Author Topic: Looking for a Canadian Money Mentor or Investor Buddy  (Read 5722 times)

lifejoy

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Looking for a Canadian Money Mentor or Investor Buddy
« on: April 13, 2013, 01:27:30 AM »
Hi! I'm new to investing, and although I've read The Wealthy Barber and MMM, I've got a long way to go.

Much of what I read is geared towards Americans, or way over my head.

Are you well-versed in personal finance and investing strategies? Care to share your wisdom? Looking for a pal that will motivate you to buy stocks instead of new shoes? I'm your gal!

I'd also be happy to make friends with people as clueless (but eager to learn) as myself. I don't have any friends that are interested in investing, and I'd love to share ideas with someone.

:)

daverobev

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Re: Looking for a Canadian Money Mentor or Investor Buddy
« Reply #1 on: April 13, 2013, 09:43:04 PM »
Hi,

sure why not! I'm not actually.. Canadian, though I'm married to one, and living near Ottawa :)

Honestly the best way to start is to have a look through Canadian Couch Potato. I'm very strongly in the 'do as I say, not as I do' camp (as I have a bad habit of buying stocks not ETFs or index mutual funds). I also have a slightly complex situation in that I have a lot of stuff in the UK, so I'm just getting things rolling here...

Anyway, drop me a PM if you like, or just post random thoughts on here, I'm sure plenty of people will also be happy to chime in!

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Re: Looking for a Canadian Money Mentor or Investor Buddy
« Reply #2 on: April 14, 2013, 06:30:12 AM »
I'll chime in!
1. I'm Canadian
2. When it comes to investing I am a dolt
3. Someone here posted the site to Couch Potato which I am slowly making my way through!!

Can't wait to hear from others, I am all ears and promise to stay away from the new shoes!

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Re: Looking for a Canadian Money Mentor or Investor Buddy
« Reply #3 on: April 14, 2013, 08:20:09 AM »
I think this would be more useful if everyone shared more about themselves, to get a better idea about the kind of advice needed.
Useful things to know: (Answer as much as you're comfortable with.)
Age
Spouse
Kids
Other Dependents
Current Financial Literacy/Methods - do you budget, track? Neither? Is it easy for you to save? Hard?
Current Financial Situation - do you spend less than you make? Emergency fund? How much? Any savings? Pension? Debt? Mortgage? Where is your money currently kept?
Financial Goals - early retirement? Retirement at all? Saving for kids? Just getting out of debt? Just not starving? Making more off your money?
Anything else you are concerned about?

I'll start - I see myself as more of a mentor than needing a mentor, but I certainly don't know it all.

Age: 36
Spouse: Yes, also 36
Kids: None and will never have.

Current Financial Literacy/Methods: I've never budgeted. Both my husband and I have always just automatically lived below our means and saved money. I also track what I spend to the penny, which I've been doing for over 10 years. Since being married I track DH's money as well, though not to the penny. We do maintain separate accounts and make our own independent financial decisions. I do give him advice. He doesn't give me advice as he's not interested in investing type stuff.

Current Financial Situation: Last year I saved 54% of my take home pay - partly because I'm reasonably well paid, but especially because the default is to not spend money. Emergency fund is part of my overall portfolio. We rent so no mortgage. Only debt is a car loan, because the rate is lower than our savings account. We use credit cards extensively for the 1% back but is paid off every month.
My investments are currently at 6X my annual spending. DH's are a bit closer to 7X his spending.
Percentage wise, investments are currently at: RSP - 64%, TFSA - 18%, Taxable: 18%.
I currently use a combination of high interest savings accounts, GICs (from when the rates were higher) and index and bond funds through TD (e-series). I currently have about 33% of my money in TD - a modified couch potato portfolio and am slowly moving more money in this direction.
I started out with ING mutual funds, which I also recommend for ease of use for beginners.
As of this year, my RSP and TFSA will be maxed and I will be adding in some taxable index funds.

Financial Goals - I want to be FI (financially independent), which should happen between 45-50 depending on how much I work in the interim. I'm not sure when I will fully retire as my job is enjoyable and allows me to work part time, and hopefully seasonably. Basically I just don't want to HAVE to work until I'm 60-70. But I want to be able to spend money now on things that I enjoy as well. I'm not particularly frugal.

