COMPLETE GUIDE to US Stock Market Investing! | Ankur Warikoo Hindi

Summary

This video offers an in-depth guide to investing in the US stock market for Indian investors, addressing key concerns like currency conversion, brokerage accounts, stock selection, and the tax implications of buying and selling. The presenter shares personal investment strategies, endorses the use of INDmoney for seamless transactions, and highlights the benefits of diversifying investments beyond the Indian market, including the potential for higher returns and currency appreciation.

Takeaways

• 🌟 Investing in the US stock market is an exciting opportunity with potentially higher returns than the Indian market, as demonstrated by the speaker's personal experience and data comparison.
• 💰 The US stock market is home to the world's largest and most global companies, making it a financially attractive market for investment.
• 📈 The speaker's portfolio allocation is 40% in the US, 35% in India, and the rest in crypto, start-ups, etc., indicating a diversified investment strategy.
• 🔄 The Liberalized Remittance Scheme (LRS) allows Indian citizens to send up to $250,000 outside India annually for various purposes, including investment.
• 💡 INDmoney is a platform that facilitates the transfer of Indian rupees to US dollars at competitive exchange rates and without transfer charges, simplifying the investment process.
• 🛒 DriveWealth, the brokerage company used by INDmoney, allows buying and selling of US stocks, including fractional shares, which is not possible in the Indian market.
• 📊 The US stock market offers the ability to invest in Exchange Traded Funds (ETFs) like the S&P 500 ETF from Vanguard, providing a simple way to diversify investments.
• 📉 Taxes on US stock investments include capital gain tax (short-term and long-term) and dividend tax, which are claimable when filing income tax returns in India.
• 💸 The only cost associated with INDmoney for transferring money back to India is a $5 withdrawal fee, regardless of the amount transferred.
• ⚠️ If transferring more than ₹700,000 from India to the US, a 5% TDS must be paid, which is claimable when filing income tax returns.
• 📈 Investing in the US stock market can benefit India by bringing money back into the country, paying taxes, and contributing to the economy.

Q & A

Why should one consider investing in the US stock market according to the video?

The video suggests that the US stock market offers exciting opportunities with better growth compared to the Indian stock market, despite having similar volatility. Historical data presented indicates higher returns from the US market over a five and ten-year period, taking into account the appreciation of the US dollar against the Indian rupee.

What is the Liberalized Remittance Scheme (LRS) and how does it relate to investing in the US stock market?

The Liberalized Remittance Scheme (LRS) allows Indian citizens to send up to $250,000 outside of India in a financial year for various purposes, including investment in the US stock market. This scheme simplifies the process of transferring funds internationally for investment purposes.

How has the process of transferring money to the US for investment improved as per the video?

The process has become more streamlined and cost-effective with platforms like INDmoney, which eliminates the high charges and exchange rate issues that were previously associated with bank transfers. INDmoney also provides a seamless experience for converting Indian rupees to US dollars.

What brokerage company does INDmoney use for facilitating US stock purchases?

INDmoney uses DriveWealth, a well-established online brokerage company, to facilitate the buying and selling of US stocks on behalf of its users.

How does the concept of fractional shares in the US stock market differ from the Indian market?

Fractional shares in the US stock market allow investors to buy a portion of a share, unlike the Indian market where one must buy whole shares. This makes it possible for investors with limited capital to invest in expensive stocks.

What is an ETF and how does it relate to investing in the US stock market?

An ETF, or Exchange-Traded Fund, is equivalent to a mutual fund in the US and represents a basket of stocks managed by a portfolio manager. It offers a simple way to invest in a diversified portfolio, such as the S&P 500, without the need for individual stock research.

What are the tax implications for an Indian investor when investing in the US stock market?

Indian investors need to be aware of both short-term and long-term capital gain taxes based on the duration they hold the investment. Additionally, there is a 25% withholding tax on dividends received from US stocks, which can be claimed when filing the income tax return in India.

