Tag Archives: ETF

May 15: Best from the blogosphere

By Sheryl Smolkin

This week we present an eclectic mix of posts from Canadian money bloggers, some of whom have been posting for years but have not previously been cited in this space.

On HowToSaveMoney.ca, Heather Clarke offers 7 Ways To Declutter Without Spending A Fortune, Instead of buying costly clear lucite boxes, monogrammed fabric bins, or classic wooden divided trays, she says that using a little creativity and a few basic craft supplies you can make attractive, low cost storage solutions. But I’m not very crafty, so I think the two year rule is the best way to minimize clutter — if I haven’t used an item in 24 months, it’s time to get rid of it.

Recently governments in British Columbia and Ontario have enacted new laws to try and cap runaway house prices in some markets. Firecracker and her husband Wanderer who blog on Millenial Revolution are typically in favour of a laissez faire approach. But as reported in Your Thoughts on Government Intervention, the majority of their readers disagree. Of 356 readers who responded to a survey they conducted, 198 believe the government should intervene. And about one-third believe a tax on speculators is the most effective strategy.

Does your financial advisor really ‘deserve’ to be paid? Doris Belland tackles this thorny issue in a recent post on Your Financial Launchpad. She notes that the financial advice industry is undergoing a profound shift in which several economists plus some of the worlds’ most successful investors and Nobel Laureates argue persuasively that the higher fees associated with traditional investment products have a negative effect on investors’ results.

Ed Rempel explains Why he will never own an ETF or index fund. He says that the average fund manager can’t beat the market, but superior fund managers clearly can. Based on his research and investment returns, he believes he has selected All Star Fund Managers who have consistently exceeded the relevant indices. “Performance fee models with a very low base fee give you the low fee advantage of an ETF or index fund – plus a good chance of above index returns,” Rempel concludes.

And finally, on Financial Uproar, Nelson introduces The Too Much House Equation. “We constantly rag on people who buy too many video games or finance vacations, but we cheer people who make a similar mistake with their houses,” he writes. “The fact is the easiest way for the average person with only a small net worth to save more is to cut their fixed expenses, starting with housing.”


Do you follow blogs with terrific ideas for saving money that haven’t been mentioned in our weekly “Best from the blogosphere?” Share the information on http://wp.me/P1YR2T-JR and your name will be entered in a quarterly draw for a gift card.

Aug 22: Best from the Blogosphere

By Sheryl Smolkin

This week we have a pot pourri of stories from some of our favourite bloggers who have continued to write compelling copy through the now waning, long hot days of summer.

Are you a techno-phobe or an early adopter? Alan Whitton aka Bigcajunman writes about how old financial technology habits die hard on the Canadian Personal Finance Blog. Despite some lingering security paranoia, he now deposits cheques by photographing them with his cell phone.

One of the primary changes personal finance advisors suggest that clients make to save money is to put away their credit cards and start spending cash. On Money We Have, Barry Choi explores what happens if you decide to use cash and debit more. He says that depending on your personal situation, this may affect your credit score, you will forgo travel reward points and you also can lose out on other standard benefits like travel insurance and auto insurance covering car rentals.

Mark Seed on My Own Advisor answers a reader’s question, How would you manage a $1 million portfolio? His bias is to own stocks indirectly via passively managed Exchange Traded Funds for the foreseeable future to get exposure to U.S. and international equity markets.  However, he says his selection of investments will likely differ after age 65 and in future he might hire a fee-only financial advisor or use a robo-advisor to manage his portfolio.

I recently helped my son find an apartment in Toronto so I thought Kendra Mangione’s article From a house to a bedroom: What $1,000 a month can rent across Canada was particularly interesting. She says you will pay $950 for a single bedroom with an ensuite bathroom in a Vancouver suburb but $950 will get you a two-bedroom, 864 sq. ft. townhouse close to downtown Regina and the university.

