Foreign money, who are they?

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tourbillon_IHB

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I am just wondering if anyone know why would some rich people from Taiwan/Korea/China would want to live in Irvine. For one thing, in order to stay in US, one needs to have some kind of long term visa. There is no way to open a bank account on a short term visa. As far as I know, the most common long term visa is the green card, which requires the holder to pay US tax. Why would anyone, let alone a rich one, want to pay 30 to 40% tax when they can pay just a hair over 15% at home. Once a person acquires US citizenship, he/she has to pay global income tax, again, I don't understand why would someone want to pay the extra 30% tax. Most of the so called foreign money I know are actually no money at all, just your average salary worker with H1B visa. They stay in the US because they have to. If anything, I know quite a few rich Americans giving up their citizenships and moving overseas to avoid paying taxes.
 
The story is that rich foreigners want their kids to go to Uni High and desire to spend big money on depreciating real estate because they aren't smart enough to find appreciating assets in which to invest.
 
<p>Both of you are foolish. What I would expect from typical Americans...sad sad country we live in. </p>

<p><strong>awgee</strong> - "because they aren't smart enough to find appreciating assets in which to invest." - the assets they are investing in are their <strong>KIDS</strong>. If you spent the same amount of time working on your own situation than complaining about the situation you might move ahead in your life. If you're so smart, what appreciating assets would you suggest? Moron...</p>

<p><strong>tourbillion</strong> - "Most of the so called foreign money I know are actually no money at all, just your average salary worker with H1B visa." - DUH, that's your problem. You only know the average joe on an H-1. Foreign money can also encompasses the minorities who run small businesses locally, or who have wealthy families from the homeland (ie. OIL). </p>

<p>"If anything, I know quite a few rich Americans giving up their citizenships and moving overseas to avoid paying taxes." - They should give up their American citizenship. Again, this is what's wrong with this country. Moving overseas to avoid tax? Must not be that rich if they worry about footing the tax bill every year....</p>

<p>If you would have paid attention in Economics class you would have understood the basics of supply and demand. Foreigners are willing to pay more to be in a safe location with good schools. Yes, they are bidding up properties (maybe too high), but that's just the way the cookie crumbles. Did it ever make you think that since Irvine already has a large Asian population, it would entice foreigners to want to move to the city and be around similar nationalities. Not sure what's so hard to believe - there is DEMAND to live in Irvine. (includes you because you wouldn't be on this board). And I'm not going to get in some discussion on the definition of demand, just because you can't understand why the demand exists....</p>

<p>Do me a favor - can you identify the US on a map???</p>
 
My my ocorbust you seem quite angry over these posts.





A few things to consider.





1) Many high earning people have skills that are not region specific i.e. they can earn their income in multiple locals. Do I really believe if we have two people in Director level positions investment banks one in Hong Kong and Manhattan that the one in Manhattan is 35% less productive? When your talking about earning 5-6 bar your suddenly talking about serious money. I am sure there are some people who would flight if capital gains rates were raised to ordinary income rates.





2) Especially with the Bush tax cuts on capital gains some people are in a position where their return to human capital Income(1-tax rate) is many multiples less than their 2007 or 2008 tax bill to the state of CA. Yes you can live in Texas or Florida or Washington but some people prefer other locals. I'm sure plenty of us can point to people in their 50s who are paying in the millions to the State of CA for capital gains. Even if you make decent money if your 55 and making 200k from your day job and staring at a $7M tax bill to the state of CA do you consider retiring and moving out of state or out of the country? Depends how much you like your job. Depends also on whether you need to be in the US to manage your business or investments. There is a 10 day rule on how many days you can be in the US if you renounce US citizenship. This is a major issue to venture capitalists that are considering moving. Real Estate you have major advantages through 1031 to US residency so you usually quietly live on Star Island for tax purposes.





3) Why should we pay for the education of people living in Taiwan or HK or Korea? Usually if I'm not mistaken we get students who are below the top tier in their home countries (especially Korean). It's a complex issue at the university level since private universities have traditionally viewed Asian parents as immense cash cows that can be used to fund diversity programs etc. If the parents claim E-1 visa to open their dry cleaner and the children claim CA residency they can attend the UC system if I am not mistaken at minimal expense while the parents pay minimal federal or state income tax on whatever noncash revenue they created. Is this sensible?



