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

«‹›223 »

Guest2553: Aug 3, 2012

I made my first RRSP contribution last week and used it to buy something today :toot:

It's a spousal RRSP since I'm the only one working - and it's admittedly not much because of the pension adjustment I get - but I'm one stop closer to maxing out TFSA/RRSP this year, and maybe even opening up an unregistered account. It's all pretty exciting for me considering that 3 years ago I had recently started evening/weekend post-grad classes while working full time, just found out I was having a kid, and had a net worth of 33% annual salary that sat in a cash chequing account. By the end of this year I should have a net worth that's about double my current salary that's entirely liquid (92% ETFs, remainder cash), due in part to some of the people in this thread who took the time to answer dumbass questions from a stupid newbie. Thanks goons :allears:

The one thing I haven't hashed out yet is asset locations. All 3 accounts are holding the same ETFs, but I figure the drag from that is way less than being out of the market until the stars are aligned just so. It'll be my thing to figure out for next year since I'll have an open account to worry about... :shepface:

# ? Jun 22, 2016 21:20

Adbot: ADBOT LOVES YOU

# ? May 17, 2024 19:48

namaste friends: Sep 18, 2004; by Smythe

https://www.investor.gov/tools/calculators/compound-interest-calculator

https://en.wikipedia.org/wiki/Registered_Retirement_Savings_Plan

quote:

Contributions to RRSPs are deductible from total income, reducing income tax payable for the year in which the contributions are claimed.[4] No income earned in the account is taxed (including interest, dividends, capital gains, foreign exchange gains, mortality credits, etc.).[5] Most withdrawals are taxed as income when they are withdrawn.[6] This is the same tax treatment provided to Registered Pension Plans established by employers.[7][8]

jesus loving christ man

# ? Jun 22, 2016 22:51

Guest2553: Aug 3, 2012

If that's a swipe at me I'm not savvy enough to get it

# ? Jun 23, 2016 01:43

cowofwar: Jul 30, 2002; by Athanatos

I'm assuming that he is trying to imply that RRSP allocation should be weighed towards income generating assets like dividend funds.

# ? Jun 23, 2016 01:48

Subjunctive: Sep 12, 2006; ✨sparkle and shine✨

cowofwar posted:

I'm assuming that he is trying to imply that RRSP allocation should be weighed towards income generating assets like dividend funds.

Why?

# ? Jun 23, 2016 01:52

cowofwar: Jul 30, 2002; by Athanatos

Subjunctive posted:

Why?

http://canadiancouchpotato.com/2013/10/30/making-smarter-asset-location-decisions/

# ? Jun 23, 2016 02:15

Postess with the Mostest: Apr 4, 2007; Arabian nights
'neath Arabian moons
A fool off his guard
could fall and fall hard
out there on the dunes

Guest2553 posted:

If that's a swipe at me I'm not savvy enough to get it

quote:

I made my first RRSP contribution last week and used it to buy something today

I think nf maybe thinks you bought some consumer good with the RRSP money, thinking you could just put it in, get the refund, take it out and then spend it. I did something like that once because I'm retarded. You probably meant that you bought some stock or ETF inside your RRSP. What did you buy?

# ? Jun 23, 2016 02:21

Guest2553: Aug 3, 2012

Ikantski posted:

I think nf maybe thinks you bought some consumer good with the RRSP money, thinking you could just put it in, get the refund, take it out and then spend it. I did something like that once because I'm retarded. You probably meant that you bought some stock or ETF inside your RRSP. What did you buy?

That makes sense. I got about 13k XEF, 10k VUN, and 7k VAB. It should trigger about 10k in refund next year, which will in turn be invested.

cowofwar posted:

http://canadiancouchpotato.com/2013/10/30/making-smarter-asset-location-decisions/

Still not getting it :ohdear:

In the meantime I'm standing by 'perfect is the enemy of good'.

# ? Jun 23, 2016 02:37

Subjunctive: Sep 12, 2006; ✨sparkle and shine✨

cowofwar posted:

http://canadiancouchpotato.com/2013/10/30/making-smarter-asset-location-decisions/

That says the opposite:

quote:

All the tax-inefficient bonds are now safely in your RRSP, while the US stocks are in your non-registered account, where the foreign withholding taxes on dividends are recoverable and you can benefit from tax-loss harvesting.

