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What would you do if you were me? (investment strategy)
Old 10-18-2020, 07:32 PM   #1
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What would you do if you were me? (investment strategy)

Hi,

I'm a fairly new forum member, and I have been a reader so far.
Apologies in advance for my rather long message.

Currently looking for some advice in terms of management of my finances, but more on a macro level. Simply put: what would you do financially, if you were me?

I'm 45, married with 2 kids (aged 11 and 14), sole breadwinner (wife has an Engineering degree like me, but lacks authorization to work in the U.S.).

My wife and I have dual citizenship (European and Canadian).
Currently in the U.S. with a non-immigrant visa (previously TN / Trade NAFTA and recently H-1B).

I am a massive saver (about 70% savings rate) - that's the only thing I am super-good at, with the money. Managed to accumulate mid six-figures cash capital in Canada, and another mid six-figures capital in the U.S. The Canadian money are still in Canada, as right after the time when I came to the U.S. (end of 2013) the CAD started to lose parity against USD. So now I'm kind of waiting for it to gain some parity back - well, to be more correct, it's a decision that depends on whether or not my residence situation here in the U.S. becomes more stable - we are all currently considered "Resident Aliens" but with me having work authorization (but only for a specific employer).

I have a SSN and the rest of the family ITINs.

It is only me mostly making all the financial decisions in the family.
Back in Canada, I've managed to buy our own house without borrowing.
I had to sell the house after moving to the U.S.

I've been reading a ton of books on investing, and I had some stock-based investment portfolio back in Canada (was consisting of index ETFs and also some individual stocks from TSX60 - mostly dividend payers like banks, utilities, etc). I was considering myself an optimist, but after the 2008's big recession, I've got to know myself (from a financial risk perspective), better. I haven't made money on stocks (even tried bonds for a while, but again, no financial satisfactions). After reading so many books on investing, I kind of consider them decoupled from reality (or to be more blunt - more like financial porn in a way). Especially after reading Richard Ney's book "The Wall Street Gang".

I've generally come to the mindset that I should never speculate, live within my means, and seek ways to PRESERVE the fruits of my hard work. Nothing more, nothing less. You know, something like those grandma's jars from the pantry...

Currently renting. No debt (I told you, saving is the best I know to do).
I was sitting on the sidelines whether or not I should buy a house. About 2 years ago I was almost to pull the trigger on that, mostly due to seeing the rent prices increasing like crazy (in Denver / Boulder, Colorado area). But after reflecting on my current residence situation, I changed my mind.

More recently, with the interest rates coming to almost 0 and the private FED mafiosi pumping money like crazy, the savers are deeply penalized.

What would you do if you were me (i.e. neither a U.S. citizen, nor a U.S. permanent resident, but you residency status hanging on your current job, and an employer potentially willing to sponsor you for permanent residence / green card but with a future very unknown, covid-1984 and other economy dynamics):

1. Would you buy a house? What to do in a worst-case scenario i.e. permanent residency not materializing within 3-5 years, also possibly being laid off, unable to find a new work visa and being forced to leave U.S. possibly for Canada or even Europe? Would I be able to sell the house quickly enough and not at an unfavorable price?

2. Would you continue to keep mid-six-figures capital in Canada in savings accounts earning 1.3%, and another mid-six-figures in American savings accounts earning 0.67% ? (SFGIdirect.com rate just went down from 0.8%, but I found yesterday National Cooperative Bank offering a 0.9% Money Market account).

3. Or would you invest in stock market but with a fairly short horizon (3-5 years), which is kind of an oxymoron . Even after 30 years the wall street gangsters could potentially bring the market down on purpose, so that they can benefit from a "fire sale", for some big-cheese having a great opportunity to enter the market (No, I don't believe the stock market is a really free / uncontrolled market). Would I be able to regain confidence in stock market?

4. Should I buy gold bars from Schiff Capital instead? (and possibly filled with Tungsten inside? :-) )

5. Other investment advice?

Unfortunately I'm not good at being entrepreneurial (didn't have great teachers throughout my school education including the University). Otherwise, the today's times would constitute a great opportunity for opening up a business in IT.