Tracking and fiddling with money is one of my hobbies. This is why I have such detailed info ready to go. I like to try to maximize my returns without feeling my money is excessively at risk.

Anyhow, I'd love to hear more about other people's stories and would be willing to discuss any topic further, here or you can pm me.

daverobev

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Re: Looking for a Canadian Money Mentor or Investor Buddy
« Reply #4 on: April 14, 2013, 09:47:11 AM »
Ok here goes:

Age: early thirties
Married, no children but likely to change soonish.

Budgeting is a funny one. I have always spent less than I earned, and only had mortgage debt. I would say I'm a bit too 'cheap' at the moment, but for the last 3 years I've been saving like crazy to reach FI. I'm almost there but only on a bare-bones level - as in, not much discretionary income left over. Current plan is to be stay at home dad when my wife goes back to work.

I'm fighting with myself at the moment - between index investing (best! I know it!) and value investing (can be REALLY GOOD... if you're intelligent about it). I'm suggesting to everyone to do the former. I'm doing 50% of the former, maybe more.

I'm dreaming of... buying a camper van and going on long trips. Don't know how/when that'll happen, but hopefully I'll be living in a camper part time this summer while working as a farmer/gardener a couple of days a week.

I think... well, this is still the debate. In a few years, or sooner, or not at all, I need to find a 'job' from which I get a good feeling of satisfaction. I'm really enjoying gardening but the climate here is just not that helpful! We'll see.

lifejoy

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Re: Looking for a Canadian Money Mentor or Investor Buddy
« Reply #5 on: April 15, 2013, 09:24:30 AM »
Hi All! :)

I'm Allie, and I'm 24. I have ~$10,000 in student loans that I'm hoping to get out of the way ASAP, but I'm also saving $400 every month that I'm looking to start investing more aggressively. Right now I have my savings in mutual funds within my TFSA and RRSP accounts.

I'm not looking to retire early, necessarily. I do, however, want the option of being a stay-at-home mom (when I have kids one day). I'd also like to work because I WANT to, not because I HAVE to! Isn't that the dream? :)

I live with my boyfriend, and while he is somewhat frugal and limits his spending in some ways... I would not describe him as mustachian.

Last month I was budgeting using the Gail Vaz-Oxlade jar system; now I'm doing a half-assed version of that.

I find it easy to save, but would find it easier if a) my income were more consistent and b) I didn't have student loans to tackle.

I don't have a mortgage. My boyfriend and I are renting a place that is nicer than we need, but he's not willing to "settle" for less.

I'm clueless when it comes to investing! I'm trying to learn more (Canadian couch potato!) and I'm looking at the options that TD bank has, even though I'm with RBC right now.

daverobev

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Re: Looking for a Canadian Money Mentor or Investor Buddy
« Reply #6 on: April 15, 2013, 10:22:42 AM »
Hey Allie!

Nothing too wrong with the RBC Index (Canadian/US) offerings. If you have other stuff with RBC already you should be able to switch from the 2 or 2.5% funds they have, to the 0.7% funds, easily. I mean - 0.7% is worse than 0.35%, BUT it's much better than 2%!!

What is the interest rate on your student loan? If it's anything like 5% I'd pay that off rather than invest in anything (RRSP aside, dependent on your marginal rate!). It's a GUARANTEED saving. Again... set up monthly or biweekly contributions into your TFSA but kill the loans first. IMHO!

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Re: Looking for a Canadian Money Mentor or Investor Buddy
« Reply #7 on: April 15, 2013, 11:25:33 AM »
What a great idea!

I'm going to join in since I find myself in the same situation (newb)! and figuring things out. I am excited we are starting out around the same age Allie and look forward to learning from the more experienced as well.

I am mid 20s, in a relationship but single in terms of finances. My goal is financial independence, not necessary early retirement since I am just starting out in a career.

I find it easy to save since I have no responsibilities to other people.

I have been reading the couch potato and recently signed up for a questrade TFSA account. In my opinion I waited a little too long to begin my investing journey, I was too cautious and wanted to make sure I had all the info. But as I went through signing up for the account with questrade and learning things, I realize I had a lot more to learn which I could have never predicted. So I think jumping right in once I had a basic sense would have been better.