The only mention of dividends says to put outside the RRSP, no?

But if we're tossing around links instead of writing explanations, I offer http://www.theglobeandmail.com/globe-investor/investment-ideas/beware-of-these-three-rrsp-myths/article9235153/?service=mobile

# ? Jun 23, 2016 03:29

Femtosecond: Aug 2, 2003

If I wanted to gamble on Britain staying in and there being a big rally tomorrow, what do you think would be the best + laziest way to bet on that? Maybe some Europe oriented ETF...? Any recommendations?

# ? Jun 23, 2016 16:32

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

Femtosecond posted:

If I wanted to gamble on Britain staying in and there being a big rally tomorrow, what do you think would be the best + laziest way to bet on that? Maybe some Europe oriented ETF...? Any recommendations?

http://www.williamhill.com/

# ? Jun 23, 2016 17:03

Femtosecond: Aug 2, 2003

Lexicon posted:

http://www.williamhill.com/

it's raining today and I don't want to go down to the horse races.

# ? Jun 23, 2016 17:08

Femtosecond: Aug 2, 2003

Oh wait they've actually been taking Brexit bets.. hahah. Well at least in Britain. I don't see anything on this website.

quote:

�Brexit� Vote Already Has a Winner: The Gambling Industry
A single screen attracts Mr. Howe's interest: one showing the odds on the so-called Brexit. They have in recent days tilted heavily toward Britain sticking with the European Union. A bet of 9 pounds to remain (about $13.24) fetches a profit of only �2 (less than $3). By late afternoon, the odds slide even more, showing an 80 percent chance that voters will maintain Britain's place in the European Union.

Far from a curiosity, the gambling markets stand as a rare source of something approximating clarity in the face of Brexit-borne confusion, assuming they turn out to be right.

Political polls have generally shown a divided electorate. Until last week, when a member of Parliament who had advocated remaining in Europe was murdered, a vote to leave seemed marginally likely. Investors absorbed polls and sent markets on a wild plunge, selling the British pound and London stocks in anticipation of a Brexit. Then those markets jumped when the polls edged back toward remain.

All the while, gamblers held firm, signaling faith that economic concerns would ultimately triumph over the politics of identity. While the margin tightened for a while, the people voting with money concluded that the electorate would stick with Europe.

In much of the world, the prospect that Britain will really walk away from Europe has generated unease. The vote alone has unleashed troubling uncertainty through world markets as traders, businesses and policy makers struggle to anticipate what might happen.

But in one corner of the commercial world � the gambling industry � not knowing what will happen amounts to an exploitable asset. To bookmakers, uncertainty is the midwife of all wagers. Brexit presents the perfect swirl of unpredictable forces: a potentially grave geopolitical risk that has provoked fratricide in Britain's ruling Conservative Party, dominating news coverage. Everyone is paying attention. No one knows how it will end.

"The betting is just massive," says Mike Smithson, founder and editor of PoliticalBetting.com, a website that is something like a Bloomberg terminal for people who wager on political events. He characterizes the referendum as "the biggest political betting event of all time, anywhere."

On Tuesday and Wednesday alone, the Brexit vote attracted wagers worth more than �3 million ($4.4 million), most of it via online transactions, and three-fourths landing on remain, Mr. Smithson estimated.

This is the picture that confronts Mr. Howe, 44, a chef at a nearby pub, as he enters William Hill Wednesday afternoon, aiming to use Britain's referendum to earn some cash.

"I think it will be remain, but the odds are crap," he says.

Hoping for better odds, he resolves to wait before making a bet sometime in the next few hours. He might bet in accord with his heart � to leave � given the financial appeal. A bet for Britain to abandon Europe is offering the gratifying returns of the long shot, a profit of �3 (about $4.41) for a �1 bet (about $1.47).

"I like to mix it up," Mr. Howe says, recounting how he just managed to collect on a complex bet involving the European soccer championship: Germany won, Poland won, and Spain and Croatia both scored goals, combining to trigger his payout. "If there's no horse I like or football I like, then I'll put a tenner on leave."

