Hello all, first post, please let me know of any etiquette I missed in the Read Me First thread!
I've been saving since my dad opened my first savings account for me (age 8). Aside from a couple motorcycles and vacations, I've been diligent about putting money in and not taking it out. So now I am 25 and have 29,000 saved. However, I don't know what to do with it. I would prefer to have it in an investment account where I know it's getting the best possible return, shove some money in there every month, and forget it. But I'm not quite there yet. Here's the breakdown.
Checking account: ~$100, topped up with $125 each week for day to day expenses.
Scotia Power Savings: ~$7500 right now, flush with a recent tax return and a healthcare reimbursement check that I'm expecting any day now. Supposedly this is Scotia's best savings account, provided you keep the balance over $5000. I've tried to do that for several years, but the interest rate is less than a percent and that seems kind of lame.
Scotia Money Master - This account had a decent interest rate when I got it several years ago, now it's even worse than the power savings. I only keep money in there when my Power Savings account drops below $5000. It rounds up to the next dollar every time you use your debit card on your checking account, and skims that money into the Money Master. I use whatever's in there to pay off my credit card, usually. It's not that useful, mostly just an extra complication.
Scotia Value Visa - not much to say. $7200 limit, low interest, no annual fee, I pay in full each month.
Scotia Line of Credit - $10,000 limit. I don't use this at the moment, no need for it. I just have it handy cause why not.
Investments
Ok, this is the annoying part for me. Age 15, I read Rich Dad Poor Dad and get the idea to start investing. My mom, not knowing anything about investing, takes me to Investors Group for advice. I give them $500 bucks and start earning interest in a very conservative, high MER mutual fund (at the time I didn't understand what MER meant). Age 18, right before the 2008 crash, I take out $2000 and buy a motorcycle. That leaves $1000, which melts into $800. I don't touch it for a few lean, student years til I start working for a company that has RRSP matching. Obviously I take full advantage of that, and start working with a new advisor, still at Investors Group.
After a couple years working there and a couple more lean student years, I get a decent paying job and an inheritance from my grandfather. Suddenly I have about 18,000. I tell my guy at IG that at 24, I really need to be investing in the most aggressive growth funds. This seems safe enough as I have a big contingency fund, a very supportive family living close by, and I don't tend to have financial emergencies at all.
IG just will not let me invest in a plain index fund. All they have are packages with lots of bonds and money market stuff mixed in for "safety". "Safety" to me sounds like a waste of money. Especially since 2013 and 2014 turned out to be excellent years for the Canadian stock market.
At this point, I talked myself into buying their most aggressive fund, which locks your money in for 7 years with hefty fees for early withdrawal. Shortly after that I did more research and got pissed off about a) the high MER (2.4%!) and b) the lock in period, which may prevent me from taking advantage of a real estate bubble that's going to pop in my area in the next couple years.
So here are my investment accounts as they stand.
Allegro Moderate Portfolio B - no withdrawal fee.
RSP - $2900
Alto Moderate Aggressive Portfolio A - locked in til 2022.
TFSA - $16,300
Allegro Aggressive Portfolio A - locked in.
RSP - $5100
So right now I'm putting away $600 a month and I want to invest the excess in my savings account but I don't want to give any more to IG, ever. I opened up an account at TD Waterhouse, meaning to put whatever I can into the eSeries index fund that I've heard about. Haven't done that yet due to technical difficulties, but that should be sorted out soon. But it's yet another account on top of all the accounts I already have open. It's confusing, and I feel like I must be generating waste. There's no real strategy, just a whole bunch of stuff and I must be getting something wrong.
My goal is to retire in ten years with $400,000 - impossible at the current savings rate, but I'd like to frame my strategy in terms of that. I just don't really know what to do. The various people I've talked to (TD bank advisor, IG advisor, my dad who doesn't know much, my investment banker uncle who probably knows something but won't tell me anything useful) just aren't helping at all. They say stuff like, "As long as you're getting ahead at all you're doing better than 90% of your peers!" Ok fine, I already know that. But I'm trying to get to the next level here.
What can I do?
