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

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cowofwar: Jul 30, 2002; by Athanatos

reflex posted:

Anybody have any advice/recommendations for changing banks? I signed up with TD when I was 14 because they were right by my house, but their savings interest rates/chequing account conditions are absolute poo poo (customer service/branch hours is excellent though) and I'm tired of leaving money on the table for no reason. Is it as easy as walking into another bank and telling them I want to transfer everything over, going to TD and telling them I'm leaving, and then it's done?

Why would you want to leave TD when you can get an e-series account?

# ¿ Sep 25, 2013 18:03

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# ¿ Apr 29, 2024 04:54

cowofwar: Jul 30, 2002; by Athanatos

reflex posted:

I'm just thinking from a day-to-day banking level. Right now I have a choice to either pay $10/month for my chequings account or never dip below a $2500 balance. When I look at throwing a downpayment out there, $2500/$10 a month is not substantial but it's still $2500/$120 a year. I organize my budget via savings accounts, so I have multiple accounts making 0.35% and when I look at something like ING, I could be getting 1.35%.

I'm not in a place where I'm looking at long-term investing just yet, aside from my RSP match through work. As I get my mortgage situation handled and finalized, I'm just trying to streamline my day-to-day banking so I can get the best return. Then I can mess around with investment options.

In that case definitely open a INGDirect.ca thrive chequing account. Switch your payroll over and they'll give you $100 free. Plus you can use the not-so-bad high interest savings accounts.

http://www.redflagdeals.com/deal/financial-services/ing-direct-open-a-thrive-chequing-account-with-payroll-deposits-get-100-for-free-3996/

# ¿ Sep 25, 2013 19:06

cowofwar: Jul 30, 2002; by Athanatos

Lexicon posted:

ING Direct loving rules. Other than the Scotiabank-purchase sword-of-damocles, I don't understand why everyone doesn't use them. It's not like you need to keep your banking in one place - I use ING Direct for banking, MBNA & Chase Amazon credit cards, TD for e-series, Questrade for ETFs, and BMO for all my business banking.

I'm a bit nuts though, admittedly.

Not really, loyalty is over-rated. I use RBC and MBNA for credit; RBC and ING for chequing; ING, Ally (now RBC) and Hubert for savings; and MDFinancial for investments. I'll be closing down my RBC accounts once my free student accounts end when I finish grad school. Paying for a chequing account is dumb.

Also INGDirect just sent me a letter informing me that they now allow cheque deposits by taking a picture of the cheque with their smart phone app. First bank in Canada to allow this option and they're free.

# ¿ Sep 25, 2013 19:22

cowofwar: Jul 30, 2002; by Athanatos

reflex posted:

How easy is it to transfer money cross-institution? The closest ING ABM is a 5min walk from work, but a 30min drive from home. If I need money on the weekend, the only real option I have is transferring cash to my TD account and using my TD debit card to withdraw that, right? That surely would take a couple business days?

EDIT: How does ING make money? There surely is some bs cash grab somewhere in there, right?

Banks make money by taking deposits, holding a percentage of that in liquid form and then loaning out the rest to clients.

Bank has $1,000,000 in deposits, holds $200,000 in reserves, loans out $800,000 at different risk levels depending on their calculations. Every year they might make $100,000 in revenues on that $800,000. From that they pay out $10,000 to depositors as 1% interest, $40,000 in expenses, $20,000 to stock holders and retain $30,000 as profit.

The idea that banks need to charge depositors for services is wrong and has led to people paying for their accounts. If you have an account with a bank they should be paying you and your banking should be free as they are using your money to make money. Paying them money so that you can have them make money off your money is idiotic and is the bank just double dipping because they know most of the public thinks of them as a service provider that just holds deposits in a giant vault.

Every quarter the big banks in Canada record multi-billion dollar profits. Do you really think they need to charge account fees? RBC has 18,000,000 clients and recorded $2.3 billion dollars in profit last quarter. Assuming every client paid $10 a month for 12 months that represents $2.16 billion in fees or one quarter's profit. So getting rid of all the account fees would drop profits from $10 billion a year to $7.5 billion a year.

cowofwar fucked around with this message at 19:56 on Sep 25, 2013

# ¿ Sep 25, 2013 19:50

cowofwar: Jul 30, 2002; by Athanatos

FrozenVent posted:

Most companies aren't too keen on a 25% drop in profits though.

