FroogalStoodent, thank you for your insights.
-You should definitely take advantage of the 401(k), at least up to the company match. If you contribute 5% and they'll match that dollar-for-dollar, you would be wise to take advantage of the opportunity to instantly double your money!
Even if they have a scheme like my employer, where they contribute 50 cents for every dollar you contribute (up to a certain limit), that's still an instant 50% return on your money!
I'm already contributing to 401(k). I don't think I've mentioned the employer's exact match ratio, but it is 50 cents for every dollar, up to 6%.
Technically, it's supposed to be min $0.5 and max $1.5, depending on company's performance. So at the end of each fiscal year, they add a bit more, as "make-up match". For example, their final match factor was $0.662 for the last (2020) fiscal year.
Just wished to remind that I had to consider many factors for my final decision, including the 10% excise tax penalty (I'm pretty sure you factored that in) put also in balance against the about 14 1/5 years until such additional tax no longer applies. As mentioned before, the Canadian 401k-equivalent, which is RRSP (Registered Retirement Savings Plan) is more flexible in that respect. Because it's not necessarily meant for long-term savings i.e. retirement, so one can be more "agile" about it and depending on the years when someone's income may be low enough, one could cash such plan in, with little to none overall income tax paid on the withdrawals (and no additional penalty).
It is usually not in my nature to like "strings attached" and socialist-like "incentives" to forcibly keep me into plans like 401k. Especially considering my U.S. residence status for the moment, it's not factor to be overlooked. But I must thank ILoveStarTrek for making me consider that a 14 1/5 waiting period, is not that long, and also for putting in balance the free-money-on-the-table accumulating high enough to compensate for that 10% potential penalty, should I decide to cash out earlier and leave.
It sounds to me as though you have a) quite a bit of uncertainty, and b) a pretty strong aversion to risk.
The level of uncertainty is exacerbated by the fact that I cannot control the immigration / residence aspect. Also the
risk aspect is amplified by this uncertainty. Add also to the mix two types of priorities and needs / expectations that I'm personally having: one is short-term (securing a place of my own) and the other is long-term (securing a reasonable comfort of living during retirement, which btw is more difficult with only one breadwinner in the family).
I am similarly in a situation with a fair amount of uncertainty but a high savings rate.
That's great, congrats for incorporating that into your daily routine and overall lifestyle!
-I would not be eager to buy a house. Many houses in my area/price range (i.e. modest ranch-style homes) are going at 10-15% above their tax assessment. I believe the tax assessments are more realistic than the going market rate, so I'll let everyone else overpay.
Based on what I've read about the Boulder area, it is probably a similar situation, although you'd know better than I would.
Let's dwell a tad longer on the house aspect. You seem to view the property tax assessments on a fee-simple, detached, single-residence house, as some equivalent P/E ratio from the stock market?
I cannot generalize for all the U.S. States and cities, but here in Colorado, the lower property tax assessments are done on purpose, actually quite similarly to certain provinces and cities in Canada: they are planned to get in sync with more recent, market values, for later on. So it's like a phased-in, gradual increase, spread over a longer time period (5-10 years).
The Coloradans are actually very tax-adverse (a personality and mindset that I actually love), so at State level there is a law enacted that protects (and regulates) against unjustified tax increases, at many levels. It's called TABOR.
The property taxes, even in more expensive Colorado city areas such as Boulder, are much LOWER than what I've got to experience back in Ontario, Canada! To give an example: For a 1600sqft (measured above-ground) 3-bdrm detached house in a small town within 70 miles from Toronto, and bought for $310K CAD, one would pay $3,800 CAD. Here, for a much bigger house (2,500-3,000sqft above ground), you can find places outside Boulder asking only for ... $1,000 USD in annual property taxes.
Also given that you do not have U.S. citizenship, that would further scare me off of buying.
Why so much aversion towards buying a house? Even if I wasn't considering it an investment (many peoples make a mistake of considering their primary place to live also an investment), I could've bought a nice house for $400-450K about 1 or 2 years ago. And the median house prices (even with covid-1984) have soared to $550k - 650k in the meantime.
