The fail

Eli may not be with us for long. And he needs help.

He’s considering exiting Canada to land somewhere in Central America. Why? To work “as a nomad, earning USD remotely, doubling my income living abroad, inspired by your posts about the Italian Canadian expats.” It’s an interesting thought, given that hundreds of thousands of migrants – chased away by violence and failed economies – are streaming north to test the US border.

So, being a studious little beaver, he went to see an accountant (CPA) dude to learn the tax implications of leaving Canada to work elsewhere. “Unlike the Italians, I plan to retain Canadian citizenship and pay the CRA taxes on my income for now,” he says. Now, the interesting part…

“When the topic of tax avoidance came up he told me that an RRSP allows you to pull money out later tax-free, and a TFSA is best used as a short term savings account. He said with a TFSA you’ll pay some amount of taxes when you pull money out. From my understanding, this all backwards!

“I’m not sure what advice is right after today. If a well-paid tax geek struggles to advise clients on investment vessels that are available to every single Canadian, what chance do I have to make the most of my hard earned income? Can you (once again) summarize the general use cases for both types of accounts, and the tax implications of dipping into them? Should I find a new accountant?”

You bet. The guy’s CPA certification must have come in a box of Cap’n Crunch. Punt him!

By the way, anybody earning income abroad still has to file a Canadian tax return if deemed to be a resident of Canada for tax purposes. That means maintaining “significant residential ties” to the mudderland. That could range from owning real estate in Canada, to having a spouse or kids here, a car, social ties, driver’s license, passport or valid health insurance card.

If you give up on Canada, become a non-resident and emigrate to another country to work (if they’ll let you) expect to face a one-time departure tax on assets left here, like a rental property or investment portfolio (but principal residences, RRSPs and TFSAs are exempt). The day you leave these assets are considered to be sold at market prices, then reacquired, triggering capital gains. So long. Pay up.

Well, back to the failed accountant and Eli’s basic questions.

RRSPs were invented in the 1950s and have worked the same way ever since. Contribute up to 18% of a year’s earnings (maximum $26,500) and deduct this from taxable income in that year or a later one. So, the more you make and the higher your marginal tax rate, the bigger the savings. The money should be invested for growth, all of which accumulates free of tax. Keep the account in place until you hit 71, then a small amount must be claimed as income each year, whether you want it or not. Money can be taken out at any time, but it’s always added to income in the year of the withdrawal – and taxed. The biggest benefit of an RRSP is shifting taxation, therefore. Contribute lots during high-income, high-tax years and suck it out when income is lower. That could be retirement, a mat leave, job loss or screw-this-I’m-going-to-Nicaragua.

The tax-free account (TFSA) is more democratic, – available to everyone regardless of income, and clocks in at a max of $6,000 a year. Like the RRSP, the ‘room’ you earn to contribute never goes away and, similarly, everything you invest inside the plan grows without being taxed. But contributions cannot be deducted from taxable income. Nor are withdrawals taxed. In fact, money taken from a TFSA is not counted as income, even if it is entirely the proceeds of growth. That means in retirement none of the cash flow coming from this account will hike your marginal tax rate nor diminish government pensions. That could be a huge boost.

There’s much more to learn. Contributions to either plan, for example, can be made without cash – by flipping over assets you currently own. An RRSP can be set up for a spouse who earns less, giving you a tax break and splitting income. And virtually any financial asset can be held inside either, yielding taxless gains. So neither should be used as a savings account, holding cash nor low-yield losers like GICs. Plus, everyone should strive to have a non-registered account as well, where gains are taxed annually but capital gains and dividends are given preferential treatment.

You’re right, Eli. Investing’s complicated. Most people suck at it. Moronic accountants don’t help. Don’t forget to write.

93 comments ↓

#1 Toronto_CA on 07.14.19 at 4:38 pm

I don’t believe TFSA growth is income tax free in your new country outside of Canada should you be tax resident in another country. RRSPs can be tax deferred, depending on the treaty with the country.

Tax residency and double tax treaties are complicated stuff! You’re likely best to cash out the TFSA when you leave and put the money in your new country’s equivalent as you build room to put the money into it (Roth IRA in the USA, ISA in the UK, etc).

Sorry the CPA you saw was a loser. Probably some CGA or CMA, only CAs are quality CPAs ;-)

Sounds like he wants to remain a resident for tax purposes (spending partial years here). In that case, keeping the TFSA intact would be a wise choice. – Garth

#2 Alessio on 07.14.19 at 4:46 pm

I usually post a sarcastic (yet realistic) message. Today I am actually looking for advice. In my thirties and I currently hold a balanced ETF mix with Wealthsimple, TFSA and RSPs maxed out in Tangerine balanced fund and my employee retirement fund. I also have employee profit sharing where I also get a match by employer. Total income each year is ~150K. Company paid pension. I also have a large amount of savings in Tangerine savings for 3% for RE down payment (townhouse in Vaughan future purchase). No debt no owned RE (sold a mid town Toronto condo and invested profit). Lastly I short term trade stocks in a DB account and have FB and Microsoft stocks in US DB Accounts and some precious metals. Anything you would change? I plan to settle down soon too.

#3 SantaClaws on 07.14.19 at 4:52 pm

It happens. There are accountants out there that should not be advising others on such matters. Choose wisely. I have actually had to fire two accountants, and I have only had two.

The first accountant agreed he had made an error, gave me back the fees he charged me, and made me sign a waiver so I would not take any further action against him. I had the second one up for review but they did not find any wrongdoing. No surprise there. The third one, I have not fired yet… Which is a good thing since she I am married to her. She does not advise me on tax matters.

I strongly recommend that you pick up a copy of Canadian Taxation for Dummies and at least acquire a cursory knowledge of taxation.

#4 MF on 07.14.19 at 4:55 pm

#52 Yanniel on 07.14.19 at 3:19 pm
“How long to become so arrogant and condescending? – Garth“

It was not my intention to come out like that. I apologize.

-No need to apologize. The discussion from last entry was really good for all who followed it (like me).

Thanks for that.

MF

#5 Not So New guy on 07.14.19 at 5:02 pm

So if you have kids here you can still be considered a resident? Would those be underage kids or do you need to shoot them before you leave the country to break all ties?

