Job Discussion Forums

[jtomstone]

I'm considering teaching in many different countries over the course of my life. The problem is I still want to save money for retirement, but as far as I know I cannot contribute to a retirement plan in my home country (RRSP in Canada).

Are there any offshore plans that are reliable? Are most of them a scam?

[tttompatz]

[scot47]

Mutual funds ? Maybe getting some real estate that you can rent out.

I did not take my own advice !

[johnslat]

Dear scot47,

Which is why you are now sleeping in doorways after having wrapped old newspapers around your shivering frame.

Regards,
John

[Hod]

You need independent financial advice from at least three advisors in your home country. Plenty of people abroad will claim to be qualified and look to sell you some offshore scheme, but don�t talk to them even if it means delaying for a year until you�ve researched and can get home to set up a scheme. Financial regulation in Canada must be a lot tighter than some destinations you�ll choose to teach in.

The problem with offshore schemes is they require a lot of management and are very expensive. This is where salesman pull wool over eyes, tell you nothing good comes cheap or other rubbish such as 3% commission isn�t much. Einstein said the most powerful force in the universe is compound interest. If you deposit $25000 for 25 years with an interest rate of 3%, you�ll have over $45000. The same sort of thing will happen in reverse with those �little� fees. Your money will be syphoned off for the fund managers and salesmen.

In the UK, if you ask any independent financial advisor if they are 100% independent, they have to answer truthfully. If they�re selling one type of scheme only, they have to tell you. That one scheme might not even suit you, but if that�s all they sell, they will try and sell it to you anyway. That�s legal but very wrong and happens every day. The best way to avoid this is to use only an independent advisor. Pay him 100$/�/� an hour if necessary, because you�ll paying a thousand times that in commission otherwise.

As for the question �are offshore schemes reliable?�, all private pensions are made up of investment funds which contain stocks and shares, property, etc. If the stock market performs badly, so will some of these investment funds. In theory, you can avoid being wiped out by a collapse by having a diverse portfolio which is regularly reviewed as you can change to better investment funds if need be. Again, financial advice�

For me, I avoided offshore funds because the fees were huge. I chose to take pensions in the UK and Germany, because I paid tax in both these countries. If you are 100% sure of being nomadic for the next decade or two, maybe an offshore scheme is the only way, but the fees and the problems with the right product mean it�s one of the hardest pensions to choose.

Finally, doesn�t Canada offer any sort of state pension? If so, I would certainly make sure you are eligible.

[naturegirl321]

I avoided offshore as well. I did research, asked around here and there and on Dave's. Spent my vacation at the library and looked at figures about the top advisors and the index and decided to do it on my own.

Also, offshore seems a bit iffy. Check the legalities of it.

[Guy Courchesne]

We've gone with real estate and will build from there with other properties, outside Canada in our case.

[jtomstone]

Thanks for your replies.

I'm not sure exactly where I'll be over the next decade, but what I want to do is just throw my money into a low-cost index fund and let it grow, tax-free if possible.

I don't know the best way to do that if I'm outside Canada (if I was in Canada for the long-term I would put it away in an RRSP). I was looking into buying some Vanguard funds as they are highly regarded. Can I purchase those through an online brokerage and then pay tax in whatever country I'm in?

I'll probably move back to Canada eventually, but I could see myself teaching overseas over the next 5-10 years, and I want my money to grow during that time.

[Perilla]

[spiral78]

I'm also probably stating the obvious here, but it's also tough to move around a lot, as you note you aim to do, in some respects. Without local reputation and connections, you're most likely always looking at entry-level positions; the better (and better paid) jobs nearly always go to people who have paid some dues locally and where people know them. This may ultimately impact how much you are saving as well.

[Perilla]

[fladude]

If you can do your own stock trading, do it.

As you get more money buy rental properties.

[scot47]

Save it all up and put it on the favourite at Cheltenham Races. Much more fun than putting it into one of those dodgy "Investment Funds" !

[jtomstone]

Yes, I would prefer to do my own stock trading. I'm in Korea at the moment, is there an online discount brokerage I can sign up for? And let's say I buy a low-cost index fund that tracks the S&P 500 or something. I would have to file a tax return and pay tax on it here in Korea? I don't know how this works. Clearly I need to book an appointment with a financial adviser.

[tttompatz]