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Couch potato investing for the last 14 years - tracking my progress

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Deal Addict
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Mar 29, 2003
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Just started following so maybe this is in one of the pages but have you stated how much total you have put into the investments over each year?
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Mar 27, 2011
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nutcrackergirl wrote: hi Germack, i have done some preliminary research and have discovered the index ETFs are the best way to invest - however i do not know where to start - when you say "a low cost diversified portfolio consisting of equities and bonds" - what exactly are some examples of indexed ETFs that have this are you referring to?

in addition, how much would you recommend investing per month?
Not Germack and I only started CP fairly recently. I also asked myself that same question.

There a lot of ETFs to pick, but good resources to scout out would be the funds recommended in this thread (Germack's first post is a good start). As well as Young and Thrifty's blog and the actual Canadian Couch Potato blog (Google).

By low cost, he means pick out the ones with low Management Expense Ratio. Generally < 0.5% MER, but I know Germack has XRE which has 0.61%.

Diversified meaning where the equity ETF is. Example: XIC is Canadian Equity, VUN is U.S. Equity, XEC Emerging, XEF is Europe Australiasia and Far East. You want a good ratio among them so that when one goes down the others can compensate.

Your last question is something you'll have to work out on your own. How much can you cut back now and what lifestyle do you want for the future?

The way that I do it is estimating the amount of work years I have left (40 year horizon), assuming a 3 - 4% growth each year, then take it from there, how much I should be contributing each year. As this model is for long term growth, of course I will live through at least 2-3 crashes, but I think 3 - 4% growth gives a good ballpark.

Just my input, maybe others can chime in.
Deal Addict
Jan 20, 2016
2028 posts
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The simplest one is XIC+XAW+VAB/XBB
XAW is vun+xef+emerging+small and mid caps.
Personally I'd look at 20+60+20 mix but ratio is up to personal preference
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Newbie
Nov 7, 2016
53 posts
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thank you gekziar
i called tangerine today
they said they do not have any indexed ETFs for purchase at the moment ... i do most of my banking with them.. they said they only have mutual funds with "one of the lowest MERs of 1.007% in the world"
that said, i am wondering .. what bank is good to go with to purchased indexed EFTs? as a first dip of the toe in .. the water .. i am thinking TD?
Member
Nov 30, 2015
221 posts
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Mississauga, ON
nutcrackergirl wrote: thank you gekziar
i called tangerine today
they said they do not have any indexed ETFs for purchase at the moment ... i do most of my banking with them.. they said they only have mutual funds with "one of the lowest MERs of 1.007% in the world"
that said, i am wondering .. what bank is good to go with to purchased indexed EFTs? as a first dip of the toe in .. the water .. i am thinking TD?
Go to TD only for e-series mutual funds. If you are planning to buy index ETFs then Questrade is your best option as they don't charge commission for buying ETFs
Deal Addict
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Jan 7, 2005
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Why don't ppl just use robo investing? Ie, wealth simple, wealth front. It's really set and forget
Deal Addict
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Aug 1, 2007
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Some people like to be hands on and in more control. It doesn't take very much at all to do it yourself either, saving a lot of money over time. The robo advisors are a good alternative for people who don't want to be bothered with it, and it can also actually be a money saver by saving people from undisciplined and emotional decisions. There's a place for DIY-ers and Robo-ers. There's also a place for full-service advisors and investment counsels, as long as they can provide value-added service and offer investment options that are truly in their clients' best interest.
[OP]
Deal Addict
Oct 1, 2006
2029 posts
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Montreal
nutcrackergirl wrote: hi Germack, i have done some preliminary research and have discovered the index ETFs are the best way to invest - however i do not know where to start - when you say "a low cost diversified portfolio consisting of equities and bonds" - what exactly are some examples of indexed ETFs that have this are you referring to?

in addition, how much would you recommend investing per month?
You have multiple options to invest in bonds/equities:

