Author Topic: Should I use a Canadian robo-advisor? If so, which one?  (Read 63518 times)

Le Barbu

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Re: Should I use a Canadian robo-advisor? If so, which one?
« Reply #100 on: April 14, 2017, 07:49:54 PM »
Paying off Mortgage Early – How bad is it for your FI Date?

Look at this thread^^^

Blissful Biker

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Re: Should I use a Canadian robo-advisor? If so, which one?
« Reply #101 on: April 14, 2017, 08:48:39 PM »
I am nearly finished The Real Retirement Book (https://www.amazon.ca/Real-Retirement-Could-Better-Happen/dp/111849864X).  It was worth reading to learn more about CPP, OAS, GIS and various Canadian financial retirement vehicles like RRIFs.  And it does a good job of helping you understand stocks, bonds and the basics of an investment strategy. 

So definitely time well spent, but the general premise of the book is not very Mustachian.  The authors encourage individuals to shift their retirement plans from retirement at 65 to retirement at 67 instead.   It also concludes that the typical family need only save 2-3% of income over 35 years to have a comfortable retirement.  Saving more would only cut into consumption unnecessarily, thus robbing joy from our lives.  Hmmm.  Can't say I am on board with that. 

So I am ready for a new book.  Any suggestions?

I also wanted to ask for opinions on what I you think should have as an asset allocation, % of stocks vs bonds.  I have been learning that this is really the cornerstone decision in any investment plan.  I know it is very subjective and there is no right answer, but I am keen to hear what you think.  I am thinking 75% stock / 25% bonds but my husband is a bit more risk averse.    The house is paid for which provides stability, and I will be retired for 40 or 45 years.  That is a long horizon.  All opinions welcome, except for Le Barbu of course, the 112% equity madman.  :)

GreatLaker, thanks for the feedback on taxable accounts.  Not so scary after all.

Meeting with financial advisor on Friday.  T - 7 days.

joonifloofeefloo

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Re: Should I use a Canadian robo-advisor? If so, which one?
« Reply #102 on: April 14, 2017, 08:54:01 PM »
So I am ready for a new book.  Any suggestions?

The Millionaire Teacher, second edition (released January!)
Canadian author (writes for all regions)
super mustachian
early retired
funny
super clear
brief

Le Barbu

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Re: Should I use a Canadian robo-advisor? If so, which one?
« Reply #103 on: April 15, 2017, 05:36:28 AM »
I am nearly finished The Real Retirement Book (https://www.amazon.ca/Real-Retirement-Could-Better-Happen/dp/111849864X).  It was worth reading to learn more about CPP, OAS, GIS and various Canadian financial retirement vehicles like RRIFs.  And it does a good job of helping you understand stocks, bonds and the basics of an investment strategy. 

So definitely time well spent, but the general premise of the book is not very Mustachian.  The authors encourage individuals to shift their retirement plans from retirement at 65 to retirement at 67 instead.   It also concludes that the typical family need only save 2-3% of income over 35 years to have a comfortable retirement.  Saving more would only cut into consumption unnecessarily, thus robbing joy from our lives.  Hmmm.  Can't say I am on board with that. 

So I am ready for a new book.  Any suggestions?

I also wanted to ask for opinions on what I you think should have as an asset allocation, % of stocks vs bonds.  I have been learning that this is really the cornerstone decision in any investment plan.  I know it is very subjective and there is no right answer, but I am keen to hear what you think.  I am thinking 75% stock / 25% bonds but my husband is a bit more risk averse.    The house is paid for which provides stability, and I will be retired for 40 or 45 years.  That is a long horizon.  All opinions welcome, except for Le Barbu of course, the 112% equity madman.  :)

GreatLaker, thanks for the feedback on taxable accounts.  Not so scary after all.

Meeting with financial advisor on Friday.  T - 7 days.

How fascinating is a DIY FI journey!

Step 1- Dont give a shit (>90% of people never get further)
Step 2- Begin to sligthly give a shit
Step 3- Read, learn, then begin to realise we have been fooled by the financial industry and widespread bad advices (Mom, Dad, BIL, medias, advertising)
Step 4- Think for a moment we are doomed (it's to late, it's to much work, I dont like $$ paperwork)
Step 5- Discover MMM forum and finaly see the light!

Glad you learned something reading this book, but the paraphrazing you posted above scares me!

You should at least take few minutes to read threads about how bad it is for your FI date to have no mortgage. And for the stocks/bonds ratio, it's only for psychological and behavioral purposes. Bonds do not improve expected returns, they're a drag for your portfolio.

We use to talk about stocks and bonds as they are not real. Stocks are real ownerships of real busines managed by real CEO who get real people to work for real. We gives to much shit about the stocks prices, it does not care that much. When you can buy & hold for decades, they pay a shitload of money to pay for your groceries, clothes, utilities, etc.

You are 2 years away from FI but prefer to delay another 10 years? Your choice!

Bonus question for engineers: what are the stocks % and leverage in the following situations

Situation 1 - Le Barbu @ 27, just bougth a 95k$ house with a 70k$ mortgage. Investments portfolio 20k$ (75/25 stocks/bonds)

Situation 2 - Le Barbu @ 45, own a 350k$ house, 200k$ HELOC (mortgage is repaid) and >900k$ portfolio 100% stocks

Hint: I prefer #2

joonifloofeefloo

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Re: Should I use a Canadian robo-advisor? If so, which one?
« Reply #104 on: April 15, 2017, 08:49:37 AM »
^ Though, on the mortgage thread we've noted that the strategy may not be as effective for Canadians, per our inability to lock in a rate for the full amortization period or lifetime. A Canadian attempting that strategy should be ready to pay off their mortgage.

As well as a psychological support, bonds are meant to be a variable that allows us to buy when stocks are on sale. Many of us don't use bonds because we (1) aren't bothered when stocks dip, and (2) have something else we can buy stocks with during a sale (ongoing income, etc). But, they do have a purpose for many.

Le Barbu

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Re: Should I use a Canadian robo-advisor? If so, which one?
« Reply #105 on: April 15, 2017, 09:19:21 AM »
^ Though, on the mortgage thread we've noted that the strategy may not be as effective for Canadians, per our inability to lock in a rate for the full amortization period or lifetime. A Canadian attempting that strategy should be ready to pay off their mortgage.

As well as a psychological support, bonds are meant to be a variable that allows us to buy when stocks are on sale. Many of us don't use bonds because we (1) aren't bothered when stocks dip, and (2) have something else we can buy stocks with during a sale (ongoing income, etc). But, they do have a purpose for many.

