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I'm completely new to having income now that I've graduated university (last December), and I'm trying to start figuring out what I should do with my money. I've got a great job currently, but it's a volatile industry and I don't want to let myself feel too secure until a longer term contract is on the table. This is a breakdown of my money situation in its entirety:pre:Assets: Account Balance Rate Chequing Account $10,100.00 0.25% Savings Account $25,000.00 0.45% Total $35,100.00 Debt: Loan Balance Rate Monthly Payment National Student Loan $15,800.00 5.50% $600.00 - well above minimum payments Provincal Student Loan $5,900.00 0.00% $60.00 - minimum payments Student Line of Credit $9,000.00 4.25% Interest only, dump in $1000 every so often Loan from Parents $2,550.00 0.00% - Credit Card $- 19.99% Total $33,250.00
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Sep 14, 2014 22:13
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Electrical Fire posted:I've been reading through this thread and others and am considering (at some point) opening a TD e-series account and starting with something simple, like the Canadian Couch Potato approach. Would it be best to start into this as soon as possible, or should I just work on my student loans first? I know it doesn't make sense to have so much in savings/chequing when I could make large payments on my loans, but I think it's a psychological thing. In case it's relevant, my employer doesn't offer RRSP matching at this time. If you just pay off your national loan and your line of credit it's like a guaranteed 5% return. Keep the 0 interest stuff and invest the rest.
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Sep 14, 2014 23:28
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flashman posted:If you just pay off your national loan and your line of credit it's like a guaranteed 5% return. Keep the 0 interest stuff and invest the rest. Agreed. But he may want to consider maxing his RRSP contribution limit for this year first, depending on his marginal tax rate, if he's really into min-maxing his finances.
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Sep 14, 2014 23:35
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Rick Rickshaw posted:Agreed. But he may want to consider maxing his RRSP contribution limit for this year first, depending on his marginal tax rate, if he's really into min-maxing his finances. Where RRSP is based on last years salary I'm not sure how much space he will have, but it should be easily doable with the remainder of the funds in savings and future cheques (with 600 a month going to RRSPs now). I hosed up my first year working by setting my RRSP contribution to 18% and forgetting it (and had to pay a big chunk of taxes come tax time).
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Sep 14, 2014 23:37
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flashman posted:Also, am I correct in assuming that for these calculators where it asks your average rate of return as a percentage if I were as a thought experiment want to compare two potential investments with the same return but different MER I would subtract the MER from the potential gain? Say if I wanted to go with 4% annual ROI and compare a 2% with a .5% I would use 2% RoR for one and 3.5% RoR for the other? Like in this calculator http://saviifinancial.com/seg-funds/m-e-r-fee-calculator/ Depends on the figures you're using. Published RoRs are net of MER already so if you're using a 4% ROR because that's what you're seeing in your TD ABC Index Fund account, that's already got the MER baked in so subtracting would be double counting. If you're just looking directly at the performance of the ABC Index, then you'd have to subtract out the MER of the investable fund.
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Sep 15, 2014 03:08
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Also, assuming that you have no space used in your TFSA and you're at the bottom of your earning curve (meaning that your salary will increase), then it's a pretty good idea to save your RRSP contribution room until you can benefit much more from the tax break. Lexicon has posted a ton of info on this idea.
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Sep 15, 2014 04:49
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tuyop posted:Also, assuming that you have no space used in your TFSA and you're at the bottom of your earning curve (meaning that your salary will increase), then it's a pretty good idea to save your RRSP contribution room until you can benefit much more from the tax break. Lexicon has posted a ton of info on this idea.  It is possible to contribute without taking the deduction but it seems more hassle than it's worth to me. Forget the RRSPs until you have a highish marginal rate would be my standard approach.
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Sep 15, 2014 06:31
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Lexicon posted:
My salary will probably be in the low 6 figures this year, so I feel as though I would benefit from the tax break. Like I said though, I'm very new to this.
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Sep 15, 2014 18:41
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Electrical Fire posted:My salary will probably be in the low 6 figures this year, so I feel as though I would benefit from the tax break. Like I said though, I'm very new to this. Highly likely it's worth doing in that case. On the other hand, you're probably in a career where it's only going to go up. Maybe you should focus on the student loans for the guaranteed return, and contribute in later years?
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Sep 15, 2014 18:45
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Electrical Fire posted:My salary will probably be in the low 6 figures this year, so I feel as though I would benefit from the tax break. Like I said though, I'm very new to this. Yeah, you're at the point where the benefits are pretty negligible for waiting. If you're in Ontario your tax rate is only ~4% below its maximum, with 3% of that coming when you make over $135,000 and the remaining 1% coming over $220,000. Ontario surtax comes in there somewhere as well but I forget the threshold. However, you don't actually have any contribution room this year given you just finished school unless you had meaningful employment during school. In this case you should pay the debt first, contribute to a TFSA this year with any excess and then start RRSP contributions in 2015 when you will have some contribution room from your 2014 earnings. If you have RRSP room then I would max your contribution first, pay your debt second (5% guaranteed return > higher risky returns in most cases) then put anything beyond that in TFSA / unsheltered accounts.
