Canadian Finance and Investing Thread - Paying More is our National Pastime

The Something Awful Forums > Discussion > Ask/Tell > Business, Finance, and Careers > Canadian Finance and Investing Thread - Paying More is our National Pastime

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slidebite: Nov 6, 2005; Good egg

Crell posted:

Great, that clears up a bunch of stuff.

A follow up question about the TFSA. I have about $17k sitting in my regular old savings account for a house downpayment. I'm not sure when I'm buying a house as I'm in no hurry, but it could be as early as this year. If put some of that money into a TFSA and invest in the e-series, can I sell some/all of the funds and withdraw it right away to go towards my house down payment without incurring any penalties? I figure if I can do that it would be much more worthwhile to have my savings sitting in the TFSA rather then the "high" interest e-savings account.

If you really think you're going to pull the money out within a year, I'd probably keep it in a high interest :lol:

savings myself. Short term rates are so lovely right now, the only way you're going to make some cash is to take a real risk.

PC:F interest first account is 1.35%, while lovely, is better than pretty much any short term GIC you'd be able to get. Of course you're paying tax on that interest though out of a sheltered account, so YMMV. That's where I keep our liquid cash savings.

http://www.banking.pcfinancial.ca/mkt/bankaccounts/interestplussavingsaccount-en.html

slidebite fucked around with this message at 06:23 on Jan 10, 2014

# ? Jan 9, 2014 20:35

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# ? May 14, 2024 01:57

Kreez: Oct 18, 2003

I am finally at a point where I can start investing some money. Starting Feb 1, I'd like to start putting away $500/mo. I have all my TFSA room still available ($31,000?).

Would opening a TFSA account with Questrade and buying couchpotato recommended ETFs every month be a reasonable strategy? I started going through the process of signing up and hit a few options in the set up process that make me uncomfortable and decided to ask here. Figured I should ask if the idea in general is a good one first though.

# ? Jan 9, 2014 20:39

Lexicon: Jul 29, 2003; I had a beer with Stephen Harper once and now I like him.

Kreez posted:

I am finally at a point where I can start investing some money. Starting Feb 1, I'd like to start putting away $500/mo. I have all my TFSA room still available ($31,000?).

Would opening a TFSA account with Questrade and buying couchpotato recommended ETFs every month be a reasonable strategy? I started going through the process of signing up and hit a few options in the set up process that make me uncomfortable and decided to ask here. Figured I should ask if the idea in general is a good one first though.

Others may disagree, but I usually recommend new investors start out with TD e-series mutual funds, not ETFs. I realize that Questrade has free ETF purchases, but that may not persist forever. At this stage, your priority is to invest regularly, and learn to not freak out at the occasional fluctuations in value of your portfolio (this is a bigger deal than it sounds. Human loss aversion is a powerful, irrational force). The ETF world has the potential to be significantly more complicated, and even cause analysis-paralysis of sorts.

When you have, say, $2X,XXX worth of a portfolio, it is likely to be worth upgrading to ETFs.

The way I see it: e-series is the entry-point to Index Investing 101, and ETFs are an upper level course.

# ? Jan 9, 2014 20:52

tuyop: Sep 15, 2006; Every second that we're not growing BASIL is a second wasted; Fun Shoe

Crell posted:

Thanks a bunch Kal Torak, I'll make sure to look into early redemption rules on the funds I buy and weigh my options about putting the savings into the market. I certainly haven't made any final decisions yet, this was more for fact finding and clarity on the subject so I can make the (hopefully) right choice.

The general rule of thumb is to stay away from the market unless you don't need the money for at least 5 years, and then to stick pretty hard to a low risk/bond-heavy allocation. ING has a promotional rate of 2.5% on right now. If I were you I'd just troll around the promotional savings rates that PCF and ING go through all the time and move your money in and out as the offers expire.

# ? Jan 9, 2014 22:20

Kreez: Oct 18, 2003

Lexicon posted:

Others may disagree, but I usually recommend new investors start out with TD e-series mutual funds, not ETFs. I realize that Questrade has free ETF purchases, but that may not persist forever. At this stage, your priority is to invest regularly, and learn to not freak out at the occasional fluctuations in value of your portfolio (this is a bigger deal than it sounds. Human loss aversion is a powerful, irrational force). The ETF world has the potential to be significantly more complicated, and even cause analysis-paralysis of sorts.

