Best-Life-Hack-For-Americans
00:00:00.000 | Hello everybody, it's Sam from Financial Samurai and I'm really really excited in this episode because I think I found the best life hack
00:00:07.200 | for Americans now
00:00:09.260 | Sorry for folks who are not Americans about 98% of readers and listeners of Financial Samurai are Americans
00:00:16.340 | But I'm always looking for arbitrage opportunities to help readers make more money and live better lives
00:00:22.380 | You know at the end of the day money is not the end goal
00:00:25.080 | It's a means to the end right and the means to the end is living the life that you want
00:00:29.760 | on your terms
00:00:31.760 | happily ever after so that life hack really is to take advantage of
00:00:36.960 | Canada now, it's not new. It's not new
00:00:41.160 | To think about Canada as an alternative to an American lifestyle after all Canada is a developed country
00:00:48.800 | They have a respectable GDP per capita
00:00:52.280 | $45,000 a year
00:00:54.640 | Very few people go through medical bankruptcies because health care is heavily subsidized if not free
00:00:59.920 | Well, it's free because the tax rates are so high. Meanwhile, the average annual tuition for Canadian universities was only
00:01:06.680 | $6,571 in the 2018-2019 academic year
00:01:12.520 | So with all these good things in mind, I think it's a no-brainer for Americans to consider
00:01:19.040 | Moving to Canada, but not at any point in their lives
00:01:24.160 | Only after they want to settle down maybe start a family or retire early
00:01:28.440 | So I have a 25 year old friend in my San Francisco softball league. He's from Vancouver, Canada
00:01:33.000 | Lovely place very expensive city. So he went to the University of British Columbia
00:01:38.320 | It's a top five University and the tuition was only fifty four hundred dollars in the computer science department
00:01:43.720 | So when he graduated he decided not to find a job in Canada
00:01:47.000 | But to come down to San Francisco where the computer engineering jobs pay much more
00:01:51.160 | He said I make twice as much in San Francisco as I would if I got a similar job in Vancouver
00:01:57.000 | And I said, well, don't you want to get back to your country?
00:02:00.480 | I thought brain drain is a big thing in Canada and he said well, yeah
00:02:04.640 | But let me make some money first after five years in San Francisco making double the money
00:02:09.400 | I'll then move to Seattle with my girlfriend where my firm is headquartered. It's Zillow and
00:02:14.280 | Seattle pays similar amounts to San Francisco pay despite the cost of living being about 30% cheaper
00:02:20.880 | And then further Vancouver is only about a three-hour drive away
00:02:24.440 | So that sounds like a great plan and then he said
00:02:28.080 | 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
00:02:34.640 | You know with a stronger government safety net. I'll feel more comfortable raising a family back home and
00:02:39.600 | All this made a lot of sense
00:02:41.800 | I did feel a little bad for Canada for not getting the benefit of his productivity after providing him with 22 years of education
00:02:48.160 | but hey
00:02:49.440 | he can do what he wishes and
00:02:51.440 | You know since Canadians are buying US stocks buying US property and taking advantage of our job opportunities
00:02:59.140 | Why don't we just take advantage of them? I mean, it's just natural to take advantage of each other, right?
