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I think you're thinking of the rollover time limit. If you rollover an IRA, you have 60 days to get the money to the new location before that rollover becomes a withdrawal. Edit: It appears you can, in fact, use that rule to do an out-and-back "rollover" within 60 days, but only once per year: http://www.chicagotribune.com/business/yourmoney/chi-ym-cruz-1007oct07,0,4813127.story . So I take it back, you can recontribute the money within 60 days of taking it out. If you do this, you'll probably need to call your IRA custodian to make sure they encode the transactions as rollover transactions instead of withdrawal/contribution. SlapActionJackson fucked around with this message at 16:17 on Feb 25, 2010 |
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Feb 25, 2010 15:01
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SlapActionJackson posted:I think you're thinking of the rollover time limit. If you rollover an IRA, you have 60 days to get the money to the new location before that rollover becomes a withdrawal. Whoo, color me relieved. You had me scared for a minute. Once a year though, that's good to know. My google-fu failed me this time. Thanks.
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Feb 25, 2010 15:20
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I thought you all might get a kick out of this article in the Globe and Mail, one of Canada's "upper-class" newspapers. http://www.theglobeandmail.com/globe-investor/personal-finance/rrsp/the-nine-milestones-of-a-financially-sound-life/article1479272/ Moshe Milevsky posted:[Revenue Canada] should therefore be treated like the business partners they are - and kept a close watch on. In filing, you should be cognizant of the worst-case scenario: Your tax return will be audited. But an audit is, by definition, a kind of negotiation. Therefore, Mr. Milevsky asks, why not be more aggressive and start with a low bid? "The relationship with Revenue Canada is more dynamic that most people allow." The bottom line: Short of breaking the law, don't be afraid to push the envelope. Moshe Milevsky posted:Many financial advisers encourage clients to save 10 per cent of their salaries. That's fine, perhaps, for people in their 40s or 50s, who may have one eye on retirement. But it's a less reasonable strategy for younger people. "I roll my eyes when a 22-year-old tells me he just opened a RRSP to start saving for his retirement in 49 years," he says. "He's harming himself. Enjoy yourself. Go to Puerto Vallarta. Moshe Milevsky posted:But children, Mr. Milevsky contends, are ultimately the best insurance you can have for old age - his new book is dedicated to his four daughters, "my genuine pensions." Think seriously about who's going to take care of you when you retire, he advises. Instead of buying insurance policies for nursing homes, long-term care and critical illness, save the premiums and have children instead. In the same article, he recommends people provoke audits from Revenue Canada, have children instead of buying insurance, and avoid saving when young (since you can save 10% when you're 40 or 50). The whole thing makes me so  . The best part is this:Moshe Milevsky posted:Moshe Milevsky never intended to write another book about financial planning. But then the 42-year-old York University finance professor watched in horror as his family's net worth shrank by nearly 50 per cent in the great market crash of 2008. So he gets decimated in the market crash and then puts out a book about investing? And his theory is that because major market crashes can happen, you should save less when you're young?
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Feb 27, 2010 07:37
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Chernori posted:http://www.theglobeandmail.com/globe-investor/personal-finance/rrsp/the-nine-milestones-of-a-financially-sound-life/article1479272/ Not only is Milevsky a pure academic who sucks at real-world investing, the journalist who wrote the article primarily writes biographies, obituaries, and theatrical reviews. Standards have been plummeting in traditional Canadian media for a long time now.
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Feb 28, 2010 21:20
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Has anyone read Motley Fool's Million Dollar Portfolio? In it, the brothers argue that 25% small caps, 25% large caps, 25% real estate, 25% commodities, rebalanced annually is one of the best long-term investment strategies out there. I'm about to come into a significant amount of money, and I'm considering following this formula. Thoughts?
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Feb 28, 2010 22:49
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InternetRulesLawyer posted:Has anyone read Motley Fool's Million Dollar Portfolio? In it, the brothers argue that 25% small caps, 25% large caps, 25% real estate, 25% commodities, rebalanced annually is one of the best long-term investment strategies out there. I'm about to come into a significant amount of money, and I'm considering following this formula. Thoughts? That's almost 100% invested on macroeconomic growth. Depending upon where you're at in the game this is extremely risky. All of those are driven by GDP growth and/or inflation. It's not that easy. IMO Fixed income needs to play a bigger role.