Would you consider the aspect of selling a house (as worst case scenario if I'm forced to leave more or less abruptly) as a more difficult thing to do than selling stock? In the sense that a stock portfolio could still be kept and sold much later than the moment of leaving?
The residential real estate market in the Denver-Boulder metro area is pretty hot, and I don't think I would have trouble selling a house relatively fast.
Rent a nice place, and let the landlord worry about fixing stuff, dealing with regulations and taxes, etc.
As a saver, you know very well that you can't necessarily get ahead with renting, especially if you're conservative (mind you: not because of one's personality but because of priorities and shorter-time horizons!) and don't wish to immerse full-throttle into the stock market.
It is also a psychological plus lifestyle aspect at play here: I am SICK of moving (even as radically as changing countries, you see) because my family and I feel like not getting roots, so the general feeling so far is of a nomadic kind of life. If I didn't have kids, maybe I could go on like this. Heck, even living in an RV and completely "detaching" myself from Government, oligarch and restriction of freedom, by becoming even more nomadic and preparing for even worse scenarios, if you know what I mean. But I don't wish to go that route, because I noticed I must counteract my "free spirited" mindset that seems to characterize me, and become more patient with things in life (I see myself as too impatient sometimes in life).
-Since you're risk-averse, a first step might be to keep a large portion of your money in cash.
The risk aversion is not necessarily "static": In the past I had other priorities (like saving to buy a house back in Canada, not having retirement funds accumulation in mid). Presently, while I am still contemplating a house purchase as objective, now I also realize that I must also think about retirement more (when you're younger time flies faster and you don't get to think about retirement necessarily).
The risk aversion stems from "not getting value from what I'm putting in", and from being burned in the past with Canadian "stock market" (which is less broad and diversified), and also after understanding myself better after financial incidents such as 2008.
[...] next time stocks plunge--not if, but when--you'll have a sizable buffer that will allow you to shrug and say, "It'll go back up before I have to worry about withdrawals."
I understand myself better now, and the key pain point is, as you said it very well in another statement, the risk itself not the volatility per-se. While I can live with volatility (assuming I have an alignment to a long-term investment horizon), a risk factor in my mind should be no more than what an informed decision allows (i.e. no un-calculated / foolish risks caused for example by getting into an exotic investment product that I cannot understand etc).
Or even better yet, you can say "Hey! A sale on stocks! Let's buy some more!"
That saying and way of thinking, is actually a double-edged sword. I
used to think a lot like that. But tell that to someone who wants to exit the market, for example a retiree wanting to cash some stock out to survive! Please don't bring the argument that selling stock should be planned "ahead of time", because I call that simply BS!
-As for how to invest, I've been wrestling with asset allocation myself. For a long time, I've been a believer in the jlcollins Simple Path:
https://jlcollinsnh.com/stock-series/
But as my assets grow and I continue to learn more, I'm starting to lean in the direction of Paul Merriman's approach described in these free e-books:
https://paulmerriman.com/how-to-invest-series-complimentary-download/ or shown in the table here:
https://paulmerriman.com/vanguard/
[...]
Whatever makes you comfortable enough to stay in it for the long haul is most important. However, you should remember that the more you have in bonds, the lower your return will be.
Thanks a lot for the investment suggestions. If I had a clearer (more deterministic?!) future ahead, especially with the US residency aspect, I'd know better what to invest into - fully 100% into stocks, because besides the need for a house, it is now clearer in my mind that I need to focus on growing those hard-earned cash assets more, for retirement (and to fight against the government crooks who want to steal our money thru inflation).
You know what my
main problem is, currently (and hence my need for an alternate view / another take on the situation via opinions from early-retirement.org forum)? I feel like being frozen in time, and my future not being able to evolve properly, because of too many "variables" for the moment. And just saving, saving and again saving, and keeping hard-earned assets into pesky savings accounts (heck, I've recently moved all the US assets to another institution to get 0.91% APY now instead of the previous 0.67%

) seems to no longer be the best strategy.
