# New Member - Is my portfolio ready for my retirment



## Tayls77 (Dec 10, 2019)

Hello all, I am looking for some input and suggestions.
Background, I am considering early retirement in the very near future. I have bought market exempt products myself previously and left most my RRSP’s with an investment advisor, but I have never invested in the market myself. Due to the recent sale of my business I have additional funds to invest.
Current investments – Divided somewhat equally between my spouse and myself
Three private REITS (Res, Comm, Retail) $ 520,000 – Avg annual Yield $33,000 – total return 12% (some in RRSP, Some TFSA, majority taxable)
Two commercial rental properties $ 475,000 – Annual Yield $34,000 
ME loans - $300,000 – Annual interest $27,000 (100k each invested in 1,2 and 3 yr notes that I can roll over)
RRSP’s with IA - $475,000 5 yr average return 4%
Cash in various high interest accounts – $1,300,000
Income requirements - I will require $125,000 annually pre-tax increasing with inflation
We are 9 years away from CPP/OAS
Questions –
1)	I need to top up our RRSP’s this year due to tax liabilities from the sale – between us we have room of $288k, would you invest with the Investment advisor or directly and if so in what?
2)	Would you leave the remaining 1 million in cash with the indications of an upcoming market correction or would you still enter the market now?
3)	I need the RRSP’s and my current cash to be relatively safe as I am well aware my market exempt investments are on the riskier side.
4)	My current strategy is to draw from cash to top up the income I receive from my first three investments, then when the market corrects Invest $300k in Canadian dividend stocks (TD, GWO, FTS and T.TO) and keep the remainder in Cash/GIC’s. I would have to draw down on cash to the tune of 15k a year until I hit 65, plus I expect about 150k in one-time expenses for vehicles/renovations and a few special trips lowering my cash to 400K by age 65. This would leave my RRSP’s growing untouched until we turn 65. The cash and loan portion (700k)of my portfolio will have been devalued by inflation, but the remaining portfolio should keep pace and then at 65 I add about 30k in annual CPP/OAS benefits between my spouse and I
I welcome your thoughts and appreciate any feedback, before leaving the workforce I am trying to assure myself we are in a good spot.


----------



## Longtimeago (Aug 8, 2018)

There are two things to consider when looking at early retirement. One is the financial side and I would say it looks like you have a decent grasp of that. Specifics of how any individual vs. another decides to manage that vary by individual and only the individual can assess the risks/rewards as they perceive them from their perspective. In other words, what works for me may not work for you and vice versa. So I see no point in suggesting anything to someone who appears to know what they are doing (as you appear to). It is only when someone does NOT appear to know what they are doing that some general advice might make sense in my opinion.

The second thing to consider when looking at early retirement and 'am I ready for retirement' is that it is not about whether your portfolio is ready for retirement it is about whether YOU are ready for retirement. Your portfolio as outlined is fine, but what is it that you really want to know? I suggest that really you are now at the FEAR stage of pulling the plug. No amount of assurance as to you having enough money will solve that. Many people could happily retire on the income you now have without having to draw from capital at all. 

I am never in favour of drawing down capital but that is my personal belief. I believe in living on the income I have, not the income I would like to have. I believe in working on a Rule of 3s formula of living expenses, discretionary spending and savings with 1/3 being allocated to each. A more common formula many follow is 50/30/20%. It's just a question of what you put first, spending what you want to or spending within what you have. https://www.investopedia.com/ask/answers/022916/what-502030-budget-rule.asp

Since I retired in my early 40s, I did not see how anyone could try to anticipate change over the likely number of decades I could still expect to live. So I saw my 'retirement' as having to be no different than the time during which I worked for a living. It is not a question of retiring and then waiting to die and hoping you will die before your money runs out is it? Why then should we stop planning on living? If we plan to go on living then does it not make sense that we continue to save money for some totally unexpected change that may happen 30 years from now? Drawing down capital never makes any sense to me since I see it as planning to die before the money runs out and heaven help you if you don't. But that's a separate subject so back to your situation.

To put it simply, you have enough money, now you just have to decide to pull the plug and that isn't about the money, it is about taking that next step. I like to use the analogy of a trapeze artist. When a trapeze artist has to transfer from one trapeze to another, the two trapezes do not necessarily meet in the middle. There is still a distance between them and sometimes that distance is greater than can be reached without FIRST letting go of the trapeze you have hold of in order to reach the other trapeze. It requires a 'leap of faith'. I'm sure it's scary every time a trapeze artist has to do it. But it has to be done or you will never reach that other trapeze. 

You may well get responses telling you, 'I would change this or that' and going into all kinds of detail on investments which quite a few regular posters here love to do but NONE of them will answer the real question, only you can answer that. Whenever I read a thread where someone is basically asking, 'do I have enough, will my plan work', what I really read is 'I'm afraid to let go because I might fall.' Well, you might but there is only one way to find out.


----------



## Tayls77 (Dec 10, 2019)

Longtimeago, Hmm, nail on the head and all that, yes it is difficult to know if today is the day. The fear, and it is real, is really financial. I have worked since I was a kid, never had a single day out of work. Never paid any head to my "money', just made more and put it away. So the thoughts of leaving the work force and the ability to cover any mistakes with a few more paychecks is indeed scary.
Like many entrepreneurs I knew my business inside out, unfortunately I never spent time understanding financial markets hence some of the questions. I do look foreword to other replies as I have several ideas but am not sure of their validity and if I can learn from someone else's victories or failures then good for me.