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Mar 1, 2010 00:45
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Anyone know if Schwab has any fees for contributions to a RothIRA? It would be into a Vanguard fund. Can't find the info exactly on the website but as my wife would attest I'm poo poo for finding things. WHERE ARE MY SHOES
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Mar 1, 2010 00:59
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mcsuede posted:Anyone know if Schwab has any fees for contributions to a RothIRA? It would be into a Vanguard fund. Can't find the info exactly on the website but as my wife would attest I'm poo poo for finding things. I was charged $49.95 in November. I don't think the fee has changed; when you've logged into schwab.com, go to Service->Access & Fees->Fees & Commissions->Commission Schedule->Mutual Funds. This is part of what has me opening a Vanguard account this year...
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Mar 1, 2010 01:13
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Yeah, I'm debating if I should go straight through Vanguard or go through Schwab and open one of their 2% cashback cards. I have an empty Schwab account just sitting there and I don't want to kill it from inactivity (used to have some gifted stocks in it but I cashed all those out in '07). I'll probably go straight through Vanguard.
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Mar 1, 2010 01:15
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The 2% cash back Visa is my favorite credit card; the cash back is automatically deposited once a month into your brokerage account (you probably know that, though). We've had no hassles with that. I also do quite a bit of international traveling with the card, and Schwab's customer service has been very good. My husband had the Schwab brokerage account before we got married, and we're probably not going to give that up, especially with the credit card attached...it's hard to find a good Visa card. I do wish I'd started my Roth IRA straightaway with Vanguard to save on some fees, but I'm not losing any sleep over $100.
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Mar 1, 2010 04:18
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InternetRulesLawyer posted:Has anyone read Motley Fool's Million Dollar Portfolio? In it, the brothers argue that 25% small caps, 25% large caps, 25% real estate, 25% commodities, rebalanced annually is one of the best long-term investment strategies out there. I'm about to come into a significant amount of money, and I'm considering following this formula. Thoughts? My intuition makes me a bit wary about this. It seems like a strange portfolio. I assume they mean 25% REITs or something similar for the real estate component. What would be the commodity part? ETFs? I would think there would be a lot of overlap between the parts of your portfolio. For example, large caps like Exxon or Barrick Gold have (obvious) exposure to the commodity market, while financials are involved in real estate. How would international exposure figure into that portfolio? Most investors have most of their net worth in real estate anyway, since they own a house. Limit Up posted:It's not that easy. IMO Fixed income needs to play a bigger role. Agreed. ps- ElehemEare, I know what you mean. I find a lot of the Globe's financial articles pretty dubious.
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Mar 1, 2010 07:44
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Does anyone have any good tips for investing in a taxable (non-401k/IRA) account? I'm in a similar boat as IRL and recently opened a brokerage account through Sharebuilder. All I ask out of the portfolio is a better than 4.00% average yearly return over a 15 year timeframe (hopefully beating my student loan interest). Although this account is separate from my emergency and retirement funds, I'd prefer to keep it fairly conservative in case I needed the money for some reason. I was thinking: 33% VTI 33% BND 33% EFA The alternative to investing is just to pay off my student loans completely. Again, they're running 4.00% not including the student loan interest deduction. Thoughts? GamingHyena fucked around with this message at 08:12 on Mar 1, 2010 |
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Mar 1, 2010 08:06
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Cross posting this out of ask /tell cause Im a douche that completely forgot this subforum was here My father in law retired at the beginning of this year at the ripe old age of 55. Now I do understand that this is a fairly young age for true retirement but I got to thinking to myself 'boy if I could check out that early and just spend the next 20ish years hanging out with my kids / grandkids and playing golf / doing whatever I want I would sure love to'. My problem is Im not sure how. My father in law was a pretty special case. He worked for the government (USPS) so he was garaunteed a pretty good retirement package. Me on the other hand, I work for a smallish company that cannot afford (or so they claim) a retirement option for their employees. So here is what I am doing so far: - I have opened a mutual fund account with the moneys protected in a Roth IRA. This cant be my only option though because even with maximum yearly contributions and a modest return rate it wont give me enough to live on for 20 years - My wife and I are loosely following Dave Ramsey's debt reduction plan. It is working and we expect to be debt free, excluding our mortgage, in a years time. - My wife has retirement benefits through the Texas Teacher Retirement system. I admit I have not done enough study of this to learn how it could benefit us. I have the page opened as I type this though. - My wife has also purchased an annuity offered through her employer. Some other random facts: I am 32 years old so if I could potentially retire at 55 that gives me 23 more years of working. Our mortgage will pay off roughly about the time I would like to retire, freeing up a good bit of money. I am also actively looking for a job with better benefits, ala 401k but I need to assume that I wont find one since its becoming increasingly more common not to have a 401k in my industry. What else can I do to accomplish my goals?
