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Editor's note: We're continuing our series on China today in DailyWealth. (You can see our first two essays here and here.) In late 2013, Steve Sjuggerud visited multiple countries in Asia – including China, Hong Kong, and Singapore. Today, we're sharing one of Steve's biggest takeaways from the trip. Check it out below...
These Places Are Better Than AmericaBy
Wednesday, May 13, 2015
I am embarrassed to admit it... but America has been beaten.
Unfortunately, the U.S. doesn't even stack up... at all.
Don't get me wrong. I love living in Florida. I have no plans to leave.
But if I'm honest about it, a few places I've been in the last few days have America beat. Even worse, based on the path we're on in America, we'll never catch up.
Take Singapore, for instance...
Here's the view from my hotel room in Singapore:
 Singapore is the most modern place I've ever been. Nowhere in the U.S. can compare. A friend of mine who picked me up at the airport here explained it well. He said:
"I can make a great living here in Singapore – a quarter-million dollars a year. Taxes are super-low. Everything here works. And it's totally safe – a great place to raise my kids."
I couldn't argue with him – he is correct on all points.
As I write to you, I'm in Hong Kong – yet another place that unfortunately puts America to shame.
You may be surprised to learn that Singapore and Hong Kong ALREADY have us beat... Income per head in both Singapore and Hong Kong is higher than it is in the U.S.
Why are these places growing so much faster than the U.S.?
I don't know... People here definitely work hard...
One possible explanation is that people get to keep more of what they earn in these places... And keeping more of what you earn generates wealth.
For example, the highest income-tax rate in Hong Kong is roughly 15%, and it's 20% in Singapore.
Meanwhile, the highest income-tax rate in the U.S. is 39.6% (and that doesn't include state and local income taxes). Ouch!
The news isn't all bad...
Based on my view from Asia, America still leads in a couple of areas...
For example, America leads in entertainment (Hollywood) and in fashion. And America is also still good at developing new technologies. But beyond that – based on what I've seen in Singapore and in Hong Kong – Asia doesn't need us.
It's a bit sad to recognize the truth on this trip.
The sad truth – as I've learned from this trip – is that America has been surpassed by Singapore and Hong Kong in many ways.
I wasn't sure if you were aware of this truth. Sitting at home in the U.S., it's easy for you to deny it or not try to confirm it. But I'm telling you, I am here in Hong Kong, and it is true.
I still plan to live in America... It's home.
And I do love living in Florida. I don't see myself ever living in Singapore or Hong Kong.
Yes, Singapore and Hong Kong are more modern than the U.S. Yes, stuff works better here... And yes, the gap between these two places and the U.S. will widen in the coming years.
Still, I have no plans to move. I just love home too much...
But having been here now, I do plan on putting much more money to work in Asia through investments in the coming years...
You ought to consider doing the same.
Good investing,
Steve
Further Reading:
Last week, Steve told readers why U.S. stocks are still cheap. "Most people see stocks are expensive based on history," he writes. "But they are ignoring the fact that interest rates are near zero." Get all the details here.
Market NotesTHE NEXT LEG UP IN REGIONAL BANKS IS HERE Regional banks have "broken the box"... And it's a sign the next leg up in the sector is here.
Like most assets, regional banks were crushed in the 2008-2009 bear market. But since bottoming in 2009, it has been all recovery in the U.S. banking sector. Regional banks have "digested" the bad debts of years past, and these businesses are now growing.
Our chart shows the price action in the SPDR S&P Bank Fund (KBE). This fund tracks the KBW Regional Banking Index, a widely followed gauge of regional banking firms. These firms aren't the giant "too big to fail" banks like Bank of America and Citigroup. They tend to practice a more boring kind of banking, rather than trading trillions of dollars' worth of financial derivatives. They benefit when their local regions enjoy better economic times and rising asset values.
As you can see below, shares were stuck in what traders call a "box" for all of 2014. But since February, KBE has jumped 13%... and just "broke the box" to the upside. Shares are now at their highest level since 2008. The bull market in regional banks is still on.
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