# Want to adapt the Couch Potato approach but feeling overwhelmed...



## Money4life (May 17, 2012)

Hello there,

I am new to this site so don't be too critical of me if I ask questions that seem fairly obvious to most people! 

I stumbled upon a website earlier in the week letting me know that the mutual funds that I have could be devouring my savings. My investment consultant has always assured me that I've made the best decisions when it came to my funds. But now I'm beginning to realize that the profits that he makes from my investments are more important to him than my long term successes. I'm not saying that he purposely directed me into bad investments but instead, has directed me into investments that have very high fees.

I have three different types of investing with my bank; a TFSA account, an RRSP account and non-registered account. My TFSA account is tied to one mutual fund, my RSP account is tied to five mutual funds and my non-registered account is tied to four mutual funds.

*For my TFSA (which consists of 30% of my total investments) is tied to a single mutual fund account* that has a MER of 1.44% with a trailing commission of 1% but has no TER.

*For my RRSP (which consists of 30% of my total investments) is tied to five mutual funds:*

Mutual fund A (which has 20% of my holdings) has a MER of 1.98% with a trailing commission of 1% but has no TER.

Mutual fund B (which has 18% of my holdings) has a MER of 2.80% with a trailing commission of 1% and has a TER of 0.25%.

Mutual fund C (which has 19% of my holdings) has a MER of 1.46% with a trailing commission of 0.5% but has no TER.

Mutual fund D (which has 20% of my holdings) has a MER of 2.48% with a trailing commission of 1% and has a TER of 0.06%.

Mutual fund E (which has 23% of my holdings) has a MER of 2.75% with a trailing commission of 1% and has a TER of 0.06%.

*For my non-registered accounts (which consists of 40% of my total investments) is tied to four mutual funds:*

Mutual fund A (which has 24% of my holdings) has a MER of 1.08% with a trailing commission of 0.5% but has no TER.

Mutual fund B (which has 20% of my holdings) has a MER of 2.75% with a trailing commission of 1% and has a TER of 0.25%.

Mutual fund C (which has 25% of my holdings) has a MER of 2.75% with a trailing commission of 1% and has a TER of 0.07%.

Mutual fund D (which has 31% of my holdings) has a MER of 1.98% with a trailing commission of 1% and has a TER of 0.02%.

All of the mutual funds that I've mentioned above were all available on a no-load basis. I've been trying to find information about the DSC of these funds but I could not find any. I should also note that my investment firm may charge me a 2% switch fee if I decide to move onto different mutual funds. Over the last two years, I think I've switched around my funds at least 5 times so I'm sure I've been charged fees many times. My advisor has said, "Don't worry about fees...because you will never see them." 

For all of these mutual funds, I currently have pre-authorized purchase plans that puts money into these accounts on a weekly basis. For my TFSA mutual fund, I currently send $96 to this fund on a weekly basis (this reaches $5000 by the end of the year). For my RSP accounts, I send $25 to each of my five funds on a weekly basis (I top it off at the end of the year to reach my RSP contribution limit). For my non-registered accounts, I send $75 to each of my four accounts on a weekly basis. My investment advisor says it's a good idea to be making these frequent purchases on all of these accounts because I am getting the best value doing it that way. I never questioned him because he is the investment advisor but now after reading up on this, I don't think it's such a good idea. According to an article on Squawkfox, selling or buying funds at a rapid pace will cost someone dearly in commissions. With all of these pre-authorized purchase plans that I do, buying into these funds with a small amount of cash will cost me a hefty commission with a humble investment to show for it. Am I understanding this correctly?

When selecting mutual funds, I've always looked at long-term performance. Generally, I would come to my advisor with a list of mutual funds that interested me and we would go over them and see which ones best fit my risk tolerance. Since I'm still young, I've always told him that my focus is long term growth so he suggested that maybe I should go into funds that had a moderate to high risk tolerance. He assured me that putting money into equity, for example, will have a better potential for growth than putting it into bonds. With that said, I do have a pretty diversified portfolio (with 10 mutual funds, I would hope so!) but for the most part, the funds haven't performed as exceptional as I've wanted to. Four of my ten funds are sector funds and I have found them to be the most volatile of them all (they happen to be the ones with the highest MER). Speaking of MER, when selecting funds a while back, I asked what MER meant and my advisor told that these funds are better managed funds and how that should be one of the more important factors when selecting funds. Also, I asked about index funds and he told me right away that I do not want these funds. Since he brushed them off so quickly, I didn't really think of asking more about it. 

This article that I read from Squawkfox led me to the website Couch Potato, which promotes a passive investing approach that has a focus on index mutual funds and exchange traded funds with very small fees. I'm beginning to understand that the less I pay in fees, the more that's left for my funds to grow. This is the approach that want to start trying but I'm feel that I might have to dig myself out of a hole first with all of these funds that I have.

It turns that TD (the bank that I am with) offers a series of index mutual funds that have been recommended by Couch Potato. Today, I was tempted to go to the bank and just switch all of my current funds to index funds but then I thought that it would be best to not panic and instead, gather as much knowledge/information first and then make the necessary changes. In addition, I eventually will want to get ETFs so doing this quick change might not benefit me long term. It appears that it would make most sense to open up an Discount Brokerage account with TD Waterhouse because then I will be able to do a lot more with my money. Also, if I choose to stay with TD, perhaps they wouldn't give me a hard time transferring my money from TD Mutual Funds to TD Waterhouse. Would TD give me a hard time and charge me egregious fees if I wanted to move all of my investing to another company like Questrade?

For fun, let's say if I stayed with TD and opened a Discount Brokerage account with TD Waterhouse. Let's imagine that I transferred my entire RRSP into a new account with TD Waterhouse, would that count as a new contribution into my retirement plan or is it merely a switch? Same question goes to my TFSA as well. As for my current non-registered accounts with TD Mutual Funds (where I have most of my investing), it seems like the only place I would be able to put this money would be into a Direct Trading account. Would I still be able to hold non-registered mutual funds accounts with a Discount Brokerage account or would I have to put this money into exchange-traded funds? I read from Couch Potato that it's smart to invest into ETFs if your portfolio is greater than $50,000. My non-registered accounts alone are not greater than 50K. If it's not smart to put that money into ETFs and if I can't set up non-registered mutual funds with a discount brokerage, should I either: A) Leave the money alone in in my current TD Mutual funds accounts with high fees or B) sell the funds and move them into a saving accounts? Both options that I've provided don't seem like good solutions. If I made some statements in this paragraph that doesn't make the most sense, could someone provide some clarify for me?

On the Couch Potato website, model portfolios have been provided for those who want to adapt their strategy. Option 2 in the Global Couch Potato section seems like a simple starters portfolio that I would be able to obtain. They're the TD e-series index funds that have a 40% focus in Canadian Bonds, a 20% focus on Canadian Equity, 20% focus on US equity and 20% focus on International Equity. Let's pretend that I only switch over my TD Mutual Funds TFSA and RRSP accounts over to TD Waterhouse Discount Brokerage accounts. Should I adapt this strategy for both my TFSA and my RSP accounts? That would be a total of 8 mutual funds. It looks like according to Couch Potato, the weighted MER of the portfolio would be divided through all of my accounts, not individually. I wonder if this also works for my current accounts with TD Mutual funds. For example, my five RSP mutual funds have the following MERs: 1.98%, 2.80%, 1.46%, 2.48% and 2.75%. Does that mean that because they're in the same portfolio, all of the MERs will be averaged out for my fees? Or am I still paying individual MERs for each fund? These details from Couch Potato have confused me here.

All in all, considering all of the information that I have provided, should I consider switching over my current mutual funds to index funds and start working my way into becoming a coach potato? Yes, I know I still have a lot of learning and reading to do but I just want to be pushed into the right direction. I know I wrote quite a bit here but if someone can be gracious enough to provide me some unbiased financial advise, it would be greatly appreciated. If necessary, I can try to provide more information if need be.

I want to be as wise as possible with my money and don't want to be doing things that might be jeopardizing my future.

thank you very much in advance.


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## MoneyGal (Apr 24, 2009)

Whew! Long first post. 

To get the DSC information on your mutual funds, you are going to have to call the fund companies directly. OR you can get your advisor to do it for you, but he or she may not want to. I'd spend the time to do it yourself - it brings a level of ownership for the funds which you are going to need if you want to manage your money yourself. 

Re: commissions - you are likely not paying ANY commissions for your purchases (directly) - instead, that's what the commissions paid to your advisor or for. 

So: first steps: 

1. Cancel your PACs. 

2. Find out all the DSCs on your current holdings. 

3. Build a spreadsheet displaying all your holdings (fund names, number of units held) and the DSC schedule for all the funds (i.e., "100 units - DSC of 2% - expires on February 1, 2013; 200 units - DSC of 3% - expires on February 1, 2014" etc.)

Then you can start to figure out your strategy of developing a new portfolio. But the first thing to do is find out where you are. You will be able to move things over as you learn more.


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## HaroldCrump (Jun 10, 2009)

Are you *the* Gail Vaz-Oxlade ?
Like the real one?


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## humble_pie (Jun 7, 2009)

you're joking, right.

if you're the real GV-O, gawd help you. May the lawd in his mercy take pity upon this poor suffering lamb & rescue her from confusion.

if you're not the real gail, the real one better get over here quick & put you out of your misery.


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## the-royal-mail (Dec 11, 2009)

LOL.

Will I get $5000 if I read your entire post?


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## Four Pillars (Apr 5, 2009)

There is no way that's the real Gail. 

I didn't read the post. All I can say is that she put Carverman to shame. That one post is longer than all of the C-Man's posts put together!


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## Toronto.gal (Jan 8, 2010)

Wow, the OP sure has nerve to start her 1st request for free help with a day-long post, and so nice that she's willing to 'provide more info. if needed'. :rolleyes2:

I agree, it can't be Gail, but FP, you're forgetting that Carverman, in most cases, provides & not asks the questions.

MoneyGal, you were awfully nice to reply even.


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## Four Pillars (Apr 5, 2009)

Toronto.gal said:


> I agree, it can't be Gail, but FP, you're forgetting that Carverman, in most cases, provides & not asks the questions.


True, but I wasn't suggesting that the post was written by Carverman.


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## humble_pie (Jun 7, 2009)

we could, though, develop a standardized $5,000 CMF Life Solution for the occasional cuckoo bird who wanders through here, like royal mail says.

financial advice. Fund recommendations. Discount broker connections. Tax-efficient planning. Spiritual renewal, smudge herbs & colonic cleanses.


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## humble_pie (Jun 7, 2009)

t.gal how can one provide a question without asking it ...


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## CanadianCapitalist (Mar 31, 2009)

Two people can have the exact same names right? It sounds improbable but I decided to give the poster the benefit of doubt.


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## Barwelle (Feb 23, 2011)

humble_pie said:


> t.gal how can one provide a question without asking it ...


Ever seen Jeopardy? :biggrin:


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## the-royal-mail (Dec 11, 2009)

LOL the odds of having two such distinctive names, hyphenated no less are mind-boggling. But whatever. I think most of us have shown the gig is up for this ID. Whatever.


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## humble_pie (Jun 7, 2009)

but CC if she isn't the real GV-O but she genuinely has the same name, don't you think she would have an automatic introductory disclaimer saying so.

for the simple reason that she would have been asked 300 gazillion times ...


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## MoneyGal (Apr 24, 2009)

Oh, c'mon you guys. Maybe GVO is her idol, and she's adopting that screen name as an homage. (TRUE FACT: my name is not actually Moneygal.)

Don't you think her questions were worth answering?


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## avrex (Nov 14, 2010)

I just don't think the OP should follow any investing advice that was provided by an Indianapolis based luxury coach bus provider.

http://www.coachpotato.com/


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## humble_pie (Jun 7, 2009)

MoneyGal said:


> Oh, c'mon you guys. Maybe GVO is her idol, and she's adopting that screen name as an homage. (TRUE FACT: my name is not actually Moneygal.)
> 
> Don't you think her questions were worth answering?



no, not worth answering. 

how would you like it if someone were to register with your true name - which we do all know, from your book - & then begin posting up truly dumb 4000 word essays about mutual fund abstractions. Not even real mutual funds. Just abstractions. In 4000 words.

i think this would be quite awkward. I doubt you would be happy. I'm fairly sure your publisher would not like it. Sooner or later one or the other of you would probably want to restrain the impudent baggage ...


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## HaroldCrump (Jun 10, 2009)

CC, if you managed to get the real Gail Vaz-Oxlade to sign up on CMF, could we please also have Amanda Lang and Pattie Lovett-Reid sign up too?

Thanks.


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## Money4life (May 17, 2012)

Hello everyone,

No, sorry, I am not the real Gail Vaz-Oxlade. Basically, I figured I was asking a lot with my giant first initial post so that's why I signed up as this username just so you guys would get a good laugh before deciding whether to help me out or not. I wanted to get everything out in one post. Sorry if this bothered some people.

Thank you MoneyGal for being the only one that gave me some real advice so far. I know money is a personal thing and people take pride in knowing the best way in doing it themselves...but all I was asking was a direction to go into. Sure I explained a lot but I wanted you guys to know where I stand and whether I should be making changes to these accounts. 

MoneyGal, by PACs, do you mean my pre-authorized purchase plans? Sorry, I am not clear with what you mean. I noticed that another person indirectly bashed the creator of the coach potato site. Is this passive agressive method with index funds/ETFs not the best way of saving money?

Again, any help is not expected but appreciated.

thank you


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## Toronto.gal (Jan 8, 2010)

And for some balance, how about Mr. Wonderful too Harold? :biggrin:

Hp is 1000% right with respect to all comments made above.


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## Four Pillars (Apr 5, 2009)

I second Amanda Lang.


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## Spudd (Oct 11, 2011)

Gail, 

Typing on my phone so I will be brief. Compare the rates of return of your funds vs the TD e-series and see if the return is that much higher to justify the fees. Chances are it will not be. 

The sarcastic comment about couch potato.com was just because that website is not the real address - it leads to a bus company.

Many on this board believe in the couch potato method.


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## avrex (Nov 14, 2010)

avrex said:


> I just don't think the OP should follow any investing advice that was provided by an Indianapolis based luxury coach bus provider.
> http://www.coachpotato.com/





 Money4life said:


> I noticed that another person indirectly bashed the creator of the coach potato site.


my apologies. I was just trying to be the funny guy, poking some fun at the repeated grammatical error.

Yes, I am a believer of the Couch Potato method (for the majority of my portfolio.)
http://canadiancouchpotato.com/


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## MoneyGal (Apr 24, 2009)

PAC = preauthorized contributions. Yes! Cancel them. That is step 1!


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## Four Pillars (Apr 5, 2009)

avrex said:


> my apologies. I was just trying to be the funny guy, poking some fun at the repeated grammatical error.
> 
> Yes, I am a believer of the Couch Potato method (for the majority of my portfolio.)
> http://canadiancouchpotato.com/


I didn't catch that until this post. Pretty funny...


