Author Topic: What to do with $300k CDN?  (Read 2599 times)

cloudsail

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What to do with $300k CDN?
« on: May 21, 2017, 08:15:28 PM »
As title says.

For reference, we are Canadians living in the US, with no plans to move back in the near future. We moved here pretty much after college so we have no assets or investments in Canada. CDN vs USD exchange rate is not so great so we don't want to convert the currency (we don't have debts other than mortgage so no immediate need for cash). There is also the off chance that we might move back to Canada when we are old or health care costs in the US become too expensive. We are open to buying property but unsure about what city. We do have experience as remote landlords.

Any and all suggestions would be awesome and appreciated.

Right now the money is just sitting in a savings account making 1% interest.

joonifloofeefloo

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Re: What to do with $300k CDN?
« Reply #1 on: May 22, 2017, 01:45:54 AM »
I think it would be determined by your location (assumed long term residence), because of wanting to weight somewhat in favour of your home country, etc. US-based people often just stuff it all into that one super diversified index fund through Vanguard. I imagine you could do that with Cdn dollars. (Those of us living in Canada, and planning to continue doing that, usually implement one of the models presented by Canadian Couch Potato.)

For Mustachian residents of the US, popular models are those presented by JL Collins or Andrew Hallam. Those are online.

Whether to invest in stocks and bonds or in real property is really dependent on many factors: personal preference, real estate deals available, type of ownership one is game for (appreciation only, landlording, etc).

If you're fairly sure you'll want to buy, you won't want that portion in stocks, as they may well be in a dip when you wish to buy. Money for a home (or property investment) purchase will be in something more stable, depending on when you'd be looking (one year, five years, ten years).

joonifloofeefloo

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Re: What to do with $300k CDN?
« Reply #2 on: May 22, 2017, 01:46:59 AM »
p.s. cloudsail, I recommend asking a moderator to move this thread to the Investor Alley section. I think you'll get more responses there.

MustacheAndaHalf

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Re: What to do with $300k CDN?
« Reply #3 on: May 22, 2017, 04:07:50 PM »
The exchange rate goes up and down without being too predictable - so I wouldn't wait it out.  If you're more comfortable doing some at a time, why not break the $300k CAN into chunks you feel comfortable investing in US dollars?

And then you could open an account at Vanguard and get stock market returns from that money, instead of 1% savings returns.  With 2% inflation, fear of currency conversion is not as big a problem as losing money every year as prices slowly go upwards.

RichMoose

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Re: What to do with $300k CDN?
« Reply #4 on: May 23, 2017, 05:27:16 PM »
As title says.

For reference, we are Canadians living in the US, with no plans to move back in the near future. We moved here pretty much after college so we have no assets or investments in Canada. CDN vs USD exchange rate is not so great so we don't want to convert the currency (we don't have debts other than mortgage so no immediate need for cash). There is also the off chance that we might move back to Canada when we are old or health care costs in the US become too expensive. We are open to buying property but unsure about what city. We do have experience as remote landlords.

Any and all suggestions would be awesome and appreciated.

Right now the money is just sitting in a savings account making 1% interest.

Just follow a Canadian Couch Potato or similar type passive investing. You can open a self-directed accounts with brokers such as Questrade, BMO Investorline, Interactive Brokers, etc. IB might be your best choice if you plan on investing out of the US when the dollar gets better. Naturally this only applies if you plan to invest in Canadian stocks or hedged international. If you go unhedged, you might as well convert to USD.

I wouldn't rush into rentals here. Our Prince/Rent ratios are nuts in most major cities. Almost a guaranteed way to get low returns going forward.

nereo

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Re: What to do with $300k CDN?
« Reply #5 on: May 23, 2017, 05:42:35 PM »
HI there - we're basically the reciprocal of you (US citizens living in Canada)

Anytime I hear about the USD/CAD "not being great" I immediately think "compared to what?" - since WWII the loonie has ranged from $1.03  to 69 USD.  There's no 'return to average' for currencies.

Canadian Couch potato has been mentioned - if you decide to convert those loonies into greenbacks I'd strongly recommend doing a Norbert's gambit to save on the spread (which could save you several thousand$ on $300k).

cloudsail

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Re: What to do with $300k CDN?
« Reply #6 on: May 23, 2017, 10:02:40 PM »
Thanks for all the advice folks. Spent a lot of time reading through Canadian couch potato.

There's a decent chance that we might need Canadian funds in the future. We might move back, or my father-in-law who lives there might need financial help. So we're not very motivated to exchange the currency.

For Canadian Vanguard funds, am I just able to buy them through any brokerage?

Originally I was looking in the Waterloo area for purchasing real estate, but they recently passed the nonresident real estate tax. We were also thinking Vancouver island, since that's a place that we really like and might want to live in when we retire. Is there really no city in Canada right now that has decent price to rent ratio?

joonifloofeefloo

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Re: What to do with $300k CDN?
« Reply #7 on: May 23, 2017, 10:10:26 PM »
I've been able to get Vanguard ETFs through RBC direct investing and TD direct investing, but not one other place (which is not needed by most people here anyway).

I've been looking (mostly lazily) for property in Canada for a while. Have found nothing I consider a wise (for me) price in any area I'd want to live, nor anything I'd want to rent out due to landlord/tenancy laws (been there, done that). I bought very wisely in the past, and am fussy about what I'd buy again.

Heckler

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Re: What to do with $300k CDN?
« Reply #8 on: May 24, 2017, 12:01:05 AM »
Vanguard Canada (and US) ETFs can be bought at any online platform that does trades on the TSX or NYSE.

http://www.moneysense.ca/save/investing/canadas-best-online-brokerages-2016/


Although I don't know about US residents opening Canadian accounts. Good luck, and maybe get an accountant.
« Last Edit: May 24, 2017, 12:04:46 AM by Heckler »

joonifloofeefloo

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Re: What to do with $300k CDN?
« Reply #9 on: May 24, 2017, 12:09:21 AM »
I've been able to get Vanguard ETFs through RBC direct investing and TD direct investing, but not one other place (which is not needed by most people here anyway).

In case I'm being confusing: I meant I wanted to get Vanguard ETFs in three places. Two of those allow it; the third firm I use does not.

pumpkinlantern

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Re: What to do with $300k CDN?
« Reply #10 on: May 24, 2017, 01:31:35 PM »
You could buy Vanguard ETFs in Canadian dollars - it would be the easy and relatively liquid if you needed part or all of the money later.

Real estate in Ontario and BC is in a ridiculous bubble right now - not sure about other provinces, but the price to rent ratios anywhere remotely close to Toronto or Vancouver are not favorable for landlording.  Foreign buyers taxes have also been implemented in both BC and Ontario.  Ontario also has imposed new rent control laws.