What is the significance of the five-dollar withdrawal fee mentioned in the video?

The five-dollar withdrawal fee is the only cost associated with transferring money back to India from the US investment account through INDmoney, regardless of the amount being transferred.

How does the appreciation of the US dollar impact the returns on US stock market investments for Indian investors?

The appreciation of the US dollar against the Indian rupee can enhance the returns for Indian investors when they convert their US earnings back to rupees, as they receive more rupees for each US dollar.

What is the role of the State Bank of Mauritius (SBM) in the investment process described in the video?

The State Bank of Mauritius (SBM) acts as an intermediary bank account that INDmoney uses to facilitate the transfer of funds to and from the US investment account.

What advice does the video provide regarding the frequency and amount of money to transfer back to India from US investments?

The video suggests transferring money back to India in bulk, preferably amounts of at least $500, to make the five-dollar withdrawal fee more cost-effective. It also emphasizes the safety and security of keeping funds in the US investment account for potential future investments.

Outlines

00:00

🌟 Introduction to US Stock Investing

The speaker introduces a comprehensive guide to investing in the US stock market, addressing common questions from viewers. They share their personal experience, highlighting that 40% of their portfolio is in the US market, which has provided better returns than the Indian market. The video aims to discuss six key topics: the rationale for investing in the US market, currency conversion processes, methods for buying US stocks, the process of selling stocks, associated charges and taxes, and the procedure for repatriating funds to India. The speaker emphasizes the importance of considering the US market due to its potential for growth and the appreciation of the US dollar.

05:02

💼 Benefits of US Stock Market Investment

The speaker elaborates on the benefits of investing in the US stock market, comparing the historical performance of the Indian Sensex and the US S&P index. They demonstrate through a five-year and ten-year analysis that the US market, coupled with the appreciation of the US dollar, can yield higher returns than the Indian market. The speaker also clarifies misconceptions about investing abroad, stating that repatriating funds to India ultimately benefits the country's economy. They share their own portfolio distribution and encourage viewers to consider a diversified investment approach, including the US market.

10:03

💼 Process of International Money Transfer

The speaker explains the process of transferring money from India to the US for investment purposes under the Liberalized Remittance Scheme (LRS). They detail the ease of transferring funds using INDmoney, which eliminates the high charges and exchange rate issues that were previously associated with bank transfers. The speaker demonstrates how to use INDmoney for a seamless and cost-effective transfer, emphasizing the platform's user-friendly interface and the benefits of its partnership with DriveWealth, an online brokerage company.

15:04

🛒 Buying US Stocks and Fractional Shares

The speaker outlines the process of purchasing US stocks through the DriveWealth platform facilitated by INDmoney. They highlight the ability to buy fractional shares, which allows investors to purchase less than one full share, thus making investing more accessible. The speaker illustrates this feature with an example of buying Tesla shares, showing how even with a limited amount, one can participate in the market. They also discuss the ease of tracking transactions and the importance of doing one's own research before investing.

20:06

📉 Selling Stocks and Investing in ETFs

The speaker describes the process of selling US stocks through the same platform used for purchasing. They detail the steps to place a sell order and the automatic execution once the market opens. The speaker also discusses the availability of a variety of stocks and suggests investing in Exchange Traded Funds (ETFs) for those who prefer a diversified approach without extensive research. They recommend the Voo ETF from Vanguard as a simple way to invest in the S&P 500 index.

💰 Taxes, Charges, and Repatriation of Funds

The speaker addresses the tax implications of investing in the US stock market, explaining the differences between short-term and long-term capital gains tax. They also mention the withholding tax on dividends and how it can be claimed when filing an income tax return in India. The speaker provides advice on minimizing costs, such as repatriating funds in bulk to reduce the impact of the withdrawal fee. They also touch on the TDS applicable on large transfers and the ease of obtaining necessary tax documents through INDmoney.