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## Money4life (May 17, 2012)

Wow, I can't believe that I kept saying coach potato! And even when responding to messages, I said coach potato. Disgusting.

Yeah I'm going to guess that the returns on my current mutual funds would not be any higher than the e-series index funds. If this is indeed the case, is this a good enough reason for me to switch over, even if I'm charged ridiculous fees just to get out of them?

Is it a good idea to open a Brokerage account and transfer my funds over to something that more fits the COUCH potato approach? Would I technically be making additional contributions to be RSP or TFSA because I am opening a new account or no because I would just technically be switching accounts?


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## avrex (Nov 14, 2010)

@Money4life. Now that's a much better user name. :smile:
Hopefully, you didn't mind my little joke up thread. Welcome to the forum.




Money4life said:


> Is it a good idea to open a Brokerage account and transfer my funds over to something that more fits the COUCH potato approach? Would I technically be making additional contributions to be RSP or TFSA because I am opening a new account or no because I would just technically be switching accounts?


If you are transferring, then these are not additional contributions.

I think you will eventually need to open a discount brokerage account and select new funds and .... but wait, don't rush.
Go back and look at the steps in MoneyGal's post. Listen to her advice. Do the proper research. Compare the costs. Take your time.


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## humble_pie (Jun 7, 2009)

there seems to be a mistake reverberating in this thread. Please look carefully at the OP's original message. There are no DSCs. There is only the OP's fear that these might exist. So there is no point in building any fictitious spreadsheet for DSCs that don't exist.

it appears that the mutual funds in question are TD no-loads. If the OP has held these for more than 90 days, there would be no fees to switch or sell, either.

the OP should be reminded that if any funds are to be sold, there would be capital gains or losses to take into consideration.


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## MoneyGal (Apr 24, 2009)

Well...she said that "all these funds were available on a no-load basis," and then her next statement is that she's been trying to find the DSC info for the funds, and she doesn't mention paying an investment fee, so I did not assume that she has non-DSC versions of the funds. But who can tell? They are all just referred to as Fund A, Fund B, etc.

Also, in my experience, people often refer to DSC funds as "no-load" funds, as there is no load going in. "All your money is working for you right away!"


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## Spidey (May 11, 2009)

Money4life - It would have helped if you had listed your mutual funds by name, as it would have given a better idea of the asset mix you may be trying to replicate. Additionally, while it is a generally advantageous to move to a low-fee passive portfolio, there may be a couple of funds (perhaps the one's with a MER under 1.5%) where it may make sense to hold them for the time being. For example, I've found good, low MER mutual funds can be competitive with ETFs in categories such as small cap, international small cap and precious metals. Coincidentally, these are categories that have been struggling lately (both ETF and MF) and it may not be the best timing for cashing them in.


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## Money4life (May 17, 2012)

I thought DSC was also known as the back-end load? Sorry, I do not have enough knowledge on this subject. All I could find from the TD website was all of the other information that I provided in this thread. I read that if I had DSC on the funds, I wouldn't be able to sell them for possibly 6-7 years without having to pay a hefty fee.

Here are the funds that I have: TD Canadian Bond, TD Real Return Bond, TD Dividend Income, TD Monthly Income, TD Dividend Growth, TD US Mid-Cap Growth, TD Emerging Markets, TD Entertainment & Communications, TD Health Sciences and TD Science & Technology. I've had all of these funds for longer than 90 days except for TD Science & Technology.

humble_pie, even if there are capital gains and losses, would it still be worth trying to sell them and move onto different funds? If I transferred them, would there still be capital gains or losses? Obviously, I should be more inclined to transfer, rather than sell, right? As Avrex pointed out, would it be a bad idea to sell because if I opened up new accounts, I would be making new contributions to both my RSP and TFSAs? I definitely don't want to be going over any contributions limits.

Avrex, don't mind the jokes at all...just shocked that it took me that long to see the constant typos!


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## Money4life (May 17, 2012)

Spidey said:


> Money4life - It would have helped if you had listed your mutual funds by name, as it would have given a better idea of the asset mix you may be trying to replicate. Additionally, while it is a generally advantageous to move to a low-fee passive portfolio, there may be a couple of funds (perhaps the one's with a MER under 1.5%) where it may make sense to hold them for the time being. For example, I've found good, low MER mutual funds can be competitive with ETFs in categories such as small cap, international small cap and precious metals. Coincidentally, these are categories that have been struggling lately (both ETF and MF) and it may not be the best timing for cashing them in.


*TFSA:*

TD Monthly Income

*RSP:*

TD Real Return Bond, TD Dividend Income, TD Emerging Markets, TD US Mid-Cap Growth, TD Health Sciences

*Non-Registered:*

TD Canadian Bond, TD Dividend Growth, TD Entertainment and Technology, TD Science and Technology.


The highest MER ones are the Sector funds and International Equity. The lowest MER ones are the Bond funds. The Dividend/Income ones are in the middle. Funny enough, the best and most consistent performing funds for me have been the dividend and bond funds.

I lied...some of my sector funds have been doing fairly well...but probably not worth the average MER of 2.80%!


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## Spidey (May 11, 2009)

Suggestions/Comments:

*TFSA:*

TD Monthly Income - Depends on the purpose of the TFSA. If you may be drawing on this fund, I would have it in something more liquid. This fund isn't too bad as far as mutual funds go. You could leave it be if you are happy with a balanced approach in your TFSA. A lower-fee alternative could be half in CDN index-e and half in bond-e. 

*RSP*:

TD Real Return Bond, TD Dividend Income, TD Emerging Markets, TD US Mid-Cap Growth, TD Health Sciences

If you are happy with this asset mix I would go with an ETF for the real return bond, a dividend ETF, a US broad-based ETF (perhaps Vanguard) and a Nasdaq index to replace the last one (perhaps the Nasdaq "e" fund or an ETF). 

*Non-Registered:*

TD Canadian Bond, TD Dividend Growth, TD Entertainment and Technology, TD Science and Technology.

I wouldn't have bond funds in your non-registered account because of tax implications. I would suggest switching the allocations of dividend to bond from registered to non registered. (eg. have your dividend allocation in this account and the bond in the registered). The bond-e fund or a bond ETF would be a good choice. Switch TD Dividend growth to either a dividend ETF. The last two, I would consider replacing with the NASDAQ-e or a NASDAQ ETF.

So once all is said and done I would have something like this:

*TFSA*

Something like a high-interest savings account if liquidity is required. Perhaps a GIC if immediate liquidity is not required but if liquidity is necessary within 5 years. Otherwise perhaps half CDN index, half bond.

*RSP*

- bond index, RR bond index, CDN market index, US market index, NASDAQ index, Emerging markets index (percentages will depend on risk tolerance)

*Non-registered:*

Dividend index or combination dividend and REIT index.

P.S. I'm not an adviser - this is just along the lines of what I would do.


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## mrPPincer (Nov 21, 2011)

Money4life, to buy the TD e-funds you first need to convert your three accounts to online accounts.
You can do this with the help of someone at your local branch.

Once the paperwork is done and processed and you have online access you can then switch your existing funds over into the index e-funds that you have chosen for your new portfolio.

Most of TDs mutual funds have a 30 day early withdrawal fee of 2% so you should be ok to switch them after 30 days (except for the e-funds) but you can find that out by looking at the prospectus.
All the e-funds have a 90 day early withdrawal fee but the MER cost is lower than a lot of etfs, and they're free to trade, so that makes them pretty hard to beat.

If that is your choice, just make sure to double-check that you're buying the e-fund version of the index funds and not the higher MER index funds that you buy at the TD walk-in branch, because both versions are buyable through TD Easyweb,


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## mrPPincer (Nov 21, 2011)

If you chose to go with TD Waterhouse you can open your accounts and then someone at your local branch to move everything over 'in-kind' without triggering anything.
Once it's moved over you can then rebalance out of the high MER stuff you have now.


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## Money4life (May 17, 2012)

Hi Spidey,

I never take out money from my TFSA (don't see a reason) so I guess with that account, I would keep it connected to index funds or ETFs. Thanks for all of your recommendations. I'm looking at the TD Waterhouse Discount Brokerage site and don't see a section for non-registered accounts. It looks like I would have to put my money into a Direct Trading account (eg. a cash account). Do you think I could put together a similar portfolio there like what I would be doing with my non-registered accounts? Eg. would I even be allowed to do this?

MrPPincer, 

Thanks for all of that information. Yes, I noticed that TD has different index funds, I'll definitely keep an eye out for the e-series funds.

Moneygal, 

I have gone ahead and cancelled all of my pre-authorized contributions. I asked the banker if any of my mutual funds have DSCs and he said they do not. I haven't done any other changes yet....I just wanted to cancel all of my pre-authorized purchases first. So step 1 is done. Step 2 appears to be done as it looks like I don't have DSCs tied to these. I guess step 3 can be disregarded as well.

To anyone else:

Hypothetically, if I created a new portfolio that had two funds in my TFSA, four funds in my RSP and three funds in my non-registered, would I be paying individual annual fees for every fund or would I be paying a collective fee for the separate accounts themselves?

thank you yet again...


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## Spidey (May 11, 2009)

I have both registered and non-registered accounts with TD Waterhouse. TD usually calls the non-registered accounts "cash accounts" or "direct-trading". Probably the first step would be to simply transfer your existing funds into the new accounts. This should be especially easy since you own all TD funds. All you should have to do is fill out a few forms and I'm sure that TD will be more than happy to help you and to take care of all the transfers. As MrPPincer said, just ensure that you inform them that you need the ability to access online trading.


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## Spudd (Oct 11, 2011)

> Hypothetically, if I created a new portfolio that had two funds in my TFSA, four funds in my RSP and three funds in my non-registered, would I be paying individual annual fees for every fund or would I be paying a collective fee for the separate accounts themselves?


At TD Waterhouse there is a fee for RRSP accounts under 50k. $100 per year. No fee for the other accounts. Then the MER for each fund is applied individually against that fund.

I am wondering why use Waterhouse if you only plan to have the TD mutual funds. I think it would be a lot less trouble to keep your current TD investment accounts and simply switch which funds you are holding. You do have to tell the bank to change your accounts to make them eligible for e-series but that's a lot less trouble than opening a Waterhouse account.


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## MoneyGal (Apr 24, 2009)

What Spudd said! 

Your main concern, in your first post, was about fees - but it turns out you don't have funds subject to DSC charges. 

I'm not sure you have identified what your goals are, what rate of return you need (over the long term) to meet them, what your risk tolerance and your risk capacity is, and all the other pieces of the puzzle you will need to put in place to manage your investments effectively.

Other than changing the funds you hold to lower-fee versions, what other steps have you identified in order to help you meet your goals? Do you feel confident that you are ready to manage your funds yourself? If the amount you were paying for investment management (through MERs) on your current funds is unacceptable to you, how much would you be willing to pay? How satisfied will you be when there is no one to call with questions about your account?


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## Spidey (May 11, 2009)

I could be wrong but it is my understanding that e-funds are only available through a TD Waterhouse account.


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## MoneyGal (Apr 24, 2009)

I don't *think* you need to have a TDW account to access efunds: http://www.tdcanadatrust.com/products-services/investing/mutual-funds/td-eseries-funds.jsp

(My RRSP is at TDW but I don't have efunds.)


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## mrPPincer (Nov 21, 2011)

Spidey said:


> I could be wrong but it is my understanding that e-funds are only available through a TD Waterhouse account.


No the e-funds are also available through EasyWeb if you have an online account though TD Investment Services, which I actually found a little simpler to deal with for trading mutual funds than by using WebBroker with TD Waterhouse.

(when you have it set up through EasyWeb there's no 3-day wait for the trades to close, and unlike with TD Waterhouse's WebBroker, each account through EasyWeb is linked directly to a bank account of your choice, so you can trade into or out of a high interest savings account on the same day of the trade providing it's done before 3PM)


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## indexxx (Oct 31, 2011)

MoneyGal said:


> I don't *think* you need to have a TDW account to access efunds: http://www.tdcanadatrust.com/products-services/investing/mutual-funds/td-eseries-funds.jsp
> 
> (My RRSP is at TDW but I don't have efunds.)


That's correct, you do not need a TDW account. I bank and invest with other institutions, and simply went into a TD Bank, opened an RRSP, put some cash into a money market fund, and then transferred it over to eSeries funds online through Easyweb. I told the agent who helped me open the account that I wanted to move into eSeries funds and he knew exactly what I wanted to do and helped me with the info I needed. I gave him a check to link to my PC Financial account for monthly contributions. Oh, their phone service has been good also.


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## Money4life (May 17, 2012)

Hi guys, thanks for your responses.

Spidey: I think the reason why I was leaning to TD Waterhouse is because you are allowed to get ETFs there. I cannot get ETFs with my current TD Mutual Funds accounts. With that said, do I need ETFs at this stage of my life? None of my three investing accounts alone are greater than 50K (I think Couch Potato mentioned that having at least 50K in an account makes it smart to try ETFs).

MoneyGal, I just want to be able to invest my money in a situation where it would give me the best chance at long-term growth. Aside from putting a down-payment on a house within the next 5 years, I would have zero interest in using the rest of my investing until maybe around my retirement. I think I would be satisfied with a 4% return long term. Right now I have a moderate to high risk tolerance, if I know I can put money into a situation where it will succeed. Basically, I want to have a diversified portfolio that covers most of the necessary factors for key investing and not having to worry if I made the wrong decisions. The reason why my focus has been low fees is because I've been reading that high fees eats away a lot of the successes with long term investing. Sure I would probably be making some money still with my current mutual funds but not enough, because a great portion of those earnings would be paying management fees, thus lowering my overall return.

I think I should be able to manage my own funds--why not? Technically, I am basically managing my own funds now; I just go the bank and that's where the changes happen. Generally, the mutual funds that I bring to the table are the ones that go through and the banker purchases the funds on my behalf. The problem is that I don't know if the bankers really care about my decisions and so I fear that they're more concerned with me in just buying mutual funds. For the while, I was oblivious to the fact that I was even paying fees until I did some reading early in the week so obviously, I don't really know what I should be expecting when it comes to fees. Ultimately, I am not an experienced investor so how can I really know what to expect? I do have goals and desires...I just want to put everything in its right place. It seems that the general consensus here is that moving to the e-series funds would be a smart decision to make since they would give me exposure to stock markets in developed counties and I would have a hand in Canadian bonds....just like the funds that I have now but without the big fees.

Another question for you, MoneyGal, why exactly did you want me to cancel my PACs? Was I getting the short end of the stick as what I predicted from page 1? I ask because I notice with my bonds/dividend funds, I was getting dividends automatically re-invested into my accounts from time to time. Wouldn't that be something that I want by putting more money into these accounts?

