Many people who aren't from New Zealand would be shocked to learn the country is home to just 4.6 million people. After all, Kiwis are everywhere—or so it seems. The Telegraph reported in 2010 that roughly a quarter of New Zealand's skilled workforce had fled the country.¹ No other developed nation has a poorer record retaining skilled workers.

Higher wages abroad might be the reason. According to The Telegraph, highly skilled Kiwis abroad earn 78 percent more than they can in their home country.² If you're reading this, you're likely one of them—or thinking about taking the plunge.

Those living overseas can open accounts at any of the offshore brokerages listed in Chapter 9.

New Zealanders who wish to repatriate one day may want exposure to their home country stock market. But options were previously limited without choosing a New Zealand stock index domiciled in the United States.

Fortunately, Swissquote offers a solution. The brokerage offers access to New Zealand's stock exchange. The Smartshares New Zealand Top 50 Fund ETF (FNZ) tracks 50 of the largest stocks in the country. It charges an expense ratio of 0.50 percent per year.³

Smartshares Total World Stock Market ETF (TWF) provides exposure to global stocks. It costs 0.56 percent per year. The company's New Zealand Bond Market ETF (NZB) costs 0.54 percent per year.⁴

Table 15.1 shows portfolio models for Kiwi investors.

Swissquote, however, charges more for New Zealand market trades than it does when investors buy off most other stock markets. As of this writing, they charged 0.9 percent of each purchase or a minimum of $250 NZD.⁵ Investors who want slightly lower exposure to the Kiwi market might choose to be creative to lower investment fees.

They could build a portfolio using Swissquote that uses two different exchanges. Table 15.2 shows examples.

Please see Chapter 13 for an example of how to rebalance a portfolio of ETFs that trade in different currencies.

Globally nomadic Kiwis might not want to retire in New Zealand. Such investors might prefer to ditch the New Zealand bias. Portfolio samples for these investors can be seen in Table 15.3.

Socially Responsible Investing (SRI)

In Chapter 10, I wrote about socially responsible investing. It's a tricky topic because people's opinions and ethics differ. For example, one company might give me the warm and fuzzies. But to you, it's the devil. Take McDonald's. To my knowledge, no SRI fund has scratched it from their list. But the firm makes people fat. It increases the odds of cancer, heart disease, and a range of other nasty ailments.

SRI funds typically avoid weapons manufacturers, alcohol businesses, gambling firms (like casinos), adult entertainment firms, and companies associated with nuclear energy.

New Zealanders could use the iShares Dow Jones Global Sustainability Screened ETF (IGSG). It trades on the London Stock Exchange and it's listed in US dollars. Its expense ratio is 0.60 percent. It reinvests dividends into new shares automatically.

As you might recall from Chapter 10, it doesn't matter what currency an ETF is listed in. This ETF is priced in US dollars. But it isn't a US dollar or a US stock market investment. As with other global funds, it's an investment in the world: virtually every global market and every global currency wrapped into a single ETF.

If, for example, the US dollar lost 50 percent against the average global currency tomorrow, this ETF would double in price tomorrow.

Do You Have What It Takes?

If you build one of the above portfolios, I can promise one thing. Over an investment lifetime, your portfolio will outperform about 90 percent of professional investors after fees on an equal risk‐adjusted basis. That means the balanced portfolios I listed, for example, will beat most professional investors who choose 60 percent stocks, 40 percent bonds. The aggressive portfolios I listed will beat about 90 percent of professional investors who choose 90 percent stocks, 10 percent bonds.

But most people who build a portfolio of ETFs obsess about crazy things. They try to figure out which ETFs have earned the best historical returns—thinking the past will equal the future. They try to second‐guess whether it's a good time or a bad time to invest in the stock market.

They seek what they hope will be “the perfect” allocation of stocks and bonds. They also obsess about finding the perfect (or the cheapest) ETF. They often stress about the economy and worry how it might affect their investments.

As I said before, building a Couch Potato portfolio is easier than peeing in a cup. But plenty of people (especially men) make a giant mess. They tweak things. They think they, or somebody they read about, owns a working crystal ball. People who know a lot about the markets and the economy are often some of the worst investors. They can't seem to shake the fact that they should leave things alone and stick to something simple. If that describes you, this isn't going to work. Don't build your own portfolio of ETFs. Go back to Chapter 8. Pick a financial advisor. Let the advisor build you a low‐cost portfolio instead.

There's plenty of hope, however, for humble people who can laugh at peer pressure. After all, the portfolios I listed above will trounce the performance of about 90 percent of investment professionals. If you're patient and you stick to the game plan, you will outperform almost everyone. That won't happen every year (or even every decade). But over your lifetime, you will outperform most professional investors after fees.