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Sep 15, 2014 18:52
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Thanks for the advice everyone. For now I'll probably work out how much I want to keep in savings for a nice emergency fund and then bite the bullet and take a big chunk out of my federal loan. I'm going to keep researching and really try to get this stuff figured out. I'd like to start saving both for the long term and for potentially buying a house/condo in the next 5 years or so.
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Sep 15, 2014 19:20
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Electrical Fire posted:Thanks for the advice everyone. For now I'll probably work out how much I want to keep in savings for a nice emergency fund and then bite the bullet and take a big chunk out of my federal loan. I'm going to keep researching and really try to get this stuff figured out. I'd like to start saving both for the long term and for potentially buying a house/condo in the next 5 years or so. Can I ask what you do? Purely curious.
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Sep 15, 2014 19:34
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Electrical Fire posted:Thanks for the advice everyone. For now I'll probably work out how much I want to keep in savings for a nice emergency fund and then bite the bullet and take a big chunk out of my federal loan. I'm going to keep researching and really try to get this stuff figured out. I'd like to start saving both for the long term and for potentially buying a house/condo in the next 5 years or so. Just get a nice, big 7% interest line of credit and invest the emergency fund.
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Sep 15, 2014 19:43
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tuyop posted:Just get a nice, big 7% interest line of credit and invest the emergency fund. I can't tell if this is serious or not. I mean, I do this in a sense but have enough money lying around in various relatively liquid investments that I could liquidate to cover it if the bank yanked it. Straight out if university he's a) unlikely to get one of any material size and b) not going to have assets to pay it off if the bank yanks it in the middle of an emergency.
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Sep 15, 2014 19:49
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Yeah, the infamous spontaneous pulling of credit by the bank. Has that ever happened to anyone here? We use it all the time as a reason to keep a hefty amount of cash, but over the past eight years of having credit I've only ever had my lines increased, never decreased or canceled unless I asked. I'm just wondering how common it is to have lines of credit closed.
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Sep 15, 2014 20:30
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Lexicon posted:Can I ask what you do? Purely curious. Field engineer in the oil sands.
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Sep 15, 2014 20:49
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Electrical Fire posted:Field engineer in the oil sands. Seemingly the only way someone makes 6 figures in Canada.
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Sep 15, 2014 21:46
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Edit - Nevermind!
Capri Sunrise fucked around with this message at 04:23 on Sep 16, 2014 |
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Sep 16, 2014 03:34
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So, I discovered this thread several months ago, and I have just now finished reading every page. First things first, I want to thank all the regular posters for all their wonderful help and advice. You may very well end up changing my financial life for the better. The reason for that, is that I am what this thread would consider to be, your typical "financially ignorant" Canadian. What makes it so much worse is that I've always placed a high importance on being financially smart, and saving as much as I possibly can. A few monuments to my ignorance: 1) I had no idea that a TFSA could be used for investing 2) I had no idea that money withdrawn from a TFSA could be replaced the following year (I withdrew $10,000 two years ago, and assumed it was lost forever) 3) I currently have about $45,000 sitting in two RRSP accounts with MERs ranging from 2.75% to 2.88% 4) I have more than $35,000 sitting in a high interest savings account and a TFSA (savings account) likely waiting to be used to buy a house 10 years down the road. Now that I've caught up with the thread, I'm hoping to begin on the path of gradually getting my house in order. Right now I'm at the phase of just trying to internalize as much as I possibly can. I'm sure I'll have many questions over the coming months, so I'll keep them spaced apart so that I don't annoy everyone. Once again, thanks so much. You guys are really amazing! Bucswabe fucked around with this message at 03:49 on Sep 16, 2014 |
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Sep 16, 2014 03:47
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Those of you that shop at Costco and have a cashback amex, some news came out that Costco is not renewing their relationship. https://ca.finance.yahoo.com/news/costco-stop-accepting-amex-cards-canada-january-044001766--sector.html quote:(Reuters) - Costco Wholesale Corp said it will stop accepting American Express Co cards in Canada from next year as it will not be renewing its credit card relationship, which expires on Dec. 31. It's the only reason I got an Amex so I'll likely either never use it again or maybe even cancel it.
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Sep 18, 2014 16:48
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slidebite posted:Those of you that shop at Costco and have a cashback amex, some news came out that Costco is not renewing their relationship. Ugh. Brutal.
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Sep 18, 2014 16:58
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This is the most middle-class thread ever 
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Sep 18, 2014 17:02
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I know this has come up in the thread, but I can't find the post anywhere. Someone linked a list of financial advisors that are independant and not affiliated with any bank. Basically you paid their fee for advice as opposed to having them sign you up for products from whichever bank or institution they work for? I'm not sure if there is an actual term to describe those kinds of advisors.