Keywords

💡US Stock Market

The US Stock Market refers to the various stock exchanges where securities for public companies are bought and sold in the United States. It is a central theme of the video, as the speaker discusses the benefits and process of investing in this market from India. The speaker mentions that the US market is 'more exciting' and offers 'better returns' than the Indian market, using the S&P index as a measure of its performance.

💡Investment

Investment in this context is the act of committing money or capital to a venture or asset with the expectation of generating income or profit. The video provides a guide to investing in the US stock market, emphasizing its potential for high returns and the process of transferring funds from India for this purpose.

💡Currency Conversion

Currency Conversion is the process of exchanging money from one currency to another. The script discusses the importance of converting Indian Rupees (INR) to US Dollars (USD) for investing in the US stock market. It also touches on the exchange rate fluctuations and their impact on investment returns.

💡LRS (Liberalized Remittance Scheme)

LRS is a facility provided by the Indian government that allows residents to freely transfer up to a certain amount of money outside of India for various purposes, including investment. The script explains that under LRS, an Indian citizen can send up to $250,000 per financial year to invest in markets like the US stock market.

💡Brokerage Account

A brokerage account is an account opened with a broker to trade financial instruments like stocks, bonds, and ETFs. The video script explains that to buy stocks in the US, one needs to open a brokerage account with a company like DriveWealth, which is used by INDmoney to facilitate the purchase of US stocks.

💡ETFs (Exchange-Traded Funds)

ETFs are investment funds that are traded on stock exchanges, similar to individual stocks. They hold a basket of different stocks and are managed by a portfolio manager. The script suggests ETFs, specifically the S&P 500 ETF from Vanguard, as an easy and diversified way to invest in the US stock market.

💡Fractional Shares

Fractional Shares allow investors to buy a portion of a full share, which is particularly useful when the price of a share is high. The script highlights that the US stock market permits the purchase of fractional shares, enabling the speaker to buy a part of a Tesla share with less capital.

💡Capital Gains Tax

Capital Gains Tax is a tax on the profit made from selling an investment such as stocks. The video script differentiates between short-term and long-term capital gains tax, explaining that the tax rate depends on the holding period of the investment and that these taxes must be paid in India.

💡Dividend Tax

Dividend Tax is the tax levied on the dividends received from stocks. The script mentions that the US withholds a 25% tax on dividends, which is similar to the concept of TDS in India. This tax is withheld in the US but can be claimed when filing an income tax return in India.

💡TDS (Tax Deducted at Source)

TDS is a system used in India where tax is deducted at the source of income before it is credited to the taxpayer's account. The script relates this to the US dividend tax withholding, explaining that the withheld tax can be claimed when filing the income tax return in India.

💡INDmoney

INDmoney is a platform mentioned in the script that facilitates the process of investing in the US stock market from India. It provides services for currency conversion, transferring funds, and buying and selling stocks through its partner, DriveWealth, without charging any fees for these transactions.

Highlights

A complete guide to US stock investing is provided, addressing key questions for potential investors.

Investing in the US stock market is presented as an exciting opportunity with potentially better returns than the Indian market.

The process of converting Indian Rupees to US Dollars for investment is explained, including charges and methods.

Investors are guided on how to buy US stocks, including the use of online brokerages and the selection of stocks or ETFs.

The selling process of US stocks and understanding the associated charges is discussed.

Details on the charges and taxes involved in US stock investing, including the importance of tax documentation.

A comparison of the performance of the Indian and US stock markets over five and ten years, highlighting the growth and conversion rate impact.

The role of the Liberalized Remittance Scheme (LRS) in transferring funds for investment purposes.

The use of INDmoney for a seamless and cost-effective process of transferring money and investing in US stocks.

The security of investments even if the intermediary service faces issues, as stocks are held by an independent brokerage.

The allowance of fractional shares in the US stock market, enabling investors to purchase less than one full share.

The simplicity of buying and selling stocks through the online platform, with examples of stock transactions.

Recommendations for new investors, including the option to invest in ETFs as an equivalent to mutual funds.

