# BMO Bond Fund...?



## Jericho (Dec 23, 2011)

Hello,

I'm new to investing (26 years old) and have a pension plan through work. I am able to work lots of overtime and figured that I should also be investing some of my money instead of spending it all.

I have recently went to the bank (before this site  ) and put a few thousand into mutual funds (BMO Bond Fund).

I'm very new to all of this and have read about GIC laddering, mutuals, ETF's etc... but should I be going about things in a different way? Basically I'm comfortable with moderate risk/return and want my money invested for the long haul. I am eligible to retire with a full pension at age 49 but would like to have a decent investment portfolio by the time I'm at age 40. I chose the BMO Bond fund since it appears to have been on the steady incline since it's inception about 20 years ago. 

Anyone else have experience with the BMO Bond Fund? Any other tips or pointers as to how I should go about my goals?


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## Spudd (Oct 11, 2011)

The MER (management fee) on the bond fund is probably higher than on a similar bond ETF. But it really depends on how often/much you'll be investing which will be the better choice. If you'll be investing a bit at a time frequently, the mutual fund would be better since an ETF costs a commission fee every time you buy it.


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## doctrine (Sep 30, 2011)

The BMO bond fund has a mix of Canadian corporate and government bonds at varying durations and has a MER of 1.53%. Given that most of their bonds are yielding 3-5%, you lose a huge portion of the returns, although historically the bond fund has performed well as interest rates have come down. That being said, even if you're investing with small amounts, there are a number of online discount brokerages that offer access to ETFs commission-free that are similar to the BMO fund but with MERs of 0.3% to 0.5%. Or you could get the TD bond fund through their e-series at a similarly low MER.


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## fatcat (Nov 11, 2009)

at 26 you should have your money in small cap growth stocks ...

you are way too young to be putting the bulk of your money in bond funds

at 26 i would have zero in a bond fund

something like XIC or XCS would be a much smarter way to go

calculate how much money you will be paying in fees with an mer of 1.53 over the next 23 years (until age 49)

lets say you stay with bond funds (i would *not recommend* staying with a bond fund) let's compare bmo 1.53 mer with phn340 mer of .58 and you starting with 10K and contribute 5K each year .. at the end of 25 years you will have paid 38K in commisions for the bmo fund and only 16K commisions for the phn 

paying an mer of 1.53 over your time horizon is insanity

you need to go here: http://www.canadiancapitalist.com/ and do some reading


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## londoncalling (Sep 17, 2011)

fatcat said:


> at 26 you should have your money in small cap growth stocks ...
> 
> you are way too young to be putting the bulk of your money in bond funds
> 
> ...


I also would not hold bonds at that age. However, if you are comfortable with bonds from a risk tolerance perspective than good for you. However, the losses due to MER over the next 25 years will most likely take 60%+ of your meager returns. At current rates between inflation and MER you would end up losing in the long run. I would choose a low fee etf as well. It will really make a difference with that type of time horizon. If you have a little more risk tolerance perhaps you could select some corporate bonds. However, due to the info in your post I find this highly unlikely.


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## Jericho (Dec 23, 2011)

fatcat said:


> at 26 you should have your money in small cap growth stocks ...
> 
> you are way too young to be putting the bulk of your money in bond funds
> 
> ...


With the money locked into an rrsp through BMO, am I able to take it out and put it somewhere that's more appropriate ? I'm new to this and really appreciate the feedback. Where should I go from here?


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## Jericho (Dec 23, 2011)

I am glad to know this early on, thank you! The money is currently under an RRSP with BMO... I'm new to all of this. What exactly should I have money put into and how do I / where do I go about doing it? 

I understand each situation depends on the person, their funds and goals and am certainily grateful that I have stumbled upon this website.


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## Sampson (Apr 3, 2009)

fatcat said:


> at 26 you should have your money in small cap growth stocks ...


I fully disagree with this.

Holding bonds in one's portfolio functions to stabilize the portfolio by diversification. If one is 'all-in' to small cap and growth stocks, how would one take advantage of buying opportunities like those experienced in 08/09?

Just look at the returns on different asset classes the past few years. Bonds have been doing very well, yielding returns greater than many stock indicies in 2 of the past 3 years.