#6 akashic record on 07.14.19 at 5:11 pm

AOC sets death trap for The Fed, setting stage for MMT.
Coming to think that she auditioned for role in politics.

https://www.zerohedge.com/news/2019-07-14/how-aoc-set-death-trap-worlds-most-powerful-central-bank-setting-stage-mmt

#7 SoggyShorts on 07.14.19 at 5:14 pm

Where’s Offshore Observer?

Every time this comes up I spend a bunch of time on the canada.ca website following links about re/nonres and deemed res and at the end still learn nothing.

I want to retire in SE Asia, mostly Vietnam.
They don’t give retirement visas. In fact I’ll have to renew a tourist visa every 3-6 months there forever. (getting a local wife isn’t an option since I’m bringing my own)

So where does that put me? I don’t mind filing and paying Canadian taxes every year, but I sure as hell don’t want to have my entire portfolio taxed in one go.

#8 Ronaldo on 07.14.19 at 5:20 pm

The last place you want to go for financial advice is to your accountant, a bank manager or [email protected] You would probably do better going to your dentist or your wealthy barber.

#9 CEW9 on 07.14.19 at 5:24 pm

#2 Alessio on 07.14.19 at 4:46 pm

I usually post a sarcastic (yet realistic) message. Today I am actually looking for advice. In my thirties and I currently hold a balanced ETF mix with Wealthsimple, TFSA and RSPs maxed out in Tangerine balanced fund and my employee retirement fund. I also have employee profit sharing where I also get a match by employer. Total income each year is ~150K. Company paid pension. I also have a large amount of savings in Tangerine savings for 3% for RE down payment (townhouse in Vaughan future purchase). No debt no owned RE (sold a mid town Toronto condo and invested profit). Lastly I short term trade stocks in a DB account and have FB and Microsoft stocks in US DB Accounts and some precious metals. Anything you would change? I plan to settle down soon too.

I would recommend a book- “Investing Demystified” by Lars Kroijer. Extremely good, one of the best for risk assessment. If ‘settling down’ means having kids, that changes everything.

#10 Macduff on 07.14.19 at 5:34 pm

Question to the group. I have lived in Canada all of my 57 years and am thinking of becoming an expat in a country. Would I still qualify for OAS if I keep my Canadian citizenship?

#11 Macduff on 07.14.19 at 5:35 pm

Should say becoming an expat in an Asian country.

#12 Dolce Vita on 07.14.19 at 5:43 pm

“…inspired by your posts about the Italian Canadian expats.”

Recall My Liege, you asked me to write that for your ‘Outta Here blog.

This one’s on you Garth.

————————————–

Keep all your money and investments in Canada.

Research reciprocal tax agreements before going anywhere (e.g., Italia & Canada have one). As well, go talk to the host country Consulate or Embassy in Canada to get advice.

And I pay CRA taxes and they know I am in Italia (no income sources from the latter).

Let Cdn Gov know what you are planning, they are fast and super helpful (unlike slow as molasses, punch yourself in the head, eventually get the job done, Italia).

Home is where the heart is.

My heart is in Canada and my residence is in Italia. To me, the best of both Worlds and 2 super countries to be a part of. It does not get better than that.

#13 Yanniel on 07.14.19 at 5:55 pm

#4 MF on 07.14.19 at 4:55 pm

“-No need to apologize. The discussion from last entry was really good for all who followed it (like me).

Thanks for that.

MF”

I appreciate your words MF. I stand by my apology. If I made one person uncomfortable, then I can expect that others probably felt the same. It was not my intention.

#14 Sail Away on 07.14.19 at 5:59 pm

Yanniel: a quote from the leverage article you linked yesterday:

“Thus, investors only face the risk of wiping out their current
investments when they are still young and will have a chance to rebuild. ”

How nice. I’ll let my young engineer friend who was wiped out on margin that the $40k he lost was no big deal. Heck, he should quit whining and get back in the game! Maybe he should try some Forex, since leverage is the name of the game there. What’s the worst that can happen?

Buffett said that derivatives are weapons of mass destruction. The paper you link has some eminent academics and mathematicians showing that using leverage could theoretically outperform the historical market returns.

Dead soldiers are still dead, even if their side won the battle.

#15 ALFRED E. NEUMAN on 07.14.19 at 6:01 pm

Alessio on 07.14.19 at 4:46 pm
“I also have a large amount of savings in Tangerine savings for 3% for RE down payment (townhouse in Vaughan future purchase). Anything you would change? I plan to settle down soon too.”

Do believe Alessio,
that Tangerine has peeled back their 3% HISA program to a guaranteed 2.50% if you commit the monies until the end of 2019.
If you confirm thus, ManuLife is offering a 3.25% HISA incentive, but think the promo ends soon.
“Stay liquid, my friend” .. to the extent required.

#16 Dolce Vita on 07.14.19 at 6:03 pm

PS:

Go live in the host country for a spell before making your mind up.

Tourism and living in that country are 2 different things.

Paying your hydro, gas, Internet, cell, city taxes, condo fees etc. reveal that country you are planning to live in, in a whole different light – and then using those services and getting them in the first place.

It took me 3 years of research and living in Italia for a spell before I made my mind up.

Superficial advice (I cook a lot), for the love of God find a country that uses 120 V, 60 Hz electricity (I had to say goodbye to far too many a trusty appliance in my move).

And careful what you bring with you, e.g., furniture. The Italians will tax your Canadian furniture as an import, a good 20% of the value. They are merciless, pound of flesh stuff.

Why it took me 3 years before deciding. A LOT to research before and it takes time (especially with Italian bureaucracy, the Canadians are fine by the way).

——————————-

It should not be a spur of the moment decision. It takes time.

#17 MaryEn on 07.14.19 at 6:11 pm

DTT depends of the agreements between countries. But there are mostly similar. If you spend more then 183 days in other country, you have to pay taxes there. Then you have to report that same income as well as paid taxes in your home country (e.g. Canada). CRA calculates taxes on that income again, deducts taxes you already paid for it abroad and manage the difference.

Whole point of DTT Agreements between countries is to defined what part of your income /property will be taxed in each country. It’s calls DTT (double tax treatment) because they should protect tax payer’s from paying double taxes on the same income/property.

