Yea, but youre risking all of those deadly spiders and animals plopping down on your shoulder while you're at a stoplight and sending you to oblivion. Is it really worth it to save a few dollars?
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How to Invest for Retirement
- Thread starter Piecake
- Start date
Yea, but youre risking all of those deadly spiders and animals plopping down on your shoulder while you're at a stoplight and sending you to oblivion. Is it really worth it to save a few dollars?
ProtoCents
Banned
Is the only exception if you're about to make a down payment on a home?
Pretty much, even then (unless we are talking days from making the down payment), it should probably be in a bond fund getting something.
Darren870
Member
Hahah, oh its f'n expensive here! That's for sure!
You should see how big the animals are here. Its actually pretty crazy. Guess thats what happens when there isn't a huge population and things can grow as big as then f'n want....
Fox Mulder
Member
I'm leaving a job for something that makes significantly more money. It has some initial start up costs that cashing out my current 401k can really help with though. I know it's generally a bad idea to cash out, but I see myself being able to replace it quickly when I get going and I'm only 30.
am i dumb?
am i dumb?
Well, can you be more specific? Is this an MLM? An actual job? A combination game store and pub? Are we talking moving costs or something?
Link
The Autumn Wind
I say we cash out our 401k's and invest in this.
My guess is that he plans to buy a truck (like, a big rig). I have faith in random posters to not be getting into MLM's here
.Whatever it is that you're actually doing. I'd say to look into the interest rates you could get on loans first, and compare that to your 401k returns. It's also possible you could incorporate and take out a loan through the corporation to protect yourself just in case things go bad.
EmptySpace
Banned
so do i just walk in to td, ask to open a tfsa direct investing account and then add the e-series funds to my portfolio?
i really wanna be careful about it and learn as much as i can since i am dropping at least 10k but then again i have no time reading and studying up on these things. it isn't so much the difficulty more than the jargon and just my lack of interest and time. i found finance so tedious in uni and i still find it tedious now. then again i don't just want to follow internet advice.especially if it involves.serious money. sigh..
PflargBlarg
Member
Well, if you're going the TD route, you would start here https://www.tdwaterhouse.ca/product...index_b.jsp?mboxSession=1430495587231-824887&
Although apparently they suck and require you to actually go in to a physical location to complete the account opening after you do the first part online.
I know maybe it's overwhelming right now, but it really doesn't have to take up a lot of time. I spent my time researching and writing up that post so you don't have to! You can always go further than I did and start splitting your investments into more directions like with REITs or whatever, but you sound fairly uninterested in that
Which is fine, it makes things simpler.I can confidently say that I stand behind my 'internet advice', since it's exactly what I'm doing right now. The problem that you will run into when you get advice from the people you're going to be buying from or through, is that they will try to fuck you any way they can.
I can't find the article right now, but it was interviews with several managers of funds/finance companies and they had absolutely ridiculous advice, and heavily advised away from index funds. The comments were rightly full of people calling them on their bullshit, but this is just an example of the kind of advice you may be in for if you talk to professionals.
There's some info from Vanguard here if you'd like to read further on index investing https://www.vanguardcanada.ca/advis...g-cost-advantage-adv-brief.htm#/zero-sum-game
The very absolute basics is that you should only buy index funds and hold them in a TFSA or RRSP. Then you rebalance between your 2 or 3 funds once a year. That's pretty much the only time you should look at them.
EmptySpace
Banned
Well, if you're going the TD route, you would start here https://www.tdwaterhouse.ca/product...index_b.jsp?mboxSession=1430495587231-824887&
Although apparently they suck and require you to actually go in to a physical location to complete the account opening after you do the first part online.
I know maybe it's overwhelming right now, but it really doesn't have to take up a lot of time. I spent my time researching and writing up that post so you don't have to! You can always go further than I did and start splitting your investments into more directions like with REITs or whatever, but you sound fairly uninterested in that
I can confidently say that I stand behind my 'internet advice', since it's exactly what I'm doing right now. The problem that you will run into when you get advice from the people you're going to be buying from or through, is that they will try to fuck you any way they can.
I can't find the article right now, but it was interviews with several managers of funds/finance companies and they had absolutely ridiculous advice, and heavily advised away from index funds. The comments were rightly full of people calling them on their bullshit, but this is just an example of the kind of advice you may be in for if you talk to professionals.