1) Tangerine Balanced (Growth) Portfolio; MER: 1.07%; Difficulty: easy

2) Robo advisor e.g. Wealthsimple; MER: ~0.75%; Difficulty: easy

3) Discount brokerage e.g. TD; a) TD-e-series funds; MER: ~0.44%; b) ETFs (e.g. VAB, VCN, VXC); MER ~0.17%; Difficulty: medium

The more you invest the better :). $300 monthly at 8% at age 25 instead of 35 ends up with an additional $604K at age 65

I would also suggest to get a copy of the excellent book "Moneysense Guide to the Perfect Portfolio". It is $4.99 on Amazon Kindle and will teach you everything you need to know about investing.
Newbie
Jun 26, 2010
18 posts
2 upvotes
Hi Germack,

Had a chance to read through a majority of the thread and wanted to wish you a huge congrats on your success. I was hoping you could answer some questions I had regarding what I've read. A bit of background on myself - I am in my mid-20s, making ~$80K/ year (pre-tax) and have a mortgage of ~$350K.

I am currently invested with the TD eSeries, but was considering QuestTrade/ ETFs and thought this would be the perfect opportunity to look into tax-efficient investing.

Currently I have invested $46.5K into my TFSA (split: 20/25/25/25) and $15K into my RRSP (split: 10/30/30/30), with a contribution room of $25K for 2016. I have around $10K extra to invest before the end of the year, and $50K emergency funds. I realize my current allocation strategy does not take advantage of the tax benefits such as US Equity in RRSP, CDN Equity in Non-Reg, etc., and I would like to change this.

I was wondering if you could offer your opinion on the below ETF Split:
VAB (CDN) - 10 % [in RRSP]
VCN (CDN) - 27.5% [in Non-Reg]
VTI (US) - 27.5% [in RRSP]
VIU (CDN) - 25% [in TFSA]
VEE (CDN) - 5% [in TFSA]
STOCKS - 5% [in TFSA]

Summary:
27.5% in Non-Reg = ~$20K
35% in TFSA = ~$25K
37.5% in RRSP = ~$27K
Total: $72K

---

Questions / Comments:
1. Stocks are just for fun to play around with
2. Plan on withdrawing my TFSA at the end of the year and redepositing it into QT; not too sure how to go about transferring my RRSP - any suggestions?
3. How did you re-balance your portfolio at the end of each year, if your RRSPs (w/ Bonds/ US Equity), TFSA (w/ INTL Equity/ US Equity) and Non-Reg (w/ CDN Equity) are in totally different accounts?? Currently it's quite easy for me to take a certain amount from my Equity and Switch it to my Bond (or vice-versa), I can't imagine doing this across a TFSA/ RRSP or across TDE/ QT.
4.. You mentioned you chose to get rid of your bond allocation and instead pay off your mortgage - can you elaborate on this? Thinking of doing something similar.
5. How did you go about switching from QT to TD? Did you fill out the transfer forms or is there a simpler way? Wondering if I should just stick with TD and get a TDW account.

Hope the above is clear...sorry for the massive amount of text. Please let me know if it makes sense, I am open to feedback :).

Thanks!
[OP]
Deal Addict
Oct 1, 2006
2029 posts
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Montreal
@JarJar Very impressive! Looks like you figured it all out. Your suggested portfolio looks great.

2. Questrade can directly transfer your TD RRSP account to them. Just fill out their transfer form. They will cover the transfer-out fees up to $150. Though, you cannot transfer TD e-series funds to Questrade. They have to be liquidated before the transfer.

3. I do not re-balance at the end of the year. Instead each time I invest money I invest it into the asset class furthest away from its target allocation.

4. Yes this is correct. Both are very safe investments. Mortgage interest rates > VAB yield to maturity (1.7%), therefore paying down your mortgage is likely the better investment.

