"When u don't agree with a government, what do u do? You Vote. Well, what if voting doesn't work: You Leave!" will think about it for the rest of this week! Thanks, Mark
I have done the same by moving to the US but I don't think it is as good as I thought. All counties have its own problems, especially you are just a bit above average
Not everyone can just move to another country or "leave" thats why illegal imigration exists. Not to get political but the solution isnt very realistic.
Actually sounds like an incredibly dumb point to make. There are a million things you could/should do before you just have a temper tantrum like a child on the playground and go home. Political advocacy, lobbying, grass routes organizations & education, policy enactment through media & organized programs, getting directly involved in politics etc. If Mark actually cared about his country and it's future he'd do any of the following and more. Instead, he cares about himself and his money so he just throws a fit and leaves, like a child who is not to be confused with the people who are coming to Canada looking for an actual better life. Mark already has all that, safety and peace, he would just rather it be slightly better so he packs it up and blames everyone around him.
@@Alex-vo2ew Not really true democracy does not really exist in the western world because there is no clear accountability measure in the constitution. The only country in the west that has this to an extent is Switzerland where there is measures made for promises made my the government, I think individuals vote on policies directly and the government has a limited time frame to implement said promise or else there is consequences. Lobbying costs a lot of money and you have to fund raise and doo all kinds of bullshiit in the hopes of changing one brick in an already broken building. People are also inherently self serving also and you are underestimating your price of relocation.
Hi Mark. You have helped me go through the CFA program, and for the last 3-5 years I have learned tons from you. What I would like to say is that you may put out a video talking about the weather and I would still listen to it. You have an exceptional gift of transferring knowledge and information, and not many intelligent people carry this gift. I wish you happy holidays and I hope that your move will bring you happiness and above all health.
Canada is sadly becoming a hellhole. Too expensive. Big city’s crowded. Homelessness. Crime increasing. Taxes are insane. Leaving is definitely becoming a consideration of mine. Getting pissed off as a young Canadian who has up until this point done everything right. Got an education, have a career, stay healthy, work hard, save and invest ect and STILL can’t afford a house. Everytime I get closer the government keeps taking and taking more. Getting sick of it.
It was always my plan/dream to move to Canada (Nova Scotia) but now its a communist clown show. Not so sure about Mr. Apples either... I he might be controlled opp as i have the feeling with milei... Oh man... Beautiful landscapes though 😢
This has to be one of the best videos I’ve seen in a very long time. Extremely insightful and educational. The additional classroom examples just adds another layer of understanding to the entire concept. Love it.
Mark first of, thank you for your work I had bought your CFA package (one fee till completion), and it was super helpful. Anyway I'm an immigrant in Quebec after 10 years living in Canada and working really hard, I managed to buy a place in 2021 and I got my citizenship last year. I will vote conservative come next election, and I will stick out in Canada for the next 3-4 years for personal reasons, if things don't get better I will also pack my stuff and leave. Taxes are too high and higher income individuals don't stand to gain anything from government services which are in an almost defunct state (terrible health care, bad elementary public education, even higher education is taking a hit etc...). If things don't change, the things that made Canada appealing as a destination to invest in and immigrate to will completely disappear and with that people will be heading to the door.
Question is, where do you go. If you're thinking Europe, and that would be a good choice in terms of lifestyle, can any of us afford it? It's extremely expensive. I hear though that Vietnam is cheap. The cultural differences could be a challenge but cost-wise a good choice. Western money goes a long way there.
@@big_red_machine3547 I lived in the US before moving to Canada but I am not originally from the US either. If I decide to leave Canada it would probably either the US or Dubai, even Saudi Arabia is looking appealing these days in terms of economic opportunity.
I've never felt at home in a country where hockey and Tim Horton's are the pillars of national identity. I left for Panama in 2006 at the age of 34, so I guess we’re neighbours now. Your economic arguments are well thought out and explained. Comparing your society to owning a security is a great analogy. Seeing Canada from afar, I would take it a step further: the economic/political situation is merely a symptom of something much deeper. We are the victims of our own PERCEIVED success. Our societies members are slowly losing their PV due to a lack of rigour and effort. Parents have taken a laissez-faire attitude towards their kids, schools are no longer pushing their pupils to excel. Universities....well, don't get me started. We’ve lost the ability to do great things. We’ve come to prefer the comfort of meaningless platitudes over a dream of prosperity and advancement. It’s like the whole country’s become nothing but a giant Kielburger Brothers pep-rally.
I totally agree with you. The economical problems reflect an underlying greater problem in Canada. This country has no social tissue. Destroyed its own identity in writting thr constitution of 1982 for the sake of mass immigration. Ironically, Quebec is the most Canadian province and yet gets critisfized for maintaining an idea of the "common". All that is left of Canada is economical laws and regulation. When this economy starts to fail, there is nothing binding the people within thr country anymore. It's very sad. Canada is nothing like my grandparents used to tell me.
As someone who left in late 2008, I couldn’t agree with you more across the board. Canadians are so sure that they are the envy of the world, ask anyone outside of Canada what they admire most about the country and they give vague answers about nice people and a safe place. The level of delusion of grandeur of the average Canadian can only be fully comprehended from afar.
@@1982mikedn I live in Quebec and I agree with everything you wrote. Canadians and Quebecers truly believe they are endowed with superior morality and intellect.
Excellent video. I totally agree with it. Where I am stuck is how to “leave”. We have a residency based tax system in Canada. So “leaving” means becoming a non-tax-resident. But to do so means deemed disposition of all assets, right? Which means a big tax bill. The “exit tax” you refer to. How did you minimize that? That would be a very helpful video!
If you grow up in Canada, for most Candians, it's generally pretty easy to migrate to Costa Rica as an adult after you've completed your education, had some work experience, and spent time building wealth. If you grow up in Costa Rica, there's only a small group of people who will be in a position where they can just move to Canada.
If you grow up in Costa Rica, you can take a bus to the US and border and walk across into the country and receive rights to stay, shelter, health care. Etc. If you grew up in the US you cannot just walk across the border into any other country.
@@zwatwashdclol my dude a US passport lets you visit basically any country, it's about as good as it gets in terms of access. I'm pretty sure migrating from Costa Rica, you're generally not going to be able to make a credible asylum claim. I used to work at a non profit that served asylum seekers, this was before the pandemic and the recent surge, so I can't speak to new conditions, but the laws haven't changed. It's always been amazing to me how people know basically nothing about this process, yet they doesn't seem to impact their confidence in their own opinion. If you think the average asylum seeker or refugee is freeloading on free housing, that's not what I saw. What I saw in San Diego, families would get a stipend for six months, typically $400/mo. Then it ends, and you're on your own. In San Diego, that wouldn't even pay for you to split a room with someone. I guess people are thinking detention centers, and being stuffed onto a homeless shelter bunk, that's "free housing?" There are major problems with US immigration, international flows of refugees, and our domestic resettlement programs. We have crazy wait times that are totally unnecessary, and could easily be solved simply by hiring more judges and adding more immigration courts (GOP refuses to do this, because they love having a broken system to point at occasionally). Burdens unfairly fall on local municipalities who have the misfortune of being on a major smuggling route. Cartels are making the whole situation 10x worse. But the idea that asylum seekers and refugees are getting all these sick handouts from taxpayers, and they come here just to lay about and collect welfare, that's not reality. I have no idea where people get this idea from
@@zwatwashdc yeah right. You make sound easy living as an illegal. Funny that i work in a shelter in Canada and the homeless and crack heads here live a better life than working people
The problem isn’t government spending, it’s the management of government spending. I easily live in a country with an 80% additional higher tax rate if I’m honest, as long as I can see that the area is clean, it’s safe, and there’s opportunity for future generations. True, it is likely people would become less aspirational to earn above this rate and or move abroad to work but at the end of the day quality of life for existing and future generations is paramount. A question I often ask people is: “what would you say is the role of government?”. It’s funny, I’ll hear answers from wanky econ students like “to ensure Real GDP growth” or “to remain competitive in the global economy”. In reality, I feel it’s to create a civilised society. To achieve this basic human needs should be met to the best of the country’s ability whilst allowing a fair degree of wealth inequality. It is such a multi-faceted and fascinating problem though.
Mark isn't particularly interested in this aspect of society. We see this in the following comments: 1) he asserts that wealth is primarily earned by hardworking individuals 2) he expresses concerns over the possibility of inheritance tax in Canada The existence of wealthy individuals who consistently fail upwards yet remain cushioned by their family's wealth is pretty much the same problem as the lazy poors making bad decisions, but the difference is that those born wealthy don't generally become poor as a result of their choices. Mark just prefers to live in a world where those born wealthy are allowed to fail more than those born poor, and he prefers his wealth to go towards supporting the privilege of his own hypothetical descendants rather than benefiting society at large. Fundamentally, wealth inequality is not a bad thing, and it's not the problem that "socialist policies" are trying to eliminate. Most ordinary people, conservatives and liberals, only have a problem with *excess* wealth inequality, which is a tricky problem to solve. Excess wealth inequality is the kind that ordinary people begin to notice when they are unable to earn the same things in life that their parents were able to earn decades ago, even when they put in more effort (this is happening all over the Western world). It's also the kind that they notice when there are people thousands of times richer than Mark that do not accrue their wealth by simply "earning" it on their own during their lifetime. We live in a world in which wealth like that is often accrued as a product of direct exploitation and corruption, and Mark's espousing on a fair, just, meritocratic world does not account for this. I could go on about how even his conceit of "free choice" being the greatest perpetuator of poverty is never really "free" under innumerable cases... monopolies, discriminatory policies, doctors liberally prescribing addictive substances as "healthy painkillers", which leads into unequal access to resources like information and healthcare, etc.
Thank you for the video essay! At 17:40 you mention implementing social policies (ie buying SPY puts) decreases GDP per capita (ie expected return of portfolio), why is this the case? With the option example its clear to see that the option has a cost and will not improve the index returns, whereas some people argue that implementing social policies actually increases GDP per capita (eg education improves human capital development and productivity). In fact nordic countries have some of the highest public spending to GDP ratios and GDP per capita levels in the world - what is different in these regimes? Thanks!
Id like to know to. As for the nordics, i dont like using them as examples. They are small population, ethnically homogeneous and cultural societies and that allows them to be much more efficient than all other countries. This and they are small enough that economic centralization is possible and fairly successful with a small government. Canada should be compared to France and Italy, where the governments need to be larger to manage the country (but at the cost of bureaucratic waste / inefficiencies). Scandinavians are also less affected by behavior modifications due to their culture (they abuse the system less then say my fellow Poles). They are the people who educate and invest and they can use government spending to better themselves,hence higher GDP. Most other peoples of the world spend and watch Netflix when given something for free.
The social policies cost money (you have to pay for protection). The top earners pay for the protection enjoyed by the bottom earners/free-riders --> total value of net earnings per capita decreases.
