Personal Finance

Looking for long term financial planning advice

  • Last Updated:
  • Sep 12th, 2019 4:33 pm
[OP]
Newbie
Oct 16, 2017
15 posts

Looking for long term financial planning advice

Hi everyone

Apologies if I posted this on the wrong place.

I am looking for a bit of long term investing/planning advice. I would like to explain my situation a bit to give as much detail as possible.

I am married, 32 years old. I am self employed, with a gross income of approximately 110k/year depending on what contracts I take on. My wife just finished her master's and was hired by the the Ottawa school board as a substitute. I decided to pay all of her school costs myself without taking a loan, which didn't leave much room for saving all that much both before she started as well as during the last 2 years (all saving mostly directed to ensuring we can pay all school and associated costs mainly). My wife's income was neglible up until now. Before getting married though I was saving aggressively.

Now that she is done and will at least have some income (approximately 25-30k before taxes depending on how often she is called) and I no longer have to pay her school costs I am looking to get our finances back on track and also trying to figure out what to do with my previous savings.

My parents passed away young and I took the inheritance from their life insurance and invested with Edward Jones (based on some elder families recommendation). I left Canada for about 10 years for school and work and didn't really touch the account much. Obviously a lost opportunity, and I don't really feel like I've been getting any return. The fees were never really clearly explained to me particularly when I was younger. I am thinking of leaving them, but not really sure how. They are currently managing a number of bonds, my TFSA and my RRSP.

I would like to take my pre marriage savings and start adding to this portfolio. In addition, I would like to take around 30% of what I was paying for school costs annually and keep adding to my portfolio. Maybe get my wife started as well when she has some savings.

In the next 2 years, we would be looking to buy a house, probably around the 400-500k range if her income increases to 50k/year gross. We are currently renting a new place in Ottawa. We have no outstanding debt.

Should I be looking for a financial planner? Should I continue with Edward Jones or move elsewhere? And if so how do I go about this process? I am happy to discuss more specifics if required. Thank you!
29 replies
Newbie
Jan 19, 2018
52 posts
11 upvotes
Below are my 2 cents:

Hire a Fee on Financial planner and discuss your financial goals/plan with them.
Though more importantly, learn about personal finances and investments, so you could make your own educated decisions without depending onthese so called experts.
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Jan 6, 2002
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Deal Expert
Aug 2, 2001
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You will likely need to talk to someone (financial planner) about the funds you have purchased with Edward Jones to be aware of any redemption fees. You should be able to discuss this with your Edward Jones rep, but I am not sure I would trust their advice. For example there can be some "good" times to sell mutual funds with DSC (deferred sales charge). Here is some discussion on their fees:
https://www.getsmarteraboutmoney.ca/inv ... fund-fees/

Banks, online brokerages, etc. are all able to transfer the money from Edward Jones without you ever talking to your rep there. It can be entirely initiated/completed by the institution you move to. However you may want to be aware of all these charges ahead of time to avoid any surprises. That's where a for-fee financial planner may be able to explain what you have, various options, etc. Even if you want to move to an online brokerage it's worth paying them for a couple hours of their time to explain what you actually have and areas of investment (TFSA/RRSP/Spousal RRSP/etc).
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May 11, 2014
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Hi there;

Good on you to get yourself to the point of getting forward! It sounds like you are in a position to build up your wealth and start building a future. Going to a fee-only advisor is a wise decision especially as you are self employed, don't have benefits,must pay for taxes, CPP etc. on your own and the fact you have significant income disparity with your wife.

That being said, it is also prudent to understand your situation and options yourself. By doing this, you can better gauge how you might want to go about doing this.

Some things you should compile together before going to an advisor.
-How are you earning your income? Is this via a corporation or are you doing this via self?
If you are fulfilling contracts via a corporation, you have other tax saving options and you may consider investing within the corporation. Also receiving payments via corporation dividends can also reduce your taxes further.

-What benefits does your wife have?
Your wife working for the school board may have access to a pension plan. Acknowledging such benefits can help you decide how you want to invest and plan your future.

-What assets do you currently have? How are these assets performing
Knowing the composition and assets is important before approaching how to manage your investment plans. You mentioned a future home purchase. What assets have you accumulated for this plan? Additionally, it is important to know how your assets are performing. Your Edward Jones investments, what kind of returns are you achieving? (feel free to post the portfolio they placed you in). (more below)

-What are your general financial goals?
Even if you don't have a specific idea, having general ideas of what you want will make it easier to place specific financial numbers to achieve those goals.