00:03:05.840 | So I was thinking to myself well
00:03:08.360 | Healthcare healthcare is a big issue
00:03:10.440 | My family pays twenty one thousand a year for healthcare premiums plus co pays and co insurance
00:03:15.360 | And I don't think this is reasonable at all for a healthy family who never sees the physician
00:03:20.040 | to generate
00:03:21.920 | 21,000 in retirement income and a 4% rate of return requires me to first amass
00:03:26.040 | 525,000 in capital
00:03:29.200 | That's a lot of money folks. And then further given the average college tuition is only six thousand five hundred seventy one dollars a year
00:03:36.000 | You know that that that means we no longer have to contribute
00:03:40.960 | 50,000 a year in our son's five to nine college savings plan to ironically make him a millionaire by the time he goes to college
00:03:46.880 | Just to pay for college
00:03:48.840 | We could easily just afford the four years of twenty six thousand dollars of Canadian University tuition just from our savings account
00:03:56.160 | So it's just mind-boggling that four years of tuition
00:03:59.240 | University tuition Canada is about eight to nine thousand less for one year of tuition for San Francisco kindergarten
00:04:07.200 | I mean, that's just crazy. So saving fifty one thousand a year in health care and college expenses
00:04:13.760 | Just by moving to Canada sounds like a home run because that's one point two seven five million less in capital
00:04:21.680 | I need to amass at a four percent rate of return
00:04:23.840 | so in other words
00:04:25.160 | You can just go to Cal Canada and just automatically be a millionaire if you want to think about it that way
00:04:30.320 | But there's another thing. This is the thing that excites me the most about Canada
00:04:36.120 | and that is
00:04:38.120 | their acceptance rates for their top universities
00:04:41.840 | So as a high school tennis coach for the past three years, I've seen my students juniors and seniors
00:04:47.240 | Grind away at taking SAT exams AP exams studying every night
00:04:53.560 | missing critical matches because they had tutoring and so forth and
00:04:57.680 | So one day I was at practice and I was talking to one of my favorite students who's going to Occidental College in Southern, California
00:05:04.680 | And he mentioned a classmate was attending McGill University in Canada
00:05:08.880 | And I was immediately impressed because I remember having a financial analyst classmate in 1999 at Goldman Sachs who had attended McGill University
00:05:16.480 | She was extremely kind she was smart and she was the only one in my class
00:05:21.920 | Who ten years later after the dot-com bomb and after all this stuff made managing director?
00:05:27.920 | She was an MD at 33. So I was thinking myself Wow McGill University
00:05:33.320 | It's definitely the Harvard of Canada. I told him and he said well really
00:05:38.360 | How can it be the Harvard of Canada? How can that be right?
00:05:44.080 | Their acceptance rate is 50% and I said there's no way McGill University has a 50% acceptance rate
00:05:50.240 | And I said, I'll happily bet you 20 push-ups that it's 45% or less
00:05:54.460 | And I was saying myself, you know secretly that's like a home run win
00:05:58.840 | I was thinking McGill University would probably have closer to a 20% acceptance rate given the best universities in America have a single-digit acceptance rate
00:06:06.720 | So he took my bet and he looked up
00:06:09.500 | acceptance rate on Google on his phone and he immediately started dancing around because it said
00:06:14.360 | 46.3% ha ha ha time to do some push-ups coach and
00:06:17.760 | Given that I am very adept at SEO and all stuff Google related since I run financial samurai
00:06:26.480 | I noticed that the acceptance rate was from 2016 as Google often has old data in its featured snippets
00:06:33.280 | So I said wait, wait, wait, buddy. I clicked on McGill's website
00:06:37.360 | I checked out their latest acceptance rate for 2018 and boom it was
00:06:43.120 | 41.7%
00:06:46.160 | ha ha ha so
00:06:48.040 | Never challenged the coach and he did 20 push-ups right there
00:06:51.360 | So I would say 41.7% acceptance rate for arguably the best university in Canada is
00:06:57.560 | Kind of a joke by US standards for the top school
00:07:02.240 | And if you don't believe McGill University is the Harvard of Canada in the top school in Canada
00:07:07.480 | Well, let's just look at some other universities
00:07:09.780 | UBC 52% acceptance rate Queens University 42% McMaster 59%
00:07:17.600 | Waterloo 52% Montreal 57% in University of Toronto a 40% blended acceptance rate
00:07:24.120 | Now in other words the best universities in Canada have an acceptance rate of 40 to 59%
00:07:30.960 | The top 25 schools none of them have an acceptance rate of above 40%
00:07:36.680 | If you look at the top 10 schools in America, you know
00:07:40.760 | The Harvard's Columbia's Juilliard Princeton MIT Yale and so forth. The acceptance rates are all in the single digits
00:07:46.440 | We're talking four four to eight percent and the only one you get to like the 20th 25th school. It's like 10%
00:07:53.120 | So good luck getting into a top school in the United States unless you're a really rich legacy student
00:08:00.560 | Or you cured malaria while fighting gun violence
00:08:03.880 | And seriously, even some rich celebrity kids couldn't get in on their own merit
00:08:08.600 | They needed five hundred thousand dollars in bribes, you know to get their kids into schools like
00:08:14.680 | USC which is okay, but come on
00:08:16.680 | Georgetown great school, but you know, come on
00:08:19.620 | It's not that great and in the USC incident was like five hundred thousand dollar bribe for rowing and then the tennis
00:08:27.680 | Bribe was like seven hundred thousand dollars. I mean, that's just nuts
00:08:31.960 | So I said it to you and to everyone else with kids
00:08:35.960 | What is the point of trying to grind so hard in middle school and high school to try and get into a top?