When you have, say, $2X,XXX worth of a portfolio, it is likely to be worth upgrading to ETFs.

The way I see it: e-series is the entry-point to Index Investing 101, and ETFs are an upper level course.

Opening a TD e-series account just seems like a pain in the rear end compared to opening a Questrade account.

# ? Jan 10, 2014 01:27

Lexicon: Jul 29, 2003; I had a beer with Stephen Harper once and now I like him.

Kreez posted:

Opening a TD e-series account just seems like a pain in the rear end compared to opening a Questrade account.

Honestly, it's a pain in the rear end either way.

# ? Jan 10, 2014 01:35

Kal Torak: Jul 17, 2003; When Giles sends me on a mission, he says "please". And afterwards I get a cookie.

Kreez posted:

Opening a TD e-series account just seems like a pain in the rear end compared to opening a Questrade account.

I think you're fine in ETFs. Especially since Questrade lets you buy them for free.

# ? Jan 10, 2014 01:36

FrozenVent: May 1, 2009; The Boeing 737-200QC is the undisputed workhorse of the skies.

If my employer refunds part of my cell phone plan, is that taxable?

# ? Jan 10, 2014 04:02

slidebite: Nov 6, 2005; Good egg

I asked Mrs. Slidebite, part engineer, part accountant, all number guru.

Generally speaking yes, it would be. As for dealing with it, it would depend how it is reimbursed to you.

If it's just on your stub with your paycheck, it's probably properly taxed already so you don't need to do anything.

If you just get reimbursed separate from your normal pay (say you get a separate expense cheque), you should likely be reporting it as "additional income" on your T1.

Note: If it's required for you to have a cellphone for your job, you might be able to claim the expense if your employer will do a T2200. Alternatively, if you have a higher end cell plan because of work you might be able to expense the difference in plans.

Or, you could alternatively play dumb and not do anything which is probably what 90% of the population would do. :v:

If you want to dig in this and get the specific part of the tax code, she offered to look it up for me tomorrow.

slidebite fucked around with this message at 06:24 on Jan 10, 2014

# ? Jan 10, 2014 06:03

FrozenVent: May 1, 2009; The Boeing 737-200QC is the undisputed workhorse of the skies.

Thanks - I'll check what other people at work do. It's a separate expense check, not on the stub.

Before I showed up they just handed out blackberries, so I don't know if this is an issue that's been addressed in the past. The phone is required, I'll check if they'd do the paperwork.

FrozenVent fucked around with this message at 06:21 on Jan 10, 2014

# ? Jan 10, 2014 06:18

slidebite: Nov 6, 2005; Good egg

Revenue Canada has been making rumblings of company issued cell phones to be a mandatory taxable benefit since they're becoming a very common perk. I wouldn't be surprised if they start running with that in the coming years.

# ? Jan 10, 2014 06:20

FrozenVent: May 1, 2009; The Boeing 737-200QC is the undisputed workhorse of the skies.

I don't know that I'd call it a perk, I'm using the phone I had before with a bunch of stuff tacked onto the plan (calls within Canada are no longer long distances! A whole TEN voicemail messages!). I'm coming out maybe $30 ahead of where I was before, but now I get emails at all hours of the day.

FrozenVent fucked around with this message at 06:27 on Jan 10, 2014

# ? Jan 10, 2014 06:24

slidebite: Nov 6, 2005; Good egg

I agree

I have a company issued Galaxy and I'd rather not have one. Part of the job in this day and age though. I admit, I'd be lying if I said it was 100% company and 0% personal though.

I am pretty sure I know what your coworkers are going to say they do

# ? Jan 10, 2014 06:30

DariusLikewise: Oct 4, 2008; You wore that on Halloween?

Having a work phone is one of the worst things about my job, mostly being on call 4 days a week though.

Anyone have a resources on how to handle the tax part of owning a small business? I can find a lot of info on running a startup in the US but Canadian info seems to be lacking. I'm assuming I want to keep everything separate from my personal finances then assign myself pay from that when it starts to make money?

