Some Americans fear higher taxes so much they are willing to move. The capital gains tax rate might go up. The step-up basis might go away. And the top marginal income tax rate might go up too. Therefore, may I present the best life hack for Americans: taking advantage of Canada!
I’m always looking for arbitrage opportunities to help readers make more money and live better lives. Taking advantage of Canada may be one of the best American life hacks of them all.
Not only do some Americans face potentially higher taxes, but all Americans are also feeling the brunt of higher inflation. Combatting inflation by moving to Canada is a serious solution many middle-class Americans should consider.
Taking Advantage Of Canada Can Be A Powerful Long-Term Trend
My favorite money-making arbitrage opportunity for the next couple of decades is investing in non-coastal city real estate due to lower valuations and higher net rental yields. Technology is accelerating the flow of capital and people toward attractive real estate opportunities.
However, taking advantage of Canada could be an even greater multi-decade investment opportunity, especially if you have children. Despite the frigid weather for four months a year, Canadians have a lot going for them.
Their GDP per capita is a respectable $52,000. Few people go through medical bankruptcies because healthcare is heavily subsidized.
Meanwhile, the average annual tuition for Canadian universities is only about $6,800 for the 2022/2023 academic year according to EduCanada. Even compared to public university tuition in America, $6,800 a year is cheap.
Let me share how one Canadian friend is taking advantage of America and how we, in turn, can take advantage of Canada.
How Canadians Take Advantage Of America
A 25-year-old friend in my SF softball league is from Vancouver, Canada. He went to the University of British Columbia, a top-five university where annual tuition is only $5,399 in the computer science department.
When he graduated, he decided not to find a job in Canada, but come down to San Francisco where computer engineering jobs pay much more. He works for an online real estate company.
“Sam, I make twice as much in San Francisco as I would if I got a similar job in Vancouver,” my softball friend told me.
“But don’t you want to give back to your country? I thought brain drain is a big thing in Canada?” I responded.
“Yes, but let me make my money first. After five years in San Francisco making double the money, I’ll then move to Seattle with my girlfriend where my firm is headquartered. Seattle pay is similar to San Francisco pay, despite the cost of living being 30% cheaper. Further, Vancouver is only a 3.1 hour drive away.“
“Sounds like a good plan!” I responded.
Will Move Back To Canada Once He’s Made His Money In America
“Once I’m in my 30s and ready to start a family, then I’ll move back to Canada and live a less hectic lifestyle. With a stronger government safety net, I feel more comfortable raising a family back home,” he explained.
Although I feel a little bad that Canada won’t get the benefit of his productivity after providing him with 22 years of education, I can’t fault his logic.
If Canadians wish to participate legally in our labor market and also buy and sell U.S. stocks and property, why not take advantage of the opportunity? After all, America is the greatest country in the world.
Canadians are consistently a top-3 largest foreign buyer of U.S. real estate. Without foreign buyers, American real estate would be more affordable. Therefore, we should return the favor and buy up Canadian real estate.
How Americans Can Take Advantage Of Canada
Following my softball friend’s logic, Americans should take advantage of Canada’s government safety net and immigrate to Canada after we’ve amassed our fortunes as well. This is the best life hack to make life easier.
One of the biggest problems we face in America is the runaway cost of healthcare. Medical-related expenses are our nation’s #1 cause of bankruptcy. It would, therefore, seem logical that those who decide to retire early and are ineligible for Medicare should migrate to Canada and get their healthcare paid for.
Move To Canada To Save On Healthcare Insurance
For example, my family of four will pay about $28,000 a year for healthcare premiums plus co-pays and co-insurance in 2023. Does this sound reasonable to you for a healthy family who never sees a physician?
To generate $28,000 in retirement income at a 4% rate of return requires me to first amass $700,000 in capital. But I will need to have closer to $880,000 in capital due to long-term capital gains taxes. With a shaky economy, retirees should also lower their safe withdrawal rates just to be safe.
If my family moved to Canada, we’d be eliminating most of our present healthcare costs and could use the savings towards living a better lifestyle. We wouldn’t have to purposefully reduce our income to get healthcare subsidies either. What a shame to stop writing on Financial Samurai, something I love to do, just for the sake of affordable healthcare.
Supplement With Private Healthcare
The only problem is that wait times at hospitals and other health providers can be very long. Therefore, you may still want to pay for private health insurance if you live in Canada just in case. I plan to for a reasonable $3,000 a year.