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Sep 18, 2014 17:04
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Lexicon posted:This is the most middle-class thread ever Hey, I'll let you know I've got a black card.  PC Financial MC
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Sep 18, 2014 17:27
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Ashley Madison posted:I know this has come up in the thread, but I can't find the post anywhere. I'm not sure on the list, but the term is "fee-based advisor". You pay for actual financial advice, instead of being sold products that funnel your money out the arse to the originating
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Sep 18, 2014 18:11
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Thanks kindly. My advisor works for the Investment Planning Counsel and he's been very helpful, but I'm going to have to take it over for myself eventually.
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Sep 18, 2014 18:26
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Bloomberg saying Costco to accept Capital One Mastercard (maybe all Mastercards?). http://www.bloomberg.com/news/2014-09-18/capital-one-said-to-replace-amex-as-costco-canada-issuer.html Kal Torak fucked around with this message at 21:47 on Sep 18, 2014 |
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Sep 18, 2014 21:41
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I just got a new credit card (BMO World Elite). I would very much prefer if the billing cycle was roughly in alignment with calendar months. I haven't phoned to activate it yet - should I wait until month end to ensure this, or will it already be set? Of course I could phone to ask - but that runs the risk of it getting actually activated – prematurely!
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Sep 18, 2014 23:20
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You're NOBODY until you have have an HSBC Premier account I don't have one
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Sep 19, 2014 01:34
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Cultural Imperial posted:You're NOBODY until you have have an HSBC Premier account I'm SO interested. Their website had pictures of yachts and other aspirational photos. What else do I get for my $100k "relationship balance"?
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Sep 19, 2014 02:09
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It's kind of a scam. Supposedly it makes moving money between countries much easier and it allows you to open an account in a foreign country easy. If you've ever had to open a bank account in a foreign country, especially one in the EU, holy moly you will understand what I'm talking about and how this is a benefit. Also, access to an HSBC wealth manager  Mostly it's the ultimate way of showing people you're rich when you pull an HSBC premier debit card out of your wallet.
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Sep 19, 2014 02:32
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Cultural Imperial posted:It's kind of a scam. Supposedly it makes moving money between countries much easier and it allows you to open an account in a foreign country easy. If you've ever had to open a bank account in a foreign country, especially one in the EU, holy moly you will understand what I'm talking about and how this is a benefit. So... Worth it! Gonna switch everything over next year when we hit 100k in assets. 
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Sep 19, 2014 02:52
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Never heard of them until just now tbh but I love the disclaimer at the bottom that says 'WE ARE NOT A BANK. YOU ARE NOT CDIC INSURED. YOU ARE NOT INSURED FROM ANY OTHER PRIVATE OR PUBLIC AGENCY. YOU MAY LOSE VALUE' Also for the dude that asked about fee only advisors, here you go.
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Sep 19, 2014 15:25
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Guest2553 posted:Also for the dude that asked about fee only advisors, here you go. Thank you very much! 
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Sep 19, 2014 16:52
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I just have had a series of the worst interactions with my bank I think I've had in my life with any company. How bad does it hit my credit rating if I cancel my line of credit and move it to a new bank?
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Sep 20, 2014 07:01
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DariusLikewise posted:I just have had a series of the worst interactions with my bank I think I've had in my life with any company. How bad does it hit my credit rating if I cancel my line of credit and move it to a new bank? Not a huge amount and not for a significant amount of time. It's much easier these days to switch banks so if yours is poo poo there's almost no reason to stay. You should try to lever your new bank into giving you better rates by hinting at all the business you might bring them while you're talking about switching.
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Sep 20, 2014 10:47
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Kal Torak posted:Bloomberg saying Costco to accept Capital One Mastercard (maybe all Mastercards?). https://ca.finance.yahoo.com/news/costco-canada-parting-ways-american-express-says-options-173547454.html quote:MasterCard Canada has also reached an agreement for Costco Canada to accept any issuer's MasterCard, not just those from Capital One.
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Sep 20, 2014 16:05
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Kalenn Istarion posted:Not a huge amount and not for a significant amount of time. It's much easier these days to switch banks so if yours is poo poo there's almost no reason to stay. You should try to lever your new bank into giving you better rates by hinting at all the business you might bring them while you're talking about switching. Good to know. I've been with Scotiabank since I was 13, was a little worried about switching, but I don't think it can get any worse.
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Sep 20, 2014 18:23
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DariusLikewise posted:Good to know. I've been with Scotiabank since I was 13, was a little worried about switching, but I don't think it can get any worse. Seriously, there's no point in this bank loyalty that so many Canadians insist on having. It's a business relationship, not a family member.
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Sep 20, 2014 18:55
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DariusLikewise posted:Good to know. I've been with Scotiabank since I was 13, was a little worried about switching, but I don't think it can get any worse. If you don't do a bunch of in-branch banking, I'd highly recommend PC Financial. You can use CIBC machines fee-free which makes deposits and everything a snap if you don't have a PCF machine nearby.
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Sep 20, 2014 19:01
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