5. Yes, I filled out the transfer form with TD and they covered the transfer-out fees. The whole process is pretty straightforward. I was always a big fan of TD, but not anymore since they increased their prime rate on variable mortgages. This was a pretty shitty move from them.
Penalty Box
Jun 15, 2012
2355 posts
723 upvotes
Saskatoon
Royal Bank also increased their prime, I believe.
It is not up to them, they just followed the bonds lead.
In my opinion, the prime rates will go up again after December's rate increase by Federal reserve.
'The rich get richer and the poor get - children.'
Newbie
Jun 26, 2010
18 posts
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Germack wrote: @JarJar Very impressive! Looks like you figured it all out. Your suggested portfolio looks great.

2. Questrade can directly transfer your TD RRSP account to them. Just fill out their transfer form. They will cover the transfer-out fees up to $150. Though, you cannot transfer TD e-series funds to Questrade. They have to be liquidated before the transfer.

3. I do not re-balance at the end of the year. Instead each time I invest money I invest it into the asset class furthest away from its target allocation.

4. Yes this is correct. Both are very safe investments. Mortgage interest rates > VAB yield to maturity (1.7%), therefore paying down your mortgage is likely the better investment.

5. Yes, I filled out the transfer form with TD and they covered the transfer-out fees. The whole process is pretty straightforward. I was always a big fan of TD, but not anymore since they increased their prime rate on variable mortgages. This was a pretty shitty move from them.
So just to clarify your responses to the bolded above:
2. Based on this method - are you also hitting your TFSA/ RRSP maximum contribution for the year as well? Or is your method independent of that? (i.e. are you taking $500 bi-weekly and putting it wherever the account deviates from your targets, or are you focused on each balancing each account)? Are you just using excel to determine where to put the contribution amount?
4. Ok good to know - so the 10% I allocated to Bonds can just be used to pay out my mortgage. Thanks for the tip!

I'm also wondering if I should just keep my VCN allocation in my TFSA rather than a non-registered since I will have the room available.

Thanks.
Sr. Member
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Jun 27, 2007
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Toronto
Hi JarJar,

Germack is correct, you can transfer RRSPs between brokers. If you have any questions about investing with Questrade or the account transfer process, let us know. We’re happy to help.

Thank you.
Sr. Member
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Mar 27, 2011
741 posts
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Toronto
JarJar wrote: So just to clarify your responses to the bolded above:
2. Based on this method - are you also hitting your TFSA/ RRSP maximum contribution for the year as well? Or is your method independent of that? (i.e. are you taking $500 bi-weekly and putting it wherever the account deviates from your targets, or are you focused on each balancing each account)? Are you just using excel to determine where to put the contribution amount?
4. Ok good to know - so the 10% I allocated to Bonds can just be used to pay out my mortgage. Thanks for the tip!

I'm also wondering if I should just keep my VCN allocation in my TFSA rather than a non-registered since I will have the room available.

Thanks.
This is a helpful portfolio rebalancing tool for rebalancing.

Didn't know about the bond reallocation to mortgage strategy, thanks for bringing it up.
Last edited by gekaizer on Nov 29th, 2016 7:50 am, edited 1 time in total.
Deal Addict
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Feb 1, 2012
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Thunder Bay, ON
JarJar wrote: I'm also wondering if I should just keep my VCN allocation in my TFSA rather than a non-registered since I will have the room available.
In a non-registered account you will be subject to taxes on VCN distributions annually, then you will be taxed on capital gains when you sell. In a TFSA there are never any taxes on distributions or capital gains. Plus if you later run out of TFSA room you can transfer VCN to a non-registered account with no tax implications. So usually a TFSA is a better choice if you have room.

The only caveat is that at lower taxable incomes dividends actually have a negative tax rate. See the tables for tax rates by province at taxtips.ca. But over a long holding time the capital gains will likely be greater than the dividends so still probably better to hold in TFSA when you have the room.
I solemnly swear, to never assume I have an inkling at which direction the market will head, and to never make any investments based on a timing strategy.

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