Investments....
#1
400WHP or bust
Thread Starter
iTrader: (7)
Join Date: Oct 2003
Location: Walkerton, Ontario Canada
Posts: 4,048
Likes: 0
Received 0 Likes
on
0 Posts
Investments....
I'm looking into investing for my retirement, I know Mutual Funds are the best way to go about it in the long term, but RRSP's offer a tax break if you put money in them before March 1st. I would like to at least maximize my tax return this year, because I'm back in school, and Money is good.
If anyone can shed light on this, that would be great; but I'm sure I'm not the only one in this situation.
Thanks,
Kevin
If anyone can shed light on this, that would be great; but I'm sure I'm not the only one in this situation.
Thanks,
Kevin
#3
Rotary Freak
iTrader: (3)
RRSP's are fine but as with any investment there is potential to lose as much as gain.
I put a lot of money into RRSP's and did some risky stuff. I could have made alot but I didn't. I didn't think much of it because it was long term investing anyway (so I thought). That was until I bought my house and used my RRSP's for downpayment. I'd be laughing had I been lucky enough to see some gains but instead I lost a significant amount of money.
My advice:
1. Plan your financial calendar short and long term.
2. Decide how much your willing to lose.
3. If you're not knowledgeable or don't have the time to be then have someone manage your money.
I put a lot of money into RRSP's and did some risky stuff. I could have made alot but I didn't. I didn't think much of it because it was long term investing anyway (so I thought). That was until I bought my house and used my RRSP's for downpayment. I'd be laughing had I been lucky enough to see some gains but instead I lost a significant amount of money.
My advice:
1. Plan your financial calendar short and long term.
2. Decide how much your willing to lose.
3. If you're not knowledgeable or don't have the time to be then have someone manage your money.
#4
400WHP or bust
Thread Starter
iTrader: (7)
Join Date: Oct 2003
Location: Walkerton, Ontario Canada
Posts: 4,048
Likes: 0
Received 0 Likes
on
0 Posts
From what I understand, over the long term Mutual funds can be very safe, and profitable, the risk isn't as great if I keep the mutual fund going over a long term right, as well as getting 12ish% gains?
I have about 2k to put into a investment, and with work I have one of the best pensions out there (I am a federal employee). I am considering dumping the 2k into a RRSP to get started, and maybe Dump another 2k away in a mutual fund next year. Good Idea yes or no?
Mutual Funds are tax deductible?
I have about 2k to put into a investment, and with work I have one of the best pensions out there (I am a federal employee). I am considering dumping the 2k into a RRSP to get started, and maybe Dump another 2k away in a mutual fund next year. Good Idea yes or no?
Mutual Funds are tax deductible?
#7
Rotary Freak
iTrader: (1)
depends on your age.
if you are young go with a sure thing simple rrsp at a bank.
stock market / funds suck over all.
there is money to be made in the stock market but its only the traders making it
on mutual funds.
only way to do well on funds of stocks is to manage them yourself.
matt
if you are young go with a sure thing simple rrsp at a bank.
stock market / funds suck over all.
there is money to be made in the stock market but its only the traders making it
on mutual funds.
only way to do well on funds of stocks is to manage them yourself.
matt
Trending Topics
#9
More Mazdas than Sense
Join Date: Aug 2003
Location: Sunny Downtown Fenwick
Posts: 2,168
Likes: 0
Received 0 Likes
on
0 Posts
What no one has mentioned is that RSP's can contain mutual funds. Mutual funds spread the risk around, but they also spread the benefits around.
Here's my step 1: Invest $20 in a copy of "The Wealthy Barber" Read it twice. Invest another $20 in business week, or Canadian Business. In a year or so you'll be better educated than 90% of the investors out there.
I'm a pretty high income earner, so my results may not be typical, but I did an analysis with my bank recently (so i could minimize the interest on an RSP loan), and I realized that I'm actually fiscally solvent (more assets than debt), which at 27 is pretty damned good.
Either who, start here:
http://www.canadianbusiness.com/my_money/index.jsp
Here's my step 1: Invest $20 in a copy of "The Wealthy Barber" Read it twice. Invest another $20 in business week, or Canadian Business. In a year or so you'll be better educated than 90% of the investors out there.