Sorry if I don't seem very knowledgeable with all of this. I was raised in a family where money was never a topic to be discussed. So I've had to try and piece all of this together...with the help of some friends, of course.

thanks yet again....


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## Spudd (Oct 11, 2011)

With less than 50k there's no point to going to Waterhouse, and you will incur fees there that you wouldn't by staying with the regular TD mutual funds account. The best thing to do for now is just switch into the e-series funds and re-start your PACs. Once you have a larger portfolio in a few years you can think about making the switch and getting into ETFs if that interests you at that point.

The only exception is that for the money you intend to use for your house downpayment, I would not put that into mutual funds since you need it in the short term. Where do you currently have the downpayment money? I would recommend a high-interest savings account or GIC's.


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## Money4life (May 17, 2012)

Spudd said:


> With less than 50k there's no point to going to Waterhouse, and you will incur fees there that you wouldn't by staying with the regular TD mutual funds account. The best thing to do for now is just switch into the e-series funds and re-start your PACs. Once you have a larger portfolio in a few years you can think about making the switch and getting into ETFs if that interests you at that point.
> 
> The only exception is that for the money you intend to use for your house downpayment, I would not put that into mutual funds since you need it in the short term. Where do you currently have the downpayment money? I would recommend a high-interest savings account or GIC's.


Yeah Spudd...for my circumstances, it seems to make sense to focus on e-series funds rather than ETFs for the time being.

Funny that you ask, I actually have no GICs or even a savings account. It was my investment adviser's brilliant idea of putting all of my money into mutual funds, aside from 10K that's still left in my chequings account. Granted, I started these accounts before I even thought about making a down-payment on a home.


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## Spidey (May 11, 2009)

Personally, I think ETFs can make sense in a portfolio of less than $50,000. For example, if you want to continue having emerging market exposure - there is no corresponding e-fund for that. And ETF emerging market mutual funds have high MERs. Even if you want to put, say $5000 or more in a category such as Canadian index, something like a Vanguard ETF may be more cost effective over the e-funds if you intend to hold it for several years. (Personally, I hold both - the Vanguard for a longer term hold and the "e" fund as a convenient vehicle for more minor contributions, where commissions would be impractical.) 

Aside from that, even if you prefer to stick to e-funds for the time being but may venture into ETFs in the future, then it may make sense to set up your account now so you are fully prepared. The one thing that you would want to verify is that if you have enough so as to not incur any annual portfolio fees.


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## Money4life (May 17, 2012)

Thanks for the advice, Spidey.

Maybe because ETFs still seem so foreign and intimidating to me, I think I might start things off with just TD e-series index funds. The only problem with excluding ETFs is that my overall portfolio seems less diversified to what I have now. I still haven't decided if I want to set up with TD Mutual Funds or TD Waterhouse. Somehow, these five pages have made me even more unsure in what I should be doing!

What I've been doing is comparing Spidey's recommendations to the model portfolios on Couch Potato. With what's been happening in the international market lately, should I even be putting money in International Equity or should I just do a more conservative amount? Is it bad timing that I want to be making all of these change now?

Also, can someone tell me why MoneyGal wanted me to stop all of my PACs? She told me twice to cancel them but she never really stated why.

Thanks again,

Money4life.


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## Spudd (Oct 11, 2011)

She wanted you to cancel them at first, because she thought there were deferred sales charges on the funds you have, so by cancelling the PAC's, you would stop putting money into funds that you want to get out of. Additionally most funds have a rule against transferring money out within 60-90 days of having put it in, so the longer you keep your PAC's active, the longer you have to wait to switch funds.


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## Four Pillars (Apr 5, 2009)

Money4life said:


> Also, can someone tell me why MoneyGal wanted me to stop all of my PACs? She told me twice to cancel them but she never really stated why.
> 
> Thanks again,
> 
> Money4life.


Her recommendation to stop all PACs was to avoid making any more purchases in DSC funds which will increase the DSC fee if you sell them in the near future.

As it turns out, it sounds like you don't have DSC fees, so that step isn't necessary.


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## MoneyGal (Apr 24, 2009)

Yeah, and also for this very very basic reason: you wrote a huge wall o' text about how you had grave fears about the path you were on. My recommendation was to stop following that path. If you are taking actions that aren't working for you, the first step is to stop the action that isn't working. Right?


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## Money4life (May 17, 2012)

Thanks guys for the feedback...except for MoneyGal and her condescending tone. I didn't join this forum to read arrogant remarks about what I should be doing. Also, I'm annoyed by you because you pretended to care and asked me a series of questions in which I answered them all to...and fully. But you never bothered to follow up. Please don't post in this thread again.

Interesting note about the transferring rule Spudd, hopefully it doesn't apply to me. Thanks to all who have been so kind in trying to help. So should I just do what's most simple and try e-series mutual funds?


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## the-royal-mail (Dec 11, 2009)

I don't see anything condescending in MG's comments. However the OP does not seem to be listening to what people are saying. Why would spudd explain something that doesn't apply to you? Why are you bolting for an easy button here? As far as I'm concerned the search for this easy button is what got you into this mess in the first place. We're not saying you have to take our advice but if you start a thread asking for alternative suggestions, don't you think you should try to listen and understand what people were saying? I agree with the suggestion to end any kind of pre-authorized debits, and not just for investing either. Take control of your finances!

It's funny to me that people in the store scrutinize the apples in the bin more than they scrutnize their investments.


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## HaroldCrump (Jun 10, 2009)

Money4Life, I can understand that all this is intimidating for you.
Mutual funds, DSC, front loads, e-Series, ETFs, reverse ETFs - it's a soup out there.

May I suggest that you take small and simple steps first.

For instance, the first step would be to stop contributing any further money into the mutual funds that are causing you all this grief.
You are unsure about them, and you are unsure about which direction to take next.
So while you figure out the best course of action, the first step is to stop causing more damage to your portfolio.

As the saying goes : _Don't just do something. Stand there_. ;o)

In other words, pause all investing activity and asset allocation decisions temporarily while you figure out the best course of action.

Stopping the PAC would be the first step.

On a related note, I don't believe anyone here is being condescending or disrespectful.
If you go back and re-read the entire thread, you will see that everyone has been patient and helpful.


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## MoneyGal (Apr 24, 2009)

HaroldCrump said:


> As the saying goes : _Don't just do something. Stand there_. ;o)


That was my former choir director's motto!

M4L: I don't understand why you think that my tone is condescending (or why you think you can prohibit me from posting here). I was the first to respond to your huge post, I suggested (in response to other posts) that your questions were interesting and proferred an explanation for your former unusual forum handle, and I have responded to each point you've made - not necessarily on your timeframe, but, uh, you don't get to dictate that either. In fact, another senior poster here suggested I was "awfully nice" to have even responded in the first place. 

The reason I suggested a few short steps and didn't provide a lot of explanation is that YOU SAID you were overwhelmed. I wanted to provide short, helpful advice to get you started --- and to get you out of the place where you seemed to be stuck and stopped (and having a giant emotional reaction, which you seem to also be having now). In short, I didn't think responding back with a similar wall of text would help you.

Also: you posted that question that I "never responded to" (because I was only "pretending to care") at 12:03 today. It is now 12:50. What kind of standard to you hold people who are providing FREE ADVICE on an Internet forum to?


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## Money4life (May 17, 2012)

HaroldCrump said:


> Money4Life, I can understand that all this is intimidating for you.
> Mutual funds, DSC, front loads, e-Series, ETFs, reverse ETFs - it's a soup out there.
> 
> May I suggest that you take small and simple steps first.
> ...


Thanks HaroldCrump for the friendly response. Per MoneyGals recommendation, I did stop my PACs a few days ago...but I just wanted to fully comprehend why I needed to do it.


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## Money4life (May 17, 2012)

MoneyGal said:


> That was my former choir director's motto!
> 
> M4L: I don't understand why you think that my tone is condescending (or why you think you can prohibit me from posting here). I was the first to respond to your huge post, I suggested (in response to other posts) that your questions were interesting and proferred an explanation for your former unusual forum handle, and I have responded to each point you've made - not necessarily on your timeframe, but, uh, you don't get to dictate that either. In fact, another senior poster here suggested I was "awfully nice" to have even responded in the first place.
> 
> ...


Hi there, I was implying to my post from 2012-05-20, 08:42 PM. You asked me a series of questions earlier in that day and I replied to them. I was not expecting but hoping that you would get back to me but you didn't. Like you said, it is free advise from strangers on the internet, but I was just looking forward to hearing a follow up from you. I think this was all bad timing...that's all. Your remark seemed a little snarky to me and it didn't help that I felt that you purposely ignored my post. I have no hard feelings to you. I appreciate that you were the first person to try and help out with clear and concise ideas.


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## Money4life (May 17, 2012)

the-royal-mail said:


> I don't see anything condescending in MG's comments. However the OP does not seem to be listening to what people are saying. Why would spudd explain something that doesn't apply to you? Why are you bolting for an easy button here? As far as I'm concerned the search for this easy button is what got you into this mess in the first place. We're not saying you have to take our advice but if you start a thread asking for alternative suggestions, don't you think you should try to listen and understand what people were saying? I agree with the suggestion to end any kind of pre-authorized debits, and not just for investing either. Take control of your finances!
> 
> It's funny to me that people in the store scrutinize the apples in the bin more than they scrutnize their investments.


I have tried my best to listen to everyone but since we're human beings, not everyone will be entitled to the same opinion.

Moreover, I've been given a number of recommendations...for one, getting my feet wet into both e-series funds and ETFs. Some have recommended both while others have recommended just mutual funds for now. Some have suggested going to be a discount brokerage while some have suggested staying with mutual funds. You are making it seem like everyone on this board has made a collaborative agreement in what I should be doing except for me. Also, you are implying that I am getting defensive about my investments...not at all. While I think they are diversified, I don't think they are ideal investments by any means. Like you pointed out, how exactly I get into this mess in the first place? 

I know the DSC charge doesn't apply to me but I wanted to know why someone would want to end those pre-authorized debits. And both Spudd and Four Pillars gave me feedback that I did not know. I didn't realize that I should only be asking questions that apply to me. I guess there are restrictions to posting on the Investment sub-forum. Good to know. I didn't know we all have to be experts here.

And I am trying to take control of my own finances...why else would I sign up on this site and post a thread about adapting the Couch Potato approach? How does that work?


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## MoneyGal (Apr 24, 2009)

I missed that post. I read CMF on multiple computers and devices through the day, and I always use the "go to first unread post" feature. Sometimes that causes me to miss posts.


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## Money4life (May 17, 2012)

MoneyGal said:


> I missed that post. I read CMF on multiple computers and devices through the day, and I always use the "go to first unread post" feature. Sometimes that causes me to miss posts.


That's fine...so given my risk tolerance, goals and expectations, what do you feel I should be doing? (Now anything that I type feels like that I am just pressing the "easy button"). I should be allowed to ask any question and not feel embarrassed or scrutinized for it.


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## 44545 (Feb 14, 2012)

Hey Money4life. 

I may have missed points while skimming this thread but I would like to address this specific reply of yours:



Money4life said:


> ...
> Maybe because ETFs still seem so foreign and intimidating to me, I think I might start things off with just TD e-series index funds...Money4life.


Easy explanation:
*Mutual Fund:* trades after market closes, net asset value (NAV) calculated at end of day.
*Exchange Traded Fund:* (as the name implies) trades on the stock market, like a stock, while the market is open. Value calculated like any other stock, while the market is open.

Both a mutual fund and an ETF can track exactly the same index.
(read that again until it sinks in - they are, for our purposes, identical)

For example, the S&P/TSX Composite Total Return Index is tracked by:

TD e-Series mutual fund "TDB900e" with an MER of 0.32%
iShares "XIC" exchange traded fund with an MER of 0.26%

Why go with the slightly higher MER Mutual Fund versus ETF? Several reasons:

The mutual fund has no trading commissions unlike the ETF
The mutual fund can be purchased in fractional amounts unlike the ETF

Once your portfolio reaches a certain size (varies based on trading commission paid to buy the ETF) the commissions for buying the ETF would be overshadowed by the 0.06% MER savings. 

Dan Bortolotti of Canadian Couch Potato made a wonderfully clear comparison here: http://canadiancouchpotato.com/2010/06/25/should-you-use-index-funds-or-etfs/

Regarding TD Waterhouse: you can avoid fees with them as I've posted on before:
http://canadianmoneyforum.com/showt...ll-in-one-banking-option)?p=130424#post130424

TD Waterhouse's fee schedule is here: http://www.tdwaterhouse.ca/apply/forms/521778.pdf
See pages 6 and 7. Fees on unregistered accounts are waived if you hold a TFSA.

TD Waterhouse TFSAs have no fees.

The annual fee for a basic RRSP is $25 below $25,000 or waived above that.

Another advantage to the Waterhouse account over TD Canada Trust: no stupid "know your client (KYC)" form. I've read on this forum of people having a TD mutual fund trade stopped because of an "out of date KYC form" with TD Canada Trust.

I keep a no fee TD Canada Trust savings account linked to the TD Waterhouse account solely as a means of moving money in and out. You can make a bill payment from external financial institutions (where you might have a no-fee chequing account - *ahem* PC Financial, ING) to TD Waterhouse (but not TD Canada Trust) to get money in.



Spidey said:


> I could be wrong but it is my understanding that e-funds are only available through a TD Waterhouse account.


You can get e-Series funds with a TD Canada Trust account but there's a separate form to convert it to an "e-Series" account accessible via EasyWeb.

For the hassle, you may as well just set up the TD Waterhouse account accessible via WebBroker since the TFSA and non-registered accounts would be fee-free. 

TD makes the process seem confusing but one trip to a TD Canada Trust branch will fix everything.

http://www.theglobeandmail.com/glob...unds-easy-to-love-hard-to-buy/article2015799/

http://www.canadiancapitalist.com/td-e-series-accounts-not-very-hard-to-set-up/


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## MoneyGal (Apr 24, 2009)

Money4life said:


> That's fine...so given my risk tolerance, goals and expectations, what do you feel I should be doing? (Now anything that I type feels like that I am just pressing the "easy button"). I should be allowed to ask any question and not feel embarrassed or scrutinized for it.


But...I don't know what your risk tolerance (or capacity) is, or your goals or expectations. I don't know how old you are, what other investments you have (house, human capital), your employment situation, whether you have a pension, whether you are married or not, your health, when you are planning to retire, the stability of your job, etc. etc. etc. 

I'm not sure why you feel "embarrassed or scrutinized" for your questions. You are asking us to pay close close attention to what you write, but not "scrutinize" it. I find this confusing and a little offputting.


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## the-royal-mail (Dec 11, 2009)

<off topic>

MoneyGal
Senior Member 
Join Date Apr 2009 
Posts *3,333*
Cool post count #!

</off topic>


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## Four Pillars (Apr 5, 2009)

Wow - MoneyGal got banned from a thread. Never thought I'd see that day.


