Author Topic: New to this looking for suggestions  (Read 3640 times)

dess1313

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New to this looking for suggestions
« on: April 18, 2015, 08:14:18 AM »
I'm a canadian, and am working my way to investing/saving more of my hard earned moolah.  I am a very conservative investor, and also new to this.  I'm not a fan of a lot of risk so i have been staying away from the market stuff for a while.  I'm currently 30, and have a lot of years of compounding ahead of me.  I'm not a huge fan of RRSPs for myself because i will be receiving a decent pension and i suspect i will be nailed hard in taxes down the road according to my calculations so for now i'm sticking to the TFSA.

I've been reading and am thinking of using https://www.tangerine.ca/en/investing/TFSAs/tax-free-investment-fund/index.html#  under our TFSA umbrellas we have here. The fees are low, only 1.07% or 1.08% and other than a few market dips due to worldly issues, they seem to have been performing well.

I am thinking of putting about 20% of my new savings in eithe the balanced income or balanced growth options, or splitting it between both.  The rest of my savings will be going to various savings accounts (or GICs if the price ever goes up)for a while, since i have limited liquid money on hand and still need to stock up my emerg fund a bit from being off work 3 years ago.  That thing save my ass, so it is one thing i will not sacrifice as much as some laugh at the lower interest rates. 

Can anyone spot some big red flags in approaching things this way?  Thanks for reading!

Heckler

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Re: New to this looking for suggestions
« Reply #1 on: April 18, 2015, 08:49:13 AM »
If your now mortgage free in five years, I suspect your TFSA limit will quickly fill up. If you intent to sit on cash, I'd keep it in a saving account, not TFSA.  That way you can max out TFSA with the balanced growth for you long term savings.  TFSA is best for tax free growth, not stagnation.



Heckler

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Re: New to this looking for suggestions
« Reply #2 on: April 18, 2015, 08:53:48 AM »
I would also get the CCP guide to the perfect portfolio and read it three times before you do anything.

http://canadiancouchpotato.com/about/

http://canadiancouchpotato.com/resources/

PharmaStache

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Re: New to this looking for suggestions
« Reply #3 on: April 18, 2015, 09:50:39 AM »
I use the Tangerine funds (balanced and balanced growth) and like them.  They are so easy to use (since they rebalance for you) and great for beginners with smaller amounts of money.  Definitely check out the model portfolios on CCP http://canadiancouchpotato.com/model-portfolios-2/ and figure out exactly what "conservative" means for you. 


okits

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Re: New to this looking for suggestions
« Reply #4 on: April 18, 2015, 11:55:54 AM »
Do you have an ER goal?  If so, at what age?  When will you be eligible to draw your pension?  What is your marginal tax bracket?  How much money can you save and invest per year?

dess1313

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Re: New to this looking for suggestions
« Reply #5 on: April 18, 2015, 03:41:28 PM »
If your now mortgage free in five years, I suspect your TFSA limit will quickly fill up. If you intent to sit on cash, I'd keep it in a saving account, not TFSA.  That way you can max out TFSA with the balanced growth for you long term savings.  TFSA is best for tax free growth, not stagnation.

Its going to take me 4-6 years to probably get even close to the max like you thought.  So for now i'm not too worried about having my EF in it because i'm no where near the limit.  If my investments did well, i would definitely move my EF outside the TFSA umbrella to make room for a better interest investment.  I'm not needing huge wads of cash, but i need more than i have now anyways.

Heckler I will definitely start reading the CCC website!

Thanks for the recommendation PharmaStache!  nice to hear from someone who uses them

Do you have an ER goal?  If so, at what age?  When will you be eligible to draw your pension?  What is your marginal tax bracket?  How much money can you save and invest per year?

I dont have an early retirement goal date set yet.  I will receive a good pension from my work but only if i hit a magic 80 while working for them. That's 22 years from now. It takes a drastic hit if you dont finish the magic 80.  working for them at .8eft or a .5eft would seem like a fantastic option for me, and would fund other things i'd like to continue doing like travel more and keep giving me time for my savings to accumulate without having to use any of it.  It may not be entirely early retirement, but would be fun for me and i do enjoy my job so far and for now what i have in mind as a semi-retired goal.

Right now with my mortgage money i can now reinvest i will be able to do about 18% of my income from that alone.  I focused on my mortgage over my major savings so now time to get back on track.  And i'm slowly working on trying to trim things in life and budget and see what else i can wrangle up.

Current tax rates for me at my income are federal 22% and  provincial 17%(manitoba)

dess1313

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Re: New to this looking for suggestions
« Reply #6 on: April 30, 2015, 03:22:53 PM »

I just got through boglehead's guide to investing, and will be rereading it again now i understand a bit more.
Also got their retirement one to try out later.   I like the no nonsense approach of the boglehead book haha.  Stuff made sense

Been reading canadian couch potato as well as here

Any other good books people can recommend?

PharmaStache

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Re: New to this looking for suggestions
« Reply #7 on: April 30, 2015, 03:53:16 PM »

I just got through boglehead's guide to investing, and will be rereading it again now i understand a bit more.
Also got their retirement one to try out later.   I like the no nonsense approach of the boglehead book haha.  Stuff made sense

Been reading canadian couch potato as well as here

Any other good books people can recommend?

Millionaire Teacher

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Re: New to this looking for suggestions
« Reply #8 on: April 30, 2015, 04:45:35 PM »
I second Canadian Couch Potato - it provides an amazing overview and all of the info a newbie could desire!  While the Tangerine funds are good for ease of use and rebalancing, and the 1% fee is certainly better than traditional mutual funds, you could open up a brokerage account at one of those that allow ETF purchases for free (Questrade, Virtual Brokers) and then you are only paying the ETF MERs (my portfolio has total weighted fees of 0.22%).  Also, I know generally investment advisors are a rip-off in Canada, but if you have access to a free one through your bank or credit union, it wouldn't hurt to meet with them and have them do the standard 'risk assessment' on you to get more info on what your actual risk tolerance is.  (Just because you meet with them doesn't mean you have to buy any of their products!)  We met with our credit union advisor just to go through the exercizes at the beginning of our investment journey, and it just gave us some additional information which never hurts.