|
slidebite posted:me prior to about a month ago So during tertiary study my father (self made business man) would hound me on the importance of learning to 'manage money' and how that is more important than earning it. Yeah whatever Dad; very conscious of the fact Dad never had to go through the rigors of undergraduate Uni. Then my professional career started and it consumed all my effort and brain cycles, again Dad would tell me that I really needed to get a handle on how tax works and how to put the money I was making to work for me. Seriously Dad, I'll get to that.. right now what is important is learning this next step in my career and landing this next role. Only now, in the last month, as I am on a long holiday overseas and have quit my job to take a step goddamn back from that treadmill have I had the time to really learn and understand personal finance. I get it Dad, you were right all along.. but it's some heavy poo poo to wrestle with on top of the corporate machine. I'm sure this is a universal experience for all our countries.
|
#
?
Nov 8, 2013 21:09
|
|
|
|
| # ? May 14, 2024 08:14 |
|
|
I'm not sure the name makes a difference. Those that don't realize a TFSA can be something other than a savings account probably couldn't tell you what the P in RRSP stands for. The same people who say they are going to buy RRSP's not realizing it is not possible to "buy RRSP's". Even if it was a Tax Free Savings Plan, banks would still push their savings accounts.
|
|
#
?
Nov 8, 2013 21:11
|
|
|
I think the ignorance is pretty common. I mean, I was very financially interested and paid off 30k in debt over two years of concentrated effort and research but didn't know that an RRSP was a holder of investments available from brokers and poo poo and not just an account that I open with a bank somewhere until my thread explained it to me. I also thought that the TFSA was just a higher-interest savings account because that was how it was advertised by ING and other banks.
|
|
#
?
Nov 8, 2013 21:11
|
|
|
tuyop posted:I think the ignorance is pretty common. I mean, I was very financially interested and paid off 30k in debt over two years of concentrated effort and research but didn't know that an RRSP was a holder of investments available from brokers and poo poo and not just an account that I open with a bank somewhere until my thread explained it to me. I also thought that the TFSA was just a higher-interest savings account because that was how it was advertised by ING and other banks. I think the takeaway here is that people need to stop solely relying on what their bank tells them when it comes to financial advice.
|
|
#
?
Nov 8, 2013 21:38
|
|
|
Kal Torak posted:I think the takeaway here is that people need to stop solely relying on what their bank tells them when it comes to financial advice. No poo poo. So many people have this wonderfully quaint notion that banks are fonts of sound financial advice, and stewards of their customers' financial future. Nothing could be further from the truth.
|
|
#
?
Nov 8, 2013 21:51
|
|
|
Kal Torak posted:I think the takeaway here is that people need to stop solely relying on what their bank tells them when it comes to financial advice.  Some bankers and consultants might genuinely good people and try to do whats best, but someone here (lexicon?) recently said, very appropriately, that "it is their job to make your money their money" and that's what it really comes down to. Even in the past weeks going over this thread with you folks here is really giving me a drive to move to self direct accts and as my low-loads come off my funds to move to ETFs. Kal Torak posted:I'm not sure the name makes a difference. Those that don't realize a TFSA can be something other than a savings account probably couldn't tell you what the P in RRSP stands for. The same people who say they are going to buy RRSP's not realizing it is not possible to "buy RRSP's". Even if it was a Tax Free Savings Plan, banks would still push their savings accounts. That was one good thing my RBCDS guy did was wake me up to the potential and for that I am grateful. slidebite fucked around with this message at 01:27 on Nov 9, 2013 |
|
#
?
Nov 9, 2013 01:06
|
|
|
The truth is that most people do not ever deal with the investment/discount brokerage units of their bank and trust whatever the under-qualified lady at their branch bank says. If you go into TD Canada Trust and ask to open a TFSA, they will open a TFSA account in which you can "save" your money. It is strategically advantageous to them, as they will take your dough, pay you essentially nothing for it, charge you fees, and use your money to make real money for them . They see the TFSA as a way to increase deposits. This is disingenuous, but as we've discussed, that's what you get for trusting the nice lady at the bank. Also, you only need to educate yourself to a pretty basic level of understanding to be more qualified than anyone who works at a branch bank with regard to how your money should be invested. The cost of not doing that is your financial future in many cases.
|
|
#
?