@jc23242 unless the free riders will become more productive as a result of that spending, increasing gross product. Eg poor kids who used state sponsored education will become more productive and generate more money/taxes... as a result
Nice analysis. I’d personally add a social argument however. We are not born equal, and the normal/asymmetric distribution you establish for returns per asset class could also be applied to your potential at birth. Not only you might be born more or less gifted than average, but how much you’ll make this potential grow will depend on parents, family, and life circumstances. Motivation in life, as well as the capacity to elevate yourself also comes from the conditions you have to support your own growth. And this compounds too, imagine if in one family, in a particular generation, someone takes bad decisions, it will compound on education potentially, from one generation to another, things can slip and get worse (and as things slip, parents are less and less likely to provide good success clues to their own children). Even though I agree with your political arguments, isn’t it better to be born on the bright side of the equation? And this way, isn’t it fair to pay a price to be a support for those who got less potential, less mental strength, less motivation, and more problems? Rich and smart people can be white knights in their own way, even though it means paying a price (taxes!) that populations don’t deeply understand. I will end with another point: no country is perfect. In France for example, you get far more social services for the taxes you pay, but talent is not rewarded like in North America.
Wrong. How much you'll make through your lifetime does not depend on your birth privileges or life circumstances. That's just a loser's excuse. How much you'll make will depend on your work ethics, your capacity to take smart decisions, being wise instead of reckless, and treat others around you with respect. All the rest is a bunch of excuses. The tone of your arguments validates Mark's points. By the way, in France you do not get more social services for the taxes you pay. Somebody else (probably someone richer) is paying them for you. Think about that when you call for the rich to pay their "fair" share. They already do, which is why you can afford "more services for the taxes you pay".
I’m from France too and I disagree with your arguments. I didn’t have a lot of money but could secure a student loan at low rates because I had a promising future. I didn’t pay anything for my Masters because I found a company to pay for it (“alternance program”). Now everybody has these levers in place but most choose to not use them because they can have social services and a sizable income by working the absolute minimum and I will be the one to pay for them.
@@Paul-wc9wy, yes, you had a ''promising future'', ie: you were born with enough intelligence and determination to create a good destiny for yourself (which is not at all against my point). Kudos to you, success is way harder in France than in North America.
You can make a decent living doing manual work in some countries. In Switzerland, those degrees are just as rewarding as doing a business school. I certainly have no empathy for people with no determination, but that is not something you are born with.
@@mikeb5664 Things can change for better or for worse. There are a lot of countries in this world changing for the better - many returning from the direction that Canada is currently heading.
Agree with so many points. I own a real estate holdco with a significant number of tenants. Our good ole government takes 50% of my company's earnings because it's considered passive income. And then I as an individual need to pay taxes on any dividends that I pay myself, to the tune of 25%. So the ultimate tax rate is pretty much 62.5%. Extremely frustrating
@@Bigchuckers oh I do. We don't pay tax, but depreciating simply defeats tax. Although at least it becomes a capital gain at sale, rather than income taxed at 50%. However, I still have to pay tax as an individual if I take money out of the company down the line, so it's still double taxation.
Q: I really like your country/company analogy. One difference I can think of off the top of my head is the population growth present in a country as opposed to a company. More people act as consumers of its own system plus additional tax payers. They are forced to consume and spend within the system whereas companies don't really have an option. Imagine a company that could increase payroll but they are forced to only buy company product. What would you say to this point or how would you address it? Don't get me wrong, I agree that Canada is/has been on the wrong path for some time. Sorry to see you go Mark, we'll miss you up in the North!
Bingo. This is why the arguments in this video actually are baseless and dare I say, borderline propaganda & misinformation. Mark conveniently left off that while all of the above have been happening, Canada has increased it's population growth via immigration more then any other western country in the last 2~ years. This means that revenues that would have seen a sharp decline and met many of his conditions are now hitting a new growth trend that offset the unsustainability of current spending and actually avoid most of the end game scenarios Mark described.
Hi Dr. Mark, as an African student following your pedagogical philosophy in teaching the professional financial Analyst course from the US, I would say teaching this welfare economics seminar from the hedging effect of the normal distribution of returns with options such as puts has really helped me with level 3 Option Strategies. This is because the linear approach you use in your teaching material I could not phantom but now seeing how puts protect assets return in a distributive way, I can see the light a end of the tunnel with the second attempt to level 3. This is because we do not have derivative markets in Africa and also as an Accountant, I am a theorical financial Analyst. A luta continua vitória é certa.
Left summer last year- high tax, low pay, rampant crime, laws unenforced, woke bs shoved down everyone’s throat, pathetic monopolistic economy… working in high finance, v happy to have left Bay St & left Canada
Nailed it, Mark! I saw the GDP/Capita tides turn in 2014/2015 and after Canada shifted form a resource and manufacturing economy to a real estate economy (2015-2016), I made my plan, got a top-tier MBA, and now work in the US. The quality of life is slightly lower here, but standard of living is several orders of magnitude higher.
The problem with framing his argument in the context of an investment is that he removes the main decision making criteria that the average person goes by --- family ties, emotions, and sentimentality
Would love to hear your thoughts on Nordic countries, which at least at a superficial level, appear to be doing significantly better then Canada as democratic capitalist systems with significant socialist programs in place
Hi Mark, as a fellow Canadian I agree with all your points,however, I would be curious to know at a high level what your ideal version of government in Canada would be in terms of policy and taxation (Cut spending where, tax who, more spending in what areas etc). I myself live abroad and have voted conservative but alas... Also, do you foresee yourself staying in Costa Rica majority of the year? Or hop around like spend a few months here and there throughout the year? I would imagine you may miss friends, family and also the food back home. Thanks and wishing you happy holidays!
I work for a .gov agency in Canada, the amount of useless paper-pushing they do is breathtaking. The problem is if they canned the deadweight, it would be 99% women and DEI checkmarks, thus causing a likely "discrimination" lawsuit, which they would lose because of the leftist judges.
I always thought about this, so nice to see someone put my thoughts into equations which I like! I think that maybe I should leave the country as well but Im still a bit young and just starting my career... Im also not sure where cuz this seems to be a trend in most of the western countries.
Hi Mark, thanks for this video. Recently the topic of socialist policies and wealth distribution has also picked up in India as the opposition alliance left with little chance against the ruling party has resorted to appeasement politics. Your equity analogy to explain the socio-economic-politics of a nation is right in mark. Mark, you can literally explain anything under the sun using a normal distribution curve. Thanks for this stuff.
Hi Mark! This is an interesting video overall. I think your bond analogy makes your decision seem rational, given your assumptions on policy. But, I think your analogy for course grades later in the video is a poor analogy for redistributive taxes. And sure, all analogies may be imperfect, but I think the assumptions baked in to this analogy really preclude its effectiveness. Here are a few reasons why this is an imperfect analogy: 1. This analogy is informed by a belief that only high performing students have a desire to perform well. a. You consider that students that expect to earn a 90 will desire to push for a 95 if they think they will receive that full mark. b. You say that the students at the bottom were "…comfortable with the work they were doing. They were going to fail anyways." 2. This analogy has fixed upper bound for scores 3. This analogy has a 100% "tax" in each letter grade bracket Now if you want to create a distribution of "desire to improve" or "willingness to give more effort" against expected performance, you get a strange relationship. Only individuals who are near the next bracket have any desire to improve. This directly informs your conclusion on behavior, where "failures", anyone distant from the next bracket, and "successful A students" all give less effort. In reality, marginal tax brackets don’t disincentivize increasing your performance (income), since you still keep a portion of your added income. There is also no income cap in the U.S. or Canada (although I think you imply that is a policy decision you expect in the future). And lastly, I don't believe "failures" have a no desire to improve. Rather, I think this desire is more randomly distributed, albeit maybe left skewed. When you change the distribution, the behavior changes. There are additional assumptions in this analogy that don't match reality: 1. Score redistributions occur only in "direct payments" a. In reality, plenty of tax redistributions happen via same-as-cash payments (food stamps) or through non-monetary benefits (education) 2. Scores occur independent from one-another a. In reality, wages are determined via a market where competition for wages impacts their value 3. This analogy assumes the entity giving scores (university) is the same entity taxing the scores and creating redistributions In reality, this is only true for public sector employees
I think there's an argument to be made that those at the bottom aren't content with being at the bottom. The rational argument is that it's simply cheaper to live abroad and reckless government spending will only increase that difference, but to think that someone working minimum wage and struggling to get by is merely there because they didn't want to work hard is a little shallow. There are countless factors as to why someone is in the bottom 50% of wages, I'm 99% sure laziness isn't a top reason.
I think the ‘present value of human capital’ explains why the US is allowing people to stream across the border. The number of people affects the amount the government can borrow and thus how much the corrupt officials can disappear into various pockets.
Hi Mark, thanks for sharing this great video. I agree with all your arguments and wish you luck in your transition. Some thoughts below: Q1: Regarding the analogy with the students and exams in the university. When you frame the problem in a university class, it absolutely makes sense on how much effort the students will put in. However, when I draw a parallel for individuals and taxes it's not so straightforward. - For the bottom 10% yes, it makes since they will say "how much effort do I need to put in to make the minimum or get the XYZ social benefit". - For the top 10% maybe it makes sense if the tax rate is very very high, like 70-75% and would say, ok, once I reach this tax bracket I have little motivation to keep going. However if the tax rate is closer to 50% they will keep working hard to earn more. Even when tax rates are as high as 70% in reality people keep working hard and pay advisers, lawyers, etc. to find the most tax efficient ways to avoid paying so high tax or relocate some of their assets to more tax favourable locations. - The middle 20-80% of the distribution, usually are not entitled to any social benefits in most democratic capitalist countries, so they are all trying to get higher and earn more money no matter of the tax rate in my opinion (not the case with the students who will target for the minimum pass rate). So the argument makes sense for the top 10% if the tax rate is very very high and the bottom 10% but loses a bit of its appeal for the middle 20-80%. Q2: Would you be more in favour of a tax system like the Netherlands where you start paying 49.5% tax when you earn more than 75k a year? The argument here is that the tax rate is high, but you reach it soon, everyone pays it, and doesn't get any bigger than that. Or again you would relocate if you were happening to build your wealth in the Netherlands? Source: www.iamexpat.nl/expat-info/taxation/dutch-tax-system Q3: I know from previous videos that you don't have wife/kids and many friends left in Canada as you were focused on building your own company. How would your choice differ, were you to include the social/sentimental variables in the equation? Q4: Again, I know from previous videos that you will give away the majority of your wealth to charitable organizations. Why bother to leave Canada and pay less tax if you don't have any children that you would like to pass them as much as possible from your effort? I agree that through tax the money won't go in the direction you really want it to go, but nevertheless you will be able to donate a respectable amount of money. So why go through all this hassle if you don't really need to consume all those tax savings or pass them on to your kids? Was it maybe that you wanted to also change environment/lifestyle apart from paying less tax in this stage of your life? Thank you in advance, and I appreciate immensely all the knowledge I gain from you at age 32. I consider you the one of the three most impactful teachers-mentors I had in my life so far.
