How I got three job offers while being outside Canada

[lushahz]

Thanks for the post that is full of life with guidance for the new comers and for the people who are planning to come.

 

[axolotl]

A few people have asked me how to invest in Canada. A seemingly easy question. But the answer is much less simple, because investment is just one aspect of personal finance. Below is a summary of my thoughts.

• Savings = Income - Expenses. Unless you can borrow money at low costs - it is possible especially for real estate investments - most of your investments will have to be funded by savings. Forget about investment unless you can make some good savings every month.
• Maximize your income by creating side income.
  • Do you have a spare bedroom? If so, you can make it available on Airbnb.
  • Is your guest interested in making easy money? Refer him/her to Tangerine, Transferwise, Questrade, Turo, Airbnb. (See footnotes.)
  • In fact, instead of looking for the cheapest apartment, you may consider renting a whole house with multiple bedrooms, occupying one bedroom yourself, and rent out all the rest through Airbnb. In a city as expensive as Toronto, you can easily find a 5-bedroom-and-3-restroom house for about 3,000 CAD a month in North York, close enough to the subway. Now instead of spending money on housing, you are making money on it. (If you have a job but not a stay-at-home partner, consider find a business partner sharing the profit/work/cost/risk.)
  • Are many of your guests interested in renting a car? If so, how about buying a used car for 5,000 CAD and rent it through Turo for 50 CAD per night? Good synergy with Turo referrals! (Do it through Turo, which takes care of the insurance.)
• Minimize your expenses by focusing on recurring costs.
  • Telecom: Instead of Rogers or Bell, consider Freedom or Chatr for your mobile plan and eBox for Internet. Cable TV? Do not waste your time or money on it! (Feel free to use GP265 as referral code for eBox.)
  • Banking: You may want to open an account first with one of the Big Five, just to get a credit card and build your credit score. They usually offer free checking/savings/credit card for free for newcomers for a limited period of time. Meanwhile, open checking and savings accounts with Tangerine, which are 100% free, and once you already have a reasonable credit score, also apply for a credit card with Tangerine for free. Now you can close all your accounts with the Big Five. (Please feel free to use my Orange Key 50249261S1.)
  • Public Transport: Ideally you want to be able to walk to work. Walking also saves you gym cost.
  • Food: Do your grocery at FoodBasics instead of Loblaws.
  • Finally, always negotiate. I negotiated off various costs with my Internet provider and CIBC. Of course you need to make them think you are a valuable customer. I first transferred a significant amount of money to CIBC and told them I was interested in getting a mortgage with them, before asking them to waive me a 50-CAD fee.
• Investment. This is actually the easiest part, at least until you have enough capital to buy real estates. Everyone should start with stocks. The most important is to know the difference between investment and speculation.
  • Stocks. I worked in investment management for four years, and the best advice that I can give is Do not try to beat the market. More concretely, it means.
    • Invest in the broad world economy through ETFs instead of speculating with individual stocks. When you buy Apple or Google, you are speculating and statistically speaking you will under-perform the market, on a risk-adjusted basis.
    • Be disciplined: Invest all your savings that you won't need soon at fixed periods. For example, buy XAW.TO every month as soon as you have got your salary. The daily, monthly, or even yearly, price fluctuations do NOT matter in the long run.
    • 100% equity: If you buy well-diversified ETFs (e.g. XAW.TO), the only scenario in which you will lose money in the long run (meaning longer than 10 years) is the world economy collapses and never recovers. And if that's the case, money is probably the least that you should worry about. Historically, it does not matter whether you take a 10-year, 20-year, or 50-year period, whether you include financial crises in your period or not, the average annual return of well-diversified stock portfolios (e.g. S&P 500) was about 8% per annum in USD terms, much higher than bonds or savings. 8% per annum means every ten years, your money doubles.
    • If you want more theories, there's a lot of information here.
    • Model portfolios for Canadian residents can be found here. Personally, I have 97% in XAW.TO and 3% in VCN.TO.
    • Questrade is probably the best option for those with less than 100k USD. (Feel free to use my QPass 786424980408390.) For those with more than 100k USD, consider Interactive Brokers. (I have both.)
  • Real estates.
    • If you buy a house in Toronto and hope its price will keep going up, you are speculating, not investing. My bet is that you will lose money.
    • A good investment is a property that can bring you a lot of rental income, relative to its purchase price. There are places in Canada where you can achieve a net rental yield of 10%. (Google rental yield if you don't know what it means. In Toronto, the rental yield is typically less than 2%.)
    • Improve your return by financing your purchase with a mortgage. When your rental yield is higher than the mortgage interest rate, taking a mortgage improves your return.
  • Tax minimization. This can be very complicated. But honestly, you will do just fine if you get the other things right. Leave it for now to those perverts like me who do not have better things to think about.