Nov 9, 2013 15:23
|
|
|
Saltin posted:It's a lot more sophisticated than that. In a non-sheltered account, taxable gains are taxed at an inclusion rate - essentially you only pay tax (at your marginal rate) on 50% of the gain you have realized. You can also write off your losses against your gains, which you cannot do in a TFSA or RRSP, for example. Finally, qualifying Canadian dividends are taxed at a very low rate (relative to most people's marginal rate) as well. I won't go into the formulas unless someone is interested in it, but I wanted to add a few points to expand on your statement that "it's a lot more sophisticated than that." There are some other considerations in your investment vehicle choices -Fees and related charges can be deducted as either carrying charges or reductions in the capital gain in unsheltered accounts. If you have a mortgage or other personal debt, various tax planning opportunities exist. -the tax impact on capital gains only arises on disposition. This means that your growth rate isn't reduced by tax, but your principal to reinvest at the time of sale is. If you have something like bank stocks that you plan to hold for 20 years this can have a significant effect on our effective growth rate. -Tax only being due on disposition allows for tax smoothing, reducing your gains in good years and increasing them in bad to equalize your taxable income. This can result in savings due to progressive tax rates. -dividends in unregistered accounts increase your taxable income beyond the actual cash received, possibility impacting OAS and eligibility for other government services/assistance for seniors. -If you are a high income earner contributing to RRSPs during your working life, the tax effects act like a weak hedge against poor investment returns in retirement. -If you have multiple options in where you draw retirement income (RRSP, TFSA and unregistered), you can manage income and by extension your tax rate more effectively.
|
|
#
?
Nov 10, 2013 17:04
|
|
|
My girlfriend has has an RBC Classic 2 Visa that costs $35/year. I think she got it 6-7 years ago while a student and the fee was waived. She'd like to stop paying a fee for a mediocre card. The internet says to keep your oldest credit card open, if she switches to a no fee card, does it still count as being a 6 year old card?
|
|
#
?
Nov 10, 2013 19:35
|
|
|
On the subject of credits cards: I pay my whole balance every month. The bank just offered to double my borrowing limit. If I did increase my borrowing limit and continued to pay off my balance would that help or hurt my credit score? There are no additional fees.
|
|
#
?
Nov 10, 2013 20:46
|
|
|
TheOtherContraGuy posted:On the subject of credits cards: I pay my whole balance every month. The bank just offered to double my borrowing limit. If I did increase my borrowing limit and continued to pay off my balance would that help or hurt my credit score? There are no additional fees. Uh, no. A component of your credit score is the ratio of your available credit and your outstanding credit. So if you have a balance of $500 on a $1000 credit card and that's your only credit, it hurts way more than if you have $500 on $15000 of credit. Increasing your limit without increasing your balance can have a positive effect on your credit score. Someone's going to say that it's bad news if you get your CC stolen and someone charges a new Kia to it or something, but I think you can't live in fear of that poo poo.
|
|
#
?
Nov 10, 2013 21:10
|
|
|
Kreez posted:My girlfriend has has an RBC Classic 2 Visa that costs $35/year. I think she got it 6-7 years ago while a student and the fee was waived. She'd like to stop paying a fee for a mediocre card. The internet says to keep your oldest credit card open, if she switches to a no fee card, does it still count as being a 6 year old card? No, that will most likely be a new account. I don't know that I would put a ton of stock in that advice. I keep my oldest card unused and around because it's free, but I certainly wouldn't pay $35 for the privilege.
|
|
#
?