And whether you have children who are new graduates or you are only beginning to help pay for your kids’ post-secondary education, check out Parents Deserve a College Graduation Present, Too in the New York Times. This piece explores a Korean-American tradition for former students to give parents sometimes lavish gifts, once they have their diplomas in hand.

Do you follow blogs with terrific ideas for saving money that haven’t been mentioned in our weekly “Best from the blogosphere?” Share the information on http://wp.me/P1YR2T-JR and your name will be entered in a quarterly draw for a gift card.

Nov 23: Best from the blogosphere

By Sheryl Smolkin

This week we are back to everyone’s favourite topic – how to get ready for retirement. If you haven’t already maxed out your 2015 Saskatchewan Pension Plan, RRSP and TFSA contributions, now is the time to make sure you are “on plan” before you start spending more than you can afford in the run up to the holiday season.

If you are not a Globe & Mail regular reader, check out the new Globe Retirement series. I particularly like Boomer retirement planning: A nine-step guide to ease your mind by our perennial favourite Rob Carrick. The publication’s online fee disclosure tool will show you how the advisory fees you pay compare with other investors.

Michael James on Money writes about Retirement Spending Stages. While there is evidence that older seniors spend less, he says spending too much in the early years of retirement could mean in your later years all you have left to live on is government benefits and any pension streams you may have.

In Save like this, retire like that – My story about early retirement in style Mark Seed interviews “RBull” from Canadian Money Forum who retired in 2014 in his 50s. He estimates that his savings rate averaged a little over 20% for about 20+ years. Approximately two years before retiring he sold almost all his stock positions to purchase broad market ETFs to simplify the portfolio, increase diversity and keep fees low.

Dan Wesley who blogs at Our Big Fat Wallet is in an enviable position. His TFSA and RRSP are Maxed Out and he is trying to decide where where to put his additional savings. Options include paying down the mortgage, opening a TFSA for his wife and opening a taxable investment account.

In MoneySense, Jon Chevreau discusses Saving mistakes you’re probably making. The single biggest mistake of course is NOT saving at all, says Adrian Mastracci, president of Vancouver-based KCM Wealth Management Inc. The easiest thing in the world is to spend 100% of what you earn or even worse, fall into debt. Chevreau says at the root of the failing-to-save mistake is the failing-to-live-within-your-means error.

Do you follow blogs with terrific ideas for saving money that haven’t been mentioned in our weekly “Best from the blogosphere?” Share the information with us on http://wp.me/P1YR2T-JR and your name will be entered in a quarterly draw for a gift card.

Oct 6: Best from the blogosphere

By Sheryl Smolkin

It’s October already! How time flies. Here are some interesting posts from some of our favourite, always prolific personal finance bloggers.

On Balance Junkie, Tom Drake discusses options for Banking on Your Mobile Phone. There are smartphone apps to run your business, create a budget, check your bank account and set up mobile payments.

How Behavioural Biases Kept Me From Becoming An Indexer is a confession from Boomer & Echo’s Robb Engen that it’s tough to sell a portfolio of high performing winning dividend stocks – his “babies” that he has nurtured through a five-year bull market. Nevertheless the more he reads about, writes about, and teaches others about investing, the more he is convinced that convinced that passive investing (indexing) is the right approach.

4 Questions to Ask Before Buying a Mutual Fund by Our Big Fat Wallet’s Dan Wesley include how the fund has performed as compared to other funds and the costs of ownership. Like Engen, he concludes that if an actively managed fund can’t beat the index, you’re likely better off with a low-cost index Exchange Traded Fund (ETF).

Whether you are a snowbird planning winter away from Canada’s cold climate or dreaming of a one week all inclusive getaway, take a look at Frequently Never Asked Questions for your Travel Medical Insurance on Bank Nerd. Did you know that in general, an emergency due to a pre-existing condition is not covered?