I do appreciate your reply, and you are correct it is more of a leap of faith then a simple step. I also agree I really hate the idea of touching principle.


----------



## habsfan59 (Oct 23, 2012)

Good day Tayls77, from where I am sitting your portfolio looks very good....! I cannot provide any "investment strategy" as I am only a regular investor and do not feel that I know enough to do so. 

Having said that, I feel that your question should be "AM I READY FOR RETIREMENT?" We (spouse and I) retired at 55yrs old almost 5 years ago. It was explained to me that retirement (for illustration) was like a tabletop sitting on four legs (Retirement Pillars). As long as the legs/pillars are present and robust, retirement will be an easy new life. The pillars are as follow (in no specific order):

#1 Financial: (which you have pretty much under control) Public Pension, Private Pension, Investment etc....
#2 Social Environment: Friends, Family, Co-Workers etccc
#3 Health: Mental and Physical 
#4 Goals/Objectives: Hobby, Travel, Volunteer, Etc... (Anything that puts a smile in your face)

As you can see, if those four pillars are present in your life, then retirement should be easy for you and your partner. Obviously, if one pillar is not present that doesn't mean that you cannot retire, but it may not be as easy.

Note: After five years into retirement, I can say that we are doing things that we like (Travelling, Volunteering, even Babysitting..LOL, etc...) but the "Decumulation" of our portfolio is something that we found harder to master than anticipated. Having been frugal for most of our life, it is hard to splurge into "luxury"...!

Hope you have a nice retirement.

Keep us appraise of your journey.

Cheers.


----------



## AltaRed (Jun 8, 2009)

habsfan59 said:


> Note: After five years into retirement, I can say that we are doing things that we like (Travelling, Volunteering, even Babysitting..LOL, etc...) but the "Decumulation" of our portfolio is something that we found harder to master than anticipated. Having been frugal for most of our life, it is hard to splurge into "luxury"...!


That is a hard one for many. Took a number of years, about 5, before I was willing to let spending creep up too much. But if the portfolio keeps growing, then it truly is time to look at oneself in the mirror and figure out a way to do something about it, even it it is giving money away to family or charity. Our spending (over 13 years into retirement) is now about triple what it was the first few years into retirement. Too much residual does very little good when one is lying prone in a casket.


----------



## Tayls77 (Dec 10, 2019)

Thanks Habsfan59, I think 2-4 are ready, at least I think so. I also think item 1 is okay but have this nagging doubt. I think my lack of investing experience is what causes my concern and frankly for the fees I pay my Advisor he doesn't add to my comfort. 
I do look forward to having time to learn more about investing.
Glad to hear you have enjoyed your first five years, your schedule sounds like the exact one i am looking forward to, including babysitting the grandbabies.


----------



## Longtimeago (Aug 8, 2018)

Tayls77 said:


> Longtimeago, Hmm, nail on the head and all that, yes it is difficult to know if today is the day. The fear, and it is real, is really financial. I have worked since I was a kid, never had a single day out of work. Never paid any head to my "money', just made more and put it away. So the thoughts of leaving the work force and the ability to cover any mistakes with a few more paychecks is indeed scary.
> Like many entrepreneurs I knew my business inside out, unfortunately I never spent time understanding financial markets hence some of the questions. I do look foreword to other replies as I have several ideas but am not sure of their validity and if I can learn from someone else's victories or failures then good for me.
> 
> I do appreciate your reply, and you are correct it is more of a leap of faith then a simple step. I also agree I really hate the idea of touching principle.


I would suggest to you that the 'fear' is NOT financial. Fear is a feeling, which means it is NOT from any kind of rational, analytical look at your financial position. I would suggest to you that no amount of assurances as to your finances will put even a tiny dent in that fear. It simply isn't rational.

Let me give you another analogy to consider. When I was younger, I used to go climbing. With ropes, etc. on rock cliff faces. Anyone who does any climbing knows that if you are doing it properly, if you fall, the rope will save you. Anyone who climbs also knows you WILL fall sometimes. It just goes with the territory and that's why you use ropes to save your butt when the inevitable happens. Anyone who climbs also knows that there comes a split second in time when you KNOW you are about to fall. At that point in time FEAR is very real indeed. Even though you know intellectually that the rope is going to save you, the fear is still there and the fear is not just of falling, it is of DYING. There is nothing anyone can fear that is worse than death itself. Ever climber experiences it.

From my experience in climbing and the fear it can generate, I used to (don't really need to any more) ask myself one simple question when having difficulty making a decision. 'If I do this and it doesn't go as expected, will it KILL me?' If the answer to that is no, it isn't likely to literally kill me, then just how big a decision is it really?

If you were a climber and came to that split second in time before you fell and I were to say to you, 'make this decision this instant and you will NOT fall.' Believe me there is no decision you could not make without hesitation. Get married, buy a house, change jobs, retire, etc. None of them have the same potential downside to them as falling off a cliff face. So what if a marriage doesn't work out or a house turns out to be a disastrous money pit, none of that will KILL you. It might not make you happy but you will move on and do what you have to do. 

When I 'retired' 30 years ago, I said to myself, 'worst case, I have enough money to live on for a decade or more if I had to. Beyond that, who knows what will happen and what will change. But I believe that I will adapt to whatever comes along when it does.' There are no guarantees in life no matter what we do. And here I am, 30 years later, still managing to live quite comfortably. My good and bad financial decisions during that time haven't managed to result in my death yet.


