Author Topic: Financial newbie (canadian edition)  (Read 18271 times)

FrugalFan

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Re: Financial newbie (canadian edition)
« Reply #50 on: May 21, 2015, 12:20:50 PM »
Ugh don't buy VUN in your TFSA, buy VTI in your RRSP, if possible.

Questrade automatically does the W-8BEN stuff, you don't actually need to fill in a form with them.

I'm not a fan of VXC either.

XEF and XEA go better in a TFSA than VUN, IMHO.

ZEA yes sorry.

ZEA and XEF hold stocks directly. Lots of developed countries that are held inside impose no withholding. If you hold a US-domiciled fund that holds these stocks then you will pay US withholding tax of 15%.

With VUN, you always pay US withholding. In a TFSA any US (or other) foreign tax imposed is gone, it's non recoverable. In an RRSP, there is no US withholding, and probably little other withholding from foreign countries that have a sensible double taxation agreement with Canada. BUT if you hold a US domiciled fund in an RRSP that then holds foreign stuff... you may still lose some withholding as the *primary* country doesn't KNOW it's a retirement account.

Basically there are multiple levels of withholding based on your residency, the ETF you bought's domicile, and the domicile of any funds, stocks or ETFs that the ETF holds.

Short answer: reduce the 'depth' of holdings. ZEA and XEF now hold stocks directly. Good! VUN basically holds VTI, NOT the stocks directly. It's FAR FAR FAR from terrible but it is sub-optimal when there are better options (Norbert's Gambit to USD and buy VTI inside an RRSP - ok, don't do it for small amounts, but when you have a chunk of a few thousand dollars in VUN, switch it).
I think you meant ZEA,right??? And why do you believe that is a better choice?

Ugh, just when I think I am starting to understand things, I read a post like this and am confused again. Where can I read more about this? I just started Perfect Portfolio, will that help?

daverobev

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Re: Financial newbie (canadian edition)
« Reply #51 on: May 21, 2015, 12:37:05 PM »
Ugh don't buy VUN in your TFSA, buy VTI in your RRSP, if possible.

Questrade automatically does the W-8BEN stuff, you don't actually need to fill in a form with them.

I'm not a fan of VXC either.

XEF and XEA go better in a TFSA than VUN, IMHO.

ZEA yes sorry.

ZEA and XEF hold stocks directly. Lots of developed countries that are held inside impose no withholding. If you hold a US-domiciled fund that holds these stocks then you will pay US withholding tax of 15%.

With VUN, you always pay US withholding. In a TFSA any US (or other) foreign tax imposed is gone, it's non recoverable. In an RRSP, there is no US withholding, and probably little other withholding from foreign countries that have a sensible double taxation agreement with Canada. BUT if you hold a US domiciled fund in an RRSP that then holds foreign stuff... you may still lose some withholding as the *primary* country doesn't KNOW it's a retirement account.

Basically there are multiple levels of withholding based on your residency, the ETF you bought's domicile, and the domicile of any funds, stocks or ETFs that the ETF holds.

Short answer: reduce the 'depth' of holdings. ZEA and XEF now hold stocks directly. Good! VUN basically holds VTI, NOT the stocks directly. It's FAR FAR FAR from terrible but it is sub-optimal when there are better options (Norbert's Gambit to USD and buy VTI inside an RRSP - ok, don't do it for small amounts, but when you have a chunk of a few thousand dollars in VUN, switch it).
I think you meant ZEA,right??? And why do you believe that is a better choice?
You may be right, but onn the other hand, I read this article in which I agree with http://canadiancouchpotato.com/2015/01/30/the-wrong-way-to-think-about-withholding-taxes/ in a sense that I shouldn't go haywire simply because one pays a foreign tax.

CCP is slightly out here, and certainly with respect to international. If you hold VXUS, say, in a TFSA you lose 15% to the US on top of (CCP guesses 10%) whatever to the original country.

VXC is the same. It holds *US domiciled funds* in its wrapper.

You are basically going from 0.2% with XEF and ZEA, to 0.27% MER plus US withholding on dividends plus any foreign withholding on those international stocks held by the US wrapper.

