Financial Advisors...

[edmontonsubbie]

...it doesn't take much to call yourself one. But, to be one, and to be good at it, is a different story. So...having said that....and noting with some interest and sometimes humour the various claims of the various perbites who have a variety of financial situations ranging from "makeaprohockeyplayergreenwithenvy" to..."havenotasingleclue"...I submit here...that I fall into the latter category.

I have nothing. I have everything. And, so it goes with priorities. I have two wonderful daughters who will graduate and be done with their studies within 4 years. For that period of time remaining, my focus remains ensuring that they have what they need to finish what they have started. In my favour, that is also the focus of their mother. Still, there remain some discretionary funds. I contribute to a match/match rrsp to the fullest extent permissible by the company...why wouldn't I? It's free money. However, as I was sitting down having a crap flipping through the catalogue of Chinese made crap that the Swedes have branded as their own, it occurred to me that I do have this source of funds. And, much like the young, attractive, and nubile young lass who has embarked on the entertainment career....I know that the fund source is finite and definable. Right now, the source of funds is healthy and will remain that way (lord willing) for the next 15 years....at which point...I intend to purchase a ball cap, allow my facial hair to grow to unkempt proportions, and make pieces of art out of stones that I have found whilst walking the beach in Point Roberts. But....enough of that...

The thought that I had....and I do work in a field the amount that I work can fluctuate...is simple. Is there a financial institution of some credibility to whom I could entrust the details of my biweekly deposit patterns and say to them...

1. For every deposit made by X (the employer), you will withdraw 5% and place it into the TFSA.
2. For every deposit made by X in excess of (pick a number), you will withdraw 25% and place it into the TFSA.
3. For every depost made by X in excess of (pick another number), you will withdraw that entire amount and place it into the TFSA.

Failing such institutionalized planning....I would delight in hearing either publically (probably a bad idea)....or privately....a recommendation for a very well trusted advisor with whom you are acquainted. Discretion is assured.

most respectfully,

eddie.

 

[Horse99]

do you know how to use excel?

Excel is great for this kinda modelling.....sure, you can probably walk into your local bank and get some answers,, but it's always going to be followed by a sales pitch (maybe).....moreso, if you were to ask someone in the brokerage industry.

Are you trying to figure out how much capital you will have at the end of 15 years? That would be easy enuf to do, but you would have to assume certain variables, like expected return on assets...and that depends on what its' being invested in now...

 

[wilde]

TFSA is a very small part of the retirement savings system. Remeber that you can only contribute $5k a year (indexed). Depending on your tax rate now and when you retire, most people will still find maxing out your RRSP first to be the better option. If you still have funds left, by all means maximize your TFSA limit. Do not invest in anything other than cash or GIC in your TFSA, other investments should be held in your RRSP or in a non-tax sheltered account as you do not want to erode this account with charges/fees, commissions or trading losses (non-deductible), etc.

 

[Sir Jim]

Wilde,

I am not a planner nor have designation of any kind but this has become another hobby to me;

If I could gently protest your post here. The Vancouver Sun ran an article recently by J. Chevreau (Wealthy Boomer book fame)on the uselessness of TFSA GIC or term deposits. I takes like 600 years to double your $$
and yet apparently 90% of TFSA's are exactly holding that. Without some exposure to equities you will be limited to those kinds of returns at which point, why seek tax protection when your
return is virtually nothing. Chevreaus advice was to go self directed and buy some equities. You can always top the TSFA up if they run short.

I bought US financial and home construction ETF's in my plan for a mere 1/2 percent commission based on $29 per buy trade of $5000 worth in my and my SO's TFSA. They returned
51% and 19% respectively, growth that the GIC crowd will never experience. I do of course and would recommend maxing the RRSP's first and pick up any room from years
prior that you may have before you place 5K in a TFSA.

My 2cents worth.

 

[cruiser]

My fincial advisors ( from one of the big 5 banks), had me fill my TFSA and put it into a mutual fund that has actually done quite well. I figured for 5K that I would go a little more risky, so sought a "Asia" based mutual fund and watched it grow.