I'm figuring out the platform and what's what, I found this info to be particular useful:
http://www.learnstocktrading.ca/classroom/securities/etfs/default.aspx

I still have to pick which etfs I want, so if someone has advise/opinions on them I'd love to hear it.

daverobev

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Re: Looking for a Canadian Money Mentor or Investor Buddy
« Reply #8 on: April 15, 2013, 02:10:01 PM »
ETFs - generally go for the one with the lowest MER that isn't of some oddball tax structure (unless it benefits you... which is beyond my understanding, should probably see tax specialist, etc). In short - avoid 'tax friendly swap structure', 'hedged' and so on unless you know why!!

Canadian: ZCN
CAD Real Estate ZRE (or VRE, which is cheaper, but less diversified)
US: VTI I think is the right one, but ideally in your RRSP. Also note that converting CAD$ to US$ is not cheap (2.5%) unless you can figure out a clever way of doing it (Norbert's Gambit, or open an RBC US$ savings account, and use a forex company to send from CAD$ to US$ at a much better rate, say 1.5%). Ugh. Ok, so basically just figure you'll lose $25 per $1k. If you do go with Questrade MAKE SURE YOU SET YOUR ACCOUNTS TO SETTLE IN ORIGINATING CURRENCY (else they will convert any US$ dividends back to CAD$) - you want to do this when YOU want to do it.
International - Well, up til now its all been VXUS but as from today's Canadian Couch Potato, there are a couple of iShares funds. The big problem with these is that they are foreign investments in a US$ ETF in a CAD$ ETF. It doesn't matter if you are in an RRSP or TFSA, you WILL lose the US withholding tax, AND any foreign withholding tax. Personally I would just convert to US$ and buy the 'native' funds - there is NO withholding tax on the US end of stuff in an RRSP WHEN IT IS A US$ fund.

However for *simplicity* just hold these new CAD$ accounts. You will not lose the 2.5% currency conversion fee at all, but your dividends will take a hit.

To be honest it is a right bugger being Canadian - with such a relatively small and concentrated stockmarket. I have stuff from the UK still, in a British brokerage, and the access is much better, the ISA (== TFSA) bigger though it doesn't roll over from year to year, etc... oh well!

Um. The reason I personally go for ZCN (or XIC, if you're an iShares fan) is that it holds the TSX composite (=254 companies) not the TSX60 (=... let me look that up!). Even with the Composite, a few companies make up an unfortunate proportion of the index (RBC, TD, ScotiaBank, CIBC, and BMO are like... 20%+ of ALL Canadian market cap!!).

Ok, rambling, rambling. Hope this is useful to someone!

Basically you can't go too far wrong with CCP's advice. To start, just having XBB (bond index) at your age, VTI, VXUS and ZCN will do you right... You've got bonds (stability) and The World there. Literally - the world. You could even skip the ZCN if you wanted, as VXUS does hold a chunk of Canadian stuff...

lifejoy

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Re: Looking for a Canadian Money Mentor or Investor Buddy
« Reply #9 on: April 15, 2013, 03:05:57 PM »
Daverobev -

I agree, paying off my student loans is a big priority, BUT - I want to get into the psychological habit of saving. Additionally, I'm in a part-time position right now, but the second I'm in a full-time gig, I should be able to wipe out my loans in 3 months. Ideally.

I can always pull money out of my TFSA, if I want to.

Thanks for the useful link, Tomatoprincess!

I'll have to look up Questrade, I've never heard of that.

iProgramStuff

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Re: Looking for a Canadian Money Mentor or Investor Buddy
« Reply #10 on: April 18, 2013, 08:43:02 AM »
This is pretty cool. I live in Canada too, and I seem somewhat similar.