If you've got $100k invested, your TER goes from 0.2% (that's for XEF/ZEA; it's less, 0.05% I think, if you buy VTI in an RRSP using norbert's gambit!), to maybe 0.6%, or 0.7%.

So you're losing a few hundred dollars a year, every year, growing as your portfolio grows and dividends are(n't) reinvested.

Don't get me wrong - if you're sitting on the fence, buy the bloody Tangerine Balanced Growth fund with 1% MER and just get on with life. Seriously. I get it. But if you are a tinkerer, don't get VXC. It's a fairly unimpressive offering from an otherwise excellent outfit.

On a quarter mil you're losing the same percentage, except it's $1250. I can be bothered to tinker to save myself money.

But no, top priority - make an asset allocation, and stick to it, and get your money invested. Absolutely.

drewdeezee

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Re: Financial newbie (canadian edition)
« Reply #52 on: May 21, 2015, 01:57:43 PM »
Here's CCP's white paper on the topic of foreign withholding taxes. 

https://www.pwlcapital.com/pwl/media/pwl-media/PDF-files/Justin%20Bender%20Assets/PWL_Bender-Bortolotti_Foreign-Withholding-Taxes_v04_hyperlinked.pdf?ext=.pdf

It's a lot to digest but it's got great examples for those who want to optimize.  I feel that by the time you get to this point, it's the equivalent of splitting the difference between earning an A-, A or A+ on a test.

We've already won by:

1. Spending less than we earn
2. Avoiding debt
3. Invest the savings
4. Prioritize tax-advantaged accounts over taxable

thriftyc

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Re: Financial newbie (canadian edition)
« Reply #53 on: May 21, 2015, 02:57:39 PM »
Have to decide for yourself if it's worth the hassle of holding VTI instead of VUN. In my case I believe it's not and I have a portfolio approaching 1MM.
VUN is simpler - again it's a difference of a .15% equivalent MER extra AND you do not have to deal with currency conversion charges and/or trying to get around them.

daverobev

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Re: Financial newbie (canadian edition)
« Reply #54 on: May 21, 2015, 06:41:34 PM »
Have to decide for yourself if it's worth the hassle of holding VTI instead of VUN. In my case I believe it's not and I have a portfolio approaching 1MM.
VUN is simpler - again it's a difference of a .15% equivalent MER extra AND you do not have to deal with currency conversion charges and/or trying to get around them.

Where do you get 0.15% from? 15% of 2% is 0.3% in withholding, VTI's MER is 0.05%, VUN.TO's is 0.15%. So 0.4% difference in an RRSP.

Which, on a million dollars, is $4k a year! And if you think about it, when SWR is from 3.7% to 4%, that is a HUGE chunk of your drawdown percentage you are throwing away.


fb132

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Re: Financial newbie (canadian edition)
« Reply #55 on: May 21, 2015, 09:21:53 PM »
Ugh don't buy VUN in your TFSA, buy VTI in your RRSP, if possible.

Questrade automatically does the W-8BEN stuff, you don't actually need to fill in a form with them.

I'm not a fan of VXC either.

XEF and XEA go better in a TFSA than VUN, IMHO.

ZEA yes sorry.

ZEA and XEF hold stocks directly. Lots of developed countries that are held inside impose no withholding. If you hold a US-domiciled fund that holds these stocks then you will pay US withholding tax of 15%.

With VUN, you always pay US withholding. In a TFSA any US (or other) foreign tax imposed is gone, it's non recoverable. In an RRSP, there is no US withholding, and probably little other withholding from foreign countries that have a sensible double taxation agreement with Canada. BUT if you hold a US domiciled fund in an RRSP that then holds foreign stuff... you may still lose some withholding as the *primary* country doesn't KNOW it's a retirement account.

Basically there are multiple levels of withholding based on your residency, the ETF you bought's domicile, and the domicile of any funds, stocks or ETFs that the ETF holds.

Short answer: reduce the 'depth' of holdings. ZEA and XEF now hold stocks directly. Good! VUN basically holds VTI, NOT the stocks directly. It's FAR FAR FAR from terrible but it is sub-optimal when there are better options (Norbert's Gambit to USD and buy VTI inside an RRSP - ok, don't do it for small amounts, but when you have a chunk of a few thousand dollars in VUN, switch it).
I think you meant ZEA,right??? And why do you believe that is a better choice?
You may be right, but onn the other hand, I read this article in which I agree with http://canadiancouchpotato.com/2015/01/30/the-wrong-way-to-think-about-withholding-taxes/ in a sense that I shouldn't go haywire simply because one pays a foreign tax.