I am ready to repay my 200k$ HELOC if neaded because I own more than enough (4x) in liquid investment (liquid) assets. Our variable rates are as much efficients as a 30 years fixed rate on average. I actualy pay <1.5% net wich is less than inflation rate ie free money

Bonds are useful for many, but we are not those "many"!

ToTheMoon

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Re: Should I use a Canadian robo-advisor? If so, which one?
« Reply #106 on: April 15, 2017, 09:34:33 AM »
Simply posting to follow - I love these Canadian specific threads, and this one has some excellent info!

Heckler

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Re: Should I use a Canadian robo-advisor? If so, which one?
« Reply #107 on: April 15, 2017, 09:49:28 AM »
And both bonds and mortgage are dependant on long term monetary policy set by people far richer than us.  I am happy not worrying if interest rates bump up 1%, will I lose my home because I'm over leveraged like many of my friends.   Instead, the payments from my 25-30% bonds A.A. will increase. 👍

Le Barbu

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Re: Should I use a Canadian robo-advisor? If so, which one?
« Reply #108 on: April 15, 2017, 10:40:47 AM »
And both bonds and mortgage are dependant on long term monetary policy set by people far richer than us.  I am happy not worrying if interest rates bump up 1%, will I lose my home because I'm over leveraged like many of my friends.   Instead, the payments from my 25-30% bonds A.A. will increase. 👍

But the value of bonds will drop. If you really worry rates hikes, at least buy something like VSB instead of VAB!

Rates will increase when inflation rate will be out of control. Stock markets benefit long before hyperinflation happen.

What is overleverage exactly? 50/50 debt/assets ratio? More? Less? Mine is 15/85

Lews Therin

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Re: Should I use a Canadian robo-advisor? If so, which one?
« Reply #109 on: April 15, 2017, 10:47:35 AM »


I am ready to repay my 200k$ HELOC if neaded because I own more than enough (4x) in liquid investment (liquid) assets. Our variable rates are as much efficients as a 30 years fixed rate on average. I actualy pay <1.5% net wich is less than inflation rate ie free money

Bonds are useful for many, but we are not those "many"!

How did you get less than 1.5%? how low is your rate to be so low after tax deduction for investments?

Heckler

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Re: Should I use a Canadian robo-advisor? If so, which one?
« Reply #110 on: April 15, 2017, 11:02:45 AM »


But the value of bonds will drop. If you really worry rates hikes, at least buy something like VSB instead of VAB!

What is overleverage exactly? 50/50 debt/assets ratio? More? Less? Mine is 15/85

I own both (two different accounts). VSB $21k big emergency fund. VAB long term buy and hold for income ten years from now.

By overleveraged, I'm talking about 35 year olds making $50-60k buying $800-1,100k homes with $200k down payment just because they have a new kid and a dog.

Stasher

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Re: Should I use a Canadian robo-advisor? If so, which one?
« Reply #111 on: April 15, 2017, 12:01:12 PM »
90% Stocks for me and I honestly don't think I will change that Asset Allocation percentage.
At 2.3% rate I will not be even remotely considering paying off my mortgage and actually just extended to the maximum amortization so I had more free cash monthly to put towards savings.

Le Barbu

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Re: Should I use a Canadian robo-advisor? If so, which one?
« Reply #112 on: April 15, 2017, 12:24:13 PM »
By overleveraged, I'm talking about 35 year olds making $50-60k buying $800-1,100k homes with $200k down payment just because they have a new kid and a dog.

...with 2 brand new cars payments and frequent high end vacations and restaurants

Blissful Biker

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Re: Should I use a Canadian robo-advisor? If so, which one?
« Reply #113 on: April 15, 2017, 12:33:46 PM »
I played around with some tools this AM to get a feel for what would be a recommended asset allocation.

Wealth Simple (https://my.wealthsimple.com/app/public/onboarding) would put us in 90% stocks / 10% bonds.

Blackrock iShares Core Builder tool (https://www.blackrock.com/tools/core-builder/us) would put us in 70% stocks / 30% bonds.

The rule of thumb of % bonds equal to age would put us at about 55% stocks / 45% bonds, using my age as opposed to my geezer husband.  :)

I am thinking 20 or 25% bonds feels about right.  We have a comfortable life and a reasonable plan.  No need to risk the farm, so to speak.

I need to find a good balanced index fund to set up for biweekly contributions, with the intent to transfer the money to ETFs when sizable enough to warrant the trading fees.  GreatLaker suggested TD Balanced Index Fund (TDB965) but I can not buy it on InvestorLine.  The Canadian Couch Potatoe site recommends TD e-series funds, but alas, I also can not buy those on InvestorLine.  Any suggestions?  And if I did not have this fabulous forum, how would I go about picking a good one on my own?

Thanks!

joonifloofeefloo

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Re: Should I use a Canadian robo-advisor? If so, which one?
« Reply #114 on: April 15, 2017, 12:40:08 PM »
My choice has been CCP's Vanguard ETFs. I use those in my TD Direct Investing and RBC Direct Investing accounts.

Stasher

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Re: Should I use a Canadian robo-advisor? If so, which one?
« Reply #115 on: April 15, 2017, 12:46:25 PM »
My choice has been CCP's Vanguard ETFs. I use those in my TD Direct Investing and RBC Direct Investing accounts.

Exactly
Keep things simple and go self brokerage , E-series still have higher fees.
CCP ETF Vanguard funds ~ VCN VUN VAB and the few other options as suggested on their portfolio page

Blissful Biker

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Re: Should I use a Canadian robo-advisor? If so, which one?
« Reply #116 on: April 15, 2017, 12:54:54 PM »
So I am ready for a new book.  Any suggestions?

The Millionaire Teacher, second edition (released January!)
Canadian author (writes for all regions)
super mustachian
early retired
funny
super clear
brief

I read the first edition of this book a couple of weeks ago.  I agree, all around awesome book.  It spurred me into action.

Le Barbu

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Re: Should I use a Canadian robo-advisor? If so, which one?
« Reply #117 on: April 15, 2017, 03:34:47 PM »
I played around with some tools this AM to get a feel for what would be a recommended asset allocation.

Wealth Simple (https://my.wealthsimple.com/app/public/onboarding) would put us in 90% stocks / 10% bonds.

Blackrock iShares Core Builder tool (https://www.blackrock.com/tools/core-builder/us) would put us in 70% stocks / 30% bonds.

The rule of thumb of % bonds equal to age would put us at about 55% stocks / 45% bonds, using my age as opposed to my geezer husband.  :)

I am thinking 20 or 25% bonds feels about right.  We have a comfortable life and a reasonable plan.  No need to risk the farm, so to speak.