I think the US has similarly retarded banking fees, especially when it comes to overdraft.

This is where governmental regulations would be expected to be in place. The current fee structures penalize the poor for being poor but they are at a disadvantage without paying for a bank account. Meanwhile rich people have their account fees waived.

# ¿ Sep 25, 2013 20:48

cowofwar: Jul 30, 2002; by Athanatos

reflex posted:

Do you goons transfer money between your ING and other banks? How long does it take for that transfer to be recognized?

I move money back and forth between RBC and ING, generally takes about a business day. Generally I get paid in to my ING chequing and on that date I move all the money in to savings accounts or my RBC chequing account which is tapped by an auto-investment transfer about a week later.

HookShot posted:

Australia always had service fees as well, a couple of their banks have gotten rid of them in the last couple years, but they're definitely still there.

They're only like $5 a month though for unlimited transactions, usually. The NSF fees will kill you over there, too though.

I'm wondering what I should be doing for investing. I have a TD bank account that I use for chequing, and two ING savings accounts, one which has my savings in it, the other which has the money I use to pay my taxes with. Obviously the taxes one I'm not going to change, but I'm open to options on the other one.

I moved back to Canada in late 2011 after leaving in early 2009. I have never had a TFSA. Does this mean I have the same $25,500 available as everyone else, or is my limit lower because of the time I spent outside of the country? Should I even use my TFSA? I'm in a high marginal tax bracket, but I'm self employed so my income is far from steady, it's not like I'm a senator or something with a guaranteed high wage forever. I definitely wouldn't be using the whole $25500 or however much it is straight away, obviously, but it'd be good to know what the limit is to avoid accidentally going over it.

How much should one keep in their regular savings before investments? Six months of emergency money? Then after that I guess the suggestion is to put the rest in e-series?

As a Canadian citizen who was age of majority when the program started you should have the full contribution limit. That said, TFSA contributions are after-tax and RRSP contributions are tax deferred. So if you are in a high income bracket now and expect to be in a lower bracket when retired then your RRSP should be a priority. Otherwise TFSA should be a priority. You should avoid using your RRSP for the first-time home buyer's withdrawal and just contribute in to your TFSA for a down-payment instead.

cowofwar fucked around with this message at 22:26 on Sep 25, 2013

# ¿ Sep 25, 2013 22:22

cowofwar: Jul 30, 2002; by Athanatos

tuyop posted:

What's the rationale behind that? The RRSP contribution still gets you the tax-deferment and the corresponding nice tax return that you can place in savings or use for your down payment or whatever. Since you're losing out on investment gains either way, wouldn't it be advantageous to just repay your RRSP AND get the tax refund instead of just saving to a TFSA, paying for a down payment, and then contributing to an RRSP later?

It can trap people who aren't great with money. You have to repay your payments over 15 years and it can't be cleared by bankruptcy.

You shouldn't be tapping your retirement funds to afford a down-payment on a house. If you can't manage the down-payment without tapping your RRSP that generally means you've tapped all your liquid funds which is not a place you should be when purchasing a house. If I was to buy a $300,000 house I should have $15,000 in an emergency house maintenance fund, never mind my 6 month emergency savings. What happens when you get a $10,000 bill for a major sewer repair within the first year of owning your house (this happened to us) and you have no savings and are committed to both mortgage payments, RRSP contributions and RRSP withdrawal recontributions? You're boned.

But if you have tons of money then it makes sense to do it rather than using after-tax money. But I would guess that the vast majority of people using the Home Buyer's Plan are not in this situation and my advice was for them. Most users will use their $25,000 from their RRSP to afford their down-payment or use it to let them buy a more expensive house that they can't afford rather than using it for a long term tax strategy.

cowofwar fucked around with this message at 23:03 on Sep 25, 2013

# ¿ Sep 25, 2013 22:58

cowofwar: Jul 30, 2002; by Athanatos

HookShot posted:

Ok cool... I don't have an RRSP because I'm stupid (and also because I didn't expect to come back to Canada when I left) so I should probably get onto that. I honestly don't have a clue what tax bracket I'm going to be in when I'm of retirement age though.

Also I believe your tax return should indicate both your TFSA contribution and RRSP contribution limits.

reflex posted:

I have a general question for you Canadian money wizards: how cautious is too cautious when dealing with real estate? In my mind, I want to have a $55,000 for downpayment/realtor costs/associated costs/minimal furniture + $25,000 in liquid funds for emergencies. But there is no way in hell everyone who buys an apartment/condo is just rolling in to the bank with 75-80 large in liquid funds, right? How do people afford to own?