----------



## Tayls77 (Dec 10, 2019)

AltaRed said:


> That is a hard one for many. Took a number of years, about 5, before I was willing to let spending creep up too much. But if the portfolio keeps growing, then it truly is time to look at oneself in the mirror and figure out a way to do something about it, even it it is giving money away to family or charity. Our spending (over 13 years into retirement) is now about triple what it was the first few years into retirement. Too much residual does very little good when one is lying prone in a casket.


AltaRed, I would love to be in the position to give away more money, fear of not being able to help family is one of the largest things holding me back from retiring. Saying that I have lost 2 employees and several friends to cancer over the past few years and wonder why I am still working.


----------



## AltaRed (Jun 8, 2009)

Tayls77 said:


> AltaRed, I would love to be in the position to give away more money, fear of not being able to help family is one of the largest things holding me back from retiring. Saying that I have lost 2 employees and several friends to cancer over the past few years and wonder why I am still working.


I think you actually have to be experiencing retirement for a number of years to be able to see the perspective from that side of the fence. Until then, it is just a concept. It obviously also depends on the amount of resources one has. If the stash (investable assets) is not growing, that is one thing, but if it is still growing, that is a bit of an oxymoron. That insight will come when it comes.


----------



## Mechanic (Oct 29, 2013)

Tayls77, I was in the same boat as you when I was 55. Took about 2 years for me to actually get "all in" with retirement, convince myself we had "enough", educate myself enough to get started and start DIY investing to preserve capital. Hit a few pitfalls along the way but now, at 63 I realize it was the best move. It is just so difficult to actually decide to stop working and enjoy life, and nobody knows how long we will be given. My schedule filled up so fast, doing things we enjoy doing and I realize how consumed I was with my business. One of my friends has been considering stopping work (professional) for the last 5 years, has substantially more investments but just cannot get comfortable with the idea of not working. He just told me "next year" again, haha. Good luck on your journey.


----------



## Longtimeago (Aug 8, 2018)

AltaRed said:


> I think you actually have to be experiencing retirement for a number of years to be able to see the perspective from that side of the fence. Until then, it is just a concept. It obviously also depends on the amount of resources one has. If the stash (investable assets) is not growing, that is one thing, but if it is still growing, that is a bit of an oxymoron. That insight will come when it comes.


Years ago when my wife was expressing concerns (fears) over her upcoming retirement, it was my brother who said to her, 'you can't see there from here.' It can be difficult for people to understand that concept.

Yet again, Tayls77 is expressing a most probably irrational fear based on no empirical evidence that would suggest otherwise. Tayls77, do you have any family members who now has and who you know will have in the future, the need for help from you financially? Again, I will suggest that FEAR is an emotion and it has nothing to do with your financial situation. 

Let's suppose we take your 'fear' of not being able to help as if it were a real thing. How MUCH money would you then want to have sitting in a separate account just waiting to be used to help them? $100k, $1 million? If it is a real thing, then come up with a real answer if you can. I would suggest that you can't in fact do so. 

Consider Steve McQueen. What does he have to do with you I hear you asking. Well when he was dying of cancer, he tried every cure known to man including 'quack' cures before he died in a clinic in Juarez, Mexico. Now suppose he was a member of your family and he asked you for help in paying for his treatments. Let's further suppose you had a net worth of $5 million. How much of it would you give up if you thought it might save him? $1 million before you said, 'no, I can't give you any more?' Two million, three or all five? 

If looked at rationally, 'one of your largest fears', the fear of 'not being able to help' simply becomes ludicrious. We all want to help when and if we can but we all have to decide when we can help and how MUCH help we can give. If I were to think of the possibility of my brother developing cancer and needing $1 million to find a cure, I could not find that money to give him. Should I agonize over that and go back to work to get that money just in CASE he needs it? Would that be rational behaviour?

Nope, sorry Tayls77, your 'fear' is NOT a reason to not retire, that's irrational. Your problem as Mechanic has now added is simple. _"It is just so difficult to actually decide to stop working and enjoy life"_. It's simple but it isn't EASY. There is a difference of course.

Consider this hypothesis, I notice in re-reading your list of assets, you have not mentioned a home. Do you rent? Or did you just forget to list a home you own and that is mortgage free? It makes a difference. I would expect you have a mortgage free home currently. I see that you appear to live in London, Ontario. The average current home price in London is $416,000 and rising at 11-12% from last year.

The average home price in Chatham, Ontario to your west is $260k and rising at 18% year from last year. See where I am going? In retirement, you can live wherever you choose to, you are not tied to HAVING to live somewhere for work. So in theory at least, you could sell in London, buy the equivalent home in Chatham and probably release $200k to help family in need. 

I know I am simplifying it but I'm sure you can get the picture. What you might decide to do tomorrow will depend entirely on the circumstances you face tomorrow. You can't see there from here remember. If someone needed help you would simply find a way to give it if you could. All the London/Chatham example does is show one simple way of doing it. You might not want to move but you would do what you had to do if you had to do so.

Don't try to guess and plan for all eventualities that can occur in the future, it can't be done. The only question to answer is can I retire TODAY under today's circumstances, yes or no?