I need to find a good balanced index fund to set up for biweekly contributions, with the intent to transfer the money to ETFs when sizable enough to warrant the trading fees.  GreatLaker suggested TD Balanced Index Fund (TDB965) but I can not buy it on InvestorLine.  The Canadian Couch Potatoe site recommends TD e-series funds, but alas, I also can not buy those on InvestorLine.  Any suggestions?  And if I did not have this fabulous forum, how would I go about picking a good one on my own?

Thanks!

Just set automatic transfer/contribution and leave it in cash until you have >5k$ to buy ETF!

GreatLaker

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Re: Should I use a Canadian robo-advisor? If so, which one?
« Reply #118 on: April 15, 2017, 08:30:35 PM »
So far it looks like we are not on track to retire in 7 years with income of $65K based on the 4%SWR (requiring 1.625 in investments in 2024), although if the assumptions hold true our net worth will grow beyond 2024.  There must be a delta in assumptions between the sheet and the basis for the 4% rule.

The 4% "rule" came from a study of historical investment returns and inflation starting in 1926 to determine how much could be withdrawn from a low-cost balanced portfolio (equities between 50% and 75%) at the start of a 30 year retirement period then adjusted for inflation each year with a low probability of outliving the portfolio.

Withdrawal rates >4% had a much higher likelihood of a retiree outliving their funds. But recognize that 4% withstood the worst investment returns including the great depression, the dirty thirties and the stagflationary 1970s (stocks peaked in 1966 and did not return to that level until 1982). A portfolio designed to withstand the worst returns will protect retirees that are unfortunate to experience such a time, especially early in their retirement. Most other retirees will have much larger portfolios at the end of their life. That's why you see your net worth going up in the simulations.

This makes sense since you will be withdrawing 4% and forecasting a portfolio return higher than that. If stock returns and inflation were predictably the same every year and you knew your lifespan you could simply pick a withdrawal rate designed to exhaust your portfolio by that age. But since those are variables that can change unpredictably and at which you can only make educated guesses, you need some contingency in your numbers.

The 4% rule does that as long as market returns are no worse than they have been since 1926.

Also does the 65k include CPP and OAS, which could kick in as early as age 60 for CPP and 65 for OAS. CPP amount depends on work history. OAS depends only on length of Canadian residency.
« Last Edit: April 15, 2017, 08:51:53 PM by GreatLaker »

Heckler

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Re: Should I use a Canadian robo-advisor? If so, which one?
« Reply #119 on: April 15, 2017, 11:38:18 PM »


Just set automatic transfer/contribution and leave it in cash until you have >5k$ to buy ETF!

Agreed!  Discipline is the key.  I'm at $10k contributions as soon as I can save them up (benefits of mortgage burned a year ago)

Le Barbu

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Re: Should I use a Canadian robo-advisor? If so, which one?
« Reply #120 on: April 16, 2017, 06:25:46 AM »


Just set automatic transfer/contribution and leave it in cash until you have >5k$ to buy ETF!

Agreed!  Discipline is the key.  I'm at $10k contributions as soon as I can save them up (benefits of mortgage burned a year ago)

I do the same, why bother investing few $$ in index funds, then sell and buy etf?

5-10k$ represent far less than 1% of OP NW, leave cash sitting still and buy once or twice a year for big chunks.

I suggest to make a plan with your investing priorities. What account do you want to contribute first? TFSA? RRSP? RESP? Then, how many wages period does it takes to accumulate this ammount? 2-3 months? Is that really important to invest for 2 months?

GreatLaker

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Re: Should I use a Canadian robo-advisor? If so, which one?
« Reply #121 on: April 16, 2017, 09:08:25 PM »
I am nearly finished The Real Retirement Book (https://www.amazon.ca/Real-Retirement-Could-Better-Happen/dp/111849864X).  It was worth reading to learn more about CPP, OAS, GIS and various Canadian financial retirement vehicles like RRIFs.  And it does a good job of helping you understand stocks, bonds and the basics of an investment strategy. 

So definitely time well spent, but the general premise of the book is not very Mustachian.  The authors encourage individuals to shift their retirement plans from retirement at 65 to retirement at 67 instead.   It also concludes that the typical family need only save 2-3% of income over 35 years to have a comfortable retirement.  Saving more would only cut into consumption unnecessarily, thus robbing joy from our lives.  Hmmm.  Can't say I am on board with that. 

So I am ready for a new book.  Any suggestions?

I also wanted to ask for opinions on what I you think should have as an asset allocation, % of stocks vs bonds.  I have been learning that this is really the cornerstone decision in any investment plan.  I know it is very subjective and there is no right answer, but I am keen to hear what you think.  I am thinking 75% stock / 25% bonds but my husband is a bit more risk averse.    The house is paid for which provides stability, and I will be retired for 40 or 45 years.  That is a long horizon.  All opinions welcome, except for Le Barbu of course, the 112% equity madman.  :)

One thing I recall from The Real Retirement (though the authors are not Mustachians) is how to estimate how much money is needed in retirement relative to pre-retirement spending. Kids are expensive so people that have kids get used to being frugal and not spending a lot on toys and vacations. So when they get the kids off the payroll and retire they can get by on significantly less than their pre-retirement income.

As far as asset allocation there are lots of rules of thumb, but it's something you just have to get comfortable with on your own. Bogleheads (the US version of Finiki) has a good section on asset allocation here:
https://www.bogleheads.org/wiki/Asset_allocation

Note especially the link to a 7 part series by Larry Swedroe on asset allocation: https://www.bogleheads.org/wiki/Asset_allocation#cite_note-11

If you like Larry's articles he also wrote a book on it:
https://www.amazon.ca/All-About-Asset-Allocation-Second/dp/0071700781/
It's kinda detailed though and goes into depth well beyond stocks vs. bonds, so I would not read it unless you really like his 7 part series.

If you do choose a portfolio with a high % of equities you have to PROMISE you won't panic and sell if there is a bear market or crash.

Blissful Biker

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Re: Should I use a Canadian robo-advisor? If so, which one?
« Reply #122 on: April 19, 2017, 10:56:48 AM »
Ahh, the house is quiet again.  We had a wonderful Easter weekend.  Hunted eggs, decorated eggs, smoked a big ham and ate it while arguing with family.  All is right in the world.  But best of all the lower trails are opening up and I got out for my first mountain bike ride of the season.  Fresh air, sunshine and BC loam.  So fabulous.  And it sharpened my focus on FIRE.  I want to ride every day!