Nov 10, 2013 22:25
|
|
|
I also read that closing accounts doesn't affect your score that much. Like a couple dozen points, max, and that it only lasts six months or so. If you're not trying to buy a house or car in the next six months, and what I read is correct, then it's not a big deal. \/\/ Yeah that's true, they don't want you defaulting if you max all your credit out at once. Is there any easy way to figure out the ideal amount of credit to have to maximize your score and also borrowing ability? tuyop fucked around with this message at 22:58 on Nov 10, 2013 |
|
#
?
Nov 10, 2013 22:51
|
|
|
tuyop posted:Uh, no. A component of your credit score is the ratio of your available credit and your outstanding credit. So if you have a balance of $500 on a $1000 credit card and that's your only credit, it hurts way more than if you have $500 on $15000 of credit. Increasing your limit without increasing your balance can have a positive effect on your credit score.
|
|
#
?
Nov 10, 2013 22:53
|
|
|
Lexicon posted:No, that will most likely be a new account. Agreed. Even if she does take a small score hit (which is not definite), she's going to have to cut the cord eventually. In the interest of science, she should pull her FICO now before she cancels it, and do it again in 6 months or so and see if there is any change. I'd be curious to know. I have about 4 Credit cards, but 1 of them I never use but I keep it open for the same reason as you mentioned, it's my oldest card and I've had it since the mid 90s. It doesn't cost me anything though so 
|
|
#
?
Nov 11, 2013 02:17
|
|
|
tuyop posted:Is there any easy way to figure out the ideal amount of credit to have to maximize your score and also borrowing ability? The FICO algorithm, if you can call it that, is proprietary. No one not encumbered by heaps of NDA documentation knows the full details. Most of these 'best practices' have been gleaned through inevitable but small leaks, the application of common sense, and a good healthy dose of urban legend. Think about it from a creditor point of view: they want to be lending to people with steady income, reliable residency, a history of responsible use of revolving credit, no delinquencies, closed accounts ended on good terms, and with a 'reasonable' level of credit utilization (too low and its easy to hide insolvency for a while - too high and they might run into liquidity issues). Meet a large subset of these items, and I don't reckon anything else really matters much.
|
|
#
?
Nov 11, 2013 04:31
|
|
|
Yeah, I agree with all the other posters. I mean, if she's like 20 years old it might have an impact, but otherwise I wouldn't worry about it, and I certainly wouldn't pay $35 for what's not going to amount to a lot of points on a credit score.
|
|
#
?
Nov 11, 2013 04:32
|
|
|
This thread was the kick in the rear end I needed to start taking charge of my finances. I got my RRSP moved to a much cheaper fund that more or less follows an index, and I finally opened a TFSA. As good as the e-Series is, I just went with ING Streetwise for the sake of easy. Perhaps as I read and learn more, I'll eventually make the move to e-Series like a big boy. Speaking of e-Series, I swear I read at one point that they were looking to make it more convenient to open an account than the current process. Who knows if that'll happen, but it'd be nice.
|
|
#
?
Nov 11, 2013 07:03
|
|
|
Mickles posted:This thread was the kick in the rear end I needed to start taking charge of my finances. I got my RRSP moved to a much cheaper fund that more or less follows an index, and I finally opened a TFSA. As good as the e-Series is, I just went with ING Streetwise for the sake of easy. Perhaps as I read and learn more, I'll eventually make the move to e-Series like a big boy. How much is easy (read: saves you two or three hours now and an hour twice a year for the rest of your life) worth to you?
|
|
#
?
Nov 11, 2013 12:05
|
|
|
tuyop posted:How much is easy (read: saves you two or three hours now and an hour twice a year for the rest of your life) worth to you? Few more hours and suddenly you're looking at realistic ways to retire early. OK DAD, YOU WERE RIGHT.. dammit. loving olds and their wisdom and poo poo..
|
|
#
?