If DTT Agreement with specific country doesn’t exist, you suppose to pay double taxes on the same income, once in that country abroad and once in your home country. Luckily, most countries have such agreement with others.

#18 Tony on 07.14.19 at 6:17 pm

Re: #2 Alessio on 07.14.19 at 4:46 pm

Sell all your gold in April 2020, buy it back in September 2020. Get out of all stocks worldwide by the middle of 2020. I would buy “deep out of the money puts” on the major U.S. indexes “monthly” starting in September 2020 for at least one year or when the major indexes drop more than 60 percent whatever comes first. You could also short the major indexes for the month of November 2019 only and/or play the volatility index long for the month of November 2019 only. Increasing your stake in the volatility index with each passing day in November 2019 until the middle of the month.

#19 Yanniel on 07.14.19 at 6:23 pm

There is a 25% withholding tax on RRSP withdrawals for non-residents of Canada.

#20 Linda on 07.14.19 at 6:29 pm

The learning never stops. I had not known RRSP’s were created back in the 1950’s (Google claims 1957 as the start date). I had thought them a more recent invention. I do however recall the media campaign to encourage Canadians to open RRSP’s. All the news articles made it sound so easy – open one, put $ in, earn X percent per year in growth & voila, you become a millionaire by age 65. Plus you get annual tax breaks. Of course, those examples depended on consistent contributions & annual growth to achieve the mighty million plus pile.

Suffice it to say that the majority of RRSP owners do not have a million plus in the account. However, for those that did achieve that status the mandated withdrawals at age 71 will likely result in a much higher tax bill. Right now the minimum rate at age 71 is 5.28%. For a million plus RRSP that means one must withdraw at least $52,800 the year one turns 71. More than coffee money, for sure.

#21 CEW9 on 07.14.19 at 6:34 pm

#18 Tony on 07.14.19 at 6:17 pm

Sell all your gold in April 2020, buy it back in September 2020. Get out of all stocks worldwide by the middle of 2020.

Tony, I am going to come back here in April & September of 2020 and see how your advice fares. Timing the market has big risks.

Sounds a lot like a certain someone’s “Turkey is the BEST” investment advice

#22 Stone on 07.14.19 at 6:49 pm

#18 Tony on 07.14.19 at 6:17 pm
Re: #2 Alessio on 07.14.19 at 4:46 pm

Sell all your gold in April 2020, buy it back in September 2020. Get out of all stocks worldwide by the middle of 2020. I would buy “deep out of the money puts” on the major U.S. indexes “monthly” starting in September 2020 for at least one year or when the major indexes drop more than 60 percent whatever comes first. You could also short the major indexes for the month of November 2019 only and/or play the volatility index long for the month of November 2019 only. Increasing your stake in the volatility index with each passing day in November 2019 until the middle of the month.

———

Sorry, but my magic 8 ball gave a definite no no to that recommendation. Considering the voodoo of the magic 8 ball, I’m going to have to side with the magic 8 ball.

Also, the palm reader down the street concurred so that means it’s for sures.

LOL

#23 Yanniel on 07.14.19 at 6:51 pm

#14 Sail Away on 07.14.19 at 5:59 pm
Yanniel: a quote from the leverage article you linked yesterday:

“Thus, investors only face the risk of wiping out their current investments when they are still young and will have a chance to rebuild. ”

Leverage is not a synonym of risk. Properly used is a risk reducer.

Properly managing risk is paramount when you deal with leverage. This is true regardless of whether you are young or old.

Let’s consider a 25 year old that wipes out its only 40k. Bad, yes. Consider now a 65 year old that wipes out is 1 million retirement portfolio. Guess who is pooched?

“How nice. I’ll let my young engineer friend who was wiped out on margin that the $40k he lost was no big deal. Heck, he should quit whining and get back in the game! Maybe he should try some Forex, since leverage is the name of the game there. What’s the worst that can happen?”

It is sad that happened to your friend. Yet that amount is not too big if you consider the salaries of engineers in this country.

Also, did your friend managed his/her risks correctly?

“Buffett said that derivatives are weapons of mass destruction.”

Yet, Buffett uses derivates. They are great to buy at the entry point you want and be paid while waiting for the bargain.

“The paper you link has some eminent academics and mathematicians showing that using leverage could theoretically outperform the historical market returns.”

It is hard to explain in a short comment how this is not in the realm of academics.

“Dead soldiers are still dead, even if their side won the battle”

True enough. It pays to study the battlefield before the battle though. There is a saying in Spanish: “Guerra avisada no mata soldado”.

#24 Sail Away on 07.14.19 at 7:09 pm

#18 Tony on 07.14.19 at 6:17 pm

Re: #2 Alessio on 07.14.19 at 4:46 pm

———————————–

Tony, I’ve rewritten the secret instructions in a way that makes more sense, or at least no less sense than the original:

“Sell all your applebits in Applemonth 2020, buy them back in Seglund 90210. Get out of all elevenses in mid Earth. I would buy “unga bunga funnel cakes” on the solstice starting at the last cock’s crow for at least one long winter or when the major stork-generals drop more than 60 newborns, whatever comes first. You could also squint the major imperflexes for that time of the hyperflex only and/or play the volatility bloodsport long.”

#25 crowdedelevatorfartz on 07.14.19 at 7:18 pm

@#2 Allessio
“Anything you would change?”
+++++

Yeah.
Stop trying to get free financial advice ya cheap prick.

#26 JacqueShellacque on 07.14.19 at 7:21 pm

So….thoughts on using the tax deduction from RRSP contribution, and possibly losing that by investing into TFSA. At my age (45) and having accumulated below-average wealth (100K, no debt or RE), I’m thinking I need to get every ounce of money I can get to invest, and not getting a tax deduction for TFSA contribution is potentially costly. I’m thinking there’s no reason for someone like myself to worry about my tax burden in the 2040s when I’ve under-accumulated to this point.

#27 Yukon Elvis on 07.14.19 at 7:22 pm

#11 Macduff on 07.14.19 at 5:35 pm
Should say becoming an expat in an Asian country.
………………………..

Try a long visit first. Language barrier, culture shock and medical care will be a big surprise for you. I have been going back and forth for ten years.