The tax implications for dividends received from US stocks, including the withholding tax and its reclaim process.

The potential need to pay TDS when transferring large amounts for investment, and its reclaim during tax filing.

The final step of repatriating earnings back to India, with a nominal fee for withdrawal through INDmoney.

The overall benefits of investing in the US stock market for Indian investors, including potential gains from currency appreciation.

Transcripts

If you want to invest in US stock market

then I'll give you, in this video,

a complete guide to the US stock investing.

Friends, US stock investing is a

very interesting market to invest in

and a lot of people have asked in parts

that what to do,

how to transfer the money,

which stocks to buy,

what should we do to

sell, what are the charges,

what are the taxes,

how to get the money back?

So I thought why don’t I

dedicate a complete video on this.

This is a complete guide

to US stock investing.

I’ll try to answer six questions in this.

Number one,

why even invest in the US stock market?

Is Indian stock market not worth it?

So, I’ll try to, hopefully,

convince you with data

that US stock market

is an equally exciting,

infact more exciting opportunity to invest.

Number two, if you want to

invest in the US stock market,

you need to convert your Indian rupees

internationally, to US dollars.

What’s the process for it?

What are the charges for it?

How to do it? We’ll try to know that.

Number three, once your money has reached there,

then how do you actually

go about buying US stocks,

what are the ways to do it?

What stocks to buy?

Is there any equivalent for stocks

or for mutual funds,

we’ll try to know that.

Number four, when you

have already bought the stocks

and you want to sell them at some point,

then what is the process of selling

the US stocks on your own?

Number five, to do all of these things,

what are the charges, what are the taxes,

we’ll try to know this.

And finally, number six

when you want to get that money back

to your bank account in India,

what is the process and charges for it?

Through these six questions,

you’ll get to know all those things,

that are necessary for you to

start your US stock investing journey.

The very first question,

why should we invest

in the US stock market?

I’ll start with my facts,

in my whole portfolio,

40% of my investments

are in the US stock market,

I had started it around 2½ years ago,

and I am so happy that I did that

because I got better returns

than the Indian Stock market,

and I have been able to do it in a manner

where it is just as risky

or not as risky as the Indian stock market.

Volatility is the same.

But, the growth is better.

And here is how

I want you to look at that as well.

So, if you want to compare the US

and Indian stock market,

then you have to consider three things.

First one,

how is Indian Stock market performing?

For that, I’ll consider Sensex.

Sensex is the best measure,

for how is India’s stock market performing.

Second,

how is the US stock market performing?

For that, the best measure is

what’s called the S&P,

Standards and Poor’s index.

And number three

which is equally important,

that how is USD and INR coversion moving?

Because you convert your

money from rupee to dollar.

And when you take the money back,

then it’ll be returned with the exchange

rate applicable on that particular day.

If the conversion rate has moved, then that

also is a factor in your investing journey.

What I did was,

I tried to make a graph for five years.

To calculate the return of five years,

I considered the date as April, 2017.

And the Sensex, five years ago

was around 29,365.

And today, it’s around 60,000.

That means a return of 101%,

which means it almost got doubled.

S&P, on the other hand, five years ago,

it was around 2032 and now it’s 4500.

This is the value of index.

It means that has grown by 91%.

So, lesser than the Indian stock market,

but, if you look at the exchange rate,

five years ago US dollar was around ₹65.

And today, it’s around ₹76.

That means the US dollar has increased by

17% as compared to Indian stock market.

So, if you would have converted your

rupees to dollars five years ago,

then you would have done it for ₹65.

If you get those dollars back to India,

you’ll get them at the rate of ₹76.

When you calculate all of that,

you ask yourself if I would have

invested one lakh rupees, five years ago,

then in India, you would have

got two lakhs instead of one.

Double, which is not bad at all.

Fifteen percent annual return

for five years, not bad at all.

But if you had invested the same

money in S&P or the US stock market,

then you would have got ₹2,24,000

which is a return of 18%, every year.