There's some info from Vanguard here if you'd like to read further on index investing https://www.vanguardcanada.ca/advis...g-cost-advantage-adv-brief.htm#/zero-sum-game
The very absolute basics is that you should only buy index funds and hold them in a TFSA or RRSP. Then you rebalance between your 2 or 3 funds once a year. That's pretty much the only time you should look at them.
that's what i'll do then. thanks.
i am reading 'elements of investing' the book that is recommended on canadian couch potato. so i at least have an idea of what i'm getting into.
ahaha i was actually planning of combining both index funds and individual stocks. then again i don't even know how to rebalance a portfolio. oh and i was planning on buying ddd (3d systems) but i guess this year's not their best year.
Do keep in mind that when you go into the bank branch they'll be trying to sell you on mutual funds with higher expense ratios (they make commissions).
The easiest route (the one I've taken for now) is the Tangerine investment funds, but they have a pretty high MER at 1.07%. The e-series funds would be a bit more effort for an overall MER about halfway between that of the Tangerine funds and ETFs.
The "best" route (as in, lowest MER) would be to get a trading account and buy ETF's. And this is probably what I'd recommend given that you seem to be considering opening up a trading account anyway. (It's also what I might do soon now that my exams are over)
The easiest route (the one I've taken for now) is the Tangerine investment funds, but they have a pretty high MER at 1.07%. The e-series funds would be a bit more effort for an overall MER about halfway between that of the Tangerine funds and ETFs.
The "best" route (as in, lowest MER) would be to get a trading account and buy ETF's. And this is probably what I'd recommend given that you seem to be considering opening up a trading account anyway. (It's also what I might do soon now that my exams are over
)EmptySpace
Banned
Do keep in mind that when you go into the bank branch they'll be trying to sell you on mutual funds with higher expense ratios (they make commissions).
The easiest route (the one I've taken for now) is the Tangerine investment funds, but they have a pretty high MER at 1.07%. The e-series funds would be a bit more effort for an overall MER about halfway between that of the Tangerine funds and ETFs.
The "best" route (as in, lowest MER) would be to get a trading account and buy ETF's. And this is probably what I'd recommend given that you seem to be considering opening up a trading account anyway. (It's also what I might do soon now that my exams are over
really? ugh i hate awkward conversations like that.
yeah bu i still don't know the basics, even rebalancing a portfolio. also, i read somewhere that questtrade is the only one to offer free charges when you purchase etfs but other than that, there are fees. e-series doesn't have fees, as far as i know.
also, it'd be extremely un-patriotic of me to not invest in a canadian fund.
as per canadian couch potato, i also don't have 50k to invest. i don't even meet the maximum of tfsa contributions. i will only be opening a $10k account and go from there, hopefully it will be $20k+ before 2016.
PflargBlarg
Member
To be fair it's only guidelines. I don't have 50k invested right now either. I get around the cost of the fees by only buying once or twice a year. You're starting with 10k so even if you make a couple of transactions you're just spending 20 bucks out of 10,000.
And yep, you're correct, buying and selling mutual funds is free. So the usual trade off between the two is that mutual funds have higher MER while ETFs have transaction fees. I figure it won't be too long before I have 50k in there so I might as well just start with ETFs anyhow.
Also, it's a fairly small percentage of people that max out their TFSA contribution every year so you're in pretty good company if you eventually reach there. I'm personally hoping to be more than maxing it out starting this year, so we'll see how that goes.
The very fact that you're in a forum thread talking about saving for retirement already puts you well ahead of the majority, so keep that in mind!
And yep, you're correct, buying and selling mutual funds is free. So the usual trade off between the two is that mutual funds have higher MER while ETFs have transaction fees. I figure it won't be too long before I have 50k in there so I might as well just start with ETFs anyhow.
Also, it's a fairly small percentage of people that max out their TFSA contribution every year so you're in pretty good company if you eventually reach there. I'm personally hoping to be more than maxing it out starting this year, so we'll see how that goes.
The very fact that you're in a forum thread talking about saving for retirement already puts you well ahead of the majority, so keep that in mind!