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## Money4life (May 17, 2012)

Hi CJOttawa and MoneyGal,

Sorry for using the word scrutinized, the-royal-mail's reply was still buzzing in my head when I wrote to you. I really do want everyone to be as candid as possible while helping me out.

So now I'm beginning to understand that I can just focus my investing on the e-series mutual funds aside from the index funds that TD doesn't offer, such as real estate, real return bonds and emerging markets. I have over 60K in investing right now between my three accounts (RSP, TFSA, Non-reg.) but none of my three accounts alone have more than 25K (non-reg.). I'm going to assume that it's still a good idea to invest into ETFs for the index funds that TD doesn't possess, even though I won't be having a lot of money allocating to those funds. Is this correct?

I'm a healthy 26 year old who makes 50K a year in a steady job. There's a 5% pension plan at work offered to me that I match. I have no debt whatsoever. I can probably afford to have a moderate risk tolerance with my money right now. I am getting married next year but we're going to be thrifty as possible (say 6K overall expenses). I have no other other investments aside from my money mentioned above. I won't be retiring until another 40 years (obviously). I do plan to purchase a house within the next 2-5 years but as I mentioned earlier in this thread, there hasn't been proper planning into that yet. I have no GICs and no savings account (investment advisor wanted to put all of my money in mutual funds....aside from money in my chequings account). At the time, I had no plans for a house. 

Thank you CJOttawa for giving me that information on fees. My chequings account has no annual fees (since I have over $5000). I've been trying to understand what you mean by your last sentence. So am I able to transfer money back and forth from my TD Canada Trust accounts to TD Waterhouse (ignoring fees) or would I have to get someone like PC Financial involved? I would be still be making all of my bill payments from my TD Canada Trust account. **EDIT** OK, I see what you are saying. You basically want me to have accounts that possess no fees. My chequings account is fee-less with the amount of money that I have now. I would have no problems sending money from TD Canada Trust to TD Waterhouse, right? The only time I would ever transfer money from TD Waterhouse to TD Canada Trust is when I sell my funds, right?

So it looks like that getting an account with TD Warehouse is the best short term/long term idea. Things are starting to become clearer. I will be able to decide on my asset allocations soon enough!


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## Money4life (May 17, 2012)

Four Pillars said:


> Wow - MoneyGal got banned from a thread. Never thought I'd see that day.


Naw...I've allowed her to come back. I need all the help I can get!


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## HaroldCrump (Jun 10, 2009)

the-royal-mail said:


> <off topic>
> MoneyGal
> Senior Member
> Join Date Apr 2009
> ...


Triple Nelson x 100.
<insert scary music here>


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## Eclectic12 (Oct 20, 2010)

CJOttawa said:


> [ ... ]
> 
> Another advantage to the Waterhouse account over TD Canada Trust: no stupid "know your client (KYC)" form. I've read on this forum of people having a TD mutual fund trade stopped because of an "out of date KYC form" with TD Canada Trust.
> 
> I keep a no fee TD Canada Trust savings account linked to the TD Waterhouse account solely as a means of moving money in and out. You can make a bill payment from PC Financial to TD Waterhouse (but not TD Canada Trust) to get money in.


Hmmm ... it has been a long time since I opened my TDW trading account but I recall having to fill out a similar form. However, I believe it would only limit more advanced items such as opening a margin account or option trading.

Maybe someone who has opened a TDW account recently can provide more details.


I have a linked TD Canada Trust chequing account. Since my PCF cheques are free and I can use the TD-CT atms outside regular business hours, that's all I've needed for money transfers.


Cheers


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## Money4life (May 17, 2012)

I have a Select Service chequings account with TD that includes everything so I shouldn't have any problems with transferring from account to account. 

Regarding TD Waterhouse direct trading accounts, would I have to set up a cash account for my non-registered accounts or would I be able to set it up normally like how I would with my TFSA or RSP? Or is the "normal way" the cash account way?

Just so it doesn't get lost in the shuffle, here's the most important bit of information that I would like to know and then I can hopefully start doing this on my own: 



Money4life said:


> So now I'm beginning to understand that I can just focus my investing on the e-series mutual funds aside from the index funds that TD doesn't offer, such as real estate, real return bonds and emerging markets. I have over 60K in investing right now between my three accounts (RSP, TFSA, Non-reg.) but none of my three accounts alone have more than 25K (non-reg.). I'm going to assume that it's still a good idea to invest into ETFs for the index funds that TD doesn't possess, even though I won't be having a lot of money allocating to those funds. Is this correct?


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## Spudd (Oct 11, 2011)

It all depends on how much money you have to allocate to those ETF's you are interested in. To buy an ETF costs $9.99 if your household money is > 50k with Waterhouse (which yours will be). So if you want to put (let's say) $1000 in an ETF, then you would be paying 1% in commission to buy it, and if you decide to sell it later, that will be another 1% commission again. Plus, you have the built-in MER of the ETF. However if you were putting in $10,000 then instead of 1% commission to buy it, it woudl only be 0.1% (because it's still $9.99 regardless of how much you invest). 

So what it boils down to is that if you're only planning to allocate a small amount of money into these ETF's, then you'll end up paying a lot of fees to do so.


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## Young&Ambitious (Aug 11, 2010)

Check out this thread on the Canadian Couch Potato site: http://canadiancouchpotato.com/2010/06/25/should-you-use-index-funds-or-etfs/

I found it very useful in my decision to go with ETFs over index mutual funds.


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## Money4life (May 17, 2012)

I see. Thank Spudd!

So here's a hypothetical overall investment allocations that I could do:

RSP:

TD Canadian Bond Index...$6K
TD Canadian Index...$4K
TD US Index...$4K
TD International Index...$3K

TFSA:

TD Canadian Bond Index...$9K
TD Canadian Index....$9K

Non-registered:

iShares S&P/TSX Cdn Div Aristocrats (CDZ)....$10K
BMO Equal Weight REITs (ZRE)...$10K
TD Nasdaq Index...$5K

Does this sound like a decent starting point to tinker around? 

Since I'm going to be putting a decent chunk of change in two funds for my TSFA, should I consider ETFs instead? No point in having duplicate funds. I'll read the ETFs vs. Mutual Funds link that CJOttawa (and now Young&Ambitious) provided for me to figure that out.

One other thing I also need to figure out is once I transfer all of this money to TD Waterhouse, I'm going to need to decide which money am I going to be using for my house downpayment in the future. What a pickle!


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## MoneyGal (Apr 24, 2009)

Not a pickle. This is what managing your own investments looks like. 

How much do you want to take out of your portfolio for a house downpayment, and from which accounts will it come? It's likely those funds should not be in markets at all. 

Also, why are you replicating two funds (TFSA and RRSP)? I'm not sure this makes sense or what your rationale is.


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## Money4life (May 17, 2012)

MoneyGal said:


> Not a pickle. This is what managing your own investments looks like.
> 
> How much do you want to take out of your portfolio for a house downpayment, and from which accounts will it come? It's likely those funds should not be in markets at all.
> 
> Also, why are you replicating two funds (TFSA and RRSP)? I'm not sure this makes sense or what your rationale is.


Since houses are ridiculously overpriced for my area, a solid downpayment would be 100K...which would throw all of this investing out the window. But keep in mind that I would be making this downpayment with my fiance whom I hope be willing to put down at least 40% herself.

My odd rationale was that I want to make my RSP account as complete as possible for what I have to work with. That's why I selected those four. For TFSAs, I've heard that it's best to stick Bonds into these types of accounts (I can't find the article from Coach Potato...Dan has too many articles!)...but since I'm dealing with indexes...there's not of lot of variety to work with for TD e-series funds...so I think I would have to use different ETFs instead if I don't want to be doing any replicating.


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## Spidey (May 11, 2009)

I think your mix looks pretty good for someone in your age group. Regarding MoneyGal's comments on replicating, I replicate funds in different portfolios where I want similar risk/reward profiles. It could be cleaner, to say, put all the bond in the TFSA and all the equity in the RRSP (or vise-verse) but I often prefer to not see one account grossly out-perform or under-perform the other. It all works out in the wash either way, I know, and would be a more cost-effective approach if one is using ETFs - but particularly if one is using e-funds, commissions are not a consideration.

However, as MoneyGal also mentions, it is important to take into consideration whether you will need the money in the near term for a down-payment or other expense. For this reason, I have a high-interest savings account in as a significant portion of both mine and my wife's TFSA.


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## Money4life (May 17, 2012)

Spidey said:


> I think your mix looks pretty good for someone in your age group. Regarding MoneyGal's comments on replicating, I replicate funds in different portfolios where I want similar risk/reward profiles. It could be cleaner, to say, put all the bond in the TFSA and all the equity in the RRSP (or vise-verse) but I often prefer to not see one account grossly out-perform or under-perform the other. It all works out in the wash either way, I know - but particularly if one is using e-funds, commissions are not a consideration.
> 
> However, as MoneyGal also mentions, it is important to take into consideration whether you will need the money in the near term for a down-payment or other expense. For this reason, I have a high-interest savings account in as a significant portion of both mine and my wife's TFSA.


Thanks Spidey...it begs the question if I should even have any money in a non-registered investing account and whether I should sell it and move it into a high interest saving account or a solid GIC. If I did that, I would only have $35K left in investing and $25K in savings....which I guess might be the better distribution for someone my age.

On the contrary, are ETFs or index mutual funds not stable enough to keep potential down-payment money tucked away in there? I think the funds that I slapped together in my hypothetical non-registered account would at least have pretty good short term growth. Don't you think there's a greater chance that I would make more money in the short term with ETFs/mutual funds as opposed to a high interest savings account? Is it just too risky thinking that way?


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## Young&Ambitious (Aug 11, 2010)

Money4life said:


> For TFSAs, I've heard that it's best to stick Bonds into these types of accounts (I can't find the article from Coach Potato...Dan has too many articles!)...


It's best to put low-return items in non-registered accounts and high-return items in registered accounts (TFSA/RRSP); however the predictability of what kind of return an investment will have is obviously unknown. Generally speaking, dividends go in non-registered and income/capital gain investments go in registered. This is the general trend but everyone's situation is different of course.


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## Money4life (May 17, 2012)

Young&Ambitious said:


> It's best to put low-return items in non-registered accounts and high-return items in registered accounts (TFSA/RRSP); however the predictability of what kind of return an investment will have is obviously unknown. Generally speaking, dividends go in non-registered and income/capital gain investments go in registered. This is the general trend but everyone's situation is different of course.


Thanks...that's good to know.

Something else I just thought of is that if I don't transfer all of my investing into TD Waterhouse and instead put some of that money into a savings account, I would probably have less than 50K in investing. That means that it would cost me $30-40 to buy ETFs. I don't want that to happen. 

If I decide that I don't want to move all of my investing into TD Waterhouse, I would probably have to just open an online account with TD Canada Trust and just work with e-series mutual funds. If I decided to move all of my investing into TD Waterhouse, I would be able to do a lot more with my money but at the expense of properly saving money for a home in the near future.


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## Young&Ambitious (Aug 11, 2010)

Money4Life, you're at a similar point as me. I posted last week about getting rid of my high-MER mutual funds and I too looked at both TD e-series and ETF's. I did a break even analysis and for me, because I am at Questrade with $9.99 trades and expect to be greatly increasing my monthly contributions going forward due to career advancement etc the ETF's make more sense for me. Now if only I could feedback on the prospective allocation I am looking at, I posted a thread yesterday and natta haha. 

Another thing to add into the when to use registered vs. non-registered is the level of risk. If it's a high risk investment I personally would keep it in a non-registered in order to get the capital loss should all go down hill.


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## Spudd (Oct 11, 2011)

You can put your money in a high-interest savings account within Waterhouse, that way you can have your cake and eat it too (and no fees to do this). 

http://www.canadiancapitalist.com/high-interest-savings-accounts-at-discount-brokers/


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## 44545 (Feb 14, 2012)

Money4life,
The article linked by Young&Ambitious and I is a MUST read BEFORE you decide between mutual fund or ETF. Here's the link again:
http://canadiancouchpotato.com/2010/06/25/should-you-use-index-funds-or-etfs/

TL;DR: you have to factor the brokerage costs along with amount invested to see the true cost of the investment vehicle. The ETF incurs commissions, the mutual fund does not.

$5,000 in a savings account earning 1% needs to be compared with $5,000 in a CDF 3% interest cash TFSA.
1% of $5,000 is $50.
3% of $5,000 is $150.

*You're PAYING THE BANK $100 in lost interest for the privilege of not paying bank fees. That's almost $10/mo.*

Per the thread I linked in my post above, you can avoid all fees by using a no fee chequing account and cherry picking the investment accounts at other institutions that don't have fees. 

If you have a TD Waterhouse account, you can make an electronic transfer to it from PC Financial to get money in. To get money out (easily) you can open a fee-free TD Savings account. (one free debit/ATM a month, unlimited internal money shuffling to/from TD Waterhouse).




Money4life said:


> ...I would probably have to just open an online account with TD Canada Trust and just work with e-series mutual funds...


I don't see the downside to opening the TD Waterhouse account. You still won't pay fees for buying or selling the e-Series mutual funds through them and you can still have a TD Canada Trust savings account (or other accounts) linked to it.



Eclectic12 said:


> Hmmm ... it has been a long time since I opened my TDW trading account but I recall having to fill out a similar form. However, I believe it would only limit more advanced items such as opening a margin account or option trading...


I found more info on the KYC form issue: http://canadiancouchpotato.com/2010/08/20/td-responds-to-e-series-concerns/


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## mrPPincer (Nov 21, 2011)

CJOttawa said:


> If you have a TD Waterhouse account, you can make an electronic transfer to it from PC Financial to get money in. To get money out (easily) you can open a fee-free TD Savings account. (one free debit/ATM a month, unlimited internal money shuffling to/from TD Waterhouse).
> 
> 
> 
> ...


For trading E-funds, TD Waterhouse account (webbroker) versus an online account with TD Canada Trust (easyweb), in my experience;

-Webbroker, to move money in, you have to push it over from the outside bank account so you have to wait until it shows up.
Easyweb, you just make your purchases and it will pull the money immediately from the account you have linked. (I use a no-fee HISA)

-Webbroker to move money out, you have to already have sold the funds and waited 3 days for the trade to settle, then phone in and ask them to transfer the funds.
Easyweb, when you sell the funds the money is sent directly to your linked account, so again, no wait time. 


With Easyweb my cash is never sitting idle, and is collecting the maximum interest whenever it isn't in equity, and I can trade e-funds at the moment I decide to, not so with Webbroker, where I have to wait a day for the funds to get there to buy, and 3 days after I sell if I'm selling, followed by a phone call and more waiting if I want it in my HISA.

Not a huge deal, but something to consider if you don't need to trade stocks yet.
I am trading some stocks now, bit I still keep an online mutual fund account with TD Canada Trust for the convenience.