As far as asset allocation there are lots of rules of thumb, but it's something you just have to get comfortable with on your own. Bogleheads (the US version of Finiki) has a good section on asset allocation here:
https://www.bogleheads.org/wiki/Asset_allocation

Note especially the link to a 7 part series by Larry Swedroe on asset allocation: https://www.bogleheads.org/wiki/Asset_allocation#cite_note-11

If you do choose a portfolio with a high % of equities you have to PROMISE you won't panic and sell if there is a bear market or crash.

Thanks GreatLaker.  I read the articles and understand better how asset allocation is based on ability, willingness and need to take risk. 

Ability - moderate - I am in a cyclical industry and located in a small town.  There is no ability to pick up work with the competitor next door.  Currently the industry is in a slump and I am working 3 days a week.  This is actually wonderful, I am really enjoying it but wish it was of my own choosing. 

Willingness - high for me, moderate for husband - risk equals reward.  I have good savings, good earning potential and a high tolerance for market swings.  I didn't lose any sleep over the 2008 crash, just kept making my biweekly contributions happy in the knowledge that I was buying low.

Need - moderate - I understand his concept of decreasing marginal utility of money once you have enough.  I would like to retire and ride my bike everyday and do not yet have the funds to do that, so in that sense I still have a need to take some risk.

So after that reading, as well as taking the Asset Allocation quiz in the Real Retirement book, I would choose an 80% equity portfolio.  But to keep peace in the household (which is also a key component in quality of life) I will set our plan at 75% equity.  FIREcalc shows less than a percent difference in probability between the two portfolios. 

I need to find a good balanced index fund to set up for biweekly contributions, with the intent to transfer the money to ETFs when sizable enough to warrant the trading fees.  GreatLaker suggested TD Balanced Index Fund (TDB965) but I can not buy it on InvestorLine.  The Canadian Couch Potatoe site recommends TD e-series funds, but alas, I also can not buy those on InvestorLine.  Any suggestions?  And if I did not have this fabulous forum, how would I go about picking a good one on my own?

Just set automatic transfer/contribution and leave it in cash until you have >5k$ to buy ETF!
OK.  Sounds good.  I'll keep it simple and keep my biweekly savings in cash until they are sufficient to warrant buying ETFs.

So what I am looking at for a plan is:
25% Bonds - ZAG BMO Aggregate Bond Index ETF
25% Canadian Equity - VCN Vanguard FTSE Canada All Cap Index ETF
50% International Equity - XAW ishares Core MSCI All Country World ex Canada Index ETF

Look familiar?  It is essentially the CCP Assertive portfolio.  Any recommendations to use different funds?  I notice several of you stick with Vanguard funds.  Any benefit to doing so, or just personal preference?

Meeting with Financial Advisor on Friday.  T - 2 days!

Thanks again. 

joonifloofeefloo

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Re: Should I use a Canadian robo-advisor? If so, which one?
« Reply #123 on: April 19, 2017, 11:09:12 AM »
Quote
I notice several of you stick with Vanguard funds.

We just like anything diverse and cheap :)

In many instances, Vanguard is the cheapest. Sometimes there's good reason to snag something else, and that's just fine...as long as it's still just as diverse and cheap. I've got a couple of alternatives per some banking requirements specific to my weird life.

Le Barbu

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Re: Should I use a Canadian robo-advisor? If so, which one?
« Reply #124 on: April 19, 2017, 11:29:02 AM »
Ahh, the house is quiet again.  We had a wonderful Easter weekend.  Hunted eggs, decorated eggs, smoked a big ham and ate it while arguing with family.  All is right in the world.  But best of all the lower trails are opening up and I got out for my first mountain bike ride of the season.  Fresh air, sunshine and BC loam.  So fabulous.  And it sharpened my focus on FIRE.  I want to ride every day!

As far as asset allocation there are lots of rules of thumb, but it's something you just have to get comfortable with on your own. Bogleheads (the US version of Finiki) has a good section on asset allocation here:
https://www.bogleheads.org/wiki/Asset_allocation

Note especially the link to a 7 part series by Larry Swedroe on asset allocation: https://www.bogleheads.org/wiki/Asset_allocation#cite_note-11

If you do choose a portfolio with a high % of equities you have to PROMISE you won't panic and sell if there is a bear market or crash.

Thanks GreatLaker.  I read the articles and understand better how asset allocation is based on ability, willingness and need to take risk. 

Ability - moderate - I am in a cyclical industry and located in a small town.  There is no ability to pick up work with the competitor next door.  Currently the industry is in a slump and I am working 3 days a week.  This is actually wonderful, I am really enjoying it but wish it was of my own choosing. 

Willingness - high for me, moderate for husband - risk equals reward.  I have good savings, good earning potential and a high tolerance for market swings.  I didn't lose any sleep over the 2008 crash, just kept making my biweekly contributions happy in the knowledge that I was buying low.

Need - moderate - I understand his concept of decreasing marginal utility of money once you have enough.  I would like to retire and ride my bike everyday and do not yet have the funds to do that, so in that sense I still have a need to take some risk.

So after that reading, as well as taking the Asset Allocation quiz in the Real Retirement book, I would choose an 80% equity portfolio.  But to keep peace in the household (which is also a key component in quality of life) I will set our plan at 75% equity.  FIREcalc shows less than a percent difference in probability between the two portfolios. 

I need to find a good balanced index fund to set up for biweekly contributions, with the intent to transfer the money to ETFs when sizable enough to warrant the trading fees.  GreatLaker suggested TD Balanced Index Fund (TDB965) but I can not buy it on InvestorLine.  The Canadian Couch Potatoe site recommends TD e-series funds, but alas, I also can not buy those on InvestorLine.  Any suggestions?  And if I did not have this fabulous forum, how would I go about picking a good one on my own?

Just set automatic transfer/contribution and leave it in cash until you have >5k$ to buy ETF!
OK.  Sounds good.  I'll keep it simple and keep my biweekly savings in cash until they are sufficient to warrant buying ETFs.

So what I am looking at for a plan is:
25% Bonds - ZAG BMO Aggregate Bond Index ETF
25% Canadian Equity - VCN Vanguard FTSE Canada All Cap Index ETF
50% International Equity - XAW ishares Core MSCI All Country World ex Canada Index ETF

Look familiar?  It is essentially the CCP Assertive portfolio.  Any recommendations to use different funds?  I notice several of you stick with Vanguard funds.  Any benefit to doing so, or just personal preference?

Meeting with Financial Advisor on Friday.  T - 2 days!

Thanks again.

Good lineup!

I would just go 20%ZAG, 20%VCN and 60%XAW...