I'm 22 and live with my girlfriend (we're moving in together TODAY!), and have 12k in student debts (but I'm still a student [kinda, on a 16 month paid internship as a programmer and return for my fourth and final year of university September 2013] so no interest yet). My girlfriend sounds a bit like your boyfriend :)

I read a bit about investing..and have a Questrade account with the Permanent Portfolio (http://earlyretirementextreme.com/wiki/index.php?title=Permanent_Portfolio) implemented. I have stashed around $26k but with the recent gold drop it is closer to $25k. I plan to be FI by 35! Earlier would be lovely! I have a little blog at www.lifewithabrain.com where I write some stuff (my FI plans, the permanent portfolio, and I have a monthly journal) you may find interesting. 
« Last Edit: April 18, 2013, 09:05:59 AM by iProgramStuff »

lifejoy

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Re: Looking for a Canadian Money Mentor or Investor Buddy
« Reply #11 on: April 18, 2013, 09:52:38 AM »
Great links, thanks!

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Re: Looking for a Canadian Money Mentor or Investor Buddy
« Reply #12 on: April 18, 2013, 03:58:40 PM »
I'll third the Canadian Couch Potato.

I'd normally recommend reading the Bogleheads Guide to Investing, various books by John Bogle or I Will Teach You to Be Rich by Ramit Sethi.

Or I can just summarize that for you:

1. Open up an RRSP (sounds like you've done this)

2. Setup a pre-authorized transfer based on your budget (if you want to do 100 a month, do a pre-auth transfer of 25 a week, so money is constantly flowing into account to take advantage of dollar cost averaging - ie. always buying to get the lowest average price- increase the amount per your budget.. ie. if it's 400, do 100 a week, etc)

3. Invest your money in an index fund or several. Ensure the MER (Management Expense Ratio, ie. how much the bank skims off the top for management) is low. Looking at Couch Potato for different Canadian funds would be good. A balance of Canadian Index, US Index (in USD), and some kind of Canadian Bond Fund or Bond Index would be a good start. Maybe throw in a Dividend Fund that has heavy holdings in good dividend stock companies.

4. Now you're done. Increase weekly investments once your debt is paid off.

If you have questions about any of the specifics, let me know. I bank with RBC and TD primarily for my TFSA / RRSP, so I'm pretty familiar with their funds if you have questions.

BONUS

5. If you max out your RRSP, then max your TFSA. If you're maxing your RRSP & your TFSA, you can open an investment account that you'll be taxed on for your additional funds.

daverobev

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Re: Looking for a Canadian Money Mentor or Investor Buddy
« Reply #13 on: April 18, 2013, 04:36:47 PM »
The RRSP is not *necessarily* the best place to put stuff.

If your marginal rate is 20% and you expect to be going higher in your career, it might be worth waiting to contribute.

Many people suggest TFSA first. But, for foreign stuff (especially US$), yes the RRSP is the best place.

I'm in a slightly odd situation in that I'm not going to be working much longer, but haven't been in Canada long either, so the RRSP room is really not that helpful, and it might not be for you either. It is sensible to check it out.

daverobev

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Re: Looking for a Canadian Money Mentor or Investor Buddy
« Reply #14 on: April 18, 2013, 06:59:31 PM »
Oh my good god.

My god.

I just looked at GIS/OAS. Bearing in mind I'm an immigrant, and don't really know about Canadian systems, except that I had to pay in to CPP last year when I didn't want to (I'm self employed so it was 10%, ugh).

It looks like, as far as I can see, when I hit 65 (which will no doubt be 70), even with no (significant) CPP, the govt will give me (us) as "stupid amount of money" for free.

Even if we have incomes of $20k+ (ie, not eligible for GIS), we'll get $550 EACH! EACH!! of OAS.

The mind boggles.

If we had absolutely nothing, not a brass bean, OAS+ full GIS is $1k a month.

Insane.

Maybe I *should* go out and buy a truck.

daverobev

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Re: Looking for a Canadian Money Mentor or Investor Buddy
« Reply #15 on: April 18, 2013, 07:03:02 PM »
*EDIT* I should point out I don't actually expect to receive that crazy amount of money from the state. I seriously doubt whether Canada will be able to afford to pay everyone who hasn't saved anything $1k a month, forever.

Which actually just makes me crazier. I wonder how many 'boomers are paying for their iPhones with this free money. In fact, overpaying for everything. Makes me understand how Bell charges so much for a damn landline!

daverobev

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Re: Looking for a Canadian Money Mentor or Investor Buddy
« Reply #16 on: April 18, 2013, 08:17:57 PM »