American expat looking to invest problems.

If you have back taxes in the US (the only reason I can think that you would need to cough up large sums of money for not reporting) you are almost certainly going to have to pay them before you can invest in the US stock market. I believe reporting is a requirement for all brokerages to have access to the US markets and they are required to provide you with your tax paperwork at the end of each year (no matter if it is a foreign brokerage or not). I also have to pay taxes to foreign countries that I own stock in, so this goes both ways. I don't think the rules are ridiculous here. They want to make sure people are paying their taxes as there is a potential for huge amounts of capital gains to be hidden overseas.

You are going to have to pay your taxes if you want to invest. If you don't want to pay taxes that's fine I guess, but don't expect any bank to take on the risk and burden of turning a blind eye to that.

I use Schwab. Easy to use, no minimum dollar amount to open an account for Americans, free checking account with ATM fee reimbursement. I don't know how they would handle you owing taxes as I'm quite sure they specifically asked this and made me check a box to promise that I didn't owe the government taxes and they certainly aren't going to refuse to report your income to the USG.

 

Schwab has a newer robo investor account option as well for those that do not want to pick their own stocks/ETFs. Answer a few questions to determine your investing goals (income/growth/short term goals/etc) and risk levels and they will sort everything out for you. I think the minimum account balance for this option to be free is 5k USD. Three out of my 4 accounts (rollover/roth/traditional IRAs) with Schwab are with their robo investor option, only my personal dividend/income account is managed by me personally. I pull in far better dividend income from the personally managed one than the Schwab robo investor does but mine may (possibly) be subject to higher tax rates (I'll find out next month how well I did with the tax loss harvesting...my realized gains were HEAVY in the red, mainly due to COVID).

Prior to Schwab I used the WealthFront robo investor. I hated it. No option to pick your own stocks or control where your money was going. I didn't stick with it long enough to know if it was going to provide any returns.

Schwab, and a few other banks, also blocked trading for those stocks. I think that was mainly for people trading on margins (buying stocks with someone else's money). Worth a watch if this is a concern for you. (If you are new to trading you should not be even thinking about options.)


I think this guy gives pretty solid trading/dividend income advice (for the most part, I disagree strongly with a few of his picks) and my portfolio is pretty much in line with his.

https://youtube.com/c/JosephCarlsonShow

Btw, he uses something called M1 Finance. I really like their user interface and they offer fractional shares. If I were just starting off and/or had limited investment income I would probably go with them.

I'm not sure how they would know you are an expat. That is in no way a legal term/citizenship status...you are American or you are not American. Since you have a SSN I see no reason why they wouldn't open an account for you. Give them a PO box/forwarding address and nothing more.

 

No. I'm comparing Schwab's robo investing to WealthFront's robo investing. I did not like WealthFront's UI at all. Extremely basic and, at the time I was using it, it did not offer nearly as many features/risk factors/financial goals and did a pretty poor job at explaining how it all worked. (It is worth noting that when I was using WealthFront Schwab did not seem to have much going on with their robo investing that I am aware of.)

My comment on my personally managed portfolio was comparing it to Schwab's robo investor. I have one account with the robo investor set to "income" and they play it extremely safe (even with the risk level maxed out) and the income it provides is nowhere close to what my personally managed portfolio is. The robo investor likes to hold a lot of cash (12%) as well when set to income and there is no way for me to change this. I understand this is a sound financial decision for most people who would have selected this financial goal but isn't a fit for me and I had to move some money around for it to make sense.

I think you just have look at the ETFs they are selecting. There is nothing magical about these robo investors and I believe there is a team of people behind the scenes hand selecting these extremely safe (even at the highest risk levels) stocks/ETFs/bonds for each risk level.

It isn't an option at all for people who want to pick their own stocks.

Yes, that is an option.