# Want to get into investing



## Mulak (Feb 7, 2017)

Hi,

I want to get into investing to build my wealth.

I currently have like 100k in cash and own a condo that I rented out for 3.5 years so far.

I bought the condo for 285k and currently worth around 380-400k.

I have like 90k in TD high interest saving account with 0.5% and the rest is in chequing account.

I have set an meeting with a finanical/investment advisor at TD on Thrusday to discuss on what I can do


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## AltaRed (Jun 8, 2009)

Mulak said:


> Hi,I have set an meeting with a finanical/investment advisor at TD on Thrusday to discuss on what I can do


You will be pressed to buy high MER TD mutual funds, or worse, a packaged managed product. Do yourself a favour and skip the TD predator. Open either an online TD e-funds account (and buy 1-4 TD e-funds) or a TDDI discount brokerage account and do the same thing (buy TD e-funds). It will be well worth you saving at least 1% in MER costs. If nothing else, please familiarize yourself with https://www.finiki.org/wiki/Simple_index_portfolios and ask your TD advisor if s/he can guarantee in writing better performance.


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## Thal81 (Sep 5, 2017)

Hi, you're me 6 years ago. Here are some tips so you don't repeat my mistakes:

1) Don't listen to what the TD rep tells you, they're sells people interesting in making money off of you. Even if they're nice. For the love of god don't buy their Comfort portfolios (they will try to sell you this, I promise). Terrible product.
2) Educate yourself to learn to do this on your own. It's really easy, despite the industry making this seems complicated.
3) Start here: https://canadiancouchpotato.com/. Listen to all the podcasts, look at the model portfolios and search the various topics as you come upon them. Take your time.

cheers


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## like_to_retire (Oct 9, 2016)

Mulak said:


> I have set an meeting with a finanical/investment advisor at TD on Thrusday to discuss on what I can do


This will likely result in paying fees that aren't in your interest, and paying for the financial advisors retirement rather than yours.

Open a discount brokerage account at TDDI (brokerage arm of TD) and transfer your cash there. Move the cash into TDB8150 high interest savings account at TDDI which will pay you 1.6% on that cash until you take the time to learn how to invest. Look into index investing using the couch potato method.

ltr


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## humble_pie (Jun 7, 2009)

Thai has some good ideas, save & except for the "don't listen to the TD rep"

you mention you are starting out, so me i'd go to the TD meeting armed with an invisible-but-impregnable armour of Listen-But-Don't-Buy-Anything.

some advisors have plenty of knowledge. If you meet with one of these, there are several topics he can touch on/explain to you, in the time you will have available. For example, asset allocation, the value of a TFSA, the value of making monthly contributions out of salary.

so i'd attend, but would resolve in advance to make no commitments. None whatsoever. In the off chance that your representative is not knowledgeable or pressures you, be prepared to thank & leave early.

next comes Thai's step.

after that comes LTR's step. Perhaps i'm wrong, but my feeling is that a brand-new novice should not plunge immediately into discount broker investing, would benefit from some self-education as Thai suggests.

best wishes for success,


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## Just a Guy (Mar 27, 2012)

Sell your rental and buy properties which will actually cash flow or invest the proceeds in the market.


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## MrMatt (Dec 21, 2011)

humble_pie said:


> Thai has some good ideas, save & except for the "don't listen to the TD rep"
> 
> you mention you are starting out, so me i'd go to the TD meeting armed with an invisible-but-impregnable armour of Listen-But-Don't-Buy-Anything.
> 
> ...


I second this advise, don't buy a single thing on your first visit.
Also risk tolerance and time horizons are important concepts.

$90k sounds like a lot in a 0.5% savings account.


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## cainvest (May 1, 2013)

humble_pie said:


> some advisors have plenty of knowledge. If you meet with one of these, there are several topics he can touch on/explain to you, in the time you will have available. For example, asset allocation, the value of a TFSA, the value of making monthly contributions out of salary.
> 
> so i'd attend, but would resolve in advance to make no commitments. None whatsoever. In the off chance that your representative is not knowledgeable or pressures you, be prepared to thank & leave early.


I agree, go in and listen without any thought of buying anything. Some bank advisors are good, some are bad and I've met with both types. So get some general knowledge about investing and come up with a plan that fits your needs. If you're good with money, as in you have the ability to save it and stick to your plan, DIY investing may be for you. If you're not good with money management, impulse spender and/or constantly thinking about changing your investment strategy then maybe going though an advisor (a good one) is the way to go.


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## Mulak (Feb 7, 2017)

AltaRed said:


> Mulak said:
> 
> 
> > Hi,I have set an meeting with a finanical/investment advisor at TD on Thrusday to discuss on what I can do
> ...





Thal81 said:


> Hi, you're me 6 years ago. Here are some tips so you don't repeat my mistakes:
> 
> 1) Don't listen to what the TD rep tells you, they're sells people interesting in making money off of you. Even if they're nice. For the love of god don't buy their Comfort portfolios (they will try to sell you this, I promise). Terrible product.
> 2) Educate yourself to learn to do this on your own. It's really easy, despite the industry making this seems complicated.
> ...


I figured I shouldn't take to any of the bank product offer... Good to know that is true

Lol how easy is it?

I will check out the couch potato... My only problem is that I'm hearing impaired/deaf so it hard for me to hear podcasts because im assumed their podcasts doesn't have subtitle of some sort?



like_to_retire said:


> Mulak said:
> 
> 
> > I have set an meeting with a finanical/investment advisor at TD on Thrusday to discuss on what I can do
> ...


Good to know ... I will consider the TDDI account, at least it will triple my current high interest saving account without doing anything 



humble_pie said:


> Thai has some good ideas, save & except for the "don't listen to the TD rep"
> 
> you mention you are starting out, so me i'd go to the TD meeting armed with an invisible-but-impregnable armour of Listen-But-Don't-Buy-Anything.
> 
> ...


Basically knowledge is power by talking to the advisor without committing to anything 

Those examples you mentioned especially TFSA... Are they worth it? Can only put limited amount per year plus get like 3% return which is a bummer lol

Even if I shouldnt go into discount broker investing account right off the bat, at least just put my money in it to get the higher return comparing to my HISA of 0.5% and gain some knowledge on investing


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## Mulak (Feb 7, 2017)

MrMatt said:


> humble_pie said:
> 
> 
> > Thai has some good ideas, save & except for the "don't listen to the TD rep"
> ...


It only $38 I got this month



cainvest said:


> humble_pie said:
> 
> 
> > some advisors have plenty of knowledge. If you meet with one of these, there are several topics he can touch on/explain to you, in the time you will have available. For example, asset allocation, the value of a TFSA, the value of making monthly contributions out of salary.
> ...


I'm good with my money and definitely not an impulse buyer... I saved my 20% down payment on the condo on my own which is 57k, no monetary help from my parents and still saving money with 100k in the bank so far


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## like_to_retire (Oct 9, 2016)

Mulak said:


> I'm good with my money.........


Yes, and that's what I got from your original post, and that's why I suggested to immediate open a do-it-yourself discount brokerage account at TDDI. You're already with TD, so the transition is simple and easy to move the cash to the TDDI account. You are already in an HISA situation, so I suggested using the standard TDDI HISA which is TDB8150. I don't really see how others find this as a _"brand-new novice should not plunge immediately into discount broker investing"._ 

If you are going to invest for yourself, rather than for others, you will need the TDDI account. Start with an HISA (that pays almost 3 times as much as you're getting now) in a TDDI account. Then you have time to learn. Even the most seasoned investor on this board, if they are with TDDI, use TDB8150 as their cash holding.

While you're setting up the TDDI standard cash account, you may as well also open a TFSA account.

ltr


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## cainvest (May 1, 2013)

Mulak said:


> I'm good with my money and definitely not an impulse buyer... I saved my 20% down payment on the condo on my own which is 57k, no monetary help from my parents and still saving money with 100k in the bank so far


Good to hear. Now is the time to read and get a good hold on the basics .... account types like non-reg, TFSA, RRSP and asset allocations, cash, bonds, stocks, etc. Also things like your income level, risk tolerance and money usage plans (retire early, saving for house, etc) will come into play going forward.


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## humble_pie (Jun 7, 2009)

Mulak said:


> I'm good with my money and definitely not an impulse buyer



yes i thought so ... & i think you will be a successful investor in equities markets as well. So far your accomlishments in finance are first-rate.

re your present low interest rate on funds on deposit vs a higher-paying HISA like TDB8150. You could transfer your savings into TDB8150 right at the branch, with the same representative with whom you made your appointment. on the spot. He will utilize a TD retail investor service company that is a sister of the broker, but not the broker itself (either way you will receive the exact same distribution)

the reason i'm inclined to delay broker selection for the time being is that it's a "heavier" decision. Not at first, but after a while the investments & the holdings make a broker account cumbersome, possibly even expensive, to transfer to another broker. 

while TD itself is an excellent broker choice for a new investor - rich with research offerings & having an exceptionally helplful & supportive personnel at its call centres - nevertheless some new investors choose to open their first accounts at a much less expensive broker such as questrade, for example. Questrade does not charge any commissions to buy ETFs, so a fully-allocated portfolio can be constructed there at zero cost.

bref, when you do get around to opening a broker account, you will want to have chosen the best candidate for your needs. It's an engagement, not a coffee date.

another zero cost possibility that permits a fully-allocated portolio is TD index e-funds. The TD representative the OP is going to meet will know about these, but because they do not reward front line vendors such as the TD rep with trailer fees, he will never recommend them. He might even dis-recommend them (this is where the Pay No Attention advice comes in handy)

re the TFSA, absolutely you should have one. The younger you are, the better. It might not look like much at 3% but in your old age it will be a godsend.

good luck!


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## AltaRed (Jun 8, 2009)

Mulak said:


> I figured I shouldn't take to any of the bank product offer... Good to know that is true
> 
> Lol how easy is it?
> 
> ...


A TFSA is a type of account, and with a TFSA brokerage account at a place like TDDI, you can invest in almost anything. True, the annual contribution level is small but for anyone who was already 18 (or 19) in 2009, there is something like $72k(?) of contribution room available that can be invested in a range of products including TD e-funds. If you don't already have a TFSA, you probably should open that first at TDDI rather than a non-registered cash account. Spend some time reading at Finiki or Couch Potato....


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## hfp75 (Mar 15, 2018)

If your gonna buy TDB8150, why not buy PSA it’s return is 2.15% ? It’s a HISA just not through a major bank.... it’ll give you an extra 0.55% in interest income. On $100,000 that’s an extra $550 / yr or $46 / month..... money is money.....

If you want to be creative, buy PFC2000, the return is 1.82%, I think it’s a ROC (return of capital) - which means you don’t decaire the distributions as interest income, instead when you sell, it’s a capital gain, more tax friendly. Should give you more cash in your hand at the end of the yr than PSA. PSA is simple to use, PFC2000 is a bit of work....

Interest income is fully taxable and roc/CG income is only 50% taxable.... plus you can pay the taxes when you want (selling your units).... not yearly....

I think PFC2000 used to be PFC2200. Someone might weigh in and correct me. I think PFC2200 got capped, might need to double check if PFC 2000 is a roc....


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## AltaRed (Jun 8, 2009)

I'd suggest this is more complicated than it needs to be for temporary parking of funds until the OP decides on an investing strategy and asset allocation. The OP may have no experience buying/selling on the TSX. Perhaps walk first, then jog.

As part of the OP's learning, and assuming the OP will be getting into equities, and assuming it could be mutual funds (such as TD e-funds) or ETFs, the OP will eventually need to learn about adjustments to ACB (if and when the OP invests outside of an RRSP or TFSA). Lots of good info on https://www.adjustedcostbase.ca/ and the OP may wish to bookmark that for future reference.


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## OhGreatGuru (May 24, 2009)

Read some of the references in the Sticky Note https://www.canadianmoneyforum.com/...-with-Weight-A-Reading-List-for-New-Investors

You could add: Mutual Funds for Canadians for Dummies; Personal Finance for Canadians for Dummies; but they are getting bit a dated, and their advice is likely repeated in the newer (2018) Investing for Canadians. Your library may copies.


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## james4beach (Nov 15, 2012)

hfp75 said:


> If your gonna buy TDB8150, why not buy PSA it’s return is 2.15% ? It’s a HISA just not through a major bank.... it’ll give you an extra 0.55% in interest income.


Beware, PSA is forbidden at some brokerages and TD's system doesn't let you enter a buy order for it (personally I think this is unjustified, anti-competitive behaviour)

There's also ZST, a very short term bond fund. This involves a bit more risk that parking cash but will return more.


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## Mulak (Feb 7, 2017)

like_to_retire said:


> Yes, and that's what I got from your original post, and that's why I suggested to immediate open a do-it-yourself discount brokerage account at TDDI. You're already with TD, so the transition is simple and easy to move the cash to the TDDI account. You are already in an HISA situation, so I suggested using the standard TDDI HISA which is TDB8150. I don't really see how others find this as a _"brand-new novice should not plunge immediately into discount broker investing"._
> 
> If you are going to invest for yourself, rather than for others, you will need the TDDI account. Start with an HISA (that pays almost 3 times as much as you're getting now) in a TDDI account. Then you have time to learn. Even the most seasoned investor on this board, if they are with TDDI, use TDB8150 as their cash holding.
> 
> ...


I was reading on the type of TDDI accounts... why not do a self directed registered disability savings plan (RDSP) because I'm hearing impaired/deaf since birth.

- No annual contribution limit 
Contributions, up to a lifetime limit of $200,000, are made with after-tax dollars and are not tax-deductible.

- Defer taxes while growing your investments
Any investment income is tax-deferred.

- You may be eligible for government assistance
Qualified families may receive up to $70,000 in Canada Disability Savings Grants and up to $20,000 in Canada Disability Savings Bonds paid to your plan.





cainvest said:


> Good to hear. Now is the time to read and get a good hold on the basics .... account types like non-reg, TFSA, RRSP and asset allocations, cash, bonds, stocks, etc. Also things like your income level, risk tolerance and money usage plans (retire early, saving for house, etc) will come into play going forward.


any good sites/books to read up on the basics?



humble_pie said:


> yes i thought so ... & i think you will be a successful investor in equities markets as well. So far your accomlishments in finance are first-rate.
> 
> re your present low interest rate on funds on deposit vs a higher-paying HISA like TDB8150. You could transfer your savings into TDB8150 right at the branch, with the same representative with whom you made your appointment. on the spot. He will utilize a TD retail investor service company that is a sister of the broker, but not the broker itself (either way you will receive the exact same distribution)
> 
> ...


great information to know

I just turned 32 years old a few weeks ago... I hope that is not too old haha

my uncle in law does stock trading, not as a career though but trade stocks... He aim like 5-8% weekly or 8-10% biweekly and if stocks go down 3-5% then he get out. he mostly trade cannabis stocks and bank stocks... He currently got 4 trades right now

He can teach me stuff on trading... you think thats wise?




AltaRed said:


> A TFSA is a type of account, and with a TFSA brokerage account at a place like TDDI, you can invest in almost anything. True, the annual contribution level is small but for anyone who was already 18 (or 19) in 2009, there is something like $72k(?) of contribution room available that can be invested in a range of products including TD e-funds. If you don't already have a TFSA, you probably should open that first at TDDI rather than a non-registered cash account. Spend some time reading at Finiki or Couch Potato....


would a RDSP be better than TFSA?


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## AltaRed (Jun 8, 2009)

I have no knowledge or expertise in RDSPs. Don't know if you would qualify or not.


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## peterk (May 16, 2010)

Mulak said:


> my uncle in law does stock trading, not as a career though but trade stocks... He aim like 5-8% weekly or 8-10% biweekly and if stocks go down 3-5% then he get out. he mostly trade cannabis stocks and bank stocks... He currently got 4 trades right now
> 
> He can teach me stuff on trading... you think thats wise?


No, that's not wise, and no, he doesn't make 5% weekly.


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## like_to_retire (Oct 9, 2016)

Mulak said:


> I was reading on the type of TDDI accounts... why not do a self directed registered disability savings plan (RDSP) because I'm hearing impaired/deaf since birth.


Sounds worthwhile. When you open a TDDI brokerage account, it will start with a non-registered account. You can then add any number of other types of accounts after that - (RRSP, RDSP, TFSA, etc)



Mulak said:


> my uncle in law does stock trading, not as a career though but trade stocks... He aim like 5-8% weekly or 8-10% biweekly and if stocks go down 3-5% then he get out. he mostly trade cannabis stocks and bank stocks... He currently got 4 trades right now
> 
> He can teach me stuff on trading... you think thats wise?


No, that's not wise. It's the fastest way to lose your money. We're talking about investing, not trading.

ltr


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## AltaRed (Jun 8, 2009)

I agree. Terrible idea even letting the thought of trading pass through one's grey matter.


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## Mulak (Feb 7, 2017)

alright good... I figured that

I rather do the long term comparing to trading short term... trading seem to be a lot more babying to do comparing to investing

what about TDDI - RSP account? ... still prefer TFSA over RSP?


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## lonewolf :) (Sep 13, 2016)

Mulak said:


> Hi,
> 
> I want to get into investing to build my wealth.
> 
> I have like 90k in TD high interest saving account with 0.5% and the rest is in chequing account.


 The conflict of interest the bank is not your friend, Duca credit union has 3% daily interest until @ least Jan 2020

90,000 compounded @ .5% over 50 years = $115,490
90,000 compounded @ 3% over 50 years = $394,551


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## cainvest (May 1, 2013)

Mulak said:


> any good sites/books to read up on the basics?
> 
> I just turned 32 years old a few weeks ago... I hope that is not too old haha


Just try starting off with a google search "basics of investing canada". Read some articles (ignore any sales pitches you read in them) on the following,
- asset allocations
- risk tolerance
- account types (non-registered, TFSA, RRSP)

Some sites may cover all of the above and even more. 

Don't feel rushed to get your money "into the market" right now until you have a solid plan and some knowledge of how things work and interact with each other. You're only 32, you've still got a good amount of time on your side!


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## peterk (May 16, 2010)

Mulak said:


> alright good... I figured that
> 
> I rather do the long term comparing to trading short term... trading seem to be a lot more babying to do comparing to investing
> 
> what about TDDI - RSP account? ... still prefer TFSA over RSP?


Good! But I wouldn't characterize it as "babying" either. It's pure gambling. And even if your relatives (or people in general) take their investing "seriously" then it's gambling in the form of "operating a risky small business that you hardly know anything about", and even if they are geniuses who have 20 years experience trading, then it's "operating a business in the most competitive industry _in the world_."

Anyway, with 100k to invest, you should probably have an RRSP and a TFSA account open to invest in both, and you'll want to learn about the right kind of investments to hold in which accounts (stocks, bonds, American stocks, etc.)

Just A Guy's comment about looking into your investment in that rental property, and really seeing whether it is a good place for your money, is a great idea also. It's quite possible that selling it at these high prices is the right thing to do financially.

Edit: Oh and I'd go ahead and cancel that meeting with the Bank if I were you. You are clearly too smart for that - and you are on the right track to figuring things out yourself here in the CMF and reading. Literally nothing good could come from it, the only possible outcomes are you will leave being: conned unwittingly, confused unnecessarily, or, if neither, then just plain old annoyed.


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## kcowan (Jul 1, 2010)

Mulak said:


> I was reading on the type of TDDI accounts... why not do a self directed registered disability savings plan (RDSP) because I'm hearing impaired/deaf since birth.
> 
> - No annual contribution limit
> Contributions, up to a lifetime limit of $200,000, are made with after-tax dollars and are not tax-deductible.
> ...


The account will require you to get your doctor's opinion on how serious you disability has impacted your ability to earn a living. I have two relatives that are disabled and neither could get their doctors to agree to the terms. One is on permanent disability from her job. YMMV

But get the TFSA and stop paying tax on most of your savings while you investigate. Any holding can be transferred in kind to the RDSP if it gets approved.