-Also recall Warren Buffett's statement that "we're risk-averse, not volatility-averse." This highlights the point that volatility and risk are not the same thing, not if you're maintaining a long-term investing horizon.
Yes, Amen to that. Maybe I should buy one share of Buffet's, because after all he's considered the best (and not necessarily lucky) investor of all time, after Graham Bell?
It's entirely possible that you could put some excess money into a brokerage account (say with Vanguard or Fidelity) now, and keep it there even if you end up moving out of the country. But that, of course, would depend on the rules of the brokerage. Since they're incentivized to keep money in-house--and since they're both huge companies that are international in scope--I'm sure they'd be willing to work with you to keep the money invested with them, even if they had to do some internal work to transfer the funds into an 'international' or 'Canadian' type of account.
I don't understand. What's the advantage of keeping cash in cash brokerage accounts earning maybe 0.01% interest rate? There is nothing international about these brokerages (an aspect which one may consider as an advantage towards easily withdrawing, or moving, liquid cash around the countries). All these online discount brokerages look "international" only on paper, believe me because I've got to experience aspects like this first-hand. These companies are buried into government and financial regulations to such extent that they are bound by specific national / state rules.
So unless one goes with multi-portfolio accounts with big companies like HSBC, Citi Int'l Personal Bank (which has nothing to do with what you know as "Citi" btw), everything is "stationary" and bound to US addresses etc. Heck, last time I was having a lot of "frictions" with a crappy discount brokerage back in Canada, even WHILE still being in Canada, so the issues would be even more exacerbated when being in an international context.
So, in terms of managing cash liquidity, I still consider savings accounts (and short-term CDs) best. I also dislike bonds - I mean of the "bond FUNDS" kind, because their perpetuity selling and repurchasing different one so that some "fund administrator" needs to maintain some "objectives" (whose?? Not mine, for sure), is not good.
I never purchased an individual bond (for the purpose of holding to maturity) - maybe I should experiment with that.
-Given the complexities of your situation, especially the international piece of it, you would probably benefit--both psychologically and financially--from visiting a good, experienced financial planner.
I'd strongly recommend looking for someone with a CFP or PFS certification, and who charges an hourly or flat rate (rather than percentage of assets under management or something similar). Such a person should have a much better idea of your options if you were to leave the U.S., and may also have some unique knowledge that nobody in this forum would have.
Eh, I'm not sure how open-minded and truly international these fee-only advisors are. At the end of the day, it is only YOU who understands the current financial (and LIFE) situation better, and nobody else can have their best interest in mind, for YOU.
And Canada and US, from a financial point of view, are generally not super-different.
Such advisors, for example, cannot know anything about work visas, immigration, etc.
On a side note, I
could buy my right of US citizenship right now, by investing half of million US$ into US economy - there are certain economical areas in the United States designated by the USCIS or Department of Labor as more in need for investments, and there is a special "US Investor program for citizenship path". But I wouldn't prefer to do that, because I wouldn't have remaining funds to buy a house.
I am still hopeful that CAD will gain more value against USD, so I'm waiting a bit on that front, and getting ready for a potential conversion to USD. Speaking of which I've been actively researching for multi-currency accounts in the US, for individual / non-business customers. It seems to be a rare thing here - I believe due to some law that insists on banks and other domestic institutions to not focus on foreign currency operations.
I was able to find so far (for those who might be interested):
HSBC (Expat account), TIAA Bank (high forex margin i.e. 1%), Cathay Bank, EastWest Bank and VectraBank in Colorado. But so far doing conversion from Canada via a service like TransferWise, or the Norbert's Gambit (buying super-stable stock in a company that is listed on both US and Canadian stock exchanges, journaling the purchase under the US-listed equivalent, and then selling it fast), are the best approach.
Thanks again for your help.