How To Keep & Grow Your Money #8

In this letter we analyse the Vanguard Total World Stock ETF

Ticker: VT | Price: $115.17 | Market Cap: $50.7B | Average 10-Year Annual Return: 8.89%

What is it (short): The Vanguard Total World Stock ETF is an exchange-traded fund that offers investors a way to gain exposure to a broad array of stocks from all over the world.

What is it (long): This ETF seeks to track the performance of the FTSE Global All Cap Index, which includes large, mid, and small-cap stocks from both developed and emerging markets. Essentially, it's a convenient way to invest in a globally diversified portfolio with a single purchase.

Our thoughts: This ETF is an excellent choice for investors who want a simple, low-cost way to invest in a globally diversified portfolio, providing broad exposure to both developed and emerging markets.

Do your own research and if you would like to take our free course to learn how to invest into ETFs and Index Funds at Index Institution™ go here.

Top Countries With No Property Taxes?

If you're interested in owning property without the burden of annual property taxes, several countries offer this advantage, making them attractive for investors and expats alike. Here are some notable options:

Monaco: Known as a playground for the wealthy, Monaco does not impose annual property taxes. However, there is a one-time transfer duty when purchasing property, but no ongoing tax, making it a highly sought-after location for luxury real estate.

Malta: Malta offers no annual property taxes, which makes it a favorite among European expats. Although there's a stamp duty when purchasing property, the absence of yearly taxes can result in significant savings over time.

Georgia: In Georgia, most residents don't pay property taxes unless their Georgian-sourced income exceeds a certain threshold. For those with income below 40,000 GEL (about $15,000), there's no property tax, making it a favorable location for low-cost living.

Fiji: Fiji does not impose property taxes on freehold land at the national level, although some municipalities may charge local property rates. This lack of national property taxes, combined with the possibility of obtaining permanent residency, makes Fiji an attractive destination for property investment.

Cayman Islands: The Cayman Islands are a well-known tax haven, with no property, income, or capital gains taxes. However, there is a 7.5% stamp duty when purchasing property, but no ongoing property tax, making it a prime choice for long-term real estate investment.

These countries offer a combination of tax benefits and attractive living conditions, making them excellent options for those looking to own property without the financial burden of annual taxes.

Read more on this here and if you would like to explore legally paying less taxes and maximizing your freedom check out Global Optimizer™ or click here.

Financial concept to learn in this edition: Value Investing

What Is a Spread?

In finance, a spread refers to the difference between two related prices, rates, or yields. The term "spread" can be used in various contexts, but it generally indicates the gap between values in a financial transaction or comparison.

Key Types of Spreads:

1. Bid-Ask Spread: This is one of the most common types of spreads. It represents the difference between the bid price (what buyers are willing to pay) and the ask price (what sellers are asking for) of a security, such as a stock, bond, or commodity. The bid-ask spread is essentially the transaction cost of trading that security.

2. Spread in Trading Positions: In trading, a spread can also refer to the difference between the prices of two related positions, such as buying one security (going long) and selling another (going short). This strategy, known as a spread trade, is often used in options and futures trading to minimize risk or maximize potential profit.

3. Interest Rate Spread: In lending, the spread can refer to the difference between the interest rate charged by the lender and a benchmark rate, like the prime interest rate. For example, if the prime rate is 3% and a mortgage is offered at 5%, the spread is 2%.

4. Underwriting Spread: In underwriting, the spread is the difference between the amount an underwriter pays to purchase a security from an issuer and the price at which the security is sold to the public. This spread represents the underwriter's compensation for taking on the risk of selling the security.

Why Are Spreads Important?

Spreads are important because they reflect the cost, risk, and potential profit in various financial activities.

For example, a wider bid-ask spread often indicates lower liquidity and higher transaction costs, while a narrower spread suggests higher liquidity and lower costs.

In trading, understanding spreads can help investors make informed decisions about entering or exiting positions.

Spreads are used by traders, investors, and financial professionals to assess market conditions, make investment decisions, and manage risks.

To learn more about Spread read more on Investopedia here.