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## Shaun8030 (Jul 25, 2018)

Time frame of investing and risk tolerance ? Which account RRSP TFSA or non registered ?


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## Mulak (Feb 7, 2017)

lonewolf :) said:


> The conflict of interest the bank is not your friend, Duca credit union has 3% daily interest until @ least Jan 2020
> 
> 90,000 compounded @ .5% over 50 years = $115,490
> 90,000 compounded @ 3% over 50 years = $394,551


pretty much it seem like major banks don't have people in their best interest



cainvest said:


> Just try starting off with a google search "basics of investing canada". Read some articles (ignore any sales pitches you read in them) on the following,
> - asset allocations
> - risk tolerance
> - account types (non-registered, TFSA, RRSP)
> ...


will google search these items 

should I at least do the TDDI TFSA?



peterk said:


> Good! But I wouldn't characterize it as "babying" either. It's pure gambling. And even if your relatives (or people in general) take their investing "seriously" then it's gambling in the form of "operating a risky small business that you hardly know anything about", and even if they are geniuses who have 20 years experience trading, then it's "operating a business in the most competitive industry _in the world_."
> 
> Anyway, with 100k to invest, you should probably have an RRSP and a TFSA account open to invest in both, and you'll want to learn about the right kind of investments to hold in which accounts (stocks, bonds, American stocks, etc.)
> 
> ...


What kind of return does RRSP have comparing to TFSA?

The only reason I don't want to sell the condo now is because eventually I'm going to move out of my mom's place and move in.

I'm gonna go to the meeting anyway... at least I can set up the TFSA with the advisor



kcowan said:


> The account will require you to get your doctor's opinion on how serious you disability has impacted your ability to earn a living. I have two relatives that are disabled and neither could get their doctors to agree to the terms. One is on permanent disability from her job. YMMV
> 
> But get the TFSA and stop paying tax on most of your savings while you investigate. Any holding can be transferred in kind to the RDSP if it gets approved.


oh wow... seem like a better hassle than I thought

should I get the RRSP as well... or just the TFSA?


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## GreatLaker (Mar 23, 2014)

Mulak said:


> any good sites/books to read up on the basics?


If you want the Coles Notes version, read If You Can: How Millennials Can Get Rich Slowly by William Bernstein. The author says more in 16 pages than many do in hundreds. It will give good insight into how the investing industry operates, so I highly recommend you read it before any meeting with an advisor. It is US based but the same principles apply in Canada if you use Canadian investments from Finiki.org or Canadian Couch Potato. Here is a link to the free ebook:
https://www.etf.com/docs/IfYouCan.pdf

Another good resource is Finiki, the Canadian Financial Wiki:
https://www.finiki.org/wiki/Getting_started
https://www.finiki.org/wiki/Portfolio_design_and_construction
https://www.finiki.org/wiki/Simple_index_portfolios





Mulak said:


> Lol how easy is it?


It may seem complex and intimidating at first. You can make it as simple or as complex as you want.

You could get extremely broad diversification and low cost through one single asset allocation ETF from Vanguard, iShares or BMO. Go to this link and scroll down to Option 4: "Asset Allocation ETFs". It's about as simple as investing can get, but through broad diversification and low cost will certainly perform well over the long term.
https://canadiancouchpotato.com/model-portfolios/


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## AltaRed (Jun 8, 2009)

Mulak, you appear to be in over your head....

1. Why would you set up a bank based TFSA when you can set up a TDDI discount brokerage TFSA and make your own, higher valued, investments even if that is only a ISA paying 1.6%? 
2. You don't just 'get' a RRSP, You have to at least partially fund it, with an RRSP contribution, probably to the tune of $15k to avoid minimum account fees. You can put funds into an ISA paying 1.6% as well pending other decisions

You fund a TFSA with 'after tax' money, while an RRSP is funded with 'before tax' money by getting a tax credit when you file for a deduction with your tax return. A TFSA never is taxed again, while the proceeds of an RRSP are taxed in the future. An RRSP is a 'tax deferral' vehicle. Younger investors in relatively low marginal tax brackets are usually better off with a TFSA, especially if they might have to access TFSA assets along the way. Only after the TFSA is max'd out would I suggest an RRSP.

I think you need to do a bunch of reading first before opening any accounts.


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## Just a Guy (Mar 27, 2012)

Returns on an RRSP and a TFSA (assuming you’d invest in the same stuff) will basically be the same. The difference comes when cashing out. RRSPs are taxable when you withdraw. TFSAs are also after tax dollars for investment, but RRSPs give you a tax credit at deposit. 

I, personally, think RRSPs benefit the government more as far as taxes in the long run because they restrict your withdrawals. Eventually the government will probably get a large tax collection from them, especially if you die with funds left. 

As for selling the “rental” you could have two, four or even 8 places (depending on where they are located) making you real profits on two, four or even 8 properties. If you got 8 one bedroom places for 50k each (I just closed on two in the past few weeks) making $1000/month rent you could buy a new place to live in and have it paid with the profits. 

I assume you’re probably more in the east, but there are better cash flowing properties in every province...not as good as the west right now, unless you go Far East, and you probably won’t find too many 50k properties, but you could actually be making money with a couple of 100k properties. 

Remember too, by moving into a former rental, you’ll trigger a capital gain that you need to report. This could come back to bite you later if the property values correct as you can’t declare a capital loss on your primary residence.


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## Rusty O'Toole (Feb 1, 2012)

"my uncle in law does stock trading, not as a career though but trade stocks... He aim like 5-8% weekly or 8-10% biweekly and if stocks go down 3-5% then he get out. he mostly trade cannabis stocks and bank stocks... He currently got 4 trades right now

He can teach me stuff on trading... you think thats wise?"

I believe this is possible although very few can do it consistently. If I were you I would take this uncle out to dinner and ask him to teach me how to trade stocks. Learn from him then paper trade for 6 months without risking any money, and then do some very small low risk trades. Stock trading is a skill best learned from someone who is doing it. I have read about many stock traders and almost all learned from a mentor.

If he refuses to mentor you, chances are he was exaggerating his success and doesn't want you to know it.


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## peterk (May 16, 2010)

Mulak said:


> *What kind of return does RRSP have comparing to TFSA?
> *
> The only reason I don't want to sell the condo now is because eventually I'm going to move out of my mom's place and move in.
> 
> ...


I think you need a bit more of the basics under your belt Mulak. There are three account types, and they can all hold the same types of investments. They don't get different "kinds of returns", they are just accounts that take your cash deposits, and then you have to decide what to do with the cash deposits. The RRSP, after you make a deposit, also gives you a tax deduction and refund immediately (on next year's taxes), while the TFSA just takes regular deposits and there is no other transaction that happens after that, no tax refund and no tax bill either (hence the name "Tax Free").




Just a Guy said:


> *Returns on an RRSP and a TFSA (assuming you’d invest in the same stuff) will basically be the same.* The difference comes when cashing out. RRSPs are taxable when you withdraw. TFSAs are also after tax dollars for investment, but RRSPs give you a tax credit at deposit.
> 
> I, personally, think RRSPs benefit the government more as far as taxes in the long run because they restrict your withdrawals. Eventually the government will probably get a large tax collection from them, especially if you die with funds left.
> 
> ...


The rental-to-primary-residence switch tax bill is a good point, and should be considered Mulak, if you're planning to move back in. You could be hit with a multi-10k tax bill you didn't know about.

But JAG, why do you insist on giving everyone your extreme examples of unrealistic rental housing scenarios that they never asked for it? Nobody cares that you sometimes buy $1000/month rentals for $50k at steep discount, nor have you ever found 8 of them in a row I bet, so why mention it casually as if this a normal thing and the OP is stupid for not realizing so? It's as unhelpful as someone new coming here wondering about how stock investment returns works and CMFers replying "Well I got 20% returns the last 2 years..."


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## AltaRed (Jun 8, 2009)

peterk said:


> But JAG, why do you insist on giving everyone your extreme examples of unrealistic rental housing scenarios that they never asked for it? Nobody cares that you sometimes buy $1000/month rentals for $50k at steep discount, nor have you ever found 8 of them in a row I bet, so why mention it casually as if this a normal thing and the OP is stupid for not realizing so? It's as unhelpful as someone new coming here wondering about how stock investment returns works and CMFers replying "Well I got 20% returns the last 2 years..."


+1 Totally non-relevant material to the discussion at hand. No one cares.


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## Just a Guy (Mar 27, 2012)

I’m pointing out that sitting on a 400k property that doesn’t generate cash flow is a bad investment. He’s sitting on a ton of dead equity earning a negative return. My examples aren’t extreme by any means, it’s just that I’m actively looking while people like you sit around not having learned from Aesop’s fable about sour grapes. 

Try looking for properties instead of saying they don’t exist.

I also never said he could find 8 in a row, however I just helped my son put an offer on a three bedroom place which should rent for around $1300/month. Price should be in the low 70’s. This would be the 8th property my family has bought in the last year, highest price we paid was 75k each for two three bedroom places. I also helped a friend buy two bachelor suites for 40k each which should rent for around $8-900/month because she wanted to get into investing. She found the properties on her own...guess how? She looked for them. 

Had you actually read the post I made, I said he could buy anywhere from 2-8, yet you are the one who focused on the 8. I downplayed it to the more realistic 4 properties at around 100k. I also pointed out that properties may not be in that 50k price range in every province, but I don’t just shop in one province and I don’t base my reality on GTA and GVA. Canada is a big place with other major cities. What I do can be easily verified if you actually took a few minutes to browse mls, but I doubt you’d ever take the time. Easier to claim the grapes were probably sour to begin with. 

As for your uncle teaching you, you need to find out what kind of investor you are, what matches your personality. I’m not a trader by nature, I don’t like watching the market, and am too lazy to even set buy/sell limits. I know how to do it, my personality doesn’t really let me do it (kind of like Peterk isn’t a real estate investor because he doesn't believe they exist/doesn’t want to do the work to find them). 

You can’t fight yourself and be a successful investor. I’m an excellent buy and hold value investor, it’s what works for me, but not everyone. You need to discover what works for you and that may cost you some money in mistakes, but it’s the price of your education.


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## Mulak (Feb 7, 2017)

GreatLaker said:


> If you want the Coles Notes version, read If You Can: How Millennials Can Get Rich Slowly by William Bernstein. The author says more in 16 pages than many do in hundreds. It will give good insight into how the investing industry operates, so I highly recommend you read it before any meeting with an advisor. It is US based but the same principles apply in Canada if you use Canadian investments from Finiki.org or Canadian Couch Potato. Here is a link to the free ebook:
> https://www.etf.com/docs/IfYouCan.pdf
> 
> Another good resource is Finiki, the Canadian Financial Wiki:
> ...


thank for the resources, i will definitely check them out

comparing ETF and stocks... do they pretty much perform somewhat similar returns long term except etf are cheaper to buy?



AltaRed said:


> Mulak, you appear to be in over your head....
> 
> 1. Why would you set up a bank based TFSA when you can set up a TDDI discount brokerage TFSA and make your own, higher valued, investments even if that is only a ISA paying 1.6%?
> 2. You don't just 'get' a RRSP, You have to at least partially fund it, with an RRSP contribution, probably to the tune of $15k to avoid minimum account fees. You can put funds into an ISA paying 1.6% as well pending other decisions
> ...


1. I meant TDDI, we were talking about TDDI TFSA and RRSP in past posts... I just kept continuing the same conversation with TDDI in my mind, just didn't put it in the post... my bad

2. I know I have to fund it... wording it wrong... how big of a tax, if I withdraw money from RRSP?



Just a Guy said:


> Returns on an RRSP and a TFSA (assuming you’d invest in the same stuff) will basically be the same. The difference comes when cashing out. RRSPs are taxable when you withdraw. TFSAs are also after tax dollars for investment, but RRSPs give you a tax credit at deposit.
> 
> I, personally, think RRSPs benefit the government more as far as taxes in the long run because they restrict your withdrawals. Eventually the government will probably get a large tax collection from them, especially if you die with funds left.
> 
> ...


I live in Oakville, Ontario.. close to Toronto ... there are definitely no 50k properties around here unless u referring to 50k down payment?

I agree on what you are saying about decide on what kind of person I can be and not force it...



Rusty O'Toole said:


> "my uncle in law does stock trading, not as a career though but trade stocks... He aim like 5-8% weekly or 8-10% biweekly and if stocks go down 3-5% then he get out. he mostly trade cannabis stocks and bank stocks... He currently got 4 trades right now
> 
> He can teach me stuff on trading... you think thats wise?"
> 
> ...


seems like trading stocks short term too volatile to deal with constantly... would it be better to get great paying divided stocks long term? and/or just great quality company stocks that does well over time and sell them then?


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## AltaRed (Jun 8, 2009)

An ETF is based on a pre-defined index of many assets. It could be based on the TSX Composite 300 such as XIC (200+ equities - stocks) or it could be based on the Canadian Universal Bond index such as ZAG (all kinds of bonds), etc. The main difference is that an ETF is a basket of assets giving you diversification that you could not get otherwise owning just a few stocks or bonds. TD e-funds are the same thing except a mutual fund consisting of many assets such as Canadian stocks, or bonds, etc. For most investors, couch potato (index) investing is by far the most productive way to be a buy and hold investor. Individual stock and bond picking is for those with the skill, experience and resources to be at least 50% successful.

If and when you withdraw from an RRSP, the dollar value of whatever you withdraw is subject to full income rates such as interest. If you withdraw, you also lose the contribution room that you earned and used to contribute in the first place. Not at all a good idea to withdraw until after retirement.

Few investors can be successful traders of, for example, stocks. Most/many of us who do stock pick generally buy high quality stocks and hold them until there is a reason to sell, such as the company going off the rails (under-performance), or to withdraw cash flow during retirement.


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## Just a Guy (Mar 27, 2012)

You may want to talk with Mr. Matt he’s based out of Hamilton and probably has a better idea on the market around you. My look is a lot broader, so he’s probably a better real estate resource.


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## Gruff403 (Jan 30, 2019)

Congratulations Mulak on a solid financial start. Early 30's with 100k cash and appreciating real estate. You obviously are doing something right. It also appears you have much to learn but at least you are reaching out for guidance. You appear smart enough to meet with a financial advisor and not sign anything. Perhaps take a trusted person with you. It costs you nothing to meet but can cost you more than you realize if you sign something. 
Learn the difference between TFSA, RRSP first. A large RRSP can have disadvantages in the future, I don't see many disadvantages to a large TFSA in 20 years. I encourage my kids to max their TFSA first before RRSP. This investing stuff is complex and will change over time as new products are created and rules are changed. Looks like you have the most important concept figured out, save more then you spend. Well done and good luck.


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## MrMatt (Dec 21, 2011)

peterk said:


> No, that's not wise, and no, he doesn't make 5% weekly.


Nope 5% a week compounded is 1200% a year.
That means in a year, he'd turn $1000 into 1.2 million, or just shy of $160 million in 2 years. 

If you get lucky sure you can make 10,20, 30% in a week on a stock, but it's just luck.


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## Mulak (Feb 7, 2017)

AltaRed said:


> An ETF is based on a pre-defined index of many assets. It could be based on the TSX Composite 300 such as XIC (200+ equities - stocks) or it could be based on the Canadian Universal Bond index such as ZAG (all kinds of bonds), etc. The main difference is that an ETF is a basket of assets giving you diversification that you could not get otherwise owning just a few stocks or bonds. TD e-funds are the same thing except a mutual fund consisting of many assets such as Canadian stocks, or bonds, etc. For most investors, couch potato (index) investing is by far the most productive way to be a buy and hold investor. Individual stock and bond picking is for those with the skill, experience and resources to be at least 50% successful.
> 
> If and when you withdraw from an RRSP, the dollar value of whatever you withdraw is subject to full income rates such as interest. If you withdraw, you also lose the contribution room that you earned and used to contribute in the first place. Not at all a good idea to withdraw until after retirement.
> 
> Few investors can be successful traders of, for example, stocks. Most/many of us who do stock pick generally buy high quality stocks and hold them until there is a reason to sell, such as the company going off the rails (under-performance), or to withdraw cash flow during retirement.


starting look like TDDI RRSP isn't in the work for me right now... look like i'm leading toward TDDI TFSA... my T4 last year, I made 30k plus tips... I'm working on trying to improve my financial situation.

Even if I don't sign anything with TD or set up an TDDI account with the advisor on Thursday... Can I set it up online and not have to go the bank?

speaking on ETFs... how do we know what cause the ETF go up or down... knowing ETF is a collection of stocks, bonds, or commodity .. obviously one or a few items of the ETF cause to go up or down comparing to a single stock because we will know when we surf the net on the specific company

is it a good idea to go stock route by buying good quality company stocks like coca cola, costco, amazon and the likes... just buy and hold and get dividends and reinvest again to buy more stocks?



Gruff403 said:


> Congratulations Mulak on a solid financial start. Early 30's with 100k cash and appreciating real estate. You obviously are doing something right. It also appears you have much to learn but at least you are reaching out for guidance. You appear smart enough to meet with a financial advisor and not sign anything. Perhaps take a trusted person with you. It costs you nothing to meet but can cost you more than you realize if you sign something.
> Learn the difference between TFSA, RRSP first. A large RRSP can have disadvantages in the future, I don't see many disadvantages to a large TFSA in 20 years. I encourage my kids to max their TFSA first before RRSP. This investing stuff is complex and will change over time as new products are created and rules are changed. Looks like you have the most important concept figured out, save more then you spend. Well done and good luck.


Thank you

I'm leading toward doing TDDI TFSA or some TFSA elsewhere with good returns



MrMatt said:


> Nope 5% a week compounded is 1200% a year.
> That means in a year, he'd turn $1000 into 1.2 million, or just shy of $160 million in 2 years.
> 
> If you get lucky sure you can make 10,20, 30% in a week on a stock, but it's just luck.


Nah I said he aim to get those percentage ... he doesn't always get them and he lost money as well ... hit and miss but he is in the black


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## AltaRed (Jun 8, 2009)

ETFs go up or down with the changes in market prices of the securities within the ETF, per the index. SPY on the NYSE will track the S&P500 index. XIC will track the TSX Composite 300. ETFs track the index that they are designed to follow. ETFs are designed to follow the index. It really is that simple.

Don't know why you say


> I'm leading toward doing TDDI TFSA or some TFSA elsewhere with good returns


 A TFSA is simply an account. Doesn't matter where you have one It's performance will depend on what assets you put into it and how those assets perform in the market.


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## Just a Guy (Mar 27, 2012)

It’s not a good idea to buy any stock that is overpriced doesn’t matter if it’s a blue chip or speculative stock. Investing is work, not random chance. You have to do some research and figure out if the stock is reasonable to buy or not depending on a criteria you set. Figuring out what that means is called developing an investment strategy. 

As I said, you can’t really copy other people unless you want to abdicate responsibility and get the results from the work of others. If you do that, you may as well go with some broker who will probably live up to his title and make you broker. This is the strategy of most people. 

Of course, as you learn more, you can change your strategy, or refine it. Not many people start off stock picking, but eventually the more successful people migrate over to it.


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## Mulak (Feb 7, 2017)

AltaRed said:


> ETFs go up or down with the changes in market prices of the securities within the ETF, per the index. SPY on the NYSE will track the S&P500 index. XIC will track the TSX Composite 300. ETFs track the index that they are designed to follow. ETFs are designed to follow the index. It really is that simple.
> 
> Don't know why you say A TFSA is simply an account. Doesn't matter where you have one It's performance will depend on what assets you put into it and how those assets perform in the market.


