Author Topic: Please help new immigrant to make right mmm-style decisions  (Read 2548 times)

new_immigrant

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Please help new immigrant to make right mmm-style decisions
« on: August 08, 2016, 03:07:32 AM »
Hello, comrade mustachians.

About me:
27, work in tech, moving to the US this autumn.
Will be on H1-B(work) visa in Sunnyvale, CA. That means not changing employer, and hence, office location in next 2 years.
Salary will be 130000$, which is, according to my calculations about 6500$-7000$ a month after taxes.
Married, would like to have a baby in next year.
Wife won't be working in the US.

Started to invest 3 years ago in Russian stocks.
Found MMM a year ago on a Russian blog dedicated to investments.
Do not have any credits.
Saved 20k$ for moving.

So what worries me is amount of money I will be able to save living in the Bay Area.
My plan is the following:
1) Rent a 1-br apartment in walking/biking distance to the office. Price of that is around 2300-2500$.
2) Bring our bikes to the States, so both wife and I can avoid using car unless it is really necessary.
3) Buy used Toyota Prius for 10k$, so we can use it for weekend trips, and also wife can use it while I at work.

Should I try to find 3-4 hundreds dollars cheaper app further from the office and commute by car or tram?
Otherwise rent will be eating more than 30% of income.

If you have any other thoughts on what should I do starting my life in the new country, please share.
It will be easy for me to implement, since I'm starting from scratch, and didn't make any expensive mistakes yet)

Thank you in advance for your pieces of advice,
new_immigrant

ShoulderThingThatGoesUp

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Re: Please help new immigrant to make right mmm-style decisions
« Reply #1 on: August 08, 2016, 05:26:57 AM »
Welcome!

$2500/month is definitely a lot in rent, but being able to bike to work will be good and you will be making a lot of money. Bay Area people will be able to tell you if there's a better place to live.

If you're planning on staying here long-term you should definitely contribute the legal maximum, $18,000 per year, to the 401(k) retirement plan that I expect your employer offers. You pay no taxes on that money until you withdraw it after you retire.

Has your employer given you information on what retirement and health care benefits they offer? If so, let us know what the options look like so we can help clear up anything confusing there.
« Last Edit: August 08, 2016, 05:34:54 AM by ShoulderThingThatGoesUp »

erae

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Re: Please help new immigrant to make right mmm-style decisions
« Reply #2 on: August 08, 2016, 05:29:15 AM »
Hello new_immigrant!

My husband is also an immigrant to the US and, looking back on his immigration journey, quickly establishing a credit history in the US was one of his best moves. A person's credit score in the US can provide them with access to lines of credit, can be used to determine how large a deposit is required by utility companies or landlords, determines the interest rates people pay banks on monies loaned, and can be used by landlords to determine if you're a reliable tenant. You'll want to get to work right away building your credit score. Two of the greatest inputs in determing your credit score are your history of managing credit lines responsibly and the percentage of your total credit line that you're using.

The easiest way to build your credit is to get a US credit card that you pay off in full each month and keep your usage of the card below 30% of your credit limit. The interest rates on a credit card are incredibly high, so you'll want to be especially diligent about paying the entire balance in full each month.

Despite your relatively high salary, many banks will not grant credit cards to new immigrants without credit history. Capital One is one of the biggest credit card companies in the US. It is reputable and will usually take on the higher risk clients that other banks don't want to take on. Of course, their interest rates are higher because of their willingness to work with high risk folks. I was born in the US and Captial One granted me my first credit card when I was 18. Capital One was also the only bank that would open a card with my husband when he immigrated to the US.

At first, my husband needed to open what's called a secured card, which means Captial One held a deposit ($900 in my husband's case) that they could use against any money owed to them if my husband proved to be irresponsible. With a $900 deposit, I think he was granted a $1200 or $1300 line of credit. He made small purchases with the card and paid the off each month, so he paid no interest and carried no balance. I also added him as an authorized user to an existing card of mine during this time to further build his own credit history and improve his credit score. If you have a family member established in the US who has a credit card and could add you to his/her account, this would help accelerate the building of your credit history. Note that adding you as an authorized user opens the account holder up to be responsible for any charges you make, so some people will not be comfortable adding you to their account. If being added to an existing account isn't an option, begin with a secured card.

A year or so after my husband opened the secured card with Capital One, his credit score was high enough that other banks would give him unsecured cards. So we closed the Captal One card and got a card through Chase with no depost (unsecured) and a line of credit that was 25% his annual salary. The higher limit on the Chase card helped to bump his credit core even higher.