As an immigrant here in Canada, I would never vote liberal and out of all my immigrant friends, I don`t know a single one that plans on voting liberal. Immigrants tend to despise woke politics. Besides...the argument that the Liberals are importing voters is ridiculous. Most immigrants can't even vote. They need to live in Canada for many years before having voting rights and...by that time they'll have already understood how Canada works and will stay away from the Liberal party. What Canadians fail to understand is that Canadians themselves (the extreme left that rules the schools and society in general) are the ones responsible for Trudeau and his friends being in power. Stop using immigrants as scapegoats. Wake up.
Comment #4, present value human capital is a function of location. This trend is slowly changing because of remote work etc. However "past returns dont indicate future results" Relocating in that sense only makes sense if you still maintain the option to return if location income changes. Thats a form of risk hedging.
You can never eliminate poverty because the poverty level is a relative measure not an absolute measure. It doesn’t matter how much you have or how big your home is. If others have more stuff and bigger homes than you, you are “poor.” Poor people today are far better off than poor people of the past and they could never tolerate the living standards poor people used to have.
I was not able to agree myself with the whole argument until he mentioned at last that he’s okay with free education 😮💨 . I would add health to it and then agree that too high taxes are harmful in long run.
It’s a shame what’s going on with Canadian politics. Amazing people, beautiful people with a nation filled with vast industries + resources. I hope matters change ASAP.
Sometimes it blows my mind that US, a country that was founded primarily because of unfair taxation on the colonies has no constraint about a maximum possible aggregate tax rate (thru all channels and all layers of govt), in the Bill of Rights.
Unfair taxation from foreign entities, not domestic. Also, is it that mind blowing when you consider that the founding fathers also stated the right of the people to take up arms and people misconstrue it as open carry 😂
@@IamnotJokic you may have a point about taxation w.o. representation being a large part of the reason for revolution. But I would argue that if that tax was small enough, it likely wouldn't warrant a revolt. So obviously there is a ceiling rate, and govt (local or colonial), has to be constrained to it, otherwise its just forfeiture in disguise of taxes.
Enjoyed your video and agree on every point. However as a large corporate sized farmer in western Canada who’s main asset has grown exponentially coming off a commodity bull run it’s hard to sympathize.
Interesting point, thank you. Apart from purely financial view, some other human factors might influence the decision (climate, access to healthcare, safety, relationships, etc.) Interestingly, Finland provides high quality of life, it seams to have as high tax rates as in Canada, it has low migration rate, and it's not "free traded" to get shares.
Regarding bonds at the 20:00 mark. You could just buy SGOV or Bil with dividend reinvested rather than taking profit on the T-Bills. Regarding not having deficit spending. That's impossible as fiat money is debt by definition. Even the currency you hold are called 'notes' or 'bills'. They're a form of debt and we assign value to them. Our current monetary system doesn't have a solution. Still, I would leave Canada. This is coming from a Floridian.
Mark i understand your move my mother is costa rican and it is a beautiful country i spend a lot of time there. My question is what about high crime in costa rica ? How do you manage to feel safe there? I have been mugged there before
Couldnt agree more with you ! I left France to come to Canada, I was fed up with working my *** off to pay taxes to finance social welfare given to drug dealers and rapists, failing school and bureaucraty. Thankfully Canada is far from being like France... for now... once I pass level 3 I am considering moving out too... I m sure we all gonna be able to find well paid jobs anywhere in the world.
It is necessary that politicians don't recognize debt is a big thing but rather whether it helps them help elections. There is no incentive in the Canadian (or US for that matter) political system to do anything that doesn't help you win and so they are incentivize to provide short-term immediate return and to win special interest group votes (because voting population of each political party is relatively stable it is often the undecided voters who can change election result).
Comment #1, for TBill you talk about variability in terms of rollover risk, but the larger risk is the underlying currency. If CAD/USD underperforms your CAD bond in practice also needs to be marked down compared to other assets because currency is just medium of exchange.
Dr. Mark this was a great video. Thanks for putting it out. I take issue with some of your fundamental reasoning on free choice though. You essentially attribute all positive outcomes with good free choices (fitness, education, hard work) and all negative outcomes with bad free choices (Netflix, substance use, laziness). To me this feels far too reductive. Please correct me if I'm putting words in your mouth, but becoming wealthy and successful owes to other factors that I think can't be reduced simply to "free choice." I would argue that timing, luck and environment are all other important factors to one's success. I would generally agree that free choice is likely the largest factor in deciding outcome though. Perhaps you covered this in your "maintenance redistribution" discussion, but what if I happen to be a person who takes excellent care of myself but end up getting a serious illness anyway? Even if I made all the "right" free choices life could still turn against me. I could get cancer, become disabled, lose my job (probably because of terrible governmental decisions) or experience other misfortune. Do you think this should all be covered under the "maintenance redistribution"? Or would this be straying too far down the socialist path? Thanks for such a great and thought provoking video.
In aggregate, without singling out edge cases or tragedies, for 99% of the people the outcomes you get from life are in correlation with the inputs you put in. If you work hard, if you take wise decisions, if you do your home work, if you are fair to others around you... basically, if you put in the right inputs, life WILL treat you (and your bank account) well. Other factors such as luck and environment, as you put it, might slow down your progression, but they wont kills it *IF* you continue putting in the right inputs. No excuses. Sorry, but I am with Mark on this one.
I could live through bad a economy, if things could improve, but the government has stopped following the law. I doubt they're going to turn a new leaf. It will become more and more apparent in the future.
As a high-earning Canadian entrepreneur paying PAINFUL amounts of tax, I appreciate your points and heard you out. I'm only here in this horrid -30C weather because my wife wants to be here. And while I agree with your economic points, as the video progressed I struggled with the way you talked about poor people. Walk a day in their shoes, you'll realize most of them are often carrying very heavy burdens and working their buts off. I'm not saying it's your responsibility to help them at all - I'm just saying there's lack of compassion and understanding in the language you used there.
I was poor. I have been on every income decile. My language was neutral. You cannot divorce outcomes from personal choice. Simple experiment, unrelated - but demonstrates the point about personal choice. Next time you are in the grocery store, look at the correlation of body size with the type of food in the cart. Fat people are fat people because of the choices they continually make. People who live paycheck to paycheck have no money, not because they don’t make money, but because they continually make poor choices with their money. Now, as a rule, there are always exceptions, but the exceptions should not make the rule.
@@MarkMeldrum Okay. I'm not going to get into a debate. Maybe just keep my feedback in mind and it might sink in at a later date. Cheers. Appreciate your content.
I just wish that Mark Meldrum online content had not gone so far downhill. Cant get answers, videos are years outdated, no one monitoring anything. When I took first times it was great, most recently it went way downhill. I hope it gets corrected.
I can’t comment on your other points, but no video is out of date. Some readings have not changed for years - so there is no point in repeating the same things year after year.
Canada is a total mess now. I wish I could leave but it's a huge hassle. I work in the tech industry and could get a job and do the TN route but I don't think my girlfriend is gonna want to uproot her entire life.
As a Canadian, I am moving to United States. Unfortunately ， As an older person, I have to find the country that has good health care system. US is not that better. But at least I can live in a states that I prefer.
Hi Mark, I'm in the same boat. I left the UK 13 years ago, however, I fell into it by finding work in places like HK, SG and Tokyo instead actively disapproving governance and policy. I never found a reason to go back as a permanent resident.
I would classify dental care more in the maintenance category than wasteful. Dental care is more than brushing and flossing your teeth. Seeing an oral hygienist and dentist on a regular basis is important. There are many dental hygiene nuances such as brushing too hard causing receding gums that you would not catch without dental care
Hi Dr Mark, Have you never calculated the PV of the tax effort you’ve been paying in Canada so far? Your assumptions about the company Canada in the future makes a lot of sense but my further question then is: why did you expect so long to change asset location? It could have produced an outstanding result if you’re wealthy has increased more at higher rates in the last years where taxation has been increasing. A warm thank you for being a bright light in this finance’s world.
If your priority is maximizing your individual wealth, then moving is clearly the correct choice for you. What I do not think is correct is your view on the nature of social programs and what drives wealth and income outcomes. 1) I don't think spending on social programs is truly analogous to buying downside protection. Because well-executed social programs are an investment with a economic return in themselves, regardless of what GDP or the broader economy is doing. The right programs done correctly can BOOST GDP-per-capita. You're a fan of free K-12 education. I know you wouldn't say spending on K-12 education lowers GDP-per-capita. We don't necessarily pay for K-12 education to boost living standards for the poor, we do it because it pays off many times over economically to have an educated populace. And this benefits all, not just those who get the free education, because children who otherwise would not have had access to education then have much greater economic potential. They go on to work at the companies that create returns for your investments. Likewise an investment in a smart, well-executed public health policy can pay off, because a healthy populace is a more economically productive populace. Of course if you're paying for others healthcare, you're paying for the person who drinks and smokes. Likewise, when you're paying for others K-12 education, you're paying for a kid to go slack off in class. But for every kid who slacks off, how many more have new opportunities as a result of the education given to them? For every irresponsibly unfit person being seen, how many more people with regular health issues, congenital health defects, or disabilities can now afford the treatment they need to become more economically productive? Smart, well-executed social programs (certainly not all social programs) result in greater human capital. How does greater human capital result in lower GDP-per-capita? 2) You characterize the poor as people who simply make poor decisions: don't work hard, don't tend to their health, prioritize entertainment over education, spend instead of save. While it is true that people with those traits are more likely to be poor, I don't think that's an accurate portrayal. While personal responsibility certainly plays a role, it does not take much creativity to come up with examples where someone could be poor (or rich) due to factors beyond their control. Opportunity is not equally distributed, fortune and misfortune are not equally distributed. This has a significant impact on ones economic outcomes in life. This is undeniable fact, you can't ignore this. Portraying economic outcomes as simply being the result of free choice, of choosing to do the right or wrong thing, is far too simple to be reflective of the real, complex world. Social programs are one way we can provide more equal opportunity for all, so that economic outcomes truly are reflective of what a person has "earned".
Hi Mark - great content! thank you for making this content. was anxiously waiting for it! My ques is: when you talk abt redistribution, what specifically do you have in mind? If you are talking abt healthcare, my view is that in Usa 70% of bankruptcies are due to medical reasons. so if u have a universal medical program, it attracts a lot of risk capital because an enterpreneur can safely start a business and not have to worry abt an insurance expense in the family budget of approx $1000/mth to support a family of 3. but yes, i dont know if just the universal healthcare is the biggest component of govt expenses to justify high taxes - if it is, yes, something needs to be done to reduce cost and therefore taxes. if it is not, then, yes, other components of govt expenses shld be addressed to reduce taxes. hence my question.
