Overview of Zero-Based America (Part 1)
This episode kicks off a three-part series with Alan and Katie Donegan as they prepare to move from the UK to the US in 2027 or 2028. The conversation uses their relocation as a “zero-based” thought experiment: if you were rebuilding your financial life from scratch, what would you actually choose today? With Aubrey Williams joining Brad, the discussion focuses on the practical first layer of U.S. financial life — banking, brokerage accounts, taxes, investing, credit cards, and insurance — with an emphasis on simplicity, avoiding inertia, and making sure each financial tool earns its place.
Why the Donegans Are Moving to the U.S.
The backstory
- Alan and Katie have spent nearly seven years nomadic and are ready for a more stable home base.
- They applied for the U.S. Diversity Visa lottery, then ultimately qualified through the EB1A “Extraordinary Ability” visa.
- They’re excited by the creativity, entrepreneurship, and community they feel in the U.S., especially compared with what they describe as a more success-skeptical UK culture.
What they want next
- A home base with belongings, routines, and deeper community connections.
- A life that is less transient and more rooted, while still aligned with their FI values.
- A chance to intentionally design the next chapter instead of defaulting to old systems.
Zero-Based Thinking: The Core Idea
What “zero-based America” means
- Start from scratch and ask: If I knew everything I know now, would I choose this again?
- The goal is to identify and remove:
- inertia
- financial “stickiness”
- sunk-cost bias
- unnecessary complexity
- It’s not a criticism of past decisions — those were likely right for that version of you — but a way to optimize for current and future self.
Why this matters in finance
- Most people build financial lives accidentally over decades.
- The U.S. system, especially, tends to accumulate accounts, tax forms, and institutions that are never re-evaluated.
- The episode argues that FI gives people the freedom to simplify, consolidate, and redesign.
Key Financial Differences Between the UK and U.S.
What feels strange to the Donegans
- U.S. investing culture is much more common than in the UK.
- The U.S. has a more complex system of:
- 401(k)s, IRAs, HSAs
- state-by-state tax differences
- separate banking and brokerage functions
- healthcare costs and insurance complexity
- British bank transfers are typically instant and simple; U.S. payments often involve ACH delays, checks, or services like Zelle/Venmo.
Cross-border investing challenge
- Their UK investments are considered PFICs by the IRS, which can be punitive tax-wise.
- They expect to sell their UK taxable investments before moving and bring the proceeds to the U.S.
- Their UK pension appears to remain in place because of tax treaty protections and punitive early withdrawal taxes.
Recommended Financial Setup in the U.S.
The simplest starting structure
Aubrey and Brad suggested a “keep it simple” structure:
- One brokerage platform
- One checking/cash management account
- One credit card
- Appropriate insurance
- Keep everything as streamlined as possible
Brokerage platform recommendation
- The main suggestions were:
- Fidelity
- Vanguard
- Charles Schwab
- If forced to choose one, Aubrey favored Fidelity because:
- user interface is easier
- cash in settlement automatically earns money market interest
- strong support for HSAs and Solo 401(k)s
- Schwab was also praised, especially for international ATM fee reimbursement.
Checking account setup
- A checking/current account is needed for everyday spending and bill pay.
- With Fidelity or Schwab, you can often get:
- a debit card
- routing and account numbers
- ATM fee reimbursement
- Fidelity’s cash management account and Schwab’s checking account were both discussed as practical options.
Investing flow: the “two-step”
- Move money into the brokerage account.
- Actually invest it in funds/ETFs.
The episode emphasizes that many people think they are “invested” when they’ve only transferred cash into an account and haven’t actually bought anything yet.
Accounts and Tax Basics
Joint vs. individual accounts
- Most tax-advantaged accounts are individual, not joint:
- IRA
- Roth IRA
- HSA
- Solo 401(k)
- Brokerage accounts can be joint or individual.
- For estate simplicity, a joint brokerage account and joint checking account may make sense for a married couple.
Filing taxes in the U.S.
- Married couples in the U.S. typically file jointly.
- This was a cultural surprise for the Donegans, since the UK system is very different.
Possible tax-advantaged accounts
- Roth IRA: may make sense if they have earned income.
- HSA: only if they have a qualifying high-deductible health plan.
- No account is required immediately; these are elective optimization tools.
Credit Cards and Travel Rewards
A major upside of moving to the U.S.
- The Donegans are especially excited about travel rewards credit cards.
- This is a new opportunity for them after years of not having access to U.S. points systems.
Practical advice
- Use a rewards card where possible.
- Set up autopay from checking to pay the full statement balance.
- Recommended starting point for card research: choosefi.com/cards
Insurance: What Matters Most
Core insurance types discussed
- Renters insurance
- Auto insurance
- Umbrella insurance
- Health insurance
- Life insurance
Umbrella insurance
- Umbrella insurance protects against liability that exceeds other policies.
- It is usually sold in increments like $1M or $2M.
- The recommendation: consider umbrella coverage roughly equal to total assets.
- It is often paired with auto insurance and may require strong underlying auto limits.
Auto insurance
- The U.S. is state-specific, and required liability limits vary.
- The advice was to get quotes from major carriers like:
- Geico
- State Farm
- others depending on state and price
- Comparison sites and brokers exist, but there’s usually some middleman earning a cut.
Health insurance
- This was framed as the biggest culture shock.
- Likely path: purchase coverage through the ACA marketplace.
- Expect high monthly premiums, probably in the $600–$1,000+ range.
- The main purpose is catastrophic protection, not a great value proposition.
- It may be especially relevant for them because employer-sponsored insurance won’t be part of their setup.
Life insurance
- Probably unnecessary for them, given:
- FI status
- no children
- no one relying on their income
- If used at all, term life insurance was recommended over permanent life insurance.
Big Takeaways
1. Simplicity wins
- Start with a basic structure and only add complexity if it clearly earns its place.
2. Use a “zero-based” lens
- Ask whether each account, insurance policy, or process would be chosen again today.
3. Don’t overcomplicate the landing
- The immediate priorities are:
- get money into a U.S. institution
- open a brokerage/checking setup
- understand taxes and residency implications
- secure insurance
- keep cash accessible
4. Cross-border tax help is essential
- The episode strongly suggests hiring someone who understands UK-to-U.S. transitions, not just generic tax prep.
5. Health insurance is the least pleasant part
- It’s expensive and complicated, but necessary.
Notable Insights
- “Banks love inertia.”
- “Make the complexity earn its way in.”
- “If it ain’t broken, don’t fix it” can be a trap when better options exist.
- FI is not just about accumulating money; it’s about using freedom to simplify and redesign life.
What’s Coming Next
- This is only Part 1 of the series.
- Future episodes are expected to go deeper into:
- more detailed tax strategy
- healthcare
- investing implementation
- likely additional real-world decisions as they prepare for their move
Action Items Mentioned
- Research and confirm:
- best brokerage for their needs
- best way to transfer funds from UK to U.S.
- tax treatment of their income and assets
- suitable U.S. insurance setup
- Consider opening:
- a brokerage account
- a checking/cash management account
- a credit card for travel rewards
- Consult a cross-border tax expert familiar with UK/U.S. moves