Low Canadian-Dollar ; lower expectations

[gerntz]

Quote:

Originally Posted by 6miths Yes good point Meadbh and that is all that should be said about that. Most snowbird Canadians likely bought a big stash of USD the last time the CAD was at 1.05. A quarter of our networth is in USD as we travel quite a bit and this is just another way to diversify.

Smart move.

[DrRoy]

As a long time visitor to Canada, I have also seen the very wide swings in value of each currency. When it is in your favor, enjoy. When not, things will cost more.

[tmm99]

Quote:

Originally Posted by gerntz - I think this is a good example reason to hold assets in a range of currencies. US$ top dog now, but doubt it stays that way for next 5-10 years.

That's exactly my sentiment. It makes life more difficult for people like me who have US funds, but are living in Canada. It is definitely good for me now, but only a few yeas ago, the situation was in reverse, so I need to be prepared for both situations. I am right now trying to convert more USD to CAD for the time CAD is stronger, but it is not easy since most of the remaining USD is in tax sheltered accounts...

[brett]

The low CAD has impacted us. We are spending very little time/money in the US. Wherever possible we are not buying any travel products that are base prices in USD or are not discounted.

We consider currency when we travel. When CAD was high we took numerous cruises and spent months in the US. We delayed a trip to South Africa by a year and saved about 15 percent on currency alone. Same for Europe. Instead of spending winters in Florida, AZ, or Hawaii we have gone to Thailand and SE Asia for the past three years. This year it will be South and Central America.

[tmm99]

Quote:

Originally Posted by brett The low CAD has impacted us. We are spending very little time/money in the US. Wherever possible we are not buying any travel products that are base prices in USD or are not discounted. We consider currency when we travel. When CAD was high we took numerous cruises and spent months in the US. We delayed a trip to South Africa by a year and saved about 15 percent on currency alone. Same for Europe. Instead of spending winters in Florida, AZ, or Hawaii we have gone to Thailand and SE Asia for the past three years. This year it will be South and Central America.

I think being able to adjust is the key. From what I can see, you are still enjoying traveling as much, but now, hitting more exotic places

[W2R]

I just checked a cost of living comparison calculator, here, and found that the COL here in New Orleans is just 53% of the COL in San Francisco. That isn't all housing. In fact everything they list except bowling and ground beef costs more in SF than it does here.

My point is that the value of the American dollar is very different depending on where you go in the US. Sure, the exchange rate is down for you, but how much you can buy with that American dollar probably depends a lot on your destination within the US.

I wouldn't let the exchange rate keep you from enjoying travels to the U.S. Maybe this might be a good year to visit the less costly states.

[Bamaman]

We often travel in Canada on vacation, and we just love the people. And we feel so bad that there is less parity with the U.S. Dollar.

I don't know how Canadians can retire with the high cost of living, including 15% sales taxes (Nova Scotia) and the cheapest beer @ $12.99 per six pack. We watch the HGTV home buying shows out of Toronto, and I honestly wouldn't be caught dead living in one of their $650K homes that needs completely rebuilding. But what really gets me is that nobody in Toronto ever wants to move to a different neighborhood--comfortable where they are.

I have a close friend (co-worker) that's a dual Canadian-U.S. citizen. When he retired recently, he took his U.S. pension and social security and moved from Illinois to Ottawa. I would think the currency conversion rate had something to do with his moving north.

[tmm99]

Quote:

Originally Posted by Bamaman I have a close friend (co-worker) that's a dual Canadian-U.S. citizen. When he retired recently, he took his U.S. pension and social security and moved from Illinois to Ottawa. I would think the currency conversion rate had something to do with his moving north.

From what I read (Correct me if I am wrong - I just moved to Canada, plus I am not receiving SS), 85% of US social security benefits are taxed as regular earned income in Canada, and all taxable income from the US will be taxed accordingly as it's worth in Canadian$ (If you have $1USD income (via 401K, taxable pensions), it will be considered $1.30CAD (or whatever the exchange rate is) for tax purposes), and Canadian income taxes are generally higher than US taxes. I don't know which comes out cheaper overall. I hope it works great for your friend (since I am pretty much in the similar boat as he is...)

[tmm99]

Does anybody buy Barilla spaghetti? That cost $1 on sale in California. Where I live (about 1.5 hours drive from Toronto), I see Barilla spaghetti on sale here for $1CAD frequently. Today, I saw it on sale for $.84CAD. How do they do it? Prices of some items from the US are the same $ amount even now...... I heard Tesco in the UK is having difficulty keeping the prices down...

[Big_Hitter]

Quote:

Originally Posted by Bamaman and the cheapest beer @ $12.99 per six pack.

well there goes my idea of a vacation in el norte

$13 gets a 30-rock of PBR or key light here

if I had to pay $13 a sixer I'd seriously consider home brewing

[brett]

$13.99?

Last week I paid $9.99 for a six pack in Calgary. That is about $7.30 USD.

Prices do vary by location. We drove though the northern states last summer. The savings we enjoyed on gas offset the higher food costs. Lodging was also less expensive than Ontario.