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Mar 1, 2010 19:58
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Syano posted:What else can I do to accomplish my goals? 1. Spend as little money as possible, and save every penny possible. 2. Learn about asset allocation and both growth and value investing. In addition to your Roth IRA, you'll want a traditional IRA. After you max those out, open a standard brokerage account. Also, in addition to that, you'll want to also focus on your job skills and move up the ladder so you get bigger paychecks and can save more, ideally landing a job with a company who has a good 401k.
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Mar 2, 2010 16:45
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dv6speed posted:In addition to your Roth IRA, you'll want a traditional IRA. After you max those out, open a standard brokerage account. Except the contribution limit applies to both. You can't contribute $5000 to a Roth and $5000 to a Traditional, as far as I'm aware.
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Mar 2, 2010 17:02
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Strict 9 posted:Except the contribution limit applies to both. You can't contribute $5000 to a Roth and $5000 to a Traditional, as far as I'm aware.
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Mar 2, 2010 17:07
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You have misread them, or something. You can contribute a maximum of $5000/yr to any combination of Roth and traditional IRAs. Otherwise, hot daaamn.... http://www.irs.gov/retirement/participant/article/0,,id=188232,00.html
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Mar 2, 2010 17:14
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WOW, thanks for the education! I'll trust that source of info. Looks like the poster will be opening a brokerage account sooner then I thought.
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Mar 2, 2010 17:19
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Ironically enough, the tax pros are bitching about the quality of that source of info in the other thread! But I'm pretty sure it's correct on this count.
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Mar 2, 2010 18:54
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are you kidding me? when has this ever been up for debate? you cannot contribute max limit to BOTH Roth and Traditional. No book or legitimate online source has ever stated you can, and the rule has never been ambiguous. edit: or am i misreading this? are the tax pros arguing about a different matter and you are just talking about the IRS.gov as the common source? 80k fucked around with this message at 19:18 on Mar 2, 2010 |
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Mar 2, 2010 19:09
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24 year old Canadian here, grossing 58K a year, looking for some advice on what to do with my RRSP and TFSA accounts. All of my accounts are with TD and I currently carry no debt. My TFSA I consider a short-mid term savings account for things like a car/house/etc, and gets an auto contribution of 400 a month, going into mutual funds. It has the following allocation: TD CDN Index - 20.650% TD US Index Currency Neutral - 20.920% TD Int'l Index Currency Neutral - 20.100% TD CDN Bond Index - 38.320% With a current market value of about $4700. My RRSP is as follows: ATVI:US - 23.52% TD:CA - 43.33% VT:US - 18.80% VWO:US - 12.63% Cash - 1.74% With a current market value of $6500. I'm getting a return this year of $3300 of which I plan to use $1400 to top off my TFSA room from last year, and the rest I would like to put into my RRSP/savings account. My RRSP contribution room for 2010 is about $7300 and I'm wondering what the best way to use that would be. I only started both accounts last year so I haven't done any rebalancing or such yet.
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Mar 2, 2010 19:14
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dv6speed posted:The formula is simple: I guess that really is simple. Time to find a good broker.
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Mar 2, 2010 20:04
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asmallrabbit posted:My TFSA I consider a short-mid term savings account for things like a car/house/etc, and gets an auto contribution of 400 a month, going into mutual funds. It has the following allocation: It sounds like this is a shorter-term fund, so your equity exposure is probably too high. If you're really a fan of stocks, you can maybe have them as much as 25% of this account, but probably not a lot more than that. quote:My RRSP is as follows: So 2/3rds of your retirement savings is in two companies. What do you see in these companies that the rest of the market doesn't? Can you explain why your strategy is likely to significantly beat the market average?
