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

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[OP]
Deal Addict
Oct 1, 2006
2025 posts
1467 upvotes
Montreal
umlowcn wrote: I tend to stop investing when seeing the stocks hitting all time high. Do you still continue to invest monthly at this time?
Please stop doing this. This is a terrible investing strategy.

I invest monthly no matter what.
Member
Jan 4, 2017
345 posts
198 upvotes
jeffyjaixx wrote: Finally finished reading this thread. Thanks everyone and Germack for creating this thread. A big congrats to reaching your 1m milestone. What an inspirational thread.

I'm just now thinking about starting to invest with a small amount (~6k) with my Tangerine TFSA. Would you recommend continuing to save and keep putting money into my TFSA whenever possible and then start investing once I reach a certain amount or just go ahead and invest right away with 6k?

So based on what I've been reading, a balanced growth is what I should be going for? And I would just keep saving money into my Tangerine TFSA to keep growing?

I also have a TD chequing account. Would going into TD e-series be better for a beginner?

Thanks to anyone for your feedbacks :)
Tangerine makes sense from $0 - $12,500 as they charge 1.07%. Beyond $12,500, the TD e-series costs you less per year even including the quarterly $25 maintenance fee. Both are just fine for beginners, but Tangerine is a little bit easier. With TD you have two options to start with e-series. Either you can open a regular mutual funds account that you'd see in EasyWeb (same place as your regular online banking), which you would then have "converted" into e-series. You do this so that you can get the funds at 0.3% instead of 0.8%+ (buying the fund yourself instead of paying someone else to buy it for you). Otherwise you can open a self directed brokerage account and buy the e-series funds yourself in there (this is what I opted for). Personally I don't find it's very difficult at all, but it definitely is a few more steps compared to opening the Tangerine fund.

If you don't want to think about it whatsoever, I'd say just stick to something like Tangerine. If you don't mind spending just a little time, then go with the TD e-series. You'll need to think about thinks like asset allocation and exposure to different sectors. You'll need to look at your portfolio at least once or twice per year and buy whatever is lower to bring up your asset allocation back to whatever your target is. If that sounds ok to you, then go for e-series. If that's beyond the effort you're willing to commit, then go with Tangerine.

Good luck!
Sr. Member
User avatar
Mar 27, 2011
741 posts
411 upvotes
Toronto
jeffyjaixx wrote: Finally finished reading this thread. Thanks everyone and Germack for creating this thread. A big congrats to reaching your 1m milestone. What an inspirational thread.

I'm just now thinking about starting to invest with a small amount (~6k) with my Tangerine TFSA. Would you recommend continuing to save and keep putting money into my TFSA whenever possible and then start investing once I reach a certain amount or just go ahead and invest right away with 6k?

So based on what I've been reading, a balanced growth is what I should be going for? And I would just keep saving money into my Tangerine TFSA to keep growing?

I also have a TD chequing account. Would going into TD e-series be better for a beginner?

Thanks to anyone for your feedbacks :)
My portfolio is around this size, but I jumped right into Questrade and have a modified CP strategy. I'm contributing small amounts bi-weekly and lump sums various times in the year. Since ETF trades are free with QT, I didn't see a problem with it.
Member
Jan 4, 2017
345 posts
198 upvotes
Hey Germack,

I'm still in the process of deciding on my last few picks to round out my portfolio. So far I'm going with TDB900 for Canadian index, TDB902 for US index, TDB911 for international index. I plan to add some bond funds and REIT in the mix. I will end up with 5-6 different categories as well, but what I'm wondering is how you ended up deciding on the particular index funds/ETFs you ended up with. How much time did you spend agonizing over which method would be more tax efficient, which fund has the absolute lowest MERs, etc? Did anything in particular drive you towards that mix of index funds vs ETFs? Not looking for you to advise me on what funds to pick as I've already looked at your list and compared to some, more just looking to understand how your thought process played out at the time when you were figuring out your plan.
Deal Fanatic
User avatar
Feb 28, 2006
6938 posts
525 upvotes
Richmond Hill
zcypher wrote: Tangerine makes sense from $0 - $12,500 as they charge 1.07%. Beyond $12,500, the TD e-series costs you less per year even including the quarterly $25 maintenance fee. Both are just fine for beginners, but Tangerine is a little bit easier. With TD you have two options to start with e-series. Either you can open a regular mutual funds account that you'd see in EasyWeb (same place as your regular online banking), which you would then have "converted" into e-series. You do this so that you can get the funds at 0.3% instead of 0.8%+ (buying the fund yourself instead of paying someone else to buy it for you). Otherwise you can open a self directed brokerage account and buy the e-series funds yourself in there (this is what I opted for). Personally I don't find it's very difficult at all, but it definitely is a few more steps compared to opening the Tangerine fund.