#28 crowdedelevatorfartz on 07.14.19 at 7:29 pm

ho hum.
Another week and more dismal numbers from the Lower Brainland.

https://www.citynews1130.com/2019/07/14/real-estate-market-cool/

The only positive side to this real estate meltdown is ….the NDP will be too stupid to react in a timely fashion….and the BC economy will “follow the pipeline” down the toilet to Alberta….while the NDP dithers…… a multi year financial kick in the gonads.

Can you say “election debacle” ….. I knew you could.

#29 SimplyPut7 on 07.14.19 at 7:37 pm

He should research what is the minimum amount of time he has to stay in Canada to keep his citizenship, health care in his province and get OAS and some CPP in retirement.

Unless he has a wife working in his new country and children that need to be in school, doing the snowbird routine may be more beneficial to him than taking long trips out of the country with no home to go back to when he does get homesick.

I have known many retirees who prefer being snowbirds than leaving the country completely, let the kids or a relative live in the primary residence and stay in the in-law suite when you need to come back to Canada.

#30 TS on 07.14.19 at 7:37 pm

Why would you move abroad to a low tax jurisdiction to be a digital nomad but plan to continue to be a Canadian tax resident? The whole reason you move to Panama, Belize, etc is because they dont tax foreign earned income. What a genius plan, stick it to man but then pay for every body else’s first world services.

#31 Herkinft on 07.14.19 at 7:54 pm

“everyone should strive to have a non-registered account as well, where gains are taxed annually ”
Thanks for another great post, Garth.
Did you mean that gains are NOT taxed annually, as long as they remain unrealized in non registered accounts?

#32 OffshoreObserver on 07.14.19 at 8:03 pm

Soggy Shorts, Mac Duff, Dolce Vita, On Accountants and other sic Professionals

I “retired” in 2010. 3 Years in Thailand then Vietnam (Da Nang) since 2014 with intermittent stays in Las Vegas, Arizona, Bali, Ecuador, Mexico, KL, Manila and Phuket.

I did have a 1 year “Retirement” Visa from Thailand. Once I escaped the Ladyboy Mafia in Pattaya I liked Da Nang better.

I just get a 3 month Visa and renew. One can depart Vietnam and re-enter for longer than 3 months. I just give my Passport to my GF and she takes care of matters. $250.

Now that my Mom has departed (2015) no real reason except my land in the Okanagan to return to Vancouver…which birth city seems to be rotting from within.

Had a squabble with my sisters which legal bills were around $400K. “Name” Accountants had a meeting with Mom and I. I wanted to know what they were going to do and why three partners were at this meeting. There was never any definitive meeting-of-the-minds.

The day after my Father’s death we got a $1,000 bill from the accountants. I told them to sue the estate, which they never did.

I just pay my taxes on my consulting income.

My heart jumped out of my throat when I received an CRA assessment for $50,000 for non-filing my holding company’s GST Return. I managed to get that reduced to $300.

I am still grappling with the “Should I Stay Or Should I Go” as to triggering capital gains and exiting.

My concern is the governments tightening the noose and stealing more money from us.

BTW, I collect my CPP and OAS, which are direct deposited to my TD Canadatrust account.

I turned 65 this year but feel like I’m good for another 65.

I loathe government so much the thought of my portfolio growth of another 65 years and my estate’s consequent increased tax liability makes me puke.

One other thing: I have an 8 year Visa to China, although it restricts any one visit to two months’ duration.

Just one more point: I learned to eschew RRSPS after watching my parents’ personal tax bills swell upon their turning 71. My room is $50K but none used. TFSAs = $110.

#33 Phil on 07.14.19 at 8:19 pm

Cash out Tfsa? Only if your move is permanent. If you’re coming back leave them. Tax free growth till then. Then tax free withdrawals thereafter. There are plenty of good reasons to become a non resident depending on where you’re headed, possible lower income tax rates, no capital gains taxes, 25% tax on interest and dividends. Things were even better before swaps were targeted. Key point as Garth pointed out, better if you own nothing;)

#34 Eli on 07.14.19 at 8:21 pm

Thanks Garth for your response.

I’m not ready to sever ties with the country that provides so much to me. Education, healthcare, and stability are all things Canada has given me in abundance for basically free, so I’m cool to pay up even though I’m earning abroad.

I’m a young(ish) single male with no kids, dogs, or real estate of my own. Those things can wait. Earning a great income remotely in American dollars is too appealing at this point in my life. I’m grateful to be a Canadian with these options, and look forward to returning in a few years with a bit of money and life experience..adios!

#35 Shawn Allen on 07.14.19 at 8:31 pm

RRSP Tax bills

Linda at 20 noted:

Suffice it to say that the majority of RRSP owners do not have a million plus in the account. However, for those that did achieve that status the mandated withdrawals at age 71 will likely result in a much higher tax bill.

***********************
True that few turning 71 today have that million dollar RRSP.

But whatever they have, they tend to resent the taxes due.

They conveniently forget that:

1. Absent the RRSP tax refunds they would not have been able to invest the same amounts and until the TFSA came around RRSPs were the way to get tax free growth. Considering the refund and the tax free growth they probably have at least double what they could have built up to in a taxable account.

2: That was the deal they agreed to, and most importantly

3. A lot of them would have never invested at all without the motivation of the tax refund.

#ungratefulRRSPinvestors

#36 Sail Away on 07.14.19 at 8:45 pm

#2 Allessio

It sounds like you have it under control. With the discrepancy between the Fed and Canada interest rates, there are some government-backed US investments that could make sense. Canada preferred shares are still on a bit of a sale.

#37 millmech on 07.14.19 at 8:50 pm

#28 Crowded
Spent the weekend looking at housing in the Fraser Valley today, one house I looked this morning has dropped their price by another $25k since I viewed it at noon. I have viewed close to 40 properties this weekend and did not see another person, it is actually becoming interesting to watch price drops daily.

#38 TS on 07.14.19 at 8:52 pm

Eli, give your head a shake. If you’re a Canadian citizen the only ties you sever by becoming a non-resident are the blood sucking taxes for services you aren’t going to use.

I was a non-resident for 15 years. All it takes is a bit of simple accounting to make sure you’re square when you leave and a couple page form and you dont have to give half your income away.

Good luck out in the wild eating what you kill as a nomad if right off the gate you want to gift half of it for warm and fuzzies.