Btw, there is a 401k match with my employer, but considering my rather unstable future / residence status, I am reluctant in investing in 401k. As opposed to its Canadian equivalent (RRSP), one cannot withdraw from 401k at any time, without an additional surtax penalty (in Canada they can be a great investment strategy - for example withdrawing in years with no or low income).

Not sure if you get my feeling: uncertain future, not being able to reach a full potential, feeling like being caught between many worlds and constraints etc.

The kids future may be uncertain as well - due to know being anchored into U.S.-based education, it would obviously make a potential leave of the country even more painful. In a way, this aspect acts as a "stabilization factor" as it makes me thinking about their education and future and kind of discouraging any intention of leaving (even though, it all depends, on rather objective and hard factors like keeping the job secure, and employer willing to proceed with next steps for immigration sponsorship).

Thank you in advance for your feedback.
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Old 10-18-2020, 08:54 PM   #2
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A friend of mine has a chunk in BC telephone. She is retired and loves the dividends. You would know better than I if that is a good investment.

For the life of me, unless your kids are headed for a very selective college, why would you prefer US colleges over Canadian? A few years ago Canadian colleges were a bargain over US in-state, now at least in British Columbia, tuition is comparable or higher. Frankly I would prefer my Oregon grandson to attend college in BC over US-PNW so long as the cost didn't break the bank. You would have the benefit of 'in-state' tuition.

The ins and outs of CN retirement savings programs are not something I have paid attention to.

I am a citizen of the State of Cascadia: OR, WA, ID, BC and northern CA. Our state flag features a salmon and an evergreen tree.
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Old 10-18-2020, 08:58 PM   #3
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The Visa situation really puts a kink in things as far as buying a home. I would not do that.

I don't know the ramifications of a foreigner owning US stock funds. I'm sure there is income tax on it. I don't know anything else that might impact ownership. I would get at least a portion of your savings into the market. At 1-1.3% inflation is not your friend. Maybe make a goal of 20-30% equity? How would that feel for you? I would buy a Total stock Market fund and not worry about any high fliers

I would at least do the 401k match. (aka free money) And use that to gradually build up to your equity goal. I would dollar cost average in the Canadian money as well. Maybe over a couple of years. If the market goes down you can buy more shares...just like the "big boys" As I said i don't know any issues if you have to leave the US in relation to stock index funds

I would not buy gold bars. Where are you going to hold them? Bottom of the closet? Let the seller rent you storage?

Good luck
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Old 10-19-2020, 12:58 AM   #4
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You should run for the hills back to Canada, take your money with you. Then you should re-assess your financial situation (which sounds pretty great).

*I'm an American*

Just go, and don't look back.
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Old 10-19-2020, 05:47 AM   #5
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If you were me (since you asked) I would look carefully at your 401k selections and find a stock index fund with low fees like Vanguard or Fidelity and avoid buying individual stocks since you admit you are not savvy enough for that.
Since I am not confident about housing at this time and you are not sure about permanent residency and possible job security I would not buy a house. Some folks think that the pandemic and the resulting job losses and home defaults may bring the prices down within the next year or two. Now is not the time if you feel the future is uncertain. Put that money into a Roth IRA or an after tax Mutual Fund. Again look into Vanguard or Fidelity and maybe T Rowe Price for stock index funds or a retirement fund. Some may suggest a balanced fund or something like Vanguard Wellington as a way to hold money in a taxable account when things become more stable for you.
These ideas are fairly conservative even though you have years to catch up. But you have other concerns that may make them a safer way to invest at this time.

In the meantime others on this forum will have some excellent suggestions for books to read that are easy to digest for the first time investor. Buy a few copies or check the local library.

Others with more knowledge than I may disagree but the bottom line is nobody has a crystal ball and you may want to consider what is most appropriate for your circumstances.


That being said and even though I don't care for cold weather being a flat land Florida boy I love Canada and have visited all the Provinces from east to west coast many times. It is one of only 3 countries I would consider moving to.



Cheers!
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Old 10-19-2020, 05:57 AM   #6
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First of all I want to congratulate you on a tremendous savings rate.
I realize that if someone has a few hundred thousand a year salary or more it is much easier to save 70% than someone making $40-50k which would almost be impossible but nonetheless it is an admirable rate.
I would agree with others about not buying a house right now until many of your unknowns are cleared up.