RichMoose

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Re: Should I use a Canadian robo-advisor? If so, which one?
« Reply #125 on: April 19, 2017, 11:37:30 AM »
So what I am looking at for a plan is:
25% Bonds - ZAG BMO Aggregate Bond Index ETF
25% Canadian Equity - VCN Vanguard FTSE Canada All Cap Index ETF
50% International Equity - XAW ishares Core MSCI All Country World ex Canada Index ETF

Look familiar?  It is essentially the CCP Assertive portfolio.  Any recommendations to use different funds?  I notice several of you stick with Vanguard funds.  Any benefit to doing so, or just personal preference?

Meeting with Financial Advisor on Friday.  T - 2 days!

Thanks again.

The funds you chose are, in my view, the current best-in-class available to us Canadians. Both from fee and tax efficiency perspectives.

My only suggestion is to chose ZBD instead of ZAG when investing in a non-registered account. They're identical fee-wise and nearly identical performance-wise, but ZDB is more tax efficient because of it's strategy. In TFSA/RRSP, just stick with ZAG.

I personally believe the obsession over Vanguard is primarily for its US-based brokerage / mutual fund business. It is pretty much unbeatable for fees and product offerings. I wish Vanguard Canada ran its own brokerage... maybe one day.

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Re: Should I use a Canadian robo-advisor? If so, which one?
« Reply #126 on: April 19, 2017, 04:50:45 PM »
Canadian Money Saver Magazine (March / April 2017) edition has a great article with this very question.

(and with a technical slant, but not too long).  I saw it in my library, but maybe you can find it here?

https://www.canadianmoneysaver.ca/


I very much like the technical info in this magazine -- much better than Moneysense, anyway.

Blissful Biker

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Re: Should I use a Canadian robo-advisor? If so, which one?
« Reply #127 on: April 20, 2017, 09:57:11 AM »
I am glad Mr. Rich Moose and Le Barbu agree with the fund selections. Phew, the plan is coming together.

Goldielocks - I think the Canadian Money Saver Magazine article you reference is on robo advisors (I can't tell for sure because I am too cheap to subscribe).  Thank you, but I am taking the bulls by the horn and going self directed with the support of my companions on this thread.

So tomorrow is the big day, the meeting with our Financial Advisor where we break the news that we are leaving him.  As promised he has updated our financial plan and shared the draft for review prior to our meeting.  I need to study it and understand it as it will be the last one we receive.  Here are the first 4 pages.


Blissful Biker

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Re: Should I use a Canadian robo-advisor? If so, which one?
« Reply #128 on: April 20, 2017, 10:25:07 AM »
And the last two pages are attached.

The good news is that we seem to be on track to retire in seven years, even if I continue to work only 3 days a week, which was the basis for the $2,167 monthly RRSP contributions.  If I work more, I could save more and retire even earlier.  Hooray!  And when we move to self directed and lose the high fees, the news should only get better.

I need to ask him a few questions:
- What is the "Other Income" shown in the first few years of retirement?
- Why the spike in "Registered Withdrawals" at about the time my husbands death?
- The initial withdrawals are primarily RRSP, transitioning slowly to primarily TFSA.  Why?  Is there a formula that sets that plan?
- I also need to see if any of our current funds have deferred sales charges that would discourage us from moving them to IL immediately.

My husband thinks that because the plan shows a net worth at death of $1.7MM as opposed to $0 I should retire earlier.  (We tell our kids that we are going to spend our last nickle on ouzo at a rave on a greek island).  I shared with him how GreatLaker described the 4% rule, that because the markets are variable and unpredictable we need to set conservative withdrawal rates to be successful in most markets, which will on average maintain or grow our net worth.  So perhaps we will have enough to take the kids to the rave in Greece in 50 years.  :)

Input welcome.  Do you think the BMO plan is sound? 

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Re: Should I use a Canadian robo-advisor? If so, which one?
« Reply #129 on: April 20, 2017, 12:24:00 PM »
Couple of quick comments after a brief look at your post:

It looks like a reasonably conservative growth plan with 5% return pre-retirement and 4% return post retirement and 2.5% inflation. Hopefully the market will provide more than that, but do you want to be safe or sorry (and hungry).

I don't see the $1.7M assets at end of life. In the 2nd table I see $1.7M investable account balance in the first row at age 52/61. In the last row at age 88/- I see $448k, which looks to me like end of life projected balance.

On death of the first spouse, the RRSP/RRIF balance passes tax-free to the surviving spouse. At that point the mandatory RRIF withdrawal becomes based on that total value, instead of just yours. Hence the mandatory withdrawal jumps up. I'm guessing it spikes up because of that, then drops down again as the RRSP is depleted and TFSA withdrawals start (which are tax-free).

It looks like withdrawals from RRSP/RRIF first until it is all spent, then start withdrawing from TFSA. I think this for a couple of reasons. 1) TFSA earnings compound tax free indefinitely, so best to defer spending them to later and withdraw from RRSP first. 2) Withdrawing from TFSA first would allow RRSP to continue to grow, which will drive up withdrawals when mandatory RRIF withdrawals start possibly driving higher tax rate. It could also drive your income into OAS clawback territory. Hence it's better to spend down RRSP before TFSA.

The adviser's software should do scenario analysis and iterations to find the savings & withdrawal plan the maximizes estate value for a specified set of assumptions, primarily rate of return, inflation, spending and lifespan. Conversely you could look at the maximum you can spend each year for a desired estate value. Also it should be capable of minimizing tax rates and OAS clawback by recommending a withdrawal plan... and also if your tax rates would be driven too high because your RRSP grows too big he should see that and recommend contributing something to a non-reg account instead of all to RRSP + TFSA. Good thing to ask the advisor though.

Good luck with the meeting.

RichMoose

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Re: Should I use a Canadian robo-advisor? If so, which one?
« Reply #130 on: April 20, 2017, 01:06:51 PM »
And the last two pages are attached.

The good news is that we seem to be on track to retire in seven years, even if I continue to work only 3 days a week, which was the basis for the $2,167 monthly RRSP contributions.  If I work more, I could save more and retire even earlier.  Hooray!  And when we move to self directed and lose the high fees, the news should only get better.

I need to ask him a few questions:
- What is the "Other Income" shown in the first few years of retirement?
- Why the spike in "Registered Withdrawals" at about the time my husbands death?
- The initial withdrawals are primarily RRSP, transitioning slowly to primarily TFSA.  Why?  Is there a formula that sets that plan?
- I also need to see if any of our current funds have deferred sales charges that would discourage us from moving them to IL immediately.