Lower College Tuition In Canada
Further, given the average Canadian college tuition is only $6,800 a year, we would no longer have to contribute $30,000+ a year in our son’s 529 college savings plan. We could easily afford to pay $27,200 for four years in Canadian university tuition from the money sitting in our online savings account.
It is truly mind-boggling that four years of Canadian university tuition costs $11,000 less than one year of private school kindergarten in San Francisco.
Paying for college by sending them to a Canadian college is also so much cheaper. You will experience less stress and anxiety having to work and save so much for college tuition. A four-year private university costs $80,000 a year in America nowadays!
Massive Savings If We Move To Canada
Saving $51,000 a year in healthcare and college expenses just by moving to Canada sounds like a home run. That’s $1,275,000 less in capital I need to amass at a 4% rate of return.
Even though the average home price in Vancouver is an absurdly high $1.4 million, it’s still about $200,000 less than the median home price in San Francisco.
Moving to Vancouver, Canada might just be the best geoarbitrage move for us. Vancouver is on the same west coast and has the same international flavor as San Francisco.
For Americans living in lower-cost-of-living areas, there are plenty of lower-cost areas in Canada as well.
Our Children Can Take Advantage Of Canada Too
In addition to recommending all adult Americans seeking financial independence migrate to Canada, there’s also a way for our children to take advantage of Canada too. The best life hack is when you can help your children as well.
One of the reasons why I became a high school tennis coach was because I wanted to learn how to interact with teenage boys before my own boy becomes a teenager in 2031. It may sound crazy to prepare so far in advance to be a better father, but I figure why not try? Planning is free to do.
During practice one day, I had a nice conversation with one of my favorite players, a senior who attended Occidental College in Southern California.
Occidental College is a good school, but I thought he was going to attend a top-10-ranked school instead. He was super smart, very wealthy, and was frequently late to practice due to constant after-school tutoring.
McGill University, The Harvard Of Canada
He mentioned a classmate was attending McGill University in Canada and I was immediately impressed. I remember having a financial analyst classmate at Goldman Sachs who had also attended McGill University.
She was extremely kind and smart. Further, she was the only one in my 1999 financial analyst class who survived the post-dotbomb layoffs and made Managing Director 10 years later. MD at 33 is quite a feat!
“McGill is the Harvard of Canada!” I exalted in a somewhat joking way. “I wonder what their acceptance rate is?“
My student responded, “Really? The Harvard of Canada? How can that be if their acceptance rate is 50%?“
“There’s no way Mcgill has a 50% acceptance rate! I’ll happily bet you 20 pushups that it’s 45% or less! You’ve got to accept the bet since I’m giving you a 5% buffer.” I retorted.
Secretly, I was thinking McGill’s acceptance rate was closer to 15% – 20%. By comparison, the best universities in America have single-digit acceptance rates.
“You’re on!” My student immediately looked up McGill’s acceptance rate on Google and started to dance.
McGill University Acceptance Rate
He showed me his phone that Google had the acceptance rate at 46.3%. “Time to do some push-ups coach!”
Never one to surrender so easily, I looked at the data closely and the 46.3% acceptance rate was from 2016. As someone who is proficient with search engines, I knew Google often had old data in its featured snippets.
Once I clicked on McGill’s website, it showed they made 15,385 offers to 37,505 applications for a 41.7% acceptance rate for the 2018 school year.
“Bahaha, never challenge the coach! 20 pushups right now!” I boomed.
More People Get Trophies In Canada
A 41.7% acceptance rate for arguably the best university in Canada is comical by US standards for the top school. The high acceptance rate shows that Canadians really are much more accepting of everybody than we are in America.
In America, where meritocracy is under attack, maybe making it easier for everybody to get into great schools and land well-paying jobs isn’t so bad after all. Think about how much less stress parents and children will feel for decades.
No wonder why Canadians have a reputation for being nice!
In 2023, McGill’s acceptance rate is still over 45% at 46.5%. Conversely, the Harvard of Harvard has an acceptance rate of about 4.5%.
If your kids are academically average, then it is much wiser to at least apply to a university like McGill. The career paths of many university graduates tend to end up in the same place.
Acceptance Rates From Other Top Canadian Universities
Let’s say you disagree that McGill is the best university in Canada. Here are the acceptance rates for the other top universities in Canada.