They don't. Consumer credit card debt has been on the rise in Canada and is higher than it was in the USA when the recession occurred. People are barely making payments on their mortgages and relying on credit cards to pick up the slack.

http://www.theglobeandmail.com/report-on-business/economy/debt-by-numbers-troubling-trends-in-consumer-spending/article14017219/

Most people just look at their rent payment to estimate whether they can buy a house. If they're paying $1200 a month in rent then they think they can afford a $1200 a month mortgage. However, when you factor in all the additional costs of home-ownership over a couple years it will tend to actually be about $2400 a month. So they rely on credit cards to pick up the slack and the bank doesn't properly discourage people from buying since there is no risk to them thanks to the Canada Mortgage and Housing Corporation.

See this thread http://forums.somethingawful.com/showthread.php?threadid=3533827

cowofwar fucked around with this message at 23:27 on Sep 25, 2013

# ¿ Sep 25, 2013 23:20

cowofwar: Jul 30, 2002; by Athanatos

HookShot posted:

Oh cool, I know I have a letter from CRA somewhere telling me my RRSP contribution limit, I bet it also has my TSFA one, I didn't even think of that, thanks!

Looks like I'm mistaken, you can find out how to determine your contribution room here: http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/tfsa-celi/cntrbtn-eng.html

# ¿ Sep 25, 2013 23:54

cowofwar: Jul 30, 2002; by Athanatos

You have to set up a special transfer I think.

Easiest to just withdraw in December and deposit it in the new one in January.

# ¿ Sep 26, 2013 05:59

cowofwar: Jul 30, 2002; by Athanatos

Zo posted:

I am living overseas for a while but will be back in Canada for a bit over new years, and want to set up an investment account during my visit.

From my understanding after reading this thread, I can just walk into a TD bank branch to open an e-series mutual funds account then handle the rest by mail and online? I already actively use EasyWeb.

Further, I have about 10k in a TFSA and 30k in a chequing account. From the sounds of it I can use my TFSA as my mutual funds account but I will be limited to my TSFA contribution limit. Is this correct?

Sorry for the dumb questions, I just wanted to have a vague idea of where to start before I go balls out on the research.

There are tons of guides on the net for opening e-series accounts. You have to go in to the branch and open a mutual funds account and then download the account conversion form and drop it off.

# ¿ Sep 26, 2013 13:44

cowofwar: Jul 30, 2002; by Athanatos

slidebite posted:

Boy, am I glad someone opened a specific thread

After a quick read, I just want to get into this thread with a couple of points, but I'm going to be asking questions as well.

I've found the #1 issue with the TFSA is that many institutions are pushing them as a glorified but typical "savings account" - not as a true investment vehicle. I mean, if you're fine collecting 1%+ interest, just get a GIC or something short term inside the TFSA, but that is such a disservice to what they can do.

I've got tons of poo poo in my TFSA ... mostly equities but I think a couple of funds too. The hardest thing was finding a financial institution that has offers a proper TFSA which lets you do that poo poo. I am a HUGE fan of the TFSA and the government, love them or hate them, did a great thing with their creation.

Also, about PC Financial and online banks; I've been with PC F for years. I think the thing that is keeping me with them is the ability to use a CIBC ATM for easy deposits and withdrawals since they're almost everywhere.

Any broker that offers registered accounts can provide a TFSA investment account. I disagree with you that the TFSA was a good move by the government, it's great for wealthy individuals but was a tactic used to pander for votes at the expense of the long term economic stability of the country (along with the GST cuts). Over time it will erode the tax revenues by the government and it provides an unfair tax shelter to the rich but not to the lower and middle classes. But that's not really the point of this thread.

Something to keep in mind is that while the TFSA offers a large upside to investing in equities during bull markets it offers a double cost during bear markets if capital losses are accrued. Not only do you lose out on gains but you also permanently lose that contribution space to your TFSA AND those capital losses cannot be written off against your taxable income. So be careful of the risk that you take in a TFSA.

# ¿ Sep 30, 2013 21:05

cowofwar: Jul 30, 2002; by Athanatos

INGDirect.ca is running a promotion (TFSA kick-start account).

http://www.ingdirect.ca/en/save-invest/tfkickstart/index.html

You put in money now and earn 2.7% for the period up to January 1st. You get the interest from 1.35% each month and then you get the three month interest from the second 1.35% on January 1st.