My husband thinks that because the plan shows a net worth at death of $1.7MM as opposed to $0 I should retire earlier.  (We tell our kids that we are going to spend our last nickle on ouzo at a rave on a greek island).  I shared with him how GreatLaker described the 4% rule, that because the markets are variable and unpredictable we need to set conservative withdrawal rates to be successful in most markets, which will on average maintain or grow our net worth.  So perhaps we will have enough to take the kids to the rave in Greece in 50 years.  :)

Input welcome.  Do you think the BMO plan is sound?

I think the plan is good, a little bit on the cautious side but no harm in that. $1.7 for $65k is a 3.8% WR. That's 95% safe on it's own if you use low-fee funds. Toss in your expected CPP/OAS income and you'll be living the life. You could party in Greece every year! ;)

Regarding the questions: The "Other Income" seems to be directly tied to increased expenses in the first few years of retirement. Maybe he's accounting for workplace payouts?

RRSPs should be depleted first mainly for RRIF issues down the road. He's on the right track with that. The only good scenario I can think of for using TFSA withdrawals as well is when your RRSP/CPP/OAS income is high enough to bump you into the next tax bracket.

Good luck with your talk! Be prepared for your advisor to become a whole lot less friendly once you mention shifting investments.

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Re: Should I use a Canadian robo-advisor? If so, which one?
« Reply #131 on: April 20, 2017, 10:52:11 PM »
I would take the approach that you are staying in the BMO family but going self directed.  I had a BMO advisor in a branch I just walked into to submit a transfer form approach me to give me the same report.  He based it on my spreadsheet details I provided, and even used my ETFs for the planning.  You will still be paying BMO commission fees, deregistration fees and they hope you buy BMO ETFs... 

This isn't the same as when we ditched Investia old lady advisor (up to her eyeballs in credit btw) who would visit our house annually to have us blindly sign some forms and take her 2.8%.

 You might get a win-win if you deal with it right.

Le Barbu

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Re: Should I use a Canadian robo-advisor? If so, which one?
« Reply #132 on: April 21, 2017, 04:35:16 AM »
I would take the approach that you are staying in the BMO family but going self directed.  I had a BMO advisor in a branch I just walked into to submit a transfer form approach me to give me the same report.  He based it on my spreadsheet details I provided, and even used my ETFs for the planning.  You will still be paying BMO commission fees, deregistration fees and they hope you buy BMO ETFs... 

This isn't the same as when we ditched Investia old lady advisor (up to her eyeballs in credit btw) who would visit our house annually to have us blindly sign some forms and take her 2.8%.

 You might get a win-win if you deal with it right.

Just tell your buying ZDB, ZAG and replace VCN for ZCN (I do not own VCN myself, just ZCN)

This way, you will own 50% BMO ETFs!

Heckler

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Re: Should I use a Canadian robo-advisor? If so, which one?
« Reply #133 on: April 21, 2017, 07:49:40 AM »
You are still a BMO high networth client. Remember that! 

Le Barbu

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Re: Should I use a Canadian robo-advisor? If so, which one?
« Reply #134 on: April 21, 2017, 08:46:50 AM »
You are still a BMO high networth client. Remember that!

I went through the same path 5 years ago with RBC vs RBC DI

This is not their core business so they seem to have nobody to handle this properly!

At the branch, you are like anybody else, especially if you have no mortgage

At DI, you are a big shot but speaking with a random clerk each time you contact them

It's ok for me but still!

Blissful Biker

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Re: Should I use a Canadian robo-advisor? If so, which one?
« Reply #135 on: April 21, 2017, 09:29:02 PM »
The meeting with the Financial Advisor went really quite well.  I had given him a heads via email that we were looking at couch potatoeing which I think helped in ensuring that the discussion proceeded without too much drama.

We started, of course, by talking about the status of mountain bike trails, which ones were open, which ones were dry, which ones we had ridden lately and had a few laughs.

Then we walked through the financial plan he had provided and he answered my questions:
- the "Other Income" shown in the first 3 years of retirement is RESP withdrawals and does not affect the retirement calculations. 
- the net worth at death of $1.7MM shown on page 2 includes the house while the investment assets at death on page 5, year 89/- show $340K remaining, which is only TFSA.  It is assumed the house will be worth $1.4MM when I am 90.
- the spike of registered withdrawals at the point of my husbands death is exactly how GreatLaker explained it, being pushed by minimum RIFF withdrawals.
- TFSAs are saved for the end to allow them to pass to family with no taxation, get us a good deal at income tested retirement homes and to have a nice long time to grow knowing that the growth will never be taxed.
- Because we are staying in the BMO family, there are no deferred sales charges and we can move our money to IL with no fees.  I am not sure if there would have been deferred sales charges if we moved the money elsewhere.  I didn't pursue the line of questioning once I knew we were in the clear.

The only real remaining issue I have is how much CPP we will receive.  He set up the calculations to run assuming I receive 100% of maximum and my husband 66% of maximum.  As you can see from the graph, there is 15 years where roughly half our income will come from CPP and OAS so we need to make sure the assumptions are valid.  If I retire at 51, I will have many years ahead of me of not contributing to CPP and thus presumably not eligible for 100%.  My husband hasn't contributed to CPP since his mid 30's and probably wont ever again.   On My Services Canada site we are able to see what our CPP is projected to be if we start withdrawing at 60, 65 or 70.  But it is not clear what the assumptions are behind those numbers.  Presumably they will drop each year when no more contributions are being made.  The Financial Advisor understood my train of thought but couldn't answer the questions.  So I am going to call the government and ask.  I'll do it when I have plenty of time to be on hold.

When we finished reviewing the financial plan we talked about shifting to a self directed approach.  I showed him my planned asset allocation, the associated ETFs and shared that I had the IL accounts set up and ready.  He gave us a soft sell on why we would be better served with an advisor but really didn't push it too hard.    (Heckler and Le Barbu - you were right, he did encourage me to switch my ETFs to those that start with "Z")

He was glad we were staying in the BMO family and offered his support if we have any trouble with IL.  I complained a bit about the wide variety of skillset among those who answer the Investline phone.  He said that once we have the money transferred when I call and enter our account number the system will recognize me as high net worth and speedily direct me to some one senior and helpful.  Not a very socialist approach, but I have to say, I like it.

We asked if he could help us update the financial plan every year and he said unfortunately not, that is not BMO's business model.  My husband plans to try and bribe him with a good scotch and a bike tune up in a year. 

So, thankfully, we left as friends.  I am pretty sure all Kootenay cyclists are good people.  Haven't met a bad one yet.  And now I feel free, ready to head out on the open road and start buying some ETFs.