As to whether or not to go with TDW at this point I do see one additional very good reason not to.. (yet):
v v v


Spudd said:


> At TD Waterhouse there is a fee for RRSP accounts


edit: CJOttawa is right, the annual TDW admin fee for RRSP or RRIF accounts under 25K is $25 for a basic account or $100 for a normal registered trading account under 25K. (basic RESP $50, normal RESP $100. under 25K)




Money4life I think it's a little early in your case to try and separate out asset classes like Reits and emerging markets.

Index funds already do hold reits, and the whole reason for separating them out is so that you can benefit from the regular rebabalancing of your portfolio.
But with modest size porfolios, the costs involved with the rebalancing pretty much eliminate any benefits.

For emerging markets, there's no inexpensive way to get in and rebalance except with fairly large portfolios that want to hold maybe 5 or 10%
For a portfolio of say, 200K I think it begins to become feasable to buy and hold some EMs reasonably cheaply, but the rebalancing is still fairly cost-prohibitive.
(I, for example, hold some VWO, but keep some cibc emerging markets through PC Finacial for 'free' rebalancing)


You mentioned that you would like to purchase a house at some point and that real estate is not cheap in your area.

For that reason as well as the size of your present portfolio, I think for now you can get everything you need with e-funds through TD Canada Trust's EasyWeb linked to a no-fee HISA. (It suited me fine until my portfolio was 200Kish, but there are reasons to deal with TDW at little earlier)

You will get different answers from everyone here, but that's what I have to offer. Good luck!


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## 44545 (Feb 14, 2012)

Spudd said:


> At TD Waterhouse there is a fee for RRSP accounts under 50k. $100 per year...


Where is that figure coming from?

See the link quoted below:



CJOttawa said:


> ...TD Waterhouse's fee schedule is here: http://www.tdwaterhouse.ca/apply/forms/521778.pdf
> See pages 6 and 7. Fees on unregistered accounts are waived if you hold a TFSA.
> 
> TD Waterhouse TFSAs have no fees.
> ...


A screen capture of page 7 of the above linked document, with the relevant fee highlighted:










$25,000 is the fee exemption threshold. If a basic RSP will do you, the fee is only $25 per year.


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## Money4life (May 17, 2012)

CJOttawa said:


> Money4life,
> The article linked by Young&Ambitious and I is a MUST read BEFORE you decide between mutual fund or ETF. Here's the link again:
> http://canadiancouchpotato.com/2010/06/25/should-you-use-index-funds-or-etfs/
> 
> ...


I'm sorry CJOttawa but I am extremely confused by most of your post. I am actually getting really frustrated that I seem to know very little about money.

1) So basically, you are suggesting that I should consider transferring my TFSA investing with TD into a TFSA with CDF? Wouldn't I have sell my funds first with TD to do that? I doubt that they would want to transfer that money "in kind" into another institution. Surely, there would be fees, no? Other than that, yes the interest rate definitely looks better there. So I guess I wouldn't have to tack on additional investing into that TFSA since the interest rate is already so good? I notice the CDF website mentions that "all rates are subject to change without notice". What if I put all of this effort into changing institutions and then they end up lowering the interest rate?

2) I thought my TD Select Service chequings account is 100% free provided that I stay over 5K? If so, would I still need to do the steps that you've suggested in getting a no-fee chequings account elsewhere or am I missing something completely? Also, with my Select Service account, I get a free Travel Rewards Visa Card provided that I stay over 5K. Are you thinking because of these restrictions that I should consider changing accounts? At this very moment, couldn't I still be making free transfers from my TD chequings account to my potential TD Waterhouse accounts or is it more complicated than that?

3) Spudd has let me know that I could technically put money into a high interest saving account within TD Waterhouse. This would still place my family income over 50K . CJOttawa, were you saying that *BEFORE* I move all of my investing into TD Waterhouse, I should first consider transferring my TFSA money to CDF *OR* were you saying that I can still transfer all of my investing into TD Waterhouse and because it's a discount brokerage account, I can just make the switch of TFSA accounts right there? Sorry, I am a total newbie with everything. I think I would better understand this if I actually had these accounts and learned from actual experience.

Yes, I acknowledge that I haven't fully read the Mutual funds vs. ETFs thread yet but it doesn't mean that I'm not going to....I just have to digest all of this other information first. For someone who has only dealt with one institution for all money in their entire life, I cannot stress enough how tough this has been for me to try and grasp everything and decide which of these recommendations would work best for me.


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## Money4life (May 17, 2012)

mrPPincer said:


> For trading E-funds, TD Waterhouse account (webbroker) versus an online account with TD Canada Trust (easyweb), in my experience;
> 
> -Webbroker, to move money in, you have to push it over from the outside bank account so you have to wait until it shows up.
> Easyweb, you just make your purchases and it will pull the money immediately from the account you have linked. (I use a no-fee HISA)
> ...


Thanks for your additions to this thread. I didn't realize it seems a little more complicated to transfer funds over with webbroker. CJOttawa did give me a good idea of opening up a TFSA that has a 3% interest rate so perhaps, I can just move all of my TFSA investing into that account and then just stick with TD easy web for the rest of my investments (e-funds). Couldn't I just link my (free with restrictions) chequings account to my e-funds accounts or is it really recommended to open a free HISA?


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## 44545 (Feb 14, 2012)

Money4life said:


> I'm sorry CJOttawa but I am extremely confused by most of your post. I am actually getting really frustrated that I seem to know very little about money.


Let's back up a step here.

Once you move beyond living paycheque to paycheque (which I suspect everyone here has), you'll have some money left over.

You want to grow that money and protect it.

*Step 1:* Emergency fund. This should be CASH or otherwise very liquid. (money market account?) THAT is what I'm suggesting the CDF TFSA is for. Put six months living expenses in that and let it sit until/unless you need it. At least it's earning 3% interest there.

*Step 2:* Investing. Once you have the emergency fund taken care of, you want the extra money to appreciate in value. This is what you have a brokerage account for. You can have non-registered accounts and registered TFSA and RRSPs. These are "investment grade" accounts that can hold things like stocks, bonds, mutual funds and ETFs.



Money4life said:


> 1) So basically, you are suggesting that I should consider transferring my TFSA investing with TD into a TFSA with CDF? Wouldn't I have sell my funds first with TD to do that? I doubt that they would want to transfer that money "in kind" into another institution. Surely, there would be fees, no? Other than that, yes the interest rate definitely looks better there. So I guess I wouldn't have to tack on additional investing into that TFSA since the interest rate is already so good? I notice the CDF website mentions that "all rates are subject to change without notice". What if I put all of this effort into changing institutions and then they end up lowering the interest rate?


Oh dear no. What I'm saying is, don't keep "cash" in an account that isn't earning you interest. 

An "investment grade" TFSA is different from a "cash" TFSA like the one offered by Canadian Direct Financial and have different purposes, per my points above about emergency funds versus investing.




Money4life said:


> 2) I thought my TD Select Service chequings account is 100% free provided that I stay over 5K? If so, would I still need to do the steps that you've suggested in getting a no-fee chequings account elsewhere or am I missing something completely? Also, with my Select Service account, I get a free Travel Rewards Visa Card provided that I stay over 5K. Are you thinking because of these restrictions that I should consider changing accounts? At this very moment, couldn't I still be making free transfers from my TD chequings account to my potential TD Waterhouse accounts or is it more complicated than that?


What I'm saying is this: the money you are "parking" in that TD Canada Trust chequing account is not growing. In fact, inflation is making it worth less than it was.

If inflation is 2%, your $5,000 is losing purchasing power at 2% per year.

Instead of that, I'm suggesting you use a no-fee chequing account elsewhere that doesn't require a minimum balance and only using accounts at TD that don't have fees or require you to "park" cash in them to avoid fees.

With the $5,000 you had "sitting around", put it in something earning interest. (the CDF 3% cash TFSA, if you've ear-marked that $5,000 for your emergency fund)

Keep in mind: all of what I'm suggesting is based on "fee avoidance." If you're fine spending an extra $100+ or so a year on fees, you'll have the convenience of holding everything with one financial institution. (say, TD Canada Trust/TD Waterhouse)




Money4life said:


> 3) Spudd has let me know that I could technically put money into a high interest saving account within TD Waterhouse. This would still place my family income over 50K . CJOttawa, were you saying that *BEFORE* I move all of my investing into TD Waterhouse, I should first consider transferring my TFSA money to CDF *OR* were you saying that I can still transfer all of my investing into TD Waterhouse and because it's a discount brokerage account, I can just make the switch of TFSA accounts right there? Sorry, I am a total newbie with everything. I think I would better understand this if I actually had these accounts and learned from actual experience.
> 
> Yes, I acknowledge that I haven't fully read the Mutual funds vs. ETFs thread yet but it doesn't mean that I'm not going to....I just have to digest all of this other information first. For someone who has only dealt with one institution for all money in their entire life, I cannot stress enough how tough this has been for me to try and grasp everything and decide which of these recommendations would work best for me.


The mutual fund versus ETF link is a quick read and VITAL in learning why you would choose one over the other.

Also, you can have multiple TFSA accounts all over the place, for different purposes. I keep an investment grade one with TD Waterhouse for housing things like Mutual Funds, ETFs, stocks, bonds etc. My CDF 3% is for cash.


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## mrPPincer (Nov 21, 2011)

I'ts not by any means necessary to have a HISA be the one that's linked.

I, for example, use a Manitoba credit union HISA for my TD Investments online mutual fund account, but I happened to use a different no-fee low interest account for my TDW trading account because that bank account had the ability to do bill payment, which my HISA didn't.

I was just trying to make it clear that there's 2 different ways to get the e-funds, and reasons for going about it either way, or both.that's all.

Also, keep in mind that if you chose to move money from one TFSA to another, have them do it in-kind to avoid triggering anything, same applies to your RRSP.


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## mrPPincer (Nov 21, 2011)

CJOttawa said:


> Keep in mind: all of what I'm suggesting is based on "fee avoidance." If you're fine spending an extra $100+ or so a year on fees, you'll have the convenience of holding everything with one financial institution. (say, TD Canada Trust/TD Waterhouse)


Just one additional point to clarify here, the simple online TD Canada Trust mutual fund account with EasyWeb has NO annual fees whatsoever.

There is still of course the early redemption fee for selling within 90 days (the e-funds) or 30 days (most of the rest), but they can be avoided easily enough if one pays attention.

The frequent trading fee mentioned above follows the normal first in - last out rule that most fund companies use.


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## Spudd (Oct 11, 2011)

The basic RSP account at Waterhouse only allows you to invest in certain things:


> They include mutual funds, GICs, Money Market Instruments, Canada and Provincial saving bonds, corporate and government issued bonds, strip bonds, Mortgage Backed Securities and cash.


For now that would be fine but if Money4Life wants to get into ETFs or stocks in the future he/she would have to upgrade to the $100 version (self-directed RSP). And I can't really see the advantage of this basic RSP over the TD investing account which is free.


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## Money4life (May 17, 2012)

CJOttawa said:


> Let's back up a step here.
> 
> Once you move beyond living paycheque to paycheque (which I suspect everyone here has), you'll have some money left over.
> 
> ...


Oh okay, see I didn't realize that someone is able to hold multiple TFSAs. I guess all that matters is the $5000 contribution limit per year, right? Unfortunately, since I had a pre-authorized purchase plan set up at the bank since the very beginning of the year, I've already put $1923 into my "investment grade" TFSA this year. That leaves only $3000 or so left for my potential "cash" TFSA. My 6 months of living expenses for me adds to about $4000 but I guess $3000 is all that I can work with. I can already see one disadvantage in having a pre-authorized purchase plan.

I see what you are saying about having money parked in accounts just to avoid fees. Does sound pretty stupid. One worry that pops out for me though is my Infinite Travel Credit Card that I just got last month. The annual fee is $120 but that fee is waived if I have a Select Service account, which I do. I also need a certain amount of money in the Select Service Account annually to avoid fees. So you are saying that I should get rid of this Select Service account entirely and open a free high-interest account with TD and then a free chequings account with PC? In that case, I would have to revert back to my no fee Visa Credit Card that I had before. Also, I would have to close my US Account (Borderless Plan) that I got for free with my Select Service account. I don't think I really have any use for that account right now, but like I've been saying over and over, my investment advisor recommended me to open an account up and I did. 

Haven't read the ETFs vs. Mutual Funds link yet (I'm off to work now) but I will let you know when I do! Thanks for your help.

Also, I will respond to the other messages above later. Thank you!


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## brad (May 22, 2009)

Money4life said:


> Haven't read the ETFs vs. Mutual Funds link yet (I'm off to work now) but I will let you know when I do! Thanks for your help.


Two things to point out with regard to ETFs vs. mutual funds: 

1) Most of these comparisons are between ETFs and standard mutual funds, and standard mutual funds have really high MERs compared with comparable ETFs. But in your case I think you want to compare ETFs with TD eFunds, which have very low MERs. It's true that their MERs are higher than most (but not all) comparable ETFs, but they're still very low.

2) It is a LOT easier and simpler to buy TD eFunds than it is to buy and sell ETFs. You can figure out how to buy eFunds in about 5 minutes. You could spend weeks learning how to buy ETFs; it's a more complicated and intimidating process. Everyone here will tell you how easy it is, but that's because they've been doing it for a long time. I found the whole process very frustrating and mystifying the first time around; Four Pillars has written the best primer on the subject I've seen anywhere; the others I read prior to placing my first order (including TD's own instructions) assume too much prior knowledge. You need step-by-step instructions that don't assume you know the difference between a market order and a limit order, or even know how to find out what an ETF is selling for. 

So to add to all the confusing and conflicting advice you're getting here, my advice would be to start with eFunds unless you feel ready to tackle process of buying ETFs (a read through Four Pillars' instructions should give you an idea of the steps involved). Once you get the hang of it you'll have no problem, but for those of us who only buy ETFs once or twice a year it's a drag because I at least can never remember how to do it again and have to re-read the instructions from scratch. If I were doing it every week that would be easy, but I'm not.


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## the-royal-mail (Dec 11, 2009)

> ... *my investment advisor recommended *me to open an account up and I did.


We know. Listening to those advisors is what got you into the mess you now want to fix. Stop listening to them, stop phoning, don't make appts at the bank, don't play clever shell games and don't allow anyone to do ANY sort of pre-authorized withdrawals from your accounts for any purpose. Stop all of these things now. We know why you got into the current situation. Your situation is very common. Think of CMF as detox for your finances.  There's a lot of work to do.

The last time I went to the bank they didn't like me very much as they didn't get far with me. They suggested a bunch of things and I turned down all of them and did my own thing. Their suggestions are in their interest, not yours. Remember that.

IMO you do not need CC's with fees. Keep only 1-2 cards with no fees. Use cash for smaller purchases. Carefully pick your accounts based on the info from the website. My bank fees are rebated to me because I keep the transactions in and out of my account to a bare minimum. I would suspect you are paying a small fortune in fees of various kinds.