Note that it's usually better to keep credit cards open  - even if you're not using them - because the longer history with the company and the unused line of credit can help keep your credit score high. In this case, though, Capital One would only return our deposit if we closed the account, and we didn't want $900 sitting with them not earning any interest.
 
« Last Edit: August 08, 2016, 05:35:47 AM by erae »

K-ice

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Re: Please help new immigrant to make right mmm-style decisions
« Reply #3 on: August 08, 2016, 03:28:59 PM »
Find something for your wife to do. Volounteer or whatever but it is very frustrating for spouses who cannot work in the US.

For health care be sure you say you are planning kids. I know some "immigrants" who were not planning on it. They already had 3 kids.  There was an unexpected 4th pregnancy. No problem they thought, they immediately called their insurance. They found out you must sign up 18 months before the bebe is born. Unless you are an Elephant it's a little hard to get insurance coverage for an unplanned pregnancy. Maybe some companies are better but I would tripple check and US health care insurance plan.

They had to pay for the cost of the delivery out of pocket.  Lucky there were no complications and a natural birth even though the Dr. wanted to do a more expensive C-section.
Natural birth, no complications $5000.

ShoulderThingThatGoesUp

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Re: Please help new immigrant to make right mmm-style decisions
« Reply #4 on: August 08, 2016, 03:37:50 PM »
K-ice, when did that happen? I expect it was pre-2009.

Anyways, I imagine it's pretty common for people on H-1B visas to have babies as the kid would be a US citizen if born in the US, so I doubt you're the first to encounter the situation.

I agree that your wife needs something to do. If she is not as comfortable with English as you there are probably Russian groups in the Bay Area you can find.

K-ice

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Re: Please help new immigrant to make right mmm-style decisions
« Reply #5 on: August 09, 2016, 11:02:09 PM »
Yes it was pre 2009.

If the rules have changed great. I just found the whole thing crazy when many unplanned pregnancies happen. How can 1/2 of the country be pro-life (ok probably an exaggeration but I'll assume most republicans are pro-life) then leave moms with such a financial burden if they don't have the right health care?

I don't want to sidtrack the OP's questions but getting good health care would be my biggest concern as an imigrant to the U.S.

Abe

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Re: Please help new immigrant to make right mmm-style decisions
« Reply #6 on: August 09, 2016, 11:49:24 PM »
Getting a credit card is really important. I didn't get one until after college, and that made everything a hassle.

Also agree with getting health insurance. San Fran general (and county-run clinics in general) is a hot mess due to the general chaos their patient population lives through. You don't want to go there for non-emergency care for your wife or baby if you can avoid it. Look at the california health insurance exchange if your employer doesn't offer coverage.

205guy

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Re: Please help new immigrant to make right mmm-style decisions
« Reply #7 on: August 10, 2016, 05:14:54 AM »
Hello and welcome. I'm a US citizen, but I also moved from abroad to the Bay Area for work, so I have somewhat similar experiences. Sounds like you have a computer job that pays decent wages, but the Bay Area is expensive and has a lot of issues around housing availability. Finding housing may be a problem, even at that price range.

When I worked in Santa Clara, I lived in downtown San Jose because I was more used to living in a city. But San Jose isn't much of a city, and all of Silicon Valley is more of a suburban sprawl. So be aware that it is the suburbs if you come from the city. The apartment complexes are boring in my opinion, so I found a room in an old Victorian house--but you won't have that choice in Sunnyvale. Sunnyvale does have a little downtown area, more of a main street with more dense apartments now, so maybe that is an option. Having an efficient car to get out of town and visit the mountains on weekends is a great idea, I used to have a civic because they were only about 5k back when priuses were new.

I'm glad you are considering biking, not just because it's the mustachian thing to do, but there are too many cars already and it's depressing to drive in silicon valley. I did bike 6 miles (10km) each way to work, which is about the limit of practicality around 30 minutes. It only freezes a few times in winter, there isn't much rain, but it does get hot 6 months of the year. Biking in Silicon Valley is a mixed bag: it's not crazy like some cities in Europe, but it doesn't have many bike lanes either--or they just paint a lane on a big road and cars cross it all the time. It's not full of trucks that want to kill you like Texas, but people are not very aware of bicyclists--always pay attention. There are lots of large roads made for cars and lots of traffic, which makes them hard to cross. There were literally some intersections that I would enter on green and not be able to cross before red. For the weekends, there are some nice bike trails by the bay and along the creeks.

I would look for apartments that are close to cultural things and shopping for your wife. Like the downtown area, the library, and a park (also good for little kids). That way she doesn't feel stuck at home with driving as the only option.