- University of British Columbia: 52.4% acceptance rate
- Queen’s University: 42% acceptance rate
- University of Toronto: 40% acceptance rate
- McMaster University: 58.7% acceptance rate
- University of Waterloo: 52% acceptance rate
- University of Montreal: 57% acceptance rate
In other words, the best universities in Canada have an acceptance rate of 40% – 58.7%!
One reader mentioned I left out Concordia University, supposedly one of the best Canadian universities. If so, that’s great because Concordia University has a 73% acceptance rate!
Acceptance Rates At The Top U.S. Universities
Now let’s take a look at the acceptance rates of some of the top U.S. universities.
Good luck getting into a top 10 school in America. It is nearly impossible.
And if your kids are Asian, then they’ve really got a Mt. Everest to climb. Is there no wonder why so many Asian families run small businesses? They know their odds are stacked against them, so they bypass the gatekeepers.
Unless you’re a really rich legacy student or cured malaria while fighting against gun violence, you or your children have little chance of getting into a top American university.
Remember, even some rich celebrity kids couldn’t get in on their own merit. The parents had to bribe school officials $50,000 – $500,000. Therefore, what makes you think your kids can get in?
What is the point of trying to grind so hard in middle school and high school to try and get into a top American university with a 10% or lower acceptance rate? Instead, you can be an average student and still get into a top-five Canadian university!
The reputations of the top Canadian universities are higher than their respective acceptance rates indicate. And some consider the top Canadian universities to have a similar amount of prestige to the top American universities.
The best life hack helps get your kids into a great school and ultimately get better jobs.
The Pressure For U.S. High Schoolers Is Immense
During my three years as a high school tennis coach, I saw and overheard my students talk incessantly about their studies. They discussed how they needed to go to expensive SAT tutoring after practice. They complained about having to take more practice AP exams and so forth.
Several even showed up late to important matches because they required extra time on their exams. They then wanted to talk to their teachers after class. I could feel the pressure they were under to try and do it all.
Maybe the pressure cooker environment has always been there in high school. But is it really a necessary rite of passage given college is becoming less necessary thanks to the free internet?
Instead of spending $52,659 in annual tuition going to Harvard only to end up with the same type of job as everyone else, why not spend 1/9th the annual tuition at the University of British Columbia and work at a US-based firm for more money instead? You might have to live in Canada for a year or two to be able to pay Canadian tuition, but it’ll be worth it!
Even if you cannot get any tuition exemption, international tuition is still about $15,000 cheaper than a comparable top-rated private university in America.
Not only might you land a $150,000 computer engineering job at Zillow, but you might also even make more than $1,000,000 a year as an MD at Goldman Sachs by your early 30s!
Less Crime In Canada Than In The United States
If you value your safety and the safety of your children, moving to Canada from America may also be appreciated.
According to World Population Review, Canada is ranked as the 82nd must crime-ridden country in the world versus 56th for the United States.
According to Macrotrends, Canada has only 1.97 crimes per 100,000 people compared to 6.52 crimes per 100,000 people in America. When you’ve got a larger social safety net and less poverty, there tends to be less crime.
Perhaps there’s a reason why Canadians have a stereotype of being more polite and considerate compared to Americans!
Take a look at the crime by country rate chart below. Maybe it’s not a coincidence Sam Bankman-Fried set up FTX in the Bahamas. Its crime rate is the second highest in the world! With higher crime comes more government corruption and the ability to bribe your way to success.
Best Life Hack: Move To Canada
I encourage all American high school students to apply to Canadian universities. You’ll get a great education and save on costs. Then once you’ve accumulated enough capital in America to retire, you can then return to Canada to live off the government’s good graces.
Having a Canadian university education should make it easier to be accepted by Canadians. You don’t even need a job thanks to Canada’s Express Entry program. All that’s required is at least one year of work experience, proficiency in English or French, and $1,500 – $2,000.
If you intend to be self-employed when you move to Canada, you’ll need to show you have at least two years of relevant experience in the field in which you intend to self-employ.
But once you get to Canada, there’s no law that states you need to start a successful business. You can just be a hobbyist to keep yourself engaged.
At the end of the day, Canada is great for early retirees, traditional retirees, people seeking financial independence, entrepreneurs, and children. Canadians are more laid back as its citizens are more focused on work-life balance.
Taking advantage of Canada truly is the best life hack for Americans. Who’s with me? Go Canada!