----------



## Tayls77 (Dec 10, 2019)

Thanks for all the perspectives. You gave me a push in the right direction. I advised everyone I was reducing my workweek to 3 days today. Thanks for all the input everyone.


----------



## Longtimeago (Aug 8, 2018)

Tayls77 said:


> Thanks for all the perspectives. You gave me a push in the right direction. I advised everyone I was reducing my workweek to 3 days today. Thanks for all the input everyone.


That's a start, congrats. Some people are more comfortable with a 'staged' retirement. A waste of 3 perfectly good days in my own opinion but what the heck, I'm biased. :tongue:


----------



## james4beach (Nov 15, 2012)

Tayls77 said:


> 2)	Would you leave the remaining 1 million in cash with the indications of an upcoming market correction or would you still enter the market now?
> 3)	I need the RRSP’s and my current cash to be relatively safe as I am well aware my market exempt investments are on the riskier side.


These are classic problems. I think you need to decide on an asset allocation that is conservative enough for your tastes so that you aren't trying to time market corrections. It's just about impossible to time the market like this. Maybe you'll decide you need an allocation such as 90% fixed income 10% stocks. Just trying to make a dramatic example; my point is that at some level of risk, you will be comfortable and should no longer have to think about what the market is going to do next.

Many kinds of assets create returns over the long term. Stocks, bonds, GICs are all assets which will have returns. Cash is the one asset which does not have any returns.

There are also varieties of bonds such as XSH which have short terms. They still provide good returns but if you really need to access the money, you can sell XSH as you wish. The returns of XSH will be similar to GICs.

So I absolutely would not sit on $1 million cash trying to wait for a market correction. Instead, I suggest deciding on an asset allocation you like, and then sticking with the plan. If you fear losses, then use the cash to build up a 5 year GIC ladder. Current GIC rates are well over 2% and you can spread the cash among several issuers, keeping all of it CDIC insured (by government). That is absolutely a better idea than having $1 million cash sitting around.


----------



## james4beach (Nov 15, 2012)

An additional thought. I couldn't quite understand the whole scenario but it sounds like you're getting your risk and high returns in private REITs and various property related investments.

It sounds like you want to keep your other liquid wealth (currently in cash) very safe. For this, I would _not_ go to an advisor. Advisors will almost always push you into stocks and things, which it sounds like you may not want to get into.

Perhaps as a starting point you should open a discount brokerage account and start investing that cash into GICs and short term bonds. Personally I like Scotia iTrade for their GIC offering. As mentioned above you can use GICs to get CDIC insured returns over 2%. Other amounts can be put into the XSH fund, which has similar returns but is liquid (can be sold any time).

There is no harm in starting out very safe. Over time you may find that you want to put some money into stocks as well, but I think your immediate priority is getting a higher return than cash (nil). Also, I don't know where you keep $1 million cash, but CDIC only covers up to 100K per institution. The rest is not insured by the government.


----------



## Tayls77 (Dec 10, 2019)

Mechanic said:


> Tayls77, I was in the same boat as you when I was 55. Took about 2 years for me to actually get "all in" with retirement, convince myself we had "enough", educate myself enough to get started and start DIY investing to preserve capital. Hit a few pitfalls along the way but now, at 63 I realize it was the best move. It is just so difficult to actually decide to stop working and enjoy life, and nobody knows how long we will be given. My schedule filled up so fast, doing things we enjoy doing and I realize how consumed I was with my business. One of my friends has been considering stopping work (professional) for the last 5 years, has substantially more investments but just cannot get comfortable with the idea of not working. He just told me "next year" again, haha. Good luck on your journey.


I truly do appreciate all the input, I don't have any retired friends yet so this perspective helps.


----------



## Tayls77 (Dec 10, 2019)

Longtimeago said:


> That's a start, congrats. Some people are more comfortable with a 'staged' retirement. A waste of 3 perfectly good days in my own opinion but what the heck, I'm biased. :tongue:


I hope to feel the same way as you soon


----------



## Tayls77 (Dec 10, 2019)

james4beach said:


> An additional thought. I couldn't quite understand the whole scenario but it sounds like you're getting your risk and high returns in private REITs and various property related investments.
> 
> It sounds like you want to keep your other liquid wealth (currently in cash) very safe. For this, I would _not_ go to an advisor. Advisors will almost always push you into stocks and things, which it sounds like you may not want to get into.
> 
> ...


Thanks james4beach, I will look into XSH and I-trades today. I bank with Scotia now so that should be easy. My cash is in a 6 month teaser at a credit union so I am getting 3% but it ends this month. If you purchase GIC's through I-Trades is there a fee, and don't you run into the same 100K insurance issue?


----------



## AltaRed (Jun 8, 2009)

Tayls77 said:


> Thanks james4beach, I will look into XSH and I-trades today. I bank with Scotia now so that should be easy. My cash is in a 6 month teaser at a credit union so I am getting 3% but it ends this month. If you purchase GIC's through I-Trades is there a fee, and don't you run into the same 100K insurance issue?


GIC commission is buried into the GIC rate, and yes, GIC rates at all discount brokerages are less most of the time than one can get at the online banking retail level (online banks or trusts or credit unions). For example, an Oaken GIC purchased directly from Oaken Financial carries a higher interest rate than the equivalent Home Trust GIC at a discount broker (same company). And yes, you still have to watch the $100k CDIC limit by issuer, although in the case of Home Trust/Oaken, they are separate CDIC members and so you can load up $100k at each. You can look up the CDIC membership list on your own.