That is the power of the US stock market,

and the appreciation of the US dollar.

Now, when you do this, please remember,

it’s not about devotion towards country.

This is something I want to stress upon.

When you sit in India and

invest in the US stock market,

and bring the money back to India,

then the beneficiary of that is India,

because you are bringing

money back to the country.

So what you are doing essentially, is what

in my opinion is the best thing you can do.

You invest in the Indian stock market,

which is something that

you should continue to do,

because in next 10 to 20 years,value of

the Indian stock market is going to be great

depending on how the economy works.

But, if you invest in the US

stock market too, sitting in India,

and when you bring those

dollars back into India,

it helps the economy.

This was for five years analysis.

If the same analysis was for ten years

then how would you do

it, and here is the answer.

Ten years ago, Sensex was around 17,000.

That means a return of 245% in ten years.

And S&P was at around 1400, so 220%.

But, in those ten years,

US dollar went from ₹50 to ₹75.

Which is an increase of 47% and

which means in the past ten years,

Sensex has given us annual return of 13%

US stock market S&P gave us return of 17%.

And that’s a marked difference

in the return.

This is the simple reason,

why you should invest in the US stock market.

It is home

to the largest brands in the world.

It is home

to the most global companies in the world.

And it is financially

a better market to be in.

So, like I did,

40% of my investments are in the US,

35% are in India

and the remaining is invested in

Crypto, start-ups and all.

But, this is my portfolio.

Seventy five percent is in the stocks.

in which almost half-half

is in the US and India,

and I would love for you to do that.

Now, to do this,

earlier the process used to be very tough,

there was a lot of paperwork,

and it was very expensive.

But, not so much, anymore.

So, let’s come to the next question.

How do you actually move

your money from India to the US?

To invest in the US stock market

you need to send the Indian rupees

from India to the US.

And convert them into US dollars.

This happens under something called LRS

Liberalized Remittance Scheme.

The government says that any

Indian citizen, in a financial year,

that means between 1st April to 31st March

can send $250,000 outside

of India, for whatever purposes.

It can be for education,

if you/your kids are going to study abroad.

It can be for investment,

if you are investing in the equities,

if it’s publicly listed

which is US stock market,

or privately listed, if I am investing

in a start-up that is US incorporated,

then I have to send money

through LRS; so on and so forth.

So, in a year,

you just need to give a declaration,

and the government,

in liberalized manner, gives the permission

to send $250,000 or 1.8 crore rupees.

Which is a lot of money.

So, I don’t think most of us will get there,

and this is fairly good for us.

Earlier, to send money through LRS,

there used to be a very cumbersome process

where you had to go to the bank,

you had to declare

what needs to be done and why.

You had to fill a lot of paperwork.

Declarations, forms and all.

And it used to be extremely

time consuming and expensive.

First one, the banks knew that

this person is sending US dollars,

he must have money.

So, they used to charge a lot of money.

Banks used to charge anywhere

between ₹1000 to ₹2000 for

every transfer, irrespective

of the amount you are sending.

If you are sending $5000,

he’ll charge you ₹2000.

If you are sending $1000,

he’ll charge you ₹2000.

If you are sending $500,

he’ll still charge you ₹2000.

So, it was fairly expensive.

Second, exchange rates weren’t lucrative.

There is usually a massive spread

of a difference between at

what rate you could buy US dollars,

and at what rate you could sell US dollars.

So, because of these two things,

it was really cumbersome, time-consuming

and expensive to send money outside.

But not now, for my US stock market,

But not now, for my US stock market,

I use INDmoney,

and I would love to go through

this process with you,

so that you may learn that

how this process is very smooth,

very elegant, and it is free of cost.

Really no charges, here is how it happens.

So, to make this video,

I had already transferred around $400.

So, that I could show you all

the buying experience.

But, if I wanted to transfer $100, and the

best part is you can make small payments,

because now, it is zero cost.