Now with the little information you have provided, some things I have noticed you may want to consider.

-Your investments
While any provider of investments can bring you to your goals, it is important to look at the investment mix your advisor has placed. your money in. Edward Jones offers mutual funds via some providers such as CI, Franklin Templeton, BMO, Invesco and Mackenzie. They have some decent funds too, however depending on the mix or specific ones your advisor has placed in, they might be poor choices or poorly performing funds. Additionally, even if the funds are in proper proportions, are the costs you pay for these investments worthwhile for the performance you are getting? Are you willing to manage your own investments? Finding your portfolio and general return over these years will help to frame this. You can then compare this with other options as well. For instance, many self-service options through brokerages can be lower cost and increase your returns especially over time. Additionally, some lower cost options such as Saskatchewan Pension Plan might be ideal for you as you lack a pension plan and can provide a low cost pension during retirement.

-RRSP, and Spousal income difference
As you are self-employed meaning you need to pay your income taxes directly from yourself, as well as the fact that you do have a somewhat higher income, utilizing your RRSP makes sense as this will reduce cash flow constraints when it comes to tax time. Additionally as you have an income gap between you and your spouse, it would make sense for you to consider a spousal RRSP account in your wife's name. By doing so, you will help to even out your incomes during retirement which can help to reduce your income taxes later in retirement. Keep in mind this is assuming your self-employment is under personal income.

Feel free to provide more details of your situation to help us assess the details. This may help you before you approach your advisors so you are fully aware of all your options.
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Newbie
Apr 5, 2017
62 posts
10 upvotes
Hi Folks,
I'm in a similar situation but just opposite of OP, I have a full time job and earns around $105K, my wife is self employed and earns around $30-35K part time and we have three small kids (older one is 6 year's old). None of us have any pension plans. I have already saved $15K in RRSP and around $7K in RESP with TD direct investing but didn't start investing any money anywhere. Own a house with mortgage balance of around 350K. No other debts, we have around 80K in our checking and savings account..... I'm 33 and she is 31 year's old. Thinking of real estate investments but scared to jump in as the market is crazy and unpredictable. Kindly advice or share your experiences or thoughts.
Newbie
Jul 27, 2019
20 posts
7 upvotes
I just read Millionaire Teacher by Andrew Hallam. This is a great read and very informative for beginners. It's a starting point for sure and I'm sure others can fill in where to go from there, but it'll at least give you some blanks to fill when it comes to investing for your retirement.
Jr. Member
Aug 23, 2019
141 posts
55 upvotes
Hi OP
Its not quite clear what youre looking to gain from the post here.
You haven't specified what your assets are, what your risk tolerance is, what your current savings/cash flow looks like.

If you want any solid answers you need to post
1) What is your risk tolerance? You will need to do some investigation into this. Without knowing this, we can't tell you if your investments at Edward Jones are good/bad. In addition, you need to specify what youre actually invested it, and what the actual growth is. You claim it hasn't done anything, but after 10 years, a moderate portfolio at Edward jones would have at minimum jugged along at 3 to 5%... Over 10 years that's a minimum 50% return.
2) We need to know the size of your accounts and the split between RRSP/TFSA/non-reg.
3) We need to know what your current cash flow looks like. How much are you ACTUALLY saving each month after all bills and expenses are paid, including those dinners/movies/dates etc.

As others have suggested to "contact a fee planner" well, you might not need to pay for advice if your needs are basic - which they seem to be. And you may not really need an in-depth plan.

In addition to above, you've only stated 1 goal, buying a house.... but what other goals do you have?
Childs education?
When do you want to retire by?
What will your wifes pension look like?
Are you drawing employment income - are you maxing out your CPP contributions?
Will you qualify for max OAS given you were out of Canada for 10 years? (once you hit 65)
What are the debts?