----------



## james4beach (Nov 15, 2012)

Tayls77 said:


> Thanks james4beach, I will look into XSH and I-trades today. I bank with Scotia now so that should be easy. My cash is in a 6 month teaser at a credit union so I am getting 3% but it ends this month. If you purchase GIC's through I-Trades is there a fee, and don't you run into the same 100K insurance issue?


Excellent that you're already with Scotia, that should make it easier. Check their web site for promotions and ask if they would give you a $100 incentive to bring new money into iTrade.

You might want to still keep some amount of cash at credit unions or high interest savings accounts elsewhere. This is what I do as well. For example, 200K cash at a credit union and 800K into iTrade.

There are fees for GICs but they are baked into the price/yield so whatever interest rate you see is what you get, and there are no additional fees beyond that. The great thing about a discount brokerage like iTrade is that many GIC issuers are available, so you can spread the deposits over each and get 100K CDIC coverage with each one. An example, using 800K

100K at 2.13% in Montreal Trust Co of Canada, 1 year
100K at 2.18% in National Trust Co, 2 years
100K at 2.24% in Concentra Bank, 3 years
100K at 2.20% in Scotia Mortgage Corp, 4 years
100K at 2.36% in Royal Bank of Canada, 5 years
100K at 2.37% in Bank of Nova Scotia, 5 years
100K at 2.37% in ADS Canadian Bank, 5 years
100K at 2.40% in Canadian Western Bank, 5 years
-----------------------------------------
Total 800K fully CDIC insured. Actual issuer names at iTrade and actual rates.

That's just a rough example of a GIC ladder but you'd want to build that more carefully and stagger the maturities more. Takes some time to build up a ladder. You'll see that rates are not necessarily higher than a credit union savings accounts, which is a reason why you'd probably want to still keep some cash at the credit union.

But the above is very safe as all those deposits are government backed through CDIC. This is stronger safety than credit union deposit insurance, which is provincial.

Separate from my GICs, I also keep a healthy amount of cash with Outlook Financial at 2.40%. Note that if interest rates decline further (which they might) the 5 year GICs are a benefit.

Both GICs and XSH can be held at iTrade. But note that for non-registered, XSH is less tax efficient than GICs. You may still decide it's worth it for the liquidity.


----------



## Tayls77 (Dec 10, 2019)

james4beach said:


> Excellent that you're already with Scotia, that should make it easier. Check their web site for promotions and ask if they would give you a $100 incentive to bring new money into iTrade.
> 
> You might want to still keep some amount of cash at credit unions or high interest savings accounts elsewhere. This is what I do as well. For example, 200K cash at a credit union and 800K into iTrade.
> 
> ...


Thanks for the hint about asking for the $100 and examples. Lots to think about and decide here shortly.


----------



## AltaRed (Jun 8, 2009)

If you are truly interested in Scotia iTRade discount brokerage, as compared to its competitors out there, it would behoove you to spend some time at https://www.scotiaitrade.com/en/direct-investing-and-online-trading/why-scotia-itrade.html to become familiar with types of accounts, commission & fee schedule, account fees, etc. iTRade is competitive with the other major brokerages but if you want to have a more rigorous look, you can compare with MoneySense and Rob Carrrick reviews of the discount brokerages.

Added: It seems to me you may ultimately have a pretty large brokerage account. iTRade should be willing to provide some financial incentive to get your business if you indicate the approximate value.


----------



## Tayls77 (Dec 10, 2019)

AltaRed said:


> If you are truly interested in Scotia iTRade discount brokerage, as compared to its competitors out there, it would behoove you to spend some time at https://www.scotiaitrade.com/en/direct-investing-and-online-trading/why-scotia-itrade.html to become familiar with types of accounts, commission & fee schedule, account fees, etc. iTRade is competitive with the other major brokerages but if you want to have a more rigorous look, you can compare with MoneySense and Rob Carrrick reviews of the discount brokerages.
> 
> Added: It seems to me you may ultimately have a pretty large brokerage account. iTRade should be willing to provide some financial incentive to get your business if you indicate the approximate value.


I Opened a practice account and purchased TD, GWO, FTS, XBAL and a five year GIC-ladder. Seemed pretty simple although it doesn't show the fees. I wonder if they will show once the practice trades occur? Comparing XBAL to my existing RRSP managed portfolio, XBAL outperformed it by between .5 and 1% depending on the term, so I am considering moving it all over to XBAL. I am going to reach out to TD to see what they are able to do regarding the fees etc. Sounds like you are familiar with I-Trade, do the dividend checks come through them and is there a fee at each distribution? 
I really do appreciate all the help, my wife was commenting on how helpful everyone is and then stated "I expect you will be able to do the same for someone else down the line once I understand more".


----------



## Tayls77 (Dec 10, 2019)

To each of you that has been so gracious with your time answering my questions - A HUGE THANK YOU!!


----------



## AltaRed (Jun 8, 2009)

Commission fees for stock trades are $9.99 to buy or sell. Not sure how realistic practice accounts are, but they should show that commission on top of the actual price you paid for each of the trades. There are no other fees for GICs or mutual funds.