#39 millmech on 07.14.19 at 9:16 pm

Yanniel
You are correct about leverage so many people do not understand it, I use it in and accept the tax deductible risks, there is much worst leverage than the investment margin of 50%-70%.
Just look at real estate which is 95%-100% leverage by a lot of investors who believe that nothing can go wrong being over extended at those levels with nothing to stop/limit the losses when the market declines.
Right now in the market I am researching the people have already lost a minimum five figures and one I am watching is now into the six figures.

#40 Yanniel on 07.14.19 at 9:21 pm

I once entertained Eli’s idea. At the time Costa Rica seemed to be the best candidate for me.

Zero tax on foreign income. So, telecommuters make out like bandits.

Cost of life was less than half the one in major Canadian cities.

Stable democracy and property rights are respected. Violence is not too bad.

Becoming a resident is relatively easy. They are friendly to expats.

Nice weather. Gorgeous nature. This country takes its environment seriously.

Cars and other luxury articles are VERY expensive.

Depending on where you are located; infrastructure and services (including health care and education) might be lacking. But overall I thought it was amenable.

It was just for fun though. I never considered this seriously. I do see why is appealing to others.

Good luck Eli!

#41 Eli on 07.14.19 at 9:40 pm

@TS

I don’t plan to be away from Canada 12 months of the year, for 15+ years. I have many reasons to come back home occasionally.

This is a short term adventure, taking advantage of remote work opportunities. Why should I give up all the benefits of Canada that are a relatively short flight away?

I’m not sold on the third world as a home base yet!

#42 MF on 07.14.19 at 9:44 pm

#32 OffshoreObserver on 07.14.19 at 8:03 pm

So you post:

“My concern is the governments tightening the noose and stealing more money from us.”

and

“I loathe government so much the thought of my portfolio growth of another 65 years and my estate’s consequent increased tax liability makes me puke.”

-Then proceed to say:

“BTW, I collect my CPP and OAS, which are direct deposited to my TD Canadatrust account.”

-So you are more than happy to take your 100% government taxpayer funded OAS every month (of course), while living in countries like Thailand, China and Vietnam with dictatorships as governments…while you complain on here about big government government. What a hilarious joke.

MF

#43 MF on 07.14.19 at 9:46 pm

#34 Eli on 07.14.19 at 8:21 pm

Nice post.

Good luck with the new journey.

MF

#44 Vampire studies (doctoral thesis) on 07.14.19 at 10:06 pm

Linda/Shawn – Another downside to even two moderate sized RRSPs is rolling a deceased spouses into the others, which then increases the required withdrawal with no way to split the income. This may be offset by the loss of the CPP/OAS of the deceased.

I’m thinking there must be an “ideal” size for a couple of equal age and approximately equal pensions. Of course if they are bigger you can retire early!

RRSP too big = First World problem. – Garth

#45 What's wrong with ... on 07.14.19 at 10:28 pm

retiring here in place? Just spent the afternoon watching the girls provincial softball tournament on a glorious day at the local park and going home to eat fresh sockeye steaks that are now in season. Turn 65 this year and get all kinds of breaks. What am I missing? Love this place …

#46 Mean Gene on 07.14.19 at 10:34 pm

Nothing wrong with a test run living in Central America, I did it when I turned 40 and ditched Canaduh for a year… every country has BS you have to deal with, Central America is the same.

Taxes pay for everything we take for granted and the stuff we never think about in Canada.

Public services in 3rd world countries are the same, low taxes = crappy or non existent services, beware what you wish for.

#47 Tom from Mississauga on 07.14.19 at 11:18 pm

Everyone should have a non-registered margin account. My emergency funds (buying a used car) comes from that and the interest is tax deductible. Keep my Canadian divvy stocks and perpetual preferreds in there. It’s done me well for 7 years now.

#48 Oh Canada, I weep. on 07.15.19 at 12:06 am

Trudeau’s foreign policy bizarre. India is increasingly angry with Trudeau sheltering and actually nurturing a terrorist regime, with many Canadians wanted for murder and terrorism in Canada. Why are we not following the same letter of law for our Indian treaty as Trudeau did for Meng and the Huawei debacle. After all, Meng is just wanted for financial crimes, Trudeau is sheltering person’s wanted for murder. Look, we all know that the ethnic voting blocs we’re formed to farm for votes, but at the sake of our soveregnty? Trudeau has one foot in the ghetto and the other in the twilight zone.

https://bc.ctvnews.ca/video?clipId=1729284

#49 jane24 on 07.15.19 at 12:29 am

Yes the Canadian govt will pay your CPP and OAS to any bank account in the world, assuming that you qualify. It pays mine every month here in England into my UK account. One of these payments gets 25% off for tax the other is paid whole and taxable in England, can’t remember which is which. Tax in Canada 25%, base rate tax in England 20% so I lose out a little.

RRSPs can be slowly cashed in by non-residents. The holding bank again takes 25% from each withdrawal for Cdn tax. I am slowly murdering mine as once you turn 71 years old the remaining money MUST be transferred to an annuity and you enjoy the peanuts it pays. I would rather have a new bathroom in my house in Italy.

#50 Smoking Man on 07.15.19 at 1:40 am

Best Canadian that ever lived.

https://youtu.be/YrLk4vdY28Q

#51 Smoking Man on 07.15.19 at 1:55 am

DELETED

#52 Smoking Man on 07.15.19 at 2:05 am

https://youtu.be/4XvI__yHNow

Cant type anymore wasted .

#53 Smoking Man on 07.15.19 at 2:23 am

My story
https://youtu.be/MjUqfRrWwcM

#54 crowdedelevatorfartz on 07.15.19 at 2:29 am

@#37 millmech
“it is actually becoming interesting to watch price drops daily.”
+++++
Yep, I’m seeing the same for sale signs week after week….

I was at a dinner party last night.
Heard a couple bragging they had signed on a house and take possession in Nov. No terms…… even though they hadnt sold their other house yet.

” No problem, our realtor told us it should be worth at least $1.5…”

I mentioned the falling RE market and slowing sales,

“It’s different in New West…”

Yeah , right, people are beating the doors down to live in New West………my God.

#55 Dolce Vita on 07.15.19 at 3:39 am

Off topic.

But yet another instance of why I keep saying N. American MSM is far left biased.