* Tangerine offers checking and savings accounts at zero costs without any minimum balance requirement. When you refer someone, both of you get 50 CAD. Without a referral a new customer will get only 25 CAD. (Please feel free to use my Orange Key 50249261S1.)
* Transferwise is probably the best way to transfer money from/to overseas for people without a lot of money. (If you are rich enough, Interactive Brokers is much cheaper.) When you refer someone, you get 25 USD and your referral will be able to transfer 500 USD free of charge. After that it costs about 1% of the total value, still much less than what a typical bank makes by using unfair exchange rates (usually about 3%).
* Turo is a p2p car rental website. When you refer someone, both of you get 25 CAD credit for free.
* Airbnb. When you refer someone and he/she becomes a host, you get 125 CAD.

 

[canuck78]

Just wanted to clarify that you should look at your lease carefully if you plan on subletting rooms or renting them out on airbnb. I would imagine lots of landlords will have written in conditions that either exclude that possibility or require permission.

 

[axolotl]

Just wanted to clarify that you should look at your lease carefully if you plan on subletting rooms or renting them out on airbnb. I would imagine lots of landlords will have written in conditions that either exclude that possibility or require permission.

Sure. The best houses for this are those owned by people who don't even live in Canada.

 

[canuck78]

Just wanted to mention it because tenants don't read their leases before doing things like renting out rooms, moving in partners, etc Not everyone is as savvy as you are. Also may not realize that they need to declare the extra money it is not just extra cash! Nothing surprises me anymore after dealing with tenants for over a decade and most of my tenants would be classified as highly educated professionals.

 

[kenok]

With regards to your opinion on transparency and racism, i agree with you. I have friends of a "different race" who are more qualified but I see get their applications rejected more times than I can count. and I see others of a "certain race" obtaining PR or citizenship with just 1 try and these are the people who most probably wouldn't even qualify for EE. And sadly I see a lot of cases where couples bring a baby into this world just to obtain some kind of resident status here but even there life is so unpredictable cause immigrations could just decide not to renew the visa once it expires.

Disclaimer: I'm just posting what i observe.

Interesting to read the posts here. Indeed the lack of transparency and race-leaning immigration policies in Singapore is very sad and unfortunate, and is also the main reason I decided to pursue the Canadian PR. I'm an African (black) with a PhD from one of the top 25 universities, yet it has always been a hassle to get o renew my employment pass in Singapore. Each time my bosses/management need to write letters and pull strings cos it's usually a "no" at first then we would have to appeal. my PR was also rejected, yet while here I have seen junior hires from certain countries and of certain races get their passes approved in days. To renew my EP we start 6 months in advance. I love Singapore and honestly understand why they want to maintain the ethnic ratio (C-M-I-O), so I would not hold it against them. That said, I just got my PPR and now looking for jobs in Canada, fingers crossed

 

[Rayyy]

Assets vs liabilities theorem basically. A car is usually a liability but if u turn it to uber, it becomes an asset. Housing in Toronto is HOT, if you can afford an apartment right now, do get it. It is a good investment, real state in Toronto wont die out like in Manitoba, Winnipeg or Saskatchewan. Good read!

