15% Guaranteed Investment Certificate TEMPTATION!

I am Canadian but currently situated in Egypt on an extended tourist visa.

The banks here issue a 15% guaranteed investment certificate. Wow, you just can’t get that on Canadian soil and guess what…it is guaranteed.

Here are the terms:

Maturity: 1 year
Payment frequency: monthly
Yield: 15%

Now I am not eligible for this certificate as I am not a resident or citizen of this country. However if I get a work visa I would be eligible to open an Egyptian bank account and buy these government backed notes. So what is stopping me from doing this? (apart from the obvious Covid19 lol)

The cost of living is very reasonable here. Food and rent are 1/3 of that in north america and 1/4 of the average european city. I am living on the mediterranean and the views are spectacular. Granted a bit of a people culture shock but if you keep to yourself, which is mandated right now with Covid19, and you have a good internet connection…its really a pleasant place to be ‘stranded’ at.

Now let’s get to the nitty gritty. I could retire here and live reasonably well on $50,000 Canadian invested in this GIC…but I am reluctant to do this but cannot articulate why, it is just a strong gut feeling. Help me ‘hash’ this out!

Now, I would prefer to live in Malta or Cyprus but that just isn’t financially feasible right now…but that is the goal however I have financial obligations in Canada.

Funny but the problem I am trying to solve is the exactly the reverse of what is typically normal.

People typically leave (Donald Trump hole countries) to the West to send cash back to them.

Due to circumstances, I am doing it in this opposite direction and feel crypto is the solution but just haven’t figured it out just yet…

I could settle for the 15% GIC (Crypto savings just cannot compete with this, are not guaranteed either) but that doesn’t solve the problem : I want to live in Malta/Cyprus and send cash back to North America.

Actually I am going to revise this and send to my appointed Academy Tutor as well but brainstorming here…thankx!

That´s counting on the fact that the bank is gonna be liquid. Absolutely tempting.

Touche, I am learning the lingo…they are NOT liquid as they are restricting the amounts that you can withdraw here. You will see lineups for blocks as they are only permitted to take out so much.

There is a saying that ‘Bail-ins are the new Bail-outs’ and you just provided the answer to what was bugging me indirectly. Liquidity.

In theory, or what the average Joe like me would think, is that the GIC is liquid. 100%. There isn’t even a penalty if you redeem early.

But the reality is that saying that when your money is in the bank, it isn’t your money anymore. Banks can restrict your access to it. Go figure? Having lived in Canada and the USA the majority of my life you are sheltered from these things…they are just taken as a given. But times have changed haven’t they?

The other thing to consider is what currency the this “GIC” is denominated in and what’s the inflation rate? If it’s in the local currency then does the interest rate cover inflation? It could still be negative real returns after inflation.

I’d highly recommend taking the DeFi 101 course. It’s possible to get 8% or more on USD stablecoins. Some protocols offer higher returns, but at higher risk. You can also lend out crypto at lower rates of 3-6% but if your lending BTC or ETH and the prices go parabolic in the next couple years you’ll also capture the increase value in the crypto token itself and earn a bit of crypto interest (usually paid out in the same token). Lots to learn about!

This is it…I haven;t looked at government statistics but I think it is a deflationary period currently…the cost of good is relatively inexpense relative to north america and europe. But relative to general wage income, that I don’t know.

Yes, the DeFi 101 is definitely on my bucket list. Just working through Blockchain business masterclass which is not really my cup-o-tea.

like everyone else pretty much I am just in a holding pattern right now waiting to see where everything is headed, not making any work commitments at present