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## fatcat (Nov 11, 2009)

Sampson said:


> I fully disagree with this.
> 
> Holding bonds in one's portfolio functions to stabilize the portfolio by diversification. If one is 'all-in' to small cap and growth stocks, how would one take advantage of buying opportunities like those experienced in 08/09?
> 
> Just look at the returns on different asset classes the past few years. Bonds have been doing very well, yielding returns greater than many stock indicies in 2 of the past 3 years.


 well, yes, perhaps we are entering a period where bonds will outperform stocks over the next 25 years but i don't think so ... i agree that one should have bonds for diversification in the portfolio but i think that at jericho's age, he has a much better chance of growing a portfolio by buying small companies that are inventing new products and services ... i could be wrong but history has so far proven that when the bulls run, you want to be in small cap stocks and i do think the bulls will run again sometime in the next 25 years  ... i guess the old formula of 1% per year of age might apply which means he should have 26% of his money in a bond fund but that's about it i should think ... maybe a better thing to do is hold 50% in stocks and 50% in cash to look for buying opportunities over the next year


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## Jericho (Dec 23, 2011)

Maybe I should just think simple and stick to GIC's ? Every site I visit, every advisor I speak with all have different answers. I guess there's no real 'right' answer to investing right? I just want to see my money grow but I don't mind if it isn't by a huge percentage... I would rather have my principal amount and some gains, than risk losing it all or having great gains.


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## Sampson (Apr 3, 2009)

But even this does not relate to the benefits of diversification.

I don't disagree about 'stocks for the long run', however, one doesn't have to hold the bond position for as long as the equity position.

If OP is all in, and the opportunity of a lifetime comes up and he has no money? It doesn't matter if small caps outperform bonds over the long-run, dampening volatility over the short to medium term - this can provide stable capital to find opportunities as they arise.

In 2008/09, someone 100% in equities would have seen a >40% decline in their portfolio. Someone with a bond position could have not only had a smaller drop in their portfolio value, but as the portfolio began to be heavily weighted in bonds, they could have sold the bonds and bought into equity positions at a 'price of a lifetime'.

Bonds, cash, real estate, precious metals, and other non-equity asset classes play a huge role whether you are 26, or 2 years from retirement.

I don't believe any research has ever shown that a portfolio comprised of 100% small caps has a very good risk-reward profile. Picking small caps is difficult - for every 10-bagger, you are bound to invest in a handful of companies that become worthless.


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## fatcat (Nov 11, 2009)

Sampson said:


> But even this does not relate to the benefits of diversification.
> 
> I don't disagree about 'stocks for the long run', however, one doesn't have to hold the bond position for as long as the equity position.
> 
> ...


fair enough, let me try again, at his age i don't think it is wise to have everything in a bond fund, i would say more like 15% would be a better idea and the rest in large caps, small caps, and real estate and some metals ... second, i would only say that he should buy low-cost etf's and not do any stock picking 

take any 26 year old who has a fistful of money and asks "where do i put it, bond funds or small-cap stock etf's and the answer should be "neither but if you have to pick one go with a small-cap growth etf"

we are at the bottom in bonds ... long term value has nowhere to go but down

small-cap stocks might not have bottomed but they present a better 25 year time horizon opportunity imo

ps. maybe large-cap stocks are a better place because in a world where governments start to default, it might be better to own coca-cola and johnson and johnson ...


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## doctrine (Sep 30, 2011)

There's something to be said about a starting investor investing conservatively. If you're in your 20's, you have a lot to learn about investing. Start conservatively in your diversification, 50% stocks/fixed income, or maybe even 25% stocks 75% fixed income. Far better to stay invested with conservative returns than to enter the market in the highest risk categories, lose 50% of everything in the first year because, say, you started investing in 2007/early 2008, get discouraged, sell everything, and then give your money to an advisor or leave it under the mattress.


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## Jericho (Dec 23, 2011)

So doing a GIC ladder with some mutuals should be okay for now? I know it's wise to have non RRSP investments, however I have about 10k that I can contribute this year. Should I keep up with and be on the ball when it comes to RRSP contributions? My goal is to have retirement funds and for sure it would allow me to not pay in / receive a refund this tax season...


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## Jericho (Dec 23, 2011)

TD has mutuals with much lower MER... hmm.


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## Sampson (Apr 3, 2009)

The e-series is IMHO the best around, almost as good as the lowest cost ETFs (from Vanguard etc.), and excellent for those early in their investing career since there are no transaction fees.


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## uptoolate (Oct 9, 2011)

Agree on TD e-series funds as being great when you are starting out with small amounts and then moving over to ETFs as amounts get bigger. I think many here would encourage you to look at the Canadian Couch Potato site for its many insights and great organization. 