The primary rationale for Scotia iTRade is that you will see all your banking and investment accounts on Scotia's home page, whereas if you go to another brokerage like TD Direct Investing, you will have to make arrangements to move funds by EFT method. Hint: Moving funds from a bank account to a brokerage account can be done by setting up a Bill Payee for that brokerage account from your bank account. I don't know how you would move funds out of TD Direct Investing back to another institution's (like Scotia) bank account. Caution about TDDI: As I understand it, you cannot yet purchase GICs online. You have to phone in the order to a rep.


----------



## james4beach (Nov 15, 2012)

My recent GIC purchasing experience at TDDI wasn't so great
https://www.canadianmoneyforum.com/showthread.php/139626-Beware-of-GIC-orders-at-TDDI


----------



## Mechanic (Oct 29, 2013)

I opened a couple of accounts with EQ and have been getting 2.3% in a HISA, one each for the wife and I. Everyone says they could cut the rate but they haven't in the 3 years since I opened them. There have also been a couple of 3-3.3% 90 day GIC's along the way. The nice thing is the cash is always readily available so its like an emergency fund that also generates over $5k year. I also just opened another with 3.3% at B2B. I'm not a big fan of tying up money in GIC's at today's lousy rates, especially when I can get 2.3 -3.3% in a HISA with no restrictions.


----------



## james4beach (Nov 15, 2012)

Mechanic said:


> I'm not a big fan of tying up money in GIC's at today's lousy rates, especially when I can get 2.3 -3.3% in a HISA with no restrictions.


The rates could get a lot lousier than they are now. Canada has some of the highest interest rates of any developed country today. Imagine the Bank of Canada cuts rates by another 0.5% to 1.0%.

I recently bought a 20K GIC at 2.37%


----------



## AltaRed (Jun 8, 2009)

Mechanic said:


> I opened a couple of accounts with EQ and have been getting 2.3% in a HISA, one each for the wife and I. Everyone says they could cut the rate but they haven't in the 3 years since I opened them. There have also been a couple of 3-3.3% 90 day GIC's along the way. The nice thing is the cash is always readily available so its like an emergency fund that also generates over $5k year. I also just opened another with 3.3% at B2B. I'm not a big fan of tying up money in GIC's at today's lousy rates, especially when I can get 2.3 -3.3% in a HISA with no restrictions.


You have been around here long enough to know those rates could easily drop 25-75 bp if BoC reduces short term interest rates. Sure, rates have held for 3 years and they probably should given 3 plus years of BoC rate increases https://tradingeconomics.com/canada/interest-rate Easy to gloat? be cocky? By all means go for it, but how sure are you that we won't see 2 years of decreases coming along, as early as Spring 2020 when the economy stalls? Of course when they do, you are too late to the game to lock in a reasonable 5 year GIC rate that exists today.

FWIW, I also have an EQ Bank account and grab their short term GIC offers as well, but a larger proportion of my fixed income is in a 5 year bond/GIC ladder as it should be. I only gamble in Vegas.


----------



## Tayls77 (Dec 10, 2019)

Hadn't really thought about the fact rates could decrease and the 5yr GIC hedging against that: as i was getting more in HIS I thought it made sense for the cash to be there. Kinda dumb it hadn't occurred to me, grew up in the days of 12-14% and struggle imagining the rates can go lower yet. So much to learn! I am running various simulations now as I plan on where to relocate everything in January. Again thanks for all the great info.


----------



## james4beach (Nov 15, 2012)

Tayls77 said:


> Hadn't really thought about the fact rates could decrease and the 5yr GIC hedging against that: as i was getting more in HIS I thought it made sense for the cash to be there. Kinda dumb it hadn't occurred to me, grew up in the days of 12-14% and struggle imagining the rates can go lower yet. So much to learn! I am running various simulations now as I plan on where to relocate everything in January. Again thanks for all the great info.


One thing I've struggled with through all my years of investing is reconciling the short term or immediate situations against the long term tendencies or averages. I still struggle with it!

For example, in the immediate situation, high interest cash earns more than GICs and bonds. However the long term average is (virtually guaranteed) that bonds and 5 year GICs outperform cash. Therefore, you should bet on the latter because that's usually the way things go. It's not feasible to keep jumping around in reaction to the market.

Similarly, with stocks. The stock indexes are at all time highs and it feels too high to buy stocks. In the immediate situation, that's tough to buy. However the long term average tendency is of course for stocks to rise.

For example, CNBC this moment runs this news item: "according to UBS, half of all S&P 500 stocks are technically over-valued" -- obviously that pushes people into short term thinking.

In both these situations, generally a person loses out on performance by responding to the immediate situations. It's definitely counterintuitive and one might even feel stupid doing this, but sticking to the long term tendencies really does work out better.


----------



## Tayls77 (Dec 10, 2019)

james4beach said:


> One thing I've struggled with through all my years of investing is reconciling the short term or immediate situations against the long term tendencies or averages. I still struggle with it!
> 
> For example, in the immediate situation, high interest cash earns more than GICs and bonds. However the long term average is (virtually guaranteed) that bonds and 5 year GICs outperform cash. Therefore, you should bet on the latter because that's usually the way things go. It's not feasible to keep jumping around in reaction to the market.
> 
> ...


I agree, counter intuitive but I plan on jumping in come January either way. I may hedge my bets on the stocks and buy 50% in January and then plan bi-monthly purchases until the remaining 50% is bought over the following 12 months. The GIC's made perfect sense as soon as I read it!


