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HOW TO INVEST: Outside Of USA (Non-US Resident) - YouTube
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how's it going today guys welcome back
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to the channel hope you're having a
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great day so far so in this video today
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I'm going to be answering one of the
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questions that I've been getting on
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almost a weekly basis for the last two
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years and I apologize has taken me this
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long to make this video but what we're
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going to be talking about today is how
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to invest in the u.s. stock market when
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you are from outside of the United
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States so I know that when you make
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videos on YouTube it is a global
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audience and a lot of my viewers are
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actually not even from the United States
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and you may decide that you want to
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participate in the US stock market well
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I'm gonna show you guys three different
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brokerages out there that may allow you
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to do this and we're gonna go through
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some pros and cons of each method
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because some are definitely better than
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other options out there and if you do
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decide at the end of this video that you
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want to sign up for one of these
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different brokerage accounts I've
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included links in the description below
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I am affiliated with first trade that is
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one of the options that I discuss in
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this video the other two I have no
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affiliation with but if you do decide to
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use my affiliate link it's totally
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optional but it is a way to give back to
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me for putting this video together at no
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additional cost to you so your use of
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that link is definitely appreciated but
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never required so starting off with
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number one here my number one choice for
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investing in stocks when outside of the
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US is going to be going with first trade
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now first trade is the top of my list
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for a number of different reasons that
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we're going to get into in a little bit
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here but essentially first trade is a
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zero Commission brokerage out there that
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has a zero dollar minimum account
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balance as well and they allow a number
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of different countries to participate in
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the US stock market so if your country
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is on this list of approved countries
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for first trade you can open up a
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brokerage account with them without
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being a permanent US resident or
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resident of us at all and you also do
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not need a social security number or tax
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identification number now the list of
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approved countries is definitely a
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little bit limited but this is because
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of tax reasons at the end of the day if
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you're investing in the US market as a
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non-us investor
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there are definitely tax implications
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associated with
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and there are only certain companies
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where they have participation agreements
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in place for taxation so the list of
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approved countries that are allowed to
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invest in US markets through first trade
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include China Taiwan Hong Kong Macau
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Japan Mexico New Zealand Singapore South
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Korea and Israel so if you are in one of
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those approved countries you can invest
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in US markets through first trade if
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you're not you're going to want to hear
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about option number two and option
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number three in a little bit now what's
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important to note here is that if you
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are investing through first trade with
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an international account you are
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actually owning the underlying assets
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and if you're a u.s. resident investing
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in US stocks you probably have
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absolutely no idea what I'm talking
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about but in a little bit here for
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number two and number three we are gonna
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have to introduce an investment vehicle
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known as a CFD which is entirely
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different than owning an actual stock
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itself but if you are investing to a
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first trade and you're on one of those
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approved countries you are owning the
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underlying assets themselves and you are
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not purchasing what is called a CFD so
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option number two is a very popular
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trading app that allows you to trade
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crypto currencies Forex stocks bonds
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ETFs all kinds of things of that nature
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known as eToro now eToro is not allowed
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in the United States again due to tax
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reasons and different reasons of that
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nature
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possibly regulation issues as well which
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we're going to get into in a little bit
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here now if you're from outside of the
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US they participate with about 60
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different countries it's too many for me
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to list in this video but they have many
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helpful resources on their website that
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tell you what countries they are allowed
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to participate with but there is a huge
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difference with using eToro
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versus first trade and that is that when
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you buy stocks on that platform you
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don't actually own the underlying asset
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instead what you're purchasing is
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something called a CFD and a CFD is
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known as a contract for difference and
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again this means that there is no
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ownership of the underlying
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acet in this case the stock essentially
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what you're purchasing is something
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called a derivative and this is a type
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of speculative investment vehicle so
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essentially the price of the CFD is
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derived from the underlying price of
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that stock but you have no underlying
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ownership of the actual stock itself so
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there are many risks associated with
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trading CFDs that you need to be
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familiar with in fact according to an
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investor pedia article about CFDs 66% of
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people who buy CFDs or trade them end up
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losing money so you want to be familiar
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with what they are and have a good
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understanding of them before you trade
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CFDs on any platform like eToro so it
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goes without saying guys
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CFDs should be considered a pure
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speculation personally I would not
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recommend investing in them if you do
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decide to make sure you do your research
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and due diligence and have a good
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understanding of derivatives and the
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type of risk involved with that type of
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speculation but that being said you are
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able to trade ETFs Kryptos Forex stocks
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through CFDs in over 60 countries
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through the eToro platform and then
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third and finally on the list here we
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have a rapidly growing brokerage
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platform from the United Kingdom known
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as DJ row now - Iroh is a little bit
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different than eToro because based on
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what country you are in in some cases
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you are buying the underlying stocks
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themselves and in other countries you
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are buying what is called the CFD which
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we just discussed with option number two
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so before you go out there and invest
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with the gyro you want to make sure
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you're actually purchasing the
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underlying stocks if that's what you are
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aiming to do if you're comfortable with
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the risks associated with CFDs and you
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want to trade them that's entirely your
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decision now de gyro participates with
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18 different countries right now and
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each country has a country specific
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website so if they do participate with
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your country I would definitely
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recommend clicking on that country
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specific website doing some more
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research and understanding whether or
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not you are trading actual stocks where
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you own the underlying asset
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or are you simply trading these CFDs but
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anyways guys those are three different
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options you have in front of you for
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investing in the US stock market when
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you're outside of the US and again the
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reason why you can't just open up a
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traditional brokerage account with one
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of these mainstream US brokerages is
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because of issues with regulation and
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primarily taxation but there's a couple
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of options there obviously I would
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definitely recommend first trade if you
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are in fact in one of those countries
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they participate with and the other two
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options there I would personally not get
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involved with CFDs but if you understand
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the risks involved and you're
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comfortable with it that's entirely up
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to you
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but thank you guys so much for watching
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this video I hope you enjoyed it and I
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will see you in the next one
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