William Hill, the largest bookmaker in Britain, assumes the industry will collectively count wagers reaching �20 million (more than $29 million) before the Brexit results are in, according to a spokesman, Graham Sharpe. The company is hopeful its own tally will eclipse the �3.25 million in wagers ($4.8 million) it saw during the last giant political referendum, the 2014 vote on whether Scotland should leave the United Kingdom. In that case, the polls had the race too close to call while the gambling markets got it right: Scotland stayed.

Lest one get the impression that Las Vegas ought to reserve dedicated space for the workings of British democracy, it is worth noting that these numbers are paltry compared to the behemoths of British gambling: soccer and horse-racing.

"I think it will be remain, but the odds are crap," he says.

Hoping for better odds, he resolves to wait before making a bet sometime in the next few hours. He might bet in accord with his heart � to leave � given the financial appeal. A bet for Britain to abandon Europe is offering the gratifying returns of the long shot, a profit of �3 (about $4.41) for a �1 bet (about $1.47).

"I like to mix it up," Mr. Howe says, recounting how he just managed to collect on a complex bet involving the European soccer championship: Germany won, Poland won, and Spain and Croatia both scored goals, combining to trigger his payout. "If there's no horse I like or football I like, then I'll put a tenner on leave."

William Hill, the largest bookmaker in Britain, assumes the industry will collectively count wagers reaching �20 million (more than $29 million) before the Brexit results are in, according to a spokesman, Graham Sharpe. The company is hopeful its own tally will eclipse the �3.25 million in wagers ($4.8 million) it saw during the last giant political referendum, the 2014 vote on whether Scotland should leave the United Kingdom. In that case, the polls had the race too close to call while the gambling markets got it right: Scotland stayed.

Lest one get the impression that Las Vegas ought to reserve dedicated space for the workings of British democracy, it is worth noting that these numbers are paltry compared to the behemoths of British gambling: soccer and horse-racing.

William Hill estimates that the bookmaking industry will rack up wagers of �500 million ($735 million) on the European Championships. A World Cup final alone tends to attract �200 million ($294 million) in wagers to William Hill's books.

Part of the reason betting on politics is so tiny compared to sports stems from a fact that may shock in this age of Trump-Clinton-Brexit-yakety-yak-saturation: There isn't enough politics to sate the bookmakers.

"In betting terms, there are relatively few events," Mr. Sharpe says.

While political betting may be a mere niche, it goes back centuries. As far back as 1503, Roman banking houses offered trades predicting who would emerge as the next pope from the papal conclave, according to Leighton Vaughan Williams, director of the betting research unit at Nottingham Business School in England. From the United States Civil War through 1940, Americans were placing bets on the presidential election on stock exchanges, a practice that consistently favored the eventual winner.

"People trading in the betting markets are looking at all the information that's available," Mr. Vaughan Williams says. "The polls are only one thing. The people who trade in the betting markets are looking at all the information."

Ironically, the glimpse of certainty emanating from the betting markets may be limiting the appeal of wagering on Brexit.

As Ingrid Sambade arrives at the William Hill shop Wednesday morning, she is eager to put her money where her heart is � with Europe. A Spaniard by birth, she makes her living cleaning homes.

"I'm in!" she says. "If they go out, they can't come back in, so the best thing is to stay in and everyone will be happy."

But Ms. Sambade, 69, is less happy when she calculates the skimpy winnings she will claim from a successful remain bet.

"It has terrible value for you," the man behind the counter tells her. He suggests she focus on more speculative questions, like the margin of victory and the size of turnout.

"I don't bet nothing," Ms. Sambade says. "It don't give you much."

Colin Hammond takes one look at the board and concurs.

"I think they'll stay, and there's no value in that bet," he says, before turning his attention to his traditional area for wagering. "I know more about football."

Ask for his opinion, and David Howe eagerly tells you how he hopes Britain will leave the European Union.

"We need to take control of our borders," he says.

But these sentiments are, at the moment, as valuable to him as his personal views on Her Majesty's latest hat. He is more keen to know how the rest of the British electorate is inclined so he can win some money.