I'm a pretty high income earner, so my results may not be typical, but I did an analysis with my bank recently (so i could minimize the interest on an RSP loan), and I realized that I'm actually fiscally solvent (more assets than debt), which at 27 is pretty damned good.
Either who, start here:
http://www.canadianbusiness.com/my_money/index.jsp
#11
Crash Auto?Fix Auto.
iTrader: (3)
I do weekly additions to my investments, automatically withdrawn so I never even know I did it.....or had it
But I think the best thing to do as far as immediate help with taxes, and also useability, would be an RRSP. They can be deducted for income tax purposes, and up to 25,000 can be used as a downpayment for a house....and (at least with my bank) if you're a first time buyer and use a portion of the RRSP as a downpayment, there is NO fee to liquidate it.
Really though, the best plan is anything with many baskets, and many small eggs Spread things out a bit and see what is working. If you notice a GIC thats doing well, add to it. Or a mutual fund thats taking off (yeah right haha!!) then add to it.
But ANY investments at a young age are better than none. My mom (who works a t CIBC) showed me a calculation a looooong time ago of two scenarios. 1 man invests (can't recall actual numbers) 2,500 dollars at the age of 20 and adds 100/year to it after that. Another man at age 40 invests 5,000 and adds 200/year to it. When both men were the age of 60, the man who started early had nearly twice as much as the man who started later, desipte the fact that the man who started later made double the contribution.
But my vote is RRSP
But I think the best thing to do as far as immediate help with taxes, and also useability, would be an RRSP. They can be deducted for income tax purposes, and up to 25,000 can be used as a downpayment for a house....and (at least with my bank) if you're a first time buyer and use a portion of the RRSP as a downpayment, there is NO fee to liquidate it.
Really though, the best plan is anything with many baskets, and many small eggs Spread things out a bit and see what is working. If you notice a GIC thats doing well, add to it. Or a mutual fund thats taking off (yeah right haha!!) then add to it.
But ANY investments at a young age are better than none. My mom (who works a t CIBC) showed me a calculation a looooong time ago of two scenarios. 1 man invests (can't recall actual numbers) 2,500 dollars at the age of 20 and adds 100/year to it after that. Another man at age 40 invests 5,000 and adds 200/year to it. When both men were the age of 60, the man who started early had nearly twice as much as the man who started later, desipte the fact that the man who started later made double the contribution.
But my vote is RRSP
#12
If you haven't bought a house yet, get an RRSP, and withdraw the funds for a down payment when you do. If you feel like a little risk/reward, mutual funds are a pretty good investment from now until about three years. The baby-boomer generation is piling their money into investments for retirement. In three years the first of them will start to pull money out so they can enjoy their retirement. These are the boom years, in around 7, the bust will start. Save during the boom and buy a house in the bust when the BBs start to sell their homes for something more practical.
#13
Rotary Freak
iTrader: (7)
Originally Posted by Nismo Convert86
At 21 I can't afford two mortages.
But two mortgages or more is the only real way to take advantage of the real estate market. You should be looking at it as carrying the mortgages since the 2nd and 3rd property shoud carry itself. Your contingency plan should include being able to cover both for a 3-6 month period to take into account loss of tenants etc but this is a tried and tested way of gaining significant wealth.
Don't just look at what you can do with your money. Learn to make money with other people's cash and you'll be fine in retirement.
#15
400WHP or bust
Thread Starter
iTrader: (7)
Join Date: Oct 2003
Location: Walkerton, Ontario Canada
Posts: 4,048
Likes: 0
Received 0 Likes
on
0 Posts
Originally Posted by ourxseven
go to the library or book store and get "The Wealthy Barber"
its a short book, easy to read, but tells you pretty much all you need to know about buying mutual funds and investing for your retirement .... a few jokes in it as well
its a short book, easy to read, but tells you pretty much all you need to know about buying mutual funds and investing for your retirement .... a few jokes in it as well
If you're calling me stupid or retarded, just come out and say it.