No one cares about your money more than you.


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## 44545 (Feb 14, 2012)

Money4life said:


> Oh okay, see I didn't realize that someone is able to hold multiple TFSAs. I guess all that matters is the $5000 contribution limit per year, right?...


It's "$5,000 per year SINCE 2008."

Right now, you can have $20,000 total in as many TFSA accounts as you want. (meaning four accounts with $5,000 or two accounts with $10,000 or 13 accounts with $1,538 each... make sense?)

So, get that high interest CDF TFSA and dump $5,000 into it. You've got $15,000 contribution room left for your *other* accounts.



Money4life said:


> ...My 6 months of living expenses for me adds to about $4000 but I guess $3000 is all that I can work with. I can already see one disadvantage in having a pre-authorized purchase plan.
> 
> 
> 
> ...


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## Money4life (May 17, 2012)

CJOttawa said:


> It's "$5,000 per year SINCE 2008."
> 
> Right now, you can have $20,000 total in as many TFSA accounts as you want. (meaning four accounts with $5,000 or two accounts with $10,000 or 13 accounts with $1,538 each... make sense?)
> 
> So, get that high interest CDF TFSA and dump $5,000 into it. You've got $15,000 contribution room left for your *other* accounts.


You for real?! I can set up as many TFSA as I want for $5000 per year? That's unbelievable. Are there any other places like CDF that offer similar interest rates for TFSAs? I almost want to just open up a bunch of TFSAs and stuff $5000 into each of them if they offer good rates. I have money that's just fucking around in my non-registered accounts.

A free chequings accounts sounds like a good idea for a cash account. Before I "upgraded" to a Select Service account, I had a free TD rebate rewards Visa card. I could always go back to that or try the PC Mastercard that you've recommended me. 

OK, so if I set up a savings account with TD, this would be the ONLY way that I could send money back and forth to my TD investments, right? Yes, maybe I will just stick with e-funds for my RSP/TFSA in a normal TD Mutual Funds account with the help of TD easyweb. It sounds like I have a lot of work cut out for me as it is. I don't know what I'll be doing with my non-registered account yet, where I have the most money.


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## Money4life (May 17, 2012)

the-royal-mail said:


> We know. Listening to those advisors is what got you into the mess you now want to fix. Stop listening to them, stop phoning, don't make appts at the bank, don't play clever shell games and don't allow anyone to do ANY sort of pre-authorized withdrawals from your accounts for any purpose. Stop all of these things now. We know why you got into the current situation. Your situation is very common. Think of CMF as detox for your finances.  There's a lot of work to do.
> 
> The last time I went to the bank they didn't like me very much as they didn't get far with me. They suggested a bunch of things and I turned down all of them and did my own thing. Their suggestions are in their interest, not yours. Remember that.
> 
> ...


Yeah, it looks like that I got royally screwed. My only future appointments with the bank will be closing accounts and/or transfering money. About pre-authorized purchases, I seem to have a lot of these. I have them set up with my internet provider, netflix, my public transit monthly passes...okay, I guess just three. I don't think these three companies really gave me a choice...I would prefer to pay these on my own with a credit card. Perhaps I can contact them later and let them know that I want to pay bills on my own will.


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## brad (May 22, 2009)

Money4life said:


> You for real?! I can set up as many TFSA as I want for $5000 per year? That's unbelievable.


That's because it's not true. You can set up four TFSAs, each with $5,000 this year, given that you haven't set up any yet. The contribution limit is always $5,000 per year, but because you haven't contributed anything yet since the TFSA option was first offered, your contribution limit is $20,000. That means you could set up a bunch of them if you want, but the total contribution this year across all of them cannot add up to more than $20,000. Next year your total limit (across all your TFSA accounts) will be $5,000 assuming you max out your $20,000 contribution limit this year.


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## Spudd (Oct 11, 2011)

You can have as many or as few TFSA accounts as you want. Assuming you were at least 18 years old in 2009 and you've never withdrawn from a TFSA, your total contribution limit is $20,000. That can be $20,000 in one TFSA account or $1000 in 20 TFSA accounts (or any permutation thereof). You have to track your own contributions especially if you have multiple accounts.


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## Barwelle (Feb 23, 2011)

CJ, I agree with most of your advice so far, though I'm curious as to what you think the advantage is of this:



CJOttawa said:


> [*]TD savings account ONLY as a "link" to your TD investment account(s).


the TDCT mutual fund account can be linked directly to the OP's main chequing account (whether it's her Select Services account, a PC account, or wherever), without need for the 'middleman' (TD savings account).

Upthread, I think you mentioned a potential issue with liquidating your investments without a TD cash account... but it is not an issue, I just checked in my TDCT account and I can redeem my e-series funds and the money will go straight back to my regular bank account. (At a different institution.)


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## Eclectic12 (Oct 20, 2010)

brad said:


> You can set up four TFSAs, each with $5,000 this year, given that you haven't set up any yet. The contribution limit is always $5,000 per year, but because you haven't contributed anything yet since the TFSA option was first offered, your contribution limit is $20,000. That means you could set up a bunch of them if you want, but the total contribution this year across all of them cannot add up to more than $20,000. Next year your total limit (across all your TFSA accounts) will be $5,000 assuming you max out your $20,000 contribution limit this year.


+1 that TFSA contribution room limits the total that can be contributed. As per the following link,


> You can have more than one TFSA at any given time, but the total amount you contribute to all your TFSAs cannot be more than your available TFSA contribution room ...


http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/tfsa-celi/sttng-eng.html
So if an individual has TFSA contribution room of $20K - they could have 20 TFSAs with $1K in each or 4 TFSAs with $5K or 2 TFSAs with $10K, etc.


However - the part about having TFSA contribution of $20K because no contributions have been made depends on two other factors.


> You cannot open a TFSA or contribute to one until you turn 18. However, when you turn 18, you will be able to contribute up to the full TFSA dollar limit for that year.


http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/tfsa-celi/lgbl-eng.html

From the same link:


> If you become a non-resident of Canada, or are considered to be a non-resident for income tax purposes ... No TFSA contribution room will accrue for any year throughout which you are a non-resident of Canada.


So to have earned the full $20K of TFSA contribution room since the program started in 2009, an individual have turned 18 in 2009 or earlier *and* be a resident for income tax purposes for all four years.

Likely this applies but it is always good to be sure of the rules.


Cheers


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## Eclectic12 (Oct 20, 2010)

brad said:


> [ ... ]
> 
> 2) It is a LOT easier and simpler to buy TD eFunds than it is to buy and sell ETFs. You can figure out how to buy eFunds in about 5 minutes. You could spend weeks learning how to buy ETFs; it's a more complicated and intimidating process. Everyone here will tell you how easy it is, but that's because they've been doing it for a long time.
> 
> ...


Hmmm ... I can agree it's likely simpler (depending on the interface) and it is an important point to consider.

However, IMO the complexity is over-blown. I think I've spent about half an hour on how to enter trade orders. To be generous, I'll double it to an hour. Sure - it's more than five minutes but nothing like "weeks".


As for having to re-read the instructions from scratch - the only thing I can think of is that your broker must be re-writing the order entry interface several times a year! :rolleyes2:


IAC, to be clear - ETFs are traded on the stock exchange so whether its a stock, trust or ETF, the more complicated order entry is needed.


Cheers


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## the-royal-mail (Dec 11, 2009)

Just to be clear and expand on what spudd said, the TFSA limit of $5000 per year is PER PERSON. You may open as many TFSAs as you like (watch out for the various fees though) but their total must not exceed the limit by even a penny. You are responsible to manage this. Don't depend on anyone else to manage it for you. If you plan to open multiple TFSAs (something I don't necessarily recommend) then start yourself a little tracking sheet in excel to keep track of the deposit dates and amounts in the various accounts.

As for the bank, you do NOT need to make an appt with them to transfer out. If you are with bank A now and want to transfer x to bank B, you ask bank B to do it. They take it from there, they handle all the paperwork and communications with bank A. You do not need to say a single word to bank A about this.

For the pre-authorized payments, you may not have a choice with netflix but with my ISP I mail them a cheque once per year to pay for the entire year and keep their fingers out of my account. Same thing goes for my car and other insurance. I pay everything in one shot. This also saves money in fees and keeps fingers out of YOUR accounts. Pay them with a cheque or as a bill payment through your online banking. You should not pay these with a credit card. Unfortunately for things like car and mortgage payments you are pretty well stuck letting them take the money like that. 

I have the opinion that the entire system is corrupt and serves interests other than my own. On the same vein, I too look after my own interests. You will do well if you do the same and it sounds like you will.


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## londoncalling (Sep 17, 2011)

I think the OP should probably step back and take a look at the situation... Step 1 stop PAC... already done... step 2... go back and read the 8 with weight... http://canadianmoneyforum.com/showt...-with-Weight-A-Reading-List-for-New-Investors

Educate yourself before making any moves... you may spend another month or two stuck in the situation that you are but at least you will be better informed and prepared to deal with your finances going forward... At this stage of the game there is too much information and too many opinions being bandied about.. All of the advice you have been given has been well informed and with sincerity but as far as I can tell you are not ready to do this on your own... The fact that you don`t even understand how the TFSA structure works leads me to believe that you are not ready to decide between TD E series, ETFs and discount brokerage selections. First stop the bleeding then start learning before you start investing.. Otherwise you may just be throwing more money away...

Welcome to the forum and congratulations on realizing what has been happening to you the past while... It has happened to the majority of us (myself included) but you have a huge amount of reading to go over and a large amount of learning and understanding to do before you take this on. I myself stopped all my contributions and took some small steps before I jumped into my DIY. I may have missed the 2009-2011 rally but at least I did not just throw my money out the window trying to sort it all out before I was informed. This does not mean I continued to let my financial advisor and bank continue to pick my pocket in the interim...

Good luck with whatever steps you take next. The first step is to realize that banks are a business and that business is to make money off of us... After that it gets much easier... You`ve already accomplished step 1. good on ya.


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## 44545 (Feb 14, 2012)

Money4life said:


> You for real?! I can set up as many TFSA as I want for $5000 per year? That's unbelievable.


That's because it isn't believable.

You didn't read this part of my post:



CJOttawa said:


> It's "$5,000 per year SINCE 2008."
> 
> Right now, you can have *$20,000 total* in as many TFSA accounts as you want. (meaning *four accounts with $5,000 or two accounts with $10,000 or 13 accounts with $1,538 each*... make sense?)...


So, no, as others have said, this isn't a licence to print free money. 

Your total of all your TFSA accounts may not exceed $20,000 as of 2012. You can split that across as many accounts as you like but it's up to you to track and not exceed that total.




Barwelle said:


> CJ, I agree with most of your advice so far, though I'm curious as to what you think the advantage is of this:
> 
> 
> 
> ...


That's fair Barwelle.

My reason for that list is I know it works. TD Waterhouse can be set up as a "bill payment" from PC Financial. (getting funds in)
To get funds out of TD Waterhouse without a cheque processing fee, I linked it to a TD Canada Trust account.
If the TD Canada Trust investment account had a means of getting money in and out, it could be another option.


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## Eclectic12 (Oct 20, 2010)

londoncalling said:


> I think the OP should probably step back and take a look at the situation... Step 1 stop PAC... already done... step 2... go back and read the 8 with weight... http://canadianmoneyforum.com/showt...-with-Weight-A-Reading-List-for-New-Investors
> 
> Educate yourself before making any moves... you may spend another month or two stuck in the situation that you are but at least you will be better informed and prepared to deal with your finances going forward... At this stage of the game there is too much information and too many opinions being bandied about.. All of the advice you have been given has been well informed and with sincerity but as far as I can tell you are not ready to do this on your own... The fact that you don`t even understand how the TFSA structure works leads me to believe that you are not ready to decide between TD E series, ETFs and discount brokerage selections. First stop the bleeding then start learning before you start investing.. Otherwise you may just be throwing more money away...
> 
> ...


+1 ... or to emphase, ++++1. :chuncky:

Understanding at minimum the overview of the parts that are being implemented is critical, IMO. Without that, it is difficult to evaluate where the risks and/or costs lie.

I'd also add that part of what is making for a lot of information is that many parts are being discussed. Another advantage to taking one's time to learn the parts is there will be a lot more confidence in the final choices.

Since the OP mentions being overwhelmed - bear in mind this is no different than learning any other hobby or skill. If one learns a bit at a time, at one's own pace before long the more complicated bits will make sense.


Cheers


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## brad (May 22, 2009)

Eclectic12 said:


> However, IMO the complexity is over-blown. I think I've spent about half an hour on how to enter trade orders. To be generous, I'll double it to an hour. Sure - it's more than five minutes but nothing like "weeks".


It actually took me months, but that's because I wanted to understand what I was doing rather than blindly following cookbook directions. And to understand what you're doing, first you have to understand what ETFs are, what stocks are, how the stock market works, what the difference is between a limit order and a market order, when you can place an order (you can buy eFunds at 4am if you want to), how to get money from your bank into your brokerage account, how to deal with the fact that, unlike eFunds, you will have money left over in your brokerage account, etc. I had questions that were so basic that the TD help personnel couldn't answer them because nobody else had ever asked these questions before. But they were fair questions from a rank beginner and I'm not an especially stupid person, I just wasn't finding the basic information I needed. I asked a lot of questions here and people pointed me to online primers, etc., but I found those online primers (Investopedia, etc.) to be of little help because they assumed you already knew the basics. It literally took me months to get to the point where I felt like I had an idea of what I was doing. And then there was all the conflicting advice (set your limit above the current price, set your limit below the current price, etc.)


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## Four Pillars (Apr 5, 2009)

brad said:


> Four Pillars has written the best primer on the subject I've seen anywhere;


Thanks for the kind words Brad and thanks again for proof-reading it for me.

I have to 2nd what Brad said - buying mutual funds (ie TD e-funds) is a lot easier and far more convenient than ETFs. Any comparison of the two products should take that into consideration.


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## MoneyGal (Apr 24, 2009)

I'm going to echo what others have said and say my advice is for you to stop. Just stop, catch a breath, and figure out what you are doing. 

Right now, you don't have a plan and you are getting distracted by smaller elements (cost minimization) versus figuring out what the bigger pieces are. If you are planning on using a significant chunk of your existing savings as a house downpayment, _those funds should not be in the market at all_ (I believe you will find strong consensus on this point here). 

You really need a financial plan, and before you get a plan in place, you need to figure out your financial goals. 

There is a LOT of FREE and GOOD financial advice here, and you've succeeded in getting a lot of attention to your posts. That won't stop, because people here like to help (and type). But you aren't going to make actual, real headway (in my opinion) until you slow down and start to focus on larger issues instead of rushing to implement half-thought-out plans.