CCP is slightly out here, and certainly with respect to international. If you hold VXUS, say, in a TFSA you lose 15% to the US on top of (CCP guesses 10%) whatever to the original country.

VXC is the same. It holds *US domiciled funds* in its wrapper.

You are basically going from 0.2% with XEF and ZEA, to 0.27% MER plus US withholding on dividends plus any foreign withholding on those international stocks held by the US wrapper.

If you've got $100k invested, your TER goes from 0.2% (that's for XEF/ZEA; it's less, 0.05% I think, if you buy VTI in an RRSP using norbert's gambit!), to maybe 0.6%, or 0.7%.

So you're losing a few hundred dollars a year, every year, growing as your portfolio grows and dividends are(n't) reinvested.

Don't get me wrong - if you're sitting on the fence, buy the bloody Tangerine Balanced Growth fund with 1% MER and just get on with life. Seriously. I get it. But if you are a tinkerer, don't get VXC. It's a fairly unimpressive offering from an otherwise excellent outfit.

On a quarter mil you're losing the same percentage, except it's $1250. I can be bothered to tinker to save myself money.

But no, top priority - make an asset allocation, and stick to it, and get your money invested. Absolutely.

You are right, so is this a good allocation for my ETF's in my TFSA: 25% on VAB, 25% on VCN, 25% on ZEA and 25% on XEF? Or maybe I should lower the % on VCN (since Canadian stock market represents only 3% of the world's market) and higher up the % in ZEA and XEF?
« Last Edit: May 21, 2015, 09:23:33 PM by fb132 »

thriftyc

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Re: Financial newbie (canadian edition)
« Reply #56 on: May 21, 2015, 09:41:04 PM »
Have to decide for yourself if it's worth the hassle of holding VTI instead of VUN. In my case I believe it's not and I have a portfolio approaching 1MM.
VUN is simpler - again it's a difference of a .15% equivalent MER extra AND you do not have to deal with currency conversion charges and/or trying to get around them.

Where do you get 0.15% from? 15% of 2% is 0.3% in withholding, VTI's MER is 0.05%, VUN.TO's is 0.15%. So 0.4% difference in an RRSP.

Which, on a million dollars, is $4k a year! And if you think about it, when SWR is from 3.7% to 4%, that is a HUGE chunk of your drawdown percentage you are throwing away.

Well, it depends on what type of account you are talking about. We have mentioned TFSA's earlier. - Here is an exact analysis for each one as taxes are treated differently in each case:
                                             Total mer inc tax/account type
FUND    Market    MER            RRSP          TFSA     TAXABLE ACCOUNT
VTI        USA       0.05%       0.05%        0.32%        0.05%
VUN      CND       0.17%       0.44%        0.44%        0.17%

TFSA
If the orginal mer's were equal, the cost of the withholding taxes of VUN held in a TFSA would be a wash with VTI total costs. (VTI is still taxed in a TFSA) = Many people do not realize this.

RRSP
Granted, there is more of a difference within an RRSP. If the mer's were equal, the net effect of the tax is equal to an mer of 0.27% in favour of VTI.

For me, because I hold VUN in a few types of accounts, the total net effect of the withholding tax averages about .15% mer equivalent. Factor in the benefit of reinvesting dividends from VUN, I just don't see VTI is worth the hassle -maybe when my account reaches greater heights I will. For someone starting out, the extra complexity VTI brings is hardly worth it.

Additionally, quoting your example, I don't think I will ever get to 1MM of VUN or VTI. I would have to hit a portfolio of 5MM before I had that much US exposure based on my allocation. I will be long FIRED by then.