I don't have a lot to offer on the other subjects because I had and have no reasons to pursue them but I would check on the 401k concern as it seems a shame to give up the company match on that.
Good luck
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Old 10-19-2020, 09:20 AM   #7
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I also think not buying a house is the best course for now. Things are too unstable and your status could be a big factor. Of course you can always sell a house quick if you price it low, but in your case why put yourself into that situation?
My bigger concern is you are way risk averse and your money all tied up in low return savings is not helping you get ahead. You are only at best keeping up with inflation. You are essentially not getting the benefit of compounding with such low returns. I would consider putting more into equities, something like a 40/60 allocation is still quite conservative, but will allow you to help grow the savings over inflation by more than just your (very good savings) contributions each month. I don' view the stock market as speculating, you should consider your definition of that. Speculating is much riskier to my way of thinking. Stock market, in a wide diversified fund, is a satisfactory way to grow the savings and help offset inflation.
As to the savings in Canadian money vs US money. That is a game of exchange rate that who knows what will happen. I would just keep the two, but consider treating them together in your risk tolerance and asset allocation decisions.
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Old 10-19-2020, 12:57 PM   #8
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A thought on the Canada funds.

A piece of stock advice I was once given, I held IBM. Would you buy IBM today, and hold it until you make a profit? If the answer is no, then sell it!
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Old 10-19-2020, 04:11 PM   #9
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1. Would you buy a house? No. Too much downside risk if you're forced to move.

2. Would you continue to keep mid-six-figures capital in Canada in savings accounts earning 1.3%, and another mid-six-figures in American savings accounts earning 0.67% ? No. You're giving up the power of compounding earnings to basically losing purchasing power with regards to inflation. After 30 years of investing, my principal comprises less than 50% of my total account values (diversified all-equity investing in mutual funds and ETFs like VTI). The 'snowball' effect is real, and it will take hold later on. My 10-year rate of return is about 13%.

3. Or would you invest in stock market but with a fairly short horizon (3-5 years), which is kind of an oxymoron . Yes. Everything is a gamble (cash, CDs, savings, inflation, health, war, Black Swan events, your health). The only historic certainty is that the US markets have outperformed gold, silver, and most foreign markets; this does not guarantee future performance, and that's why diversification (including foreign investments) is important. All civilizations fail, but what are the odds that the US fails in the next 30 years?

4. Should I buy gold bars from Schiff Capital instead? (and possibly filled with Tungsten inside? :-) ) No. Historically, gold underperforms the markets by significant margins.

5. Other investment advice? Choose an AA that's at least 50% equities, and includes 3-5 years worth of your annual expenses in Cash/Cash equivalents (MM, savings, checking, cash). Stick to it long-term.


6. You did not ask for this advice, but your economic and domestic future seems up in the air due to citizenship/visa issues. I'd suggest you pick a country that will accept you (Canada or Europe), and build your life there. Waiting for US immigration policy to catch up with your desires may or may not work out for you, and you may waste years without making any traction. If you choose a country where you can stay permanently, you can purchase a house with less risk, and start building equity in that, which helps diversify your AA.
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Old 10-19-2020, 04:27 PM   #10
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Originally Posted by smihaila View Post
Hi,
I haven't made money on stocks (even tried bonds for a while, but again, no financial satisfactions). After reading so many books on investing, I kind of consider them decoupled from reality (or to be more blunt - more like financial porn in a way). Especially after reading Richard Ney's book "The Wall Street Gang".

[etc]
3. Or would you invest in stock market but with a fairly short horizon (3-5 years), which is kind of an oxymoron . Even after 30 years the wall street gangsters could potentially bring the market down on purpose, so that they can benefit from a "fire sale", for some big-cheese having a great opportunity to enter the market (No, I don't believe the stock market is a really free / uncontrolled market). Would I be able to regain confidence in stock market?



The vast majority of posters in this forum will tell you to get over your fear of the stock market.