I'm talking about better interest rate % return from different places



Just a Guy said:


> It’s not a good idea to buy any stock that is overpriced doesn’t matter if it’s a blue chip or speculative stock. Investing is work, not random chance. You have to do some research and figure out if the stock is reasonable to buy or not depending on a criteria you set. Figuring out what that means is called developing an investment strategy.
> 
> As I said, you can’t really copy other people unless you want to abdicate responsibility and get the results from the work of others. If you do that, you may as well go with some broker who will probably live up to his title and make you broker. This is the strategy of most people.
> 
> Of course, as you learn more, you can change your strategy, or refine it. Not many people start off stock picking, but eventually the more successful people migrate over to it.


alright good to know... knowledge is power


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## kcowan (Jul 1, 2010)

Mulak said:


> I'm talking about better interest rate % return from different places


But this implies that you still don't get it? Those different interest rates (at least ones worth considering) are available wherever you open your TFSA. So go into a branch and open your TFSA, then move your holdings over to avoid further taxable interest. Every day you delay is another day that you lost the tax free status! That is lost forever.


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## like_to_retire (Oct 9, 2016)

Mulak said:


> starting look like TDDI RRSP isn't in the work for me right now... look like i'm leading toward TDDI TFSA... my T4 last year, I made 30k plus tips... I'm working on trying to improve my financial situation.
> 
> Even if I don't sign anything with TD or set up an TDDI account with the advisor on Thursday... Can I set it up online and not have to go the bank?


Yes, you can open a TDDI brokerage account online. See here.



> speaking on ETFs... how do we know what cause the ETF go up or down.


An ETF is a collection of individual securities that represents a flavour such as a stock index or bond index. If the individual securities within the ETF appreciate in value overall, then the value of the share price of your ETF rises.



> I'm leading toward doing TDDI TFSA or some TFSA elsewhere with good returns


Again, you open an account type (TFSA, RRSP, Non-Registered) and you purchase various securities (HISA, ETF, Mutual Fund, Stocks, Bonds) within that account. A TFSA doesn't have a "good return" - it is an account that is empty until you fill it.



> is it a good idea to go stock route by buying good quality company stocks like coca cola, costco, amazon and the likes... just buy and hold and get dividends and reinvest again to buy more stocks?


Sure, although you only mentioned USA stocks. You might want to include Canadian stocks also. The balance of the types of securities of stocks versus bonds versus cash is figured out by yourself first in what is called asset allocation. For example, 60% equity (stocks ETF), 35% fixed income (bonds, ETF), 5% cash. Then within your equity allocation decide if you want perhaps 60% Canadian, 35% USA, 5% international.

With individual stocks versus an ETF index you are taking a lot more risk, and it is something you should absolutely not do from the start. Begin with ETF indexes in a reasonable allocation such as 60% stock index ETF, 40% bond ETF.

ltr


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## Eclectic12 (Oct 20, 2010)

hfp75 said:


> If your gonna buy TDB8150, why not buy PSA it’s return is 2.15% ? It’s a HISA just not through a major bank.... it’ll give you an extra 0.55% in interest income. On $100,000 that’s an extra $550 / yr or $46 / month..... money is money.....


If money is money then why not go all-in by setting up a virtual bank savings account to make 2.3% to 3.0%?

The pro to PSA is that it is higher ... the question is what are the cons?
The ones I'd be investigating are:

1) the loss of the HISA been treated as cash. One can order an investment with 0% cash and 100% TDB8150 as the TDDI order system treats both as cash. Some other brokers require a sale of their HISA before buying.

2) the loss of buying/selling for free.

3) the addition of a holding period to avoid an early sale penalty.

4) the addition of a sale needing to settle before an investment can be bought.





hfp75 said:


> ... If you want to be creative, buy PFC2000, the return is 1.82%, I think it’s a ROC (return of capital) - which means you don’t decaire the distributions as interest income, instead when you sell, it’s a capital gain, more tax friendly ...


??? ... with the number of more experienced investors who don't understand RoC and don't update their adjusted cost base correctly, is it really a good idea to suggest something that has to be invested for RoC and if paid, bookkeeping done correctly to a novice?


Personally, if the OP wants a better return - I would go with 1x times what the first purchase would be in TDB8150 and a mix of higher paying ones that are understood and allow the cash to show up in a reasonable time frame.


Cheers


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## AltaRed (Jun 8, 2009)

Mulak said:


> I'm talking about better interest rate % return from different places


It is unclear to me what you are really looking for. Initially you were looking for a better interest rate (I think). There are solutions for that, including owning TDB8150, an HISA available through a discount brokerage account. Or you could open a savings account online at a virtual bank like EQ Bank and get 2.3% interest. Or you open a TFSA account at EQ Bank and get 2.3% interest tax free but that TFSA is limited to products at EQ Bank. I don't subscribe to having TFSAs at TD Bank or EQ Bank or any such place where you are limited to that institution's offerings. The world is your oyster for decades to come. Avoid being trapped in a single insitution.

A TFSA account at TDDI will give you the opportunity to buy TDB8150 in the TFSA at TDDI and get interest tax free, plus the TFSA allows you to buy a wide range of ETFs, GICs, bonds, stocks, etc, etc over time to build a portfolio. I think that is where you should be headed, and yes you can open a TDDI TFSA account online. You will likely have to mail in a signed application to complete the application process and once it is open in 2-4 weeks, you can transfer your TD savings into it and start your 'purchases'. But of course, until you have studied the links in terms of how you want to build your portfolio, simply keep the money in TDB8150 paying interest until you have done enough reading and learning to start making investment decisions.

By all means, if you wish to keep your appointment with the TD advisor do so, but there will be pressure to sell you high MER products. As said by others, that is not where your future is. Your future is in taking control of your own investments. It is not hard to do with a Couch Potato index fund (TD e-fund, or ETF) portfolio. There is no reason to be a stock picker, especially with smaller accounts.

Please note: You can only put so much into a TFSA, Be aware of your contribution room limitations. There are CRA penalties for over-contributions.


> You can't lose your TFSA contribution room. If you've never opened a TFSA, you can contribute up to $63,500 today: $5,000 for each year from 2009 to 2012; $5,500 for each of 2013 and 2014; $10,000 for 2015; $5,500 for each of 2016, 2017 and 2018; and $6,000 for 2019


Once you run out of TFSA contribution room, you can start an RRSP as well using some of your unused RRSP contribution room, or you can start a non-registered cash brokerage account. You should always have a certain amount of cash in a readily avaiable HISA to serve as a slush fund for lumpy purchases, i.e. you don't want 100% of your funds tied up in a TFSA/RRSP.


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## like_to_retire (Oct 9, 2016)

AltaRed said:


> Once you run out of TFSA contribution room, you can start an RRSP as well using some of your unused RRSP contribution room, or you can start a non-registered cash brokerage account. You should always have a certain amount of cash in a readily available HISA to serve as a slush fund for lumpy purchases, i.e. you don't want 100% of your funds tied up in a TFSA/RRSP.


Yes, as I initially advised, you open a Non-registered account first, along with a TFSA and a RRSP. The non-registered account is used to transfer funds back and forth from the TD Bank savings or chequing account. It's also used to house at least an HISA for (as you say) slush or lumpy funds.

ltr


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## Eclectic12 (Oct 20, 2010)

Just a Guy said:


> ... I, personally, think RRSPs benefit the government more as far as taxes in the long run because they restrict your withdrawals. Eventually the government will probably get a large tax collection from them, especially if you die with funds left ...


Used improperly ... sure there can be higher taxes but that will depend on what one's income is like when the withdrawals are made.

One can withdraw from an RRSP at any time so if there is a period of low income - nothing stops one from having contributed at a high tax rate and withdrawing a low tax rate. Where one leaves the RRSP until it is forced to be converted to an annuity or RRIF around age 71, there will be minimum withdrawals mandated.


Cheers


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## AltaRed (Jun 8, 2009)

like_to_retire said:


> Yes, as I initially advised, you open a Non-registered account first, along with a TFSA and a RRSP. The non-registered account is used to transfer funds back and forth from the TD Bank savings or chequing account. It's also used to house at least an HISA for (as you say) slush or lumpy funds.
> 
> ltr


I would start with holding both a non-registered cash account and a TFSA to start. The RRSP can come once the dust settles on where he wants to go with his portfolio long term. The OP doesn't have that much to invest initially. $63.5k can go straight to the TFSA if he has never contributed to a TFSA. Walk first before getting into a jog.

There is nothing wrong with the RRSP vehicle. The whining and ranting about high marginal tax rates during withdrawal is overstated and restricted to those who were lucky enough to accumulate very substantial portfolios. They are part of the 5% or 10% club and right now, no one in their 30's knows if they will be part of that group. It is a nice problem to have when one is 70 yrs of age or so.


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## lonewolf :) (Sep 13, 2016)

MrMatt said:


> Nope 5% a week compounded is 1200% a year.
> That means in a year, he'd turn $1000 into 1.2 million, or just shy of $160 million in 2 years.
> 
> If you get lucky sure you can make 10,20, 30% in a week on a stock, but it's just luck.


 Using proper money management the gains would not be any where close to those numbers. The best traders would put max 2% usually less more like 1% of their account on the table @ one time i.e., if you had 100,000 in your account you would maybe put $1000 on the table. If you made 5% which would be $50 your account would now be worth 100,050. The money on the table for the next trade would be 1% of 100,050


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## Eclectic12 (Oct 20, 2010)

Mulak said:


> ... should I get the RRSP as well... or just the TFSA?


I'd go with a brokerage TFSA for now (a bank one likely will limit severely or moderately your investment choices). 

There are factors to consider to make the RRSP work for you. From the "what type of return" for each account type, it sounds like you have some learning to do so IMO the TFSA is the safer route to go. If after sorting the factors, account types and taxes out, the RRSP is a good idea - you can withdraw from the TFSA to make the RRSP contribution then use whatever tax refund or other income to put money back. Whatever is in the TFSA as well as any gains are Canadian tax free.

Just make sure you understand the TFSA rules first. One of several areas that people make mistakes is that withdrawals made this calendar year, say in 2019 - won't be additional TFSA contribution room until next calendar year, which would be 2020.

https://business.financialpost.com/...s-why-you-should-contribute-every-penny-of-it
https://www.canada.ca/en/revenue-ag...e-savings-account-tfsa-guide-individuals.html


Another TFSA area where people IMO over complicate things is the charts that tell one the cumulative TFSA contribution room for someone who was 18 in 2009 and has met all the criteria to be granted the annual amount for every year since. They are great to figure out the total available without having to add it up yourself. Where people IMO go astray is they ignore that TFSA contributions use up this amount, similar to writing a cheque depletes a chequing account balance. Keeping track as it action happens so one knows what is available, right now is better than having to get the current total then subtract all contributions and add back all previous year withdrawals.

Seems easier to me to have the most current number, Jan 1st add in the new annual amount + previous year withdrawals and as the year goes on, subtract contributions. I also note withdrawals as a reminder for the Jan 1st update.


Cheers


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## Rusty O'Toole (Feb 1, 2012)

Mulak there are basically two ways to go when it comes to investing.
1) Learn all you can about the stock market. Learn or develop a method that makes sense to you and works for you. It could be technical or fundamental as long as you understand it and can make money with it. This will take several years of study and practice and several hours work per week, minimum.

If you don't feel you can handle that or it does not appeal to you there is an alternative.

2) Buy an index fund that mimics the S&P500. There are several to choose from, Vanguard is the oldest and one of the best but there are others.
Do this and you will beat 90% of the hedge funds and money managers.

I got this idea from Warren Buffet, the world's most successful (multi billionaire) stock investor. He recommends the value approach to investing, and if you don't feel like doing that, buy an index fund.

For an amusing comparison of hedge funds vs index funds see Warren's million dollar bet.
https://www.investopedia.com/articl...etts-bet-hedge-funds-year-eight-brka-brkb.asp
https://www.yahoo.com/news/investing-warren-buffett-10-challenge-155114511.html

I will now tell you how to beat Warren Buffet. Find a weekly chart of the S&P and add a 10 week and 50 week moving average. When the 10 week is above the 50 week, buy. When the 10 week is below the 50 week, sell. In other words do as he did and buy the S&P but time your investing according to the moving average cross.


Now look up a weekly chart of the S&P and figure out what your results would have been if you had gotten in and out of the market as I suggest. You will find you would have avoided some big drawdowns, and beaten the best of the best, all with 5 minutes 'work' a week.


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## AltaRed (Jun 8, 2009)

LOL..... Talk about complicating life for a newbie. C'mon folks. Use your heads and provide appropriate advice for the specific situation at hand.


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## like_to_retire (Oct 9, 2016)

AltaRed said:


> LOL..... Talk about complicating life for a newbie. C'mon folks. Use your heads and provide appropriate advice for the specific situation at hand.


OMG, no kidding. Next suggestions will be _options._

At TDDI open a simple TFSA and non-registered account. 

Put allowable cash in the TFSA in TDB8150 HISA and the remaining cash in the non-registered account in TDB8150 - full stop.

Then slowly get educated and perhaps invest that cash in a couch potato index method - done.

ltr


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## Rusty O'Toole (Feb 1, 2012)

What is complicated about buying an index fund?


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## AltaRed (Jun 8, 2009)

Rusty O'Toole said:


> What is complicated about buying an index fund?


Two lines of your post were about a S&P500 index fund. Then on you went about trading it and all sorts of other gobbly **** associated with links on this and that..... Bloody hell. KISS. If/when the OP sorts out what he want to do with asset allocation and diversification, then the next process is to select the product, e.g. Buy the index fund, park it and get on with other things in life.


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## GreatLaker (Mar 23, 2014)

Mulak it looks like you are getting into analysis paralysis and muddling several things together. That's not unusual since there are a lot of issues to understand. Try taking a more structured approach:


What are you saving or investing for? If it is retirement, you could consider a lot of equities for higher growth (but with higher volatility), whereas if you are saving to buy a house in a couple years you should stick to HISA or GIC products.

What type of investor do you want to be? Conservative / risk averse means sticking to HISAs and GICs. If you want to be very hands on you can buy individual stocks/bonds, but that takes a lot of research to succeed. Probably not where you are at now given the nature of your questions. Couch potato style with index ETFs is a good starting point for rookie investors and you could stay with it forever, or evolve to individual stocks later

What is your mental discipline like? Investing can be emotionally hard as markets can be very volatile, and lack of investment discipline can lead to buy high, sell low behaviour that undermines your success

Type of financial institution. Discount brokers like TDDI are DIY and give very broad choice of investments. Investment accounts at big banks have a more limited range of products and their advisors tend to sell in-house products with high fees, but they do come with advice. If you just want to stick with GICs and HISAs the best rates are available at online banks and credit unions. But they have very limited product sets, and chasing rates in registered accounts is difficult as you need to do registered transfers to move among different banks

Type of account. Different accounts have different tax treatment. TFSA is more flexible than RRSP and is better if your tax rate is lower when you contribute than when you withdraw. RRSP is better if your tax rate is higher when you contribute than when you withdraw. You can check the tax tables at www.taxtips.ca to try and estimate your future tax rates. Based on your comments so far filling up your TFSA first then RRSP seems like the best choice


Based on what you have said so far a simple growth based balanced index ETF like VGRO, XGRO or ZGRO at a discount broker like TDDI is where you should start. Or for less volatility consider ETFs with higher fixed income content like VBAL, XBAL or ZBAL. Here is a good comparison:
All-in-One ETFs Battle: Vanguard vs iShares vs BMO

But keep reading the references provided upthread to ensure you understand and are comfortable with whatever alternative you choose before starting to invest.


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## james4beach (Nov 15, 2012)

I think we've thrown way too many complicated ideas at a first time DIY investor. If a friend approached me with this question, I'd say:

1. Just store the cash for now. Maybe open a discount brokerage account, and use either the savings ISA (like TDB8150), or PSA, or ZST to store cash and earn interest. In fact PSA & ZST will give you a flavour of what stock trades are like, while sticking to cash-like stuff. ZST will even give you a flavour of risk, since it does fluctuate a bit, but still isn't too big a departure from cash.

2. Read up on all of this stuff, especially asset allocation, indexing, couch potato. A really tough question here is deciding how much risk you're comfortable with. I suggest starting with low risk strategies until you gain some experience.


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## Mulak (Feb 7, 2017)

AltaRed said:


> It is unclear to me what you are really looking for. Initially you were looking for a better interest rate (I think). There are solutions for that, including owning TDB8150, an HISA available through a discount brokerage account. Or you could open a savings account online at a virtual bank like EQ Bank and get 2.3% interest. Or you open a TFSA account at EQ Bank and get 2.3% interest tax free but that TFSA is limited to products at EQ Bank. I don't subscribe to having TFSAs at TD Bank or EQ Bank or any such place where you are limited to that institution's offerings. The world is your oyster for decades to come. Avoid being trapped in a single insitution.
> 
> A TFSA account at TDDI will give you the opportunity to buy TDB8150 in the TFSA at TDDI and get interest tax free, plus the TFSA allows you to buy a wide range of ETFs, GICs, bonds, stocks, etc, etc over time to build a portfolio. I think that is where you should be headed, and yes you can open a TDDI TFSA account online. You will likely have to mail in a signed application to complete the application process and once it is open in 2-4 weeks, you can transfer your TD savings into it and start your 'purchases'. But of course, until you have studied the links in terms of how you want to build your portfolio, simply keep the money in TDB8150 paying interest until you have done enough reading and learning to start making investment decisions.
> 
> ...


will get the TDDI TFSA in order to get TDB8150 and non-reg brokerage account

Yeah I agree my future isn't with the TD advisor, I'm not easily pressure to buy high MER products... don't worry on that... at least I can use the advisor to set up the brokerage accounts quickly, I assumed instead doing it online and have to send an application to process for some time.

I started reading "if you can: how millennials can get rich slowly" today. The author mentioned to read the millionaire next door and common sense on mutual funds... are they worth reading?



like_to_retire said:


> Yes, as I initially advised, you open a Non-registered account first, along with a TFSA and a RRSP. The non-registered account is used to transfer funds back and forth from the TD Bank savings or chequing account. It's also used to house at least an HISA for (as you say) slush or lumpy funds.
> 
> ltr


I want to keep my TD HISA account because my mortgage from CIBC pull money from there and my work put money in there. I don't want to deal with the hassle of changing account and branch number for both places. I have to have at least 25k to waive account fees.



AltaRed said:


> I would start with holding both a non-registered cash account and a TFSA to start. The RRSP can come once the dust settles on where he wants to go with his portfolio long term. The OP doesn't have that much to invest initially. $63.5k can go straight to the TFSA if he has never contributed to a TFSA. Walk first before getting into a jog.
> 
> There is nothing wrong with the RRSP vehicle. The whining and ranting about high marginal tax rates during withdrawal is overstated and restricted to those who were lucky enough to accumulate very substantial portfolios. They are part of the 5% or 10% club and right now, no one in their 30's knows if they will be part of that group. It is a nice problem to have when one is 70 yrs of age or so.


I don't have that much to invest? 

I got like maybe 90k in my HISA, 15K in chequing account... thats not alot? lol

how can I put 63.5k straight to the TFSA, I thought the limit was like 6k?



GreatLaker said:


> Mulak it looks like you are getting into analysis paralysis and muddling several things together. That's not unusual since there are a lot of issues to understand. Try taking a more structured approach:
> 
> 
> What are you saving or investing for? If it is retirement, you could consider a lot of equities for higher growth (but with higher volatility), whereas if you are saving to buy a house in a couple years you should stick to HISA or GIC products.
> ...


1. kinda everything I guess lol... retirement, build up money to afford a house in this crazy house price market, be comfortable financial state.

2. definitely not HISAs and GICs, not enough money for me... look like potato couch style work best for me... I'm curious on how much money do people make on potato couch style of investing? what is the typical percentage returns range?

3. i'm humble I would say, I know it sucks to lose money but knowing in near future I can make more money to make up the loss... as long I'm in the black, i'm good

4. I know someone mentioned questrade, not sure if in this thread or read somewhere... how is that comparing to TDDI brokerage account?