Here is a resource that does a great job at explaining it:
http://canadiancouchpotato.com/2014/02/20/the-true-cost-of-foreign-withholding-taxes/




« Last Edit: May 21, 2015, 10:37:15 PM by thriftycanadian »

daverobev

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Re: Financial newbie (canadian edition)
« Reply #57 on: May 22, 2015, 05:49:30 AM »
In a TFSA I agree, probably not worth it; but the best place for US stuff is in an RRSP in USD. Without looking at your portfolio it's impossible to say. But for the sake of a few clicks, I'd swap VUN for VTI in say $5k increments.

daverobev

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Re: Financial newbie (canadian edition)
« Reply #58 on: May 22, 2015, 05:54:34 AM »
You are right, so is this a good allocation for my ETF's in my TFSA: 25% on VAB, 25% on VCN, 25% on ZEA and 25% on XEF? Or maybe I should lower the % on VCN (since Canadian stock market represents only 3% of the world's market) and higher up the % in ZEA and XEF?

Depends on the whole picture. FIRST work out your asset alloc, THEN work out where those assets should be housed. Also factor money in an RRSP is 'worth less' than money elsewhere because it will be taxed as income when you withdraw it - unless you can fit it into your personal allowance.

IF you are talking about having an RRSP, TFSA, and unreg - I would fill the TFSA with XEF or ZEA (they are basically the same, don't need both), RRSP with VTI, and put bonds and Canadian unregistered - that's the most efficient.

fb132

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Re: Financial newbie (canadian edition)
« Reply #59 on: May 22, 2015, 06:06:07 AM »
You are right, so is this a good allocation for my ETF's in my TFSA: 25% on VAB, 25% on VCN, 25% on ZEA and 25% on XEF? Or maybe I should lower the % on VCN (since Canadian stock market represents only 3% of the world's market) and higher up the % in ZEA and XEF?

Depends on the whole picture. FIRST work out your asset alloc, THEN work out where those assets should be housed. Also factor money in an RRSP is 'worth less' than money elsewhere because it will be taxed as income when you withdraw it - unless you can fit it into your personal allowance.

IF you are talking about having an RRSP, TFSA, and unreg - I would fill the TFSA with XEF or ZEA (they are basically the same, don't need both), RRSP with VTI, and put bonds and Canadian unregistered - that's the most efficient.
For now I ain't touching the RRSP or the non-reg since I am in the lower tax bracket, I am trying to maximize my TFSA first. Once that's done (If I will ever be able to maximize it), then my next option would be maximizing RRSP and investing in  non-reg.

daverobev

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Re: Financial newbie (canadian edition)
« Reply #60 on: May 22, 2015, 08:46:41 AM »
You are right, so is this a good allocation for my ETF's in my TFSA: 25% on VAB, 25% on VCN, 25% on ZEA and 25% on XEF? Or maybe I should lower the % on VCN (since Canadian stock market represents only 3% of the world's market) and higher up the % in ZEA and XEF?

Depends on the whole picture. FIRST work out your asset alloc, THEN work out where those assets should be housed. Also factor money in an RRSP is 'worth less' than money elsewhere because it will be taxed as income when you withdraw it - unless you can fit it into your personal allowance.

IF you are talking about having an RRSP, TFSA, and unreg - I would fill the TFSA with XEF or ZEA (they are basically the same, don't need both), RRSP with VTI, and put bonds and Canadian unregistered - that's the most efficient.
For now I ain't touching the RRSP or the non-reg since I am in the lower tax bracket, I am trying to maximize my TFSA first. Once that's done (If I will ever be able to maximize it), then my next option would be maximizing RRSP and investing in  non-reg.

Ok fair enough, makes sense then.

I'd do 15% Canada (remembering Canada is something like 4% of global market cap? Or less? I forget), you're already getting 'exposure' to Canada through OAS/GIS/CPP/housing. Then maybe 15% bonds. 15-20% emerging (XEC, say), and the rest split between VUN and XEF or ZEA.

Something like that.

fb132

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Re: Financial newbie (canadian edition)
« Reply #61 on: May 22, 2015, 09:06:18 AM »
You are right, so is this a good allocation for my ETF's in my TFSA: 25% on VAB, 25% on VCN, 25% on ZEA and 25% on XEF? Or maybe I should lower the % on VCN (since Canadian stock market represents only 3% of the world's market) and higher up the % in ZEA and XEF?