 
<p>I think you might have answered your own question tourbillon. They are rich. Taxes or not, they want the best for themselves and/or their children, and cost premiums are justified when education and environment provide a safe atmosphere they feel good about when they go to sleep at night.</p>

<p>In terms of visa, it wasn't all that difficult. A friend of mine who got married in Korea had the parents of both sides give 75k each to their kids, so that they could use that money to invest into a business in the US. That provided them with a visa to enter the country, purchase a business, open both personal and business checking accounts, and live like any other normal small business owners would in OC. Then the parents purchased a home in Irvine for them to live in, but the newlyweds pay zilch in terms of monthly rent. Just taxes and monthly utilities. </p>

<p>The not-so-rich people I know still rent and try to live it out in Irvine because of the schooling. I can only speak for Koreans (since I am one, and my circle of close friends are in the Korean-American community), but school means everything to Koreans back home. The school your child attends for elementary helps to the right Jr. High, which helps to a great name High School, which increases their chances to admission to a good college, which will lead to a good job for their children. That's how they were raised, so they can only base their decision based on what they experienced. </p>

<p>By the way, Koreans have never cared for the number of Asians living in the neighborhood when choosing a new home. What they care for is education system of the neighborhood #1, safety #2. If there was a High School rated #1 in the country for sending kids off to Ivy League schools in San Juan Capistrano, Koreans (and I'm sure a lot of other Asians as well) will move out there for their kids, or drive their kids 25 miles each way daily just for their education.</p>

<p>Also, 1st generation Koreans and 2nd generation Koreans have very different attitudes about the above said topic. What i just wrote is in regards to the 1st generation parents. </p>
 
Wow --- and I felt kind of picked on when ocbuster jumped all over me yesterday for suggesting that $450K might be a good median price for Irvine, or that $2400 might be a good median rent for a 3 bed in Irvine. I guess Buster's blustering yesterday was just a warm up for his/her big bust out this morning....
 
<p>Weather been too hot?....</p>

<p>CK,</p>

<p>Depends on the sq. footage. But I have seen where $2400/mo will get you a 2 bdrm from TIC.</p>
 
<p>ocorbust is a straight shooter but his/her comments make a lot of sense.</p>

<p>Many oversea folks who come here on work visa, dream to purchase a home here for their children. These folks do have millions sitting in the bank back home. The problem is to transport the money into US. I work with these folks; I rarely hear any complains about real estate being too expensive here.</p>
 
<p><em>>>The problem is to transport the money into US.</em></p>

<p>I always thought you could wire money from Asia, especially with the increasing numbers of Asian banks in the US, but maybe I'm mistaken.</p>
 
<p>ELS,</p>

<p>Always a challenge as the foreign government limits the amount to something like $10K/year, IIRC. Another challenge is the foreign government wants to have talents return home so they have these folks sign contract to return. It's difficult to explain to the employer why you are transporting large amount of money.</p>
 
<p>NIR,</p>

<p>Those talented people who work here have their housing paid by their employers. I doubt they will complain about housing being too high. I know that Samsung has plenty of people working in LA and Orange County who came from Korea, who have their housing, transportation (company car) and gas, communication (personal cell phones), and food all paid for by corporate. I doubt they are the only one who offer such benefits.</p>
 
<p>Such anger. Where is that coming from? </p>

<p><em>"<strong>awgee</strong> - "because they aren't smart enough to find appreciating assets in which to invest." - the assets they are investing in are their <strong>KIDS</strong>. If you spent the same amount of time working on your own situation than complaining about the situation you might move ahead in your life. If you're so smart, what appreciating assets would you suggest? Moron..."</em></p>

<p>I didn't know it was necessary to purchase an overinflated home in order to invest in one's children. But, what do I know, because according to ocorbust, I am a moron. I am a moron who sold his home at the top of the credit bubble, (known to many as the housing bubble), and took my family, including my children, on a two month vacation accross the US. It is amazing what you can do when you have neither a house payment, property taxes, utility bills, rent, etc. I am the moron who is sending his oldest to UCLA and is leasing in an extremely nice neighborhood and sending his other two daughters to wonderful schools. I am the moron who pays for his children's piano lessons and gymnastics lessons and drives them to these activities. I am the moron who takes his daughters to Indian Princess camp outs and father/daughter dances and events. I am the moron who invested the proceeds from his home sale into appreciating assets and is making a heck of a better return than the geniuses who bought in this re market. I guess I am the moron who thinks that the rich foreigners are just as smart or smarter than me and have also figured out that they can lease a home for much less and have their kids attend Uni or another great school. But then, maybe they got rich by being morons like me, and just can't figure it out.</p>

<p>The part I don't get though is the part where ocorbust says that I am complaining. But then, I am a moron, so maybe someone can help me find where I was complaining.</p>
 
<p>Your post confirms my original view.</p>

<p>Let's look at the facts. Your post was the first response. I want you to read it over and figure out what tone/message you were trying to send. </p>

<p>And I want to be the first to congratulate you for your achievements. Would you like a medal or a cookie? </p>
 
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