I understand your example at school of the grades. But in reality, when the "genius" failed, the tax payer has to go and save the situation. They created a safety nest for themselves at the cost of the poors. I don't think what the government doing is wrong to tax more from those people. In your words, this is just the higher insurance premium the government has to charge them. What happened in 2008 told us that at the end, the "good student" can still walk away with much better life style as the company only takes limited responsibilities. And they still get bonuses in 2008 and 2009 when thousands of poors lost their homes.
Agree with your views on Canada (as a Canadian too), and this argument makes lots of sense, but what about things that are harder to quantify? Such as family, friends, relationships? Moving countries can be very difficult when there's other people involved. I'm not sure about your particular situation, but for someone who has a significant other, or young kids, would you still recommend them to leave Canada?
Canada is arguably ceding all hitherto pretences of applied civil liberties via the Charter. If you were in mortal danger simply for peacefully protesting/being civilly disobedient and that risk to life and property wasn’t high enough for you to move at any cost because your family couldn’t see such reality …why are you choosing to stay for family/friends who at best can’t read the writing on the wall and at worst would turn on you if their post-nation state overlords told them to? This is much bigger than unsustainable/unacceptable cost of living considerations.
Have you considered moving around different countries within a year or every several years? E.g. 6m in Costa Rica, 6m in Dubai or a couple of years in Costa and then maybe Singapore. Variety is the spice of life but perhaps is logistically challenging... What minimum level of wealth would you say can enable a comfortable, non-extravagant life in Costa Rica for a foreigner? If your net worth was 10% of what it is now, would your quality of life be really any different in Costa Rica?
Thanks Dr. Meldrum for this video. As a fellow Canadian, working in finance (who actually just got his CFA charter through the help of your CFA prep) what advice would you have for us that have an expectation of high human capital with many high earning years to come? Should we relocate and restart our early careers in a locale in tax friendly jurisdictions? What would you do if you were in our shoes?
Just remember that Canada’s tax rates are just less than the OECD average. I relocated to Japan and my tax burden here is roughly the same as what I had in Canada but we get much much less for our taxes. Just the drives on the freeway cost an arm and a leg. So beware
If you want lower tax rates Ireland looks pretty good, a lot of companies seem to be relocating there like Patreon and Google. However healthcare there is in decline but so is Canada's.
Comment #2, when talking about total debt load, its your relative debt that matters. If my companies produce 2x more net profit, i can increase debt and still be better off. So debt to productivity gains is the better measure here. We on average get 4% productivity gain a year which results in the RGDP of 2% when factoring in M2 supply expansion effects. Not saying government spending expansion is good, just saying the argument is more nuanced
You seem to spend a lot of time working, out of curiosity what do you do for fun in your spare time? Any hobbies? Any interests outside finance and investments?
Great deep dive! Have learnt alot from you and will continue to do so on how to think differently about things. Just wanted to know if there were any specific reasons for choosing Costa Rica over any other country that would have potentially offered similar benefits that you were looking for.
I would like you to consider two point. First off, thank you for laying out your argument at such level of depth and using investment point of view in your analysis. Point 1: I am 99% sure that conservatives are going to win on the next election and the polls agree with me. Polls normally understate conservative vote so I am confident that there will be a conservative wipe out not seen in decades. You stated that newcomers are likely to vote liberal and currently we are importing millions of them. Perhaps they will vote Liberal, I am not sure. However, it will take at least 5-6 years before those newly arrived can vote so they will not be a factor in the next election. Point 2: I believe there will be a mean reversion within the Liberal party. Trudeau represents a significant deviation from the norm within the Liberal party of past decades. As you pointed out he is woke, incompetent and self-obsessed. It appears that the voices within his party are growing loader for him to step down. After the Liberal's humiliating defeat in 2025 there will likely be a more sensible Liberal leader to revert the party to the center. Out of curiosity, what kind of changes do you need to see in Canada for you to come back? Perhaps, coming back is out of the question for you at this point, if so, why?
Hey Mark! Fellow Canadian here. I'm curious what your pov is on a country like Norway. Would you not consider them a successful socialist country? Their tax rates are higher which support social programs, and they have a very strong gdp per capita.
If you do follow up can you explain why you chose Costa Rica? Would be interesting video to break down what does Costa Rica (yes tax favorable) but apart from that. Things like health care / education / etc. Thanks
One of the best videos of 2023! This is applicable to the current scenario in NZ, however there is glimmer of hope with the newly elected govt. Inequality is consistently rising and standard of living is on a continuous decline, however interestingly citizens do not seem to be affected, too bothered about being politically correct. Good news is their voting patterns are changing, which means they are just not publicly expressing their true opinions. Hopefully Canadians make a similar choice in the next elections.
The issue here is the average would be GDP. I dont think the political system has a large impact on the GDP, the government spending can be misallocated to reduce gdp via unproductive investments or boost gdp via productive investments . And it really doesnt bode well for a socialism vs capitalism. The GDP of the russian SFR was higher than that of capitalist russia today. Also a bunch of the government spending is a direct subsidy to the wealthy. My city recently spent 600 million on a sports stadium, with the province coughing up an extra 300 mil. Now the taxes are up, but they haven't "bought puts" to stick with your analogy. They took from average homeowners to give a massive handout to an already super rich sports corporations.
If it's a strictly economic decision and the friction of uprooting is small, going to better tax country is rational, given you can maintain a comfortable living standard there. Most people have families or communities that make this a non optimizing, non-economic decision. I'm American and have lived abroad in Asia for over a decade before moving back to the US a few years back. I lived in a wealthy area of China and often felt it was better to be poor in America than be rich in China because with all the problems of home at least I could always count on getting proper medical care or healthy food, etc. Now that I have kids there's a small chance I would live outside the US. I'm not sure how Canada works, but in the US we can always move to a different state if we are trying to optimize taxes. Surprisingly, finance knowledge isn't that helpful in this decision-making beyond hypothetical examples. The US is absolutely a tax-haven if you know estate and trust laws, which I don't but I am aware assets would be much safer in a South Dakota trust or a Delaware LLC for example than in a Central American country that could turn on a dime in term of tax policy on Gringos. I have some family in Ontario CA and they are not happy about the current state there as well. I wish you the best in CR brother. Under the right circumstances I think you have no reason to second guess your decision.
Idk. At this point any type of post highschool graduation is a necessity. So i don't mind paying for it. Also feels like in a roundabout way I'd be paying for it anyways. Because at best these people end up going to the military to get an education which we already pay for or at worst these people just end up homeless and doing crimes of necessity which we again end up paying for. Same goes for healthcare. Though with that I also don't mind a sugar tax.
He said in another video (why costarica) that he didnt choose Dubai because of very expensive real estate caused by influx of Russian rich people relocating because of ukraine war
This is pretty reasonable. Politically Im a georgist. So im not sure its better value to move. I also love our natural beauty. Im willing to pay to live in our mountain regions
Thank you for your honesty and openness, with which you have exposed yourself at the same time. You tried using the example of Arbitration to justify your decision, which is economic and material, and you are absolutely right. However, from the aspect of national unity and sense of belonging, I could not agree, that is, I would try to put you in the context of British citizens, who are scattered all over the world, but have only one homeland, GB, and individuals have possessions and property larger than GB , or they are richer than the king, and yet they obey the king, because they know that they are connected by a system of values and ethical principles, which form a community and an alliance against external threats. If you look at it over a longer period, it is important where your children will grow up, what values and beliefs they will cultivate, then where you will be treated in case of serious illnesses, also whether you will join the army if Canada is attacked... CR is a beautiful country, but how safe is it, whether there will be social unrest, nationalization, these things must be taken into consideration. These are all facts that need to be taken into account in the long term...
Comment #3, good comparison with govnt expenditure and average gdp/capita. However, again its a bit more nuanced than this because GDP/Capita is valued globally not nationally. One common argument is that highly educated professionals prefer living in areas with robust social safety systems and that increases net migration of talent. The problem in Canada is not debt (its lower than USA) its use of capital. The vast majority of canadian wealth is tied up in essentially land speculation and not in productive assets which undermines overall productivity gains.
I believe policy restricting spending (eg force saving to an account that you can only unlock to buy a property or start a company) is not that bad mixing it with otherwise liberal and conservative policies such as in Switzerland and Singapore.
Costa Rica is a wonderful place 🎉. My father lived there a couple of months when I was a child, and with my mom we were worry that he won’t return because it is a magnificent place to live 😂
"When u don't agree with a government, what do u do? You Vote. Well, what if voting doesn't work: You Leave!" will think about it for the rest of this week! Thanks, Mark
I have done the same by moving to the US but I don't think it is as good as I thought. All counties have its own problems, especially you are just a bit above average
Not everyone can just move to another country or "leave" thats why illegal imigration exists. Not to get political but the solution isnt very realistic.
Actually sounds like an incredibly dumb point to make. There are a million things you could/should do before you just have a temper tantrum like a child on the playground and go home.
Political advocacy, lobbying, grass routes organizations & education, policy enactment through media & organized programs, getting directly involved in politics etc.
If Mark actually cared about his country and it's future he'd do any of the following and more. Instead, he cares about himself and his money so he just throws a fit and leaves, like a child who is not to be confused with the people who are coming to Canada looking for an actual better life. Mark already has all that, safety and peace, he would just rather it be slightly better so he packs it up and blames everyone around him.
@@Alex-vo2ew Not really true democracy does not really exist in the western world because there is no clear accountability measure in the constitution. The only country in the west that has this to an extent is Switzerland where there is measures made for promises made my the government, I think individuals vote on policies directly and the government has a limited time frame to implement said promise or else there is consequences. Lobbying costs a lot of money and you have to fund raise and doo all kinds of bullshiit in the hopes of changing one brick in an already broken building. People are also inherently self serving also and you are underestimating your price of relocation.
@@Alex-vo2ewthis may be the dumbest take in history, Alex.
Hi Mark. You have helped me go through the CFA program, and for the last 3-5 years I have learned tons from you.
What I would like to say is that you may put out a video talking about the weather and I would still listen to it. You have an exceptional gift of transferring knowledge and information, and not many intelligent people carry this gift.
I wish you happy holidays and I hope that your move will bring you happiness and above all health.
I would even pay to listen to Dr. Meldrum talk about the weather
Canada is sadly becoming a hellhole. Too expensive. Big city’s crowded. Homelessness. Crime increasing. Taxes are insane. Leaving is definitely becoming a consideration of mine.
Getting pissed off as a young Canadian who has up until this point done everything right. Got an education, have a career, stay healthy, work hard, save and invest ect and STILL can’t afford a house. Everytime I get closer the government keeps taking and taking more. Getting sick of it.
A third world country with all those refugees coming more and more and fewer qualified immigrants.
It was always my plan/dream to move to Canada (Nova Scotia) but now its a communist clown show. Not so sure about Mr. Apples either... I he might be controlled opp as i have the feeling with milei... Oh man... Beautiful landscapes though 😢
" you are free to attack my arguments but you are not free to attack me"
Well said sir, well said.
Hey! Fellow Canadian here, would love if you could talk more about the process you took to leave Canada. Thanks!!