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## MoneyGal (Apr 24, 2009)

Four Pillars said:


> Thanks for the kind words Brad and thanks again for proof-reading it for me.
> 
> I have to 2nd what Brad said - buying mutual funds (ie TD e-funds) is a lot easier and far more convenient than ETFs. Any comparison of the two products should take that into consideration.


Hey! That is a GREAT primer. I'm sorry I didn't see it until now! Fantastic post.


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## Money4life (May 17, 2012)

*No, I think I do understand how TFSAs work.* Reading back, I realize that CJOttawa didn't know the full story of my TFSA history and because I'm a idiot, I didn't recognize this and asked him a question based on the knowledge that he knew about me. In addition, I also made a stupid typo while asking that question which made my question seem even more ridiculous. Two pages later, I can try to correct this.

Basically, this is the knowledge of TFSAs that I had before I signed up here:

You are able to contribute up to $5000 per calendar year into a TFSA. 

I've done this every individual year since 2009. My market value stands at 18K (a little higher than my overall contributions). I've contributed $1923 into my TFSA this calendar year through PACs which only leaves me with $3077 of contribution room this year, as I pointed out in post #90. 

CJOttawa then mentions to me that I'm able to open multiple TFSA (didn't know that) but he also said this to me:


CJOttawa said:


> It's "$5,000 per year SINCE 2008."
> 
> Right now, you can have $20,000 total in as many TFSA accounts as you want. (meaning four accounts with $5,000 or two accounts with $10,000 or 13 accounts with $1,538 each... make sense?)
> 
> So, get that high interest CDF TFSA and dump $5,000 into it. You've got $15,000 contribution room left for your *other* accounts.


This was where I misinterpreted him. He thought I had more room since I didn't make any contributions in past years, which was not true. I didn't notice this and followed up with a blatantly dumb question that also had a typo. And that's when we have other users letting me know that "I'm not ready to control my money", which I don't think is entirely true.


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## MoneyGal (Apr 24, 2009)

Money4life said:


> On the contrary, *are ETFs or index mutual funds not stable enough to keep potential down-payment money tucked away in there*? I think the funds that I slapped together in my hypothetical non-registered account would at least have pretty good short term growth. *Don't you think there's a greater chance that I would make more money in the short term with ETFs/mutual funds as opposed to a high interest savings account?* Is it just too risky thinking that way?


This is why you should stop and take a breath. Not because of any typos.


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## Money4life (May 17, 2012)

MoneyGal said:


> This is why you should stop and take a breath. Not because of any typos.


Okay...I now know that ETFs and mutual funds should always be for long-term finances and something like GICs and savings accounts should be geared towards more imminent things like a down-payment on a house. But before that, I need to create an emergency fund, which I had yet to do that. I think even right now, I can create a to do list of what I should be doing and it shouldn't be too overwhelming for me, provided that I don't do everything all at once.


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## Four Pillars (Apr 5, 2009)

MoneyGal said:


> Hey! That is a GREAT primer. I'm sorry I didn't see it until now! Fantastic post.


Thanks - you guys are making me blush. 

First round at the Ulster is on me....


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## Money4life (May 17, 2012)

I'm skimming around the TD Canada website and have discovered Market Growth GICs that seem pretty interesting to me. It appears that each of these market growth funds are linked to index funds with no fees and there's even a guaranteed principal on-top of that. Thoughts?

*GIC Plus* is linked to S&P/TSX 60 Index (60 largest stocks in TSX measured by market cap).

*Financials GIC Plus* is linked to S&P/TSX Banks Index (stocks of various Canadian financial institutions)

*Utilities GIC Plus* is linked to S&P/TSX Capped Utilities Index (stocks of various Canadian utilities companies)

*US GIC Plus* is linked to S&P 500 Index (500 US stocks chosen for market size, liquidity and industry grouping).

*Global GIC Plus* is linked to S&P 60 Index, S&P 500, FTSE 100, Nikkei 225, Dow Jones EUROSTOXX 50 (weighing determined by TD, paid in Canadian Dollars)

*Security GIC Plus* is linked to S&P/TSX Bank Index and S&P/TSX Capped Utilities Index (50% weighing each)

Thoughts?

If I decide that I'm not ready for ETFs and move some of my current mutual funds over to the e-series funds, should I try to move the other part of my investing over to here? Or should I really be choosing between one or the other since it looks like that they almost deal with the same indexes?

Yes, I know that I really need to do a lot of financial planning as a whole first before making these decisions but do these market growth GICs sound like a feasible option?


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## HaroldCrump (Jun 10, 2009)

Money4Life, those Market Linked GICs are a singularly bad, bad deal for investors.
You can all of the downside of stock markets, with limited (capped) upside, miss out on the dividend yield of the underlying, get almost 0% guaranteed returns (because of the current low rates), etc.

I have to repeat what most of us have said above - you should stop thrashing at this time.
You have to take a pause, slowly egg out of the managed mutual funds that have been causing you so much concern, and then take your time to figure out what your investing strategy is going to be.

Have you looked at the markets recently?
There is no rush to buy - it aint going nowhere fast.


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## Money4life (May 17, 2012)

HaroldCrump said:


> Money4Life, those Market Linked GICs are a singularly bad, bad deal for investors.
> You can all of the downside of stock markets, with limited (capped) upside, miss out on the dividend yield of the underlying, get almost 0% guaranteed returns (because of the current low rates), etc.
> 
> I have to repeat what most of us have said above - you should stop thrashing at this time.
> ...


OK thanks...just thought I'd mention it because it seemed something along the lines of what I should be looking for.

OK I'll take a breather from looking at investments and focus on other matters that need to be dealt with first.

Thanks for the insight.


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## Toronto.gal (Jan 8, 2010)

MoneyGal said:


> 1. I'm going to echo what others have said and say my advice is for you to stop. Just stop, catch a breath, and figure out what you are doing.
> 
> 2. There is a LOT of FREE and GOOD financial advice here, and you've succeeded in getting a lot of attention to your posts. That won't stop, because people here like to help (and type). But you aren't going to make actual, real headway (in my opinion) until you slow down and start to focus on larger issues instead of rushing to implement half-thought-out plans.


1. I hope the OP is not doing all this research and lengthy posts [writing/reading] from work; the focus needed for this is 1000%.

2. This is, by far, the best and most helpful forum. OP is incredibly lucky that he found CMF.

I'm always amazed at the patience and the generosity of so many here to give so much of their free and valuable time, especially you MoneyGal on this thread [& others], and even after you were told to stay out of this thread. LOL, a junior member making such comments to one of the most valuable senior members here. Hope you received an apology. s:rolleyes2:


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## Eclectic12 (Oct 20, 2010)

brad said:


> It actually took me months, but that's because I wanted to understand what I was doing rather than blindly following cookbook directions. And to understand what you're doing, ...
> 
> I just wasn't finding the basic information I needed. I asked a lot of questions here and people pointed me to online primers, etc., but I found those online primers (Investopedia, etc.) to be of little help because they assumed you already knew the basics. It literally took me months to get to the point where I felt like I had an idea of what I was doing. And then there was all the conflicting advice (set your limit above the current price, set your limit below the current price, etc.)


While I sympathise with your experience, it sounds like part of what dragged it out is the "piece meal" as well as "cookbook" sources. 

The "beginners" guide at the public library had a chapter devoted to stock market orders. Once an brokerage account was opened, I used two penny stocks to practice. As I say, if it was an hour total - I'm being generous. After all - whether it was my uncle thirty years ago or myself online last week, a market order is a market order and a limit is a limit.

Then too, I understand from my co-worker who opened a brokerage account this month was given access to a "play area" to place dummy trades to learn how orders work.


Just so I'm clear - I agree that TD eSeries is likely much easier. 



Cheers


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## jet powder (May 29, 2012)

I would get rid of the mutal funds @ market highs mutual funds always have thier lowest cash levels & @ lows have their highest cash levels. 

Interest rates are low & if any one of the funds is holding bonds they will drop in value if rates rise. It is better to buy individual bonds or GICs use ladder & hold to maturity.

A lot of the broad index ETFs can now be bought commision free. The banks are making a fortune charging outragous fees stop the bleeding get out of the funds.

After the crash of 1929 - 1932 investment trusts had to change there name so investors would purchase them again & now we have the mutual funds that mostly under preform the market.

Most invest to much money in the market & are not able to have disapline to follow a method that gives them an edge ( many dont even have an edge) I find I do my best when I play based on my method & play as if I dont care. To do this my position size must be small.


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## Eclectic12 (Oct 20, 2010)

jet powder said:


> I would get rid of the mutal funds @ market highs mutual funds always have thier lowest cash levels & @ lows have their highest cash levels.
> 
> [ ... ]
> 
> ...


Hmmm ... earlier in the thread there is mention of the TD e-series index MFs which can be bought online, commission free. 

I'm curious as to who offers ETFs commission free. So far, the only way I am only aware of to buy an ETF is through a broker who will charge commissions.


Cheers


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## HaroldCrump (Jun 10, 2009)

Eclectic12 said:


> I'm curious as to who offers ETFs commission free. So far, the only way I am only aware of to buy an ETF is through a broker who will charge commissions.


Some brokerages are now offering a list of ETFs for commission free trading.
Scotia iTrade and QTrade are two that I know of.

However, what I disagree with in that above quote is the "broad index" part.
Most of the ETFs that are commission free (at least at Scotia iTrade) are low volume, highly specialized ETFs.
Like the inverse, swap based, double leveraged low volume securities.
Not regular, high volume, broad equity ETFs like XIU, XIC, etc.


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## Four Pillars (Apr 5, 2009)

HaroldCrump said:


> Some brokerages are now offering a list of ETFs for commission free trading.
> Scotia iTrade and QTrade are two that I know of.
> 
> However, what I disagree with in that above quote is the "broad index" part.
> ...


Agreed - they are also higher MER, so if you are comparing to the cheap broad-based index ETFs like offered by iShares & Vanguard you have to consider that someone with more money might pay more for MER than they save in transaction costs.

However, for someone starting out, they are likely a very good deal.


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## Eclectic12 (Oct 20, 2010)

HaroldCrump said:


> Some brokerages are now offering a list of ETFs for commission free trading.
> Scotia iTrade and QTrade are two that I know of.
> 
> However, what I disagree with in that above quote is the "broad index" part.
> ...


Interesting ... I'll have to keep this in mind. Thanks for the update.


Cheers


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## jet powder (May 29, 2012)

Yes you guys are propably right I was able to find 2 etfs that would have met my needs if I was trading the Canadian markets & assummed that they most likely had ones that could play the broad market (sorry my mistake)
Through my research I had developed a sun- lunar trading method for part of my trading portfolio & there were ETFs that let me trade the technology sector & the oil & gas sector for free in the Canadian market. But I decided to use the QQQ , XOP & XLE instead.


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## Money4life (May 17, 2012)

Hello!

Back again to provide an update. I've taken the forum's advice by cooling down and attaining more knowledge before I do anything. That is why that I have decided to start reading the recommended 'Eight for Weight'. I am a third of the way into 'Investing for Canadians for Dummies.' This actually was a good starting point for me because already, I am reading about many factors that I never really understood in the first place.

In the middle of all of this, I am trying to get the "little things" done. Turns out that my credit card is free for the rest of the year so there's no need to ditch that card for a no-fee card. Not just yet.

As for my emergency funds, so far, I've applied for a savings account with Canadian Direct Financial. Their 2% savings account (with no minimum monthly balance) is better than any savings account with TD. Once that's approved and I am officially a member, that's when I'll apply for the 3% TFSA. 

I've already received a pamphlet in the mail for a free chequing account with PC Financial. I guess I missed the part about only being able to withdraw $500 from a bank machine at a time. It seems a little odd to me...but looking ahead, I'm thinking that shouldn't be too much of a problem.

One more thing: a TD representative phoned me yesterday to talk about my TD accounts (must have been because I ended my PACs). I was nice enough to give him a chance to speak to me. In the conversation, he asked me if I was satisfied overall and I mentioned how I wasn't the most satisfied because of my accounts requiring a monthly minimum balance for such low interest rates. He then said that I shouldn't worry about interest rates and should just focus on avoiding fees so I can maintain these accounts. The conversation never went much further after that and we never even talked about my investments.


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## Eclectic12 (Oct 20, 2010)

Money4life said:


> Hello!
> 
> Back again to provide an update. I've taken the forum's advice by cooling down and attaining more knowledge before I do anything. That is why that I have decided to start reading the recommended 'Eight for Weight'. I am a third of the way into 'Investing for Canadians for Dummies.' This actually was a good starting point for me because already, I am reading about many factors that I never really understood in the first place.
> 
> ...


It's great to get an update, as well as hear that the "Eight with Weight" is working out. I'm sure you will be much more confident in your decisions going forward. Not to mention far less easy a target for those looking to make money off of you!

As for the ATM limit, I have not really noticed this as an issue for the years I've had an account. For my needs, anything over $200 I setup as a bill payment, write a cheque or use my cash-back credit card then program a bill payment to pay it off. So now that you are aware of it, this may not end up being an issue however, everyone has different requirements so YMMV.


Cheers


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## Toronto.gal (Jan 8, 2010)

Money4life said:


> That is why that I have decided to start reading the recommended 'Eight for Weight'. I am a third of the way into 'Investing for Canadians for Dummies.' This actually was a good starting point for me because already, I am reading about many factors that I never really understood in the first place.


It is great to hear that you're investing some time reading basics! 

The reason why so many go wrong and/or think investing is too complex, is exactly because they did not start with the fundamental basics/mechanics of investing.

You will see how empowered you will feel the more you read & learn!


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## 44545 (Feb 14, 2012)

Money4life said:


> Hello!
> 
> Back again to provide an update. I've taken the forum's advice by cooling down and attaining more knowledge before I do anything. That is why that I have decided to start reading the recommended 'Eight for Weight'. I am a third of the way into 'Investing for Canadians for Dummies.' This actually was a good starting point for me because already, I am reading about many factors that I never really understood in the first place.


Way to go Money4life!

I too am going through that list. I found "The Naked Investor" downright frightening but extremely informative. (terms like "discretionary trading" and "churn" were new to me) I think you'll like that one.





> ...In the middle of all of this, I am trying to get the "little things" done. Turns out that my credit card is free for the rest of the year so there's no need to ditch that card for a no-fee card. Not just yet.


*nods* Good plan there - take advantage of free use while you can.



> ...As for my emergency funds, so far, I've applied for a savings account with Canadian Direct Financial. Their 2% savings account (with no minimum monthly balance) is better than any savings account with TD. Once that's approved and I am officially a member, that's when I'll apply for the 3% TFSA.


Do let us know what you think of the CDF interface and features. There's not a lot of talk about CDF online yet.



> ...I've already received a pamphlet in the mail for a free chequing account with PC Financial. I guess I missed the part about only being able to withdraw $500 from a bank machine at a time. It seems a little odd to me...but looking ahead, I'm thinking that shouldn't be too much of a problem.