Mr. Howe is standing inside a William Hill gambling shop near Westminster, home to the British Parliament. It is midday Wednesday, less than 24 hours before British voters will go to the polls to determine the political geography of Europe. Video roulette machines flicker behind him. Televisions above him beam in dog races from hither and yon.

# ? Jun 23, 2016 17:11

Femtosecond: Aug 2, 2003

I'm just half joking about the Brexit gamble. All of my investments are in US equities and I've been thinking that I should probably diversify and invest in other areas for months. The Brexit headlines this morning just reminded me of this.

# ? Jun 23, 2016 17:59

Aagar: Mar 30, 2006; E/N Gestapo
I am talking to a mod right now about getting you probated/banned/gassed

Femtosecond posted:

I'm just half joking about the Brexit gamble. All of my investments are in US equities and I've been thinking that I should probably diversify and invest in other areas for months. The Brexit headlines this morning just reminded me of this.

Vanguard has some good options for passive index investing abroad:

VE: Developed Europe ETF
VA: Developed Asia ETF
VEE: Emerging Markets ETF

MERs are all very reasonable (slightly higher than Canadian and US ETFs) - 0.2-0.3%.

# ? Jun 23, 2016 20:10

Guest2553: Aug 3, 2012

I asked myself if I should gamble on it as well but ultimately decided to stay the course with a portfolio of index-tracking ETFs. XEF is already like 20% UK based businesses anyways, and a vote of remain will probably lead to some sort of international rally anyways.

In the opinion of this goon.

# ? Jun 23, 2016 23:46

Femtosecond: Aug 2, 2003

Well I was so busy today that I didn't have the time to look into this at all before the market closed, so given how the brexit results are coming in, I guess I dodged a bullet lol.

This will severely impact all the worlds' markets though, not just Europe.

# ? Jun 24, 2016 04:42

Risky Bisquick: Jan 18, 2008; PLEASE LET ME WRITE YOUR VICTIM IMPACT STATEMENT SO I CAN FURTHER DEMONSTRATE THE CALAMITY THAT IS OUR JUSTICE SYSTEM.; Buglord

Don't panic when your euro/intl indexes tank goons

# ? Jun 24, 2016 06:52

Mantle: May 15, 2004

So in theory tomorrow my bonds will be up and I should sell them to buy more XEF?

# ? Jun 24, 2016 07:06

Guest2553: Aug 3, 2012

If it's rebalancing time, sure.

I'm going to bed with the expectation that I'll have lost a month's salary by the time I wake up at which point I'll shrug, enjoy my day off, and play with my toddler at the park.

# ? Jun 24, 2016 07:16

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

The only way you should be unhappy about this is if you are retired and liquidating assets in order to live.

If you are young and saving, everything is on sale. This is a good thing.

# ? Jun 24, 2016 15:24

Guest2553: Aug 3, 2012

I didn't check any financial news until after the trading day ended. Down a whopping 2%, whee. I guess there's a lot of room for things to call further, sure, but at a time when all the headlines are making GBS threads out world-is-ending reports, am diversified portfolio seems to have done alright.

Can't wait to see some of the resulting bad-with-money schadenfreude though :unsmigghh:

# ? Jun 24, 2016 22:21

Chillyrabbit: Oct 24, 2012; The only sword wielding rabbit on the internet; Ultra Carp

Kal Torak posted:

The only way you should be unhappy about this is if you are retired and liquidating assets in order to live.

If you are young and saving, everything is on sale. This is a good thing.

But my Vancouver house prices! It's going up if I don't buy that crack house for 2 million it will be 3 million by next week!

# ? Jun 24, 2016 22:32

sbaldrick: Jul 19, 2006; Driven by Hate

I somehow made money in one of my funds but everything else was down an average of 3%

# ? Jun 24, 2016 23:12

Mantle: May 15, 2004

My VAB was up .8%. Sold half to buy more XEF.

All in all I was down about 2.6% on the day.

Mantle fucked around with this message at 00:07 on Jun 25, 2016

# ? Jun 25, 2016 00:02

iv46vi: Apr 2, 2010

CIBC is running their free ETF trades promo again:
https://www.investorsedge.cibc.com/ie/pdf/ETFoffer_2016_termsconditions_en.pdf

Most of Vanguard ones are eligible, so it's a pretty good time to start a no-hassle passive portfolio with one of the majors.