What I do is put in $5,500 now, collect interest on it, then remove it before January 1st and transfer it to my real TFSA at my investment broker before it auto-transfers in to my ING TFSA. On January 1st I still get the bonus interest.

# ¿ Oct 2, 2013 19:16

cowofwar: Jul 30, 2002; by Athanatos

Lexicon posted:

Not a bad plan I guess if you have money sitting around in cash anyway, but we're talking a gain of less than $40 here. I'm not sure it's worth the effort if it comes at the expense / delay of setting up a longer-termed investing strategy of which the TFSA is a part.

Just my $0.02.

I already have an INGdirect savings account with > $5,500 in it. It took me one minute to just move the money in to a new sub-account and set up a calendar reminder reminding me to withdraw the money before Jan 1, 2014.

If you don't have an INGDirect account it's more work but then it's worth signing up for the payroll $100 bonus.

Although a note is that it would probably auto-transfer that $20 or whatever in to a TFSA for you since it's paid out on Jan 1. So your TFSA contribution for 2014 to a different TFSA would be $5,500 less that amount.

# ¿ Oct 2, 2013 19:25

cowofwar: Jul 30, 2002; by Athanatos

slidebite posted:

So I have been reading a little bit on that couch potato website and those TD -e series funds. After reading what you guys here say and understanding MERs you have a really good point about fees and we pay out the rear end for trade fees outside the TFSA.

I'm seriously thinking of going to one of those online brokerage outfits and self direct accounts.

My wife and I are presently with RBC Dominion Securities and have 6 accounts with them

2x TFSA
2x RRSP
1x LIRA
1x Unregistered generic investment account

How big of a deal is it to move accounts over in kind from a brick and mortar brokerage like RBCDS to one of those online places with TD Waterhouse or Questrade? Is it a huge exercise in frustration? This is largely our life savings we're talking about so it's kind of a big deal if there are issues.

I am a newbie with trading. I know enough to get into trouble and that's about it. Is there a good Canadian read that can be recommended? Not that I am planing on becoming a day trader, but I want to understand what I am doing if I am using some online account and I buy/sell on my own instead of via a person that understands what they're doing.

If you do your banking with RBC and have lots of accounts you may end up saving more money by sticking with them if they offer enough bundling discounts. You don't have access to the TD e-series funds but you do have access to the RBC funds which are not that much more expensive.

Fund name Fund ID MER Index tracked
RBC Canadian Index RBF556 0.72 S&P/TSX Composite
RBC US Index RBF557 0.72 S&P 500
RBC US Index * RBF558 0.72 S&P 500
RBC International Index * RBF559 0.70 MSCI EAFE
RBC Canadian Gov�t Bond Index RBF563 0.66 DEX Universe Federal Bond

By the time your portfolio gets large enough for the fees to be a significant issue you should be switching over to ETFs anyways.

The best strategy is to purchase index funds monthly (free) and then once a fund reaches $10,000 in value, sell it and buy the equivalent ETF. Rinse and repeat.

Another option is to open a questrade account which currently offers free ETF trades. However questrade has really bad customer service and takes a long time to do certain things so be warned. Also the promotion could end at any time.

cowofwar fucked around with this message at 16:08 on Oct 4, 2013

# ¿ Oct 4, 2013 16:06

cowofwar: Jul 30, 2002; by Athanatos

He shouldn't since as far as I know you can't even buy them through a normal TD brokerage account.

Might be the normal TD funds which are similar aside from MER.

# ¿ Oct 5, 2013 01:44

cowofwar: Jul 30, 2002; by Athanatos

Spadoink posted:

Help! I went to open a Questrade account, and to verify my identity they asked me about :

- a line of credit opened in 2009;
- how much per month I am currently paying towards the line of credit (the minimum amount option was $700 per month); and
- a gas company credit card opened in 2011.

I do not hold this line of credit or gas company credit card. I'm obviously requesting my Transunion and Equifax credit reports right this minute but am hopeful that someone in this thread will chime in with a "oh ho ho those Questrade questions, by gum" story, which will placate my fears about discovering that someone has been meddling with my credit and/or identity.

In the absence of an extensive credit history the questions asked to confirm your identity will be made up. They need to ask a certain number of questions. The answer will be none of the above.