Modern portfolio theory suggests that it is all about asset allocation. If you already have a pension (good for you) then it is probably already investing relatively conservatively and this allows you to be a little heavier on the equity side outside the pension. Your HR department should be able to tell you how your pension funds are invested.

At your age, as far as bonds or equities, most would likely say go heavier on equities. As far as equities go, French and Fama (and excellent research) suggest that going with small cap and value stocks will get you slightly greater returns. Overall though, adding in other equities with lower volatility and fixed income assets will markedly decrease volatility and not reduce returns by that much. Next is to keep expenses to an absolute minimum and that is why you will see simple index ETFs advocated or the e-series mutual funds for those with smaller amounts to invest. Again, this is well outlined at the Couch Potato site. 

Good luck.


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## Jericho (Dec 23, 2011)

Understood... I went to the BMO site to see if there were any penalties for jumping out of the Bond Fund but couldn't find any. I'm sure there are probably early penalties... perhaps I will call them. In the meantime I'm going to head to TD tomorrow to discuss ETFs and low MER funds.... So glad to have others' input as I don't want to mess up when I'm young. 

I'll also find out where my pension is being invested... I pay almost 1000 a month and my employer matches it. Worst case scenario, I can retire at 49 with my full pension however I would love to have enough so that I'm debt free in my late 30's and have a sizable chunk into my own retirement savings


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## Jericho (Dec 23, 2011)

And so I went to TD today and the guy really said that I should have my money into the TD Monthly Income Fund... even though it's MER is similar to the BMO Bond Fund, he said that the Monthly Income Fund has very good returns after MER is paid.


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## fatcat (Nov 11, 2009)

Jericho said:


> And so I went to TD today and the guy really said that I should have my money into the TD Monthly Income Fund... even though it's MER is similar to the BMO Bond Fund, he said that the Monthly Income Fund has very good returns after MER is paid.


 but you DONT NEED monthly income ... you have monthly income (you have so much extra monthly income that you need to invest it, how could he ever have given you the idea that you need a monthly income fund ?) ... you need long term gains ... they are 2 completely different investing approaches ... you cannot have both monthly income and long term appreciation ... monthly income funds are for seniors like me ... either you misstated what you want or you got handed a plate of bs by the td guy ... there is no way in [email protected]#$ you should be paying that kind of mer over the next 25 years

why not stick with a mix of low-cost td e-series ?

like canada equities, us equities, international equities and some smaller amount of bonds

you should be able to get a simple portfolio that will cost you like .50 mer and you can add to it for no cost whenever you like

make your own decision ... i am not offering investment advice ... i am old and slow and dull-witted ... so, take that into account


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## Homerhomer (Oct 18, 2010)

Jericho said:


> With the money locked into an rrsp through BMO, am I able to take it out and put it somewhere that's more appropriate ??


You need to find out yourself what you can and can't do in your plan, just contact the plan administrator or adviser and they will tell you what you can or can't do.

My questions would be: are you limited to mutual funds? can you purchase etf or shares, if yes what are the transaction costs? can you move your rrsp elswhere?

Bond fund imo is a complete waste of your money, fees eat up half of your income so what's the point.

If you want to have more input into your investments I would strongly suggest reading about various investment strategies, dividend growth investing is my favourite (dividendgrowth.ca for example), but they are plenty others like couch patatoe, you just need to find one (or combination of few) that works for you.

ps, I guess I am not sure if your are asking about locked in rrsp with your employer or your personal rrsp, either way find out exactly what you have, can or can't do learn as much as you can and go from there. If you are asking for advise you will always get conflicting opinions, you will have to make up your mind on what's best for you, poeple in the industry usually do what's the best for them (which is taking money from you)


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## KaeJS (Sep 28, 2010)

fatcat said:


> but you DONT NEED monthly income ... you have monthly income (you have so much extra monthly income that you need to invest it, how could he ever have given you the idea that you need a monthly income fund ?) ... you need long term gains ... they are 2 completely different investing approaches ... you cannot have both monthly income and long term appreciation ... monthly income funds are for seniors like me ...


Are you sure you know what you're saying?

I disagree about everything you've said in regards to small caps. This guy should not be investing in small caps - regardless of the return. His investor profile says he won't sleep at night, so you are giving the guy poor advice from a financial advising perspective. This is exactly why the advisor at TD recommended the monthly income fund. And in my personal opinion (coming from someone who trades margin and 3x leveraged ETF's) small caps are a joke. Like someone else said, for every 10 bagger, you get 10 worthless companies. Small caps are joke stocks for the most part and they require lots of research.