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... My bigger concern is you are way risk averse and your money all tied up in low return savings is not helping you get ahead. You are only at best keeping up with inflation. You are essentially not getting the benefit of compounding with such low returns. I would consider putting more into equities, something like a 40/60 allocation is still quite conservative, but will allow you to help grow the savings over inflation by more than just your (very good savings) contributions each month. I don't view the stock market as speculating, you should consider your definition of that. Speculating is much riskier to my way of thinking. Stock market, in a wide diversified fund, is a satisfactory way to grow the savings and help offset inflation...
+1

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... I would look carefully at your 401k selections and find a stock index fund with low fees like Vanguard or Fidelity and avoid buying individual stocks since you admit you are not savvy enough for that.
+1

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Originally Posted by HI Bill View Post
2. Would you continue to keep mid-six-figures capital in Canada in savings accounts earning 1.3%, and another mid-six-figures in American savings accounts earning 0.67% ? No. You're giving up the power of compounding earnings to basically losing purchasing power with regards to inflation. After 30 years of investing, my principal comprises less than 50% of my total account values (diversified all-equity investing in mutual funds and ETFs like VTI). The 'snowball' effect is real, and it will take hold later on. My 10-year rate of return is about 13%.
+1

It is unfortunate that Richard Ney's book has scared you away from stock market investing. I haven't read his books, but from what I have heard, they give an extremely jaded view of the stock market. While there are professional investors that make money by short selling and other advanced techniques, many common people do in fact make money in the stock market. It's really not rocket science and it doesn't take an insider to make money. To use a quick reference:
https://www.investopedia.com/ask/ans...urn-sp-500.asp
"According to historical records, the average annual return since its inception in 1926 through 2018 is approximately 10%11%. The average annual return since adopting 500 stocks into the index in 1957 through 2018 is roughly 8%."
Many people who post regularly on this forum, including myself, are "buy-and-hold" investors who invest in low-cost mutual funds / ETFs and do not try to time the market but hold onto the mutual funds for years (even through downturns like 2008-9), to achieve the 8% long-term return spoken of on this web page. My own equity holdings have more than doubled over the past several years and are worth more than a million dollars.

About your statement, "Even after 30 years the wall street gangsters could potentially bring the market down on purpose..." - Per the above web page I referenced, average equity returns have been good for a lot more than 30 years - namely, since 1926. If nearly 100 years of average positive returns isn't good enough for you, you could wait another 100 years to get more confirmation, but the problem is, you will be dead by then!

"Or would you invest in stock market but with a fairly short horizon (3-5 years), which is kind of an oxymoron."
I don't quite understand the part about the short horizon. I agree that investing in the stock market is riskier with a short (< 5 years) time frame. But why do you have a short horizon? Even if you move back to Canada, you don't have to sell your US stock market assets but you can keep them there for a much longer period of time. If your "short horizon" is for your house down payment money (which you are saving until you move back to Canada to buy a house), it's okay if you want to keep that out of the stock market, but that shouldn't represent all your money. You should have other savings, especially retirement funds, which can be invested in the stock market.

Finally, don't buy gold! It is not a good long-term investment.
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Old 10-19-2020, 05:16 PM   #11
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I would buy tungsten bars with gold inside.
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Old 10-19-2020, 08:26 PM   #12
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I would buy tungsten bars with gold inside.
Yes!

What about osmium or rhenium (from memory)?
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Old 10-20-2020, 04:45 PM   #13
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I'm risk averse, as you seem to be. There simply are very few adequate investing choices for the risk averse these days. Getting into the stock and bond markets at historical extremes could be dangerous. Or it could be lucrative. Nobody knows. Gold could go up or down. Cash can lose value to inflation, or it could come in handy during a market crash to buy assets cheaply. Real estate can produce income and go up in value, or it can do the opposite. Sometimes losing the least amount of money by taking what might appear to be less risk can be a good choice if it helps you to sleep.

There are simply no good answers. Risk takers have it easy...they pile into the markets and look forward to their huge returns while sleeping well at night. The only time they run into a problem is when the occasional crash happens. No one knows when that will be. People with hedging strategies may be able to cover their risk taking, but this is trading, not investing.
Maybe consider putting a little into Wellesley for a small amount of risk and a wee bit into gold bullion/silver just in case. If you wait for a crash, it may never come. If you go all in, you could lose most of it, or you could become wealthy beyond your wildest dreams. There is no good answer...only you can decide what works for you. Maybe speak to a fee only financial advisor...one who aligns with your risk tolerance. Good luck to you.
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Old 10-20-2020, 11:21 PM   #14
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OP - buying a house is too risky due to immigration.