That's great advice about the credit card, just be sure to use it a bit (groceries, etc) and pay it off every month--treat it like a bank card, not a line of credit.

For healthcare, companies usually provide good coverage with the choice of PPO (select your own doctor) or HMO (a company that manages hospitals and doctor offices, usually Kaiser). Child birth should be covered, but it's always good advice to read all the paperwork and choose the one that's better for you (PPO usually costs more than HMO--the part you pay every month through work, and the copay when you visit a doctor). Companies also offer life insurance and it costs extra to cover your wife, but I personally choose to spend a few extra dollars on that every month--especially with kids myself.

For the 401k, it's great if you can max it out, but you may need a little more cash in your first months, so you could start out with the minimum to get the employer matching contribution, if they have one. You can always increase it later at any time. Another thing to consider is that 401k is retirement money, so it's locked away for a long time. Until your situation is more certain, you may want to save money in a regular investment account (like vanguard). It will be taxed, but it will also be easy to move the money if you need it. You will need to open the account yourself and set up a monthly transfer.

Speaking of money, you will need to open a bank account. You have the choice between big corporate banks (Bank of America, Wells Fargo, Chase) and coop banks (sometimes called mutuals in Europe). I have used both, the big banks have more ATMs to get cash, the coops are more ethical and community oriented. In any case, a credit card is good to have because you can use at to pay almost everywhere now.

Silicon Valley is a big mix of cultures, but they're not always celebrated out in the open. If you didn't go look for it, you wouldn't find the Latino, Korean, or Chinese communities and events. So be open to exploring the area and finding other things to do, not just computer culture and suburban living. I know you'll also hang out with other Russian immigrants, it's only natural, but also try to meet other people.

This is true for food as well--you don't have to shop at the bit American store chains (like Safeway), there are lots of Smaller choices and you can avoid American processed foods. For example, I used to buy sandwiches at the Vietnamese shop near my appartment in San Jose, and I'd buy most of my vegetables at a small store run by a lab ease family. There are farmer's markets, but only once a week and you have to find them--and they tend to more expensive but better quality.

Of course, there is always San Francisco, which has a lot of nice things to see and do, and where culture is more open, but it's almost one hour away with frequent traffic jams--but you can get there on the train.

If you like the outdoors, there are lots of hiking trails in parks and open spaces around the Bay Area (it's a great place for that). For example you can drive less than an hour and hike in redwood forests. Many places are free, but state parks charge a reasonable small fee--or you can get an annual pass. Just be sure to learn about poison oak, so you can recognize it and avoid it. And don't pick the mushrooms because they are different than in Europe (join a club and learn to recognize local mushrooms if you're interested).

I know this is too long, but I remember how it was an exciting but uncertain time for me. I wish you he best of luck, and feel free to ask more questions. There must be a lot of Bay Area mustachian on here.

new_immigrant

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Re: Please help new immigrant to make right mmm-style decisions
« Reply #8 on: August 13, 2016, 10:36:19 AM »
Thank you everybody for your time giving pieces of advice to me!
(I'm doing my job in promoting this blog to coworkers and family members as well)

ShoulderThingThatGoesUp, I know that employer doesn't match 401(k). I know new employees receive a brochure with all available benefits on first day. Will ask when I will see what options are present there.

erae, Abe thank you! This is what was bothering me. I heard that it is highly recommended to have good credit history, but I was confused, because I do not want to borrow money at all. Now I understood that I can have a credit card, and pay it in full each month just to build history, and it will not cost me anything.

K-ice, thanks for that advice! Coworker(us-citizen) told me that it was 20k$ bill from hospital for his wife giving a birth, but luckily insurance company paid 100%. (he has Cigna medical insurance)

205guy , that's great! After reading your post I feel more confident and excited about my future there)
About 401k, I think I will not invest in it unless I will be 100% sure that I'm going to retire in the US. I did read Bogle's book though, and will use low-commission ETFs if I will put anything to 401k.
Will look for apartments close to downtown and caltrain station. Actually, I see there are listing close enough to bike to the office and walk to caltrain, which will be great, I think.

Thanks again, everybody. I think I will update my topic once arrive to the country.



MidWestLove

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Re: Please help new immigrant to make right mmm-style decisions
« Reply #9 on: August 13, 2016, 10:50:27 AM »
Welcome! Also, if you read Russian check out privet https://forum.privet.com/ - Russian language here in US, ping to find people in the area and see what else they can help with (furniture, initial assistance/orientation ,etc.). you are not the first one, not the last one, whenever possible people try to pass it forward..