I am *21 years old* and have my TFSA invested fully in the TD Monthly Income Fund. I purchased it less than two years ago and turned my $15k into $16,048 and have more units, as I have obviously reinvested all of the distributions. Do I need monthly income? No. But I *NEED* to take advantage of compounding. Sure, my gain is only about 7% over the time period, which is not stellar, but then again the market hasn't been all that stellar over the time period, either. I use my TFSA as my "safe money" and trade my own stocks in a separate portfolio.

The bond fund is not risky enough for Jericho, small caps are too risky for Jericho, and the TD Monthly Income Fund would actually probably quite decent for Jericho as a starting point to investing, even with the MER. Nobody is saying he is going to stay in the TD monthly income fund for the next 25 years. He is starting out. He will learn. Right now he needs a place to park his cash relatively safely, but not as "safe" as a bond fund, which is almost as useless as small caps when 100% invested.

What he really should be doing is picking dividend paying stocks that are large caps, but he doesnt yet have the knowledge or the risk tolerance for this. He can do this later when he learns more.

*Jericho,* forget the RRSP. Do you have a TFSA maxed out yet? If you don't, you should do this first. Throw $20,000 into a TD Monthly Income Fund within a TFSA and reinvest the distributions. This will net you $48.72/month approximately, and if you reinvest it will get you around 3 new units or shares per month. Then just sit back and watch it grow. Forget about the MER (for now). It wont kill you to pay a 1.5% MER for a year or two.

The TD Monthly Income Fund consists of bonds and stocks, so you get the best of both worlds. Plus, as you are 26, you get to take advantage of compounding which is very important. There will always be opportunities to make capital gains, but you can't make up lost time for compounding.

Remember - making money in markets is more about mitigating your RISK, than it is to HIT IT BIG. The sooner you learn this, the better you will be.

If you want to check out my spreadsheet below, there is a small table there that shows my position in the TD Monthly Income fund.

And as far as your BMO Bond Fund goes, I work for BMO. I believe there is a 2% early redemption fee if you withdraw your funds within 30 days. Just a heads up. With that being said, DO NOT withdraw until after 30 days.


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## fatcat (Nov 11, 2009)

> Are you sure you know what you're saying?


no, i don't ... i can't predict the future ... half the time, i just make **** up to amuse myself ... nevertheless

1) i only recommend etf's and not stock picking ... picking small cap stocks requires a time and energy investment that he doesn't want to make, so i would recommend a small cap low-cost etf fund like XCS or vanguard in the states ... however, if you read my previous posts i said that a more balanced portfolio would be a better idea

2) if you look at the performance of small caps in bull markets, they out-perform every other category and we are going to get another bull-market here someday

3) you can't have it all - income funds give income not growth and vice versa .... this guy has all the income he needs, he has so much income that he needs to find a way to invest it ... why would you want to sacrfice growth for income that you don't need ?

4) this guy doesn't even know where to put his money and you think he is going to sit down and do the reading required to stock-pick good dividend payers ? ... he doesn't appear to have the slightest interest in doing so ... something like CDZ would be a much better choice ... but even that over a 25 year time horizon makes little sense

5) maybe go with plain old XIU which has the advantage of low cost and some good dividend stocks

i just see no rationale whatsoever for this guy investing the td monthly income fund at any mer let alone 1.48 or the BMO Fund at 1.53 neither option makes any sense

reasonable people disagree and i will now let them have the last word as i slip out the side door ... happy new year


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## KaeJS (Sep 28, 2010)

2) I don't disagree with this. But this is irrelevant. The OP is not going to invest in small caps. It does _not_ fit his investor profile. This argument is null and void.

3) You _can_ have income and growth. The growth may just not _always_ be as extravagant as a pure growth play, it doesn't mean it is non-existent.

4) You didn't read what I said. You just agreed with me that he is not going to stock pick dividend payers. I said he can do this later once he learns. 

You see no rationale for Jericho investing in this fund because you aren't looking at his investor profile. You are seeing what you would do in his shoes with your current knowledge. 

Reasonable people don't "bank" on small caps. 

Happy new year.


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## OhGreatGuru (May 24, 2009)

Jericho said:


> With the money locked into an rrsp through BMO, am I able to take it out and put it somewhere that's more appropriate ? ...