Depends on the whole picture. FIRST work out your asset alloc, THEN work out where those assets should be housed. Also factor money in an RRSP is 'worth less' than money elsewhere because it will be taxed as income when you withdraw it - unless you can fit it into your personal allowance.

IF you are talking about having an RRSP, TFSA, and unreg - I would fill the TFSA with XEF or ZEA (they are basically the same, don't need both), RRSP with VTI, and put bonds and Canadian unregistered - that's the most efficient.
For now I ain't touching the RRSP or the non-reg since I am in the lower tax bracket, I am trying to maximize my TFSA first. Once that's done (If I will ever be able to maximize it), then my next option would be maximizing RRSP and investing in  non-reg.

Ok fair enough, makes sense then.

I'd do 15% Canada (remembering Canada is something like 4% of global market cap? Or less? I forget), you're already getting 'exposure' to Canada through OAS/GIS/CPP/housing. Then maybe 15% bonds. 15-20% emerging (XEC, say), and the rest split between VUN and XEF or ZEA.

Something like that.
Where do you go to see what each index funds are invested at? I only about XEF, VUN, VAB and VCN because canadian couch potatos go in details about these ETF's. Is there a website that explains in detail each ETF and where they invest?

It's been only 1 month I am trying to learn about ETF's and this is also the first month I want to "divorce" with my bank when it comes to investing (I was a former mutual fund investor), so I am still a newbie in this.
« Last Edit: May 22, 2015, 09:10:21 AM by fb132 »

Ottawa

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Re: Financial newbie (canadian edition)
« Reply #62 on: May 22, 2015, 09:20:49 AM »
Where do you go to see what each index funds are invested at? I only about XEF, VUN, VAB and VCN because canadian couch potatos go in details about these ETF's. Is there a website that explains in detail each ETF and where they invest?

It's been only 1 month I am trying to learn about ETF's and this is also the first month I want to "divorce" with my bank when it comes to investing (I was a former mutual fund investor), so I am still a newbie in this.

Just go directly to the ETF provider.  You can download the data from there if you want to play with it.
Blackrock for XEF
i.e. http://www.blackrock.com/ca/individual/en/products/251421/ishares-msci-eafe-imi-index-etf and click on "All Holdings"

Vanguard for the 'V's
i.e. https://www.vanguardcanada.ca/individual/mvc/detail/etf/overview?portId=9557&assetCode=EQUITY##overview

fb132

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Re: Financial newbie (canadian edition)
« Reply #63 on: May 22, 2015, 09:43:55 AM »
Where do you go to see what each index funds are invested at? I only about XEF, VUN, VAB and VCN because canadian couch potatos go in details about these ETF's. Is there a website that explains in detail each ETF and where they invest?

It's been only 1 month I am trying to learn about ETF's and this is also the first month I want to "divorce" with my bank when it comes to investing (I was a former mutual fund investor), so I am still a newbie in this.

Just go directly to the ETF provider.  You can download the data from there if you want to play with it.
Blackrock for XEF
i.e. http://www.blackrock.com/ca/individual/en/products/251421/ishares-msci-eafe-imi-index-etf and click on "All Holdings"

Vanguard for the 'V's
i.e. https://www.vanguardcanada.ca/individual/mvc/detail/etf/overview?portId=9557&assetCode=EQUITY##overview

Thanks, they are very helpfull.

To daverobev: How does this look 15% VAB, 15% VCN, 15% XEC, 35% VUN and 25% XEF ....If I understand each ETF, XEC is for emerging markets, VUN is for the US market and XEF is for international market if I read each of the ETF's descirptions through their website,right??? The MER should be about 0,35%, right?

In the TFSA, there won't be any "gotcha" with those ETF's right. Sometimes I feel you have to always read the fineprint like the VXC where it has 2 witholding taxes or that dreadfull Norbert's Gambit(usefull,but complicated to understand) that I keep hearing about on US ETF's. All I want is to invest in peace, no forms to fill, no expensive fee's to pay...just invest for my future, because I want to be FI hopefully in my 40's (I am 33 at this moment), it would be great being FI earlier, but that would be tough.
« Last Edit: May 22, 2015, 10:09:25 AM by fb132 »

daverobev

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Re: Financial newbie (canadian edition)
« Reply #64 on: May 22, 2015, 03:41:45 PM »
Where do you go to see what each index funds are invested at? I only about XEF, VUN, VAB and VCN because canadian couch potatos go in details about these ETF's. Is there a website that explains in detail each ETF and where they invest?