All of these things will factor /should factor into your goals and planning for the future
Last edited by Doebird on Sep 5th, 2019 9:01 pm, edited 1 time in total.
Jr. Member
Aug 23, 2019
141 posts
55 upvotes
MK1986 wrote:
Sep 5th, 2019 3:02 pm
Hi Folks,
I'm in a similar situation but just opposite of OP, I have a full time job and earns around $105K, my wife is self employed and earns around $30-35K part time and we have three small kids (older one is 6 year's old). None of us have any pension plans. I have already saved $15K in RRSP and around $7K in RESP with TD direct investing but didn't start investing any money anywhere. Own a house with mortgage balance of around 350K. No other debts, we have around 80K in our checking and savings account..... I'm 33 and she is 31 year's old. Thinking of real estate investments but scared to jump in as the market is crazy and unpredictable. Kindly advice or share your experiences or thoughts.
It's also unclear what advice you are looking to gain from posting here without being more specific. Based on your post and having $80k sitting in cheq/sav account, you're likely scared to do anything with it. Maybe investing in real estate is not something you are looking for.
$7k in RESPs is a far cry from where you should be. A 6 year old means you should have at least maxed that out every year at $2500 a pop x 6 to max out the grant. You should be doing that for each child. But you haven't.
You need to figure out what your goals are, what you real cash flow is, what your real investment risk tolerance is, and then come back and pose the same question.
Deal Addict
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Mar 29, 2008
3186 posts
460 upvotes
xgbsSS wrote:
Sep 4th, 2019 11:14 pm
Hi there;

Good on you to get yourself to the point of getting forward! It sounds like you are in a position to build up your wealth and start building a future. Going to a fee-only advisor is a wise decision especially as you are self employed, don't have benefits,must pay for taxes, CPP etc. on your own and the fact you have significant income disparity with your wife.

That being said, it is also prudent to understand your situation and options yourself. By doing this, you can better gauge how you might want to go about doing this.

Some things you should compile together before going to an advisor.
-How are you earning your income? Is this via a corporation or are you doing this via self?
If you are fulfilling contracts via a corporation, you have other tax saving options and you may consider investing within the corporation. Also receiving payments via corporation dividends can also reduce your taxes further.

-What benefits does your wife have?
Your wife working for the school board may have access to a pension plan. Acknowledging such benefits can help you decide how you want to invest and plan your future.

-What assets do you currently have? How are these assets performing
Knowing the composition and assets is important before approaching how to manage your investment plans. You mentioned a future home purchase. What assets have you accumulated for this plan? Additionally, it is important to know how your assets are performing. Your Edward Jones investments, what kind of returns are you achieving? (feel free to post the portfolio they placed you in). (more below)

-What are your general financial goals?
Even if you don't have a specific idea, having general ideas of what you want will make it easier to place specific financial numbers to achieve those goals.

Now with the little information you have provided, some things I have noticed you may want to consider.

-Your investments
While any provider of investments can bring you to your goals, it is important to look at the investment mix your advisor has placed. your money in. Edward Jones offers mutual funds via some providers such as CI, Franklin Templeton, BMO, Invesco and Mackenzie. They have some decent funds too, however depending on the mix or specific ones your advisor has placed in, they might be poor choices or poorly performing funds. Additionally, even if the funds are in proper proportions, are the costs you pay for these investments worthwhile for the performance you are getting? Are you willing to manage your own investments? Finding your portfolio and general return over these years will help to frame this. You can then compare this with other options as well. For instance, many self-service options through brokerages can be lower cost and increase your returns especially over time. Additionally, some lower cost options such as Saskatchewan Pension Plan might be ideal for you as you lack a pension plan and can provide a low cost pension during retirement.
Some interesting suggestions. I’d just note that Edward Jones is a full service brokerage (i.e. stocks, bonds, and mutual funds, managed accounts etc.) and as far as I know they have no proprietary funds.
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User avatar
May 11, 2014
3111 posts
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Iqaluit, NU
random pattern wrote:
Sep 5th, 2019 9:15 pm
Some interesting suggestions. I’d just note that Edward Jones is a full service brokerage (i.e. stocks, bonds, and mutual funds, managed accounts etc.) and as far as I know they have no proprietary funds.
They are a full-service brokerage, but in general, most of the time, they do stick to MFs from what I have seen, although OP did mention bonds.
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Newbie
Apr 5, 2017
62 posts
10 upvotes
Doebird wrote:
Sep 5th, 2019 8:58 pm
It's also unclear what advice you are looking to gain from posting here without being more specific. Based on your post and having $80k sitting in cheq/sav account, you're likely scared to do anything with it. Maybe investing in real estate is not something you are looking for.
$7k in RESPs is a far cry from where you should be. A 6 year old means you should have at least maxed that out every year at $2500 a pop x 6 to max out the grant. You should be doing that for each child. But you haven't.
You need to figure out what your goals are, what you real cash flow is, what your real investment risk tolerance is, and then come back and pose the same question.
Thanks for replying. I'm pretty new to Canada, its been 5 year's now. Yes I'm very scared to do anything with my money as I have very little knowledge about investing and don't have any family members for proper guidance. My wife wants me to buy a second house for investment. My risk tolerance level is very low as I'm the main bread winner and have three small kids ! I had posted here to get some general ideas and suggestions on how to start building up my assets in Canada. Yes definitely I'll put more money into my kids RESP's but I doesn't make any sense If i'm not investing it correctly, right ?
[OP]
Newbie
Oct 16, 2017
15 posts
xgbsSS wrote:
Sep 4th, 2019 11:14 pm
Hi there;