#17
Rotary Freak
iTrader: (1)
This is a huge topic. Real estate investing, as has been pointed out, is an excellent way to make significant wealth. Fund-type investments, whether tax deferred in RSP's or not, can provide good, but typically not great returns. A variety of investment tools is the best idea - ie, real estate for your potential big gains (but also more risk), and funds for a lower-risk source of long-term wealth. I would suggest dealing with an independent broker, rather than what are known as captive companies (ones where the broker works only for Investors Group, Clarica, WFG, and so on), simply because they may have a very good investment for you, or they may not, but they're always going to recommend their company's product because its all they have to offer. An independent broker can look at funds from multiple companies and potentially offer a better mix of risk vs. return to suit your situation. Find someone who takes the time to ask and answer questions and learn your financial situation and aspirations and risk sensitivity - all should, but not all do. You should not feel confused or bamboozled, and they should not quickly decide for you what your investment should be - that may be a sign of someone following a simple formula, or more concerned with their commission.
I would also strongly recommend investing in segregated funds rather than mutual funds (seg funds). Segregated funds do two things mutual funds do not: your principle is guaranteed (so your original investment can't be lost), and they may allow you to lock in your gains (roll in the gains to the principle, so the gains become part of the protected portion).
Besides the Wealthy Barber, Rich Dad, Poor Dad, and other books by Robert Kyosaki are an excellent start on learning about becoming wealthy.
I would also strongly recommend investing in segregated funds rather than mutual funds (seg funds). Segregated funds do two things mutual funds do not: your principle is guaranteed (so your original investment can't be lost), and they may allow you to lock in your gains (roll in the gains to the principle, so the gains become part of the protected portion).
Besides the Wealthy Barber, Rich Dad, Poor Dad, and other books by Robert Kyosaki are an excellent start on learning about becoming wealthy.
#18
1/1 scale Hot Wheels
iTrader: (1)
Originally Posted by Bass
You're stupid.
seriously , the Wealthy Barber is a great book ....... pay particular section on "dollar cost averageing" , thats what makes just about any mutual fund work in the long run (buy small but often is better than buy big once in awhile)
#21
Senior Member
Join Date: Nov 2006
Location: Airdrie, Alberta
Posts: 405
Likes: 0
Received 0 Likes
on
0 Posts
Originally Posted by Lawyer's Spirit
But two mortgages or more is the only real way to take advantage of the real estate market. You should be looking at it as carrying the mortgages since the 2nd and 3rd property shoud carry itself. Your contingency plan should include being able to cover both for a 3-6 month period to take into account loss of tenants etc but this is a tried and tested way of gaining significant wealth.
Don't just look at what you can do with your money. Learn to make money with other people's cash and you'll be fine in retirement.
Don't just look at what you can do with your money. Learn to make money with other people's cash and you'll be fine in retirement.
#22
1/1 scale Hot Wheels
iTrader: (1)
Originally Posted by Lawyer's Spirit
Buy low, sell high
too much work ........ buy a fixed $$ amount monthly (what you can afford) of a canadian balanced mutual fund RRSP no matter what the price of the "units" that month and sell in 30 years. .... dollar cost averageing eliminates your need to worry about high and low over the long haul .... set up a direct purchase from your account on pay day And forget about it
and do the real estate thing as well
#24
EliteHardcoreCannuckSquad
Join Date: Apr 2001
Location: Montréal, Québec, Canada
Posts: 3,081
Likes: 0
Received 0 Likes
on
0 Posts
Real estate is a good idea. Buy some RSP Mutual funds in real estate. A good one with a fair expense ratio (what the manager charges you to manage your portfolio) and a decent 500$ minimum is the CIBC Canadian real estate. Obviously, the performance will depend how long the Alberta and BC real estate boom will go on like it currently is.
Then, buy some very good canadian market funds, but I recommend a safe, unbiased portfolio approach, such as the RBC O'Shaughnessy funds. Unfortunately, the Canadian Equity fund was capped this january, but he launched a new one called the All-Canadian fund wich seems just as good. Also a 500$ minimum, RPS eligible, and strickly based on pre-determined buy and sell policy proven by years of research by the fund manager.