Here is something the Cdn. and US MSM did not show you from France on Bastille Day (Macron in the parade, the far Lefts darling – turn the volume down on the video…you’ll thank me):

https://twitter.com/matteosalvinimi/status/1150428154198183936

There you go.

Can’t fake that from the French people (note, no Yellow Vests in the crowd either, just the people). Recall, Paris voted near 90% for Macron in that election.

Trudeau a downright darling compared to Macron.

#56 john serf on 07.15.19 at 6:56 am

>>>>By the way, anybody earning income abroad still has to file a Canadian tax return if deemed to be a resident of Canada for tax purposes. That means maintaining “significant residential ties” to the mudderland. That could range from owning real estate in Canada, to having a spouse or kids here, a car, social ties, driver’s license, passport or valid health insurance card.

******************************

Meng Wanzhou has a two houses and a spouse resident in YVR, kids who have gone to school in Canada, a car, a BC driver’s licence, and a BC Medical Services card.

But Ms. Meng states that she is a non-resident for tax purposes.

So will the CRA audit her, in the same ruthless psychopathic manner that they audited my family?

Or is Canada is a country of two justice systems?

#57 BillyBob on 07.15.19 at 7:40 am

Can’t speak to the conspiracy theories about the MSM Dolce, but the BBC is pretty mainstream and lefty and reporting both the booing and that there was most certainly a very large contingent of yellow vests that infiltrated the crowd without the vests (bragged by unofficial leaders) and then created all kinds of havoc post-parade.

Hardly representative of “the French people”.

https://www.bbc.co.uk/news/world-europe-48983089

#58 dharma bum on 07.15.19 at 7:40 am

“He’s considering exiting Canada to land somewhere in Central America. Why?”
——————————————————————-

Why?

I think because he’s maybe mucho loco!

Central America? Ay, caramba!

Looking for trouble, amigo.

https://www.youtube.com/watch?v=Od1wfZe6EvE

#59 Yanniel on 07.15.19 at 7:42 am

39 millmech on 07.14.19 at 9:16 pm

“I use it in and accept the tax deductible risks,”

Yes. That’s nice.

“there is much worst leverage than the investment margin of 50%-70%.”

I haven’t used margin. Not sure I’ll ever do. Nothing wrong per say. I simply think you can achieve better capital efficiency with derivatives. Ah yeah, beware the margin call!

“Just look at real estate which is 95%-100% leverage by a lot of investors who believe that nothing can go wrong”

Yeah, that to me is crazy. I wouldn’t be able to sleep.

#60 Tater on 07.15.19 at 7:48 am

#49 Yanniel on 07.14.19 at 2:20 pm
45 Sail Away on 07.14.19 at 12:07 pm

Leverage = risk. That’s not necessary so.

Leverage can be a powerful tool in risk control.
—————————————————————-

Can you flesh this out a bit?

#61 dharma bum on 07.15.19 at 7:49 am

#25 crowdedelevatorfartz

“Stop trying to get free financial advice ya cheap prick.”
——————————————————————–

I’m still laughing!

#62 Tater on 07.15.19 at 8:03 am

#18 Tony on 07.14.19 at 6:17 pm
Re: #2 Alessio on 07.14.19 at 4:46 pm

Sell all your gold in April 2020, buy it back in September 2020. Get out of all stocks worldwide by the middle of 2020. I would buy “deep out of the money puts” on the major U.S. indexes “monthly” starting in September 2020 for at least one year or when the major indexes drop more than 60 percent whatever comes first. You could also short the major indexes for the month of November 2019 only and/or play the volatility index long for the month of November 2019 only. Increasing your stake in the volatility index with each passing day in November 2019 until the middle of the month.
—————————————————————-

Some terrible advice here. But, lets start with the OTM put buying. If you started buying 20% OTM 3M SPY puts in January of 08 and rolled them quarterly until June of 09, you’d have lost money. While the SPY went from 154 to 68. Oooof.

If you’d sold 3M 20% otm SPY calls, you’d have made money. Which follows from the number 1 rule of option trading: If you know which way a market is going, you should be SELLING options.

#63 Elcheapo on 07.15.19 at 8:05 am

Yanniel’s incessant droning makes it clear to me this website could use a better commenting system. I never thought I’d encounter a blog dog more holier-than-thou then Smoking Man or the simply boring Leo Trollstoy. I know beggars can’t be choosers Mr Turner, but it would be AMAZING if comments could be organized by threads. I suspect your dedicated readers would happily hit up a Go Fund Me to finance it too. I’m in for $100- anyone else?

#64 Yanniel on 07.15.19 at 8:28 am

#60 Tater on 07.15.19 at 7:48 am

Have to go to work now. I’ll get back to you.

#63 Elcheapo on 07.15.19 at 8:05 am

You just gave me a nice laugh. I never though of myself as a “drone”?! :-) I killed my FB account. Maybe I am in withdrawal.

#65 crowdedelevatorfartz on 07.15.19 at 8:29 am

@#55 Dolce Vita
“But yet another instance of why I keep saying N. American MSM is far left biased.”
++++

Well, I saw a 6pm News clip last night with Macron in the Bastille Day parade and the Newscaster specifically pointed out the booing and jeering crowds….it was loud.
Macron , another intellectual, effete snob that won the last election based solely on the anger of the mob.
Mind you ….A twitter feed from the likes of Salvini isn’t exactly “unbiased” .

#66 crowdedelevatorfartz on 07.15.19 at 8:32 am

@#56 Johnny dont Surf
“Or is Canada is a country of two justice systems?”
++++
You’ve lived here all your life and you have to ask that?

One last time.
Here it goes.
Yes.
One for the rich and one for the poor

#67 crowdedelevatorfartz on 07.15.19 at 8:37 am

@#49 Jane Two-four
” I would rather have a new bathroom in my house in Italy.
“”””””

A house?!?!?!

I do believe a while back you said you lived in a “palazzo” (palace)?

If you tell me you actually rent I’ll know my entire life has been a sham up til now and I’ll have to live my pathetic existence vicariously through IHCTD9 and the clouds of nothern Ontario black flies….

Only you can save me.
Please confirm you live in a palace and you’re really really really rich.