5. I wouldn't know my tax rate in the future because I'm trying to change my profession to improve my financial situation... so probably advisable to do the TDDI TFSA for now



james4beach said:


> I think we've thrown way too many complicated ideas at a first time DIY investor. If a friend approached me with this question, I'd say:
> 
> 1. Just store the cash for now. Maybe open a discount brokerage account, and use either the savings ISA (like TDB8150), or PSA, or ZST to store cash and earn interest. In fact PSA & ZST will give you a flavour of what stock trades are like, while sticking to cash-like stuff. ZST will even give you a flavour of risk, since it does fluctuate a bit, but still isn't too big a departure from cash.
> 
> 2. Read up on all of this stuff, especially asset allocation, indexing, couch potato. A really tough question here is deciding how much risk you're comfortable with. I suggest starting with low risk strategies until you gain some experience.


1. do non-reg brokerage account, TFSA and TDB8150

2. starting reading today "if you can: how millennial get rich slowly "



just want to say thanks for guiding and helping me out so far ...feel like you guys are my big brothers/sisters watching my back, making sure i dont make stupid mistakes lol


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## like_to_retire (Oct 9, 2016)

Mulak said:


> will get the TDDI TFSA in order to get TDB8150 and non-reg brokerage account
> 
> Yeah I agree my future isn't with the TD advisor, I'm not easily pressure to buy high MER products... don't worry on that... at least I can use the advisor to set up the brokerage accounts quickly, I assumed instead doing it online and have to send an application to process for some time.


Yep, they can fill out the forms at the TD bank and send them in for you. Remember that "advisor" will be 10% advisor and 90% salesperson. They want to sell you their products.



> how can I put 63.5k straight to the TFSA, I thought the limit was like 6k?


The amounts you're allowed to deposit into a TFSA is accumulated each year if you don't use up the limit. Since you haveen't used a TFSA yet, you have a lot of headroom built up.



> I'm curious on how much money do people make on potato couch style of investing? what is the typical percentage returns range?


Maybe total return 4%-7% a year. Maybe more.



> 1. do non-reg brokerage account, TFSA and TDB8150


With respect you may be confused here. The non-reg brokerage and TFSA are accounts where you purchase securities that are housed in these accounts. TDB8150 is basically a stock (actually it's a mutual fund) that you purchase and sell, and resides inside the accounts. 
For example, I have a non-registered account, a TFSA account, and a RRSP account. I have various dollar amounts of TDB8150 stock in _each _of those accounts. It's no difference than buying and selling a stock that pays a dividend. TDB8150 pays interest of 1.6% a year, and is paid monthly into the cash portion of your account that it resides in - just like a stock..

ltr


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## AltaRed (Jun 8, 2009)

Mulak said:


> I don't have that much to invest?
> 
> I got like maybe 90k in my HISA, 15K in chequing account... thats not alot? lol
> 
> how can I put 63.5k straight to the TFSA, I thought the limit was like 6k?


What I meant was that you are just starting on the investing journey, so you don't have a huge amount of assets built up yet. TFSA contribution room is added too each year since 2009. The contribution room accumulates if you have not used it, so yes, as of today, you have $63.5k of unused contribution room. Next January, there will be another $6k. That will take care of about as much of the $90k as you will want to commit right now anyway in the TFSA.




> 2. definitely not HISAs and GICs, not enough money for me... look like potato couch style work best for me... I'm curious on how much money do people make on potato couch style of investing? what is the typical percentage returns range?
> 
> 3. i'm humble I would say, I know it sucks to lose money but knowing in near future I can make more money to make up the loss... as long I'm in the black, i'm good
> 
> 4. I know someone mentioned questrade, not sure if in this thread or read somewhere... how is that comparing to TDDI brokerage account?


Couch potato investing is market index investing. If a particular index goes up, e.g. if you own XIC that follows the TSX Composite, then to the extent the TSX goes up, so does your investment. There is no set percentage for any index anywhere, although if you want an approximate 20 year rule of thumb, assume Total Return of 4-6% per year for equity markets, and perhaps 2-3.5% per year for bond markets. There will be periods of years where performance returns will be higher, and some periods lower, with some major dives along the way. Just look at a 10 year TSX chart https://web.tmxmoney.com/quote.php?qm_symbol=^TSX and click on 10 years. For the S&P500, look at https://www.macrotrends.net/2488/sp500-10-year-daily-chart

Clearly the USA was the place to be this decade, but there is no assurance of continued strength over the next 10 years. It could be the Canadian TSX, or Europe. The point is to be diversified longer term in a range of geographic areas to hedge your risk. There are no guarantees, and oh by the way, there is no guarantee on stock picking either. That gem of a stock today could go cold in the future. After all, the market is the sum of all returns of all stocks.

Some people like Questrade because ETF buying is free, rather than $10 commissions, and there may be some other bonus quirks, but I think that is a red herring for the average investor who shouldn't be trading much anyway. Costs are important, but so is convenience worth something. Questrade might be a place to go someday when you have broader skill and knowledge of he market and more funds to invst, but I'd suggest making it easier on yourself for now to stay in the TD family and see everything on one online screen. As I keep saying, learn to walk before you jog.


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## GreatLaker (Mar 23, 2014)

Mulak said:


> I started reading "if you can: how millennials can get rich slowly" today. The author mentioned to read the millionaire next door and common sense on mutual funds... are they worth reading?


Millionaire Next Door is a good book but it is very long and focuses more on frugal living than investing. The author goes on about how millionaires buy cars and to avoid management careers where you need to spend money on nice clothes. Of the "millionaire" books I vastly prefer Millionaire Teacher. It's a great inspirational story about low-cost investing and frugal living, written by a Canadian from a global perspective. It's shorter and easier to read than MND.

I have not read Common Sense on Mutual Funds but anything by Jack Bogle is good. It will expand on what is in If You Can and help understand why what the TD advisor will recommend is in TD's best interest, not yours.

Once you finish If You Can I recommend you move on to the Finiki.org links I provided and Canadian Couch Potato.




> I don't have that much to invest?
> 
> I got like maybe 90k in my HISA, 15K in chequing account... thats not alot? lol
> 
> how can I put 63.5k straight to the TFSA, I thought the limit was like 6k?


You have lots to start investing.

As long as you were a resident of Canada and turned 18 years of age in 2009 or earlier you can contribute the full $63.5k to a TFSA. Unused contributions carry forward indefinitely.
https://www.canada.ca/en/revenue-ag...tax-free-savings-account/who-open-a-tfsa.html
https://www.canada.ca/en/revenue-ag...avings-account/contributions.html#tfscntbtnrm


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## Mulak (Feb 7, 2017)

like_to_retire said:


> Yep, they can fill out the forms at the TD bank and send them in for you. Remember that "advisor" will be 10% advisor and 90% salesperson. They want to sell you their products.
> 
> 
> 
> ...


their products will bounce like bullets off superman... I thought TD advisor can set the account already on the spot... then it no point of doing the application, if I do it online.. still the same process time, correct?

ahh I didnt know that about TFSA can start way back... I thought it start the year when TFSA is created... good to know

I was thinking like pulling 50k from my HISA, too much to pull out?... just not sure how much to split into the TDDI non-reg and TFSA

I hope i get more returns than 4-7% 

Ohh ok ... I'm thinking TDB8150 like a HISA account, my bad ... is there a certain ratio amount, you put in the TDB8150 for your non-reg, TFSA, RRSP... why you have TD8150 in each account? why not have all 3 amounts in one account instead?



AltaRed said:


> What I meant was that you are just starting on the investing journey, so you don't have a huge amount of assets built up yet. TFSA contribution room is added too each year since 2009. The contribution room accumulates if you have not used it, so yes, as of today, you have $63.5k of unused contribution room. Next January, there will be another $6k. That will take care of about as much of the $90k as you will want to commit right now anyway in the TFSA.
> 
> 
> 
> ...


S&P500 got quite a drop in December ... but at least overall it increasing in a long run

good to know about questrade... maybe in the future I might use it... since I'm a newbie, I will KISS


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## james4beach (Nov 15, 2012)

Another way to think about returns is "real return" or "return after inflation". Since inflation always erodes the value of money, the main goal with all this investment stuff is to get a positive real return. It's the difference between the % return figure and inflation rate at the time. For example a 0% real return means that money retains its purchasing power, no matter what the inflation rate is. If stocks go up 10% and inflation is 10%, that's a 0% real return and you really haven't become richer at all.

For example if stocks return 7% over a decade and inflation is 2% then you have a 7 - 2 = 5% real return, in annualized rate of returns. Which is pretty good, a normal stock return.

You can take a look at this report from Credit Suisse to see what long term real returns have been in various countries. On page 20 you'll see US returns since 1900, which are 6% real return in stocks, 2% real return in bonds.

Across many countries, the range of real returns in stocks is 1% to 6% annually with most countries having between 3% and 6%. (Historically, Canada has one of the highest real returns of all countries in the survey).

I write all this because it's important to have realistic expectations about what passive stock investing can do for you. You will probably get between 3% and 6% real return, after inflation, over the long term. In the shorter term (such as 10 to 15 years) it's possible to get much lower or much higher. It's also important to keep in the back of your mind that it's possible you would get lower, such as the 1% real return seen in Austria over the last 118 years.

Stocks provide no assurance of positive returns. Most of us just hope they will provide a positive return based on historical precedent, because there isn't much else to go on.


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## like_to_retire (Oct 9, 2016)

Mulak said:


> I thought TD advisor can set the account already on the spot... then it no point of doing the application, if I do it online.. still the same process time, correct?


Yeah, either way, you'll have to sign some papers and then they tell you when you're good to go. Then you'll be set to transfer money from TD Bank to your TDDI brokerage account(s).



> I was thinking like pulling 50k from my HISA, too much to pull out?... just not sure how much to split into the TDDI non-reg and TFSA


Well, any interest or dividends or gains you make in the TFSA is tax free, but there's the catch that when you withdraw cash from it, you can't replace it until the next year. With the non-registered account, all interest, dividends, etc are taxable, but you can take out and deposit whatever and when you wish.

I suppose if you have $90K, then fill up the TFSA and the rest may go to the non-registered as your emergency fund, or maybe split the remainder into the RRSP and the non-registered. Most people keep a small amount of working cash in their regular banks savings or chequing account, and if they need funds, they simply move cash from the non-register brokerage account online into their bank account.



> I hope i get more returns than 4-7%


Yeah, you and everyone else.



> I'm thinking TDB8150 like a HISA account, my bad ... is there a certain ratio amount, you put in the TDB8150 for your non-reg, TFSA, RRSP... why you have TD8150 in each account? why not have all 3 amounts in one account instead?


In RRSP, TFSA and non-registered accounts, the securities throw off cash all the time in the form of dividends and interest. It's wise to have a decent amount of cash built up before a new security is purchased or money is added to existing securities. While that cash builds up, you don't want it sitting there not working, so you keep adding to TDB8150. So, every account type uses TDB8150 as a cash holding that gains a little interest.
Once you get $5-$10K built up in the TDB8150, you move it out of TDB8150 and make your purchase (trade fee is $10 to buy a security, so it would be silly to buy a stock for $100 and pay $10 to do it). The TDB8150 (being classed as a mutual fund) is no charge to buy and sell.

lty


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## AltaRed (Jun 8, 2009)

Mulak said:


> I hope i get more returns than 4-7%


At the risk of complicating matters with numbers, some excellent materials at Stingy Investor (Norm Rothery) include this periodic table for Canadians http://www.ndir.com/cgi-bin/PeriodicTableofAnnualReturns.cgi Note how the different asset classes and geographic regions vary over time? Investing across the spectrum will moderate volatility and avoid performance chasing and trying to guess what is going to be hot this year (trust me - virtually no professional gets it right).

You can also play with the Asset Mixer http://www.ndir.com/cgi-bin/downside_adv.cgi to see what various asset classes have done over the past 40 years or so. Over the last 40 years, Canada had ~9% CAGR nominal or ~6% real return. The S&P500 had ~11% nominal or ~9% real CAGR over 40 years. But if you take a 20 year period instead from 1998-2018, the TSX numbers are ~7% norminal, ~5% real, and the S&P500 is ~7% norminal, 5% real. 

Chances are global growth is slowing, so the expectation is returns will be lower over the next 20 years than past 20 years. Add in a component of fixed income, and you shouldn't expect more than 5% CAGR nominal (~3% real) on a balanced equity/bond portfolio. FWIW, i have a 85/15 equity/bond portfolio and my assumptions are about 6% CAGR nominal return over the next decade or more. All we can do is make some overall REALISTIC assumptions and go from there.


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## james4beach (Nov 15, 2012)

I would agree with that ~ 3% real return expectation on a balanced portfolio. I expect about that in my allocation.


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## Mulak (Feb 7, 2017)

james4beach said:


> Another way to think about returns is "real return" or "return after inflation". Since inflation always erodes the value of money, the main goal with all this investment stuff is to get a positive real return. It's the difference between the % return figure and inflation rate at the time. For example a 0% real return means that money retains its purchasing power, no matter what the inflation rate is. If stocks go up 10% and inflation is 10%, that's a 0% real return and you really haven't become richer at all.
> 
> For example if stocks return 7% over a decade and inflation is 2% then you have a 7 - 2 = 5% real return, in annualized rate of returns. Which is pretty good, a normal stock return.
> 
> ...


equities is quite higher comparing to bonds

it a bummer that stocks provide no assurance of positive returns... but is it possible buying stocks from high quality companies like apple, one of the big 4 banks, old companies, well branded companies since they have been around for so long and just hold it and get dividends.. forget about ever selling the stocks and just get dividends and reinvest to buy more stocks 




like_to_retire said:


> Yeah, either way, you'll have to sign some papers and then they tell you when you're good to go. Then you'll be set to transfer money from TD Bank to your TDDI brokerage account(s).
> 
> 
> Well, any interest or dividends or gains you make in the TFSA is tax free, but there's the catch that when you withdraw cash from it, you can't replace it until the next year. With the non-registered account, all interest, dividends, etc are taxable, but you can take out and deposit whatever and when you wish.
> ...


I'm not gonna pull all 90k... mortgage and work deposit in that account.. probably keep like 35k in there and pull the rest

when buying something, make sure it minimum 5k build up in TDB8150 



AltaRed said:


> At the risk of complicating matters with numbers, some excellent materials at Stingy Investor (Norm Rothery) include this periodic table for Canadians http://www.ndir.com/cgi-bin/PeriodicTableofAnnualReturns.cgi Note how the different asset classes and geographic regions vary over time? Investing across the spectrum will moderate volatility and avoid performance chasing and trying to guess what is going to be hot this year (trust me - virtually no professional gets it right).
> 
> You can also play with the Asset Mixer http://www.ndir.com/cgi-bin/downside_adv.cgi to see what various asset classes have done over the past 40 years or so. Over the last 40 years, Canada had ~9% CAGR nominal or ~6% real return. The S&P500 had ~11% nominal or ~9% real CAGR over 40 years. But if you take a 20 year period instead from 1998-2018, the TSX numbers are ~7% norminal, ~5% real, and the S&P500 is ~7% norminal, 5% real.
> 
> Chances are global growth is slowing, so the expectation is returns will be lower over the next 20 years than past 20 years. Add in a component of fixed income, and you shouldn't expect more than 5% CAGR nominal (~3% real) on a balanced equity/bond portfolio. FWIW, i have a 85/15 equity/bond portfolio and my assumptions are about 6% CAGR nominal return over the next decade or more. All we can do is make some overall REALISTIC assumptions and go from there.


thats a pretty cool chart... the equities look good in early 2010s for S&P500 double digits returns 

Do you think with the global growth possibly slowing down will affect the ETF prices to be cheaper?


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## james4beach (Nov 15, 2012)

Mulak said:


> equities is quite higher comparing to bonds


In the very long term yes, but what complicates this is, there are also times where equities perform worse than bonds. For example, US bonds and stocks had the same return from mid 1998 to mid 2014, a span of 16 years. This is why both are reasonably good investments. Most of us hold both; that's the "balanced fund".

Actually shifting dates, seems it's even longer, 17.5 years. Notice in this chart that the S&P 500 (shown in green) is below bonds for ALL of those 17.5 years: http://schrts.co/uNTsWzrv

Similarly, Canadian stocks underperformed bonds for 18 years, from 2001-2019. Here again is the chart, with stocks (green) staying below bonds for nearly all the years: http://schrts.co/STNcQwIu

Stock/bond performance really depends a lot on where you start & end and obviously I chose start dates to show this extreme example. But what I'm emphasizing is that, although stocks have outperformed bonds in the very long term, you can go pretty long stretches... like 18 years shown above... where stocks don't do so great.



> it a bummer that stocks provide no assurance of positive returns


No assurance, true, but most experts believe stocks will go up in the long term. And it's useful to study historical examples to get a sense of what's possible. For me it means mentally preparing myself for the possibility of 18, or perhaps 20, even 25 years where stocks don't do so well (versus bonds), with the expectation that eventually they still will perform well over the very long term.

Stock investment requires some really long term thinking, and that's very hard. You and I are both in our 30s. How do we even understand a 20 year time span? And in the stock market, 20 years is still a pretty short period. This makes things tough, I think.


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## GreatLaker (Mar 23, 2014)

Mulak said:


> Ohh ok ... I'm thinking TDB8150 like a HISA account, my bad ... is there a certain ratio amount, you put in the TDB8150 for your non-reg, TFSA, RRSP... why you have TD8150 in each account? why not have all 3 amounts in one account instead?


Think of TDB8150 as a way to earn interest on cash that you hold in any TDDI account.

It is a CDIC insured deposit product that currently pays 1.6%. You buy it like buying units of a mutual fund, which makes it easy to hold in any TDDI account. The price is always $10/unit. Interest earned on it is taxed the same as interest from any bank account. If held in a non-registered account, at tax time you will get a T5 to report the interest.

You can find more information on it here:
https://www.td.com/ca/en/asset-management/additional-solutions/
https://www.tdassetmanagement.com/document/PDF/TD ISA Product Features.pdf

And Canadian Couch Potato has a broader post on broker HISAs here:
https://canadiancouchpotato.com/2010/10/12/parking-cash-in-your-portfolio/


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## Retired Peasant (Apr 22, 2013)

So, go see the advisor and don't let them pressure you. Tell them you want to set up a TFSA account with TD Direct Investing. This will automatically get you a non-registered account and a TFSA account. It's actually the same account number with a letter on the end to distinguish the account type - at least that's been my experience. 
I suggest you do it in person, because they'll want to verify your identity. You wait (don't know how long) for the accounts to get set up.
You can access them online, and transfer $$ from your bank account to the tfsa (be sure not to transfer more than you're allowed). Then buy what you want within the TFSA - I agree with the recommendations above to buy TDB8150 at this point until you learn more. You can also transfer $$ from your bank account into the non-registered account and buy TDB8150 within it.
You can always add a RRSP account at TDDI later if you wish.


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## AltaRed (Jun 8, 2009)

Mulak said:


> it a bummer that stocks provide no assurance of positive returns... but is it possible buying stocks from high quality companies like apple, one of the big 4 banks, old companies, well branded companies since they have been around for so long and just hold it and get dividends.. forget about ever selling the stocks and just get dividends and reinvest to buy more stocks


I know you have asked that Q a few times. If you are concerned about no assurance of positive returns in any given year in stock markets at large, the volatility in individual stocks can be much larger. There is no assurance that any or the stocks you mention will not have major swings in market prices, potentially for long periods of time. The average stock picker will likely under perform the stock market long term simply because the sum of all stock investors including the professionals and institutions like pension plans cannot beat the market itself. Why do you think you can beat the odds on a pretty consistent basis? There are reasons why an individual, including some here, can beat the market with a particular investing strategy but it takes years to fine tune that and there is no guaranteed that strategy will work long term.