# ? Jan 10, 2014 20:35

HookShot: Dec 26, 2005

Is your small business incorporated, or a sole proprietorship?

# ? Jan 10, 2014 21:12

Lexicon: Jul 29, 2003; I had a beer with Stephen Harper once and now I like him.

DariusLikewise posted:

Anyone have a resources on how to handle the tax part of owning a small business? I can find a lot of info on running a startup in the US but Canadian info seems to be lacking. I'm assuming I want to keep everything separate from my personal finances then assign myself pay from that when it starts to make money?

Talk to an accountant. Seriously. If you are unable to afford the investment of a few hundred dollars (at most - many will give you an initial consultation for free as a means of business development for them), I'd question the wisdom of being involved in a startup at all.

# ? Jan 10, 2014 21:21

Lexicon: Jul 29, 2003; I had a beer with Stephen Harper once and now I like him.

Asking for a friend: anyone have any suggestions on how optimally to park a largeish amount of USD (think high five figure) at a Canadian bank or discount brokerage for a couple of years? The interest rates on USD-denominated savings accounts are terrible. Something safer than investing in VTI but with a higher return than savings would be ideal.

# ? Jan 12, 2014 18:25

rhazes: Dec 17, 2006; Reduce the rectal spread!
Use glory holes instead!

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Lexicon posted:

Asking for a friend: anyone have any suggestions on how optimally to park a largeish amount of USD (think high five figure) at a Canadian bank or discount brokerage for a couple of years? The interest rates on USD-denominated savings accounts are terrible. Something safer than investing in VTI but with a higher return than savings would be ideal.

Maybe look into VGSH or BSV (US-listed), or create your own USD market-linked term deposit/GIC by buying USD strip bonds of the appropriate duration that at maturity will pay you back your principal, and say VTI with the remainder? See here: http://canadiancouchpotato.com/2012/06/11/a-homemade-principal-protected-note/ . Not sure how to go about doing that with 50k at a Canadian broker, but you could look into it. I'd say these are your best bets.

Looking at USD term deposits, the interest rates are absolutely poo poo. I think the second option would be safest, but could be a lot of work to set up.

# ? Jan 12, 2014 22:31

Lexicon: Jul 29, 2003; I had a beer with Stephen Harper once and now I like him.

That's an interesting suggestion, thanks!

# ? Jan 14, 2014 04:22

Lexicon: Jul 29, 2003; I had a beer with Stephen Harper once and now I like him.

Pretty big news today: RBC Direct Investing is switching to a $9.95 per trade pricing scheme for all investors, regardless of portfolio size (so no need to maintain > $50k).

http://online.wsj.com/article/PR-CO-20140114-903716.html

# ? Jan 14, 2014 16:16

cowofwar: Jul 30, 2002; by Athanatos

Lexicon posted:

Pretty big news today: RBC Direct Investing is switching to a $9.95 per trade pricing scheme for all investors, regardless of portfolio size (so no need to maintain > $50k).

http://online.wsj.com/article/PR-CO-20140114-903716.html

Do they still charge a quarterly fee if your portfolio is below a certain size? That's why I left them.

# ? Jan 14, 2014 17:10

Kal Torak: Jul 17, 2003; When Giles sends me on a mission, he says "please". And afterwards I get a cookie.

cowofwar posted:

Do they still charge a quarterly fee if your portfolio is below a certain size? That's why I left them.

$25 if less than 15K.

http://www.rbcdirectinvesting.com/commissions-fees-schedule.html#fees

# ? Jan 14, 2014 17:15

cowofwar: Jul 30, 2002; by Athanatos

Kal Torak posted:

$25 if less than 15K.

http://www.rbcdirectinvesting.com/commissions-fees-schedule.html#fees

Yeah, gently caress them, then. RBC loves to double dip and nickle and dime. Lots of better alternatives in Canada.

# ? Jan 14, 2014 18:15

Kal Torak: Jul 17, 2003; When Giles sends me on a mission, he says "please". And afterwards I get a cookie.

cowofwar posted:

Yeah, gently caress them, then. RBC loves to double dip and nickle and dime. Lots of better alternatives in Canada.