Yes!! Especially how to safeguard your retirement assets or access them while living abroad
This has to be one of the best videos I’ve seen in a very long time. Extremely insightful and educational. The additional classroom examples just adds another layer of understanding to the entire concept. Love it.
Immediate sub. This lesson was the most engaged I've been about economics in a long time.
Mark first of, thank you for your work I had bought your CFA package (one fee till completion), and it was super helpful.
Anyway I'm an immigrant in Quebec after 10 years living in Canada and working really hard, I managed to buy a place in 2021 and I got my citizenship last year. I will vote conservative come next election, and I will stick out in Canada for the next 3-4 years for personal reasons, if things don't get better I will also pack my stuff and leave.
Taxes are too high and higher income individuals don't stand to gain anything from government services which are in an almost defunct state (terrible health care, bad elementary public education, even higher education is taking a hit etc...). If things don't change, the things that made Canada appealing as a destination to invest in and immigrate to will completely disappear and with that people will be heading to the door.
Question is, where do you go. If you're thinking Europe, and that would be a good choice in terms of lifestyle, can any of us afford it? It's extremely expensive. I hear though that Vietnam is cheap. The cultural differences could be a challenge but cost-wise a good choice. Western money goes a long way there.
Where did you live before Canada? Thanks
@@big_red_machine3547 I lived in the US before moving to Canada but I am not originally from the US either. If I decide to leave Canada it would probably either the US or Dubai, even Saudi Arabia is looking appealing these days in terms of economic opportunity.
@@sdsodrod Agreed 👍. It’s a huge hassle to leave, but sometimes we have to do what’s necessary
I've never felt at home in a country where hockey and Tim Horton's are the pillars of national identity. I left for Panama in 2006 at the age of 34, so I guess we’re neighbours now. Your economic arguments are well thought out and explained. Comparing your society to owning a security is a great analogy.
Seeing Canada from afar, I would take it a step further: the economic/political situation is merely a symptom of something much deeper. We are the victims of our own PERCEIVED success. Our societies members are slowly losing their PV due to a lack of rigour and effort. Parents have taken a laissez-faire attitude towards their kids, schools are no longer pushing their pupils to excel. Universities....well, don't get me started. We’ve lost the ability to do great things. We’ve come to prefer the comfort of meaningless platitudes over a dream of prosperity and advancement. It’s like the whole country’s become nothing but a giant Kielburger Brothers pep-rally.
I totally agree with you. The economical problems reflect an underlying greater problem in Canada. This country has no social tissue. Destroyed its own identity in writting thr constitution of 1982 for the sake of mass immigration. Ironically, Quebec is the most Canadian province and yet gets critisfized for maintaining an idea of the "common".
All that is left of Canada is economical laws and regulation. When this economy starts to fail, there is nothing binding the people within thr country anymore. It's very sad. Canada is nothing like my grandparents used to tell me.
Canada used to have great education, until they started going after teacher's unions and increasing class sizes without proper support staffing
As someone who left in late 2008, I couldn’t agree with you more across the board. Canadians are so sure that they are the envy of the world, ask anyone outside of Canada what they admire most about the country and they give vague answers about nice people and a safe place. The level of delusion of grandeur of the average Canadian can only be fully comprehended from afar.
@@1982mikedn I live in Quebec and I agree with everything you wrote. Canadians and Quebecers truly believe they are endowed with superior morality and intellect.
@@1982mikedn 💯. It feels as if it comes down to programming (marketing) and repeating the same narrative that really doesn't apply.
Such a nostalgic voice! I learnt CFA Level 01 from you about 5 years ago. I'm just happy to hear your voice again!
Me too. I also cleared CFA L1 with his help.
Excellent video. I totally agree with it. Where I am stuck is how to “leave”. We have a residency based tax system in Canada. So “leaving” means becoming a non-tax-resident. But to do so means deemed disposition of all assets, right? Which means a big tax bill. The “exit tax” you refer to. How did you minimize that? That would be a very helpful video!
one way would be to not have anything
If you grow up in Canada, for most Candians, it's generally pretty easy to migrate to Costa Rica as an adult after you've completed your education, had some work experience, and spent time building wealth.
If you grow up in Costa Rica, there's only a small group of people who will be in a position where they can just move to Canada.
If you grow up in Costa Rica, you can take a bus to the US and border and walk across into the country and receive rights to stay, shelter, health care. Etc. If you grew up in the US you cannot just walk across the border into any other country.
@@zwatwashdclol my dude a US passport lets you visit basically any country, it's about as good as it gets in terms of access.
I'm pretty sure migrating from Costa Rica, you're generally not going to be able to make a credible asylum claim. I used to work at a non profit that served asylum seekers, this was before the pandemic and the recent surge, so I can't speak to new conditions, but the laws haven't changed. It's always been amazing to me how people know basically nothing about this process, yet they doesn't seem to impact their confidence in their own opinion.
If you think the average asylum seeker or refugee is freeloading on free housing, that's not what I saw. What I saw in San Diego, families would get a stipend for six months, typically $400/mo. Then it ends, and you're on your own. In San Diego, that wouldn't even pay for you to split a room with someone. I guess people are thinking detention centers, and being stuffed onto a homeless shelter bunk, that's "free housing?"
There are major problems with US immigration, international flows of refugees, and our domestic resettlement programs. We have crazy wait times that are totally unnecessary, and could easily be solved simply by hiring more judges and adding more immigration courts (GOP refuses to do this, because they love having a broken system to point at occasionally). Burdens unfairly fall on local municipalities who have the misfortune of being on a major smuggling route. Cartels are making the whole situation 10x worse.
But the idea that asylum seekers and refugees are getting all these sick handouts from taxpayers, and they come here just to lay about and collect welfare, that's not reality. I have no idea where people get this idea from
@@zwatwashdc yeah right. You make sound easy living as an illegal. Funny that i work in a shelter in Canada and the homeless and crack heads here live a better life than working people
The problem isn’t government spending, it’s the management of government spending. I easily live in a country with an 80% additional higher tax rate if I’m honest, as long as I can see that the area is clean, it’s safe, and there’s opportunity for future generations.
True, it is likely people would become less aspirational to earn above this rate and or move abroad to work but at the end of the day quality of life for existing and future generations is paramount.
A question I often ask people is: “what would you say is the role of government?”. It’s funny, I’ll hear answers from wanky econ students like “to ensure Real GDP growth” or “to remain competitive in the global economy”. In reality, I feel it’s to create a civilised society. To achieve this basic human needs should be met to the best of the country’s ability whilst allowing a fair degree of wealth inequality.
It is such a multi-faceted and fascinating problem though.
Mark isn't particularly interested in this aspect of society. We see this in the following comments:
1) he asserts that wealth is primarily earned by hardworking individuals
2) he expresses concerns over the possibility of inheritance tax in Canada
The existence of wealthy individuals who consistently fail upwards yet remain cushioned by their family's wealth is pretty much the same problem as the lazy poors making bad decisions, but the difference is that those born wealthy don't generally become poor as a result of their choices. Mark just prefers to live in a world where those born wealthy are allowed to fail more than those born poor, and he prefers his wealth to go towards supporting the privilege of his own hypothetical descendants rather than benefiting society at large.
Fundamentally, wealth inequality is not a bad thing, and it's not the problem that "socialist policies" are trying to eliminate. Most ordinary people, conservatives and liberals, only have a problem with *excess* wealth inequality, which is a tricky problem to solve. Excess wealth inequality is the kind that ordinary people begin to notice when they are unable to earn the same things in life that their parents were able to earn decades ago, even when they put in more effort (this is happening all over the Western world). It's also the kind that they notice when there are people thousands of times richer than Mark that do not accrue their wealth by simply "earning" it on their own during their lifetime. We live in a world in which wealth like that is often accrued as a product of direct exploitation and corruption, and Mark's espousing on a fair, just, meritocratic world does not account for this.
I could go on about how even his conceit of "free choice" being the greatest perpetuator of poverty is never really "free" under innumerable cases... monopolies, discriminatory policies, doctors liberally prescribing addictive substances as "healthy painkillers", which leads into unequal access to resources like information and healthcare, etc.
Thank you for the video essay! At 17:40 you mention implementing social policies (ie buying SPY puts) decreases GDP per capita (ie expected return of portfolio), why is this the case? With the option example its clear to see that the option has a cost and will not improve the index returns, whereas some people argue that implementing social policies actually increases GDP per capita (eg education improves human capital development and productivity). In fact nordic countries have some of the highest public spending to GDP ratios and GDP per capita levels in the world - what is different in these regimes? Thanks!
Id like to know to. As for the nordics, i dont like using them as examples. They are small population, ethnically homogeneous and cultural societies and that allows them to be much more efficient than all other countries. This and they are small enough that economic centralization is possible and fairly successful with a small government. Canada should be compared to France and Italy, where the governments need to be larger to manage the country (but at the cost of bureaucratic waste / inefficiencies). Scandinavians are also less affected by behavior modifications due to their culture (they abuse the system less then say my fellow Poles). They are the people who educate and invest and they can use government spending to better themselves,hence higher GDP. Most other peoples of the world spend and watch Netflix when given something for free.
Norway pays for it with natural resource exploitation
The social policies cost money (you have to pay for protection). The top earners pay for the protection enjoyed by the bottom earners/free-riders --> total value of net earnings per capita decreases.
Also these countries rely on the US government for protection.
@jc23242 unless the free riders will become more productive as a result of that spending, increasing gross product. Eg poor kids who used state sponsored education will become more productive and generate more money/taxes... as a result
Thank you so much for sharing these 'Leaving Canada" videos. It is much appreciated! Also, I wish you the best in the future, Cheers!
Nice analysis. I’d personally add a social argument however. We are not born equal, and the normal/asymmetric distribution you establish for returns per asset class could also be applied to your potential at birth. Not only you might be born more or less gifted than average, but how much you’ll make this potential grow will depend on parents, family, and life circumstances. Motivation in life, as well as the capacity to elevate yourself also comes from the conditions you have to support your own growth. And this compounds too, imagine if in one family, in a particular generation, someone takes bad decisions, it will compound on education potentially, from one generation to another, things can slip and get worse (and as things slip, parents are less and less likely to provide good success clues to their own children). Even though I agree with your political arguments, isn’t it better to be born on the bright side of the equation? And this way, isn’t it fair to pay a price to be a support for those who got less potential, less mental strength, less motivation, and more problems? Rich and smart people can be white knights in their own way, even though it means paying a price (taxes!) that populations don’t deeply understand. I will end with another point: no country is perfect. In France for example, you get far more social services for the taxes you pay, but talent is not rewarded like in North America.
I agree only for old people, the disabled and children. Everyone else gets little sympathy
Wrong. How much you'll make through your lifetime does not depend on your birth privileges or life circumstances. That's just a loser's excuse. How much you'll make will depend on your work ethics, your capacity to take smart decisions, being wise instead of reckless, and treat others around you with respect. All the rest is a bunch of excuses. The tone of your arguments validates Mark's points.