----------



## Longtimeago (Aug 8, 2018)

james4beach said:


> One thing I've struggled with through all my years of investing is reconciling the short term or immediate situations against the long term tendencies or averages. I still struggle with it!
> 
> For example, in the immediate situation, high interest cash earns more than GICs and bonds. However the long term average is (virtually guaranteed) that bonds and 5 year GICs outperform cash. Therefore, you should bet on the latter because that's usually the way things go. It's not feasible to keep jumping around in reaction to the market.
> 
> ...


LOL, it's called greed james4beach and everyone has to deal with it, it's normal human behaviour. I get a bit of a laugh when I read a comment by someone in their 30s writing about 'all my years of investing'. You're just a tyro yet james4beach. Wait till you've been doing it for 50 years and you still struggle to reconcile a short term return vs. a long term safer bet. 

I think where most people get it wrong and you are right to warn of is when they are 'chasing things'. Generally, that happens when as you say they are reacting to immediate situations like the CNBC news item you quote. 

However, if you read a news item that said, 'the aging Baby Boomer generation is projected to result in a 100% increase in the sale of mobility scooters in the next decade', you might think about investing in mobility scooters, based on that news item. That isn't likely to change over the short term at all.

As a Baby Boomer not yet ready for a mobility scooter I do have to say that looking down the road and if I ever needed one, here is a model I could get excited about.
https://www.daymak.com/boomerbeast-2-news.html Look at the tires on that beast, go anywhere. Kinda like the SUV of mobility scooters. Now if someone said, 'wanna invest $50k in our company?' I might be tempted with that one.

https://www.marketwatch.com/press-r...to-exhibit-us-1070-million-by-2024-2019-05-23


----------



## Eclectic12 (Oct 20, 2010)

Tayls77 said:


> Hadn't really thought about the fact rates could decrease and the 5yr GIC hedging against that ...


This suggests the basics are lakcing ... the GIC guaranteed rate versus deposit rates that float around has been around a long time with minimal changes. It's also part of the beginner's introduction to what types of investments are out there.


Cheers


----------



## Tayls77 (Dec 10, 2019)

Eclectic12 said:


> This suggests the basics are lakcing ... the GIC guaranteed rate versus deposit rates that float around has been around a long time with minimal changes. It's also part of the beginner's introduction to what types of investments are out there.
> 
> 
> Cheers


It is true, my investing until now has been, pay off my home, pay off my rentals, steadily contribute to my managed RRSP's and build the business. My business income has more than sustained me and while I should have, I didn't pay much attention to my investments. Hence my sudden and intense interest I almost everything on this and other sites. Luckily I am a relatively quick learner LOL
Sold the business now I need to make that money work.


----------



## Tayls77 (Dec 10, 2019)

Update - I have a bit of down time and thought I would post an update on our first four months of retirement.
1) To all of you that said take the retirement plunge, you could not have been more correct. 4-1/2 months in I wonder why I waited this long.
2) Our spending (less planned for one time expenses) has been much lower than when I was working, our income is 1/3 but our spending has fallen to 30 percent less than I had planned on, once you deduct the taxes and savings I no longer have to pay we are spending about 45% of our pre-retirement spend. 
3) Invested my new RRSP money in MAW104 and been very happy, haven't moved my managed RRSP money yet but I am planning to as it just hasn't performed will for the 2% fees.
4) Opened a Scotia on-line investing account and have been able to make some great dividend paying stock buys, to say my timing was lucky would be a huge understatement.
5) With the reduced spending we are living easily on the returns from less than half of our savings which gives us a great safety cushion.

Now we spend our time going for a morning walk, then a quick swim, do some renovation work on the house, watch BNN at lunch and have the afternoon free 

So I can easily say retiring at 56 was a great move for us, I was concerned about it as I was making the decision but have no regrets at all now. In fact I was offered a very good consulting job last week and said no thanks!

Cheers,


----------



## Longtimeago (Aug 8, 2018)

Why do you swim 'quick' Tayls77? You gotta learn to slow down. 

When I first started living on a Greek island, I used to go to my local kafenion (coffee shop) in the morning and have a coffee. I spent perhaps 15 minutes on that. The locals probably got a good laugh watching me. Gradually as time went on, I discovered that it actually takes a couple of hours to have a cup of coffee and join in the discussions of how to solve all the world's problems.

So, just for fun, let's see how many Retirement 101 lessons you have learned so far.

Rule 1. There is no RUSH to do anything anymore.
Rule 2. Never go to the supermarket on a weekend when all the working class have to go.
Rule 3. You don't need to shave every day.
Rule 4. You can dress like a bum but if you do your wife may leave you. Appearance does still count.
Rule 5. We all need some structure in life but your 'To Do' list for the day doesn't have to include everything today.
Rule 6. Realize that 'work expands to fill time available'. In other words, all tasks take more time when you have time.

That's a start, how many can you check off already? Perhaps others here will give you some more to think about.


----------



## Tayls77 (Dec 10, 2019)

Longtimeago said:


> Why do you swim 'quick' Tayls77? You gotta learn to slow down.
> 
> When I first started living on a Greek island, I used to go to my local kafenion (coffee shop) in the morning and have a coffee. I spent perhaps 15 minutes on that. The locals probably got a good laugh watching me. Gradually as time went on, I discovered that it actually takes a couple of hours to have a cup of coffee and join in the discussions of how to solve all the world's problems.
> 
> ...


