Author Topic: Ditherer needs Canadian investment advice please!  (Read 4785 times)

centwise

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Ditherer needs Canadian investment advice please!
« on: December 04, 2013, 09:56:43 AM »
Hello Mustachian friends!

I have been lurking around for a few months and finally got around to registering. I'm looking for some quick advice from Canadian mustachians.

The quick and dirty question: what is your favourite company for EASY online investing, and why? ING? TD? something else?

Like another recent poster, I have been saving money but afraid to invest. I've been dithering about where to open an account, but dithering is all I do and time has ticked by (years!) and I haven't done ANYTHING, other than amass 100k in Canada Savings Bonds. This is getting ridiculous, and I'm unable to make a decision.

Forgive me for asking a question similar to previous threads. I have read through some of the other threads but I just keep going around in circles.

Mustachians, please come to my rescue. The immediate deadline is that I want to open an RESP before Dec 31. As Canadians know, I will lose some government matching funds if I don't do this before my kid's tenth birthday.

Later I will want to open a TFSA and some kind of brokerage account to buy mutual funds. Top priority is that it should be EASY! Easy to open an account, easy to invest, easy to transfer funds to/from my bank (BMO), etc. otherwise I will never do it. Of course, I want cheap fees as well.

I do have a small RRSP (cash account) with Scotia Itrade (formerly Etrade Canada), but their customer service seemed incompetent so I've been looking for something better.

I guess I'm asking you to TELL ME WHAT TO DO. I have procrastinated endlessly about  making this decision. Please help a dithering fool.

Signed, Centwise but pound foolish

huadpe

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Re: Ditherer needs Canadian investment advice please!
« Reply #1 on: December 04, 2013, 10:01:42 AM »
Go here and read my friend: http://canadiancouchpotato.com/

Most likely, you'll be looking at TD e-series mutual funds, but do some homework there to make sure it's what works for you.

Ishmael

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Re: Ditherer needs Canadian investment advice please!
« Reply #2 on: December 04, 2013, 10:57:27 AM »
I'm pretty happy with TD. Don't like Royal.

TD fees are excessive if your total investments are below $100k ($100/yr + $30/trade) but once you get above that the fee goes away and the per trade cost is $10.


MorningCoffee

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Re: Ditherer needs Canadian investment advice please!
« Reply #3 on: December 04, 2013, 11:13:17 AM »
I second the Canadian couch potato portfolio, the TD e-series are great and easy to use.

It's also free through TD Canada Trust  (not sure about TD Waterhouse) if you set up a PPP (pre purchase plan?) ie regular contributions (at least for RRSPs - I don't have an RESP account there).

centwise

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Re: Ditherer needs Canadian investment advice please!
« Reply #4 on: December 04, 2013, 01:21:28 PM »
Thank you so much for the quick and useful responses. I'm at work so I only have time to check in here very briefly.

From the responses so far, it looks like TD is the way to go.

Huadpe, thank you for the referral to the couchpotato blog. I've read a lot of couch potato articles, but having all that info in one place on the blog is invaluable.

TD fees are excessive if your total investments are below $100k ($100/yr + $30/trade) but once you get above that the fee goes away and the per trade cost is $10.

Thanks, Ishmael, this is good to know! I recall that some people said that "ING is good for beginners". At the time, I interpreted it to mean "ING is simple to use for basic stuff". But -- now it occurs to me that they might have meant "ING is good if you are just starting out and don't have much money to invest".

So here's my plan: Tomorrow I have a half-day off work. I'll sit down and go over the fine print on the TD website and figure out what I need to do to open an account. I might aim to open the RESP and the TFSA at the same time.

Thanks, and if anyone else has thoughts to offer, I'm looking forward to your responses!

Centwise

Motovated

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Re: Ditherer needs Canadian investment advice please!
« Reply #5 on: December 04, 2013, 01:31:42 PM »
It sounds like your best bet is going to be the TD e-series. I found it fairly simple to set up and once it is running it is easy (and free) to work with.