> thats a pretty cool chart... the equities look good in early 2010s for S&P500 double digits returns
> 
> Do you think with the global growth possibly slowing down will affect the ETF prices to be cheaper?


ETF market prices will go up or down with the stock market indices that they follow. No more complex than that. If we get a recession in the next 1-5 years like we had in 2008-2009, then yes, ETF prices may drop by 30% or more for a period. No one will know that in advance. If you want stability and certainty, buy GICs for 2.5% interest, with almost zero after tax real return.

I do think future stock market performance, on a CAGR basis, will be less overall in the future than it has been in the past. This planet simply cannot sustain historical rates of GDP growth over the next 20-50 years without significant environmental consequences. Technology will continue to mitigate consequences and allow real GDP growth, but the days of 3% global GDP growth are over. We better get used to ~1.5% real GDP growth, and more importantly, so must governments. They cannot continue to rely on GDP growth to cover budget deficits and accumulated debt. Debt servicing will become a larger problem affecting growth as well. More reasons for headwinds than tailwinds on continued global GDP growth.


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## Just a Guy (Mar 27, 2012)

Mulak,

You will find plenty of theories out there telling you how to invest...

A well balanced portfolio of stocks and bonds...
Rebalance yearly
Couch potato
Dogs of the Dow
Diversification

There are literally thousands of theories out there and are all designed to ease the mind of the investor. Some work a little better than others at different times, but none are the “sure thing” people want to believe they are. If they were, everyone would do the same thing and people would be moderately well off. 

I’m not saying these strategies are crap, just don’t get sucked into them any more than the ones presented by the advisor you talk to. No one here can read he future any better than they can. The only real difference is people here aren’t making money off of your decisions, but we all have our bias and beliefs in what we think is the best way...some here do better than others.

You’ll need to figure out what works for you.


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## like_to_retire (Oct 9, 2016)

AltaRed said:


> ETF market prices will go up or down with the stock market indices that they follow. No more complex than that. If we get a recession in the next 1-5 years like we had in 2008-2009, then yes, ETF prices may drop by 30% or more for a period. No one will know that in advance. If you want stability and certainty, buy GICs for 2.5% interest, with almost zero after tax real return.


Agreed, and certainly something Mulak should think about before deciding on an asset allocation (percentage of equity versus fixed income in his accounts). He should ask himself how he would react if he had $50K in stock ETF's and they dropped 30% in one year? Now the ETF is worth $35K and to get back to $50K the market would have to rise by 43%. The purpose of the fixed income allocation (bonds/GIC's/HISA) is capital preservation - it isn't to make money. Mulak, this is why it's a good idea to start out in TDB8150 and then do your research to get a feel for the market and how it works.

ltr


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## Eclectic12 (Oct 20, 2010)

Mulak said:


> will get the TDDI TFSA in order to get TDB8150 and non-reg brokerage account ...


Good ... a bit of a side bar but quoting everything then responding makes the message long/hard to read (at least for me). I like trimming the quotes back to the minimum then responding.




Mulak said:


> .... Yeah I agree my future isn't with the TD advisor ... at least I can use the advisor to set up the brokerage accounts quickly, I assumed instead doing it online and have to send an application to process for some time ....


YMMV ... if it is a bank only location, it may not be that easy to open a brokerage account. In my area, there are co-located spots where part are the tellers and part are the advisors as well as brokerage reps. If I was doing opening a brokerage account again - I would find one and call to setup an appointment with a brokerage rep.




Mulak said:


> ... I want to keep my TD HISA account because my mortgage from CIBC pull money from there and my work put money in there. I don't want to deal with the hassle of changing account and branch number for both places. I have to have at least 25k to waive account fees ...


I understand the convenience. It has also been easy for me to use a TD ATM to deposit funds then go online to make TFSA or RRSP contributions to the brokerage accounts or pay for non-registered stock purchases before the deadline.

Needing $25K to waive the account fees is steep though. I used to have my mortgage taken from my then PCF, ow Simplii Financial account so I did not need a lot of transactions in the TD chequeing account. The result is that the monthly fee is rebated for having $2K on deposit.

I understand that one can have an EFT setup to the brokerage account but haven't followed up as the chequing account/ATM access has been free.




Mulak said:


> ... how can I put 63.5k straight to the TFSA, I thought the limit was like 6k?


It would seem that you have much to learn. The $6K you mention is the 2019 annual amount granted to you if you are 18+ in 2019 as well as some other factors such as being resident in Canada.

The $63.5K TFSA contribution amount assumes one was 18+ in 2009, have been a Canadian resident from 2009 through 2019 and *have never made a TFSA contribution*.
https://www.taxtips.ca/tfsa/contributions.htm

Available TFSA contribution room = unused TFSA contribution room + annual amount added Jan 1st of each year + last year's withdrawals - contributions as they are made.




Mulak said:


> ... 5. I wouldn't know my tax rate in the future because I'm trying to change my profession to improve my financial situation... so probably advisable to do the TDDI TFSA for now


The common mistake is that people get the message that using an RRSP is a good idea but then don't estimate their retirement income to see if there might be issues. If they do estimate it, they don't factor in all the sources of private pension, public pensions (CPP, OAS though likley not GIS) , investment income etc. They also typically don't consider retiring early to have a period of low income to withdraw from their large RRSP until the time is limited or it is too late.

They seem to follow up on a spousal RRSP, though. 


The beauty of using the TFSA is that should you figure out that an RRSP makes sense, you can withdraw from the TFSA to make the RRSP contribution if cash flow can't handle the RRSP contribution amount. You can then put the TFSA money back, the following calendar year when the withdrawal amount becomes added TFSA contribution room.



Cheers


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## Eclectic12 (Oct 20, 2010)

like_to_retire said:


> Y ... The amounts you're allowed to deposit into a TFSA is accumulated each year if you don't use up the limit. Since you haveen't used a TFSA yet, you have a lot of headroom built up.


Probably true ... as long as Mulak was 18+ in 2009 and has been a Canadian resident for the intervening years.
(I know it might seem to be hair splitting but who knows who is reading the thread.)

RRSP contribution room is also accumulated where unused room is carried forward, building a bigger total amount. Some of the key differences are that the RRSP contribution room is tied to "earned income" so not everyone is granted it and the amount granted varies person to person. Another key difference is that RRSP withdrawals are taxed as income (TFSA withdrawals are not) plus do not become added contribution room.

https://www.getsmarteraboutmoney.ca/invest/savings-plans/tfsas/comparing-tfsas-and-rrsps/
https://www.moneysense.ca/save/investing/tfsa/tfsa-vs-rrsp-decision/




like_to_retire said:


> ... For example, I have a non-registered account, a TFSA account, and a RRSP account. I have various dollar amounts of TDB8150 stock in _each _of those accounts. It's no difference than buying and selling a stock that pays a dividend. TDB8150 pays interest of 1.6% a year, and is paid monthly into the cash portion of your account that it resides in - just like a stock ...


+1 ... I also have TDB8150 in four accounts (non-registered, TFSA, LIRA and RRSP).

I would tweak this a bit to say buying TDB8150 is like buying a mutual fund. The buy/sell page is a bit different than the stock one. It is also different in that stock order have a commission to pay to buy/sell while TDB8150 does not. 

Unlike other MFs, there is no holding period for TDB8150. As mentioned earlier in the thread, when one decides to buy something else - cash plus TDB8150 will be counted as available funds for buying other investments. In a non-registered account, one has T+2 to pay so this feature does not matter much. In a registered account, one has to have the cash so this feature IMO is a good one.


Cheers


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## Eclectic12 (Oct 20, 2010)

Mulak said:


> ... ahh I didnt know that about TFSA can start way back... I thought it start the year when TFSA is created... good to know ...


This misunderstanding is an example of why you have learning to do. 

Registered accounts have grant their contribution room whenever the room is granted. Whether one has opened an account or multiple accounts - the contribution room is granted based the appropriate criteria where making contributions uses up the available contribution room.

For the TFSA, 2009 is the first year room was possibly granted, depending on whether one qualifies. Someone who qualified in 2009 where all the years in between they also qualified will have the full $63.5K of TFSA contribution room granted to them. Someone who turned 18 in 2019 will have only $6K available to them.

Should both max out their TFSA contribution room by May 2019 by making contributions, they will both have $0 TFSA contribution room with one or more TFSAs that have whatever the FMV that the $63.5K and the $6K have amounted to, based on the investment chosen. Or it could be less if bad investments were chosen.




Mulak said:


> ... I was thinking like pulling 50k from my HISA, too much to pull out?... just not sure how much to split into the TDDI non-reg and TFSA


The first step is to confirm how much TFSA contribution room you have. If it is $63.5K as expected then the full $50K would fit into the TFSA.




Mulak said:


> ... Ohh ok ... I'm thinking TDB8150 like a HISA account, my bad ... is there a certain ratio amount, you put in the TDB8150 for your non-reg, TFSA, RRSP... why you have TD8150 in each account? why not have all 3 amounts in one account instead?


Because withdrawing from the TFSA means the funds won't tax free while withdrawing from the RRSP means reporting the withdrawn amount as income.

The idea is that cash that would earn next to nothing while held as cash (ex. dividends or distributions paid) is used to buy TDB8150 units so that it will earn 1.6% while looking for other investments. My RRSP is 3x the size of my non-registered account and bigger than my brokerage TFSA so there's more cash being paid that I want to earn something on while deciding what to do with it.




Mulak said:


> ... good to know about questrade... maybe in the future I might use it... since I'm a newbie, I will KISS


If you decide Questrade is better, you can transfer to questrade later. One of the differences will be that the I don't believe they have a HISA MF that allows buying/selling without fees and for small amounts.

If Questrade fits your future investment choices this may not matter. Or it might.


Cheers


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## Mulak (Feb 7, 2017)

No denying that I got learn or read up on these things

I wish I could still no real estate but I don't want to deal with another tenant


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## Longtimeago (Aug 8, 2018)

Mulak said:


> No denying that I got learn or read up on these things
> 
> I wish I could still no real estate but I don't want to deal with another tenant


So far, page 9 of advice and what can you conclude? There ain't no easy answer and if you get 4 people in a room, you'll get 6 opinions.

I would point out to you though that you can see some trends in the responses if you look. Most assume meager returns are acceptable and most are afraid of losing money. The only respondent so far that has suggested anything to you outside of the herd is Just A Guy who has suggested investing in real estate directly. That got him attacked earlier in this thread. 

I am responding at this point because you have now mentioned it yourself but tied it to, 'don't want to deal with another tenant'. You are making an assumption when you write that. Not all real estate investing is about buying a single tenant property and then having to act as a landlord yourself. I would never want to do that myself and never have. But I have invested in commercial/industrial real estate in the past with good success.

Note how quickly (again, look at overall trends in the responses) you were told 5% per week is not achievable. Yet on another thread in this forum I gave an example of an investment that made 400% profit after 18 months. They ignore that possibility entirely. They don't say, well if you are willing to risk losing your $90k perhaps, just perhaps it is possible to make more than 2-4% on your money. I'm not suggesting you should become a 'day trader' but I will say to you that there are plenty of day traders similar to your uncle, who are in fact making far greater returns than most here. Why then do so many here say, 'no that's a bad idea'. How do they KNOW whether or not YOU might not have the makings of a successful day trader? The answer is, they don't know, they just know that they themselves are not wiling to try it. The're afraid of losing money.

Where do you see any responses suggesting you invest directly in something? Answer, there are none, other than that by Just A Guy. What does that tell you? That you are getting responses from people who do not do any direct investing. Why is that? Is it because no one does any direct investing? Obviously not, but this forum does not contain many who do which means you are getting a biased view of what the word 'investing' means. While most here are busy trying to figure out how to squeeze a 1/4% more out of their money by avoiding taxes, using various investment vehicles, etc. some people are out there making far greater returns on their money. No one ever got rich employing any of the suggestions most here are giving you. 

I love the advice you were given by Great Laker on page 4, "If you want the Coles Notes version, read If You Can: How Millennials Can Get Rich Slowly by William Bernstein." Note the operative word 'slowly'. 

You have to decide what your goals are and 'slowly' may not be part of that. When I decided to retire early, 'slowly' did not come into the equation. So the advice to read that book would have been totally useless to me. I wanted to 'get rich quickly' in order to be able to retire as soon as possible. What's your goal? Without a goal, how do you know if any advice you are being given is likely to help you achieve it? Listening to people who expect to work till their 60s and then retire on a modest but reasonable income in their retirement may not be what you want.

You have some money to work with but FIRST you must decide what you are working towards. If you want to retire in say 10 years, that will throw all the advice you have been given here, right out the window. That was my initial goal, to retire in 10 years. I achieved it in 7 years in fact but not by listening to the advice of the herd.


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## Longtimeago (Aug 8, 2018)

Do you see anyone here suggesting anything like reading the following?

https://www.thebalance.com/types-of-investments-in-small-business-357246

Do you see anyone suggesting you consider being an 'angel investor'?

http://www.angelscorner.com/articles/12_rules_for_inv.htm

https://www.google.com/search?rlz=1...i30j0i67j0i131i67j0i131j0i10j0i13._RRCOjgeoVY

Those posting here will give you all kinds of reasons why THEY do not consider anything like that, but none of them can deny that the returns can be far in excess of any return they expect to get with their conservative forms of investing.


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## Mulak (Feb 7, 2017)

It would be awesome to retire in 10 years ..
How is even possible?

I'm fine with owning a house, decent income spending flow, just comfortable in life .. I'm a simple guy ... I'm not a traveler so not worrying on expensive travelling trips lol

But if I do settled down and having a kid... A kid is expensive as hell nowadays



@longtimeago ... You mean like those guys from dragon den?


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## marina628 (Dec 14, 2010)

to OP if you qualify for disability tax credit you can get rdsp.I have helped my friend do this for their two kids , you put $1500 in and you will get grant of $3500 and they let you go back at least 1 year that you qualified but did not contribute.I have heard but cannot confirm you can go back every year but I dont know this as fact.TD will let you set up self directed rdsp with them.As for investment advise ,when i had under $50,000 to invest I started with index investing canada usa international and I saved $5000 to buy one dividend paying stock , back then the one I choose and still hold is TD.With my daughter's RESP which i started 10 years ago before i got this group ,i went into the branch and bough mutual funds with high mercs but having said that the ones I bought have done well .I bought tdb972 ,tdb652 (odd duck entertainment and communication) TDB964 .TDB981 .TDB218.The branch employee had daughter similar age to mine and this was almost what she had.I originally went 50% CANADIAN and 50% USA but year two added some of the others above ,we did catch up years as we did not start when our daughter was born so was buying $415 a month and purchases spread out.


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## OnlyMyOpinion (Sep 1, 2013)

I do appreciate LTA challenging 'the norm'. I agree, people should explore life. Whether it is investing, traveling, alternative life styles, etc. 

In the past, most of us got married and had children which brings different responsibilities. That is changing though it would seem.

With regard to investing, while I still think most can get rich slowly with more reliability, LTA mentioned he'd decided to 'get rich quick'. 
My caution in that regard is pointed out in one of LTA's links: 12 Rules for Investing in Someone Else's Business 1. Don't be "sold" investments. 
Recognize that the human desire to get rich quick is a strong one, and as a result there are many scam artists who take advantage of that desire and the gullibility of people. We read about it in the news regularly. Don't become one of those.

While moving beyond your original post regarding simply investing, I think Dragon's Den and Shark Tank have good value providing insight into people's ideas and efforts to market a product or start a company, and some of the challenges/issues involved. It is necessarily light on detail. There are several similar shows: The Big Decision, Recipe to Riches, Redemption Inc, Money Moron, and the new Arlene Dickson show 'Under New Management', etc.

I'm not sure if an advid watcher of these can become more entrepreneurial or not. I think it still takes a certain personality as LTA notes, but it can't hurt. Better than watching some of the garbge out there.


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## Just a Guy (Mar 27, 2012)

I find it kind of funny that so many people seem to think I’m a “risky” investor because I don’t use the traditional “safe” approaches that all the talking heads expound. 

The irony here is, when I started investing, I couldn’t afford to lose money. I didn’t really have any (only a couple thousand to both survive on and make grow) and I had a young family which depended on me to be right and not lose anything. 

To do this, I developed my own strategy which, over time, has proven very safe and profitable. As long as I follow my strategy, I’ve never lost money (it was different when I tried different strategies). 

My strategy is fairly simple, I ignore almost everything balancing, asset allocation, rebalancing, bonds, GICs, any low yield stuff, trading, Canadian vs US stocks, you name it...

All I do is buy good companies that I know and probably use when they run into trouble or are reasonably priced. Some of those turned out to be grand slam home runs, others just really good returns. I don’t sell the stocks, so I defer taxes and keep the full earning power working for me. I sometimes leverage the investments to buy a new piece of real estate to add to the earning power as well. 

In many of these purchases, the dividend has replayed the initial investment in less than 10 years, so my holding are now mainly pure profit. 

I guess you could say the strategy is to pick solid companies which will almost always be winners long term and just hold on to them. Why people worry about all the other stuff, especially “diversification” (when all your really buying is stocks, so how are you diversified really?) makes me wonder. When I think about it, a lot of those strategies are just going to lower your returns in the long run. 

Of course, it may all be luck, but doing something dumb will also get you dumb results sometimes. I did something different and was rewarded. Personally, I try to poke holes in my strategy all the time, looking for weakness but, aside from a total market collapse (which would kill nearly every strategy) I find more holes in the “safe” investing strategies than mine.


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## Rusty O'Toole (Feb 1, 2012)

Just a Guy you have a good strategy there. May I ask, have you picked any klunkers and what do you do if one of your investments does not pan out?


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## Just a Guy (Mar 27, 2012)

The only time I blew it was when I tried to play an obvious pump and dump. I knew it was happening, I knew what I had to do, but I just didn’t do what I was supposed to do and lost it. Eventually I wrote it off (capital loss) against a property which I sold because it was worth 4 new properties (capital gain). 

So far, my system hasn’t yielded a loss, but I buy when things go wrong, so the prices are already down. Examples are income trusts when the government decided to change the taxes, they dropped 25% overnight until people realized nothing changed for four more years, and then it didn’t really change. The 2007/8 financial meltdown. My most recent purchase was kraft/Heinz because of the scandal. 

The market has been pretty much a bull for 20 years though, so it’s hard to lose money in this environment. The future may not be as good.

P.S. I should point out that I’m not saying my investments never went down. They fluctuate like any stocks, but I often get my initial investment money back out from dividends and, since they already started at a low point, they’ve never fallen further than my purchase price any significant time period after I bought (I didn’t always buy at the bottom in other words, but once they recovered, they didn’t drop to those levels again).


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## Mulak (Feb 7, 2017)

Forgot to tell you guys the meeting I had with the TD financial advisor

He said pretty much what u guys said ... Options to do saving account, gics 1 or 3 years, mutual funds, balanced portfolio ... He said balanced portfolio would possibly averaged out after fees around 7% .. some years will go down and up but overall it increase over time

Also mentioned about tfsa and rsp ... Doesn't recommend to focus too much on rsp because of my current financial situation isn't high since i have the option to pull money from tfsa without getting tax to do something financial in near future 

He said I should diversified my portfolio with not just real estate ... In case the possibility that real estate market could crash

He actually brought up about potato couch investing and gave me a reddit link to check it out and suggested a book called the millionaire teacher and said it will change my life


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## james4beach (Nov 15, 2012)

Mulak said:


> He said balanced portfolio would possibly averaged out after fees around 7%


That's extremely optimistic. We're currently in an excellent stretch of performance for balanced funds, and the Morningstar category Global Neutral Balanced shows 5.2% annualized return going back 15 years. The Canadian Couch Potato model ETF portfolio sheet shows (theoretical) 20 year return of 5.4% annualized.

Even at one of the best times in market history, you're only seeing 5% CAGR. Not sure how he justifies 7%.