All the big banks are the same. That's why I use Questrade for registered accounts and IB for margin.

# ? Jan 14, 2014 18:16

Lexicon: Jul 29, 2003; I had a beer with Stephen Harper once and now I like him.

Kal Torak posted:

All the big banks are the same. That's why I use Questrade for registered accounts and IB for margin.

Even Questrade has inactivity fees too (I don't recall the thresholds but they do exist). They all try to nickel and dime in one form or another - that's practically the primary competency required in running a successful financial institution.

Personally, I like $BIG_5_DISCOUNT_BROKERAGE because I want as little disruption as possible to my long-term investments, and I know with close to 100% certainty that Investorline, the outfit I use, will still exist its current form in 10 years time. I'll be amazed if Questrade does (though I certainly hope they do of course). The difference in trading fees per year (~ $70 versus $20 or whatever) is worth paying, for me, for that assurance.

# ? Jan 14, 2014 19:00

Jolarix: Feb 28, 2004; Your reading skill has increased by +1 point(s).

As a RBCDI client, this is great news!

Kal Torak posted:

$25 if less than 15K.

Keep in mind, if you set up a $100/month PPP deposit, the $25 fee is waived. This is what I'm doing now, just to avoid the hassle of switching my RRSP out of RBC (plus hey, $100 in incentivised/mandatory contributions).

# ? Jan 14, 2014 19:03

slidebite: Nov 6, 2005; Good egg

OK, I'm pretty much in like flynt. I think I'll move it all over to RBCDI. Need to talk it over with the Mrs, but that sounds pretty good.

What's their investing tools/interface like?

# ? Jan 14, 2014 22:03

Vehementi: Jul 25, 2003; YOSPOS

Questtrade has "Inactivity fee (under $5,000 combined equity) $19.95/quarter". The fine print is kind of interesting at http://www.questrade.com/pricing/admin_fees

# ? Jan 14, 2014 23:26

anitsirK: May 19, 2005

I'm trying to figure out the MER on the funds I've got available to me in my employer-matched RRSP.

Here's an example of one. The top of the fact sheet calls it "Canadian Equity Index Fund (TDAM)"

quote:

Fund code: S120
Asset class: Canadian equity
Asset category: Canadian Equity
Fund inception date: January 2004
Segregated fund size: $331.1 million
Underlying fund: Emerald Canadian Equity Index Fund
Underlying fund size: $5198.2 million
Total fund operating expenses
2012 2011 2010
0.051% 0.046% 0.052%

That last line can't possibly be the MER, right? I found another table in the materials that are linked in my account that lists "annualized charges", and for this fund, it lists 0.681%. It looks like it's this fund, but I still don't see anything listed as an MER, but I only skimmed the linked documents.

I'm just trying to figure out what I'm potentially losing by sticking with what my plan makes available, vs the amount of the employer match.

# ? Jan 15, 2014 03:53

rhazes: Dec 17, 2006; Reduce the rectal spread!
Use glory holes instead!

An official message from the British Columbia Centre for Disease Control

I'm sticking with Questrade, but I am certain that a lot of medium to big portfolios (say, 300k+) would do well with RBC DI now, if they had the choice. That quarterly inactivity fee is only for teeny accounts- I understand why they have it at most brokerages and I don't find it unreasonable- those tiny accounts probably are a net loss to the company.

TD Waterhouse's trades are what, $30, unless you have a large portfolio? I bet they'll have to cut fees as well.

# ? Jan 15, 2014 06:11

Kal Torak: Jul 17, 2003; When Giles sends me on a mission, he says "please". And afterwards I get a cookie.

rhazes posted:

I'm sticking with Questrade, but I am certain that a lot of medium to big portfolios (say, 300k+) would do well with RBC DI now, if they had the choice. That quarterly inactivity fee is only for teeny accounts- I understand why they have it at most brokerages and I don't find it unreasonable- those tiny accounts probably are a net loss to the company.

TD Waterhouse's trades are what, $30, unless you have a large portfolio? I bet they'll have to cut fees as well.

But nothing has changed with medium/big portfolios. This only removes the 50K restriction. You can trade for 9.99 at any of the big banks if you have 50K.