By the way, in France you do not get more social services for the taxes you pay. Somebody else (probably someone richer) is paying them for you. Think about that when you call for the rich to pay their "fair" share. They already do, which is why you can afford "more services for the taxes you pay".
I’m from France too and I disagree with your arguments. I didn’t have a lot of money but could secure a student loan at low rates because I had a promising future. I didn’t pay anything for my Masters because I found a company to pay for it (“alternance program”). Now everybody has these levers in place but most choose to not use them because they can have social services and a sizable income by working the absolute minimum and I will be the one to pay for them.
@@Paul-wc9wy, yes, you had a ''promising future'', ie: you were born with enough intelligence and determination to create a good destiny for yourself (which is not at all against my point). Kudos to you, success is way harder in France than in North America.
You can make a decent living doing manual work in some countries. In Switzerland, those degrees are just as rewarding as doing a business school. I certainly have no empathy for people with no determination, but that is not something you are born with.
I also left Canada. It's no longer the country I grew up in and love. Good for you for making the move!
Turns out as time passes, things change. And the same thing will happen wherever you are.
@@mikeb5664 Are you upset that he left the cult?
@@user-dj4fd5vc6c No, just pointing out that some of us can't cope with change.
@@mikeb5664 Things can change for better or for worse. There are a lot of countries in this world changing for the better - many returning from the direction that Canada is currently heading.
@@DaveIngelson And where exactly is Canada headed?
You articulated what I was feeling but couldn't put into words. Very good. Canada sucks. I'm trying to leave too.
Mark you have the best wonderful analogies, look at the country like you look at a company and the people running it ? management team! Thanks man
Comment #6, your class average examples is awesome and hilarious. Im going to use it in the future
Agree with so many points. I own a real estate holdco with a significant number of tenants. Our good ole government takes 50% of my company's earnings because it's considered passive income. And then I as an individual need to pay taxes on any dividends that I pay myself, to the tune of 25%. So the ultimate tax rate is pretty much 62.5%. Extremely frustrating
Why don't you depreciate the property and pay no tax?? Don't see the wisdom in not doing so.
@@Bigchuckers oh I do. We don't pay tax, but depreciating simply defeats tax. Although at least it becomes a capital gain at sale, rather than income taxed at 50%. However, I still have to pay tax as an individual if I take money out of the company down the line, so it's still double taxation.
@@Shivastorm88 it's just you said the government takes half of your company's earnings..but now we see they don't.
@@Bigchuckers the tax rate on income in a holdco is 50%...
@@Shivastorm88 The rate is too high, but the double taxation is logical. 2 different entities are making money in such a case.
Wife and I seriously thinking about leaving. Almost certainly leaving Ontario. Amazing how Doug Ford gets a pass for much harm he did to this province
Indeed. Disgraceful. Get out. The grass is greener.
You're 100% right, it all makes sense Mark!
Q: I really like your country/company analogy. One difference I can think of off the top of my head is the population growth present in a country as opposed to a company. More people act as consumers of its own system plus additional tax payers. They are forced to consume and spend within the system whereas companies don't really have an option. Imagine a company that could increase payroll but they are forced to only buy company product. What would you say to this point or how would you address it?
Don't get me wrong, I agree that Canada is/has been on the wrong path for some time. Sorry to see you go Mark, we'll miss you up in the North!
Bingo. This is why the arguments in this video actually are baseless and dare I say, borderline propaganda & misinformation.
Mark conveniently left off that while all of the above have been happening, Canada has increased it's population growth via immigration more then any other western country in the last 2~ years.
This means that revenues that would have seen a sharp decline and met many of his conditions are now hitting a new growth trend that offset the unsustainability of current spending and actually avoid most of the end game scenarios Mark described.
Hi Dr. Mark, as an African student following your pedagogical philosophy in teaching the professional financial Analyst course from the US, I would say teaching this welfare economics seminar from the hedging effect of the normal distribution of returns with options such as puts has really helped me with level 3 Option Strategies. This is because the linear approach you use in your teaching material I could not phantom but now seeing how puts protect assets return in a distributive way, I can see the light a end of the tunnel with the second attempt to level 3. This is because we do not have derivative markets in Africa and also as an Accountant, I am a theorical financial Analyst. A luta continua vitória é certa.
Left summer last year- high tax, low pay, rampant crime, laws unenforced, woke bs shoved down everyone’s throat, pathetic monopolistic economy… working in high finance, v happy to have left Bay St & left Canada
Nailed it, Mark! I saw the GDP/Capita tides turn in 2014/2015 and after Canada shifted form a resource and manufacturing economy to a real estate economy (2015-2016), I made my plan, got a top-tier MBA, and now work in the US. The quality of life is slightly lower here, but standard of living is several orders of magnitude higher.
CBDCs will allow the government to force your spending and saving, no choice.
Q1: What about family and friends in Canada?
Q2: Have you considered becoming active in politics in Canada before moving to Costa Rica?
The problem with framing his argument in the context of an investment is that he removes the main decision making criteria that the average person goes by --- family ties, emotions, and sentimentality
" becoming active in politics in Canada"
don't fukin deal with evil trash.
Super interesting video! Well done Mark.
Would love to hear your thoughts on Nordic countries, which at least at a superficial level, appear to be doing significantly better then Canada as democratic capitalist systems with significant socialist programs in place
Are they flooding their countries with immigrants? If so, those programs may be doomed too.
They are worse for wealthy people. It has the least favorable tax systems.
Hi Mark, as a fellow Canadian I agree with all your points,however, I would be curious to know at a high level what your ideal version of government in Canada would be in terms of policy and taxation (Cut spending where, tax who, more spending in what areas etc). I myself live abroad and have voted conservative but alas...
Also, do you foresee yourself staying in Costa Rica majority of the year? Or hop around like spend a few months here and there throughout the year? I would imagine you may miss friends, family and also the food back home.
Thanks and wishing you happy holidays!
I work for a .gov agency in Canada, the amount of useless paper-pushing they do is breathtaking. The problem is if they canned the deadweight, it would be 99% women and DEI checkmarks, thus causing a likely "discrimination" lawsuit, which they would lose because of the leftist judges.
As a subscriber from Australia there are a lot of similarities between the current state of Canada and Australia
I always thought about this, so nice to see someone put my thoughts into equations which I like! I think that maybe I should leave the country as well but Im still a bit young and just starting my career... Im also not sure where cuz this seems to be a trend in most of the western countries.
Hi Mark, thanks for this video. Recently the topic of socialist policies and wealth distribution has also picked up in India as the opposition alliance left with little chance against the ruling party has resorted to appeasement politics. Your equity analogy to explain the socio-economic-politics of a nation is right in mark.
Mark, you can literally explain anything under the sun using a normal distribution curve. Thanks for this stuff.
You are lucky snd privileged you started in canada regardless where you end up.
Canada is different now. That is true for him, and what Canada was. For someone today you are not lucky to start in Canada imo.
@@michael2275 imagine thinking being born in a first would country isn't lucky lol
Hi Mark!
This is an interesting video overall. I think your bond analogy makes your decision seem rational, given your assumptions on policy. But, I think your analogy for course grades later in the video is a poor analogy for redistributive taxes. And sure, all analogies may be imperfect, but I think the assumptions baked in to this analogy really preclude its effectiveness. Here are a few reasons why this is an imperfect analogy:
1. This analogy is informed by a belief that only high performing students have a desire to perform well.
a. You consider that students that expect to earn a 90 will desire to push for a 95 if they think they will receive that full mark.
b. You say that the students at the bottom were "…comfortable with the work they were doing. They were going to fail anyways."
2. This analogy has fixed upper bound for scores
3. This analogy has a 100% "tax" in each letter grade bracket
Now if you want to create a distribution of "desire to improve" or "willingness to give more effort" against expected performance, you get a strange relationship. Only individuals who are near the next bracket have any desire to improve. This directly informs your conclusion on behavior, where "failures", anyone distant from the next bracket, and "successful A students" all give less effort.
In reality, marginal tax brackets don’t disincentivize increasing your performance (income), since you still keep a portion of your added income. There is also no income cap in the U.S. or Canada (although I think you imply that is a policy decision you expect in the future). And lastly, I don't believe "failures" have a no desire to improve. Rather, I think this desire is more randomly distributed, albeit maybe left skewed. When you change the distribution, the behavior changes.
There are additional assumptions in this analogy that don't match reality:
1. Score redistributions occur only in "direct payments"
a. In reality, plenty of tax redistributions happen via same-as-cash payments (food stamps) or through non-monetary benefits (education)
2. Scores occur independent from one-another
a. In reality, wages are determined via a market where competition for wages impacts their value
3. This analogy assumes the entity giving scores (university) is the same entity taxing the scores and creating redistributions
In reality, this is only true for public sector employees
I think there's an argument to be made that those at the bottom aren't content with being at the bottom. The rational argument is that it's simply cheaper to live abroad and reckless government spending will only increase that difference, but to think that someone working minimum wage and struggling to get by is merely there because they didn't want to work hard is a little shallow. There are countless factors as to why someone is in the bottom 50% of wages, I'm 99% sure laziness isn't a top reason.
I think the ‘present value of human capital’ explains why the US is allowing people to stream across the border. The number of people affects the amount the government can borrow and thus how much the corrupt officials can disappear into various pockets.
This was an enjoyable exercise thanks looking forward to the Raven video if it’s still coming 👍
Hi Mark, thanks for sharing this great video. I agree with all your arguments and wish you luck in your transition. Some thoughts below:
Q1: Regarding the analogy with the students and exams in the university. When you frame the problem in a university class, it absolutely makes sense on how much effort the students will put in. However, when I draw a parallel for individuals and taxes it's not so straightforward.
- For the bottom 10% yes, it makes since they will say "how much effort do I need to put in to make the minimum or get the XYZ social benefit".
- For the top 10% maybe it makes sense if the tax rate is very very high, like 70-75% and would say, ok, once I reach this tax bracket I have little motivation to keep going. However if the tax rate is closer to 50% they will keep working hard to earn more. Even when tax rates are as high as 70% in reality people keep working hard and pay advisers, lawyers, etc. to find the most tax efficient ways to avoid paying so high tax or relocate some of their assets to more tax favourable locations.
- The middle 20-80% of the distribution, usually are not entitled to any social benefits in most democratic capitalist countries, so they are all trying to get higher and earn more money no matter of the tax rate in my opinion (not the case with the students who will target for the minimum pass rate).
So the argument makes sense for the top 10% if the tax rate is very very high and the bottom 10% but loses a bit of its appeal for the middle 20-80%.
Q2: Would you be more in favour of a tax system like the Netherlands where you start paying 49.5% tax when you earn more than 75k a year? The argument here is that the tax rate is high, but you reach it soon, everyone pays it, and doesn't get any bigger than that. Or again you would relocate if you were happening to build your wealth in the Netherlands?