Thanks again for all your help.  I read your input before the meeting and was really useful for me.  And after the meeting my husband commended me for how knowledgeable and prepared I was.  Thanks go to you!

« Last Edit: April 21, 2017, 09:38:47 PM by Blissful Biker »

Blissful Biker

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Re: Should I use a Canadian robo-advisor? If so, which one?
« Reply #136 on: April 22, 2017, 09:35:57 AM »

The only real remaining issue I have is how much CPP we will receive.  ...  If I retire at 51, I will have many years ahead of me of not contributing to CPP and thus presumably not eligible for 100%. 

If you want precision regarding impact of zero earning years for some time before withdrawals (given assumptions about current regulations, your supposed earnings til retirement etc.), you can have this calculated for a fee by Doug Runchey, or see his posts at retirehappy.ca on how to do this.  I got some answers fairly close to his calcs using his method, but wanted to be sure.  He also calculated some survivor CPP numbers for us.

His site is: http://www.drpensions.ca/

Thank you.  I will definitely make use of this.


Today I am working on shifting my money from the mutual funds at the branch to Investorline.  I have to select if I want to transfer in cash or in kind.  What should I choose?  I do not intend to keep the mutual funds so I imagine cash is the way to go and then once that cash arrives in my IL account, use it to buy ETFs.  Agree?

Stasher

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Re: Should I use a Canadian robo-advisor? If so, which one?
« Reply #137 on: April 22, 2017, 09:50:08 AM »

We asked if he could help us update the financial plan every year and he said unfortunately not, that is not BMO's business model.  My husband plans to try and bribe him with a good scotch and a bike tune up in a year. 

So, thankfully, we left as friends.  I am pretty sure all Kootenay cyclists are good people.  Haven't met a bad one yet.  And now I feel free, ready to head out on the open road and start buying some ETFs.

Thanks again for all your help.  I read your input before the meeting and was really useful for me.  And after the meeting my husband commended me for how knowledgeable and prepared I was.  Thanks go to you!

MTBers for the win... yes we are all an awesome bunch right !
Super happy with how far you have come since the start of this thread. So cool that you and the husband are rocking this path together and rad that your BMO advisor was super cool. Exciting to follow along with you on this journey.

joonifloofeefloo

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Re: Should I use a Canadian robo-advisor? If so, which one?
« Reply #138 on: April 22, 2017, 10:11:25 AM »
In my case, it was much faster to get everything where I wanted when I transferred in-kind, then sold, then bought what I wanted. Because we like "days in market", this was important to me, so I went this route.

I don't know, though, what factors determine the speed of each step in either path, so don't know if this is the case across the board.

I would ask your investment firm how many days each step would take, max (i.e., assuming worst case scenario), add up the days out of market, and choose the fastest one.

GreatLaker

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Re: Should I use a Canadian robo-advisor? If so, which one?
« Reply #139 on: April 22, 2017, 10:26:01 AM »

Today I am working on shifting my money from the mutual funds at the branch to Investorline.  I have to select if I want to transfer in cash or in kind.  What should I choose?  I do not intend to keep the mutual funds so I imagine cash is the way to go and then once that cash arrives in my IL account, use it to buy ETFs.  Agree?

If you transfer in-kind you will have to sell each of the holdings after you transfer, incurring a commission on each order. If you had a lot of individual stocks the commissions could really add up, but with your mutual fund holdings it wont be a lot of transactions. Transfer in cash is easier, but if you want total control you can transfer i kind. Not likely to make a huge difference but you may miss on some gains if the market goes up a bunch while the cash makes its way into your account.

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Re: Should I use a Canadian robo-advisor? If so, which one?
« Reply #140 on: April 22, 2017, 10:56:53 AM »
I would transfer in kind but then, sell everything in each account and wait the cash deposit before make the ETFs buying transactions. At worst, you will loose 2-3 days in the market but will have no surprises afterward. Some transactions sets the next day*, some other sets 3 days later**

*mutual funds, when traded before 14:00, are sold at the "end of day" price and sets the next day
**etfs and stocks are traded at the market price immediatly and sets 3 days later

Do not trade anything outside trading hours on trading days. Sometime, weird things happen outside these days/hours

Always sets a limit order price within 2-3 cents/share just to make sure there is no glitch. This way, you will never get abused.

Do not trade when known event can widely move the needle (elections in France actually) it's another reason to move in kind and trade 2 weeks from now.

Do not trade to the last penny (figure trading cost etc) it's not a big deal if 50$ remains in each account.

Good luck!

Heckler

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Re: Should I use a Canadian robo-advisor? If so, which one?
« Reply #141 on: April 22, 2017, 10:04:20 PM »
Why not trade to the last penny Barbu?  I calculate cash on hand minus $9.95 and then maximize # units at ask price plus/minus a penny or two.  My tfsa has $0.23 cash right now
« Last Edit: April 22, 2017, 10:35:18 PM by Heckler »

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Re: Should I use a Canadian robo-advisor? If so, which one?
« Reply #142 on: April 22, 2017, 10:12:36 PM »
If you don't plan to hold your MF, just transfer cash.  Save yourself the hassle of selling. It'll be a week or two, but irrelevant in the long run.   Since you're bmo --> bmo, it'll be pretty quick actually.

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Re: Should I use a Canadian robo-advisor? If so, which one?
« Reply #143 on: April 23, 2017, 04:41:47 AM »
Why not trade to the last penny Barbu?  I calculate cash on hand minus $9.95 and then maximize # units at ask price plus/minus a penny or two.  My tfsa has $0.23 cash right now

Just because as a Rookie, I already made a mistake. Honestly, I dont remember if I forgot the commission or did not factored the bis/ask spread. At the end, I overdrafted just a bit and had to pay interests @ 21%

Remember Blissful Biker will transfer cash every 2 weeks and buy every 2-3 months. Cash is not that bad, for some short period of time, it perform better than stocks!


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Re: Should I use a Canadian robo-advisor? If so, which one?
« Reply #144 on: April 23, 2017, 08:53:06 AM »
BMO has some good ETFs. Many of them are segment funds so you need to choose carefully. ZAG is recommended by CCP and has the lowest MER of any aggregate bond ETF. ZCN is simiar to VCN, although it uses a different index, both track closely to the TSX composite. ZCN is my largest holding. ZCN and ZAG both have more assets than the corresponding Vanguard funds. What BMO lacks is an all world ex-Canada fund like XAW or VXC. You would have to hold ZSP (US S&P500) + ZEA (global developed) and ZEM (emerging markets) and even then those funds have fewer holdings, so for outside Canada XAW is the best choice.