 

[SGtoCAD]

Interesting to read the posts here. Indeed the lack of transparency and race-leaning immigration policies in Singapore is very sad and unfortunate, and is also the main reason I decided to pursue the Canadian PR. I'm an African (black) with a PhD from one of the top 25 universities, yet it has always been a hassle to get o renew my employment pass in Singapore. Each time my bosses/management need to write letters and pull strings cos it's usually a "no" at first then we would have to appeal. my PR was also rejected, yet while here I have seen junior hires from certain countries and of certain races get their passes approved in days. To renew my EP we start 6 months in advance. I love Singapore and honestly understand why they want to maintain the ethnic ratio (C-M-I-O), so I would not hold it against them. That said, I just got my PPR and now looking for jobs in Canada, fingers crossed

oh which country you from my friend?

 

[Leo010]

@axolotl, do you have any suggestions on how to prepare for the winter, what kind of winter wear do you need and what is the best place to purchase it.

 

[kirribilliCN]

@axolotl, do you have any suggestions on how to prepare for the winter, what kind of winter wear do you need and what is the best place to purchase it.

You asked her but I am gonna throw in my advice. Surviving winter outdoors is mostly about proper layering.

• You need light/medium gloves that you wear most of the time but also a thick pair which is water resistant material on the outside and also lined with warm material inside. On extremely cold days you will get frostbite even if you keep your hands outside for a short time
• Then you need either a good pair of earmuffs or a thick beanie cap which will cover your ears fully, ideally have both but you can just buy one
• Buy one or two fleece hoodies and/or inner jackets that you can wear as second layer all day
• Then invest in a good outer jacket which is thicker and can withstand light rain, snow etc. Ideally, buy this with a pullover or hoodie which can be hidden in a zip pocket when not in use.
• For days when it is snowing and you have to walk in snow it will suck if you are wearing thin shoes, so look for boots which have thick toe box
• You can wear inner thermals, but then again once you enter a building you will be very uncomfortable because they will be heated
• You can buy toe and hand warmers for extremely cold days as extra protection

There is always more but those are basics.

 

[axolotl]

@axolotl, do you have any suggestions on how to prepare for the winter, what kind of winter wear do you need and what is the best place to purchase it.

I think @kirribilliCN has already given a great answer to your question.

I bought such things when I was in the US. So I don't really know which shops are the best. I know a colleague who bought a Canada Goose jacket on kijiji.ca and he's quite happy with it.

Don't forget sunglasses when it snows. I haven't experienced any Canadian winter yet but I guess sunglasses should be enough. If not, I'll wear my ski goggles

 

[canuck78]

@axolotl, do you have any suggestions on how to prepare for the winter, what kind of winter wear do you need and what is the best place to purchase it.

Really depends where you are living. There is a big difference if you live in Winnipeg compared to Vancouver or Toronto! You can buy jackets everywhere at all different price points. You get what you pay for although there are some brands that more expensive than you really need unless you work outdoors. You can also look a ski jackets if you do outdoor sports as well. Eddie Bauer offers some good options but most stores have winter wear. My advice is to wear a hat, gloves and warm socks and then layer.

 

[Leo010]

Thank you all for your helpful responses.

 

[FreshLife]

@axolotl Very interesting read! I lived in Singapore several years back and loved it there, it was so much easier to get a PR at that time with no random rejections. But sadly good things never last forever - especially in the immigration world
Thanks for sharing your game-plan with the real-estate market. I like real-estate investments in general (though haven't been as successful as I would have liked till now). But I will love to share notes when I get in the market there.
At the moment I am still in bay area and pondering over my long term plans; but its heartening to learn that you are enjoying the work and the state of tech industry in Toronto; especially after working at Twitter, etc.
I was wondering if you had any comment / suggestions regarding a thread that I posted: http://www.canadavisa.com/canada-immigration-discussion-board/threads/google-microsoft-amazon-compensation.524223/
I am sure that I will have to take a huge pay cut. But haven't been able to collect some reliable data points to guesstimate of how-much? I don't want to interview with the companies there and waste their time unless I have finalized my future / timeline and started the whole process.