Nov 11, 2013 12:11
|
|
|
Mickles posted:This thread was the kick in the rear end I needed to start taking charge of my finances. I got my RRSP moved to a much cheaper fund that more or less follows an index, and I finally opened a TFSA. As good as the e-Series is, I just went with ING Streetwise for the sake of easy. Perhaps as I read and learn more, I'll eventually make the move to e-Series like a big boy. Streetwise is a good start, but it costs 3X as much in fees. I recommend that most people go straight to TD, honestly.
|
|
#
?
Nov 11, 2013 13:50
|
|
|
Dumb question. My RSP is now converted to an e-series ready account. What is the best way to move my money from the mutual fund that it is in. Do I have to switch from the 1 fund that I have and just do it 4 times to move 20% to one of the e-series and so forth? And it seems like redeeming the fund sells it off then transfers it back into my chequing?
|
|
#
?
Nov 12, 2013 20:47
|
|
|
.
Sassafras fucked around with this message at 08:19 on Nov 26, 2013 |
|
#
?
Nov 12, 2013 21:49
|
|
|
Funds bought on no load can take years to get out without penalty, so you'll want to check on that too. I know that's an issue with mine, but I'm not yet sure what the penalty is to know if it's worthwhile just paying it or not. That MER adds up over a few years too.
|
|
#
?
Nov 13, 2013 05:32
|
|
|
slidebite posted:Funds bought on no load can take years to get out without penalty Are you loving serious? Can you point me towards a prospectus of a fund with that property? I thought I had a good handle on ripoff financial products, but this is a new low.
|
|
#
?
Nov 13, 2013 05:41
|
|
|
I asked in the other thread but didn't get a response. When we talk about 'buying bonds' as a low risk element in our portfolio, are we saying actually buying bonds or just a bond indexed ETF? Why?
|
|
#
?
Nov 13, 2013 09:50
|
|
|
Tony Montana posted:I asked in the other thread but didn't get a response. Index. Diversification.
|
|
#
?
Nov 13, 2013 13:09
|
|
|
Saltin posted:Index. Diversification. Either I'm misunderstanding you, or you're misunderstanding me. Why we buy bonds is a fundamental, but why the index rather than actual bonds? Liquidity? As it's a exchange traded stock you can sell out your position very quickly. Or do you mean diversification and in an index fund that indexes a combination of bonds - corporate and government, perhaps even different government's bonds - all further diversifying the position?
|
|
#
?
Nov 13, 2013 13:17
|
|
|
Tony Montana posted:Either I'm misunderstanding you, or you're misunderstanding me. Why we buy bonds is a fundamental, but why the index rather than actual bonds? Liquidity? As it's a exchange traded stock you can sell out your position very quickly. Or do you mean diversification and in an index fund that indexes a combination of bonds - corporate and government, perhaps even different government's bonds - all further diversifying the position? I think he means the second one.
|
|
#
?
Nov 13, 2013 13:41
|
|
|
Tony Montana posted:Either I'm misunderstanding you, or you're misunderstanding me. Why we buy bonds is a fundamental, but why the index rather than actual bonds? Liquidity? As it's a exchange traded stock you can sell out your position very quickly. Or do you mean diversification and in an index fund that indexes a combination of bonds - corporate and government, perhaps even different government's bonds - all further diversifying the position?
|
|
#
?
Nov 13, 2013 14:06
|
|
|
Alright so I was looking for market-indexed funds where I already bank, and I found this one that seems a little weird. Am I understanding this right that if the market goes down 5%, they pay out at an higher rate than if it doesn't? Right now, my RSP have a 2.35% management fee so I'm kind of looking into moving to something with a lower expense; I'd rather not move to a different institution. Their market funds seem pretty good, but I'm a bit iffy about the 5 year term, what if I want to buy a house and all that... Mind you the real estate market is probably going to need at least five years to get over itself, at this rate.
|
|
#
?
Nov 13, 2013 15:07
|
|
|
Lexicon posted:Are you loving serious? When I say years I mean 3 in my case. I'll see if I can find it in print for you, but I am going off what my broker guy said. What is the norm for no load in your experience?
|
|
#
?