We are not planning any US vacations. Stopped in Hawaii for two days on our way back from Oz but the flight savings covered the damage. We simply look at other destinations. We want to go back to Hilton Head and the Carolinas but not now. Instead it will more advantageous for us to fly to Greece and the Turkish Med. coast. It could all change in a few years IF the price of oil increases.

Our taxes are definately higher. But, health insurance is part of the package. I suspect that the US cost of living varies considerably by location, just as the Canadian one does.

[Big_Hitter]

Quote:

Originally Posted by brett I suspect that the US cost of living varies considerably by location, just as the Canadian one does.

yep - huge difference for the cost of a pint in NYC versus the cost of a pint in Bunkie, LA

[kcowan]

We really lucked out with exchange rates. In 2003 when we were deciding where to snowbird, Mexico peso was 7.1 to the canuck buck. and COL was 50% of Vancouver. By 2007 when we bought, C$ was $1.065 US (RE is priced in USD). Now we get 15.3 pesos to the C$.

So we went from being able to survive on our pensions and stash in 2003 to being able to live large forever in 2017!

(Better to be lucky than smart!)

[Fermion]

So what ways are there to diversify into the Canadian dollar for those of us who want to spend significant time in Canada?

I see FXC as a exchange traded fund tracking the loonie but it has a fee of 0.40%. It was $100 a couple years ago and is $74 now. Maybe?

But you couldn't do much else with the money....well perhaps you could sell calls against it to gain some additional profit or at least offset the fee.

[brett]

Not certain, but perhaps you could open a bank account and a trading account. Buy/sell stock or funds on the TSX, cash out in CAD and transfer to your bank account.

[Danmar]

Quote:

Originally Posted by Bamaman We often travel in Canada on vacation, and we just love the people. And we feel so bad that there is less parity with the U.S. Dollar. I don't know how Canadians can retire with the high cost of living, including 15% sales taxes (Nova Scotia) and the cheapest beer @ $12.99 per six pack. We watch the HGTV home buying shows out of Toronto, and I honestly wouldn't be caught dead living in one of their $650K homes that needs completely rebuilding. But what really gets me is that nobody in Toronto ever wants to move to a different neighborhood--comfortable where they are. I have a close friend (co-worker) that's a dual Canadian-U.S. citizen. When he retired recently, he took his U.S. pension and social security and moved from Illinois to Ottawa. I would think the currency conversion rate had something to do with his moving north.

Yes it can be more difficult being Canadian. On average we make less and pay more taxes. I am always amazed to hear how low the cost of living can be in parts of the US. Canadians are generally not as mobile as Americans and this is often abetted by our social welfare safety net that pays more generously in depressed areas. Oh well, we make do the best we can.

[marko]

Personally I wouldn't let the FX ever change my plans.

We lived in France during the time when euro was about E1.30 to the $1USD. Didn't really see it as a factor.

As DW says "the price is the price". Won't tell you what mom says.

[Ian S]

Quote:

Originally Posted by Fermion So what ways are there to diversify into the Canadian dollar for those of us who want to spend significant time in Canada? I see FXC as a exchange traded fund tracking the loonie but it has a fee of 0.40%. It was $100 a couple years ago and is $74 now. Maybe? But you couldn't do much else with the money....well perhaps you could sell calls against it to gain some additional profit or at least offset the fee.

Probably better to invest in some actual Canadian stocks. The "Big 5" Canadian banks are good candidates and are available on the New York stock exchange. They are listed in US$ and the dividends are converted to US$ but they would still be impacted by an increase in the CAN$. I have two of the banks in my portfolio and they have done very well over the years.

[brett]

We consider currency when making travel plans. We several USD Med cruises when CAD was high. Plus lots of US travel and US purchases. Very few now.

We have lots of places in our respective bucket lists. We work the top ones based on good travel offers, currency, hotel and transportation costs, etc.

The GPB is lower now and the euro is down from previous highs for us so this may be our fall trip if the stars align.

[timemoveson]

Quote:

Originally Posted by Bamaman We often travel in Canada on vacation, and we just love the people. And we feel so bad that there is less parity with the U.S. Dollar. I don't know how Canadians can retire with the high cost of living, including 15% sales taxes (Nova Scotia) and the cheapest beer @ $12.99 per six pack. We watch the HGTV home buying shows out of Toronto, and I honestly wouldn't be caught dead living in one of their $650K homes that needs completely rebuilding. But what really gets me is that nobody in Toronto ever wants to move to a different neighborhood--comfortable where they are. I have a close friend (co-worker) that's a dual Canadian-U.S. citizen. When he retired recently, he took his U.S. pension and social security and moved from Illinois to Ottawa. I would think the currency conversion rate had something to do with his moving north.

This is an amusing thread for a Canadian in a specific demographic (i.e., near the top). The move in the dollar has been painful but we've been in much worse shape in prior years and it's actually still tolerable against everything major but USD. And, it could change back anytime for many reasons or no reason.

You'll need to grant me some sarcastic license about Toronto.

- I wouldn't live in a $650K Toronto home either; the average liveable home is about $1.4mm and those frequently get torn down too. Mine is just ok at about $1.6mm.
- We don't move from Toronto because it's...Toronto...and neighbourhoods are really important here.