Learning as I go!

[orange]

Congratulations Koala,

You're very lucky to find someone who makes you happy...and you got the added bonus of someone with the same financial interests.

It's tough building your financial foundation right out of school these days, especially when you come out with student loans. Good for you and your hubby for keeping the loans to a minimum with work and scholarships during school (too many people don't try to offset the costs, rather willingly rack up loans) and paying those off so quickly after!

I'm fairly new to the investment game as well (although solo right now as my other half doesn't care about finance at all), so I can't offer much advice, but I look forward to following your progress!

One piece of advice I will share, since you said you're looking to buy a house...don't pay any attention to how much the bank will lend you - it is NOT what you can afford...they will always lend you MUCH MORE than you can comfortably afford. Look at your expenses and your income, and figure out how much you are comfortable spending (on mortgage, property taxes, maintenance, utilities, etc.), then base your house price on that.

Also, don't feel like you must buy right now. You don't have to. You will not regret it if you wait to find a home you like in your price range.

[Koala]

Thanks Orange!
We're not looking quite yet, I want to finish school first and may wait until I have a job, so it will probably be at least 6 months.
When it comes time to actually start seriously looking, hopefully I can come to you with some questions!

[Barwelle]

As for a fee only advisor, from what I've read, they are fairly expensive when you're just starting off, aren't they?

...

Our next financial decision will be what to do with some of the money in my (non-TFSA) savings account. I'll probably move at least $10,000 into something that will (hopefully) do better than the 2% it's currently earning. The money will be used for a house downpayment though, so it won't be a long-term investment.

Hey, it's great to talk to other like-minded young folk. I have yet to have any real discussions with any of my friends about investing. +1 that you are also in AB! You might teach me a thing or two.

In fact, you already have. You're totally right about the fee-only advisors. I should have done my due diligence... from this website, you're looking at $125 - 400 an hour. Yikes. Let's just stick with CMF, shall we!

You're doing well at 2% for cash savings. I haven't found anything better, unless you would lock into long term GIC's... 2.5% at Ally for a 5 yr. You still get some interest if you cash out early, doesn't say how much though. ING is 2.35% for 5 years, and they drop that to 0.5% if you cash out early. For now, I'm letting my down payment savings sit in ING earning 1.5%, though I might put some into the 5 year GIC.

My money is my money and his money is my money.
Seriously though, we view it as all our money and we’re both aware of what’s going on with all the accounts.

My mom says the same thing about my father's money! And everything else that is "his" for that matter.

It's great that you've found someone who thinks the same way you do. Though some would disagree, money plays a huge role in relationships!

[Saniokca]

You're totally right about the fee-only advisors. I should have done my due diligence... from this website, you're looking at $125 - 400 an hour. Yikes. Let's just stick with CMF, shall we!

actually 125-400 doesn't seem too high to me, obviously it is if your portfolio is 5k. I will stick to ETFs and a few individuals until I reach 50k or so. After that, I think it's a good investment (with a lot of due diligence and references of course). CMF is great for general advice but you want someone to sit with you and look at the specific situation.

By the way, the "advisers" in the bank will seemingly be free but they are getting commissions which someone pays for. That someone will be you.

[Koala]

Barwelle, I agree about money playing a role in relationships. We're great about finding little things to argue about (sometimes the arguments are fun), we don't need a large stressor!

Saniokca, I'm trying to grow away from fees. Paying for a fee based advisor might be a good idea when we have more money and are about to switch to DIY. For now, I see paying the MERs as a part of the learning process.

Right now I'm a little annoyed with my original bank. Automatic prepayments for the MF didn't come from the TFSA set up with the voucher, it came from my savings. The TFSA is not actually a savings account but a 'savings deposit'. I thought it was a bigger issue at first, and that I couldn't transfer it over to the MF. Turns out I can do it manually, but cannot set up automatic payments or transfers. I'm going to have to put slightly more work into this fund than I thought.

[Barwelle]

Yea, it's all relative. In her situation (and mine, and yours by the sounds of it), these fee-only's are pricy.

My networth is around $29,000. Of that, $11,000 is in investments. If I were to sit down with the cheapest adviser for just one hour a year, that cost for that would be like having a 0.5% or 1.1% MER, depending on which number you use, on top of the MER of whichever investments you hold. That would significantly reduce the advantage that ETFs have over mutual funds. Would they be able to provide meaningful advice in just one hour a year? I don't know. Depends on how much help you need, and how involved you want them to be. And if they can convince you that you need more help than you think.

[Barwelle]

I must have misread something somewhere... I'm going to flip flop again. Koala, I thought you were starting out on your own already, but now I see you said you were just working towards it.

If you are sure you want an adviser... at least with the fee-only's, you know what you're paying and you can do things to limit that (i.e. only go see them when you really need to). The banks... like Sanoik said, you're still paying it, it's just hidden. And even if you never visit your adviser again for 5 years... you'll still pay that fee anyway.

And then you are also avoiding that conflict of interest that the bank advisers have.

See if you can find out what the MER of your funds are. Also check out if there are any deferred sales charges (DSC).

Maybe the TD e-series funds or ING streetwise funds would be a good idea... they're easy and simple, and with few options so you wouldn't be overwhelmed with all the choices. How much do you think the adviser has actually helped you?

[Koala]

Barwelle, I agree that I need to get away from the MERs. Before this though I really just had savings accounts and GICs so it's a step up. For now, I just have 2 MFs, one with a fairly high MER (the Global Resources) which is a little less of an investment (although I hope it does well!) and more of a learning experience. It's not something I'll hold onto forever. The other one is 1.48%, which I probably will switch to something with a lower MER.

[Koala]

The seminar at TD was a bit different than what I thought it was going to be, but I found it worthwhile. It was completely about how to use TDW WebBroker in a practical way. I was expecting a little bit more talking, but most of it consisted of her using a demo user within the actual program. I had no idea there was so much information you could pull up . The fees for making trades were covered, and there was an info sheet about their TFSAs, but otherwise nothing was being promoted, not even their e-series. Even if I decided to use something like Questrade instead, I think it was very worthwhile to see in general how things before fiddling with everything myself.

I will probably attend a different one seminar sometime.

[uptoolate]

I would suggest you go check out the Canadian Couch Potato site. TD e-series funds are excellent for those just starting out and those making monthly contributions to savings. TD definitely does NOT push them because they are so low cost that the bank doesn't make much if any money on them. The bank itself will more likely try to push their actively managed funds. TD Waterhouse doesn't push much of anything as they are more about trading fees and more 'sophisticated' investors. You don't need to have a TDW account to use TD e-funds. Just TD online banking.

Keep reading and learning. The Couch Potato site is good but a better all-round easy to read starter book might be something like Andrew Hallam's new 'Millionaire Teacher' book.