Your wife can look for a job, go to interview, if accepted, tell them she will go back to Canada and get a TN visa only needing a letter from the employer. If she does this you can PM me for more details.

You can buy in Canada index ETF's which are low cost (MER 0.20 % and not 2% MER mutual fund). And buy shares in Banks, all do go up over long time periods.

Like others said do the 401K to get the match at least, it's free money. Worst case is you have to leave country as lose job, wait until the next year and then cash out your 401K , you will have zero US income except for the 401K so it will be a small tax hit and quite possibly a net savings when you consider the deduction you will currently take for the contributions you make.
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Old 10-21-2020, 12:13 AM   #15
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You should run for the hills back to Canada, take your money with you. Then you should re-assess your financial situation (which sounds pretty great).

*I'm an American*

Just go, and don't look back.
Would you care to elaborate, or is it just sarcasm?
So you don't have any ancestry and heritage from the early foreign pioneers, and who originally settled and founded this country, do you?

On my side, I don't feel Canadian at heart (came from Europe, like your ancestors). And I love U.S. because it is not as socialist as Canada. I work hard (sometimes as long as 14 hours/day) to make the ends meet, and with just 1 income in the house.
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Old 10-21-2020, 12:22 AM   #16
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For the life of me, unless your kids are headed for a very selective college, why would you prefer US colleges over Canadian? A few years ago Canadian colleges were a bargain over US in-state, now at least in British Columbia, tuition is comparable or higher. Frankly I would prefer my Oregon grandson to attend college in BC over US-PNW so long as the cost didn't break the bank. You would have the benefit of 'in-state' tuition.
That's a very good point. Both kids were born in Montreal, QC, and in principle, they could benefit from some reduced tuition rate, if say, they went to McGill University (the Canada's Harvard?)

Not sure if my point on their education was fully understood: I wasn't necessarily debating between U.S. and Canada as tertiary education options. The point was this: in a worst-case scenario, forcing a leave from U.S. and not returning to Canada (I have nothing to return to there, no ties, and no relatives) and instead deciding to go maybe to Europe (where I have many relatives), then considering my kid's English background, it would be almost impossible for them to accommodate sync up with a non English-speaking country and its culture.

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The ins and outs of CN retirement savings programs are not something I have paid attention to.
Yes, there are always nuances, and when living and working for a considerable number of years, in multiple countries, you get to appreciate the differences, good and bad.

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I am a citizen of the State of Cascadia: OR, WA, ID, BC and northern CA. Our state flag features a salmon and an evergreen tree.
Awesome, great meeting you, and many thanks for your feedback.
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Old 10-21-2020, 12:43 AM   #17
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Apologies, for some reason this online forum platform seems to send a notification of new replies to a thread only once. I have to catch up with all your answers and respond individually. Thank you so much for your advice!

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The Visa situation really puts a kink in things as far as buying a home. I would not do that.
That was exactly my gut feeling, too. One one hand the optimist and "carpe diem" in you, wants to forget about the unstable residency aspect and go ahead with getting a home (arguing that "eh, not a big issue - it can be sold relatively quick in a solid/stable market, so, exactly like your professional, day-to-day job and "career" chugs along, why should you be too fearful about the immediate situation? :-). But then the other persona - the rationalist, comes to counter-balance.

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I don't know the ramifications of a foreigner owning US stock funds. I'm sure there is income tax on it. I don't know anything else that might impact ownership.
That doesn't pose any problem. I am deemed a Resident Alien for tax and general financial, purposes. Fully contributing into the system, and also paying taxes like the others. Any interest, capital gains or dividend income is considered fully-attributable to, and originating from, the U.S.

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I would get at least a portion of your savings into the market. At 1-1.3% inflation is not your friend. Maybe make a goal of 20-30% equity? How would that feel for you? I would buy a Total stock Market fund and not worry about any high fliers.
The inflation is indeed, the big enemy in this picture. I could dare to re-enter the stock market, but ... the investment horizon is at issue here: What if within 4-5 years, I either get permanent residence (or a good assurance that I'm on that path), or the renters' market becomes so aggressive (significant, unsustainable rent increases) to such extent that buying a home would suddenly feel more attractive? What stock-centric type of investment to go for, for such narrow horizon?

