globe traveller - working from another country
If you will be spending any significant amount of time or money in another country in the near future, listen up. Owning property in Spain to visit during the winter or working from Italy for a year have become achievable goals for many Canadians. One of my dear friends from junior high moved to Spain with her family for a year on a digital nomad visa! Our lives are as large as we want them to be. As we expand our lives there are a few things to keep in mind as you straddle between earning your income and having your savings in Canada and spending in any other country.
The currency and changing fees could kill you. Luckily in the digital nomad visa scenario, you have a little bit of runway before you take off for that villa in Tuscany.
In the past 2 years, there has been a about a 0.15 difference between the approximate high and low of the Euro in Canadian dollar terms. That may not sound like much, but over a year you may be spending $60,000 CAD ($87,000 Euro) between accommodations, pocket money, food (my God the food), travel. The difference between the exchange rates from low to high is a difference of about $9000 Euro and that's money you could spend on wine, or shopping, or just being a bon vivant.
This is not a large problem. Buying currency through the bank is not your only choice. It is possible to open a Euro denominated investment account to start buying into the currency when the price suits you. You set a price that you find suitable, say anytime the Euro is at 1.45 or lower in the above example. The funds sit in the account currency that you will need, earning interest (remember to make sure it is earning interest in money market or something equally liquid and safe). I should stress, these are not options or futures or anything like that, just buying currency by moving the funds from a Canadian account to a Euro account. It goes without saying that if you will be spending a significant amount of time in another country you will likely open a bank account there and use that debit card. You would fund that banking account from your investment account in that same currency.
Bottom line: Managing your currency risk will be increasingly more important the longer you stay in another country or if you intend to return year after year. You will have ongoing expenses in that currency and you won't want to be relying on the currencies to remain stable. The link to open an investment account at Interactive Brokers would be managed by Jennifer Snyder at Doyenne Financial Ltd. if approved, based on the Investment Policy statement, know your client questionnaire and identity verifications. Jennifer would manage the investing on your behalf, based on the needs that you discuss together in advance. Book a call to review any currency risks you might want to manage.