Good on you to get yourself to the point of getting forward! It sounds like you are in a position to build up your wealth and start building a future. Going to a fee-only advisor is a wise decision especially as you are self employed, don't have benefits,must pay for taxes, CPP etc. on your own and the fact you have significant income disparity with your wife.

That being said, it is also prudent to understand your situation and options yourself. By doing this, you can better gauge how you might want to go about doing this.

Some things you should compile together before going to an advisor.
-How are you earning your income? Is this via a corporation or are you doing this via self?
If you are fulfilling contracts via a corporation, you have other tax saving options and you may consider investing within the corporation. Also receiving payments via corporation dividends can also reduce your taxes further.

-What benefits does your wife have?
Your wife working for the school board may have access to a pension plan. Acknowledging such benefits can help you decide how you want to invest and plan your future.

-What assets do you currently have? How are these assets performing
Knowing the composition and assets is important before approaching how to manage your investment plans. You mentioned a future home purchase. What assets have you accumulated for this plan? Additionally, it is important to know how your assets are performing. Your Edward Jones investments, what kind of returns are you achieving? (feel free to post the portfolio they placed you in). (more below)

-What are your general financial goals?
Even if you don't have a specific idea, having general ideas of what you want will make it easier to place specific financial numbers to achieve those goals.

Now with the little information you have provided, some things I have noticed you may want to consider.

-Your investments
While any provider of investments can bring you to your goals, it is important to look at the investment mix your advisor has placed. your money in. Edward Jones offers mutual funds via some providers such as CI, Franklin Templeton, BMO, Invesco and Mackenzie. They have some decent funds too, however depending on the mix or specific ones your advisor has placed in, they might be poor choices or poorly performing funds. Additionally, even if the funds are in proper proportions, are the costs you pay for these investments worthwhile for the performance you are getting? Are you willing to manage your own investments? Finding your portfolio and general return over these years will help to frame this. You can then compare this with other options as well. For instance, many self-service options through brokerages can be lower cost and increase your returns especially over time. Additionally, some lower cost options such as Saskatchewan Pension Plan might be ideal for you as you lack a pension plan and can provide a low cost pension during retirement.

-RRSP, and Spousal income difference
As you are self-employed meaning you need to pay your income taxes directly from yourself, as well as the fact that you do have a somewhat higher income, utilizing your RRSP makes sense as this will reduce cash flow constraints when it comes to tax time. Additionally as you have an income gap between you and your spouse, it would make sense for you to consider a spousal RRSP account in your wife's name. By doing so, you will help to even out your incomes during retirement which can help to reduce your income taxes later in retirement. Keep in mind this is assuming your self-employment is under personal income.

Feel free to provide more details of your situation to help us assess the details. This may help you before you approach your advisors so you are fully aware of all your options.
Thanks for the detailed post and replies. I think seeing a fee-based financial planner might help

Couple answers here:
1. I am earning my income myself though have considered incorporating for some time.
2. We are still working on figuring out what benefits my wife gets access to. As a substitute, it is not very much.
3. These are the types of funds I have with Edward Jones:
Investment account (102k):

C.I.SIGNATURE DIVIDEND FUND (610)
FRANKLIN BISSETT CANADIAN DIVIDEND FUND (1017)
MACKENZIE CUNDILL CANADIAN SECURITY FUND SER C (738)
RENAISSANCE HIGH YIELD BOND FUND (908)
SYMMETRY CONSERVATIVE PORTF FUND FE (2912)

Over 11 years, I have received a 2.78% return.