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Mar 2, 2010 20:14
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slap me silly posted:Ironically enough, the tax pros are bitching about the quality of that source of info in the other thread! But I'm pretty sure it's correct on this count. "tax pros" are arguing about the reliability of irs.gov as a source of tax law information?
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Mar 2, 2010 21:03
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Well, I am overstating the case - there are probably some situations where the pubs aren't good guidance for navigating the tax laws, but I hardly think that would apply in common situations like this or the 1000 other questions people always ask here.
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Mar 2, 2010 21:29
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DuckConference posted:It sounds like this is a shorter-term fund, so your equity exposure is probably too high. If you're really a fan of stocks, you can maybe have them as much as 25% of this account, but probably not a lot more than that. Are mutual funds a bad choice for a short-mid-term fund or do I need to just carry different funds? I like the ETF's because of the lower MER but beyond that I'm open to suggestions. ATVI I bought more because I like the company as a gamer myself, and TD was similar because I bank with them and they've done rather well. The only reason 60% of my savings is currently between the two has more to do with the fact that I've only started contributing since last year and im trying to do larger trades with fewer stocks so as to keep commission costs low. Hence I want to do a bit of rebalancing now so it isn't so lopsided.
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Mar 2, 2010 21:44
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Never fall in love with a stock. This isn't the stock thread so I won't go too much further than that, but this is advice coming from someone who did pretty well until he stayed with a company for emotional reasons instead of a cold, rational assessment of the likely future performance of the stock.
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Mar 2, 2010 21:53
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asmallrabbit posted:Are mutual funds a bad choice for a short-mid-term fund or do I need to just carry different funds? I like the ETF's because of the lower MER but beyond that I'm open to suggestions. The idea is that the bond market is a lot less volatile than the stock market. The stock market can easily make huge moves, which is fine if you can patiently wait out the 10+ years it could take if you invested at just the wrong time, but if you're using the money on a shorter term, you can end up taking a big (30-40%) loss from selling at the wrong time. quote:ATVI I bought more because I like the company as a gamer myself, and TD was similar because I bank with them and they've done rather well. The only reason 60% of my savings is currently between the two has more to do with the fact that I've only started contributing since last year and im trying to do larger trades with fewer stocks so as to keep commission costs low. Hence I want to do a bit of rebalancing now so it isn't so lopsided. Yes, but why is investing in these companies going to earn you returns that are much, much better than the market average?
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Mar 2, 2010 22:19
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DuckConference posted:The idea is that the bond market is a lot less volatile than the stock market. The stock market can easily make huge moves, which is fine if you can patiently wait out the 10+ years it could take if you invested at just the wrong time, but if you're using the money on a shorter term, you can end up taking a big (30-40%) loss from selling at the wrong time. What would a better balance be for my TFSA then? I'm planning on using it to get a car in the next few years. Should I move to mostly bonds/gic's with only a small portion in the index funds? I don't particularly believe that they would return more or less then the market average. In particular with ATVI i really should have bought it in a non registered account, but they are both strong companies with good potential and sound performance so far.
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Mar 2, 2010 22:32
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asmallrabbit posted:What would a better balance be for my TFSA then? I'm planning on using it to get a car in the next few years. Should I move to mostly bonds/gic's with only a small portion in the index funds? If your time scale is a few years, yes that'd be a good idea. The choice between individual (government) bonds and bond funds is a somewhat interesting one, but with that account size you'd be looking at bond funds or GICs most likely. quote:I don't particularly believe that they would return more or less then the market average. In particular with ATVI i really should have bought it in a non registered account, but they are both strong companies with good potential and sound performance so far. This is essentially the point I'm trying to get at. If your strategy isn't going to beat the market, why take on a bunch of extra risk by being so concentrated? If all you're going for is the average, get a good index fund and let it be.
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Mar 2, 2010 22:38
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Does anyone have any opinions on dividend reinvestment, both in tax-sheltered and non tax-sheltered accounts? If I plan on holding something like a utility or index fund for a long term (5-10 years or more), what are the upsides/downsides to DRIP'ing (not with the company directly, but through the broker)?
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Mar 3, 2010 00:18
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ixo posted:what are the upsides/downsides to DRIP'ing (not with the company directly, but through the broker)? Automatic reinvestment might mean you are paying more then you should, however, for the people who prefer the least amount of involvement, then it's the better option.