I figure I should start looking at index funds now that I have my first job, although it's only a temporary position.
I've got a TFSA at TD Canada Trust. Some of the money is in a GIC and the rest in a mutual fund. Does the GIC need to mature before I can change to a Direct Investing TFSA? Also do I need to do anything with the mutual fund beforehand?
I've got a TFSA at TD Canada Trust. Some of the money is in a GIC and the rest in a mutual fund. Does the GIC need to mature before I can change to a Direct Investing TFSA? Also do I need to do anything with the mutual fund beforehand?
EmptySpace
Banned
thanks for all the help.
i just signed up online for the td direct investing tfsa. it says i have to go to a td waterhouse branch after 2 business days. do i just go in, go to customer service and tell them i signed up for it? i forgot to jot down the reference number (it didn't say anything about taking the reference number with you. only a valid id and a void cheque).
given that i do not know anything, i wonder what the mutual funds rep will tell me about. do i just say, "oh i'm here to gain access through easyweb and complete my application. i don't want to waste your time. thanks for the hard work and goodbye."? oh gosh.
Napoleonthechimp
Member
This stuff is so damn confusing... But at 29 I've got no money to invest just yet so I'm just going to go right ahead and forget about it.
Having said that after reading "Rich Dad, Poor Dad" I certainly would be interested in eventually investing in other things in order to secure money for my eventual retirement.
Having said that after reading "Rich Dad, Poor Dad" I certainly would be interested in eventually investing in other things in order to secure money for my eventual retirement.
Unknown Soldier
Member
Most people use smartphones now. I find mine to be indispensable and so I'll pay the extra monthly for a good smartphone and data plan. This is a priority for me and most people these days really. I haven't had a land line in something like 6 years now.
Now cable, I cut that cord more than 2 years ago now. Feels good to not be giving Comcast so much money for 500 channels I never watched.
EmptySpace
Banned
i couldn't finish reading rich dad poor dad. i don't know. it seemed very know-it-all and sometimes very "that's wrong, this is right. don't let them tell you otherwise.". reading the book, i was thinking, "is this supposed to be *the* bestseller?"
Yea, I looked at some of the amazon descriptions of his books and they do look like they are probably filled with a bunch of BS. I mean, save money, get out of debt, diversify and invest for the long term is EXACTLY how you should invest. Sure, you will never be a billionaire, but you won't blow all your hard earned money on some risky investment. I am kinda curious, what is this Rich Dad, Poor Dad's philosophy of investing and money? I honestly still have no idea after reading some of his book descriptions and a few reviews.
As for saving money to invest for retirement, I think a number of people think that they can't, but if they actually took a good look at what they spend, create a budget, and start listing priorities that they will be able to find money to invest.
Do you have a smart phone, cable, go out to eat often, or drive a car when you could easily bike? These are very simple ways to cut down on your monthly expenses in order to save for your retirement. Do you own an expensive car or a house/arpartment you really can't afford? If so, then that is something you should also look into because do you really think those things are worth it if it forces you to live off of social security and live in poverty when you retire or are forced to retire?
I would check out http://www.mrmoneymustache.com/ You might think he is full of shit about retiring in 10 years, but that really doesnt matter since he does have some excellent advice to save serious amounts of money.
I read it ages ago. Besides the standard motivational stuff, the made up story, and some repackaged financial cliches (why work for money when money could work for you!), it largely boils down to this: college and getting a decent job are for suckers, instead you should use other people's money to invest and make tons of money. i.e. real estate investing. He makes a lot of claims about his own wealth that are likely untrue in order to push this idea that real estate investing is where it's at.
I don't think it comes up in his book, but he's been heavily involved with MLMs for years, and uses a lot of their techniques. To the extent he actually has wealth at this point, it's from books and seminars and the like, not real estate.
I don't think it comes up in his book, but he's been heavily involved with MLMs for years, and uses a lot of their techniques. To the extent he actually has wealth at this point, it's from books and seminars and the like, not real estate.
PflargBlarg
Member
Plus, making money on real estate is highly dependent on where you are.
MMM lives in a fairly decent area for getting good cash flow from rental properties and he could also make money just from flipping houses if he wanted to.
I, on the other hand, live in Vancouver. There is no market for new landlords to enter and make money on because the prices are so insane.