Thanks again. Please keep up the great work. It is really nice to read your journal and relate with so many things

 

[axolotl]

My response to someone's comment. I was harsh but it was my honest opinion.

axolotl, I think FreshLife has a legit and genuine question. Anybody who is accustomed to the bay area for some time, these figures wouldn't whack his/her brains out. This is practical and more importantly you may not be aware of the tax madness, high cost of living and crazy real estate in bay area.

If you think living in bay area Freshlife can save a fortune in 2 years that is suffice enough for the rest of their life, a quick ring to any of your silicon valley friends may enlighten you.

Anyways, I believe FreshLife is realistic in setting up his/her expectations for a pay cut that is obvious moving out of bay area.They are just gauging the paycuts to deem their move decision fit.

And regarding "stop working".... oh well

I asked a Silicon Valley friend, an ex-colleague at Twitter, a while ago "How much do you need to retire?" His answer was 5 million USD. I asked him where's the number's from? He said "Let's assume there's a 2% annual return..."

I worked in Silicon Valley myself and I know the trap that most people fall into. No matter what's your income, there's something to spend your money on, be it a bigger house, a better school for your children, a faster car, etc. You are wired into believing you need all that shit because that's what others around you want.

Here's what I would do.

1. Live as cheaply as I can and save as much as possible.
2. Once I have enough capital, move to a cheaper place.
3. Make sure my income is greater than my expenses without having to work much at all.
4. Meanwhile let my capital grow by investing in world stock indices. I won't touch my investment and withdraw any money from it, until I really need it. (I'll explain what I mean by "really need it".)

Regarding 1, I lived in Walnut Creek and paid 1,750 USD a month for a 1-bedroom instead of 2,400 USD for a studio in SF. I bought a 2,000-USD 2001 Chrysler instead of a 20,000-USD whatever. I used different cash-back cards for different categories. I opened bank accounts to get a few hundred dollars for free and then closed them. I made it very clear to everyone around me that I was cheap so no one would bother to ask me to party around and waste money.

Regarding 2, I now live in Canada where health care is "free" and you don't need to send you children to some expensive private school. In Toronto, I am living on less than 1,000 CAD per month for all my expenses, including housing, food, and whatever you can think of. I may move to Quebec because they have wonderful child-care subsidies, which may make sense when I have children.

Regarding 3, I plan to either buy or rent a house (depending on the rental yield obviously) and let my partner run airbnb, which should cover all our living expenses. Given how cheap I am, it is not an ambitious goal.

Regarding 4, I told my boss in January that I was leaving Twitter, when I reached 500,000 USD liquid assets. (Ironically I got promoted after that.) I knew by doing nothing but investing passively in a well-diversified world stock portfolio, in the long run its value will double every ten years. Plus the inheritance that I will eventually get from my parents, I'll become a multi-millionaire sooner or later.

Here's what I meant by "really need it". I plan to live for ever. I believe or at least hope the technology of immortality, or more likely before it, rejuvenation, will become available before I die. But it will be expensive in the beginning. So I will need the money. (If I die before it happens, I'll have my brain frozen and that will also cost a lot of money.)

What I honestly think is that there are too many people who are smart enough to make good salary, yet not smart enough to figure out what they should or can do with the salary.

(Regarding crazy real estate prices: no one is forcing you to buy a house in the Bay Area, or in Toronto or Vancouver. Use your brain to figure out what's the best way to spend your money. Actually, there are no good ways to spend your money, only good ways to invest your money. I don't consider speculation on property price appreciation investment. Get this book and learn about discounted cash flows and valuation. Such concepts are actually also useful for personal financial planning.)