00:08:43.880 | American University with a 10% or lower acceptance rate when you can be an average student and still get into a top five Canadian
00:08:51.320 | University, I mean it's as if everybody gets a trophy in Canada and
00:08:55.720 | It's probably true for the universities because if you think about their customs and the government the way it's set up
00:09:03.200 | You know, they're very welcoming of immigrants. They are
00:09:07.440 | Subsidizing they've got universal health care
00:09:11.840 | They've got high tax rates. So it's a much more socialistic society to help everybody and
00:09:17.640 | So given that's the case. It makes sense to go apply to Canadian universities with a 40 to 60 percent acceptance rate
00:09:25.680 | Given they're more accepting right? But also the reputations of the top Canadian universities are higher than their respective
00:09:33.320 | acceptance rates indicate
00:09:35.480 | I don't think most Americans and most
00:09:38.960 | American employers realize how high those acceptance rates are and how big of a difference they are
00:09:45.320 | between American top universities
00:09:48.200 | So I recommend applying to these universities
00:09:52.400 | Look at my friend my softball friend. He went to UBC. It's a great school
00:09:57.480 | but again
00:09:58.280 | 40 plus acceptance rate and he makes probably a hundred twenty thousand dollars as a software engineer here down in America and then my Goldman
00:10:05.720 | Classmate who probably makes or who's been making over a million dollars since she was 33 years old and she's now like 42 years old
00:10:13.440 | And she went to McGill University and some people have criticized me for saying well
00:10:18.480 | Look, you're not gonna be able to pay the local tuition rates of like sixty five hundred or five thousand dollars a year
00:10:26.280 | Well, that's true. You've got to
00:10:28.920 | Immigrate to Canada and be a resident for one or two years to be eligible
00:10:32.960 | but I think that's worthwhile sacrifice to be instantly a
00:10:35.920 | millionaire or save on having to accumulate more than 1.2 75 million dollars in capital or
00:10:41.920 | Alternatively, you can just accept that you're gonna have to pay the international tuition
00:10:46.440 | Which is still about ten thousand dollars a year cheaper than comparable top rated universities while having a similar
00:10:53.960 | level of reputation
00:10:56.040 | so
00:10:57.880 | Canada
00:10:58.960 | Wonderful wonderful country
00:11:00.240 | I think all parents and students should consider and this is something that I've been thinking about so much since I became a father is
00:11:07.160 | What is the life of my son gonna look like in?
00:11:10.360 | 15 to 25 years given globalization because there's so much more competitive
00:11:15.800 | You know, there's wage stagnation
00:11:18.520 | It's just it just seems like a tough and competitive world in the future
00:11:23.320 | and I think this is one arbitrage opportunity that we're definitely going to encourage and
00:11:29.120 | That's to apply to Canadian universities. So if you have any other arbitrage
00:11:33.480 | Opportunities that people aren't aware of maybe shoot me an email. Let's keep it private
00:11:39.480 | Let's not tell the world. Otherwise all arbitrage opportunities eventually get whittled away
00:11:44.760 | Thanks so much everyone and leave a comment in the post below. Bye