Anybody currently or planning on taking advantage of Canada to live a better life? What are some of the downsides to taking advantage of Canada besides long wait times for healthcare and cold weather? Should American work and education culture trend more towards Canadian work and education culture to there’s less stress and anxiety?
Best Wealth Hack
Now that you know the best life hack, know about the best wealth hack. Stay on top of your overall finances by signing up with Empower.
Empower is a free online tool I’ve used since 2012 to help build wealth. Before Empower, I had to log into eight different systems to track 35 different accounts.
Now I can just log into Empower to see how my stock accounts are doing. I can easily track my net worth and spending as well.
Their 401(k) Fee Analyzer tool is saving me over $1,700 a year in fees. Finally, there is a fantastic Retirement Planning Calculator to help you manage your financial future.
Best Investment Hack
Real estate is a core asset class that has proven to build long-term wealth for Americans. Real estate is a tangible asset that provides utility and a steady stream of income if you own rental properties.
If the U.S. housing market ever gets as hot as the Canadian housing market, I expect U.S. real estate prices to go up another 30%+. Americans truly don’t appreciate how cheap U.S. property is compared to the rest of the world.
Consider taking advantage of the current housing market weakness by investing in heartland real estate. Fundrise, my favorite private real estate investment platform, primarily invests in single-family and multi-family homes in lower-cost areas of the country.
Thanks to technology and work-from-home, the long-term demographic trend is away from the expensive coasts.
Keep In Touch
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The Best Life Hack For Americans is a Financial Samurai original post.
The Expostriate says
Perhaps the best life hack for Americans is to move out of America? I’m glad I moved to Europe. My only regret is not doing it sooner
Thinking about the opposite, but then go back to Europe.
I’m Canadian but I’ve been working in finance and living in America for 11 years.. making a lot of money in the U.S. is nice for sure, but I’m definitely going back to Canada once I’ve milked it. I can make 7 figures but that’s harder to make in Canada.. but in Canada you don’t really need that much because healthcare is free. My issue with Canada are the taxes and cost of living. Real estate is super expensive in big cities (even Calgary in the prairies is now expensive) but mainly the tax rates are punitive. I live in Texas and pay no state tax and food, gas, etc is so much cheaper vs. Canada. In Canada, you’ll pay $25 for a simple takeout lunch, whereas that’s $12-$15 in the U.S. The
U.S. has just become a bit unstable and the possibility of more and more political strife continues to go up. Unity is poor and that originally made America – there was common goals and historically, empires rise and fall on education and unity. I’m sure the British, Spanish, Arabs before that (Egypt in 700-1200 AD was the America of its time when Europe was in its Middle Ages), Chinese – i.e. past empires, all thought their countries were incredible and super safe until they weren’t… crime in America is high and lifestyle in Canada, overall, is much better.
I do really enjoy America and the money is great – quality of life in Texas is incredible and people are much nicer than the news makes them seem to be.. not everyone is racist.. few and far between.. but there’s just too much bullshit happening nowadays. Americans, unfortunately, have become too complacent and maybe too successful. The political situation is a mess and debt is high- that even caused the Roman Empire to fall. Would agree with Sam – move to Canada.
Transplanted Torontonian says
Hey Indian Tiger –
So Toronto is a racist, sh#thole…perhaps a quick review of these links might be in order…
Be careful throwing stones from a glass house!
Robert C. says
Ignore the haters!! Great article and enjoyed it. I was born in Canada but have lived in USA, and pondered many times moving back. Canada is a great country with many positive attributes. Yes if you are Canadian citizen college is cheap my niece paid 12K for McGill room and board included, and never lived a day in Canada. All she had was have a father born in Canada. You make people think and give them options, so keep at it!
Canada is what the United States would be if the United States sucked. It’s America on easy mode. Sadly looks like the United States is going that way with the rise in worship of socialism. It’s sad to see such a great country slowly crumble due to the parasitic ideals of socialism/leftism
Geez, who put a turd in your cheerios this morning?
Susan from LA says
Which part of Canada you don’t like: Safer living environment? Great affordable education that won’t put a lot of students in debt? You don’t like that they have good health care for everyone? Do you hate that they enjoy a less stressful life than Americans?
Canadians are happier than Americans according to the World Happiness Report. Providing a better social safety net does not take away your ability to make money and be obscenely wealthy if you want to. You should really look into the difference between socialism and communism.