So that there is no misunderstanding:

You shouldn't "take it out". That would be treated as an RRSP withdrawal, on which you would be taxed, and you would lose the RRSP room permanently.

Inside the current RRSP you can move the money to any of BMO's mutual funds or GIC products;
If you want to invest in different instruments, open an RRSP at a different institution and ask them to transfer the assets in your BMO RRSP to the new one. This will be handled by the institution, and will not be considered an RRSP withdrawal by CRA.

As for your asset allocation, a bond fund is probably too conservative for someone your age with a good pension plan. You should be vested more in equities. Do some reading on investing for beginners.

Suggested Readings:

Mutual Funds for Canadians for Dummies, 2nd ed. Andrew Bell. Pub. 2002. The specific fund references are getting dated because of the way markets have changed radically since 2001, but still an excellent introduction to what mutual funds are all about. Good common sense advice for the average investor

Personal Finance for Canadians for Dummies, 4th ed. (2006) Eric Tyson & Tony Martin

Investing for Canadians for Dummies, 3rd ed. Eric Tyson & Tony Martin
For the more advanced investor, but has a chapter on mutual funds.

Stock Investing for Canadians for Dummies. Andrew Dagys & Paul Mladjenovic

Money Management for Canadians All-in-One Desk Reference for Dummies, 2nd Ed. Andrew Bell, Andrew Dagys & Paul Mladjenovic; Tony Inannou w. Heather Ball; Margaret Kerr & JoAnn Kurtz; John Lawrence Reynolds; Kathleen Sindell. I haven’t read this one, seems to be a compilation of material from some of the other books.


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## Jericho (Dec 23, 2011)

OhGreatGuru said:


> So that there is no misunderstanding:
> 
> You shouldn't "take it out". That would be treated as an RRSP withdrawal, on which you would be taxed, and you would lose the RRSP room permanently.
> 
> ...


I have purchased the Money Management for Canadians for Dummies and it's very informative. KaeJS hit the nail on the head for me at this point... as I know Jack about investing and very little about money management (other than how not to have a poor credit rating), I would like to see my money initially grow just a little bit until I learn how things work. Then, I might be a little more willing to get involved with increased risk.

I used to be one of the masses who thought 'work, get paid, pay bills and if anything's left, let's go spend it' type. Then my wife got pregnant and I started to look at the future... putting money away for future college/university, purchasing a larger home down the road etc... At my age, I do want to take advantage of compounding and I do want to learn how to manage my money to make it work for me. It's not that I'm not interested in stocks, but I don't feel comfortable throwing my money at them yet.

I will wait until 30 days to withdraw the money from the bond fund and have it sit in the monthly income fund. In the mean time, I can earn at least an extra $500 a month in my pocket through optional work with some months yielding +1000-2000$. I plan on working at least optional jobs for the next 6 months to help get an early boost on my investments. 

I do not have any money in a TFSA as people have been telling me to max out my RRSP contributions first and I have about 10k left to invest. Perhaps I should diversify a little and have some funds under a TFSA.

Thanks to all so far for helping guide me, my family and I thank you


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## KaeJS (Sep 28, 2010)

Jericho said:


> I do not have any money in a TFSA as people have been telling me to max out my RRSP contributions first and I have about 10k left to invest. Perhaps I should diversify a little and have some funds under a TFSA.


Jericho, this is backwards.

You always want to max out a TFSA before an RRSP unless you are making the most money you will ever make in your life.

If you are making $100k/year now, but will only make $50k/year in the future, then you want to put it all into an RRSP. If this is not the case, then you want to do TFSA first. I would highly recommend you leave your RRSP alone for now until your TFSA has been maxed out.

A TFSA is never taxed. A RRSP is. With that being said, wouldn't it make more sense to watch your compounding grow and know that you don't need to pay tax when you withdraw, as opposed to watching your money compound and paying more tax in the future?

TFSA > RRSP.