Nov 13, 2013 15:18
|
|
|
Tony Montana posted:Either I'm misunderstanding you, or you're misunderstanding me. Why we buy bonds is a fundamental, but why the index rather than actual bonds? Liquidity? As it's a exchange traded stock you can sell out your position very quickly. Or do you mean diversification and in an index fund that indexes a combination of bonds - corporate and government, perhaps even different government's bonds - all further diversifying the position? Yes you're misunderstanding me. Only sophisticated investors should ever be looking at a single bond or equity issue, and even when they do, they are considering it within the context of a portfolio that comprises many issues. You can't manage that complexity. Anyone in this thread who is actually learning something should limit their investments to index or other funds which comprise a basket of bonds/equity. As an example (and just that, I am not advising this is an ideal ETF) - http://ca.ishares.com/product_info/fund/holdings/CVD.htm You can see the holdings comprise a mix of corporate debt issues with all sorts of different coupon/rate/maturity variables. You can get ones that mix federal/provincial/muni/corporate in all sorts of combinations. You cannot get access to a single issue, in general, with the right risk:return rate dynamic (read:4-7%) anyhow, because the blocks you need to buy in are often in the 6 figure range. There is no reason for a retail investor to own a single issue, ever. Saltin fucked around with this message at 15:35 on Nov 13, 2013 |
|
#
?
Nov 13, 2013 15:28
|
|
|
FrozenVent posted:Alright so I was looking for market-indexed funds where I already bank, and I found this one that seems a little weird. Am I understanding this right that if the market goes down 5%, they pay out at an higher rate than if it doesn't? I'd stay the hell away from that. There's no free lunch.
|
|
#
?
Nov 13, 2013 15:51
|
|
|
slidebite posted:When I say years I mean 3 in my case. I'll see if I can find it in print for you, but I am going off what my broker guy said. To be absolutely honest, I didn't know what to expect. That just seems utterly scandalous in light of the good options we've been discussing all thread.
|
|
#
?
Nov 13, 2013 15:53
|
|
|
Lexicon posted:Are you loving serious? Yes, it's actually quite common. Here is the prospectus for a number of Front Street funds. http://frontstreetcapital.com/files/fundfiles_public/FSMFLTD_Prospectus.pdf Check out page 16 - Redemption fees. Unless you hold for 3 years, you are charged a fee for getting out. And it's not cheap, 3% if within a year and a half. There are literally thousands of mututal funds just like this one with redemption fees. Kal Torak fucked around with this message at 16:28 on Nov 13, 2013 |
|
#
?
Nov 13, 2013 16:25
|
|
|
Kal Torak posted:Yes, it's actually quite common. Here is the prospectus for a number of Front Street funds. http://frontstreetcapital.com/files/fundfiles_public/FSMFLTD_Prospectus.pdf  You know - it's remarkable. Financial services should be among the most competitive and low-margin industries out there. Their product, money (or securities), is literally the most fungible thing that can possibly exist. Yet there are people at all levels of the chain earning tons of money for doing either nothing, or active harm to their customers. I've said it before, and I will again: vast swathes of the investing industry are predicated, indeed utterly reliant upon, consumer ignorance.
|
|
#
?
Nov 13, 2013 18:05
|
|
|
Yes, not only are you paying management fees, you're paying for the privilege of buying them on top of it. All these funds that are run by MBAs with a penchant for 50 year old scotch and Cuban cigars have to get paid somehow!
|
|
#
?
Nov 13, 2013 18:37
|
|
|
The hardest thing for me was to allocate a percentage of my current TFSA limit to a bond index. Like, I know that I need to hedge all of my aggressive equity holdings, but uuuugh I want nothing to do with the bond market right now. Operation Twist. 
|
|
#
?
Nov 13, 2013 21:46
|
|
|
|
| # ? May 14, 2024 08:14 |
|
|
Why? Are bond prices plummeting? That would be a Good Thing.
|
|
#
?
Nov 13, 2013 23:16
|
|