#68 TurnerNation on 07.15.19 at 8:42 am

Never forget folks T-Rump ia just an actor setting the stage for a likely North American Union.
The Mexico-Usa border has been rendered porus. Up here the Rcmp carry lots of luggage across the border and into waiting hotel rooms.

What will the catalyst be…a welfare state made to collapse? A financial or currency crisis – say a new North American currency the Amero?
Who knows atand by for the next act.

#69 Bytor the Snow Dog on 07.15.19 at 9:15 am

63 Elcheapo
—————————————-
Don’t need any money. Your mouse has this thing called a scroll wheel. Cheap (heh) and effective.

Use it.

#70 Penny Henny on 07.15.19 at 9:20 am

#32 OffshoreObserver on 07.14.19 at 8:03 pm

I did have a 1 year “Retirement” Visa from Thailand. Once I escaped the Ladyboy Mafia in Pattaya I liked Da Nang better.
////////////////////

I, for one, would like to hear more about this part.

#71 crowdedelevatorfartz on 07.15.19 at 9:31 am

More negative publicity for CREA

https://ca.reuters.com/article/businessNews/idCAKCN1UA1G9-OCABS

#72 millmech on 07.15.19 at 10:18 am

#14 Sail Away
Your young engineer friend got off lucky, check out this listing, price drop of $150k, it still has another $100k to go I bet. I bet these owners would be ecstatic to only lose $40k. I have an even better on that has a price drop of $200k, that you could show him/her to help ease the pain.
1451 GOVERNMENT STREET, Penticton, British Columbia V2A4V9
For Sale

#73 crowdedelevatorfartz on 07.15.19 at 10:38 am

@#70 Penny Henny
“I, for one, would like to hear more about this part.”

*****
I believe it was …..something about his lady mafia friend asking if she could have his gold teeth after he expired that ruined the post coital pillow talk……..

#74 TS on 07.15.19 at 10:49 am

I don’t plan to be away from Canada 12 months of the year, for 15+ years. I have many reasons to come back home occasionally.

——-
No worries Eli, if you want to be mother Teresa and give half your income away for no reason I’ll be the first in line to thank you for your selfless contribution.
All I’m saying is it will pay to do a little homework. 5 minutes with the google (Garth even laid out most of it) and a single guy without a ton of assets can make a really easy case for non-residency if you’re gone 183 days a year. You can come back litterally half the time and still be a non resident for tax purposes.
Canadians are a funny bunch. While the rest of the world is trying to figure out how to avoid their meager tax burdens any means necessary, these guys are trying to figure out if they can continue to pay one of the highest tax regimes on earth while living in a tax haven. God help us.

#75 Ronaldo on 07.15.19 at 10:53 am

#72 millmech

That house is listed for $599.000. Was assessed at $387,300. I presume they did a major reno and now trying to seriously capitalize on it. What price are they asking for it now?

#76 BIG TIMER on 07.15.19 at 10:57 am

Hey Garth,

My TFSA and RRSP accounts are all maxed out with index, bond, and individual company stock.

The only thing left in cash is my margin trading account.

What are the most tax-efficient investments to purchase for this account?

#77 Damifino on 07.15.19 at 11:12 am

#63 Elcheapo

I know beggars can’t be choosers Mr Turner, but it would be AMAZING if comments could be organized by threads.
—————————————–

We’ve been over this ground a hundred times. This blog is far too dynamic to have it’s comment section organized by ‘threads’ that will be stale by tomorrow. That’s a strategy for crappy bitch-fest non-blogs like ‘Vancouver Condo Info’, a hotbed of un-moderated childish venom.

#78 45north on 07.15.19 at 11:43 am

First used Australian fighter jets now flying in RCAF colours with more to come

https://nationalpost.com/news/canada/first-used-australian-fighter-jets-now-flying-in-canadian-colours-plans-underway-to-extend-jet-fleet-to-2032

“In terms of value for dollar of extending this aircraft out to 2032 and allowing it to achieve operational parity with current threats, the department, the (chief of the defence staff), the (deputy minister) and the minister have decided that’s an efficient and a necessary use of resources,”

baloney

the Australians bought the F35 because they need it to defend their country

as have the UK, Italy, the Netherlands, Belgium, Denmark, Israel, Japan, Norway, Turkey, South Korea and the US

Justin Trudeau has treated the armed forces with disdain and effectively downgraded our ability to defend our country

#79 crowdedelevatorfartz on 07.15.19 at 12:15 pm

@#78 45 North
“Justin Trudeau has treated the armed forces with disdain and effectively downgraded our ability to defend our country.”

++++

Like Father like son.
Trudeau the elder hated the military and all its expenditures.
But then again.
As one wag put it on the F35 purchase/ non purchase
( or was it the Helicopter purchases?…. I forget)

“After studying Canada’s Military Procurement Program …it should be used as a classic case study on how NOT to procure military hardware.

#80 DON on 07.15.19 at 12:56 pm

#54 crowdedelevatorfartz on 07.15.19 at 2:29 am

@#37 millmech
“it is actually becoming interesting to watch price drops daily.”
+++++
Yep, I’m seeing the same for sale signs week after week….

I was at a dinner party last night.
Heard a couple bragging they had signed on a house and take possession in Nov. No terms…… even though they hadnt sold their other house yet.

” No problem, our realtor told us it should be worth at least $1.5…”

I mentioned the falling RE market and slowing sales,

“It’s different in New West…”

Yeah , right, people are beating the doors down to live in New West………my God.
*******************
” No problem, our realtor told us it should be worth at least $1.5…”

You should of reminded them that their professional realtor got his/her certificate in 2 months.

WOW New West 1.5 million

#81 april on 07.15.19 at 12:58 pm

CREA numbers downplayed as usual.

#82 SoggyShorts on 07.15.19 at 1:07 pm

#63 Elcheapo on 07.15.19 at 8:05 am
Yanniel’s incessant droning makes it clear to me this website could use a better commenting system. I never thought I’d encounter a blog dog more holier-than-thou then Smoking Man .
*************************
Screw that, I’ve actually learned something from Yanniel’s posts.
Comparing him to SM is ridiculous.
*burp* “I invented a forex algo that wins 100% of the time” *burp* “canada sucks”

#83 Sail away on 07.15.19 at 1:42 pm

Regarding leverage, derivatives and margin: the amount of time, effort and expense to fully understand and use these is a full-time job, that will most likely end up less effective than a simple passive index investment.

