Hello MMM Community,
I have read through the entire blog and started reviewing the forums and I think I have a slightly different case study than any I’ve been able to find on the site.
An opportunity came up for myself (31) and my wife (30) to relocate to the Middle East and it has turned in to a great adventure and financial success story for us so far. We are non-residents, living as expats and enjoying a mainly tax free life.
This is the situation (All figures in Canadian dollars):
Debt: $0
Credit Cards – Only used for points and always paid off.
Current Savings: 70,000 (basically earning 0%)
Current RRSPs: 12,000 (can’t contribute or touch as non-residents)
No Cars or other liabilities
Estimated Total Savings in 3 years: $300,000 (CAD)
Now the twist in the case study – forget about our current expenses. We are fairly frugal (myself more than my wife, although I’m slowly working on her) and our only plan moving forward is to start a family – soon. We don’t know if we’ll move back to Canada or if we’ll relocate to another country but we know that our time here is limited. In three years I expect us to be on the move with either 1 or 2 children in tow.
Assuming we move back to Canada (as it’s the most likely possibility) and we return to Canada with $300,000 (CAD) and a blank slate, what would you recommend we do to optimize our return and relocation?
After reading the entire blog (thank you MMM) I am debating between two major options: Rent vs. Buy. Given our financial start what would be the best Mustachian strategy?
I need to make a plan. The cash we’re accumulating is sitting idle because we expect to need it liquid very soon if we are going to buy a house and my understanding is that for investing (other than short term deposits at slightly higher interest) investing in the stock market for lets say 1-3 years is a bad idea (if you will need to liquidize it). However if we are deciding to rent I can put my little army of employees to work immediately and they can give us a 3 year head start.
On the flip side – we will eventually buy a place (I would say a fair estimate would be after 5 years of renting?). If we wait 5 years the prices surrounding the GTA are going up on average 5% a year, meaning the house we would buy today would likely be 100k more expensive when we make the move and we would have a smaller down payment (at least 20% though). What would be the best Mustachian move?
With no current commitments and a healthy start to our next step how would you suggest we tackle the short/long term investments given the Rent vs. Buy scenarios. An important note is that my wife is conservative when it comes to money and investing and she is leaning towards purchasing a home (which means there's good odds I'll be a commuting sukka). *EDIT* The purpose of renting would be to avoid being a car clown and commuting 90min-120min a day (in hopes of improving quality of life and saving money - if the numbers make sense)
Additional Details:
- If we rented we would have 1 car, if we bought a home we would have two cars (used/paid in full/fuel efficient).
- If we bought a home it would be on the west side of the GTA (closer to family).
Goals:
- Find the best way to re-establish ourselves in Canada.
This request is starting to get long but if you require any additional details please let me know.
Any suggestions would be very much appreciated.
Sincerely,
EcoCanuck (Mustachian in Training)