# ? Jun 25, 2016 06:52

mojo1701a: Oct 9, 2008; Oh, yeah. Loud and clear. Emphasis on LOUD!
~ David Lee Roth

sbaldrick posted:

I somehow made money in one of my funds but everything else was down an average of 3%

Same here. Until this morning, anyway.

# ? Jun 25, 2016 17:53

HookShot: Dec 26, 2005

Yeah mine finally updated overnight and I'm down around 3.2%.

# ? Jun 25, 2016 20:01

pokeyman: Nov 26, 2006; That elephant ate my entire platoon.

Read through this whole thread, learned a lot, huge thanks to everyone posting in it. Both to the knowledgable folk who are sharing and to the newbies for asking my dumb questions for me.

Someone linked some Vanguard Canada portfolio strategies a few pages back and I can almost see the eye roll accompanying this bit of copy:

quote:

Canadian investors have historically demonstrated a significant home bias when investing in stocks and bonds.

Or maybe I'm reading too much into it.

I'm trying to decide on a portfolio allocation and I'm curious about how y'all decided on how many index funds to buy. The simplicity of index funds compared to a manually diversified portfolio is a big part of what brought me on board. That simplicity could extend all the way down to holding just two funds (one bonds, one equity), or even one (if you're all equity). But it seems like a lot of people end up holding four or more. Why?

(It wouldn't surprise me to learn that it doesn't much matter, assuming you stick to an allocation and diligently rebalance, but I'm curious nonetheless.)

# ? Jun 25, 2016 23:41

cowofwar: Jul 30, 2002; by Athanatos

Hold whatever you want that gives you the exposure and risk profile you want. For instance I agree and only hold VXC and VAB.

# ? Jun 25, 2016 23:49

Rick Rickshaw: Feb 21, 2007; I am not disappointed I lost the PGA Championship. Nope, I am not.

I also only hold VXC and VAB.

# ? Jun 26, 2016 03:51

Rick Rickshaw: Feb 21, 2007; I am not disappointed I lost the PGA Championship. Nope, I am not.

Sadly the time has come to stop adding to my investment accounts and save for the next house, which will probably take 2-3 years. I'm trying to figure out the best place to store the money until then.

I am not sure if I'm going to sell my current place, or rent it out (I'm already renting out three rooms in it now as it is). If I knew that I was going to sell it, I could look into the possibility of putting it on the mortgage (at a measly 2.85%, but it's something). Or would the bank consider the equity in that house a down payment?

Assuming the real estate market doesn't crash, of course. This is Halifax though - things are a little more stable here than other places.

tl;dr - where to stuff money for down payment savings. Mortgage? Savings account? Money Market? (I don't even really know what the Money Market is, but I've heard of it)

edit: For those who want to talk me out of buying, you should know that I'm not buying anything that doesn't have at least a basement rental apartment, or maybe even a duplex.

Rick Rickshaw fucked around with this message at 17:27 on Jun 28, 2016

# ? Jun 28, 2016 17:11

Baronjutter: Dec 31, 2007; "Tiny Trains"

Jesus loving christ I just heard from a friend that they cashed out almost all their mutual funds and put them mostly into bonds "because of brexit". I'm hearing stories and "advice" like this more and more. "stocks are low, buy bonds"
You should have bought those bonds before Brexit you idiots, you don't sell now, you are selling low, you missed the window now the best thing to do is wait for things to go back up. I tried to explain that the markets going up and down is normal, and unless they need this money now this little dip is just going to be a blip over the 30 more years or whatever that they're sitting on these funds for retirement. But nope "Market is down, gotta sell!!"

I never understood when people would complain about "we HAD to cash out all our investments in 2008" or "our investments got wiped out". When people talk about "having" to cash out I assume they had some emergency and needed cash even if cashing out was at a loss, but nope, they just panic and cash out because they don't understand markets have ups and down. And when people say they "lost everything" I assumed it meant they had invested in poo poo that went out of business, but nope, they just panic sold in a really large downturn, or sometimes just were not diversified at all and were holding just a few specific stocks (specially where they work, hey if I own stocks in my own company it's like profit sharing!!!)