> He said I should diversified my portfolio with not just real estate ... In case the possibility that real estate market could crash


Good advice! This is a reason I've avoided buying a home. If I bought a house, my net worth would be highly concentrated in real estate. And not just general real estate but the value of a single asset. Talk about non diversified!


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## kcowan (Jul 1, 2010)

Mulak said:


> He said balanced portfolio would possibly averaged out after fees around 7% .. some years will go down and up but overall it increase over time


Yup and happened to have one to sell you!

The days of 7% gains even without MERs are past for now.


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## cainvest (May 1, 2013)

james4beach said:


> Even at one of the best times in market history, you're only seeing 5% CAGR. Not sure how he justifies 7%.


Some balanced funds have returned better than 7% long term so it's possible. Will it continue ... who knows. I would agree that 7% might be a little on the high side though.



james4beach said:


> If I bought a house, my net worth would be highly concentrated in real estate. And not just general real estate but the value of a single asset. Talk about non diversified!


This could go either way and is area dependent I would think. You have to live somewhere so either it's a pure expense (renting) or you have a chance at making/losing (buying) money on it.


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## OnlyMyOpinion (Sep 1, 2013)

Thanks for the update Mulak. 

Tough crowd. I'm actually impressed with how your meeting went. Sounds like a fairly broad discussion, not just an effort to get you into a MF.

I agree that 7% nominal (5% real?) might (or might not?) be at the high end of long term future performance. But none of us really knows how the companies and economies that a balanced fund invests in will perform.

Your advisor may have been referring to TD's balanced growth fund (TDB970) which has returned 6.5% on average since it started in 1987, and 7% over the last 10 years (which have been an astounding bull market run). We'll all choke to see that the MER for this fund is 2.22% though (but remember the 7% performance is reported after that MER has been taken out).
It is interesting to see that TDB970 it is up nearly 10% YTD, while VBAL is "only" up 7.3% this year to date. Go figure.

We have to remember that many people don't take the initiative to become their own advisor as you are doing. 
And some who do, will still get poor performance as a result of trying to outsmart the market, panic sell, etc. 
So many people can do worse than having an honest advisor put them into a fund like the above and act as a 'buffer' against indiscriminant buying or selling.

Good luck on your journey!


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## Gruff403 (Jan 30, 2019)

So Mulak did you make any decisions? Apologies if that is to personal.
You want to learn and take control and that is fantastic.
Please be aware that the financial product landscape changes faster than the weather.
I have been investing for over 30 years and have seen tons of new products. TFSA, robo advisors, ETF, RESP, self directed investing etc... It can become confusing and it will be fascinating to see what new products are created.
You will make mistakes - we all have. The trick is to not make major mistakes. Minor mistakes are how we learn.
Retiring early is conceptually not that hard, it's the execution that is tricky. You just have to create enough post tax passive income to cover living expenses and adjust for inflation. 50 K invested paying a 4% yield creates $2000 pre tax in passive income annually.
Live within your means, work to reduce debt, save and invest a little each month and continue to learn - you'll get there.


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## Longtimeago (Aug 8, 2018)

Mulak said:


> It would be awesome to retire in 10 years ..
> How is even possible?
> 
> I'm fine with owning a house, decent income spending flow, just comfortable in life .. I'm a simple guy ... I'm not a traveler so not worrying on expensive travelling trips lol
> ...


The investors on Dragon's Den are Angel Investors, yes. 

Retiring in 10 years is possible for some and not for others. What is sure however is that no one does it unless they have that as their goal. Consider this, if you set that as a goal, what happens to your investment strategy? Can you invest in something that returns 7%? The answer is no you cannot, it will grow too slowly to meet your goal. The point is that it is your goal that determines how you make decisions. Without the goal, you are like a ship without a rudder.

You will have noticed that several people here have referred to Warren Buffett and his advice on how to invest. What they don't mention and probably don't even know is that he in fact did not get rich by doing what he suggests doing, such as investing in Indexed Funds. Nope, he got rich by 'direct investing' and what's more, by doing it with other people's money. https://monevator.com/how-did-warren-buffett-get-rich/ He became a millionaire by choosing individual companies to invest in. He became a billionaire by doing it with other people's money.

I'm not suggesting that someone else should follow that exact same path but I am saying that what Buffett did was refuse to accept any kind of low return and focused on INDIVIDUAL investments in companies, either directly or by buying stock in those companies. If someone had said to him, 'you can make 7% investing in this', he would have refused to invest and most likely laughed all the way out the door. There's a line in the link above that tells you Buffett grew his wealth by 61% per year since going to college.

It is your GOAL that drives your decisions. The lower your goal, whether you have actually consciously articulated it or not, the lower your expectations and the return you will be willing to accept. If say what someone wants is to have $1 million net worth in 10 years and is starting with $100k, then there is NO POSSIBILITY of investing in something that is likely to return 7%. That person MUST find an investment that has a reasonable chance of a far higher return. Then continue to find similar investment opportunities and build on that along with the magic of compound growth. Or ABANDON the goal.


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## Longtimeago (Aug 8, 2018)

OnlyMyOpinion said:


> I do appreciate LTA challenging 'the norm'. I agree, people should explore life. Whether it is investing, traveling, alternative life styles, etc.
> 
> In the past, most of us got married and had children which brings different responsibilities. That is changing though it would seem.
> 
> ...


While I used the words, 'get rich quick', I was using them only in relative terms and opposition to 'get rich slowly'. Obviously, I don't suggest falling for any 'get rich quick' scams. 
I just don't advocate taking 30 years to get to your end goal. It can be done in less time and many people do manage to do so.

Regarding Dragon's Den et al, I don't suggest watching those pitching their business ideas, I suggest watching the Dragons and how they evaluate whether or not to invest in something. We are talking about how to decide what to invest in, not about how to become an entrepreneur and start your own business. Other side of the coin.

They are not buying mutual funds, they are investing in individual companies directly. Whether it is by taking an equity share in that way or by buying individual stocks in a publicly traded company, the principle is the same. Individual/direct investments with high reward potential is what they are looking for. How many times do you hear them say, 'I'm out, it would take me too long to get my money back'. If you listen, you will probably hear it at least once on every single episode of Dragon's Den. They will not accept anything they see as being likely to provide a low return even if they believe the business will be successful overall. 

Listen to what the Dragons say. They may indicate they see it as a buy and hold business, they may see it as a business they want to have an exit strategy for. But they are always looking for high returns, fast growth and with a reasonable chance of achieving that. That's what any investor should be doing and you don't get that from investing in mutual funds etc.


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## Just a Guy (Mar 27, 2012)

A lot of people here are big fans of David chilton, aka the wealthy barber. 

He too doesn’t make his money the way he tells other people to do it. That’s why I don’t really value his advice. Sure, if you want to make safe, meagre returns follow away, if you want to be like him, you can forget his advice. 

Warren buffet often got sweetheart deals to invest in companies, especially when Wall Street needed confidence added to a stock. 

Now that I look at it, my investment strategy is similar to the was Warren buffet works.


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## Mookie (Feb 29, 2012)

Mulak said:


> He actually brought up about potato couch investing and gave me a reddit link to check it out and suggested a book called the millionaire teacher and said it will change my life


I've seen a few recommendations for Millionaire Teacher on here, so I picked it up from the library a couple days ago. Currently halfway through, and definitely an excellent book. Lots of interesting and entertaining examples to get his various points across. Easy to read and understand for anyone.

I will be recommending this book to my teenage daughters to reinforce everything I've already been telling them about personal finance and building wealth.


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## james4beach (Nov 15, 2012)

cainvest said:


> Some balanced funds have returned better than 7% long term so it's possible. Will it continue ... who knows. I would agree that 7% might be a little on the high side though.


Well I'm just pointing out that balanced funds on average haven't done 7% in recent times, despite stocks and bonds hitting all time highs right now. TD Balanced Growth (TDB970) was mentioned upthread. Its 15 year return was 4.9% annually, even lower than the balanced fund category average.

More broadly we're facing the issue of slow growth in developed countries in recent times, but it's true we don't know what will happen going forward. Maybe growth will bounce back to how it was during the 90s, in which case returns will go up. Currently this does not appear to be the case, with stubbornly low GDP growth across USA, Canada, Europe and most experts projecting this to continue.

Personally I don't think there's any problem with 5% CAGR or +3% real return. That's a positive real return, actually increasing at a faster pace than economic growth. Frankly I'm not even sure it makes sense for passive portfolios to return more than broad economic activity suggests.


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## AltaRed (Jun 8, 2009)

Future GDP growth is likely to be less than historically just because such growth is not sustainable on this planet for decades to come. While MAW104 has a 5 year nominal CAGR of 7.86% (10 year is an aberration due to the great recession), it is pretty hard to see that continuing. I'd agree 5-6% nominal will be more likely in the future. That is not at all shabby given 4% SWR methodologies.


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## james4beach (Nov 15, 2012)

MAW104 is great, but the fund manager also had some advantages earlier in its history due to a small fund size. Money only started flooding in around 2014 as you can see on the Morningstar performance page. Many years back, MAW104 barely had $100 million (tiny). Today it has $4 billion AUM.

It's a whole different game with 40x the assets as during some of their star years. It's inevitably going to get closer to indexing. That's not bad, but it suggests returns will come down towards average.

It's a great fund which obviously had a great manager, but I don't think its performance should be used to form expectations.


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## Longtimeago (Aug 8, 2018)

Mulak said:


> Forgot to tell you guys the meeting I had with the TD financial advisor
> 
> He said pretty much what u guys said ... Options to do saving account, gics 1 or 3 years, mutual funds, balanced portfolio ... He said balanced portfolio would possibly averaged out after fees around 7% .. some years will go down and up but overall it increase over time
> 
> ...


If you want to invest in a relatively simple and meager return way, then Millionaire Teacher is as a good book to read as any. Somehow, just because a school teacher kept putting his discretionary income into 60/40 stock funds/bonds for decades and ended up with a $1 million nest egg, that makes him a 'guru' on how to invest. I think not, all his book will tell you is how the herd does things. It's hardly better than saying, 'put your money in a bank savings account every month and one day you too will have $1 million saved.' Anyone can amass $1 million in assets EVENTUALLY if they spend less than they earn. The question that is not addressed is in HOW LONG will it take to get there.

I have no doubt that many posting here will get there eventually and that will still put them in a relatively small percentage of the population. There is nothing wrong with that at all if you are willing to take decades getting there. I just wonder why some people are willing to do that when they could do it in less time simply by investing differently from the herd. Millionaire Teacher will not get you there faster Mulak, it will only get you there eventually.


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## OnlyMyOpinion (Sep 1, 2013)

LTA, I think you already made your case for alternate ways of building wealth quite adequately.

Now, ISTM, you are merely insulting members who have suggested other methods and resources for the OP to grow their knowledge.

Not everyone will want to follow your 'recipe', your life choices, or emulate you in the least.

It is a fact that members of 'the herd' can save, invest, and retire early in conventional ways if that is what they choose.

The Millionaire Teacher and other such books should not be dismissed just because you don't agree with them.

As I said earlier, your perspective is valuable in challenging people to 'think outside the box'. If they choose to do something else, that does not make you or your choices morally superior. That may not be your intention, but that is certainly how you come across to me, more often than not.


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## Just a Guy (Mar 27, 2012)

Curious, you go after LTA for expressing his opinion and being negative about the “traditional” approach, yet don’t seem to have an issue with people like jamesforbeach who does it to people like LTA in reverse.


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## james4beach (Nov 15, 2012)

Just a Guy said:


> Curious, you go after LTA for expressing his opinion and being negative about the “traditional” approach, yet don’t seem to have an issue with people like jamesforbeach who does it to people like LTA in reverse.


What are you taking issue with in my posts? I had rebuttals to LTA and pointed out why the line of thinking he endorses can often be a bad idea, especially for new investors.


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## AltaRed (Jun 8, 2009)

Some posters here have consistent and repetitive bad ideas for most mainstream and novice investors, and are best ignored (and in some cases put on ignore). Since it should be obvious most people do not have the acumen or personality for rolling the dice for a 1 or a 6, it is a disservice to continue time and time again to promote outlier behaviour.

Added: FWIW, it is no secret that I have certain posters on a **** list and others like OMO, MOA, etc. that I take time to appreciate.


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## Just a Guy (Mar 27, 2012)

I didn’t criticize your posts, I pointed out that OMO didn’t take issue r reverse criticism. There is a difference. You have a very traditional approach and don’t like alternatives, that’s fine. You defend your opinion, so did LTA but he was called out. I was wondering about the double standard is all.

I also wonder, considering most posters on here have never even tried alternative investment approaches, how they can be so sure that a novice couldn’t do these things. As I’ve pointed out, most would consider me an alternative, but my approach is a lot simpler than most, but I’m painted with the same brush as an options or day trader. Why not try something before criticizing it?


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## Longtimeago (Aug 8, 2018)

As I wrote earlier, not everyone who plays hockey as a kid is going to become an NHL player. But unless you get on the ice to begin with, you cannot KNOW that as a fact.

I have no problem with anyone who wants to take a 'traditional' approach to investing. But I do have a problem with people who have any opinion at all about something they have not tried themselves. When I read comments like, "Some posters here have consistent and repetitive bad ideas for most mainstream and novice investors", I wonder on what basis they make such statements? Based on personal experience of trying what they are saying are bad ideas or simply based on it not being in line with their own ideas?

Anyone reading here is free to agree or disagree with anyone else. I don't take such disagreement personally, I fully support anyone's right to be wrong. If you want to make money slowly follow the herd. If you want to make money faster, ignore the herd. That is really all I am saying, the choice is entirely up to the individual. But I am quite willing to agree that both ways exist. Now are you guys equally as willing to say that faster ways exist than the ways you are following?

What is it about that thought that really bothers you?


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## Longtimeago (Aug 8, 2018)

Just a Guy said:


> I didn’t criticize your posts, I pointed out that OMO didn’t take issue r reverse criticism. There is a difference. You have a very traditional approach and don’t like alternatives, that’s fine. You defend your opinion, so did LTA but he was called out. I was wondering about the double standard is all.
> 
> I also wonder, considering most posters on here have never even tried alternative investment approaches, how they can be so sure that a novice couldn’t do these things. As I’ve pointed out, most would consider me an alternative, but my approach is a lot simpler than most, but I’m painted with the same brush as an options or day trader. Why not try something before criticizing it?


It really seems to me Just a Guy that the real issue some people have is that they don't want to consider there are any alternatives to their way. 

It's like someone who will not try a new food choice. 'Go to a Thai restaurant, no thanks.' Yet how can they know they won't like it if they have never tried it? I never understand how people do that.


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## cainvest (May 1, 2013)

Longtimeago said:


> Anyone reading here is free to agree or disagree with anyone else. I don't take such disagreement personally, I fully support anyone's right to be wrong. If you want to make money slowly follow the herd. If you want to make money faster, ignore the herd. That is really all I am saying, the choice is entirely up to the individual. But I am quite willing to agree that both ways exist. Now are you guys equally as willing to say that faster ways exist than the ways you are following?


I fully agree there are ways to make money faster, seen it done by a few friends and others I have known over the years. My neighbor (a construction guy) buys homes, renovates and rents them out just like what JAG does. So yes, there are other ways to make money, some of them faster. Now with my admittedly "outside knowledge" based on talking to these people and knowing what they are doing, it is much more complicated (and time consuming) than simple investing is. So if you are a highly focused and motivated person that will do everything you can to get the job done I'd say you have a chance at doing well in these "non-herd" like strategies. On the flip side, even with your best efforts, some of these strategies may net you a total loss after putting in years of work and you're starting over from zero again which most people can't stomach IMO.


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## Just a Guy (Mar 27, 2012)

But not all alternatives are risky. For example, explain to me how rebalancing is good for growing your wealth. Basically the idea is to either sell or water down your winner to be “safe”. That’s almost moronic in my opinion. Also, trading your stocks triggers capital gains, which lowers your earning potential since you have to pay taxes which takes away money to invest. Why hold something that earns 3%, but is taxed at 50% when inflation is 2% and think you are making money?

All these things are considered “safe” and “smart”, explain to me how that’s so?

To counter that, you could buy a bank stock which pays a 5% dividend. Do you really think that’s risky? Are banks going to fail? Now consider buying a bank in 2007 when the dividend was over 10%, and has increased to around 15% because they raise the dividend every year. In 8 years you got you investment back and...the stock has gone up 300%

Does it take a lot of work to buy a bank stock? Was it high risk investing? How did that gic perform over the past 10 years?


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## humble_pie (Jun 7, 2009)

Just a Guy said:


> Now that I look at it, my investment strategy is similar to the was Warren buffet works.



:biggrin: let the record show that the poster considers his securities investment strategy to be on a par with warren buffett's (there are 2 "t's" in "buffett" & the above was not a spell check error)


.


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## james4beach (Nov 15, 2012)

Just a Guy said:


> To counter that, you could buy a bank stock which pays a 5% dividend. Do you really think that’s risky? Are banks going to fail? Now consider buying a bank in 2007 when the dividend was over 10%, and has increased to around 15% because they raise the dividend every year. In 8 years you got you investment back and...the stock has gone up 300%


So you buy Citigroup in 2006, when the dividend yield wasn't even worrying. A world class bank, largest in the world, blue chip by all accounts. Here's what you got, an 82% loss through to today, which includes dividends: http://schrts.co/BnHIVuVg

Citigroup did not fail, by the way. It is alive and well. It returned -82% for the investor who bought in 2006.

These are the kinds of reasons most professionals recommend diversification, both in # of stocks, but also across sectors and countries. Making money in the stock market is not as simple as finding a handful of stocks you think look good.

The nice thing about couch potato strategies and index investing is that it automatically gets you diversification. Alternatively, you could also carefully design your portfolio yourself to achieve sufficient diversification. That's completely valid as well, but indexing is much easier.


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## Just a Guy (Mar 27, 2012)

Glad humble can read..,similar strategy is not, by anyone who understands the English language, equivalent to “on par”. Try dictionary.com instead of making things up humble.

Btw, warren buys companies he knows and uses the products of...he doesn’t buy fad stocks. Gee, sounds very similar does it not? Do we buy the same companies? Maybe, maybe not. That’s why we’re not “on par”, but “similar”.

James, I was actually talking about Canadian banks. Which didn’t nearly have the exposure of American banks...plus, as I’ve said, I invest in companies I know and use. I use Canadian banks, not american ones.

I’m sure, if you looked hard enough, there was probably some Bolivian bank that did even worse...keep looking, you’ll be able to prove anything, if not, make it up like humble.


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## OnlyMyOpinion (Sep 1, 2013)

Just a Guy said:


> Curious, you go after LTA for expressing his opinion and being negative about the “traditional” approach, yet don’t seem to have an issue with people like jamesforbeach who does it to people like LTA in reverse.


JAG, If it helps, I do feel that James is too conservative in his financial approach (and too liberal in his politics ). But he's explained some of his reasons for this, take them as you will. I do find that his suggestions and responses generally provide informative rationale/reasons/resources for his comments. So I don't generally 'go after' them. 

I was responding to LTA's post that offered no ideas, and appeared to be written just to slam The Millionaire Teacher, and suggest that anyone who might set out to save and invest using that approach was making a mistake, settling for 'meager' returns, taking far too long, and following 'the herd'. I think we agree that most of the herd don't actually even follow that simple, meager path. The median net worth of a senior Canadian family is $763k.
Critical that 'how long' has not been addressed? Well, let's offer that it will take you 18 years to turn $100k into $1MM, but you'll have to earn 7% and save another $20k per year. Is that too long? Too much to save? You tell me. We do know the sooner and more you can start with the better.

Is it such a mistake for Mulak to begin down this path? LTA had suggested they look at alternatives. I don't disagree with that. I think a diversity of investments over an investing life is a good idea. Perhaps Mulak will now look for opportunities they might not have otherwise. Meanwhile they're looking for starting suggestions. Are we suggesting they keep their money in a savings account while they look for a 'quicker' investment? Any guidelines or suggestions outside of a few angel investor sites?