If you don't want to think about it whatsoever, I'd say just stick to something like Tangerine. If you don't mind spending just a little time, then go with the TD e-series. You'll need to think about thinks like asset allocation and exposure to different sectors. You'll need to look at your portfolio at least once or twice per year and buy whatever is lower to bring up your asset allocation back to whatever your target is. If that sounds ok to you, then go for e-series. If that's beyond the effort you're willing to commit, then go with Tangerine.

Good luck!
Thanks for the info! So would you go right now into the market with ~6k or should I just keep trying to max out my TFSA then go in when it's higher?
Sr. Member
Mar 14, 2015
694 posts
42 upvotes
Edmonton
Hey Germack,

do you ever hold onto a portion of cash or do you just invest it no matter what each month? buffet went cash for this year so just wondering if you adjust
Member
Jan 4, 2017
345 posts
198 upvotes
jeffyjaixx wrote: Thanks for the info! So would you go right now into the market with ~6k or should I just keep trying to max out my TFSA then go in when it's higher?
Threads like this here one by Germack have taught me that for the long-term index/ETF fund investor, the answer to the "when to invest" question is almost always "right now". You don't know if the market will go up or down, but there's usually an "opportunity cost" to doing nothing/waiting. The way it works with TFSA is you're allowed to deposit a certain amount per year, and if you don't use that up, it carries over. In my case I never really made use of the TFSA space until recently so I have ~$50k of available contribution room. I'm no expert and just starting out too, but to me it seems obvious that it makes a lot more sense to use up the TFSA space investing instead of using it for regular savings at low interest. Whether or not you pay tax on an investment earning ~1% interest is inconsequential compared to how much tax you could save on compounded gains like the ones Germack has shown.

*stops hijacking thread and quietly backs out*
[OP]
Deal Addict
Oct 1, 2006
2025 posts
1467 upvotes
Montreal
jeffyjaixx wrote: Finally finished reading this thread. Thanks everyone and Germack for creating this thread. A big congrats to reaching your 1m milestone. What an inspirational thread.

I'm just now thinking about starting to invest with a small amount (~6k) with my Tangerine TFSA. Would you recommend continuing to save and keep putting money into my TFSA whenever possible and then start investing once I reach a certain amount or just go ahead and invest right away with 6k?

So based on what I've been reading, a balanced growth is what I should be going for? And I would just keep saving money into my Tangerine TFSA to keep growing?

I also have a TD chequing account. Would going into TD e-series be better for a beginner?

Thanks to anyone for your feedbacks :)
zcypher wrote: Tangerine makes sense from $0 - $12,500 as they charge 1.07%. Beyond $12,500, the TD e-series costs you less per year even including the quarterly $25 maintenance fee. Both are just fine for beginners, but Tangerine is a little bit easier. With TD you have two options to start with e-series. Either you can open a regular mutual funds account that you'd see in EasyWeb (same place as your regular online banking), which you would then have "converted" into e-series. You do this so that you can get the funds at 0.3% instead of 0.8%+ (buying the fund yourself instead of paying someone else to buy it for you). Otherwise you can open a self directed brokerage account and buy the e-series funds yourself in there (this is what I opted for). Personally I don't find it's very difficult at all, but it definitely is a few more steps compared to opening the Tangerine fund.

If you don't want to think about it whatsoever, I'd say just stick to something like Tangerine. If you don't mind spending just a little time, then go with the TD e-series. You'll need to think about thinks like asset allocation and exposure to different sectors. You'll need to look at your portfolio at least once or twice per year and buy whatever is lower to bring up your asset allocation back to whatever your target is. If that sounds ok to you, then go for e-series. If that's beyond the effort you're willing to commit, then go with Tangerine.

Good luck!
+1. The earlier you start investing the better. $300 monthly at 8% at age 25 instead of age 35 ends up with an additional $604,195 at age 65.

Yes, I believe a balanced portfolio is the way to go.
Deal Addict
User avatar
Feb 19, 2014
2736 posts
1597 upvotes
Langley
jeffyjaixx wrote: Finally finished reading this thread. Thanks everyone and Germack for creating this thread. A big congrats to reaching your 1m milestone. What an inspirational thread.

I'm just now thinking about starting to invest with a small amount (~6k) with my Tangerine TFSA. Would you recommend continuing to save and keep putting money into my TFSA whenever possible and then start investing once I reach a certain amount or just go ahead and invest right away with 6k?

So based on what I've been reading, a balanced growth is what I should be going for? And I would just keep saving money into my Tangerine TFSA to keep growing?

I also have a TD chequing account. Would going into TD e-series be better for a beginner?

Thanks to anyone for your feedbacks :)
Because you have such a small amount, I would stick to TD e-series.
The OP's portfolio has ETF's which wouldn't make sense since you would have to pay per trade. Once you can easily put larger amounts into your accounts

It's better for you to put $200 a month away into the TD e-series as there are no buying or selling fees.

With your $6k invested and if you put in $200 a month every year with a return of 7% which most of the portfolio's are getting over 30 years that will equal $298,000.