# ? Jun 28, 2016 18:09

Rick Rickshaw: Feb 21, 2007; I am not disappointed I lost the PGA Championship. Nope, I am not.

Baronjutter posted:

Jesus loving christ I just heard from a friend that they cashed out almost all their mutual funds and put them mostly into bonds "because of brexit". I'm hearing stories and "advice" like this more and more. "stocks are low, buy bonds"
You should have bought those bonds before Brexit you idiots, you don't sell now, you are selling low, you missed the window now the best thing to do is wait for things to go back up. I tried to explain that the markets going up and down is normal, and unless they need this money now this little dip is just going to be a blip over the 30 more years or whatever that they're sitting on these funds for retirement. But nope "Market is down, gotta sell!!"

I never understood when people would complain about "we HAD to cash out all our investments in 2008" or "our investments got wiped out". When people talk about "having" to cash out I assume they had some emergency and needed cash even if cashing out was at a loss, but nope, they just panic and cash out because they don't understand markets have ups and down. And when people say they "lost everything" I assumed it meant they had invested in poo poo that went out of business, but nope, they just panic sold in a really large downturn, or sometimes just were not diversified at all and were holding just a few specific stocks (specially where they work, hey if I own stocks in my own company it's like profit sharing!!!)

Our brains are wired to prefer doing something, rather than nothing, even if it's proven that doing nothing actually provides better long-term results.

I think in many cases it's because people want to believe they're smart and special and can make a good decision based on a piece of information they receive.

# ? Jun 28, 2016 19:32

Postess with the Mostest: Apr 4, 2007; Arabian nights
'neath Arabian moons
A fool off his guard
could fall and fall hard
out there on the dunes

Losing something we had also affects us a lot differently than gaining something we didn't.

# ? Jun 28, 2016 19:40

Risky Bisquick: Jan 18, 2008; PLEASE LET ME WRITE YOUR VICTIM IMPACT STATEMENT SO I CAN FURTHER DEMONSTRATE THE CALAMITY THAT IS OUR JUSTICE SYSTEM.; Buglord

Some people need a locked-in rrsp for that reason specifically

# ? Jun 28, 2016 19:43

Baronjutter: Dec 31, 2007; "Tiny Trains"

"We can't afford the full vacation we planned this year, I just lost $40,000, we're going to have to cut back on spending"

Like... I just, my brain can't understand. You didn't lose $40,000, your investment's value dropped that much but unless you were needing to sell that all right now it doesn't change anything. Your day to day or year to year spending has nothing to do with these investments. Unless you were planning on cashing out some of your funds to pay for your big euro trip, how is this effecting things? Are people insane and don't understand that investments are for the long term and aren't cash?

These are the same people who will spend more on the same income because their house value went up. You can't spend that poo poo until you sell it! People seem to think they're as rich as their net-worth and spend accordingly.

# ? Jun 28, 2016 20:02

Subjunctive: Sep 12, 2006; ✨sparkle and shine✨

Baronjutter posted:

People seem to think they're as rich as their net-worth and spend accordingly.

To be fair, isn't "high net worth" a very common definition of "rich"?

# ? Jun 28, 2016 20:07

Jan: Feb 27, 2008; The disruptive powers of excessive national fecundity may have played a greater part in bursting the bonds of convention than either the power of ideas or the errors of autocracy.

Subjunctive posted:

To be fair, isn't "high net worth" a very common definition of "rich"?

"Able to live off your net worth" is the proper wording here.

If your investments have lost value and your income from it is reduced, then yes, you need to adjust. For most people investing, their income is effectively zero until they withdraw (i.e.: retire).

# ? Jun 28, 2016 20:27

Adbot: ADBOT LOVES YOU

# ? May 17, 2024 19:48

cowofwar: Jul 30, 2002; by Athanatos

Most people treat worth as income. Income is what determines how much you can spend, your worth is unrelated as you could have a million dollars and no income, or even invested that million would only give you a non-inflation protected comparable quality of life as someone making minimum wage at $30k/yr.

# ? Jun 28, 2016 21:49

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

«‹›223 »