# ¿ Oct 7, 2013 20:22

cowofwar: Jul 30, 2002; by Athanatos

Corrupt Cypher posted:

First off, thanks so much for putting this thread together OP. I've just finished paying off my OSAP debt and had already begun putting my monthly savings into Investors Group mutual funds to help out a friend whose recently started at the company.

After reading this, I have obviously pulled all my money out and am beginning to look at lower overhead options. Are these e-Series funds perfectly liquid? My main concern is I currently drive A LOT for work, and am driving a beater. Naturally, I'm going to keep it going as long as practical but at some point I will need to outlay for a new ride. With this sensitivity to liquidity, does it make sense to put it in a TD e-series, or should I just go to a PC Financial savings account for the interim? My main problem is the window for saving could be 6 months or 18, not sure at this point.

Budget your money better. Every month have a portion of it set aside to different savings horizons. A short term emergency fund (liquid), a medium term purchases fund (vacations/cars/houses - semi-liquid) and a long term investment fund (market).

# ¿ Oct 28, 2013 19:40

cowofwar: Jul 30, 2002; by Athanatos

Baronjutter posted:

I'm glad I put pretty much all my money into one of these right before this thread started. They pay better than the bank's interest rates but the fund's management % take is always wayyy higher than any gains I see. But even after reading this entire thread twice I'm still too stupid to figure out what the alternative is as there's no couch-potato recommended place anywhere near me.

Questrade? There are other Canadian online brokers as well. Never mind the investment broker sides of the big banks like TDW and RBC Dominion Securities.

# ¿ Oct 30, 2013 03:54

cowofwar: Jul 30, 2002; by Athanatos

Baronjutter posted:

What are "securities" and why do I need 4? I'm picturing 4 security guards standing guard of my money-bin.

-I'm wanting a fairly long term low-upkeep place to dump money that will see good returns over a longer 10+ time period. A nice big fund that will be a retirement fund and/or a downpayment on getting into the strong and stable Canadian real-estate market some time in the post-apocalyptic future. Nothing I'd need a moment's notice.

-I'm terrified though that anything other than a hoard of gold under my bed will be wiped out in some Russian style financial collapse that of course will see the financial class and oligarchs some how come out even more ahead.

-I'm terrified that by even getting into the financial game these people are going to trick me out of all my pennies.

-I'm terrified of knowing what funds to put my money into and making the wrong choice and having like 100k wiped out because I invested it all in RIM or Enron or something.

-I'm terrified that if there is a big housing crash it will some how wipe out all my investments so I won't be able to buy that nice 2br house for 300k and I'll be back at square one.

-As a ridiculous min/maxer and lover of economic games I will go OCD crazy if I'm not making the 100% best max-gains choices because unlike a video game you can never have access to all the information or a perfect understanding of the system so that once again terrifies me that I'll make some wrong or not-optimal decisions.

-I hate paperwork and financial jargon.

My current situation is that me and my wife both have low paying jobs but very small living expenses so we've surprisingly got close to 100k in savings/investments. We just opened a manulife account or what ever a couple months ago and have "a guy" managing it all. I didn't understand a word he said so basically we just dumped the money on him and said "just put it in the best places" after he asked about our lives and plans. I love not having to think or worry about it, I hate that the fund is getting like 6% or something as a management fee and I'm getting like 3-4%. Every week or two we seem to get some huge envelope (each) from manulife or the fund or who knows what full of numbers and graphs that mean nothing to us and we can't decipher and it's just a huge waste of paper. If I could read this poo poo I wouldn't need "a guy" doing this for me.

You fear what you don't understand. If you like reading you should pick up the four pillars book or an investing for dummies book. If you don't like reading I'm sure there is a khan academy video on intro to investing.

In short, publicly owned companies issue shares. Share are traded between people and listed on indexes. When companies or governments need money they will sell debt as bonds.

Now middle men want to make money for doing nothing. So they create funds. Funds are pools of money managed by some rich white guy which uses the money to buy some amount of shares of some number of companies. You can find that information if you look up the fund. There are oil funds, bank funds, metal funds, etc. Every market has a fund, the point is to offload the work on to someone else who takes a cut and you lower your risk by diversifying by buying in to a sector rather than a single stock. But the selection of stocks is done by some guy trying to beat the market.

Those are active managed funds, they have higher expense ratios (MER) than a passive fund. The point of a passive fund is to basically mirror the performance of an index and not beat it. So the s&p 500 index tracks 500 biggest companies in the US. So a passive fund might buy a representative number of shares in that index so its returns and performance mirrors that of the index.