Source: www.iamexpat.nl/expat-info/taxation/dutch-tax-system
Q3: I know from previous videos that you don't have wife/kids and many friends left in Canada as you were focused on building your own company. How would your choice differ, were you to include the social/sentimental variables in the equation?
Q4: Again, I know from previous videos that you will give away the majority of your wealth to charitable organizations. Why bother to leave Canada and pay less tax if you don't have any children that you would like to pass them as much as possible from your effort? I agree that through tax the money won't go in the direction you really want it to go, but nevertheless you will be able to donate a respectable amount of money. So why go through all this hassle if you don't really need to consume all those tax savings or pass them on to your kids? Was it maybe that you wanted to also change environment/lifestyle apart from paying less tax in this stage of your life?
Thank you in advance, and I appreciate immensely all the knowledge I gain from you at age 32. I consider you the one of the three most impactful teachers-mentors I had in my life so far.
As an immigrant here in Canada, I would never vote liberal and out of all my immigrant friends, I don`t know a single one that plans on voting liberal. Immigrants tend to despise woke politics. Besides...the argument that the Liberals are importing voters is ridiculous. Most immigrants can't even vote. They need to live in Canada for many years before having voting rights and...by that time they'll have already understood how Canada works and will stay away from the Liberal party. What Canadians fail to understand is that Canadians themselves (the extreme left that rules the schools and society in general) are the ones responsible for Trudeau and his friends being in power. Stop using immigrants as scapegoats. Wake up.
ua-cam.com/video/53EURrQjNdQ/v-deo.html
Hard to argue with actual evidence of voting patterns.
Comment #4, present value human capital is a function of location. This trend is slowly changing because of remote work etc. However "past returns dont indicate future results"
Relocating in that sense only makes sense if you still maintain the option to return if location income changes. Thats a form of risk hedging.
You can never eliminate poverty because the poverty level is a relative measure not an absolute measure. It doesn’t matter how much you have or how big your home is. If others have more stuff and bigger homes than you, you are “poor.” Poor people today are far better off than poor people of the past and they could never tolerate the living standards poor people used to have.
I was not able to agree myself with the whole argument until he mentioned at last that he’s okay with free education 😮💨 . I would add health to it and then agree that too high taxes are harmful in long run.
It’s a shame what’s going on with Canadian politics. Amazing people, beautiful people with a nation filled with vast industries + resources. I hope matters change ASAP.
Their health policies killed my loved ones, then they colluded with foreign corps to prevent us from talking about it online.
If you listen to the end of the video , then "I hope matters change ASAP" is not going to happen. That's the fact
Sometimes it blows my mind that US, a country that was founded primarily because of unfair taxation on the colonies has no constraint about a maximum possible aggregate tax rate (thru all channels and all layers of govt), in the Bill of Rights.
Unfair taxation from foreign entities, not domestic. Also, is it that mind blowing when you consider that the founding fathers also stated the right of the people to take up arms and people misconstrue it as open carry 😂
@@IamnotJokic you may have a point about taxation w.o. representation being a large part of the reason for revolution. But I would argue that if that tax was small enough, it likely wouldn't warrant a revolt. So obviously there is a ceiling rate, and govt (local or colonial), has to be constrained to it, otherwise its just forfeiture in disguise of taxes.
@@IamnotJokic aint touching any other amendment arguments (or for that matter anything related to interpretation)
Enjoyed your video and agree on every point. However as a large corporate sized farmer in western Canada who’s main asset has grown exponentially coming off a commodity bull run it’s hard to sympathize.
Well said, happy holidays
Interesting point, thank you. Apart from purely financial view, some other human factors might influence the decision (climate, access to healthcare, safety, relationships, etc.) Interestingly, Finland provides high quality of life, it seams to have as high tax rates as in Canada, it has low migration rate, and it's not "free traded" to get shares.
Good job, living the dream to escape before the country fully implodes. Well done sir
Regarding bonds at the 20:00 mark. You could just buy SGOV or Bil with dividend reinvested rather than taking profit on the T-Bills. Regarding not having deficit spending. That's impossible as fiat money is debt by definition. Even the currency you hold are called 'notes' or 'bills'. They're a form of debt and we assign value to them. Our current monetary system doesn't have a solution. Still, I would leave Canada. This is coming from a Floridian.
I just posted a video on why I left Canada as well, it's time! Currently in Vietnam now.
Thank you for this video. You have tipped the scales in favour of me getting my CFA.
Mark i understand your move my mother is costa rican and it is a beautiful country i spend a lot of time there. My question is what about high crime in costa rica ? How do you manage to feel safe there? I have been mugged there before
Couldnt agree more with you ! I left France to come to Canada, I was fed up with working my *** off to pay taxes to finance social welfare given to drug dealers and rapists, failing school and bureaucraty. Thankfully Canada is far from being like France... for now... once I pass level 3 I am considering moving out too... I m sure we all gonna be able to find well paid jobs anywhere in the world.
It is necessary that politicians don't recognize debt is a big thing but rather whether it helps them help elections. There is no incentive in the Canadian (or US for that matter) political system to do anything that doesn't help you win and so they are incentivize to provide short-term immediate return and to win special interest group votes (because voting population of each political party is relatively stable it is often the undecided voters who can change election result).
Also thinking of leaving Canada. The tax is way too much! Getting recked along with safety also declining.
Comment #1, for TBill you talk about variability in terms of rollover risk, but the larger risk is the underlying currency. If CAD/USD underperforms your CAD bond in practice also needs to be marked down compared to other assets because currency is just medium of exchange.
Dr. Mark this was a great video. Thanks for putting it out.
I take issue with some of your fundamental reasoning on free choice though. You essentially attribute all positive outcomes with good free choices (fitness, education, hard work) and all negative outcomes with bad free choices (Netflix, substance use, laziness). To me this feels far too reductive. Please correct me if I'm putting words in your mouth, but becoming wealthy and successful owes to other factors that I think can't be reduced simply to "free choice." I would argue that timing, luck and environment are all other important factors to one's success. I would generally agree that free choice is likely the largest factor in deciding outcome though.
Perhaps you covered this in your "maintenance redistribution" discussion, but what if I happen to be a person who takes excellent care of myself but end up getting a serious illness anyway? Even if I made all the "right" free choices life could still turn against me. I could get cancer, become disabled, lose my job (probably because of terrible governmental decisions) or experience other misfortune. Do you think this should all be covered under the "maintenance redistribution"? Or would this be straying too far down the socialist path?
Thanks for such a great and thought provoking video.
In aggregate, without singling out edge cases or tragedies, for 99% of the people the outcomes you get from life are in correlation with the inputs you put in. If you work hard, if you take wise decisions, if you do your home work, if you are fair to others around you... basically, if you put in the right inputs, life WILL treat you (and your bank account) well. Other factors such as luck and environment, as you put it, might slow down your progression, but they wont kills it *IF* you continue putting in the right inputs. No excuses. Sorry, but I am with Mark on this one.
I could live through bad a economy, if things could improve, but the government has stopped following the law. I doubt they're going to turn a new leaf. It will become more and more apparent in the future.
Exactly.
As a high-earning Canadian entrepreneur paying PAINFUL amounts of tax, I appreciate your points and heard you out. I'm only here in this horrid -30C weather because my wife wants to be here. And while I agree with your economic points, as the video progressed I struggled with the way you talked about poor people. Walk a day in their shoes, you'll realize most of them are often carrying very heavy burdens and working their buts off. I'm not saying it's your responsibility to help them at all - I'm just saying there's lack of compassion and understanding in the language you used there.
I was poor. I have been on every income decile. My language was neutral. You cannot divorce outcomes from personal choice. Simple experiment, unrelated - but demonstrates the point about personal choice. Next time you are in the grocery store, look at the correlation of body size with the type of food in the cart. Fat people are fat people because of the choices they continually make. People who live paycheck to paycheck have no money, not because they don’t make money, but because they continually make poor choices with their money. Now, as a rule, there are always exceptions, but the exceptions should not make the rule.
@@MarkMeldrum Okay. I'm not going to get into a debate. Maybe just keep my feedback in mind and it might sink in at a later date. Cheers. Appreciate your content.
@Chris-yu6ow same I guess. Maybe keep my comment in mind and it might sink in at a later date.
I just wish that Mark Meldrum online content had not gone so far downhill.
Cant get answers, videos are years outdated, no one monitoring anything.
When I took first times it was great, most recently it went way downhill.
I hope it gets corrected.
I can’t comment on your other points, but no video is out of date. Some readings have not changed for years - so there is no point in repeating the same things year after year.
you are one of the best teachers I've ever learnt from..
a master of his craft....
Canada is a total mess now. I wish I could leave but it's a huge hassle. I work in the tech industry and could get a job and do the TN route but I don't think my girlfriend is gonna want to uproot her entire life.
As a Canadian, I am moving to United States. Unfortunately ， As an older person, I have to find the country that has good health care system. US is not that better. But at least I can live in a states that I prefer.
Hi Mark, I'm in the same boat. I left the UK 13 years ago, however, I fell into it by finding work in places like HK, SG and Tokyo instead actively disapproving governance and policy. I never found a reason to go back as a permanent resident.
You are gold, as always.
very thorough video, thank you. But where did you go? Based on the moment at 55:00 i think you went to US
the Rich Coast
I would classify dental care more in the maintenance category than wasteful. Dental care is more than brushing and flossing your teeth. Seeing an oral hygienist and dentist on a regular basis is important. There are many dental hygiene nuances such as brushing too hard causing receding gums that you would not catch without dental care
Hi Dr Mark,
Have you never calculated the PV of the tax effort you’ve been paying in Canada so far? Your assumptions about the company Canada in the future makes a lot of sense but my further question then is: why did you expect so long to change asset location? It could have produced an outstanding result if you’re wealthy has increased more at higher rates in the last years where taxation has been increasing.
A warm thank you for being a bright light in this finance’s world.
If your priority is maximizing your individual wealth, then moving is clearly the correct choice for you. What I do not think is correct is your view on the nature of social programs and what drives wealth and income outcomes.
1)
I don't think spending on social programs is truly analogous to buying downside protection. Because well-executed social programs are an investment with a economic return in themselves, regardless of what GDP or the broader economy is doing. The right programs done correctly can BOOST GDP-per-capita.
You're a fan of free K-12 education. I know you wouldn't say spending on K-12 education lowers GDP-per-capita.
We don't necessarily pay for K-12 education to boost living standards for the poor, we do it because it pays off many times over economically to have an educated populace. And this benefits all, not just those who get the free education, because children who otherwise would not have had access to education then have much greater economic potential. They go on to work at the companies that create returns for your investments.
Likewise an investment in a smart, well-executed public health policy can pay off, because a healthy populace is a more economically productive populace.
Of course if you're paying for others healthcare, you're paying for the person who drinks and smokes. Likewise, when you're paying for others K-12 education, you're paying for a kid to go slack off in class.
But for every kid who slacks off, how many more have new opportunities as a result of the education given to them? For every irresponsibly unfit person being seen, how many more people with regular health issues, congenital health defects, or disabilities can now afford the treatment they need to become more economically productive?