Odd. I don't think I have a $500 limitation, though I've heard that complaint before.
You could write a cheque instead - no limit on those.



> ...One more thing: a TD representative phoned me yesterday to talk about my TD accounts (must have been because I ended my PACs). I was nice enough to give him a chance to speak to me. In the conversation, he asked me if I was satisfied overall and I mentioned how I wasn't the most satisfied because of my accounts requiring a monthly minimum balance for such low interest rates. He then said that I shouldn't worry about interest rates and should just focus on avoiding fees so I can maintain these accounts. The conversation never went much further after that and we never even talked about my investments.


lol. It's amusing how the bank customer service reps change their tune when they realize you know what you're talking about and how to manage your money.  The PC rep I told about the CDF 3% TFSA lost his cool briefly (cheerfully), saying "Noooo! Seriously? 3%?" - sounded like he was going to go open one of his own.


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## Money4life (May 17, 2012)

Thanks for the feedback guys...

CJOttawa, yeah I thought it made sense to keep my travel rewards card with TD but just yesterday, I was thinking..."how the hell am I supposed to pay my bills if I'm going to get rid of my chequing account with TD?". If and when I open a savings account with TD, I am allowed to have one free debit transaction per month from it but do I really want to be paying my credit card from a savings acccount? That also means that I'll have to feed money into it but I think I would rather have more of my savings in the CDF savings account.

I might have to get the PC Mastercard afterfall...


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## Eclectic12 (Oct 20, 2010)

Money4life said:


> Thanks for the feedback guys...
> 
> CJOttawa, yeah I thought it made sense to keep my travel rewards card with TD but just yesterday, I was thinking..."how the hell am I supposed to pay my bills if I'm going to get rid of my chequing account with TD?".
> 
> [ ... ]



Just setup the TD travel rewards credit card as a bill to pay using whatever financial account you choose. There is no need to have a TD account to pay a TD credit card. 

For example, in the past I've paid a BMO MasterCard, a CIBC Visa as well as an American Express from my PCF chequing account, all without having an bank account with any of them.


Cheers


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## Barwelle (Feb 23, 2011)

CJOttawa said:


> Do let us know what you think of the CDF interface and features. There's not a lot of talk about CDF online yet.


+1 on this. I also would like to know more about CDF. I'm disappointed in ING Direct: 1.35%/1.40% for non-reg/TFSA savings? At first I didn't care when they dropped their rates because it's a small percentage difference, but now I am starting to feel a little ripped off and have been considering CDF.



CJOttawa said:


> It's amusing how the bank customer service reps change their tune when they realize you know what you're talking about and how to manage your money.  The PC rep I told about the CDF 3% TFSA lost his cool briefly (cheerfully), saying "Noooo! Seriously? 3%?" - sounded like he was going to go open one of his own.


This made me LOL.


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## Barwelle (Feb 23, 2011)

CJOttawa said:


> Do let us know what you think of the CDF interface and features. There's not a lot of talk about CDF online yet.


There is actually a [short] thread here re: CDF. 

And I saw in a different thread that you (CJOttawa) have an account there. Maybe you'd like to add your thoughts there?


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## Money4life (May 17, 2012)

Hello,

I haven't posted in a while so my apologies if this post turns out to be a long one.

_Electic12_, that’s a good call on using my Visa card with other bank institutions. For some reason I didn’t realize that I could do that.

_Barwelle_, Canadian Direct Financial has been pretty good so far. I have my savings account and tax-free savings account set up. You had to fill out an application form online on their website for a savings account and then send a cheque in the mail. I initially thought that sending a cheque in the mail was a little sketchy so I just sent them $10 over. It took about a week for them to get it (I’m from Toronto and they’re based out of Edmonton) but within a week, I was set up and the transaction went through. I then wanted to set up my TFSA but the entire application process had to be mailed to them instead of doing it online. This time a $50 minimum deposit was required but seeing as my other cheque went through no problem, I didn’t have any hesitations to do the process over again. Once again, in about a week, that account was set up. I then transferred money over from my chequing account from another institution into my TFSA with CDF. An e-mail was sent to me saying it would take 3-5 business days, even though it really took 6-8 business days. Whatever—the money was sent over successfully. Customer service has also been very friendly and supportive. You don’t have to wait longer than 30 seconds to talk to someone. The interface is also great and easy to use on their online banking website.

Regarding my TFSA contributions, earlier in the year, I put approximately $2100 into my TFSA mutual funds with TD. I then topped off the remainder of my yearly contribution over to my new CDF TFSA. While this wasn’t a bad idea, I’m beginning to think that this might have not been the best idea. In a TFSA fund, the capital gains and dividends interest you earn are all tax-free. Shouldn’t I take advantage of this and continue to invest my TFSA contributions into stock and bond funds, especially when we're only allowed to use $5K a year? On the contrary, all of my invested money has just been focused on my retirement (will go into detail later), so maybe it’s best that I focus my money onto something more income/short-term related like a CDF TFSA with no investments attached to it. Also, I’ve learned that I could have also been putting my emergency fund money into something more like a high-yield money market account or a high interest savings account. 

Through my readings, I’ve learned that I literally had no goals with my money from the get-go. I knew it wasn’t smart keeping my money stagnant in a chequing account so a good two years ago is when I decided to place my money into mutual funds. The problem was that I placed nearly ALL of my money into long-term investments with absolutely no regard of fees and tax implications. Because of this, I have a bit of a mess right now (as you’ve read in earlier pages but I am starting to understand and take control).

The biggest problem is that I have most of my invested money in non-registered accounts! I think that deserves an exclamation mark. This is bad for many reasons; first, the most obvious one is tax implications. I am getting taxed on any dividends and capital gains distributions in my accounts, whether my money appreciates or depreciates. Yes, dividends and capital gains aren't nearly taxed as bad as normal income but it is still getting taxed. Next, two of my funds in my non-registered accounts are volatile sector funds! This is dreadful because investing in a single industry defeats the major purpose of investing in mutual funds—diversification is gone. Next, my management fees here are higher than any of my other funds—they’ve averaged MERs of about 2.75%. Next, the taxable distributions in these sectors alone make it all the more worse in a non-registered account; these have high rates of trading or turnover of their investment holdings. Also, let’s not forget that all of my investing is in funds that are actively managed. These mutual fund managers are trying to beat the market so in their attempts to increase returns, they buy and sell stocks more frequently so this trading increases a fund's taxable gains distributions and reduces a fund's after-tax return, meaning less money for me!

I’ve learned that with non-registered accounts, it’s best to invest in the most tax-friendly way possibly such as Canadian dividends and real estate funds. The problem is that I don’t want to invest too much money into these areas--I want most of my investing to be in diversified stocks and bonds. To recap, I have approximately $26K in my non-registered mutual fund account, $18K in my mutual fund TFSA and $18K in my mutual fund RSP. I also have $8K tucked away in my pension plan at work. I think I’ve made nice ground in terms of investing for retirement (I'm only 26 years old) and should start focusing more in short-term investing, say in the next 2-5 years. As I mentioned earlier in this thread, eventually, I would like to save enough money to put a down-payment on a house with my fiancé. This is my number one goal right now for me. I would rather not use money from my RSP or TFSA to buy a house (they have long-term investments in there—I want to let them grow). I am considering taking all of the money out of my non-registered account and putting it elsewhere. The thing is that I haven't decided where yet. I've read that a good way in saving money for something in the short-term is to place the money in a high credit, short-term bond fund, since they are the least sensitive to interest fluctuations. Is this a decent idea or is there a better way to put aside money that will be used in a few years?

I haven't touched any of my investments yet (refer to page 4 to see them) but I think I would be satisfied in indexing my entire portfolio. They keep fees lower, are tax-friendly and get market returns. Apparently index funds typically outperform about three-quarters of funds that invest in the same types of companies but try to pick winners. The more I look into the TD e-series funds, the more I realize that these are solid investments for someone like me. I like all of the indexes that these TD funds try to portray—they are all very diversified: DEX Universe Bond Index, S&P/TSX Composite Index, S&P 500 Total Return Index and the MSCI EAFE ND Index.

If I'm going to take 26K out of my non-registered account, that only leaves 36K of money to work with index mutual funds. If I go this route, one of my two ideas was to transfer in-kind 9K from my TFSA into the Canadian Bond Index Fund and 9K in-kind from my TFSA into the Canadian Index Fund. Next, I would transfer in-kind 9K from my RSP into the US Index Fund and 9K in-kind from my RSP into the International Index Fund. Since both my TFSA and RSP are tax-free accounts, does it really matter where I distribute the funds in my portfolio, just as long as I have these four index funds that I like? Yes, obviously the weighing (actual percentages of these funds) matter but I'm more referring to the location within my portfolio.

In case if any of the above was a concern, my other idea what to create four funds in both my RSP and my TFSA, meaning that all four Canadian Index/Canadian Bond Index/US Index/International Index Funds would exist in both registered accounts, totaling 8 index funds. If I did this, I would adapt the 'Global Coach Potato' approach and divvy up the percentages like this: 20% Canadian Equity, 40% US & International Bonds and 40% Canadian Bonds. Would it be unnecessary having 8 index mutual funds spread out by only a total of $36K?

Let's get back to the 26K in my non-registered account for a second. I mentioned that I possibly wanted to take that money out of investing but should I really need to if I'm still going to have that money focused mostly on short-term bonds? Yes, I could always set up an Discount Brokerage account and purchase ETFs that don’t involve the index funds that I currently want from TD…but do I want to be doing that if my current goal is to save money for a house in a short number of years?


So I was right--this turned out to be a long post. Investing is starting to become clearer to me but that doesn't mean that the decisions are getting easier! Thanks in advance for any help that is offered.

Money4Life


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## Navigate Sensibly (Oct 24, 2011)

*To Money4Life*

I only read a couple of sentences out of that article you wrote there, but just one correction. REIT`s should not be held in non-registered account.


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## Money4life (May 17, 2012)

Hey, thanks Navigate Sensibly! Yes...judging by the lack of responses, I kinda figured that my post was too long so I'm going to shorten it right now by taking key points from my last post!

*Summary of my article from post #132:*

*Regarding my non-registered accounts:*

I have approximately $26K in my non-registered mutual fund account, $18K in my mutual fund TFSA and $18K in my mutual fund RSP. I also have $8K tucked away in my pension plan at work. I think I’ve made nice ground in terms of investing for retirement (I'm only 26 years old) and should start focusing more in short-term investing, say in the next 2-5 years. As I mentioned earlier in this thread, eventually, I would like to save enough money to put a down-payment on a house with my fiancé. I would rather not use money from my RSP or TFSA to buy a house (they have long-term investments in there—I want to let them grow). I am considering taking all of the money out of my non-registered accounts and putting it elsewhere. The thing is that I haven't decided where yet. I've read that a good way in saving money for something in the short-term is to place the money in a high credit, short-term bond fund, since they are the least sensitive to interest fluctuations. Is this a decent idea or is there a better way to put aside money that will be used in a few years? What I could also do is set up an Discount Brokerage account and purchase ETFs that don’t involve the index funds that I currently want from TD (see below)…but do I want to be doing that if my current goal is to save money for a house in a short number of years?

*Regarding my registered accounts:*

I haven't touched any of my investments yet (refer to page 4 to see them) but I think I would be satisfied in indexing my entire portfolio. The more I look into the TD e-series funds, the more I realize that these are solid investments for someone like me. If I'm going to take 26K out of my non-registered account, that only leaves 36K of money to work with index mutual funds. My first idea with my registered accounts was to create four funds in both my RSP and my TFSA, meaning that all four Canadian Index/Canadian Bond Index/US Index/International Index Funds would exist in both registered accounts, totaling 8 index funds. If I did this, I would adapt the 'Global Coach Potato' approach and divvy up the percentages like this: 20% Canadian Equity, 40% US & International Bonds and 40% Canadian Bonds for both accounts. Would it be unnecessary having 8 index mutual funds spread out by only a total of $36K? If so, then my other idea would just be opening two funds in my TFSA (Canadian Bonds & Canadian Index...divvy them up 40% by 60%) and then open two funds in my RSP (US Index & International Index...divvy them up by 60% to 40%). Which of these two is the better idea?

Thanks!

Money4Life


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## Spudd (Oct 11, 2011)

For part 1, I would just put the money you need in a few years in a high interest savings account. Even bonds have some risk, and you don't want to take risk with that money. 

For part 2, I think your plan is sound, and I don't think it makes a difference which way you do it. Totally up to whatever way you like better.


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## Eclectic12 (Oct 20, 2010)

Navigate Sensibly said:


> I only read a couple of sentences out of that article you wrote there, but just one correction. REIT`s should not be held in non-registered account.


Actually some tax experts recommend REITs in a taxable account (i.e. non-registered). 

A good chunk of the REIT cash distribution is typically Return of Capital (RoC) that is taxed at the preferred capital gain (CG) rate and likely is also tax deferred (i.e. get paid cash today, pay the CG five years from now when the units are sold). 

See the "Depreciation in REITs" section of link:
http://howtoinvestonline.blogspot.ca/2010/07/return-of-capital-separating-good-from.html

Of course, the RoC means the investor has to keep the Adjusted Cost Base (ACB) updated for each cash distribution, as the RoC portion will change the ACB with each payment. [Note that an ACB of zero or negative means the RoC portion of the distributions has to be reported as a CG on each tax return, until something changes the ACB to positive - so keeping current is helpful.]

The trade-off for the investor is a deferred or CG tax rate with extra bookkeeping (i.e. taxable account) versus no-tax (i.e. TFSA) or longer term tax deferral that has in the future will has taxes as income (i.e. RRSP), where both registered account types avoid the extra bookkeeping.

Note that another group that will prefer the REIT in a taxable account is a retired person as CG does not affect income for OAS where all other forms of payments will.



So depending on the investor's situation and preferences, a REIT in a taxable account may make sense.


Cheers


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## Money4life (May 17, 2012)

Thanks Eclectic12 for that detailed explanation of REITs.

Does anyone else echo Spudd's thoughts on what I should do with my investments?


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## Eclectic12 (Oct 20, 2010)

Money4life said:


> Thanks Eclectic12 for that detailed explanation of REITs.
> 
> Does anyone else echo Spudd's thoughts on what I should do with my investments?


Thanks ... it's good to know I didn't go overboard as some of my friends don't like that much detail.

As for the part 1 money - I agree with Spudd. I've seen too many investments go the wrong way for such a short time frame. 

Personally, the most risk I'd take on with this money is a DIY index-linked GIC. I'll have to find the link that was posted in another thread but it boils down to putting most of the money into a GIC or HISA and the rest into an index (ETF or TD eSeries).

Example, have $10K - put $9K into a HISA and $1K into TSE 60 ETF. Short of a financial collapse, the $9K plus interest with the potential of whatever the market does with the $1K.


Cheers


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