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## humble_pie (Jun 7, 2009)

jericho it's nice to see what a perfect sense you have of feathering your nest slowly but surely. Plus not letting yourself get sidelined by one or another magpie fluttering & clucking at you to do this, buy that.

here you have received a wonderful reading list from OGGuru. Plus - even more wonderful - you've begun to read it. This may seem like dull & boring preparation, but learning in the beginning imho will pay off far more over a lifetime than ever will plunging prematurely into one or another kind of stock or bond fund or etf.

some of the anti-bond arguments, ie 1) you're too young, 2) bonds are at historic highs, have nowhere to go but down, 3) your pension may be akin to a bond fund if it's the guaranteed kind, so you don't need any more bonds in private life, actually do make sense.

however you have plenty of time to think about all of this & obviously the will power to slog through the learning process so as to arrive at the right answers for yourself & your new family.

perhaps you could offer yourself a year to read & think, before you make any major changes.

swapping a bond fund for another bank's monthly income fund is not really a major change imho, so ok to do pronto, if you go for the idea.

however dumping a bond fund to immediately buy a small cap fund would be diving off a cliff for one just beginning to invest, as you are. You might eventually decide, as your studies progress, that an equity exposure of some type will suit your lifetime plans very nicely. But there's plenty of time for this decision.

there's only one thing i don't quite agree with & that's the way you are leapfrogging over a tfsa. For several reasons, i think tfsa investment plans are a priceless priority.

what produces a particular urgency to build one up, even at a very young age, is the fact that the federal government might stop them or reduce them drastically. If that were to happen, it would be reasonable to expect that existing plans will be grandfathered, at least to the dollar amount accumulated. That's why i think it's important for young investors in their 20s to concentrate on their tfsas first, especially since their salaries are often so low that they don't particularly need their rrsps to reduce taxes.


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## Homerhomer (Oct 18, 2010)

humble_pie said:


> That's why i think it's important for young investors in their 20s to concentrate on their tfsas first, especially since their salaries are often so low that they don't particularly need their rrsps to reduce taxes.


One caveat would be home buyers plan, imo for any young individual or a couple it is important to take advantage of this plan if they intend to be home owners, have enough in the rrsp to reach the max allowed for withdrawal and then take care of tfsa. If one is to qualify for a mortgage they will most likely get some tax break, even if they are in the lower or mid income tier.


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## Jericho (Dec 23, 2011)

I leapfrogged the TFSA because someone at BMO told me that the interest rates for that account is very low. I didn't realize it was a plan like an RRSP... I thought it was an actual type of savings account.

These forums have taught me an ocean of information so far and I am so fortunate to be here. I will start opening a TFSA first thing when I'm off work.

I have made some booboos in my past (small credit card debt, buying 2 new vehicles on the same day, etc)... and once I realized it was very hard keeping up with the paymetns, I looked to other sources to try to remedy the situation. The first thing I realized was my attitude. Now that I have that changed, everything seems to be a learning phase. Once I am comfortable with investing in risky areas, I will do so. I just feel a little reluctant to put thousands into something that someone else says is ok right now as I am not sure how everything works and would hate to lose my money.

I'm sure once I understand how things work, I may move to more risky areas but the TD Monthly Income Fund seems okay for the first year or so until I get my ducks in a row (and more cash built up). When I think of anything now, I think of ways I can save money (couponing, carpooling, buying a cheaper model/version, etc).

For once, I am so excited even though I have some bills to pay off. I have never felt excited about money before because I've always been the type to work, get paid, pay bills and spend the rest.


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## KaeJS (Sep 28, 2010)

Jericho,

Were you able to get a TFSA set up like you said you were going to?

Another thing you may wish to consider, if you will be playing with mutual funds in your TFSA, is splitting your investments across different risk tolerances. This will help you get a feel for the market, but more importantly for yourself as an investor and how your emotions deal with volatility.

Example, you may want to try throwing $1000 at a very risky, aggressive growth fund with no income whatsoever. At least you know your investment loss is very limited (more than likely, the most you would lose is $750, assuming all the markets go to crap). This will give you a feel for risk, while also giving you the _potential_ to earn a high reward.

This is what I did when I started investing. I carried one fund from each "class". I had a money market, an income fund, a balanced fund, a growth fund, an international fund and I also picked an Energy fund for a sector.

I wouldn't necessarily recommend doing what I did and picking that many funds, especially the individual sectors, but as I said, it may be of interest to you to split up some of your money between different funds. Diversify a little, so to speak, within your TFSA.

Remember, you will be able to transfer units between funds at any time within your TFSA without "withdrawing" these funds, and it is free to do so (after 30 days, of course).

Just something to think about. Ultimately, it's up to you.

Glad to see you are getting excited about money. The more it excites you, the easier it will be to save it.


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## Jericho (Dec 23, 2011)

I have a day off tomorrow so I'll go set one up and I've already got some cash set aside to dump into it. It is amazing how I have managed to change how I view life, money, spending, etc. Everyone is frustrated with me because it's all I can talk about now...but I don't care. When I go to retire, I'll be sitting pretty, debt free and living it up!


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