INDmoney doesn’t charge you anything

to actually make this transfer happen.

So, let’s say, I want to charge

and I want to charge ₹5,000.

So, it clearly shows,

there’ll be a GST charge of ₹45.

That is something you’ll have to pay.

The total amount for deposit will be 64.62

the exchange rate is already added, which

is the best exchange rate you can get.

Exchange rate would be higher than

the rate you usually see on the Google.

But that is the buying exchange rate,

and this will be true for any

bank experience that you’ll have.

But here is the best part,

you can see, congrats you are saving ₹964

on the transfer charges and FOREX charges.

So, if you do this through any bank,

you would have to pay around ₹1000

extra on the ₹5000 that you want to send,

which is obscenely expensive, 20% cost.

Let’s say I want to transfer ₹65,000.

You see, GST charges ₹117.

It’s very less. No additional charges.

And now, I am saving ₹2,139.

I’ll click on transfer now.

What will happen is my bank account

is already listed,

so I have my HDFC bank account,

which is already listed in there,

so I can say yes.

And then all I have to do is either

through UPI or through net banking,

I can make this payment.

So I want to show you my previous one,

So I want to show you my previous one,

I did $390, on 6th April

in the evening at 6:40.

And you’ll see that on 7th April

in the evening at 5:50,

money had been transferred to my account.

What account is it? SBM,

its an account of State Bank of Mauritius.

That INDmoney will open on your behalf

and that will be used for you to be funding

your US Bank account where money will go.

This is the way you transfer your money

to the US Bank account to start investing.

Now, question number three,

that once your money has reached there,

how will you buy?

If you want to buy stocks in India,

you create a brokerage account.

It may be Zerodha, Groww,

5paisa, so on and so forth.

What is the equivalent for this in the US?

So, INDmoney uses a brokerage

company called DriveWealth.

DriveWealth is a very well known,

well established company,

that acts as an online brokerage

for all international brokerage.

So, you may read as much as you

want about DriveWealth on Google.

It’s a very secured company

and the best part is that DriveWealth

powers a lot of online brokerages.

So, it’s not just with INDmoney

but it’s business is to do this

for a lot of other companies.

When you convert your Indian rupee

to US dollar with INDmoney

and send it to the US and then you,

go through the process of buying.

you are actually buying, through

DriveWealth.

So, all your stocks are in DriveWealth.

That is the beneficiary of your stocks.

INDmoney is only an intermediary that is

giving you a product to go

through this experience.

It converts your Indian rupees to US dollars,

it buys your stocks through DriveWealth

it sells your stocks through DriveWealth

and when you need your money back,

then again, you get the money

from SBM or State Bank of Mauritius

to your bank account which

is your personal bank account.

All of that is managed through INDmoney.

The question here is, is my money secure?

God forbid, what if something happens

with INDmoney, then what happens?

And there the best part is because

Drivewealth which is an independent unit,

is buying and selling stocks on your behalf

so, God forbid, even if

something happens to INDmoney

your stocks are still secure.

Because they are with DriveWealth.

You could sell your stocks

from DriveWealth at any time

and bring your money back to India.

Because that is your custodian

and that is where your stocks are.

To buy, it’s very simple.

To buy, it’s very simple.

As I have $390 in my account,

if I want to buy,

so I will go and let’s say

I want to buy the stocks of Tesla today.

The stocks of Tesla dropped by 3%,

so I think it’s a good buy.

When I go to Tesla’s page,

you see all the data that I want,

how much is it for one day,

how much is it for three months,

how much is it for one year.

So, all the details I can go and check

what are its stats and all.

Everything I would need to make a purchase.

In ‘Buy’, I’ll go in there,

now here’s the best part.

In the US stock market,

fractional shares are allowed.

That means,

one share of Tesla costs, $1025.

That means around ₹75,000.

I only have $400.

So can I buy shares of Tesla?

If the same was in Indian market,

the answer would be no.

I couldn’t have purchased it.