Go to a TD, tell them you want to set up a TFSA that will be for purchasing the e-series. They create an account and then have to send off a form that converts it to an e-series account. You give them a void cheque or whatever so you are able to buy from your BMO acct. Eventually you will be notified that this is all set up, and you can log in and purchase your e-series funds.

Spudd

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Re: Ditherer needs Canadian investment advice please!
« Reply #6 on: December 04, 2013, 01:33:10 PM »
Ishmael is referring to the TD Direct Investing brokerage with his response (similar to your Scotia iTrade account). This lets you buy/sell any Canadian mutual funds/stocks/etc. But I don't think it's what you want.

What you want is a regular TD investing account (at the bank, not the brokerage). This will let you invest easily in the TD e-series mutual funds. They have low MER (management fees) and there is no fee at all to buy/sell them.

At this link, near the bottom, there's a link saying "Establishing a new e-series Funds account is easy" - click on that and it will show you the directions to do it.
http://www.tdcanadatrust.com/products-services/investing/mutual-funds/td-eseries-funds.jsp?tab=what-does-td-offer

TrMama

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Re: Ditherer needs Canadian investment advice please!
« Reply #7 on: December 04, 2013, 01:40:55 PM »
If you do decide to open an ING account, you can use my referral code (13987324S1) to earn us both an extra $50.

However, either TD or ING will be better than simply piling everything into bonds. You likely need RSP, TFSA and RESP accounts. I'd also check your last Notice of Assessment from CRA to see how much RSP room you have available. Moving some of that bond money into an RSP, could net you some serious tax savings this year.

As far as RESPs go, I only contribute enough to get the $500 grant/per kid each year. Otherwise all extra money goes in RSP or TFSA accounts. However, I'm not yet at the point of being able to max out my TFSA or RSP accounts.

centwise

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Re: Ditherer needs Canadian investment advice please!
« Reply #8 on: December 08, 2013, 09:19:33 PM »
 
OP here with a quick an update: I went to the TD website, started reading all the rules and details... then I started to sweat, and the old familiar urge to procrastinate reared its ugly head! "Uh, I can figure out all this stuff later. When I have more time." HA.

But thanks to this thread, and the very specific and helpful info, I picked up the phone and made an appointment with a TD representative for Tuesday afternoon! I told them that I want to open an RESP and a TFSA, and that I want to be able to invest in e-series funds. They told me to bring two pieces of ID and my Social Insurance Number. This is going to happen at last.

I can't wait. If there's anything else I should know, ask or keep in mind, let me know!


Ishmael

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Re: Ditherer needs Canadian investment advice please!
« Reply #9 on: December 09, 2013, 07:17:45 AM »
I think you might need the kid's SIN for the RESP, so if you have it, bring it.

Ensure they explain all fees that you may encounter. There is likely a different cost associated with performing a transaction in-person/over the phone vs online. There will also be a yearly fee, which I expect would be about $100.

They'll probably talk about setting up automated payments and investing in particular items. You can respond with, "No, I'm just going to start with a lump sum of cash and figure out my investing strategy soon". That will give you all the time you need to research, while your money just sits in cash in your new accounts. This is the easiest thing to do at this point, if you find yourself overwhelmed at all.

Or, if you decide to go ahead with moving money into specific investments at this stage, say you're interested in a diversified set of(*1) low fee index funds (*2). Ask and understand any fees, and pay particular attention to the MER (Management Expense Ratio). This should be well below 1%. Here's a link for you to look at beforehand concerning TD's index funds: http://canadiancouchpotato.com/recommended-index-funds/.

Good luck! Don't be afraid to get them to explain things until you understand it, but it will be fine and much easier than you are probably imagining it :)

*1 - diversified means that you're investing a little bit in a lot of different companies in a lot of different markets (countries) and businesses (retail, oil&gas, technology, etc).
*2 - index funds are set up to track a particular stock market index. In Canada, that's the TSX, and the US has the Dow Jones and Nasdaq. They do this by buying shares in a set of companies that represent the market as a whole, and then you own the index fund. By owning the index fund, you indirectly own bits of shares in lots of different companies (so they are diversified by their very nature).

