I try to keep our approach to crossborder investing as simple as possible, but there are some unavoidable complications. We are Americans who have moved to Canada as permanent residents, but a lot of what I’m going to cover would apply to Americans living in other countries as well. I’ll also try to include information relevant to the flipside — folks from other countries living in America where appropriate, but that isn’t my area of expertise.
As I write this, I’m assuming a certain baseline investment knowledge. For example, I’m going to assume you know what an ETF is and what I mean when I say asset allocation. If you don’t, a couple of resources I recommend are the Boglehead’s wiki (for the US side of things, although they do also have non-US information) and Finiki.org (for the Canadian side of things).
Some context: our investing philosophy is focused on low-cost index funds. I have tried other things along the way (individual stocks, actively managed mutual funds, and peer-to-peer lending to name a few) but 1) I’ve come to accept that neither I nor any fund managers can reliably beat the market, 2) the main thing I can (and should) control are the fees that I pay and 3) there is real value in simplicity. We’ve never been landlords so that isn’t something I’ll cover. I’m also not planning to talk about options, crypto or gold, but if I end up investing in them, I’ll share my experiences.
Hey, thanks so much for doing this! I’m a dual citizen that returned to Canada in 2021 after 15 years in the US. My wife is Canadian and gave up her green card. It’s taken years to optimize our investments to simplify the tax implications! A new issue has come up, though. I’m looking to improve the yield on our USD cash (~23K), which is part of our emergency fund (1 year of expenses). I’m thinking of putting it into VUSXX (5.10% 7 day yield) in my Questrade margin account, but I don’t fully understand the different tax rules for these money market ETFs with “government obligations.” My income is very low, so I don’t think I would be subject to US federal income tax. Any thoughts?
Thanks! I’m not sure exactly what you’re asking, but I don’t know that I’d have any any insight to add regardless. The big thing I’d consider is I’d want to avoid PFIC filing requirements. Since VUSXX is US-domiciled, though, that shouldn’t be an issue. And, as far as US federal income tax, if there were any required, I’d expect it to be offset by whatever you owed in Canada. Again, though, I might be misunderstanding your question. I also don’t have any direct experience with money market ETFs. I’ve been keeping our emergency fund in a combination of EQ Bank accounts and GICs.