In the US stock market,

fractional shares are allowed.

And what I can do is actually

buy lesser than one unit.

I’ll show you how that works.

So, I want to buy in dollars.

I have $390.

Let’s say I put all of that into my Tesla.

So, with $390.07,

I’ll buy 0.38037426 shares.

I will play the “Buy” order,

and the order has been placed successfully.

Because the market is not open yet,

so, the order has been parked.

When the market opens,

the order will go through.

And I will be able to have

the order in my dashboard.

If you want to see the transactions,

then you’ll see Tesla is queued.

See, for $390.07,

before that I’ve made many transactions,

Tesla, Alphabet, Cloudflare,

please these are not recommendations,

so don’t buy without thinking.

These are just stocks that I have bought.

You don’t have to buy them.

Please do your own research.

But these are the entries

that I’ve done in the past.

So, this is as simple as it gets.

One click purchase which will

be true for any other good product.

And that is how it is seamless.

Now, number four,

if you have bought these stocks,

and now you want to sell them,

then what is the process of selling?

Let’s go through that too.

So, to sell, again I’ll go on “Sell”,

and I can see that how

many stocks I have for Tesla.

So, 12.5873 because these are fractional.

Assume I want to sell the stocks of $50.

So, I’ll sell 0.04875.

Or I can even say this

that I want to sell in shares.

I can say 0.48 or whatever, 0.001.

Yeah, so I want to sell shares worth $10,

0.01 of Tesla shares.

I placed the “Sell” order,

and the order is placed successfully.

as soon as the market opens,

As soon as the market opens,

the order will get placed,

along with my buy order worth $390.

And I’ll be a proud Tesla owner

and a proud Tesla seller

in just one click.

That’s the beauty of a

seamless product like this.

Now, the question that

a lot of people ask me

is that what should we buy in the US stock

because we only know to purchase

Facebook, Alphabet, Google, Amazon.

The good thing is that now SEBI has

also allowed to purchase these from India.

But there are a lot of

really good quality stocks,

that are still not allowed

in the Indian market,

that you can access as

a product of INDmoney.

My suggestion will be the following,

if you already have stocks,

that you know or you want to buy,

because you saw a potential,

you’ve researched and so on.

Of course do that.

If you don’t have,

then buy the equivalent of

mutual funds in the US called ETFs.

ETFs are the equivalent of mutual funds.

Basically a basket of stocks,

managed by a portfolio manager.

And then he’ll give

recommendations to you.

Then you’ll have to buy an ETF.

My simplest recommendation

for an ETF is what’s called Voo.

It’s an S&P that bets on

the top 500 US companies.

So, if you want to bet

on the US stock market

and you don’t want the

headache of what, why, how,

then you can buy an ETF of S&P 500.

It’s from Vanguard. V-A-N-G-U-A-R-D.

S&P 500, ETF and this will

be the best way for you to enter,

this will be also the best SIP

to go through.

Because if you want to invest in

the US stock market every month,

you don’t need headache of

what research, which, how and all.

Then just come buy, whatever you can.

It maybe $100, $200,

$5,000, $10,000, $15,000.

Whatever you can invest,

you can do that.

As you see, it’s free from INDmoney,

so you don’t have to pay any money for it.

And you’ll get into the discipline

of riding on the biggest market that

the world has to offer.

Now, number five, to do all these things,

what are taxes and what is with charges?

First of all, on INDmoney,

everything is free of cost.

Buying and selling of stocks is free.

Transferring money is free.

I have already mentioned selling.

The only charge that you have to pay

is when you get the money back to India,

then you need to pay a

withdrawal fee of five dollars.

My suggestion will be whenever you

want to bring the money back to India,

Please get it in the bulk, atleast $500,

so that, the five dollar will

represent only one percent or lesser,

if you are bringing more than $500.

Don’t get $100 or $50, then

the five dollar will start bothering.

A meaningful cost to pay

and I don’t recommend that.