One other area that I've done is went into dividend paying mutual funds and then when the dividends are paid at the end of the month, I have them reinvest back into that same fund to buy more units.

I've never done an ETF but would like to learn more about them.

Cruiser

 

[Sir Jim]

Cruiser,

Advisors tend not to recommend ETF's since there is no fee back to them every year. In a mutual fund part of the 2.5% that comes off the top, good year or bad goes back to the advisor on your account. It's called a trailer and it forms part of their remuneration every year. Hence you have to question their bias issues about the recommendation. Capiche?

 

[chilli]

How come the majority of financial advisors are not rich?

 

[oh3421]

How come the majority of financial advisors are not rich?

Because they have no idea about investing , they are SELLING PRODUCT for commission. That inherent conflict of interest is what brings them down.
It is actually not that difficult to self-manage a balanced portfolio built of dirtcheap ETFs, look at the couch Potato portfolio at Moneysense.ca. They claim your time committment is 15 MIN/YEAR and subscription is 20 bucks a year.

 

[wilde]

Wilde,

I am not a planner nor have designation of any kind but this has become another hobby to me;

If I could gently protest your post here. The Vancouver Sun ran an article recently by J. Chevreau (Wealthy Boomer book fame)on the uselessness of TFSA GIC or term deposits. I takes like 600 years to double your $$
and yet apparently 90% of TFSA's are exactly holding that. Without some exposure to equities you will be limited to those kinds of returns at which point, why seek tax protection when your
return is virtually nothing. Chevreaus advice was to go self directed and buy some equities. You can always top the TSFA up if they run short.

I bought US financial and home construction ETF's in my plan for a mere 1/2 percent commission based on $29 per buy trade of $5000 worth in my and my SO's TFSA. They returned
51% and 19% respectively, growth that the GIC crowd will never experience. I do of course and would recommend maxing the RRSP's first and pick up any room from years
prior that you may have before you place 5K in a TFSA.

My 2cents worth.

My 1 cent again.

Do not invest in anything other than cash or GIC in your TFSA, other investments should be held in your RRSP or in a non-tax sheltered account as you do not want to erode this account with charges/fees, commissions or trading losses (non-deductible) , etc.

 

[cruiser]

Cruiser,

Advisors tend not to recommend ETF's since there is no fee back to them every year. In a mutual fund part of the 2.5% that comes off the top, good year or bad goes back to the advisor on your account. It's called a trailer and it forms part of their remuneration every year. Hence you have to question their bias issues about the recommendation. Capiche?

Interesting...I'll have to ask my financial advisors about switching some of my portfolio over to an ETF and see what they say.

Thanks for the tip.

Cruiser

 

[HubbaHubba]

Do not invest in anything other than cash or GIC in your TFSA, other investments should be held in your RRSP or in a non-tax sheltered account as you do not want to erode this account with charges/fees, commissions or trading losses (non-deductible), etc.

That's the most rediculous thing I've read in a while. Any type of investing is all about your risk toleranece. Why put 5k in the to earn 3%, are you really getting ahead? I bought a .03 stock I watched get demolished, it's now at .11 and hit a high of .13. If all goes well it should be between .25 -.50 within 6 months. High risk, high reward! But tax free money to pay off debt, reduce your mortgage or whatever the case may be. I don't think paying $50 to buy and $50 to sell is a very big deal.

If you're happy earning 3% in a GIC, good for you my man but don't tell people that's the only way to go, cause it simply isn't true. The TFSA is a great way for Canadians to save and build tax free savings!

 

[hunsperger]

Because they have no idea about investing , they are SELLING PRODUCT for commission. That inherent conflict of interest is what brings them down.
It is actually not that difficult to self-manage a balanced portfolio built of dirtcheap ETFs, look at the couch Potato portfolio at Moneysense.ca. They claim your time committment is 15 MIN/YEAR and subscription is 20 bucks a year.

exactly...

their entire purpose is to sell you financial vehicles...

they can barely tell you what happened yesterday, never mind what's going to happen tomorrow...

as has been noted previously, if any of these clowns actually knew what they were doing, why would they be wasting their time writing books and working as financial advisors...

it's a schtick...

best to educate yourself...

