The Canadian Question Thread

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canadiandream
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The Canadian Question Thread

Postby canadiandream » Wed Apr 11, 2007 11:36 am

As this is bound to come up sometime I thought I would start a Canadian question thread.

So if you have questions on taxes, RRSP, CPP, OAS or anything else in Canada please ask it here and I'll do my best to find out the answer if I don't know it myself.

CD
On the way to early retirement at 45.
http://blog.canadian-dream-free-at-45.com

quadraphonic
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Postby quadraphonic » Wed Apr 11, 2007 11:49 am

Here's a question.. do you have any recommendations on good RRSP portfolios? I have around $23K in right now and will probably kick in another $8K next year. I'm investing with CIBC right now, but certainly open to other suggestions.

Thanks for the offer of help BTW!
Will

brad
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Postby brad » Wed Apr 11, 2007 11:59 am

I don't know if this is a "good" RRSP portfolio or not, but I have mine split fairly evenly between two TD e-Funds, the US index fund and the Canadian index fund. TD's eFunds have very low fees and I've been satisfied with their performance so far. I don't have any other account with TD; they let you electronically transfer funds from any bank into your TD eFund RRSP accounts, and it's worked well for me so far.

When/if I retire it's going to be a bit of a mess, as I'm a dual US-Canadian citizen and lived in the US most of my life, so I have several US IRAs, a 401(k) and another retirement account (I think 403(b) or something, it's with TIAA/CREF), plus my Canadian RRSPs, US Social Security, and Canadian Social Security. How I'm going to keep all that straight, I have no idea!

consultantjournal
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Postby consultantjournal » Wed Apr 11, 2007 2:55 pm

I follow the MoneySense couch potato strategy. It's similar to what is mentioned above.
Andrea Coutu
Consultant Journal
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canadiandream
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Postby canadiandream » Thu Apr 12, 2007 11:55 am

Quad,

I personally like the MoneySense global couch potato. 25% bond index, 25% Cdn Index, 25% SP500 (US), 25% International index. You might be able to set something up within CIBC I don't know there funds that well. Just make sure your not paying all that much for the MER.

Also depending on your total holdings you might want to add a REIT part to the mix. It all depends on your timeline and what you feel comfortable doing.

Brad,

Ouch, that sounds like a mess. Will you qualify for OAS in Canada? I thought you needed like 40 years within the country to qualify and it sounds like you've spend most of your time in the US. Just wondering.

CD
On the way to early retirement at 45.
http://blog.canadian-dream-free-at-45.com

brad
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Postby brad » Thu Apr 12, 2007 12:18 pm

canadiandream wrote:Ouch, that sounds like a mess. Will you qualify for OAS in Canada? I thought you needed like 40 years within the country to qualify and it sounds like you've spend most of your time in the US. Just wondering.


Ack, acronym soup...I dunno what OAS stands for, but I assume it's the Canadian version of Social Security? If so, I have no idea, but I hope so because I had to stop contributing to my US Social Security when I moved to Canada five years ago. I am certainly paying into the Canadian system so I hope I get something back at the end. I was born here but we moved to the US when I was one year old and I lived there until five years ago (I'm 48 years old now).

canadiandream
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Postby canadiandream » Thu Apr 12, 2007 1:56 pm

Brad,

In Canada there are two programs that provide government income OAS = Old Age Security and CPP = Canada Pension Plan.

Check out my blog on the bottom left side there is a section called Tools with a link to some useful information.

CD
On the way to early retirement at 45.
http://blog.canadian-dream-free-at-45.com

quadraphonic
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Postby quadraphonic » Fri Apr 13, 2007 8:57 pm

canadiandream wrote:Quad,

I personally like the MoneySense global couch potato. 25% bond index, 25% Cdn Index, 25% SP500 (US), 25% International index. You might be able to set something up within CIBC I don't know there funds that well. Just make sure your not paying all that much for the MER.

Also depending on your total holdings you might want to add a REIT part to the mix. It all depends on your timeline and what you feel comfortable doing.

Brad,

Ouch, that sounds like a mess. Will you qualify for OAS in Canada? I thought you needed like 40 years within the country to qualify and it sounds like you've spend most of your time in the US. Just wondering.

CD


Thanks Andrea and CD.. that sounds like an approach to fits in with my philosophy as well.

Off-topic: CD, your quest is particularly interesting to me as it seems like you and I are at about the same place. I'm 29, a professional in my chosen career with 5 years in. Retiring at 45 sounds pretty good to me.
Will

Mike M
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Postby Mike M » Mon Apr 23, 2007 8:50 pm

Chalk me up as another advocate of the MoneySense global couch potato portfolio. I use it too.

canadiandream
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Postby canadiandream » Thu Apr 26, 2007 11:22 am

Mike,

The global couch potato is a good starting point. My problem know is coming up with a new one for when I retire.

So far I been liking about something like:

60% Fixed Income
15% REIT index
10% Candian Index
7.5% US
7.5% International

Any ideas/comments on this?

CD
On the way to early retirement at 45.
http://blog.canadian-dream-free-at-45.com

MillionDollarJourney.com
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Postby MillionDollarJourney.com » Tue May 01, 2007 11:10 am

canadiandream wrote:Mike,

The global couch potato is a good starting point. My problem know is coming up with a new one for when I retire.

So far I been liking about something like:

60% Fixed Income
15% REIT index
10% Candian Index
7.5% US
7.5% International

Any ideas/comments on this?

CD


CD,
60% fixed income is WAY too much for someone your age in my opinion. Perhaps you should consider re balancing so that you have around 20-25% fixed income and throw a global dividend ETF in there.
Best Regards,
FrugalTrader
http://www.MillionDollarJourney.com

brad
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Postby brad » Tue May 01, 2007 11:46 am

MillionDollarJourney.com wrote:CD,
60% fixed income is WAY too much for someone your age in my opinion. Perhaps you should consider re balancing so that you have around 20-25% fixed income and throw a global dividend ETF in there.


But if he's less than 15 years away from retiring (he's in his late 20s and wants to retire at 45), maybe keeping more than half in fixed income is a good thing.

In my RRSPs I have zero in fixed income and everything in index funds, but I'm very comfortable with risk and am not planning to retire until my late 60s at the earliest (if ever). I'm 48. But I think the closer you are to retirement, the more you want to be out of the stock market just to be sure you don't lose your principal if there's a crash.

canadiandream
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Postby canadiandream » Tue May 01, 2007 2:53 pm

Guys,

I should point out that suggested breakdown was when I'm at 45. I have no plans to have that much in fixed income now.

CD
On the way to early retirement at 45.
http://blog.canadian-dream-free-at-45.com

Mike M
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Postby Mike M » Wed May 02, 2007 8:42 pm

canadiandream wrote:Mike,

The global couch potato is a good starting point. My problem know is coming up with a new one for when I retire.

So far I been liking about something like:

60% Fixed Income
15% REIT index
10% Candian Index
7.5% US
7.5% International

Any ideas/comments on this?

CD


That sounds reasonable for retirement. The rule of thumb I've alway seen is 100-age = %of portfolio in equity, but obviously that goes out the window for an early retirement. I'm currently only 31 so I'm not to worried about it yet, but as I move toward financial independence (15 years at *best*), I'll definitely be shifting toward more fixed income, as well.


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