Now funds aren't traded on the market like shares. But at some point some rich dudes wondered why not so now there are exchange traded funds (ETFs). These are funds that issue shares. So instead of buying in to a mutual fund for free and paying a higher MER you purchase a ETF share with an associated transaction cost on the market and pay a lower MER.

Long story short, get a discount self directed brokerage account and set up a monthly purchase order for a Canadian, US and international passive mutual fund as well as a bond fund. This diversifies your portfolio across multiple global regions which lowera risk. Bonds generally perform well when stocks do not and vice versa. This further reduces risk through diversification. You can also buy in to other sectors like REITs or precious metals but they are less favored. Consult canadiancouchpotato for good funds or the globe and mail fund list. I use 20%, 20%, 20%, 40%. Use whatever your risk tolerance allows. Rebalance annually.

cowofwar fucked around with this message at 05:33 on Oct 30, 2013

# ¿ Oct 30, 2013 05:26

cowofwar: Jul 30, 2002; by Athanatos

Lobok posted:

I assume this automation won't work with transfers from accounts outside of TD correct? I don't have any chequing or savings accounts with TD anymore, just a line of credit.

While we're on the subject, is there a quick 1-2-3 explanation of exactly what one would ask for in setting up these accounts? You have to make a full-on appointment with one of the investment managers at a branch so I don't want them to give me some spiel that distracts me from getting the very simple thing I want. I want to have the e-series TFSA that this thread mentions time and again, which I will have to do the final conversion of myself through the mail-in forms.

Download the forms to open a mutual funds account and then conversion form. Fill them out, go to the bank and open a mutual funds account then drop off the conversion form once you have your account information.

# ¿ Oct 30, 2013 17:28

cowofwar: Jul 30, 2002; by Athanatos

I have the MBNA smart cash world mastercard which is pretty good. Pure cash back.

I also have an RBC Visa that I use less often but it gives me 1 point per dollar spent and I can convert it in to cash at around 1 point per dollar and deposit it in to my RBC TFSA.

Neither have fees.

Apparently the Scotiabank cashback one is also good if you have a high enough income.

# ¿ Oct 30, 2013 23:41

cowofwar: Jul 30, 2002; by Athanatos

Careful about frequent purchases of ETFs as unless you have a questrade account these transactions will incur fees.

# ¿ Oct 31, 2013 03:36

cowofwar: Jul 30, 2002; by Athanatos

RBC Dominion Securities is the investment bank of RBC. Just like RBC, they are penny pinching and suck unless you're high wealth.

I ditched them for MD Financial a long time ago.

# ¿ Nov 4, 2013 22:21

cowofwar: Jul 30, 2002; by Athanatos

slidebite posted:

I didn't even know they had a direct investing division

But yes, they are a managed investment division of RBC.

That said, I might just go to their direct investing side for this acct. $9.95 flat is reasonable enough, and it might make it simpler.

Other than this whole exorbitant fee fiasco, I've been fairly happy with them. What is MD financial?

Investment broker firm for doctors. They don't have an account maintenance fee or anything. $9.99 trades. But not open to the public. I was trying to switch from RBC to questrade but the latter was too incompetent to both take my money or do a working transfer.

# ¿ Nov 5, 2013 03:25

cowofwar: Jul 30, 2002; by Athanatos

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.

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.

Having a lot of unused credit in some form can be a problem though if you want to get a car loan or mortgage. Creditors look at your score, income, assets and other factors including total available credit from other sources to determine how much credit they can offer you.

# ¿ Nov 10, 2013 22:53

cowofwar: Jul 30, 2002; by Athanatos

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?

Someone else can explain it better but a bond fund has preferable characteristics over individual bonds. Not just diversity (which is very important as bonds can be wiped). But a bond fund also includes a large number of bonds with different maturity dates and lengths giving it other benefits.

# ¿ Nov 13, 2013 14:06

cowofwar: Jul 30, 2002; by Athanatos

People suck at understanding complex systems or abstract concepts. Also they're busy and aren't interested.

If you try to get someone to care about saving 1% a year on their MER their eyes will glaze and they wont care because it's only like $1.

# ¿ Nov 24, 2013 23:09

cowofwar: Jul 30, 2002; by Athanatos

Rated PG-34 posted:

Cross-post from the other finance thread: how should I be handling my finances as a dirty foreigner in freedomland? Should I funnel my USD back into my TFSA, or open an American brokerage/savings account?

