to make separate posts as one claimed to not trust robos and rather pick stocks themselves. Another claimed to never touch cryptos at all. Just killing two birds with one stone in one post. I am aware they are different.

People claim all sort of things I see absolutely no point in robos but am very positive on crypto ahaha

[malcontent]

There are plenty ways to speculate on things that have no underlying investment value. I’m perfectly happy with my boring, low cost, broadly diversified index funds which have been proven to beat 89% of all professional money managers in the long term.

[Lisafuller]

There are plenty ways to speculate on things that have no underlying investment value. I’m perfectly happy with my boring, low cost, broadly diversified index funds which have been proven to beat 89% of all professional money managers in the long term.

Same here. Call me old school, but it works for me.

[smoulder]

As someone who works in the banking technology sector I'm all for technology. But at the moment I can't see the benefit of crypto. To me, it looks like going to a casino.

[MOCHS]

All I’m saying is, regardless how you invest or what you invest, we are still better than those who will never do so and will remain swimming in the sea of inflation.

At least all of us in this thread made the choice to escape inflation and grow our wealth. That’s what matters.

[malcontent]

I know people in my office who have been working for over a decade and are just sitting on a pile of cash savings. Personally, I believe that stocks, when invested in a sufficiently diversified manner, have the best risk adjusted return to be had. To convince myself, I downloaded the annual returns of the S&P 500 going back to before the Great Depression, then I looked at the best, worst and average 5, 10, 15 and 20 year returns. What I found was on average, you can expect just under 12% per annum in the very long term.

The worst ever 10 year return was close to break even, and surprisingly it wasn’t the during the Great Depression, it was the 10 years during the 2000’s after the tech bubble burst.

Even if we are in a post-Covid bubble now, I honestly don’t see 10
Year returns being less than break-even. And, the worst 15 year return is still a healthy mid-single digit, better than any fixed deposit. No guarantees for the future, but I’m convinced.

[Lisafuller]

As someone who works in the banking technology sector I'm all for technology. But at the moment I can't see the benefit of crypto. To me, it looks like going to a casino.

Exactly, it’s like taking a high risk gamble every single time. Just like stocks, but without any basis to be successful.

[Lisafuller]

I know people in my office who have been working for over a decade and are just sitting on a pile of cash savings. Personally, I believe that stocks, when invested in a sufficiently diversified manner, have the best risk adjusted return to be had. To convince myself, I downloaded the annual returns of the S&P 500 going back to before the Great Depression, then I looked at the best, worst and average 5, 10, 15 and 20 year returns. What I found was on average, you can expect just under 12% per annum in the very long term.

The worst ever 10 year return was close to break even, and surprisingly it wasn’t the during the Great Depression, it was the 10 years during the 2000’s after the tech bubble burst.

Even if we are in a post-Covid bubble now, I honestly don’t see 10
Year returns being less than break-even. And, the worst 15 year return is still a healthy mid-single digit, better than any fixed deposit. No guarantees for the future, but I’m convinced.

My thoughts exactly. Compared to the pathetic 0.050-3% interest you’d get with mainstream banks, stocks are the best way to go.