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I would at least do the 401k match. (aka free money) And use that to gradually build up to your equity goal.
I was explaining that the 401k as tax-deferred investment vehicle here in the U.S. feels oriented towards keeping the money for long. Because, as a slight disadvantage to the Canadian equivalent, there is a 20% surtax on top of what one has to pay as ordinary income tax, if money withdrawn earlier. That is the factor kind of influencing me to not commit to 401k.

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I would dollar cost average in the Canadian money as well. Maybe over a couple of years. If the market goes down you can buy more shares...just like the "big boys".
I was staying away of stock market with the Canadian funds as well. Again due to that short time horizon / potentiality of buying a house. But even if not for a house purchase, the aim was to consolidate the funds in one country (awaiting for Canadian $ to gain part of its parity to US$ a bit). But many may argue that perhaps it's better to have multiple bets and keep assets more diversified, just in case? I could even ride on the fact that US$ is much stronge, to my advantage, and convert to CDN (a sort of contrarian mindset). But I don't see a prospect of returning to Canada. The best thing that I can truly say that I liked of Canada, was the single-payer healthcare system...

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As I said i don't know any issues if you have to leave the US in relation to stock index funds.
That wouldn't be a problem. The portfolio could in theory remain invested for many more years after an eventual leave, especially that now we seem to have so many global and electronic way of transferring redeemed cash around.

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I would not buy gold bars. Where are you going to hold them? Bottom of the closet? Let the seller rent you storage?
My thinking too! They aren't liquid, and should you need to sell, you loose a bit of gold due to having to be "essayed", also a lot of overhead with shipping them to the buyer when you wish to sell.

Thank you.
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Old 10-21-2020, 12:57 AM   #18
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If you were me (since you asked) I would look carefully at your 401k selections and find a stock index fund with low fees like Vanguard or Fidelity and avoid buying individual stocks since you admit you are not savvy enough for that.
But considering a relatively short investment horizon (i.e. buying a house may become an increased probability within 4-5 years), wouldn't you consider re-entering the stock market riskier than waiting + buying a house? After all, renting kind of loses long-term (even though there is some school of thought that may disagree even with such assertion).

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Originally Posted by Scrapr View Post
Since I am not confident about housing at this time and you are not sure about permanent residency and possible job security I would not buy a house. Some folks think that the pandemic and the resulting job losses and home defaults may bring the prices down within the next year or two. Now is not the time if you feel the future is uncertain.
Thank you for your opinion on the situation.
So your main concern would be not an inability to sell fairly fast, but house market potentially going down significantly, even in places like Denver-Boulder metro area?

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Originally Posted by Scrapr View Post
Put that money into a Roth IRA or an after tax Mutual Fund. Again look into Vanguard or Fidelity and maybe T Rowe Price for stock index funds or a retirement fund. Some may suggest a balanced fund or something like Vanguard Wellington as a way to hold money in a taxable account when things become more stable for you.
These ideas are fairly conservative even though you have years to catch up. But you have other concerns that may make them a safer way to invest at this time.
If I was to re-enter the stock market, I would personally favor taxable accounts. Unless I have strong "guarantees" of many years to come (close to retirement even) of stable situation here, situation where, yes, I may reconsider registered investment vehicles. But in general, my way of being is "no string attached", adversion to too many rules, extreme socialism and government patternalistic attiudes. (I also experienced a communist and dictatorial regime back in Eastern Europe, hence my adversion to socialism). Heck, if it was for me, I would've preferred that all that money that goes to SSA (or RPP in Canada), to be left to me to self-administer it.

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In the meantime others on this forum will have some excellent suggestions for books to read that are easy to digest for the first time investor. Buy a few copies or check the local library.
No more books, please. I am fed up with reading over 30 books on finances and investing. Siegel's "Stocks for the Long Run" ? BS.

[QUOTE=Scrapr;2499392]
Others with more knowledge than I may disagree but the bottom line is nobody has a crystal ball and you may want to consider what is most appropriate for your circumstances.[/QUOTES]
Only the stock market insiders and the CIA's Market Plunge Mitigation team have that crystal ball, yes indeed.