TFSA (maxed):

BMO CONCENTRATED GBL EQTY LL (98213)
FRANKLIN HIGH INCOME FUND (186)
MANULIFE WORLD INVESTMENT CLASS ADV SRS LL (8721)

Over 3 years, I have received a 5% return which I feel is ok compared to the other account.

RRSP: 40k. Negligible returns as I just started putting money in last year.
[OP]
Newbie
Oct 16, 2017
15 posts
Doebird wrote:
Sep 5th, 2019 8:54 pm
Hi OP
Its not quite clear what youre looking to gain from the post here.
You haven't specified what your assets are, what your risk tolerance is, what your current savings/cash flow looks like.

If you want any solid answers you need to post
1) What is your risk tolerance? You will need to do some investigation into this. Without knowing this, we can't tell you if your investments at Edward Jones are good/bad. In addition, you need to specify what youre actually invested it, and what the actual growth is. You claim it hasn't done anything, but after 10 years, a moderate portfolio at Edward jones would have at minimum jugged along at 3 to 5%... Over 10 years that's a minimum 50% return.
2) We need to know the size of your accounts and the split between RRSP/TFSA/non-reg.
3) We need to know what your current cash flow looks like. How much are you ACTUALLY saving each month after all bills and expenses are paid, including those dinners/movies/dates etc.

As others have suggested to "contact a fee planner" well, you might not need to pay for advice if your needs are basic - which they seem to be. And you may not really need an in-depth plan.

In addition to above, you've only stated 1 goal, buying a house.... but what other goals do you have?
Childs education?
When do you want to retire by?
What will your wifes pension look like?
Are you drawing employment income - are you maxing out your CPP contributions?
Will you qualify for max OAS given you were out of Canada for 10 years? (once you hit 65)
What are the debts?

All of these things will factor /should factor into your goals and planning for the future
Thanks for prompting these questions.

1. I would say I would be a bit more balanced in my risk tolerance vs. a full growth tolerance. My main account with Edward Jones has a 2.78% return over 11 years.
2. I have shared the split of my accounts just now
3. Month to month is a bit hard for me since income fluctuates so much (several months without contracts being paid, followed by receiving 40,000 at once for example). I would say annually I am able to save around 20,000-25,000.
4. We do not have children. We are planning to in 2-3 years time.
5. Retirement Ideally at 60; though as I am self-employed I do not see myself fully retiring (ie. though I hope to significantly lessen my workload as I near normal retirement years)
6. No idea on my wife's pension; she just started as a substitute
7. I am self-employed, I am required to pay the max on CPP due to my income
8. During the time I was away, I continued to pay my taxes in Canada so should qualify for OAS
9. We do not have any debts at the moment
Deal Addict
User avatar
May 11, 2014
3111 posts
2619 upvotes
Iqaluit, NU
sdutta6 wrote:
Sep 6th, 2019 11:39 am
Thanks for the detailed post and replies. I think seeing a fee-based financial planner might help

Couple answers here:
1. I am earning my income myself though have considered incorporating for some time.
2. We are still working on figuring out what benefits my wife gets access to. As a substitute, it is not very much.
3. These are the types of funds I have with Edward Jones:
Investment account (102k):

C.I.SIGNATURE DIVIDEND FUND (610)
FRANKLIN BISSETT CANADIAN DIVIDEND FUND (1017)
MACKENZIE CUNDILL CANADIAN SECURITY FUND SER C (738)
RENAISSANCE HIGH YIELD BOND FUND (908)
SYMMETRY CONSERVATIVE PORTF FUND FE (2912)

Over 11 years, I have received a 2.78% return.

TFSA (maxed):

BMO CONCENTRATED GBL EQTY LL (98213)
FRANKLIN HIGH INCOME FUND (186)
MANULIFE WORLD INVESTMENT CLASS ADV SRS LL (8721)

Over 3 years, I have received a 5% return which I feel is ok compared to the other account.

RRSP: 40k. Negligible returns as I just started putting money in last year.
Yikes... not great when you are young and the last 11 years had some of the best gains. Can you breakdown the approximate percentages of each fund. I will review this, but it would help if you provided the breakdown.
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