Has everyone already forgotten Buffett’s 10 year bet? Buffett invested passively in the S&P500 index against a hedge fund manager who did his active management magic. The outcome: the hedge fund was thoroughly crushed and capitulated early after coming second every year except the first.

Passive good, active bad. Leverage, margin, derivatives are active. ‘Nuff said.

#84 DON on 07.15.19 at 1:50 pm

#77 Damifino on 07.15.19 at 11:12 am

#63 Elcheapo

I know beggars can’t be choosers Mr Turner, but it would be AMAZING if comments could be organized by threads.
—————————————–

We’ve been over this ground a hundred times. This blog is far too dynamic to have it’s comment section organized by ‘threads’ that will be stale by tomorrow. That’s a strategy for crappy bitch-fest non-blogs like ‘Vancouver Condo Info’, a hotbed of un-moderated childish venom.
*************

Agreed the web gadgets don’t make the blog it is the content and the debate and of course Mr. T …he don’t pity no fool.

#85 James on 07.15.19 at 2:16 pm

#82 SoggyShorts on 07.15.19 at 1:07 pm

#63 Elcheapo on 07.15.19 at 8:05 am
Yanniel’s incessant droning makes it clear to me this website could use a better commenting system. I never thought I’d encounter a blog dog more holier-than-thou then Smoking Man .
*************************
Screw that, I’ve actually learned something from Yanniel’s posts.
Comparing him to SM is ridiculous.
*burp* “I invented a forex algo that wins 100% of the time” *burp* “canada sucks”
________________________________________
I’m actually beginning to enjoy watching the Old Man derail himself every day. Jesus he said he was only sixty the other day, I’m still saying add another 10-12 years to him. My father is sixty and looks a hell of a lot younger that Smoking Man. But then again my father doesn’t drink tenaciously or smoke.
If his Forex algorithm is so virtuous why doesn’t he have a home paid for in cold hard cash instead of being a renter next to the cockroach hotel in Newport Beach? Perhaps his pining wify poo will purchase one now that she too is a Forex God with her $500,000 winnings. Did she self declare yet Old Man?

#86 James on 07.15.19 at 2:19 pm

#78 45north on 07.15.19 at 11:43 am

First used Australian fighter jets now flying in RCAF colours with more to come

https://nationalpost.com/news/canada/first-used-australian-fighter-jets-now-flying-in-canadian-colours-plans-underway-to-extend-jet-fleet-to-2032

“In terms of value for dollar of extending this aircraft out to 2032 and allowing it to achieve operational parity with current threats, the department, the (chief of the defence staff), the (deputy minister) and the minister have decided that’s an efficient and a necessary use of resources,”

baloney

the Australians bought the F35 because they need it to defend their country

as have the UK, Italy, the Netherlands, Belgium, Denmark, Israel, Japan, Norway, Turkey, South Korea and the US

Justin Trudeau has treated the armed forces with disdain and effectively downgraded our ability to defend our country
_________________________________________
Not to worry when the shooting starts Mr socks can be the one in front of the other troops leading people-kind on! Oh sorry, he should cry in front of our enemies and they will feel sorry for us and go home.

#87 BillyBob on 07.15.19 at 2:48 pm

#85 James on 07.15.19 at 2:16 pm
My father is sixty and looks a hell of a lot younger that Smoking Man. But then again my father doesn’t drink tenaciously or smoke.

==================================

Your father is 60? So that makes you what, in your 30’s? Wow! I always assumed from your bitterness you were much older than that, but now it makes sense – just another twisted millennial.

#88 baloney Sandwitch on 07.15.19 at 3:46 pm

If you are retired which account should you liquidate first, registered, rrsp or tfsa?

#89 Mattl on 07.15.19 at 3:52 pm

#72 millmech on 07.15.19 at 10:18 am
#14 Sail Away
Your young engineer friend got off lucky, check out this listing, price drop of $150k, it still has another $100k to go I bet. I bet these owners would be ecstatic to only lose $40k. I have an even better on that has a price drop of $200k, that you could show him/her to help ease the pain.
1451 GOVERNMENT STREET, Penticton, British Columbia V2A4V9
For Sale

————————————————————–

That house is assessed for 387k. Looks like he slapped some paint on, new roof and Ikea kitchen and thinks that justifies a 599K ask. It only has 1100 sqft finished, doesn’t even have a carport much less a garage.

Comps in the area from last year look to be in the 450K range. A lot softer this year so maybe a 420K home?

Last, there is no sale posted in the past 3 years so depending on when he purchased he is probably into it for less then 300K. A loss in RE is not asking price – sold price. He only loses money if he sells below the purchase price + reno’s. Seller likely ends up ahead, but his ask is out to lunch.

#90 jess on 07.15.19 at 3:58 pm

Italy seizes ‘combat-ready’ missile in raids on far right

3 hours ago
https://www.bbc.com/news/world-europe-48987723

Ukraine conflict
The missile was in a large cache of guns and ammunition

Anti-terrorism police in northern Italy have seized an air-to-air missile and other sophisticated weapons during raids on far-right extremist groups.

Three people were arrested, two of them near Forli airport. Neo-Nazi propaganda was also seized, in the raids.

The raids were part of an investigation into Italian far-right help for Russian-backed separatist forces in eastern Ukraine, local media said.

———-
if they were the engine
China’s economy grows at slowest pace since 1990s

#91 millmech on 07.15.19 at 4:40 pm

#75 Ronaldo
I believe it was listed at $749k

#92 Billy Wong on 07.15.19 at 4:42 pm

#63 – totally agree. This should be a forum. It’s very hard to follow and engage in any discussion.

#93 Ronaldo on 07.15.19 at 5:49 pm

#91 millmech on 07.15.19 at 4:40 pm
#75 Ronaldo
I believe it was listed at $749k
————————————————
I see a previous listing in April for $749m. No sales history in past 3 years. I agree that it has to come down at least another $100 grand. They are dreaming in technicolour. My niece lives just around the corner from that place and they paid $485m (20,000 over assess.)2 years ago this month for a house the same vintage. They did a major reno on it shortly after buying and its now assessed at $488m and I don’t see the value in it. Prices are way out of line up in the land of the sun and soon to come back to reality.