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That being said and even though I don't care for cold weather being a flat land Florida boy I love Canada and have visited all the Provinces from east to west coast many times. It is one of only 3 countries I would consider moving to.
I personally happen to dislike with utter passion the Canada's frigid, long winters. Those from Quebec and Ontario at least. Living in BC ("Bring Cash") or Alberta/Calgary, may be a different story though. But I am kind of fed up moving between places and countries - I feel like I have to gain some roots, because the kids' future is also important.

Thank you so much.
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Old 10-21-2020, 01:06 AM   #19
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First of all I want to congratulate you on a tremendous savings rate.
Thank you. One may argue that it's a hard thing to do, but after a while, it becomes one's second nature, and a matter of lifestyle.

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I realize that if someone has a few hundred thousand a year salary or more it is much easier to save 70% than someone making $40-50k which would almost be impossible but nonetheless it is an admirable rate.
You may not believe this, but actually in Canada, the 1 income-earner families were tax-penalized more than families with 2 incomes and each income being half of that single income!

My employment income is far from being spectacular (typical mid-class figure, for an engineering profession, slightly higher than what a same mid-class and profession would earn in Canada). On a funny note, the Canadian socialism and extremely unionized work environments, were creating paradoxical situations - I had this info directly from an insider: a public transportation bus driver in Southern Ontario, with about 5 years experience, was earning ... almost the same as a Sr. Software Engineer with 15-20 years of experience.

Where living and working helps here in the U.S., as opposed to Canada, are at least 2 key factors: (1) Lower taxation (but it's State-dependent) and (2) Lower day to day cost of living. U.S. is 10 times the population of Canada, so there is a better economy of scale, more competition, more diversity in terms of products and services being offered. Also, in some States and cities, the property taxes may be lower than in Canada, when compared sqft-by-sqft (above grade sqft). But again, only in some regions.

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I would agree with others about not buying a house right now until many of your unknowns are cleared up.
Thanks again for the great advice. By gut feeling too, and I thought that maybe the more we grow old, we become less optimistic and don't dare to make decisions faster like we did 10 years ago :-)

I don't have a lot to offer on the other subjects because I had and have no reasons to pursue them but I would check on the 401k concern as it seems a shame to give up the company match on that.
Good luck[/QUOTE]
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Old 10-21-2020, 01:15 AM   #20
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I also think not buying a house is the best course for now. Things are too unstable and your status could be a big factor. Of course you can always sell a house quick if you price it low, but in your case why put yourself into that situation?
Yeah, and if I had relatives or close friends, I could keep such house and have it rented out, and sell only after the real-estate markets stabilize.But without relatives, it's harder. The only relative I have in the U.S. is a cousin in Portland, OR.

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My bigger concern is you are way risk averse and your money all tied up in low return savings is not helping you get ahead. You are only at best keeping up with inflation. You are essentially not getting the benefit of compounding with such low returns.
Yes, the situation is caused by my lack of decision. Because I was kind of sitting on the sidelines, and hoping for that house...And even if it's not now, maybe after 5 years. And how can you invest in stocks for 5 years and at least preserve your principal intact?

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I would consider putting more into equities, something like a 40/60 allocation is still quite conservative, but will allow you to help grow the savings over inflation by more than just your (very good savings) contributions each month.
I'll think about setting something up - using a passive approach and set-and-forget (because psychologically, the more I think about these aspects, more damage seem to do to my self - I am my worst enemy - looking in the mirror). No individual stock picks, and obsession for low-cost (index ETFs). What to use for fixed-income? Bond indices? They seem to work like the Bond mutual funds i.e. bonds renewed at a Fund administrator's whim, in perpetuity - never made a cent in "profits" from bonds!

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Originally Posted by 38Chevy454 View Post
I don' view the stock market as speculating, you should consider your definition of that. Speculating is much riskier to my way of thinking. Stock market, in a wide diversified fund, is a satisfactory way to grow the savings and help offset inflation.
I see it in a way, as a form of speculation (maybe not to the same degree as, say, a zero-sum game), but in a way it's still like a casino / Monte Carlo machine. Because the market doesn't seem to be 100% free / just.

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Originally Posted by 38Chevy454 View Post
As to the savings in Canadian money vs US money. That is a game of exchange rate that who knows what will happen. I would just keep the two, but consider treating them together in your risk tolerance and asset allocation decisions.
In other word, you would recommend going into stocks also for the Canadian markets?

Again, my investment horizon is fairly short - 5 years...

Thank you.
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