 

[hunsperger]

Why put 5k in the to earn 3%, are you really getting ahead?

ahead of what...

actually a 3% ROI would have outperformed Buffet's Berkshire Hathaway fund last year...

 

[HubbaHubba]

ahead of what...

actually a 3% ROI would have outperformed Buffet's Berkshire Hathaway fund last year...

That's great! Thanks for your insight as always.

 

[wilde]

That's the most rediculous thing I've read in a while. Any type of investing is all about your risk toleranece. Why put 5k in the to earn 3%, are you really getting ahead? I bought a .03 stock I watched get demolished, it's now at .11 and hit a high of .13. If all goes well it should be between .25 -.50 within 6 months. High risk, high reward! But tax free money to pay off debt, reduce your mortgage or whatever the case may be. I don't think paying $50 to buy and $50 to sell is a very big deal.

If you're happy earning 3% in a GIC, good for you my man but don't tell people that's the only way to go, cause it simply isn't true. The TFSA is a great way for Canadians to save and build tax free savings!

Are you really that stupid? I am not telling people not to invest in equities, just don't do it in your TFSA.

 

[HubbaHubba]

Are you really that stupid? I am not telling people not to invest in equities, just don't do it in your TFSA.

I know what you're telling them (and me). If I took your advice I wouldn't have about $18,300 tax free sitting there after 1 year. If I took your advice I'd have about $5150. I guess i really am that stupid.

 

[JaJaBinks]

Hello everyone, I just wanted to give my 2 cents worth here. I was a licensed mutual funds salesperson, and an equities investor myself. There should be several things that you should be aware of, that no muutal funds advisor will tell you. Firstly, its great to max out your RRSP contribution every year. But depending on your employment and anticipated retirement income, this may not be a good idea. I have seen clients that owe CRA taxes every year because they were too succesful in their RRSP contribution. Lets say a client retires and receives a company pension, and later on as they age, they additionally receive CPP, OAS, spousal pension from a deceased spouse, and RRIFs (when the RRSP rolls over), etc. They will end up with $40K plus a year in taxable income and not too many deductions that they can take. So, on a fixed income, they owe CRA taxes.

Other clients have purchased income properties, instead of RRSP. This is not for everyone as there headache of maintenance and tenants, but if their rent covers there mortgage, they have a clear title property in 25 years and an income stream from the rents. In addition, they have capital gains, which they will only pay 50% taxes on if they decide to realise it by selling the property. Gains in your RRSPs are taxed as personal income when they are eventually withdrawn. Big difference.

Lastly, when you do go into a bank for a mutual fund RRSP purchase or for a mortgage, look across the table at the investment advisor. Many of them are freshly minted university graduates or just someone who took the liciensing course. Ask them whether they themselves have a mortgage or a RRSP mutual funds. You will be surprised how many of them don't hold the products they are trying to sell you. Than ask yourself why you should buy the product from someone who direct experience of it.

 

[wilde]

I know what you're telling them (and me). If I took your advice I wouldn't have about $18,300 tax free sitting there after 1 year. If I took your advice I'd have about $5150. I guess i really am that stupid.

You want to invest in volatile investments in your TFSA where the losses are not deductible, by all means. High reward = high risk, you said so yourself.

If you know of an investment that will appreciate in 1 year from $5,000 to $18,300 then go ahead and pour you life savings into it. Just don't cry when you find out it's another ponzi scheme. So in a year your $5,000 becomes $0 and to add insult to injury, you can't even claim the losses because you had the investment in your TFSA. Now that is stupid.

 

[wilde]

wilde I'm not telling you how to invest, I just disagree with your notion equities shouldn't go in a TSFA.

I give up.

 

[HubbaHubba]

I give up.

Finally!!!!