In fact, a portion of my net worth came from a startup that we later took public and later yet sold to a larger co. It can be lucrative, but those opportunities aren't necessarily readily available and normally shouldn't represent all of your investments. This, RE and market investments all contibuted, at different times, and as investing capacity allowed. Neither of our kids have had a similar opportunity to this point. They have bought homes like Mulak though, and they're taking the Millionaire Teacher approach to saving and investing. I have no doubt they will be FI before I was, although I doubt an early LTA-type exit interests them.

Perhaps you find LTA's posts informative/helpful, I generally don't.


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## Just a Guy (Mar 27, 2012)

Fair enough, I tend to agree with LTA that just because someone wrote a book that makes them an expert. I also question people like David chilton who preach one thing and do a different thing themselves. I’ve read millionaire teacher and don’t have issues with its general philosophy...it’s pretty much the same as most conservative books. Heck a professional wrestler wrote a financial book that is also similar...maybe it will appeal to that crowd and get them to save a portion of their money and invest it in a balanced portfolio. 

I also think LTA has a point that, whenever someone brings up an alternative strategy they’re opening themselves up to uninformed attacks. Maybe that’s why he doesn’t want to give details.


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## kcowan (Jul 1, 2010)

If there was a moderator, this thread would be closed. Repetitive echo chamber.


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## AltaRed (Jun 8, 2009)

Put it into the context in which a member/poster posts. Frame responses that likely match temperment, expererience, acumen and the status of their investing journey. A lot of folk here quickly get into complicated investing strategies for a novice starting out...when that person should be in TD e-funds in a TFSA to start asset base growth, rather than taking flyers on alternative investments early on. More people build their wealth through tried and true strategies flying in a 737 than trying to be a Top Gun fighter jock. Few of us started with the knowledge and skill we had today. We crept into it as we learned.


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## Rusty O'Toole (Feb 1, 2012)

Re Citigroup - I can't imagine holding a stock for more than ten years as it declines by 82%. I should hope I had sense enough to get out long before that, say around $70 or $60 at the worst. But that would be technical trading wouldn't it, and we all know technical traders or chart readers can't compete with buy and hold investors.


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## Longtimeago (Aug 8, 2018)

AltaRed said:


> Put it into the context in which a member/poster posts. Frame responses that likely match temperment, expererience, acumen and the status of their investing journey. A lot of folk here quickly get into complicated investing strategies for a novice starting out...when that person should be in TD e-funds in a TFSA to start asset base growth, rather than taking flyers on alternative investments early on. More people build their wealth through tried and true strategies flying in a 737 than trying to be a Top Gun fighter jock. Few of us started with the knowledge and skill we had today. We crept into it as we learned.


AltaRed, when you started into your 'investment strategy', what was your goal? Did you actually have one? Or was it just to have your capital earn some income somehow? The reason I ask is because as I have already said, it is your GOAL that will determine your strategy and then your tactics. Before starting on my own investment road, I was like many people in that I tended to spend as much as I earned (many of course spend even more than they earn, it's called debt) and had next to no savings at all. When I had my eureka moment, I decided my goal was to retire as soon as possible. That is pretty simple to understand I think.

I don't know what the OP's goal is, he hasn't told us if he even has one. All he has said is that he 'wants to get into investing', without telling us WHY. I may be biased but I tend to think that most people want to amass money so that they can stop working. Am I wrong? Why do you invest? 

Without knowing what someone's actual goal is, advice on how to get there is really just a shot in the dark. You may be happy with a conservative investment strategy if your goal is as OnlyMyOpinion has apparently worked out, "it will take you 18 years to turn $100k into $1MM, but you'll have to earn 7% and save another $20k per year." I would have no problem with someone who has that goal being told to follow a conservative strategy. But first they have to tell me that is their GOAL.

When I started, I had a goal of retiring in 10 years. What then would your advice be to me on how I should 'creep into it'? Most people here if they are being honest, have a goal if they have ever actually articulated that goal to themselves, of an exit strategy that sees them having enough money to retire at 50, 55, 60, 65 and being able to live off their savings with a reasonable lifestyle, until they die. They don't even expect to live off 'passive income', they expect to live of 'savings'. That's what an SWR strategy is.

As far as I am concerned, I did creep into it. I started with one investment of $50k and then put in another $50k after 6 months and came out with $400k at the end of 18 months. I put a toe in the water. I had no knowledge of commercial real estate before that. All I had was a guy who had an idea of shared office space and a business plan of what he wanted to do. He needed investors and I agreed to be one. I made that decision because of my GOAL. My goal would not allow me to creep into a mutual fund paying 7% on average. 

So as I say, you tell me what you would have advised me to do? What 'tried and true' strategy to retiring in 10 years would you have suggested to me? I'm all ears and perhaps some other readers will be too.


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## Longtimeago (Aug 8, 2018)

OnlyMyOpinion said:


> I was responding to LTA's post that offered no ideas, and appeared to be written just to slam The Millionaire Teacher, and suggest that anyone who might set out to save and invest using that approach was making a mistake, settling for 'meager' returns, taking far too long, and following 'the herd'. I think we agree that most of the herd don't actually even follow that simple, meager path.


OnlyMyOpinion, I wasn't 'slamming' the approach in the book, I was pointing out the limitations of that approach. I wrote that if it met your goals, it was fine but if you had more ambitious goals it was useless. How is that 'slamming' it? What I was 'going after' if anything was this pervasive belief that there is no alternative to a conservative strategy. The financial advisor that Mulak went to certainly seemed to indicate that was the case, in my opinion. Saying to Mulak that, 'this will change your life'. 

My question to his 'advisor' would be, what is your understanding of what Mulak's goal is? If the answer is, 'to retire at 65 and live off savings using an SWR strategy', fine, an approach such as the book suggests would probably get him there. In fact, just about any conservative strategy probably would.

I don't know why it is that people can't seem to get the significance of knowing the goal before arguing what 'starting suggestions' should be. As I have asked AltaRed, I will now ask you. What would your 'starting suggestions' be to Mulak if his goal is to retire in 10 years. Let's all not forget that his reaction to that idea was in fact that 'it would be great to retire in 10 years.'


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## AltaRed (Jun 8, 2009)

LTA, the vast majority of individuals simply want a good job that will provide for their families, educate their kids, not take so much risk as to leave their family potentially homeless, and if they are lucky to retire at some undefined age comfortably without having money worries. These kind of forums, e.g. CMF and FWF, are set up and designed, with their sub-forums, for gaining financial knowledge and empowerment to further those goals. Those willing to live on the edge and roll the dice won't get satisfaction here. There are other venues for them to chase their dreams.

I wouldn't begin to pretend to give advice to anyone who is looking to make a small fortune in a short period of time, e.g. 10 years. Their behaviour and temperment don't fit classical financial opinions/advice that is the foundation of these forums. It really is as simple as that.


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## Longtimeago (Aug 8, 2018)

OK fair enough AltaRed. But do you think that if that was the reason this forum was set up, that that is enough to say it should continue to be limited to that? 

I always remember being frustrated by limitations the company I was working with at the time, tried to impose. Speaking to a fellow salesperson, I said I would like to put a big poster up on the office wall that would read, 'Think small and conform.' Just as I was saying that, the VP walked by and gave me a dirty look. Two years later, I had his job.


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## AltaRed (Jun 8, 2009)

Any enterprise, including 'free' financial discussion forums, are set up with specific objectives in mind, and the structure (and thus personality) primarily attracts those who can identify with the subject matter. Obviously, anyone can participate but they need to recognize they will be swimming upstream and get bruises on obstacles along the way. That is just the way it is. I prefer to participate in those forum that I can identify with, and don't consider the dozens, or hundreds, that are of no interest to me. What would be the point? Life is too short to expend energy that way.


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## kcowan (Jul 1, 2010)

Longtimeago said:


> So as I say, you tell me what you would have advised me to do? What 'tried and true' strategy to retiring in 10 years would you have suggested to me? I'm all ears and perhaps some other readers will be too.


Why would anyone do that? Have you read the Financial Wiki? Do you know about an IPS? These forums are to help people achieve their objectives not to reform them!

Generally the participants to not react well to blowhards telling us about themselves. JAG gets significant blow back for that.


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## james4beach (Nov 15, 2012)

Reminds me of something from my university days. I think it was 2001 and it was an accounting & corporate finance course of some kind, in the business school. There was a slightly older man in the class who told us he had been working as an institutional trader.

Other classmates were very excited (remember this was 2000-2001) and kept asking him about stock investing. They were asking for strategies and ideas how to get rich in the stock market. The trader said, very clearly: please don't speculate, don't pick stocks. He could not have been more clear... don't do it.

But of course, people didn't listen to him. People went on to buy tech stocks and other "solid blue chip companies", and of course lost their shirts. I remember one friend in his 20s blew away all his scholarship money, it was 2K or 4K. Thankfully at the time my hard-earned money was locked up in GICs so I did not get suckered in.

Forums like this are no different than anywhere else in life. You hear a bunch of stuff from people, some of it is contradictory, and it's up to you to pick out the good advice from the bad. From my own life experience, I would suggest that the OP look into: asset allocation, index investing and couch potato strategies.


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## Just a Guy (Mar 27, 2012)

AltaRed said:


> LTA, the vast majority of individuals simply want a good job that will provide for their families, educate their kids, not take so much risk as to leave their family potentially homeless, and if they are lucky to retire at some undefined age comfortably without having money worries. These kind of forums, e.g. CMF and FWF, are set up and designed, with their sub-forums, for gaining financial knowledge and empowerment to further those goals. Those willing to live on the edge and roll the dice won't get satisfaction here. There are other venues for them to chase their dreams.
> 
> I wouldn't begin to pretend to give advice to anyone who is looking to make a small fortune in a short period of time, e.g. 10 years. Their behaviour and temperment don't fit classical financial opinions/advice that is the foundation of these forums. It really is as simple as that.


How many people do you know who live this way and fail? I know a heck of a lot. The reason they live like this is because they were taught to live that way, go to school, get a job and retire at 65. It worked in the 50’s and 60’s it certainly doesn’t work that well these days. When I graduated school I was the only one out of 650+ students in my class that got a job. That job was a contract position, it lasted a few years and was terminated. Some of my classmates eventually got jobs, most have been downsized or fired at some point in their “careers”. Many parents of my friends continued to have part time work well into their “retirement years” because they still had mortgages and expenses. 

I think people, especially today, that try to live this lifestyle will wind up like sags demanding more money from the government to support them.


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## like_to_retire (Oct 9, 2016)

james4beach said:


> Forums like this are no different than anywhere else in life. You hear a bunch of stuff from people, some of it is contradictory, and it's up to you to pick out the good advice from the bad. From my own life experience, I would suggest that the OP look into: asset allocation, index investing and couch potato strategies.


Totally agree James.

The hucksters in their shiny suits with stories of instant riches need not apply.

ltr


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## AltaRed (Jun 8, 2009)

Just a Guy said:


> I think people, especially today, that try to live this lifestyle will wind up like sags demanding more money from the government to support them.


You are not talking about the savvy people who visit forums such as this looking for opinions and guidance. If people actually were members of this forum and took all the good advice about budgeting, living below one's means, develop an IPS and invest with asset allocation, diversification and re-balancing principles in mind, they would do just fine by the time they are ready to hang up the saddle. You missed the whole point of my response to LTA. 

I grew up on a cash flow poor cattle ranch, learned cash management early, got an education, lived below my means, never took on consumer debt, paid off my mortgage as quickly as possible, and focused on reaching the corporate level with stock options. By the time I was 40, the mortgage was gone and I was investing large portions of my salary in tried and true investing principles that are readily tested and re-tested for success over the decades. I learned from capital market investing discussion forums starting in the late '90s and that discipline allowed me to retire on my terms. My now ex-spouse and I each have 6 digit income streams with absolutely no financial concerns for the rest of our lives. CMF members have the opportunity to do the same with tried and true capital market investing principles.

A few such forums:
http://www.early-retirement.org/
https://www.financialwisdomforum.org/forum/index.php
https://www.bogleheads.org/forum/index.php

and a few earlier ones such as The Wealthy Boomer that preceded FWF and no longer exist. Some 20 years of participation and/or lurking.


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## Longtimeago (Aug 8, 2018)

AltaRed said:


> You are not talking about the savvy people who visit forums such as this looking for opinions and guidance. If people actually were members of this forum and took all the good advice about budgeting, living below one's means, develop an IPS and invest with asset allocation, diversification and re-balancing principles in mind, they would do just fine by the time they are ready to hang up the saddle. You missed the whole point of my response to LTA.
> 
> I grew up on a cash flow poor cattle ranch, learned cash management early, got an education, lived below my means, never took on consumer debt, paid off my mortgage as quickly as possible, and focused on reaching the corporate level with stock options. By the time I was 40, the mortgage was gone and I was investing large portions of my salary in tried and true investing principles that are readily tested and re-tested for success over the decades. I learned from capital market investing discussion forums starting in the late '90s and that discipline allowed me to retire on my terms. My now ex-spouse and I each have 6 digit income streams with absolutely no financial concerns for the rest of our lives. CMF members have the opportunity to do the same with tried and true capital market investing principles.


Umm, no he WAS talking about someone who does visit this forum(sags)while you were I believe talking about 'most people.' I quote you here, "LTA, the vast majority of individuals simply want a good job that will provide for their families, educate their kids, not take so much risk as to leave their family potentially homeless, and if they are lucky to retire at some undefined age comfortably without having money worries."

I would certainly be prepared to argue that 'the vast majority' you are referring to, do not visit this forum. You could argue that you do not consider sags to be a 'savvy' person but that would be between you and sags to argue over.

As I read the response by JustAGuy to your comment re 'the vast majority', what he is saying is that what may have worked in the past and for you personally, may not work today. 

You do not say at what age you retired or when. Reading his comments, I am reminded of having a conversation with my son and telling him that no one should need to work more than 8 hours a day to do well. He said that he knew of very few people doing well by normal standards, who only worked 8 hours a day. In other words, someone who just had 'a good job' etc. as you describe would not be likely to achieve by 65 what you say is what they 'simply want'. 

I'm simplifying the discussion I had but I think it makes the point. What the average person did when I was in my 30s; what the average person did when you AltaRed were in your 30s and what the average person in their 30s today does, all differ. As I read JustAGuy's comment, that's what he is saying to you.

I would add that you are also assuming that what you wanted in your 30s and what someone in their 30s today wants are the same thing. They don't even have the same definition of 'financial independence'.
https://www.moneysense.ca/save/millennials-expect-financial-independence-by-age-27/

Some of the numbers and their inferences are quite eye-opening to me.


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## Just a Guy (Mar 27, 2012)

Wow, “financial independence” was defined as being able to move out of the family home and paying your own rent. Most millennials expected to achieve that by 27...what the heck are people teaching their kids these days? Too many Sag-like parents obviously...all waiting for UBI to pay the bills for them. 

To contrast that, my son will probably be financially independent (by definition have a passive income which means he doesn’t need a traditional “job” to survive) by 27 as he’s got a plan to do just that. Bought his first rental last week at 18, landed a good summer job paying a wage I can’t believe (good marks and a good work ethic pay off it seems) and plans to invest the wages in a TFSA not blow the money.


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## cainvest (May 1, 2013)

Longtimeago said:


> I'm simplifying the discussion I had but I think it makes the point. What the average person did when I was in my 30s; what the average person did when you AltaRed were in your 30s and what the average person in their 30s today does, all differ.


Is it really all that different from then to now ...

Are you saying people nowadays can't live within their means, save money and plan to retire by 65 providing they hold down a reasonable job for most of their life?


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## Just a Guy (Mar 27, 2012)

I don’t think it works that way as often as it used to. In my day we saved up before we bought things with the exception of maybe a car and a house. These day, easy monthly payments allows everyone to have all the toys they feel entitled to. People are living beyond their means from day 1.


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## AltaRed (Jun 8, 2009)

Longtimeago said:


> Umm, no he WAS talking about someone who does visit this forum(sags)while you were I believe talking about 'most people.' I quote you here, "LTA, the vast majority of individuals simply want a good job that will provide for their families, educate their kids, not take so much risk as to leave their family potentially homeless, and if they are lucky to retire at some undefined age comfortably without having money worries."
> 
> I would certainly be prepared to argue that 'the vast majority' you are referring to, do not visit this forum. You could argue that you do not consider sags to be a 'savvy' person but that would be between you and sags to argue over.
> 
> ...


Well, of course I was talking about the vast majority of people out there, not those who visit this forum. A whole lot of the 'vast majority of people out there' should be visiting this forum to get their act together. And yes, what worked when I was young can work today just as well. I have 2 sons, now in their early '40s, and my spouse has 3 children ranging in age from 38-43 who we have watched establish themselves. They are all successful and my sons in particular have followed my path with frugality, living within their means, not incurring consumer debt, and building their net worth. One of spouse's children are much like my own 2 sons while the other 2 have been more consumer oriented, e.g. buy their vehicles on credit, but are two income families and making headway in building their net worth. One of them also has investment real estate. 

None of the 5 are remotely close to being within $200 of making ends meet, and as you might note, are all Gen-Xers. All are employees working the typical 35-40 hour weeks. Three of the 5 are with companies with DB pension plans, only one of which is quasi-public service. So yes, things ARE the same in many ways for a great many people. The problem today is living within one's means and having a strong work ethic. Plain and simple.


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## kcowan (Jul 1, 2010)

AltaRed said:


> All are employees working the typical 35-40 hour weeks. Three of the 5 are with companies with DB pension plans, only one of which is quasi-public service. So yes, things ARE the same in many ways for a great many people. The problem today is living within one's means and having a strong work ethic. Plain and simple.


Likewise, our 2 kids and 3 GCs are living they way you describe. 2 other GCs are too young. I believe it has to do with upbringing.

Maybe LTA can tell us how his kids are doing?


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## james4beach (Nov 15, 2012)

I'd like a DB pension. Can someone point me to some place with a DB that's hiring, that's not oil & gas?

Lots of privileged people at CMF, by the way. Lots of extremely wealthy oil & gas people too (which I find confusing, because I thought I heard that Trudeau destroyed Alberta).


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## Eclectic12 (Oct 20, 2010)

I guess you didn't like the answers in the retirement thread?
https://www.canadianmoneyforum.com/...5-Year-Countdown-to-Retirement-in-2022/page11

I seem to recall crown corps being top of the list.


Wasn't the thinking in another thread that a pension that was more portable like a DC one the better bet for young ones like yourself?


Cheers


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## james4beach (Nov 15, 2012)

Eclectic12 said:


> I seem to recall crown corps being top of the list.
> 
> 
> Wasn't the thinking in another thread that a pension that was more portable like a DC one the better bet for young ones like yourself?


I am indeed looking into crown corps. I wasn't (yet) convinced that the portable DC ones are better, but that may be true. I can be convinced.


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## Mulak (Feb 7, 2017)

haven't responded in quite awhile, sorry about that... was busy with easter on the weekend and watching the raptors games 

It would be nice to make sizeable capital and just live on the interest

I don't think I'm able to get another property right now because I don't make a lot of money for the bank to be comfortable to give me another mortgage on another property ... Might get a mortgage but it will probably be such a low mortgage amount that it not enough to afford a property. 

definitely have to decide either index investing or think of a non-index investing ideas


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## Eclectic12 (Oct 20, 2010)

james4beach said:


> I am indeed looking into crown corps. I wasn't (yet) convinced that the portable DC ones are better, but that may be true. I can be convinced.


I seem to recall several comments about the job market dictating having to change jobs often in other threads where those in DB pensions outlined that this would slash the future payout.