Then, you have to choose wether you want to jump on the china bandwagon. Unfortunately, as much as you can get great returns, the market there will be very sensitive to new regulations that local authorities could decide to put in place. A good fund there is the HSBC Chineese equity fund, which is managed straight from china, by chineese managers, not some canadian managing a fund in china from some office in Toronto. Also a very good expense ratio and RSP eligible with a minimum of 500$.
There are just examples, I've been researching the market for quite a while now and have had luck with equity funds, but the explosion of offerings over the past few years has made it a challenge to pick the winners over the losers. Avoid those funds that charge you a front or back-end fee (basically they are asking you to pay a commission to buy or sell parts in their funds) which to me is a big scam has the big benefit of mutual funds is that there is NO commission to pay.
Eventually, as you grow older, you'll want to get in on stocks from well-established companies, known to pay good dividends. But that's only once you're getting closer to retirement and have a few tens of thousands of dollars to spare.
Then, buy some very good canadian market funds, but I recommend a safe, unbiased portfolio approach, such as the RBC O'Shaughnessy funds. Unfortunately, the Canadian Equity fund was capped this january, but he launched a new one called the All-Canadian fund wich seems just as good. Also a 500$ minimum, RPS eligible, and strickly based on pre-determined buy and sell policy proven by years of research by the fund manager.
Then, you have to choose wether you want to jump on the china bandwagon. Unfortunately, as much as you can get great returns, the market there will be very sensitive to new regulations that local authorities could decide to put in place. A good fund there is the HSBC Chineese equity fund, which is managed straight from china, by chineese managers, not some canadian managing a fund in china from some office in Toronto. Also a very good expense ratio and RSP eligible with a minimum of 500$.
There are just examples, I've been researching the market for quite a while now and have had luck with equity funds, but the explosion of offerings over the past few years has made it a challenge to pick the winners over the losers. Avoid those funds that charge you a front or back-end fee (basically they are asking you to pay a commission to buy or sell parts in their funds) which to me is a big scam has the big benefit of mutual funds is that there is NO commission to pay.
Eventually, as you grow older, you'll want to get in on stocks from well-established companies, known to pay good dividends. But that's only once you're getting closer to retirement and have a few tens of thousands of dollars to spare.
#25
Senior Member
Join Date: Nov 2003
Location: Calgary, AB
Posts: 457
Likes: 0
Received 0 Likes
on
0 Posts
The thing about leveraging your primary residence's equity to procure a new mortgage is that you can become a very unfortunate victim of a downturn. The key is the debt to equity ratio. Suppose you have a $400K house that has $200K mortgage on it (pretty typical in Calgary these days). If you take 100K of equity and use it as a 25% downpayment on another 400K house, then you'll have 800K worth of assets, and 600K of debt. Your debt to equity ratio was 50% and now it's 75%. If house prices go up as quickly as the mortgage rate (which has been the case over the past few years) you're laughing. But if you buy at the wrong time and the market cools, a fairly small 25% dip in house values will leave you with no equity at all and faced with the very real prospect of bankruptcy. You've essentially thrown your 200K of hard-earned equity away by risking it on the most volitile top 25% of the housing market. On the other hand, if you hit another boom like we've seen in Alberta you can become wealthy quite quickly and easily...
Due to my personal situation I've been considering for a while what a good debt to equity ratio is. I think 50% is pretty safe. 60% might be alright. Esspecially with the boom we just came through, I'm very reluctant to go up to 75% in case we see some reversals.
In any case, the best way to protect from the downturn is to be able to carry the mortgages you have for very long periods of time (10 years + IMO), so that you can wait it out until values start going back up. Bottom line is having 75% debt to equity ratio can pay off huge, but is also a very big risk that could leave you starting over from scratch.
Due to my personal situation I've been considering for a while what a good debt to equity ratio is. I think 50% is pretty safe. 60% might be alright. Esspecially with the boom we just came through, I'm very reluctant to go up to 75% in case we see some reversals.
In any case, the best way to protect from the downturn is to be able to carry the mortgages you have for very long periods of time (10 years + IMO), so that you can wait it out until values start going back up. Bottom line is having 75% debt to equity ratio can pay off huge, but is also a very big risk that could leave you starting over from scratch.