If you're Canadian and living and working in the US you'll want to keep that money in USD and open a brokerage account in the US. You'll be paying US taxes. You're not going to be getting TFSA space as a US-resident.

# ¿ Nov 26, 2013 23:33

cowofwar: Jul 30, 2002; by Athanatos

Tapping your HBP is a good sign that you can't afford a house or are over extending yourself. Almost always a bad idea in practice.

# ¿ Dec 8, 2013 18:36

cowofwar: Jul 30, 2002; by Athanatos

Don't buy ETFs unless your transaction costs are $0 (unlikely in Canada aside from Questrade). You're likely better off with low MER funds. Even better is a TD e-funds account.

Funds are better suited for frequent contributions. ETFs are better suited for infrequent $5,000+ purchases.

# ¿ Dec 28, 2013 04:01

cowofwar: Jul 30, 2002; by Athanatos

Jolarix posted:

I'm not sure the difference. That's from Vanguard's own online comparison table tool. It shows both fees for any fund you can throw at it.

Example:
RBC Canadian Equity Class Adv
Mng Fee: 1.75 %
MER: 2.06 %

Using the above metrics, it seems Vanguard's ETFs even outshine the TD e-series in some respects. Or am I missing something?

Mutual funds and ETFs are different.

# ¿ Jan 2, 2014 02:11

cowofwar: Jul 30, 2002; by Athanatos

Lexicon posted:

For reference, once my rebalancing exercise is over, I'll be approximately 15% Canadian equity versus 24% US equity, 15% developed international (e.g. Europe, Australia), and 6% emerging market.

What fund do you use for emerging market exposure? The cheapest ones that I can find are 1.8% MER, most are over 2%.

# ¿ Jan 7, 2014 19:31

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

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

cowofwar: Jul 30, 2002; by Athanatos

Hahhaha, 8% a year for forty years?

I imagine TFSA contribution increases will be one of the first things to go. It's just a vote pandering tax shelter for rich white people.

# ¿ Jan 17, 2014 23:18

cowofwar: Jul 30, 2002; by Athanatos

Saltin posted:

I've been wondering about the risk associated with Bond index funds given all the chatter about QE tapering. It can't be good for Bond index funds, and it's just a question of when, not if.

Does anyone have any thoughts on this? I am busy reducing my positions in this area, personally.

Sounds like you're trying to time your long term investments based on short term market speculation.

Right now the Canadian dollar and index are being shorted by a lot of people in anticipation of a further weakened economy, bubble pop and market crash. But you are more concerned about interest rates going up because? Is it because "it's the only direction left to go since they're so low"? Because people have been saying that for years and we could enter a deflationary period or a stagnation period for a few years which I think is more likely in Canada than growth.

cowofwar fucked around with this message at 16:59 on Jan 18, 2014

# ¿ Jan 18, 2014 16:55

cowofwar: Jul 30, 2002; by Athanatos

Kal Torak posted:

When I say wealthy, I am not talking super rich millionaires.

With the total amount now up to 31K and the Harper government talking about eventually doubling the contribution room, it's getting to the point where you have to be fairly well off to max this out. Isn't the average income in this country somewhere around 50K? If it was doubled, how many average people could put 20%+ of their income into a TFSA every year?

The average Canadian has a fairly low rate of tax anyway. I'm not saying the TFSA is a huge benefit to the wealthy, but I think it's getting to the point where it benefits the wealthy more than it does the average Canadian.

Most Canadians are actually highly leveraged with consumer and mortgage debt. Their retirement savings, if any, are auto-contributions taken off their pay. Very few middle class Canadians can afford to make after tax contributions to additional retirement savings vehicles like RRSPs and TFSAs. They are relying on house appreciation to fund their retirement.

So yes, if you have a spare $5000 a year or double that as a couple, you are wealthy.

# ¿ Jan 18, 2014 20:05

cowofwar: Jul 30, 2002; by Athanatos

Don't blame individual people for their inability to save. It's an economic and sociocultural problem.

# ¿ Jan 18, 2014 20:57

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# ¿ Apr 29, 2024 04:54

cowofwar: Jul 30, 2002; by Athanatos

To an extent QE tapering is already priced in with bonds having been selling at a discount for the last year.

# ¿ Jan 18, 2014 21:53

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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