Easy compound interest calculator.
http://www.moneychimp.com/calculator/co ... ulator.htm
[OP]
Deal Addict
Oct 1, 2006
2025 posts
1467 upvotes
Montreal
zcypher wrote: Hey Germack,

I'm still in the process of deciding on my last few picks to round out my portfolio. So far I'm going with TDB900 for Canadian index, TDB902 for US index, TDB911 for international index. I plan to add some bond funds and REIT in the mix. I will end up with 5-6 different categories as well, but what I'm wondering is how you ended up deciding on the particular index funds/ETFs you ended up with. How much time did you spend agonizing over which method would be more tax efficient, which fund has the absolute lowest MERs, etc? Did anything in particular drive you towards that mix of index funds vs ETFs? Not looking for you to advise me on what funds to pick as I've already looked at your list and compared to some, more just looking to understand how your thought process played out at the time when you were figuring out your plan.
I am a big fan of the Canadiancouchpotato blog and when I started investing I just selected the ETFs he suggested in his model portfolios.

If I would have to start all over again I would purchase the following ETFs:
ETFS.png
Images
  • ETFS.png
Last edited by Germack on Jan 14th, 2017 2:58 pm, edited 1 time in total.
[OP]
Deal Addict
Oct 1, 2006
2025 posts
1467 upvotes
Montreal
FlyOverMyDoodle wrote: Hey Germack,

do you ever hold onto a portion of cash or do you just invest it no matter what each month? buffet went cash for this year so just wondering if you adjust
I invest no matter what. I do not adjust.
Sr. Member
User avatar
Dec 11, 2009
510 posts
113 upvotes
Toronto, ON
gekaizer wrote: FYI CCPers, the model portfolio has recently been updated.

So for those that have been on the fence for awhile, you might want to take a look at the new recommendations: http://canadiancouchpotato.com/wp-conte ... s-2016.pdf

VAB changed to ZAG and VXC to XAW.

Read the update blog post here: http://canadiancouchpotato.com/2017/01/ ... -for-2017/
I'm a total beginner and I'm looking at the returns on the portfolio you mentioned. I have a few observations:

- 20 Year Annualized returns (even 10 Year) seems to be very close for the different allocation strategies. Does that mean that if you have a few decades before retirement it doesn't matter too much which you choose? Could I even say there is no reason to take unnecessary risks if they all normalize on the long run?

A more general question. How does one retire with this kind of annualized return of around 6%? After accounting for inflation and tax it seems that 6% is not going to generate enough money to retire unless you start very very early and work until 65 or you make obscene amounts of money and can save a lot. What am I missing here?
[OP]
Deal Addict
Oct 1, 2006
2025 posts
1467 upvotes
Montreal
MoreDealsPlease wrote: I'm a total beginner and I'm looking at the returns on the portfolio you mentioned. I have a few observations:

- 20 Year Annualized returns (even 10 Year) seems to be very close for the different allocation strategies. Does that mean that if you have a few decades before retirement it doesn't matter too much which you choose? Could I even say there is no reason to take unnecessary risks if they all normalize on the long run?

A more general question. How does one retire with this kind of annualized return of around 6%? After accounting for inflation and tax it seems that 6% is not going to generate enough money to retire unless you start very very early and work until 65 or you make obscene amounts of money and can save a lot. What am I missing here?
Past performance does not equal future returns. Bonds did very well over the last 20 years. With current yields of bonds it is very unlikely that these kind of returns will be repeated for the next 20 years. Risk and returns are often related. The higher the risk the higher the potential returns.

An annualized return of 6% per year is very decent. I would be very happy if I would be able to achieve this kind of return for the next 40 years.

Most people way overestimate the amount of money they need to save for retirement.

Example:
Assumptions: Couple with a house and 2 children with an annual income before taxes of $78k. Annual return on investments: 5.75% per year.
Goal: Same income available for regular consumption before and retirement.
--> To be able to achieve this they would only have to save around 2.1% of their pay to an RRSP account starting at age 30 to age 65.

Simplified Math:
Income available for regular consumption:
Before retirement: $35,600 = Annual income ($78,000) - RRSP contribution ($1,600; 2.1%) - CPP contributions ($3,500) - child raising costs (9,400) - mortgage payments ($13,900) - employment expenses (e.g. EI premiums) ($3,700) - income tax and provincial health premium($10,300)
After retirement:$35,600 = Annual income (CPP, OAS, GIS + RRIF). No mortgage, child raising costs, RRSP contribution, employment expenses and income tax anymore.
Member
May 30, 2015
231 posts
120 upvotes
Germack wrote: I am a big fan of the Canadiancouchpotato blog and when I started investing I just selected the ETFs he suggested in his model portfolios.

If I would have to start all over again I would purchase the following ETFs:

ETFS.png
I was wondering if there was a screenshot that you posted here (in bold).
I think that the image is not there.
Are others being able to see it?
Thank you.

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