TrMama

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Re: Ditherer needs Canadian investment advice please!
« Reply #10 on: December 09, 2013, 01:59:41 PM »
Yes, you will need your child's SIN to open an RESP for them. This is the only reason my children even have SINs.

MrMyMoney

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Re: Ditherer needs Canadian investment advice please!
« Reply #11 on: December 09, 2013, 09:36:09 PM »
Hello everyone,

This is my first post here and I want to say I was going to ask about investing for Canadians (vanguards will only take US residents unfortunately). I have been working for 3 years in China and I'm done paying off my students loans and misc debts. I'm completely debt free at the moment and after reading MMM's blog and this forum, I absolutely decided to turn my life around.

centwise

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Re: Ditherer needs Canadian investment advice please!
« Reply #12 on: December 21, 2013, 12:11:38 PM »
Dithering Centwise is back again, with a positive update to share. I'm not done yet, but I'm getting there. First, a quick welcome to MrMyMoney! Sounds like you are doing great. Are you still in China, or back in Canada?

Items 1 -- 5 below are an update (exciting to me, maybe boring for you) but down at the bottom, "Next Up" contains a question.

I think you might need the kid's SIN for the RESP, so if you have it, bring it.

1. Thanks to Ishmael and TrMama for reminding me about the SIN issue! I had forgotten about that. I turned the house upside down looking for her SIN. No success. So (after adding "go to Service Canada" to my to-do list) I went to my appointment at TD without the SIN. The TD representative was very helpful, set up my TFSA and did everything she could for the RESP without the SIN.

2. Next morning, off to Service Canada! I don't know why I'm always such a nervous procrastinator when it comes to "official" tasks. The lineup was short, the people were helpful, and I got my daughter a SIN on the spot. Turns out, she never had one before.

3. Phoned TD and left a message regarding the new SIN, then popped in on my lunch hour to sign the forms for the RESP. Ta da! The ball is really rolling now. But I have to wait for them to be converted to e-series mutual fund accounts.

4. Received an e-mail from TD. The e-series accounts (TFSA and RESP) exist! The e-mail says "phone this number to set up EasyWeb access". Phoned; waited forever listening to muzak; finally found out that I need to return to the branch to get an Access Card before they can set up web access. :( Called TD for another appointment.

5. This brings us to today. I got the card, logged in, and initiated my first mutual funds purchase inside the RESP!! I purchased $1000 of Canadian Index fund. Looks like I have to wait until Monday to make sure that it went through.

Next up: I'm allowed to put a maximum of $5000 into the RESP for 2013. My plan is to end up with the following TD e-series funds before Dec 31 (based on the couch potato web site):

$1k Canadian Index fund (already purchased online today)
$1k US Index fund
$1k International Index fund
$2k Canadian Bond Index


On Monday I will verify that everything -- the money transfer from my linked BMO account, and the first $1k mutual fund purchase  -- is working. Then I will purchase the remaining $4k. Friends, please let me know if you have comments, suggestions or reminders. Thank you!
« Last Edit: December 21, 2013, 12:13:49 PM by centwise »

daverobev

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Re: Ditherer needs Canadian investment advice please!
« Reply #13 on: December 21, 2013, 12:55:27 PM »
centwise, how old is your child or children?

Not sure you need much in the way of bonds if they won't need the money for 15+ years - the market will rise, crash, and rise again... you can start transitioning to bonds in the ~5 years before they'll need the money.

@MrMyMoney - Vanguard ETFs are available; there are some listed on the TSX here. I think that's not what you mean (actually having an account *with* Vanguard?), but if you're looking for a low-cost brokerage, try Questrade. It's free to buy ETFs with them; including VRE.TO, VUN.TO, etc.