MMM lives in a fairly decent area for getting good cash flow from rental properties and he could also make money just from flipping houses if he wanted to.
I, on the other hand, live in Vancouver. There is no market for new landlords to enter and make money on because the prices are so insane.
I always assume this is how popular financial authors make their money.
Right. Which isn't necessarily a problem. It really depends on how you present yourself.
Napoleonthechimp
Member
The only thing I took from it was to restructure my personal balance sheets and invest in opportunities that could generate income for me over the long term. What I do know is that I am not interested in working all my life for next to nothing, so some of the ideas in that book do appeal to me.
However there isn't much substance to the book beyond that and I certainly wouldn't look to his other stuff for any kind of detailed advice on how to achieve financial freedom.
I have almost no income and next to no assets that have any value. So there really is no more cutting corners for me.
The best I can do is leverage my knowledge and skills by starting my own business (I'm working with an organisation to do just that) as a digital imaging technician on the set of films, commercials and music videos. Only when I've got a decent amount of money could I begin to think about how to use that for potential early retirement options.
And yes, I'm aware of the money moustache site.
Wellington
BAAAALLLINNN'
I don't think the book is BS but I DO think that it should be entry level required reading before say starting a business or jumping into investing in real estate. I too read it ages ago and what he says is now just common sense to me: make money with other people's time/money/energy etc. It's the basic tenets of trying to set up a business or opportunity that generates passive income. The reason it lends so heavily into real estate is that it's one of the ways people can best recognize that would lend itself to passive income generation........
......another one is MLM, which as Cyan mentioned he is heavily involved in. NEVER EVER EVER sign up for an MLM scheme. There's actually a Listen Money Matters episode on why they don't work, for those that still don't believe how awful they are.
You're not looking hard enough then. I argue you can make money in real estate anywhere, the issue is that the bar for entry will be much higher in New York or San Fran than the mid-west United States, for example.
Just going to bump this in the hopes of one of our Canadian posters can help this person out.
According to http://www.getsmarteraboutmoney.ca/en/managing-your-money/investing/guaranteed-investment-certificates/Pages/How-to-cash-in-GICs.aspx#.VUV7sGZHanM
It depends. If it is redeemable, you can cash out before maturity and then put the money into another investment in a tfsa. If it's not, you'll have to pay a penalty for redeeming early.
I do t know if you can claim a current investment as a tfsa after the fact though
Randolph Freelander
Member
Dollar Cost Averaging is a fancier way of saying Rate of Return Reduction.
Yeah, I wouldn't disagree. However, decent chunk means ~110k. Have the feeling that I'll be buying in at the top. Guess it doesn't matter that much in the long run, but...still.
Randolph Freelander
Member
You're running against 2 basic guidelines:
1) Don't try to time the market.
2) Don't leave money on the sidelines, where it is guaranteed not to grow.
On average, the market will always be at the top, because on average, the market is always growing. My question wouldn't be when is a good time to invest the $110K, it would be why isn't the $110K already invested.
RumblingRosco
Member
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Your brain is telling you to invest it all right away. Your emotions are telling you to try to time the market, DCA, or something else. Who do you think you should listen to?
Even if you get unlucky and the market tanks right after you invest, you should take comfort in the fact that you made the right move. Making the right move all the time will lead to better financial success than listening to your emotions when you are dealing with significant amounts of money.
Still, if you really don't want to do it, then just DCA like Soka recommends. I think that also can lead to some bad feelings because you might be kicking yourself for losing money doing DCA and choosing emotion over your brain. At least if you chose your brain you will only feel upset about losing out on some gains that won't matter all that much in the long run
**Replying to the last three posters
I probably should have clarified better. The money is currently invested in some bond funds that I'm not happy with. They are just about back to the initial investment value (dividends were pulled but capital gains were reinvested). I don't see them as long term holdings, and with the looming rate hike, it seems to be a good time to make the switch. My taxes were a bit of a surprise last year, so I don't mind selling at a bit of a loss.
Thanks for the advice! I'll take it into consideration this week.