Keep the money there itself.

They are not going anywhere.

As I said, it is safe and secure,

a third party so your money is

always going to be protected.

Whenever the market falls,

or you want to buy again,

you can obviously use that and it’ll work.

That will be my recommendation.

Apart from this, taxes are very important.

There are two types of taxes

in the US Stock market,

one is capital gain tax,

capital gain tax is also of two types,

long-term and short-term capital gain.

If you buy any stock and

sell it within two years,

then it is called short-term capital gain tax

That means whatever gain you’ve

earned on it was for a short-term.

You need to pay tax for it in India,

as per your income tax slabs.

So whatever your income slab is,

you need to pay taxes based on that itself

and that is something

you’ll have to pay in India,

when you are filing the IT return

at the end of the year.

If you buy any stock

and sell it after two years,

then that classifies as

long term capital gain tax.

That means whatever gain

you’ve earned is in long-term.

And the tax on it is 20% fixed,

this is something that you’ll again have

to pay along with your income tax return.

Good thing about INDMoney is,

at the end of the financial year,

whatever documents you’ll need,

tax documents,

your buying and selling records,

whatever your tax implications are,

all your paperwork is available for you,

through the account itself.

You don’t need to do anything.

You just have to give all

the accounts to your CA.

They will know exactly

what needs to be done.

You simply have to track

if you are selling

within two years or after two years,

to imply if it’s going to be a long-term

or a short-term capital gain tax.

If you get a dividend,

dividends are taxed differently.

Let’s suppose you bought

a stock of Google, for $100,

dividend been announced recently.

So, on that US applies

25% of the dividend tax,

that means $25 after $100.

The difference is, those $25 are retained in the US.

They are withheld,

which is called a withholding tax.

And you’ll only get $75, in your account.

Now, is that $25 lost?

No, these $25 are yours.

These have been just withheld.

Like in India, they withhold TDS,

so when you’ll file your return,

then those $25 can be claimed.

Because there is a treaty

between US and India on this tax.

In summary, a 25% of

dividend tax will be applied.

It will be withheld.

You’ll only get 75% of

the dividend that you’ll get.

But when you file your return,

then that tax which has been withheld by 25%,

it is yours and you can claim it,

as tax you’ve already paid.

Exactly like how TDS works in India.

These are the only costs

that you need to bear in mind.

Apart from this there’s one more thing,

which would be applied for

very less people, hopefully,

but it is important to know.

If you are, at any point,

transferring more than seven lakh rupees,

from India to the US, then you

need to pay five percent TDS.

Which means if you are

transferring seven lakh rupees,

then your five percent, ₹35,000,

will be charged for TDS separately,

this again will be something that is yours

when you file the income tax,

then you can claim this five percent.

But this is a way of government

to reserve the taxes,

that you’ll eventually be paid.

This is not a cost but something

that you have to bear in mind.

Finally, everything is done,

we’ve made money,

now the money will return to India,

and as I said, the only cost that you have to

bear which is applicable as of today,

April 2022.

Maybe it’ll become even lesser

as we move forward.

You’ll need to pay five dollars,

irrespective of the amount

that you are transferring back.

It maybe $100, $500 or $5,000,

you need to pay $5 as per INDMoney

to get your money back

directly into your bank account.

That is it. This is the entire

summary of how you can

start your investing journey

in the US stock market.

I would love for you to do that.

Because as I said,

it is the world’s largest market,

it's also something where you can actually

gain from the depreciation of rupee.

And when you bring the money back,

that money is only going to help India,

because you are paying taxes here,

you’ll spend it here.

So, you are actually using your money

to make India rich in a way

by investing in the US stock market

or in the US large companies.

Please do that. I have used INDMoney,

you can use any product that you like,

and works for you.

And I hope that the next time, I meet you

you’ll be talking about yourself

being a proud Google, Amazon,

Facebook or any other such brand

that you would love, stock owners.

On that note, Ankur Warikoo signing off.