The comments section to frugal toques post is getting a little long, so I thought I would start this here. My apologies if there is already another thread.
My goal is to stimulate general discussion although I have provided some specifics to star things along.
I recently sold a rental property and have planned the following allocation of proceeds:
VEE 20%
VDU 20%
XUS 20%
VCN 20%
XSU 20%
I will be purchasing this through a td trading account since current holdings are mostly there in the td e series accounts. (I thought I was doing well until the recent post). I am maintaining my current holdings in the td e series accounts since I think the tax liability of selling offset the potential benefits of slightly lower mer.
Comments/ questions/ suggestions? I'm intentionally steering away from Canadian and us markets for the moment. (Gut feeling)
When choosing indexes, the big question is obviously which index?
Of note, there are some areas where ishares is cheaper than vanguard Canada. (Xus vs vun/vus)
Since they track the same indexes as far as I can see there is no reason to pay more for vanguard.
My questions are the following:
1. If an option for cad currency hedging is offered, do you take it? (E.g. Vdu/vef or vun/vus). What are the costs / benefits associated with currency hedging?
2. Options out there other than vanguard/ishares? No experience with this so comments would be helpful.
3. At what point does it become more practical to buy individual shares and try to replicate the smaller indices? My trading account is in the mid 6 figures & it did not seem to be a good use of time / trading costs to go this route.
4. If I go the early retirement route (I'm 34 now and 40 seems realistic), how does one go about rebalancing the portfolio through retirement? (Or do you even bother?)
I.e. Which funds do you withdraw your 3.3% (or 4% as the case may be) per year from? Do you take it out equally or from winners (high tax bill) or from losers (lower tax bill) or a bit from each to offset tax liability?
5. Once you hit early retirement and are no longer getting employment income, do you have a means of still adding money to an rrsp? My understanding is that interest income and capital gain income are not considered eligible sources.
6. What kind of balance between rental and investment income would be considered desirable/ideal?