I probably should have clarified better. The money is currently invested in some bond funds that I'm not happy with. They are just about back to the initial investment value (dividends were pulled but capital gains were reinvested). I don't see them as long term holdings, and with the looming rate hike, it seems to be a good time to make the switch. My taxes were a bit of a surprise last year, so I don't mind selling at a bit of a loss.
Thanks for the advice! I'll take it into consideration this week.
Wellington
BAAAALLLINNN'
This may not be the right venue for it but maybe you guys have some ideas. One of my financial goals for the year was to reduce the amount of taxes I have to pay at the end of the year. I'll lay out what I already take advantage of and hopefully someone can add more or I at least give you guys some ideas:
1) Of course, the deduction from my mortgage interest
2) Increased my 401k contributions to as near the cap as I can comfortably get.
3) This year I am trying to get a side business off of the ground and I am shelling out some cash for the expenses related to it. Should be able to claim those as a loss. Don't get me wrong I hope I turn a profit but right now it looks grim.
4) I volunteer regularly, I can deduct any money I spend for the activities related to the volunteering and mileage driven to get to/from the events.
5) I need to do some research, but I have to replace the windows at the front of my house since there is a big time air leak - there should be some kind of credit for the windows as they contribute to energy savings.
I am not married and have no kids. If anyone has other tips I'd love to hear them
1) Of course, the deduction from my mortgage interest
2) Increased my 401k contributions to as near the cap as I can comfortably get.
3) This year I am trying to get a side business off of the ground and I am shelling out some cash for the expenses related to it. Should be able to claim those as a loss. Don't get me wrong I hope I turn a profit but right now it looks grim.
4) I volunteer regularly, I can deduct any money I spend for the activities related to the volunteering and mileage driven to get to/from the events.
5) I need to do some research, but I have to replace the windows at the front of my house since there is a big time air leak - there should be some kind of credit for the windows as they contribute to energy savings.
I am not married and have no kids. If anyone has other tips I'd love to hear them
RumblingRosco
Member
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In regards to #3, I'm doing a similar thing and was told that I can roll over the costs from starting the business and deduct them from any future profits. They are called start up costs. You can't just claim them as a straight loss; at least that's what my tax person said/recommended. You can roll them over for years, though, so just keep track.
EmptySpace
Banned
i just want to ask, i want to go the "aggressive" route as you said, but returns on international last year clocked in at 2% vs. canadian bonds at 8%. would it still be wise to forego canadian bonds index and bring over that portion to international? thanks.
Past performance isn't really indicative of future performance.
You want to have some bonds in order to diversify more. In a situation where the stock market is crashing hard bonds would be holding steady or even going up in value as people moved from stocks to bonds. And then you can sell bonds to buy equity at the new low price until you've returned to your target allocation. (re balancing).
EmptySpace
Banned
don't invest in gold/silver.
i am a beginner but i don't think silver/gold is a good investment.
Precious metals don't really do anything for you. They just kinda sit there while stocks or bonds would be paying you dividends/interest. http://www.fool.com/investing/general/2014/09/13/why-warren-buffett-hates-gold.aspx
For some apocalypse scenario where government and currencies are collapsing you'd probably be better off investing in bullets and canned food.
The returns on holding gold vs. the stock market are terrible, over any medium to long term horizon. Metal is just metal, dug from the ground, and its value is driven by speculation. With stocks you are investing in business that are generating returns, and cash dividends, as Mr.Mike said.
I suggest doing some research on the relative performance of gold vs. the stock market. It's not pretty.
PflargBlarg
Member
Yeah, as was mentioned, the past performance doesn't really indicate anything about future performance.
That said, feel free to make the allocations you feel comfortable with. Averaged over your lifetime bonds will return less but be more stable while the opposite is true for stocks. Feel free to start off with the 10% in canadian bonds and shift more into it as you get older.
EmptySpace
Banned
hmmm...okay will do that then. i just want to maximize returns so i thought foregoing bonds for international index wouldn't get me higher returns (in the short term) than an equal distribution. still, as you said, we never know.
and seeing how low the canadian economy is right now, i was thinking of investing in both cad and us index funds exclusively.
Darren870
Member
Gold would have been smart to invest in a while back, but an ETF, not the actual bullion. Basically you start to lose money when it comes to storing the stuff. You don't want that stuff sitting in your closet/bed. Insurance companies wont cover it if it gets stolen.