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Mar 3, 2010 00:49
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asmallrabbit posted:What would a better balance be for my TFSA then? I'm planning on using it to get a car in the next few years. Should I move to mostly bonds/gic's with only a small portion in the index funds?
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Mar 3, 2010 01:36
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ixo posted:Does anyone have any opinions on dividend reinvestment, both in tax-sheltered and non tax-sheltered accounts? If I plan on holding something like a utility or index fund for a long term (5-10 years or more), what are the upsides/downsides to DRIP'ing (not with the company directly, but through the broker)? Automatically reinvesting dividends in a taxable fund makes specific share identification for capital gains / losses reporting a pain in the rear end (because of more frequent transactions). I do automatically reinvest on the IRA side, however.
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Mar 3, 2010 03:18
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dv6speed posted:This depends how active of an investor and how picky you are about your buy price. Personally, I'd rather collect the dividends as cash, and then reinvest them myself when I see a buy point I like. You better be extremely good at timing the market over the long term and also have a large enough position that the extra commissions are irrelevant if you're going to recommend this strategy. I would bet 90% of people who try to time it themselves don't do any better than a DRIP (probably worse a lot of times), just based on the fact very few people are actually any good at timing the market.
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Mar 3, 2010 08:02
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I said it depends on how active of an investor you are. If you are a more active guy, then you are trading around core positions, taking advantage of various price moves up or down as you see them happen. If you are doing this, then it'd make perfect sense to collect dividends as cash. You then would take that cash and lump it along with the rest of your cash to buy more stock/fund/ETF when you see fit. When you say someone is timing the market you are implying they are looking for bottoms and tops. Active investors don't do that, they buy and sell in smaller increments to average out their costs because they know that they can't time the market. Now if we are talking about a $1000 position that might net you less then $20 in dividends, and you don't have any other cash sitting in your account to buy more stock/fund/ETF anyway, then this discussion we are having is entirely moot.
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Mar 3, 2010 14:57
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dv6speed posted:
And dividends are paid out quarterly, meaning by letting the dividends reinvest you are averaging out the cost by buying at 4 different times throughout the year. Anything more than this is trying to time the market. No offense dv6, but you are giving some awful advice...this is the LONG-TERM Investing and Retirement thread.
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Mar 3, 2010 15:14
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Don Wrigley posted:No offense dv6, but you are giving some awful advice...this is the LONG-TERM Investing and Retirement thread. Since everyone wants to accuse me of awful, ridiculous, silly, or whatever adjectives have been used, and apparently have no desire to hear about more advanced long term investing concepts, I will just stop posting in and reading this thread.
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Mar 3, 2010 16:06
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Don Wrigley posted:And dividends are paid out quarterly, meaning by letting the dividends reinvest you are averaging out the cost by buying at 4 different times throughout the year. Anything more than this is trying to time the market. True that... and also Generally, dividends and capital gains of the underlying holdings are actually reinvested throughout the year. So come distribution time, if you choose to take it in cash, it is more like a forced sale of shares than it is a release of accrued cash. For instance, if there is a scheduled 8% distribution on December 15th, it is not like you are 92% invested on Dec 14th. You are quite nearly fully invested, and a reinvestment of shares is just an accounting change that affects quantity of shares and price of share. If you take it in cash, you are going from nearly fully invested to 92% invested, meaning you took a forced sale of shares at approximately 8% of your investment. So if you want to be in control of when you sell and when you buy (as dv6speed is saying), then you should actually do the opposite of what he says: reinvest dividends/capital gains, and place buy and sell orders yourself. However, reasons for NOT reinvesting dividends include: - like what var1ety said, it complicates specific share identification - also will occasionally complicate your tax returns due to wash sales and short-term capital gains in tiny amounts (that are no big deal from a tax bill situation but require you to split out sales and do a little arithmetic). - some funds have purchase and sale fees (to offset trading costs), but the fees are waived for reinvestment of dividends. So if you plan to rebuy back into a fund anyway, it is cheaper to reinvest as you will not be subject purchase fees.
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Mar 3, 2010 18:02
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Doesn't the market take an upcoming dividend into account when it prices a given security? I always thought that meant that the share price would drop by an appropriate amount when the dividend is issued, so that if you immediately re-invest, you're effectively buying discounted shares on that day anyway.
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Mar 3, 2010 21:19
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