It's been only 1 month I am trying to learn about ETF's and this is also the first month I want to "divorce" with my bank when it comes to investing (I was a former mutual fund investor), so I am still a newbie in this.

Just go directly to the ETF provider.  You can download the data from there if you want to play with it.
Blackrock for XEF
i.e. http://www.blackrock.com/ca/individual/en/products/251421/ishares-msci-eafe-imi-index-etf and click on "All Holdings"

Vanguard for the 'V's
i.e. https://www.vanguardcanada.ca/individual/mvc/detail/etf/overview?portId=9557&assetCode=EQUITY##overview

Thanks, they are very helpfull.

To daverobev: How does this look 15% VAB, 15% VCN, 15% XEC, 35% VUN and 25% XEF ....If I understand each ETF, XEC is for emerging markets, VUN is for the US market and XEF is for international market if I read each of the ETF's descirptions through their website,right??? The MER should be about 0,35%, right?

In the TFSA, there won't be any "gotcha" with those ETF's right. Sometimes I feel you have to always read the fineprint like the VXC where it has 2 witholding taxes or that dreadfull Norbert's Gambit(usefull,but complicated to understand) that I keep hearing about on US ETF's. All I want is to invest in peace, no forms to fill, no expensive fee's to pay...just invest for my future, because I want to be FI hopefully in my 40's (I am 33 at this moment), it would be great being FI earlier, but that would be tough.

I make that 105% ;)

If you want super easy go Tangerine Balanced Growth. It's one fund that is 25% each Canada/US/international/bonds. Falling off a log easy.

To get to 100 I'd reduce the US by 5% if you're going the discount brokerage route. You WILL lose an extra 0.3% US withholding on VUN, but yeah for simple just do it.

fb132

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Re: Financial newbie (canadian edition)
« Reply #65 on: May 22, 2015, 04:22:10 PM »
Where do you go to see what each index funds are invested at? I only about XEF, VUN, VAB and VCN because canadian couch potatos go in details about these ETF's. Is there a website that explains in detail each ETF and where they invest?

It's been only 1 month I am trying to learn about ETF's and this is also the first month I want to "divorce" with my bank when it comes to investing (I was a former mutual fund investor), so I am still a newbie in this.

Just go directly to the ETF provider.  You can download the data from there if you want to play with it.
Blackrock for XEF
i.e. http://www.blackrock.com/ca/individual/en/products/251421/ishares-msci-eafe-imi-index-etf and click on "All Holdings"

Vanguard for the 'V's
i.e. https://www.vanguardcanada.ca/individual/mvc/detail/etf/overview?portId=9557&assetCode=EQUITY##overview

Thanks, they are very helpfull.

To daverobev: How does this look 15% VAB, 15% VCN, 15% XEC, 35% VUN and 25% XEF ....If I understand each ETF, XEC is for emerging markets, VUN is for the US market and XEF is for international market if I read each of the ETF's descirptions through their website,right??? The MER should be about 0,35%, right?

In the TFSA, there won't be any "gotcha" with those ETF's right. Sometimes I feel you have to always read the fineprint like the VXC where it has 2 witholding taxes or that dreadfull Norbert's Gambit(usefull,but complicated to understand) that I keep hearing about on US ETF's. All I want is to invest in peace, no forms to fill, no expensive fee's to pay...just invest for my future, because I want to be FI hopefully in my 40's (I am 33 at this moment), it would be great being FI earlier, but that would be tough.

I make that 105% ;)

If you want super easy go Tangerine Balanced Growth. It's one fund that is 25% each Canada/US/international/bonds. Falling off a log easy.

