# Young couple here: how are we doing?



## Money4life (May 17, 2012)

*His Assets:*

*Bank A:*
_Basic Cheuqing account_: little over $1500
_Mutual Fund TFSA, low fee Canadian Index Fund:_ $12,000
_Mutual Fund TFSA, low fee Canadian Bond Fund:_ $7,400
_Mutual Fund RSP, low fee US Index Fund: _$11,000
_Mutual Fund RSP, low fee International Index Fund:_ $7,400

*Bank B:*
_High Interest Savings Account:_ $35,000 at 1.9% interest.
_High Interest TFSA:_ $2,900 at 3% interest.

*Bank C: *
_No fee Cheuqing Account: _$800

*Work Pension Plan:* $11,000

*Total Assets:* $89,000

*Liabilities:* $0

*Things to do:*
1)	Change little used Bank A Basic cheuqing account over to a Savings account and link it to Mutual Funds accounts.
2)	Not sure what else I should be doing.


*Her Assets:*

*Bank A:*
_Premium Cheuqing Account:_ $12,000
_High Interest Savings Account:_ $33,500 at 1.1%.
_Daily Interest Savings RSP: _$0.01 (not a typo)
_Mutual Fund RSP, Portfolio_, benchmark: 65% DEX Universe Bond Index, 17.5% S&P/TSX Composite Total Return, 17.5% MSCI World Index (C$), MER + TER = 1.82% annual rate; $14,000.
_Global Market Growth GIC RSP_, from Feb 2011 to Feb 2014: $2,000 at unknown interest rate.
_Utilities Market Growth GIC RSP_, from Feb 2001 to Feb 2014: $2,000 at unknown interest rate.
_Financials Market Growth GIC_, from Dec 2010 to Dec 2013: $1,500 at unknown interest rate.
_Utilities Market Growth GIC_, from Dec 2010 to Dec 2013: $1,500 at unknown interest rate.

*Bank B:*
_High Interest Savings Account_: $3,000 at 1.9%
_High Interest TFSA_: $15,000 at 3%.

*Work Pension Plan:* approximately $1000 

*Total Assets*: $85,500

*Liabilities:* $0, however Bank A gave her an unsecured line of credit ($5,000) that she’s never used before. She also has an overdraft limit of $3,500 with her Premium Cheuqing account that she’s never used before.

*Things to do:*
1)	Take $5,000 from Bank A Cheuqing Account and transfer to Bank B High Interest TFSA.
2)	Open up Bank A low fee Mutual Funds and transfer her RSP mutual funds over, possibly the same allocations as what I have.
3)	Possibly terminate Bank A Line of Credit and Overdraft limit (any chance that she is paying for these?)
4)	Change Bank A Premium Cheuqing Account to Basic Cheuqing Account and transfer thousands over to Bank B High Interest Savings Account.
5)	Possibly close Bank A Daily Interest Savings RSP, however I noticed that once her GICs mature, they are transferred over to this RSP savings account. Any chance that she is paying a fee to have this account open?

*Our goals:*
1)	Getting married in May of 2013. Have spent about $4,000 so far, ideal limit is $7,000.
2)	Would like to buy a house within the next two years. Currently living/renting and working in Toronto but might make more sense to buy a house in Hamilton (more bang for your buck and closer to family).
I am 26 years old ($50,000 salary) and she is 24 years old ($37,500 salary).

Is there anything that we should be doing that I haven’t mentioned yet? 
Any advice at all would be greatly appreciated. Thank you so much.


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## Pigzfly (Dec 2, 2010)

Well, you seem to have amassed quite a lot of assets! Well done.
Are you holding all of that cash in HISA because you plan to use it for a house? You seem to have a whole lotta cash!


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## Money4life (May 17, 2012)

Pigzfly said:


> Well, you seem to have amassed quite a lot of assets! Well done.
> Are you holding all of that cash in HISA because you plan to use it for a house? You seem to have a whole lotta cash!


Thanks! Yes, the plan is to save as much as we can in HISA for a house in the short term. I don't think that money should be fluctuating if we plan to use it in the next few years.


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## Pigzfly (Dec 2, 2010)

Sounds solid - I was just checking that it was all earmarked for the house, otherwise I would have suggested moving a bit of it. That should give you a healthy downpayment!

Do your employers contribute to your RRSPs, have matching plans, etc? Are you maximizing your returns from those? Have you considered or investigated using the First Time Homebuyers plan with your RRSPs? I'm not necessarily suggesting that you do, just that you should be aware of all of the possibilities.


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## Young&Ambitious (Aug 11, 2010)

You guys seem to be doing very well considering your young ages and that you are presumably at your early career stages/lower earning potential in comparison to the future. Kudos to you two!

My only question would be you don't seem to know what the MERs are on your mutual funds. I would look into this, look at their historical performance, and question if the return is worth the MERs you are paying.


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## Money4life (May 17, 2012)

Pigzfly said:


> Sounds solid - I was just checking that it was all earmarked for the house, otherwise I would have suggested moving a bit of it. That should give you a healthy downpayment!
> 
> Do your employers contribute to your RRSPs, have matching plans, etc? Are you maximizing your returns from those? Have you considered or investigated using the First Time Homebuyers plan with your RRSPs? I'm not necessarily suggesting that you do, just that you should be aware of all of the possibilities.


Yes, both of our employers contribute to our RRSPs. For me, I have to contribute 5% of my pay in order for them to match 5% (which is what I've been doing) and as for my fiance, her employer contributes 5% regardless if she contributes anything from her pay. Because of this, she hasn't been making any contributions herself but she probably should be contributing at least 1% or something. I think she wants to take home most of her money so she can stuff it in savings accounts for the short term. She does max out her RRSPs every year though with other investments. 

Yes, I've considered the First Time Homebuyers Plan but I'm not sure if I want to be doing that, especially when my RRSPs are tied to long term investments. Using that money in the short term would damage the long term growth of those investments. Also, we wouldn't get any tax deductions once we start re-paying the 25K from each our RRSPs because we're just replacing money that the government let us borrow.

Thanks for the feedback!


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## Money4life (May 17, 2012)

Young&Ambitious said:


> You guys seem to be doing very well considering your young ages and that you are presumably at your early career stages/lower earning potential in comparison to the future. Kudos to you two!
> 
> My only question would be you don't seem to know what the MERs are on your mutual funds. I would look into this, look at their historical performance, and question if the return is worth the MERs you are paying.


Good question! Forgot to include that info.

_Mutual Fund TFSA, low fee Canadian Index Fund: $12,000_...has a MER + TER of 0.34%. Had I invested into this fund 10 years ago, my average return would be at 7.3%
_Mutual Fund TFSA, low fee Canadian Bond Fund: $7,400_...has a MER + TER of 0.55%. Had I invested into this fund 10 years ago, my average return would be at 5.9%
_Mutual Fund RSP, low fee US Index Fund: $11,000_...has a MER + TER of 0.35%. Had I invested into this fund 10 years ago, my average return would be at 4.7%
_Mutual Fund RSP, low fee International Index Fund: $7,400_...has a MER + TER of 0.50%. Had I invested into this fund 10 years ago, my average return would be at 0.8%

All things considered, I'd say these investments are worth the MERs that I'm paying. Thanks for the reply!


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