Really confused about how to reach FI

[Dmy0013]

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[plainjane]

First, congratulations to you and your wife on the upcoming baby.

I'm going to provide my suggestions.  Some of them are not what I am doing, some of them may not be mathematically optimal, but they're based on the info you have provided.

#1 - you do _not_ need to keep paying the high MERs.  Stop giving them your money.  http://canadiancouchpotato.com/ has 3 model portfolios.  I am embarrassed to admit that I am currently following all three (Tangerine, TD e-series, and just started with Vanguard ETFs with Questrade).  I'd recommend the TD or Vanguard ETFs and skipping the Tangerine given the amount you're working with.  They were all fairly simple to set up, with Questrade being the most annoying, but I already had a TD account, which might have made it easier.  Start off by putting new money into the approach you decide on, you can worry about moving over your existing money later once you're more comfortable.  If you go with Questrade, several people on the board have referral codes.

#2 - I wouldn't go into landlording in Sask right now.  You are about to have a baby which equals no time to get up to speed.  Also, the vacancy rates and employment stability in the region are concerning.  A basement rental suite makes sense if you can take care of the mortgage without that extra cash flow.

#3 - once you've filled out your TFSAs and RRSPs, you're going to need to start investing in taxable accounts.  There is some stuff on the Couch Potato about doing this in a tax efficient manner.  I'm just starting to figure this out, but from what I can see, Canadian equities tend to go in taxable accounts first.

#4 - if you're concerned about the market, don't dump in the leftover cash all at once, do it in regular defined intervals.  There are basically 3 options. You can wait on the sidelines, you can put in regular amounts over a 6-8 month period, you can put it all in a lump sum.  Dollar cost averaging is better than sitting in cash.  And it's almost always going to be better than paying off the mortgage. (I admit, I paid off the mortgage, it wasn't the smartest thing.)

#5 - figure out your budget for when your wife is on maternity leave, and start living on it now.  If you don't have enough coming in while she's on maternity leave, you should save the extra to tide you over.  If you have enough, then put it towards FI.

#6 - once the baby is born, you should look into RESPs.  The government matching program is pretty sweet.

[Le Dérisoire]

Real estate: I do not know a lot about real estate, but I would probably avoid buying real estate in the Canadian Prairies right now. If you don't know how to interpret the most common real estate ratios (price to rent, price to income, etc.) or how to independently establish the value of a building, you do not have the required qualifications to successfully invest in real estate.

Funds: Here are the steps to invest in funds by yourself, without having to pay the gigantic fees you’re paying right now.

• Find out what is your investor profile and what should be your asset allocation (% of bonds vs stocks). Many financial institutions have free online tools that may help you do that, but you should not only rely on them.
• Read this: http://canadiancouchpotato.com/couch-potato-faq/
  
  And this: http://canadiancouchpotato.com/recommended-funds/
  
  And this: http://canadiancouchpotato.com/model-portfolios-2/
• After reading this, you should have an idea in what you will invest. For this discussion, let’s say you will have an asset allocation of 40% bonds, 30% Canadian stocks and 30% global stocks, and that you have chosen the Tangerine Funds.
• WRITE DOWN a plan. Your plan could be that you will initially invest in the asset allocation you chose and rebalance every first week of January and first week of July. "Rebalance" means that you have a look at all your assets, and then sell and buy some to go back to your initial asset allocation. You could rebalance more frequently, but the important is to do it on FIXED, PRE-DETERMINED DATES.
• Open a direct brokerage account. Most financial institutions have direct brokerage subsidiaries. You should not have to pay more than 10$ / transaction. If you chose the tangerine or TD funds, you have to open a tangerine or TD account.
• Buy the funds/ETF you have chosen so that your chosen asset allocation is met.
• And, the most important: DO NOT try to time the market or predict what will happen, STICK to your plan at all time unless your life circumstances change (job loss, sickness, death, etc.) and require you to have a different asset allocation, DO NOT WORRY about the ups and down of the market.

I hope this helps!

EDIT: Find on the internet the pdf document-- If You Can: How Millennials Can Get Rich Slowly by William J. Bernstein (you should find it for free). Read it carefully. It is US oriented but it will tell you almost all you need to know.

[nereo]

The others beat me to recommending Canadian Couch Potato, which I'll also recommend.

Additionally, for basic knowledge I highly recommend reading JL Collin's stock series
http://jlcollinsnh.com/stock-series/

It's written for an audience in the US, but most of it still applies to those of us living north of the boarder (though you can ignore the discussions about IRAs and tax code specific to the US- much of that is covered by Canadian Couch Potato).

[ooeei]

The others beat me to recommending Canadian Couch Potato, which I'll also recommend.

Additionally, for basic knowledge I highly recommend reading JL Collin's stock series
http://jlcollinsnh.com/stock-series/

It's written for an audience in the US, but most of it still applies to those of us living north of the boarder (though you can ignore the discussions about IRAs and tax code specific to the US- much of that is covered by Canadian Couch Potato).

Beat me to it!  I was about to post the exact thing, and when I hit submit it said a new reply had been posted. 

[Sailor Sam]

I humbly suggest this thread: One (investing) question at at time, started by our very own Scrubbyfish. It might help you level up your investment understanding. She is also canadian, so you won't have to do any awkward investment vehicle translations, and all those extra U's will be good company.

[arebelspy]

Additionally, for basic knowledge I highly recommend reading JL Collin's stock series
http://jlcollinsnh.com/stock-series/

+1!