To get to 100 I'd reduce the US by 5% if you're going the discount brokerage route. You WILL lose an extra 0.3% US withholding on VUN, but yeah for simple just do it.
lol, I did a calculation mistake again...how the hell did I pass math in the old days :P

fb132

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Re: Financial newbie (canadian edition)
« Reply #66 on: May 28, 2015, 08:01:23 AM »
I am fighting over my asset allocations. As I am 33, is 75% on stocks / 25% Bonds a good asset allocation for me. If my TFSA was just for retirement, I would of gone 90/10, but since I am still unsure if I want to buy a condo in 5-10 or 15 years, that is why I thought maybe 75/25 would be a good number since it would accumulate the cash fast and the bonds may cover me for awhile if there is a market crash (There will be one, we just don't know when).

On one hand, I figure "fuck it, go all on stocks (90/10 like CCP suggests for aggressive) and will see what the future decides", but on the other hand, I figure if I meet someone in the near future, we would want to buy a condo together (not a big fan of homes, too much outside repairs).

As for retirement, I love my job, so if nothing changes it, I will likely retire at 60, but I want to be FI asap (late 40's or early 50's). Since I am low income, the fact I can't save more than 50% will hurt me on that one, but it's ok, that part doesn't worry, because like I said, I love my job.
« Last Edit: May 28, 2015, 08:04:36 AM by fb132 »

Retire-Canada

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Re: Financial newbie (canadian edition)
« Reply #67 on: May 28, 2015, 09:41:51 AM »

On one hand, I figure "fuck it, go all on stocks (90/10 like CCP suggests for aggressive) and will see what the future decides", but on the other hand, I figure if I meet someone in the near future, we would want to buy a condo together (not a big fan of homes, too much outside repairs).

How much would a condo down-payment be in your area? Figure out how many months it would take to save from scratch at your current savings rate?
« Last Edit: May 28, 2015, 09:44:43 AM by Vikb »

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Re: Financial newbie (canadian edition)
« Reply #68 on: May 28, 2015, 09:55:37 AM »

On one hand, I figure "fuck it, go all on stocks (90/10 like CCP suggests for aggressive) and will see what the future decides", but on the other hand, I figure if I meet someone in the near future, we would want to buy a condo together (not a big fan of homes, too much outside repairs).

How much would a condo down-payment be in your area? Figure out how many months it would take to save from scratch at your current savings rate?
I could get one from 150 000 to 250 000$ on average in my area (I live in a big city). The only problem is the "When will I buy it", that is the part I don't know, just like retirement, I don't have an age on when it's going to happen. I estimate my retirement at 60, but if I still enjoy my job then, I might extend it too.

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Re: Financial newbie (canadian edition)
« Reply #69 on: May 28, 2015, 09:59:42 AM »

I could get one from 150 000 to 250 000$ on average in my area (I live in a big city). The only problem is the "When will I buy it", that is the part I don't know, just like retirement, I don't have an age on when it's going to happen. I estimate my retirement at 60, but if I still enjoy my job then, I might extend it too.

So say $200K.

10% down is $20K

25% down is $50K

How long at your current savings rate would it take you to save that from scratch?

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Re: Financial newbie (canadian edition)
« Reply #70 on: May 28, 2015, 10:08:14 AM »

I could get one from 150 000 to 250 000$ on average in my area (I live in a big city). The only problem is the "When will I buy it", that is the part I don't know, just like retirement, I don't have an age on when it's going to happen. I estimate my retirement at 60, but if I still enjoy my job then, I might extend it too.

So say $200K.

10% down is $20K

25% down is $50K

How long at your current savings rate would it take you to save that from scratch?
I have a more ambitious goal, when I buy a condo, it will be cash, no mortgage. Right now I pay rent (whcih cost me less than if I would have a mortgage). I am not in a hurry to leave right now, because I get along with the people I live with and its a win-win situation for both of us.

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Re: Financial newbie (canadian edition)
« Reply #71 on: May 28, 2015, 11:37:13 AM »

Been there, done that.  Condos are an ongoing money pit.  Look into "special assessments"

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Re: Financial newbie (canadian edition)
« Reply #72 on: May 28, 2015, 11:55:13 AM »

Been there, done that.  Condos are an ongoing money pit.  Look into "special assessments"

This is the word.  The Weetabix condo towers going up in Toronto will likely need to be totally reskinned within 10 years.  Can everyone owner please give 20,000K? 

Yeah, renting is a far better proposition.  Don't even think about buying in Toronto.