In case you missed it upthread, Justin at Canadian Portfolio Manager did a blog and video on building an ETF portfolio at BMO:
https://www.canadianportfoliomanagerblog.com/how-to-build-an-etf-portfolio-at-bmo-investorline/

The CPP numbers you are seeing on your Service Canada login assume you continue to work until those ages. The numbers are not useful if you retire early, which will definitely increase your zero contribution years and lower the payout. If you had low-income years while the kids were under 7 those years will get dropped out of the calculation. Someone already mentioned Doug Runchey. Here are some of his articles:
https://retirehappy.ca/understanding-cpp-statement-contributions-soc/
https://retirehappy.ca/how-to-calculate-your-cpp-retirement-pension/
https://retirehappy.ca/child-rearing-drop-out-parents-can-get/

Doug also has huge threads on FWF and CMF where he posts as Dogger1953
http://www.financialwisdomforum.org/forum/viewtopic.php?f=30&t=115904
http://canadianmoneyforum.com/showthread.php/15085-I-m-a-CPP-expert-Any-questions

Here is a CPP calculation spreadsheet. It is an approximation and does not factor in the child rearing dropout, but will give a reasonable estimate based on past contributions and projecting current income forward.
http://pabroon.blogspot.ca/2014/03/cpp-calculator.html

I think the need for an annual plan update is over emphasized. Once you have a detailed plan, you should have annual reviews to ensure you are still on plan, and detailed updates only if you drift significantly off plan, or have a substantial life change that affects your finances. I have a plan that is based on income, spending, projected rate of return and savings, and gives me projected account balances, spending in real dollars, income from investments, CPP, OAS, taxes and tax rates, etc for every year until I make my last shift into low gear and climb that final hill to Cloud 9.

Anyway, congrats on the great outcome!

Blissful Biker

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Re: Should I use a Canadian robo-advisor? If so, which one?
« Reply #145 on: April 24, 2017, 06:51:38 PM »
Thanks for the input.  I talked to a guy at InvestorLine and he said that because I am transferring from BMO to BMO it should only take a few days, so I am choosing the easy route of requesting cash as opposed to transferring in-kind.  I have all the transfer forms filled out and am walking to the library to fax them in the AM.   

But the InvestorLine guy had bad news too.  I expected to take advantage of the promotion where you get $1000 from InvestorLine when you deposit $250K or more.  I figured we would get it twice, once for me and once for my husband and confirmed that with a lady who picked up the IL phone a couple of weeks ago.  Her English was poor but she assured me we would receive the $2000 promotion money.  The guy today says we are not eligible for the promotion because the funds are coming from BMO accounts and are thus not new money to BMO.  Drat!   I think I'll check in with my local ex-financial advisor, and see if he can break the tie.

Today I also learned how to log into the CRA website and view my TFSA and RRSP contribution room.  I added the numbers to the spreadsheet that Heckler started for me and I am slowing solidifying.  The CRA site also said that my tax return was approved without issue and we will receive a $6200 refund tomorrow!  Hooray, more money for ETFs.

MTBers for the win... yes we are all an awesome bunch right !
Super happy with how far you have come since the start of this thread. So cool that you and the husband are rocking this path together and rad that your BMO advisor was super cool. Exciting to follow along with you on this journey.
Thanks Stasher.  Indeed we are an awesome bunch! 

I am looking forward to digging into the CPP question this week.  Thanks for the resources. 

I also need to learn more about what the numbers on IL mean.  A couple of weeks ago I opened my RRSP IL account with $5K, bought 155 shares of VCN for $4943.60 leaving $56.40 in cash. 
Today my home screen shows Cash: 56.40, Account Balance: 4,957.10, Unrealized loss -42.90 (in a blood red colour).   
But in My Portfolio Positions page it shows Cash: 56.40, Value of Securities: 4,938.30, Account Balance: 4,994.70, Unrealized loss: -5.30 (same red colour)
I do not understand why the Account Balances do not match and better get it figured out before the real money shows up.

BTW, the $38K that I had intended to use as practice money still hasn't arrived from Scotia.  I thought it would be a few days, not a few weeks.

Le Barbu

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Re: Should I use a Canadian robo-advisor? If so, which one?
« Reply #146 on: April 24, 2017, 07:04:32 PM »
The difference of Unrealized loss is because you looked at different time like last trading day closing value vs real time value.

Blissful Biker

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Re: Should I use a Canadian robo-advisor? If so, which one?
« Reply #147 on: April 24, 2017, 07:31:10 PM »
The difference of Unrealized loss is because you looked at different time like last trading day closing value vs real time value.

Ahh, yes, you are right.  The My Portfolio Positions page lets you toggle between "Previous Business Day" and "Today's Activity".  When I select "Previous Business Day" the numbers match the home page exactly.  Thanks!

Blissful Biker

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Re: Should I use a Canadian robo-advisor? If so, which one?
« Reply #148 on: April 25, 2017, 05:16:43 PM »
The fax machine at the library is broken and they are not in a big rush to fix it because who faxes these days?  InvestorLine apparently.   So I drove to the BMO branch and they faxed the package of fund transfer forms for me.  Hopefully in a few days my accounts will be flooded with cash.

In case you missed it upthread, Justin at Canadian Portfolio Manager did a blog and video on building an ETF portfolio at BMO:
https://www.canadianportfoliomanagerblog.com/how-to-build-an-etf-portfolio-at-bmo-investorline/

This is a very helpful video.  Thanks.  Justin does two videos for InvestorLine, the one above for an ETF portfolio and another to demonstrate Norbert's Gambit.  I watched them both and out of curiosity also googled Norbert's Gambit.  I now understand the mechanism for purchasing US dollars, but I am not clear on the motivation.  In the near term I am going to stick with the simple Couch Potato Portfolio but down the road, what would be the benefit in investing in US dollars?

Le Barbu

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Re: Should I use a Canadian robo-advisor? If so, which one?
« Reply #149 on: April 25, 2017, 06:57:53 PM »
I now understand the mechanism for purchasing US dollars, but I am not clear on the motivation.  In the near term I am going to stick with the simple Couch Potato Portfolio but down the road, what would be the benefit in investing in US dollars?

The remaining* motivation of investing in USD is the witholding taxes agreement between Canada and US. This works only for US investments in RRSP. We talk about 15% on dividends so 15% x 2% (make your own maths)

*most of the reasons we had couple years ago disapeared since MER droped a lot and diversity of available ETFs is way better in CAD.

My RRSP is 100% USD (50%VTI and 50%VXUS) but for a RRSP under 200k$, I would not even think about it. Norbert-Gambit is a bit of a hassle for less than 100k$...