# ? Jan 15, 2014 06:15

rhazes: Dec 17, 2006; Reduce the rectal spread!
Use glory holes instead!

An official message from the British Columbia Centre for Disease Control

Kal Torak posted:

But nothing has changed with medium/big portfolios. This only removes the 50K restriction. You can trade for 9.99 at any of the big banks if you have 50K.

OK then, well, it's still not good, but at least the people at the wrong brokerage for the amount they have aren't getting fleeced as bad as they used to be?

# ? Jan 15, 2014 06:31

Lexicon: Jul 29, 2003; I had a beer with Stephen Harper once and now I like him.

rhazes posted:

OK then, well, it's still not good, but at least the people at the wrong brokerage for the amount they have aren't getting fleeced as bad as they used to be?

It's definitely good. The 9.95 threshold used to be at 500k, not 50k. Now it's zero, at RBC at least.

It's progress for the consumer, in a country and industry not especially reputed for striving to deliver that.

# ? Jan 15, 2014 06:46

Jolarix: Feb 28, 2004; Your reading skill has increased by +1 point(s).

Lexicon posted:

It's definitely good. The 9.95 threshold used to be at 500k, not 50k. Now it's zero, at RBC at least.

It's progress for the consumer, in a country and industry not especially reputed for striving to deliver that.

Also RBC allows you to trade all Mutual Funds for free, and only charges fees on Stocks, ETFs, etc. Not sure if this is unique to RBC, but it sure is nice.

# ? Jan 15, 2014 14:57

Lexicon: Jul 29, 2003; I had a beer with Stephen Harper once and now I like him.

Jolarix posted:

Also RBC allows you to trade all Mutual Funds for free, and only charges fees on Stocks, ETFs, etc. Not sure if this is unique to RBC, but it sure is nice.

Pretty standard actually.

# ? Jan 15, 2014 15:13

Demon_Corsair: Mar 22, 2004; Goodbye stealing souls, hello stealing booty.

Does anyone have comparable mutual funds to the td e-series? I am so fed up with their bullshit that I don't care if it costs a little more.

# ? Jan 16, 2014 00:16

Lexicon: Jul 29, 2003; I had a beer with Stephen Harper once and now I like him.

Demon_Corsair posted:

Does anyone have comparable mutual funds to the td e-series? I am so fed up with their bullshit that I don't care if it costs a little more.

Only if you're prepared to pay 2-3x as much (at least) in MER fees.

# ? Jan 16, 2014 20:36

Lexicon: Jul 29, 2003; I had a beer with Stephen Harper once and now I like him.

This is a fascinating concept: Management Expense Ratio per Quarter-century (MERQ): http://www.michaeljamesonmoney.com/2012/02/merq-is-too-extreme-to-be-believable.html

Michael James posted:

One thing I�ve discovered about the MERQ in casual discussions is that many people simply don�t believe it. For example, the Investors Group Beutel Goodman Canadian Balanced Fund Series A has an MER of 2.89% which translates into an MERQ of 51.4%! This means that after 25 years, more than half of your portfolio would be consumed by fees.

In contrast, a balanced portfolio of index ETFs from iShares (XIU and XBB) has an MER of 0.235% for an MERQ of 5.7%. So, a portfolio that would have come in at a million dollars without fees would end up with $486,000 with the Investors Group fund and $943,000 with the iShares ETFs.

Most of these mutual fund jokers are outright thieves.

# ? Jan 16, 2014 20:40

Saltin: Aug 20, 2003; Don't touch

Lexicon posted:

Most of these mutual fund jokers are outright thieves.

That is a phenomenal metric and really needs to be mandatory on all prospectuses immediately, and since people don't read those, fund salespeople should have to tell the client before selling to them.

# ? Jan 17, 2014 00:25

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# ? May 14, 2024 01:57

Vehementi: Jul 25, 2003; YOSPOS

But Saltin, *my* mutual fund outperforms the market, so this is not a fair comparison! Just look at the historical performance!

# ? Jan 17, 2014 00:30

The Something Awful Forums > Discussion > Ask/Tell > Business, Finance, and Careers > Canadian Finance and Investing Thread - Paying More is our National Pastime

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