Smart, well-executed social programs (certainly not all social programs) result in greater human capital. How does greater human capital result in lower GDP-per-capita?
2)
You characterize the poor as people who simply make poor decisions: don't work hard, don't tend to their health, prioritize entertainment over education, spend instead of save. While it is true that people with those traits are more likely to be poor, I don't think that's an accurate portrayal.
While personal responsibility certainly plays a role, it does not take much creativity to come up with examples where someone could be poor (or rich) due to factors beyond their control. Opportunity is not equally distributed, fortune and misfortune are not equally distributed. This has a significant impact on ones economic outcomes in life. This is undeniable fact, you can't ignore this.
Portraying economic outcomes as simply being the result of free choice, of choosing to do the right or wrong thing, is far too simple to be reflective of the real, complex world.
Social programs are one way we can provide more equal opportunity for all, so that economic outcomes truly are reflective of what a person has "earned".
Hi Mark - great content! thank you for making this content. was anxiously waiting for it!
My ques is: when you talk abt redistribution, what specifically do you have in mind? If you are talking abt healthcare, my view is that in Usa 70% of bankruptcies are due to medical reasons. so if u have a universal medical program, it attracts a lot of risk capital because an enterpreneur can safely start a business and not have to worry abt an insurance expense in the family budget of approx $1000/mth to support a family of 3.
but yes, i dont know if just the universal healthcare is the biggest component of govt expenses to justify high taxes - if it is, yes, something needs to be done to reduce cost and therefore taxes. if it is not, then, yes, other components of govt expenses shld be addressed to reduce taxes. hence my question.
I understand your example at school of the grades. But in reality, when the "genius" failed, the tax payer has to go and save the situation. They created a safety nest for themselves at the cost of the poors. I don't think what the government doing is wrong to tax more from those people. In your words, this is just the higher insurance premium the government has to charge them. What happened in 2008 told us that at the end, the "good student" can still walk away with much better life style as the company only takes limited responsibilities. And they still get bonuses in 2008 and 2009 when thousands of poors lost their homes.
sucess is a combination of forces not just personal choices 😢
Do Quebec and Ottawa face the same issues as the rest of Canada, such as bad housing market?
Yes
Agree with your views on Canada (as a Canadian too), and this argument makes lots of sense, but what about things that are harder to quantify? Such as family, friends, relationships? Moving countries can be very difficult when there's other people involved. I'm not sure about your particular situation, but for someone who has a significant other, or young kids, would you still recommend them to leave Canada?
Canada is arguably ceding all hitherto pretences of applied civil liberties via the Charter. If you were in mortal danger simply for peacefully protesting/being civilly disobedient and that risk to life and property wasn’t high enough for you to move at any cost because your family couldn’t see such reality …why are you choosing to stay for family/friends who at best can’t read the writing on the wall and at worst would turn on you if their post-nation state overlords told them to? This is much bigger than unsustainable/unacceptable cost of living considerations.
@@jasperalberts7647 Way bigger. Don't cast pearls before swine. Let it burn.
Costa Rica Gdp per capita 12K however, our beloved Canada still gives 60K per capita
Have you considered moving around different countries within a year or every several years? E.g. 6m in Costa Rica, 6m in Dubai or a couple of years in Costa and then maybe Singapore. Variety is the spice of life but perhaps is logistically challenging...
What minimum level of wealth would you say can enable a comfortable, non-extravagant life in Costa Rica for a foreigner? If your net worth was 10% of what it is now, would your quality of life be really any different in Costa Rica?
Thanks Dr. Meldrum for this video. As a fellow Canadian, working in finance (who actually just got his CFA charter through the help of your CFA prep) what advice would you have for us that have an expectation of high human capital with many high earning years to come? Should we relocate and restart our early careers in a locale in tax friendly jurisdictions? What would you do if you were in our shoes?
Just remember that Canada’s tax rates are just less than the OECD average. I relocated to Japan and my tax burden here is roughly the same as what I had in Canada but we get much much less for our taxes. Just the drives on the freeway cost an arm and a leg.
So beware
If you want lower tax rates Ireland looks pretty good, a lot of companies seem to be relocating there like Patreon and Google. However healthcare there is in decline but so is Canada's.
Comment #2, when talking about total debt load, its your relative debt that matters. If my companies produce 2x more net profit, i can increase debt and still be better off. So debt to productivity gains is the better measure here. We on average get 4% productivity gain a year which results in the RGDP of 2% when factoring in M2 supply expansion effects.
Not saying government spending expansion is good, just saying the argument is more nuanced
You seem to spend a lot of time working, out of curiosity what do you do for fun in your spare time? Any hobbies? Any interests outside finance and investments?
What a great video, thanks Mark. Really interesting breakdown.
Great deep dive! Have learnt alot from you and will continue to do so on how to think differently about things. Just wanted to know if there were any specific reasons for choosing Costa Rica over any other country that would have potentially offered similar benefits that you were looking for.
I would like you to consider two point.
First off, thank you for laying out your argument at such level of depth and using investment point of view in your analysis.
Point 1: I am 99% sure that conservatives are going to win on the next election and the polls agree with me. Polls normally understate conservative vote so I am confident that there will be a conservative wipe out not seen in decades. You stated that newcomers are likely to vote liberal and currently we are importing millions of them. Perhaps they will vote Liberal, I am not sure. However, it will take at least 5-6 years before those newly arrived can vote so they will not be a factor in the next election.
Point 2: I believe there will be a mean reversion within the Liberal party. Trudeau represents a significant deviation from the norm within the Liberal party of past decades. As you pointed out he is woke, incompetent and self-obsessed. It appears that the voices within his party are growing loader for him to step down. After the Liberal's humiliating defeat in 2025 there will likely be a more sensible Liberal leader to revert the party to the center.
Out of curiosity, what kind of changes do you need to see in Canada for you to come back? Perhaps, coming back is out of the question for you at this point, if so, why?
I would have voted you for MP lol. Don't blame ya for leaving. Thank you kindly for the lesson!
Hey Mark! Fellow Canadian here. I'm curious what your pov is on a country like Norway. Would you not consider them a successful socialist country? Their tax rates are higher which support social programs, and they have a very strong gdp per capita.
If you do follow up can you explain why you chose Costa Rica? Would be interesting video to break down what does Costa Rica (yes tax favorable) but apart from that. Things like health care / education / etc. Thanks
He could call it "Why I came to Costa Rica"
One of the best videos of 2023! This is applicable to the current scenario in NZ, however there is glimmer of hope with the newly elected govt. Inequality is consistently rising and standard of living is on a continuous decline, however interestingly citizens do not seem to be affected, too bothered about being politically correct. Good news is their voting patterns are changing, which means they are just not publicly expressing their true opinions. Hopefully Canadians make a similar choice in the next elections.
Nz isn't coming back bro. I hope it will but I don't think it won't.
The issue here is the average would be GDP. I dont think the political system has a large impact on the GDP, the government spending can be misallocated to reduce gdp via unproductive investments or boost gdp via productive investments
. And it really doesnt bode well for a socialism vs capitalism. The GDP of the russian SFR was higher than that of capitalist russia today.
Also a bunch of the government spending is a direct subsidy to the wealthy. My city recently spent 600 million on a sports stadium, with the province coughing up an extra 300 mil.
Now the taxes are up, but they haven't "bought puts" to stick with your analogy. They took from average homeowners to give a massive handout to an already super rich sports corporations.
If it's a strictly economic decision and the friction of uprooting is small, going to better tax country is rational, given you can maintain a comfortable living standard there. Most people have families or communities that make this a non optimizing, non-economic decision. I'm American and have lived abroad in Asia for over a decade before moving back to the US a few years back. I lived in a wealthy area of China and often felt it was better to be poor in America than be rich in China because with all the problems of home at least I could always count on getting proper medical care or healthy food, etc. Now that I have kids there's a small chance I would live outside the US. I'm not sure how Canada works, but in the US we can always move to a different state if we are trying to optimize taxes. Surprisingly, finance knowledge isn't that helpful in this decision-making beyond hypothetical examples. The US is absolutely a tax-haven if you know estate and trust laws, which I don't but I am aware assets would be much safer in a South Dakota trust or a Delaware LLC for example than in a Central American country that could turn on a dime in term of tax policy on Gringos. I have some family in Ontario CA and they are not happy about the current state there as well. I wish you the best in CR brother. Under the right circumstances I think you have no reason to second guess your decision.
Agree with this one hundred percent.
Idk. At this point any type of post highschool graduation is a necessity. So i don't mind paying for it.
Also feels like in a roundabout way I'd be paying for it anyways. Because at best these people end up going to the military to get an education which we already pay for or at worst these people just end up homeless and doing crimes of necessity which we again end up paying for.
Same goes for healthcare. Though with that I also don't mind a sugar tax.
Hi Mark, did you consider Dubai or Abu Dhabi? Very tax friendly cities, extremely safe and all round advanced nice places to live imho
I think he may not like the climate over there
He said in another video (why costarica) that he didnt choose Dubai because of very expensive real estate caused by influx of Russian rich people relocating because of ukraine war
This is pretty reasonable. Politically Im a georgist. So im not sure its better value to move. I also love our natural beauty. Im willing to pay to live in our mountain regions
Thank you for your honesty and openness, with which you have exposed yourself at the same time.
You tried using the example of Arbitration to justify your decision, which is economic and material, and you are absolutely right.
However, from the aspect of national unity and sense of belonging, I could not agree, that is, I would try to put you in the context of British citizens, who are scattered all over the world, but have only one homeland, GB, and individuals have possessions and property larger than GB , or they are richer than the king, and yet they obey the king, because they know that they are connected by a system of values and ethical principles, which form a community and an alliance against external threats. If you look at it over a longer period, it is important where your children will grow up, what values and beliefs they will cultivate, then where you will be treated in case of serious illnesses, also whether you will join the army if Canada is attacked...
CR is a beautiful country, but how safe is it, whether there will be social unrest, nationalization, these things must be taken into consideration.
These are all facts that need to be taken into account in the long term...
Comment #3, good comparison with govnt expenditure and average gdp/capita. However, again its a bit more nuanced than this because GDP/Capita is valued globally not nationally. One common argument is that highly educated professionals prefer living in areas with robust social safety systems and that increases net migration of talent.
The problem in Canada is not debt (its lower than USA) its use of capital. The vast majority of canadian wealth is tied up in essentially land speculation and not in productive assets which undermines overall productivity gains.
Agree 100%! How do we connect with your realtor ?
Great video! Any chance you could create a Spotify channel? I'd love to listen to listen to your material during my commutes.
I believe policy restricting spending (eg force saving to an account that you can only unlock to buy a property or start a company) is not that bad mixing it with otherwise liberal and conservative policies such as in Switzerland and Singapore.
Costa Rica is a wonderful place 🎉. My father lived there a couple of months when I was a child, and with my mom we were worry that he won’t return because it is a magnificent place to live 😂