LOL, true, quick was just an old often used term, I am actually covered all 6 to one degree or another. I had a military hair cut for 36 years, haven't cut it since I retired. I once again have "flow". My wife doesn't mind the beach bum look luckily. Other than keeping ahead of some contractors I seldom feel rushed. In fact my body and mind have never felt better. Played golf today and then went for lunch and a beer, use to rush home after the game. I remember reading your posts on retirement and you are so right, it is the best thing ever! Cheers.


----------



## Canadafan (Oct 19, 2014)

Hello Tayls77
My advice FWIW
With one million + in cash/investments you should be with PH & N "wealth mangement", offered through RBC
The fees are all upfront and visible. The funds offred are "zero" based mangement fees.
The more you have the less % of fees, but for a milllion or so, would be about 1.1% annual.
Most importantly , they will spnd the time upfront to analyze your situation.Listen to your goals, risk level, and expected returns.
Then, set out a complete cash-flow/RRSP/RRIF/CPP/OAS draw-down model.

That function alone can save people thousands in taxes & lost income.

Can you do better on your own? Unless you are market savy, and have a handle on the global economies, past present & future ..not even close.
RBC Investments manages many billions of $$ Globally and have the best economists, stock pickers etc etc in the world working for them.
Give them a shout, worst case you dont like what you hear and move on.
I have been with RBC/PH & N for 6 years. We set up a meduim balanced portfolio. with a target of 5.9% ( after fees), annualized.
Even after the recent Covid crash, and recovery , we are sitting at 5.8%, annualized over the 6 years.
Back to my point: You need to look broader at your whole finanical picture & best use of assests for your long, years ahead.
The retirement question you have already answered.
Not to promote only RBC: CIBC and Scotia also offer what is known as "wealth mangment" functions.
Minium buy-in is one million, which you have. Average client base is $3 million in investable assets.

For me? Just like you I worked my whole life to accumulate my $ for retirment> now I want it to be available for me. Not a burden for me.
very happy with having a hands off approach.


----------



## Tayls77 (Dec 10, 2019)

Canadafan said:


> Hello Tayls77
> My advice FWIW
> With one million + in cash/investments you should be with PH & N "wealth mangement", offered through RBC
> The fees are all upfront and visible. The funds offred are "zero" based mangement fees.
> ...


Thanks Canadafan, I am happy to hear you are doing well with RBC Wealth management, I have a friend who's daughter works for them in TO she does VERY well. I am on my second wealth advisor over the past 20 years and while they were/are both nice people, neither are as concerned about my money as I am. My current IA had laid out a complete "plan" for me a few years ago that would have me drawing down from principal. I spent the time to look at alternatives and decided to create and follow my own plan, something I review weekly. I never mind paying anyone, but if I am paying them they better outperform me and so far that has never been the case. The local wealth advisor at my Scotia branch is always after me, but so far I just don't feel the need. I have started buying into MAW104 with my RRSP room and will likely end up transferring the money with my current advisor in there as well. 
I enjoy following the alternative investments I am involved in as well as stock picking so maybe when it becomes a chore I will move back to an advisor. I also keep in touch with some Investment bankers and PE guys I know and look for unusual opportunities. 
The surprising thing I have found is how little we are spending, we are living nicely on the income from our rentals, alternative investments and dividends, so not only are we not drawing down principal, over half of our money is just sitting their growing. Guess my kids will be happy LOL. Now if something happened to me my wife would most definitely need an advisor as she has no interest in learning any of this.


----------



## Canadafan (Oct 19, 2014)

Now if something happened to me my wife would most definitely need an advisor as she has no interest in learning any of this.
That was exactly why I made the move. Previously I did all of the investing. Some good, some bad but over al for my time period a fair return.
However, my wife could care less. So I moved over the 100% mangaged account.
now we both can concentrating of living, spending & enjoying.


----------



## Tayls77 (Dec 10, 2019)

Canadafan said:


> Now if something happened to me my wife would most definitely need an advisor as she has no interest in learning any of this.
> That was exactly why I made the move. Previously I did all of the investing. Some good, some bad but over al for my time period a fair return.
> However, my wife could care less. So I moved over the 100% mangaged account.
> now we both can concentrating of living, spending & enjoying.


Yes I can see doing that down the road, probably once I get bored of doing it myself.


----------



## Longtimeago (Aug 8, 2018)

I sometimes think the word 'retired' should be banned from the English language. It has this 'finished' aspect to it, as if everything after you retire stands still forever while you wait to die.

Life after retirement continues to change just as it did before retirement. The only difference is how you SPEND your time. You have the ability to choose how to spend it far more than you did before.


----------



## Tayls77 (Dec 10, 2019)

Longtimeago said:


> I sometimes think the word 'retired' should be banned from the English language. It has this 'finished' aspect to it, as if everything after you retire stands still forever while you wait to die.
> 
> Life after retirement continues to change just as it did before retirement. The only difference is how you SPEND your time. You have the ability to choose how to spend it far more than you did before.


Agreed 100%, it is just another phase, in fact it should be replaced with "free", so instead of retiring you are becoming free.


----------



## Longtimeago (Aug 8, 2018)

Tayls77 said:


> Agreed 100%, it is just another phase, in fact it should be replaced with "free", so instead of retiring you are becoming free.


I sometimes refer to the 'retired' as the 'leisure class' as opposed to the 'working class.' For some reason those who have to work for a living don't like to hear that. LOL


----------