In any case, DB pensions take care of the investing so a novice that is in one, won't have to manage the funds. If it is a DC pension or Group RRSP then the OP would also need to figure out what was offered and what would be a good plan within the limits of the plan (including options for transferring out to one's personal RRSP that likely provides more/cheaper choices).


Cheers


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## Eclectic12 (Oct 20, 2010)

Mulak said:


> ... I don't think I'm able to get another property right now because I don't make a lot of money for the bank to be comfortable to give me another mortgage on another property ... Might get a mortgage but it will probably be such a low mortgage amount that it not enough to afford a property.


If you are already in the RE rental game and are okay with it, I don't see why what you have should make a difference. A FI that sees you are paying below FMV and that will have tenants easily will likely be happy to provide the mortgage. It sounds like you might not have the track record of JAG who likely has an easier time because of that history but if the right situation comes along, history shouldn't be an issue.




Mulak said:


> ... definitely have to decide either index investing or think of a non-index investing ideas


Or go with a mix.


Cheers


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## Just a Guy (Mar 27, 2012)

You once asked why I thought the property wouldn’t cash flow, when you say it does. Maybe post some numbers and we’lagh out loud see if you’re right or if you are deceiving yourself from the true numbers.


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## james4beach (Nov 15, 2012)

Eclectic12 said:


> I seem to recall several comments about the job market dictating having to change jobs often in other threads where those in DB pensions outlined that this would slash the future payout.


But from what I've read elsewhere, you can generally take a DB's value with you into a LIRA. Sure there is a bit of value loss, but the resulting money is still a pure benefit. Even with haircuts in notional value, doesn't the pure $ benefit of a DB still create a huge benefit, and a net benefit to an employee who has one vs none?

For example in my last two jobs, the only similar benefit I had was matching RRSP contributions. This amounts to about $5 K per year; that's the entire value of the benefit. Correct me if I'm wrong but I thought typical DB benefits, even if you switch jobs, works out to a larger benefit.


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## AltaRed (Jun 8, 2009)

Not necessarily. DB commuted values, and/or transfer values in the lucky instance of portability, may not be worth much. What is worth a lot in DB plans is years of service, and how that compounds in the latter part of one's career. 

I've not read it, but you likely should read The Pension Puzzle by Bruce Cohen and Brian Fitzgerald https://www.amazon.ca/Pension-Puzzl...ocphy=9001437&hvtargid=pla-567891520306&psc=1 It is a bit dated but I think the principles remain sound. Bruce posts on FWF, along with many other things, on pension matters. There is another one too that I cannot recall at the moment. Then there is this that I know nothing about https://www.morneaushepell.com/ca-e...adian-pension-and-benefits-plans-16th-edition

It might be helpful on whether DB plans do anything for someone likely to switch jobs, or not be with an employer for more than 10-15 years. For myself, I worked for a crown corporation the first 9 years of my career and basically had to take CV when I left and put into an RRSP. My last stint was 27 years with an O&G company and it was the longevity of service and the average of the final 5 years of salary that gave me a sound DB pension (subsequently shared 50/50 with my ex - not so good). I don't think my final endpoint would have been as good had those 27 years been with 2-3 employers. Will never know.


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## Eclectic12 (Oct 20, 2010)

james4beach said:


> But from what I've read elsewhere, you can generally take a DB's value with you into a LIRA. Sure there is a bit of value loss, but the resulting money is still a pure benefit. Even with haircuts in notional value, doesn't the pure $ benefit of a DB still create a huge benefit, and a net benefit to an employee who has one vs none?


The clear cut benefits are a forced savings plan (including diversification, professional management for a reasonable cost), the employer's contributions and possibly the interest rate used to calculate the commuted value working in one's favour.

Beyond that - it is similar to a disciplined employee who invests for retirement. Where the disciplined employee may do better is that they aren't restricted to no more than 10% in a single company, timing investment contributions (ex. max out during March 2009 around the low or make a leveraged buy in Dec 2018 that is up 100% today).




james4beach said:


> ... For example in my last two jobs, the only similar benefit I had was matching RRSP contributions ...


What's the contribution rate into the RRSP? 

What's it worth to you to be able to transfer the company RRSP to your personal RRSP when leaving the company where you can use those funds at any time?
The DB pension funds in my LIRA came from pensions that set age 55 as the earliest retirement date so I can only manage the investments for this first pension for twenty two years and sixteen years respectively. After that, I can think about withdrawing/unlocking - though it has grown too large to deal with in a year or two.

What's it worth to have your RRSP contribution reduced dollar for dollar instead of a $2.2 reduction for each $1 contributed to the DB pension?

*Edit:*
The $1:1$ versus $2.2:$1 reduction of earned RRSP contribution room is for a DC pension versus a DB pension. Since you are in an RRSP, I'd have to dig around to be sure but it is more likely zero reduction versus a $2.2:$1 reduction for the DB pension.




james4beach said:


> ... This amounts to about $5 K per year; that's the entire value of the benefit.


I doubt it ... like the DB pension CV, there's growth as well. Plus as the other factors mentioned above.




james4beach said:


> ... Correct me if I'm wrong but I thought typical DB benefits, even if you switch jobs, works out to a larger benefit.


Say I told you neighbour A contributed 2% of salary to their DB pension while neighbour B contributed 10.8% to their RRSP so that with growth, neighbour B had more.
Would you then say the RRSP has a larger benefit that should be sought out when changing jobs?

Literally, at one company I worked for, those hired one month after me were in the DC pension (1% of salary from employer + 1% of salary from employer) while I was in the grandfathered DB pension (5.4% of salary from employee + 5.4% 0f salary from employer) so the difference in rates is real world.


It is not as simple as "the proceeds from one is bigger so that the benefit is better".


Cheers


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## Eclectic12 (Oct 20, 2010)

AltaRed said:


> Not necessarily. DB commuted values, and/or transfer values in the lucky instance of portability, may not be worth much. What is worth a lot in DB plans is years of service, and how that compounds in the latter part of one's career ...


True.

The DB pension plan details as they vary plan to plan also matters. I was happy to find out that I had the option to transfer my CV to the new employer's DB pension to buy extra credits. This wasn't an option at the previous employer that had a DB pension. 

I was less excited to find out that the entire CV from years in the old DB pension was going to buy all of four months credit in the new DB pension.


Cheers


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## AltaRed (Jun 8, 2009)

Indeed. With portability of some plans, it often takes a long time for the 2 pension plans to sort out 'transfer value', all of it complicated by contributory rates, actuarial factors, interest rates, etc.


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## Eclectic12 (Oct 20, 2010)

The receiving DB pension had a calculator so that part about it being four months of credit took all of ten minutes or so. Getting the CV from the sending DB pension took something like three or four months, as I recall.


Cheers


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## Mulak (Feb 7, 2017)

Just a Guy said:


> You once asked why I thought the property wouldn’t cash flow, when you say it does. Maybe post some numbers and we’lagh out loud see if you’re right or if you are deceiving yourself from the true numbers.


tenant paying 1375/month...mortgage, property tax, maintenance fee add up like $40 over

she is also the previous owner's tenant as well.. she is like 60 years old flight attendant and not even there half the time because of her job which probably also help to keep the maintenance fee low because I have one of the lowest fees in the building which is $421 where most units like mine got fee at high $400-mid $500 / month

I was expecting to rent out for a couple years and I will move in because I thought I would be able to improve my salary to be comfortable paying it... I want to increase my rent but my parent is arguing with me to not increase the rent because it could make the tenant leave and the tenant keep the place nice and clean surprisely since sometime we hear a few stories of tenants just trashing the place or not being on their best behaviour 

currently in my building 1+1 bed condos rent out $1800/month... I found out through my buddy instagram's story that he rented a 1 bed condo in my building for $1700


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## Just a Guy (Mar 27, 2012)

Did you factor in the money for the downpayment or is that just dead money insurance for the bank? For example, your place is worth 100k, you put down 20% so barely cash flows at 80k, but if you ran the numbers at 100k you lose even more money. If the place was vacant, you also lose more money. Basic maintenance and repairs, more money. You still need to budget in things like roof, doors, windows, heating systems, etc.

I think, you’ll find that the place doesn’t cash flow a bit worse than you think.


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## Longtimeago (Aug 8, 2018)

Did any of you talking about DB plans see the OP Mulak asking about them? If not, just why are you going on and on and on about them? 

Mulak, how long has the rent been $1375? Is there a Rental Agreement and if so, what does it say about rent increases? As for your parent arguing against an increase, ask how easy they think it will be for the tenant to find a new place if your rent is that much lower than comparable properties and why the tenant would want the hassle of having to move again. There are always 2 sides to everything. 

If I were a tenant, I would not want to pay more rent but I would be smart enough to know that it can't stay the same forever either. So a REASONABLE increase would not be enough to make me move.


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## Mulak (Feb 7, 2017)

Just a Guy said:


> Did you factor in the money for the downpayment or is that just dead money insurance for the bank? For example, your place is worth 100k, you put down 20% so barely cash flows at 80k, but if you ran the numbers at 100k you lose even more money. If the place was vacant, you also lose more money. Basic maintenance and repairs, more money. You still need to budget in things like roof, doors, windows, heating systems, etc.
> 
> I think, you’ll find that the place doesn’t cash flow a bit worse than you think.


no I didn't factor in the down payment, I just want to the mortgage, fee and property tax covered... I wasn't planning to rent out the condo for this long, just couple years and I move in.

I was betting on equity build up because I knew when the house boom started, it will too expensive for people to afford houses and shift their focus on condos which cause the prices to go up as well. Then I was planning to sell the condo and use the profit to put a big down payment on a town/house

I bought the condo 3.5 years ago for 285k and it now worth 380-400k



Longtimeago said:


> Did any of you talking about DB plans see the OP Mulak asking about them? If not, just why are you going on and on and on about them?
> 
> Mulak, how long has the rent been $1375? Is there a Rental Agreement and if so, what does it say about rent increases? As for your parent arguing against an increase, ask how easy they think it will be for the tenant to find a new place if your rent is that much lower than comparable properties and why the tenant would want the hassle of having to move again. There are always 2 sides to everything.
> 
> If I were a tenant, I would not want to pay more rent but I would be smart enough to know that it can't stay the same forever either. So a REASONABLE increase would not be enough to make me move.


it been $1375 since I bought the condo and rent it out to the tenant for 3.5 years. it was a year rental agreement and month to month after that.. I will have to check on the agreement on rental increases 

haha I will tell my parents that ... thanks


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## Rusty O'Toole (Feb 1, 2012)

If you are in Ontario you should always take the legal rent increase every year, for several reasons. The amount is so low no tenant will leave because of it. Especially as the rent will continue to fall behind market rent a little every year. If you check, you will probably find similar units are renting for hundreds of dollars more than yours, and you can never catch up as long as that tenant is in place, and you can't evict without cause, and losing money is not a cause.


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## Mulak (Feb 7, 2017)

Rusty O'Toole said:


> If you are in Ontario you should always take the legal rent increase every year, for several reasons. The amount is so low no tenant will leave because of it. Especially as the rent will continue to fall behind market rent a little every year. If you check, you will probably find similar units are renting for hundreds of dollars more than yours, and you can never catch up as long as that tenant is in place, and you can't evict without cause, and losing money is not a cause.


the condo is in Oakville, Ontario.. it only a 10 years old building

how much do you think I should increase to? $1400?


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## Just a Guy (Mar 27, 2012)

Ontario has very strict regulations on what you can and can’t do. I suggest you do some reading.


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## AltaRed (Jun 8, 2009)

Mulak, Rusty raised the flags.... Why are you asking how much? YOU need to find out for yourself what the legal limitations are. Did you not know this before you became a landlord?


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## Mulak (Feb 7, 2017)

AltaRed said:


> Mulak, Rusty raised the flags.... Why are you asking how much? YOU need to find out for yourself what the legal limitations are. Did you not know this before you became a landlord?


i'm asking if $1400 wouldn't make the tenant leave, $1400 is the max i can go without getting the tenant board involve ... the limit increase is 1.8% which is basically $25 increase


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## Rusty O'Toole (Feb 1, 2012)

Nobody is going to move for a $25 increase. Especially when they look around and see how much similar places are going for. Check some ads and find out how cheap your rent is. If you send out a notice every year, the tenant comes to expect it. Even WITH the legal annual increase you will find yourself falling behind market rent. At the moment I am renting a 5 bedroom 2 bath house for $1300 a month, that I could easily get $1800 for if the tenant moved out. But they are never going to move, why should they? They have been in the house 10 years. Not that I mind, they pay promptly every month and keep the place nice and clean. The point is, 1) Nobody is going to move house for $25 not even $25 a month. 2) You are going to wind up behind the 8 ball anyway, might as well get what you can. Because if you don't ask for the increase this year you can't ask for it next year. The opportunity is gone forever.


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## Mulak (Feb 7, 2017)

Rusty O'Toole said:


> Nobody is going to move for a $25 increase. Especially when they look around and see how much similar places are going for. Check some ads and find out how cheap your rent is. If you send out a notice every year, the tenant comes to expect it. Even WITH the legal annual increase you will find yourself falling behind market rent. At the moment I am renting a 5 bedroom 2 bath house for $1300 a month, that I could easily get $1800 for if the tenant moved out. But they are never going to move, why should they? They have been in the house 10 years. Not that I mind, they pay promptly every month and keep the place nice and clean. The point is, 1) Nobody is going to move house for $25 not even $25 a month. 2) You are going to wind up behind the 8 ball anyway, might as well get what you can. Because if you don't ask for the increase this year you can't ask for it next year. The opportunity is gone forever.


Right I agree with that, too bad tenant doesn't seem she want to leave on her own lol so I can get a new tenant and get $1800 😛... I will look for the form today and start the process

I have a question regarding the TD direct investing ... What is the reason to get unregistered account? ... I get the reason for the TFSA since it tax free, but why get unregistered account dealing with investing?

Is the unregistered account use for buying index, stocks etc and take amount of money I make from unregistered account and transfer to TFSA?

I'm going to start the application process today


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## Just a Guy (Mar 27, 2012)

When you fill up your TFSA, rrsp and other registered accounts going to stop investing more money or use an unregistered account.


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## like_to_retire (Oct 9, 2016)

Mulak said:


> I have a question regarding the TD direct investing ... What is the reason to get unregistered account? ... I get the reason for the TFSA since it tax free, but why get unregistered account dealing with investing?


When an RRSP and TFSA account are full, what else can you do? The upside is that there aren't those pesky restrictions that are associated with registered accounts. The other upside is that you get to deduct capital losses.

ltr


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## AltaRed (Jun 8, 2009)

Mulak said:


> I have a question regarding the TD direct investing ... What is the reason to get unregistered account? ... I get the reason for the TFSA since it tax free, but why get unregistered account dealing with investing?


If you have $10k to invest every year, and you only have $6k of annual TFSA contribution room available, you have to invest in a different account, e.g. RRSP (if you have contribution room), or a non-registered account. Anecdote: My TFSA contribution room is filled and my RRSP contribution room is filled. No choice but to then invest in a non-registered account. Consequently, 90% of my investment portfolio is in non-registered accounts.

Added: LOL... bunch of quick answers.


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## Mulak (Feb 7, 2017)

AltaRed said:


> Mulak said:
> 
> 
> > I have a question regarding the TD direct investing ... What is the reason to get unregistered account? ... I get the reason for the TFSA since it tax free, but why get unregistered account dealing with investing?
> ...


Gotcha 

Is the unregistered account from TDDI... Is that margin and cash accounts?


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## like_to_retire (Oct 9, 2016)

Mulak said:


> Gotcha
> 
> Is the unregistered account from TDDI... Is that margin and cash accounts?


Yes, but you would start with the cash account. I would leave turning it into a margin account for down the road, if ever. I certainly don't have a margin account - not interested.

ltr


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## AltaRed (Jun 8, 2009)

I've never ever been interested in a margin account either.


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## Mulak (Feb 7, 2017)

like_to_retire said:


> Mulak said:
> 
> 
> > Gotcha
> ...





AltaRed said:


> I've never ever been interested in a margin account either.


Alright cool ...good to know

Will start the application soon and get the cash and TFSA accounts from TDDI


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## Just a Guy (Mar 27, 2012)

Nothing wrong with a margin account if used properly. Why not leverage your assets and get them earning for you if it’s a safe investment. I often use my margin account to pay for a new property until I can get a mortgage for it. The. I pay back the margin.


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## AltaRed (Jun 8, 2009)

Most investors should not be using leverage in capital markets. It is how a lot of people get margin calls and get wiped out. There likely would have been margin calls in the Dec 2018 swoon. 

Besides, the brokerage can lend out "your" securities in a margin account. How does one think Questrade can provide commission free ETF purchases, for example?


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## james4beach (Nov 15, 2012)

One advantage of a margin account is that it provides some extra liquidity if needed. The securities account can be used like a secured line of credit where the stocks/ETFs/GICs are collateral. Although I fully pay for all securities and don't borrow or leverage anything, I have margin available. In a pinch, I could borrow $20K cash out of my margin account at 5.5% for a sudden need.

This can be very dangerous if misused, but I do consider it an advantage of the margin account. I should also add that I keep most of my securities in a cash (non-margin) account.

If I _really_ wanted to be leveraged long stocks (I don't), I would probably use a vehicle such as SSO which has done a reasonably good job being leveraged long S&P 500. Note that SSO experienced a 85% to 90% drawdown during the last bear market which tends to cause heart attacks and window-jumping. But at least it survived, which is more than can be said for most leveraged strategies.


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## Mulak (Feb 7, 2017)

good to know... I think I will stick with the cash account for now since I'm new to this... keep it easy for now


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## Eclectic12 (Oct 20, 2010)

Mulak said:


> ... I have a question regarding the TD direct investing ... What is the reason to get unregistered account? ... I get the reason for the TFSA since it tax free, but why get unregistered account dealing with investing?
> 
> Is the unregistered account use for buying index, stocks etc and take amount of money I make from unregistered account and transfer to TFSA?


Maybe something changed in the last two decades or so but when I opened my brokerage RRSP, it came with a non-registered CAD and USD accounts. I don't believe I could open the RRSP without the NR accounts being opened. The TFSA didn't exist then.




like_to_retire said:


> When an RRSP and TFSA account are full, what else can you do? The upside is that there aren't those pesky restrictions that are associated with registered accounts. The other upside is that you get to deduct capital losses.


The down side is having to track taxable income that changes one's cost base that one didn't need to be concerned with in a registered account. As well .... having to pay taxes on income as well as selling. :rolleyes2:




like_to_retire said:


> Yes, but you would start with the cash account. I would leave turning it into a margin account for down the road, if ever.


Hmmm ... I will have to check as I believe my margin account is separate from the cash CAD and USD accounts.

For big margin buys, I have preferred to use my HeLOC that had a lower rate and didn't change the required payments because of volatility in the investments bought.


Cheers


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## Mulak (Feb 7, 2017)

Apparently I do have disability tax credit already

My mother got someone to do both of our income tax form and already claiming it

So I emailed my financial advisor if I have to get a copy of the DTC as proof or just use my sin number

He responded back saying "It should come from the government. I know that to open the RDSP that we need to have proof issued by the government, so if I were you I would request a copy from them"

Is he right or wrong to get a copy of dtc from the government?


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## kcowan (Jul 1, 2010)

I think you need to ask you mom or her financial adviser for the proof. If they cannot provide it then you have not been getting it. Getting it is a non-trivial task. But it is worth doing if you and your doctor believe you qualify.


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## Mulak (Feb 7, 2017)

I went to myCRA registered account and check the 2017 assessment that I have disability credit amount also went to disability tax credit link to check status and it shown I'm eligible to claim disbaility from 2001 to indefinite


Gonna ask my financial advisor if I can just print out those two information and present them as proof for RDSP


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## Mulak (Feb 7, 2017)

Finally got TDDI set up and got the cash, tfsa and rdsp accounts


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