And finally, on Retire happy, Sarah Milton addresses the question Should New Canadians join a Group RRSP? She agrees that RRSP accounts are intended as a vehicle for retirement savings but says that doesn’t mean they only have value if you plan to retire in Canada.

Do you follow blogs with terrific ideas for saving money that haven’t been mentioned in our weekly “Best from the blogosphere?” Share the information with us on http://wp.me/P1YR2T-JR and your name will be entered in a quarterly draw for a gift card.

Big Cajun Man shares RDSP, RESP expertise

By Sheryl Smolkin

Alan Whitton and his son Rhys
Alan Whitton and his son Rhys

 

podcast picture
Click here to listen

Hi,

As part of the savewithspp.com continuing series of podcast interviews with personal finance bloggers, today I’m talking to the “Big Cajun Man,” author of the Canadian Personal Finance Blog.

In real life, he is actually, Alan Whitton, a mild-mannered government civil servant and father of four, living in Ottawa. Alan has been blogging about finance and consumerism for about ten years, focusing on real life experiences.

As a result, he has written extensively about Registered Disability Savings Plans and parenting a disabled child.

Welcome, Alan.

My pleasure Sheryl.

Q: First of all Alan, tell our listeners where your alter ego name, “Big Cajun Man,” came from.
A:  Well, I was playing golf with friends and was wearing a straw hat and someone yelled at me, “What do you think you are, some kind of big stinking Cajun man?” and the guys I was playing with have called me that ever since.

Q: Why did you start blogging?
A: Well, I started initially just on BlogSpot as sort of an open letter to my mother because at the time, my wife was pregnant with our fourth child, who was a bit of a surprise. Then I realized I could write about other things and I was always interested in money so I figured I’d just start blogging about it.

Q: How frequently do you post?
A: I try to write four or five posts in a week. The Friday post is usually a ‘best of’ what I’ve seen during the week.

Q: How long are the blogs and how complex are they? Do they vary?
A: Oh, it’s usually somewhere between four and eight paragraphs. What shows up, or what I read about or something that happens in my life is usually the catalyst for the more interesting ones.

Q: Tell me about some of the topics you write about.
A: Well, family and money and how families work with money, a little bit on investing, a lot more on disability and how families can deal financially with kids with disabilities or loved ones with disabilities. And that really, again, arose because when Rhys was diagnosed on the autism spectrum, I had to learn about all this so I figured I’d write about it too.

Q: And, how old is Rhys now?
A: He is 9. I have three beautiful daughters who are 24, 22 and 20, and my son who has just turned 9. It’s a multi-generational family. That’s why I end up writing about things like university costs and parenting a 9-year old.

Q: There are probably over a dozen personal finance bloggers in Canada. What’s different about your blog. Why do you think it’s a must read?
A: I don’t know. I mean, my point of view as a father of a multi-generational family is interesting. I always have had a different perspective on things. I leave a lot of the specific investing ideas to some of the more qualified chaps like Michael James and Rob Carrick. I mostly just talk about John Public’s point of view of things.

Q: How many hits do you typically get for your blogs?
A: Between 8,000 and 12,000 a month. It started off very slowly and I think with the backlog of over 2,500 posts there’s a lot of people who just search and end up finding me accidentally.

Q: What are some of the more popular blogs you’ve posted?
A: Well, anything under my RDSP and RESP menus are popular, like how to apply for your child’s disability tax benefits. And on the RDSP side of things all the fights I’ve had with TD about putting money in and taking money out. Also, surprisingly, I wrote one simple blog that just said “I am a civil servant,” and let me tell you, that one caused no end of excitement.

Q: What is the essence of that particular blog?
A: I was trying to blow up some of the very negative views people have about civil servants. I mean, I worked in the private sector for over 20 years. I‘ve been a civil servant for 4 years.

Q. Tell me some of the key features of Registered Disability Savings Plans and what parents of disabled children need to know about them.
A: Well, just that right now they’re sort of the poor stepson at most financial institutions. I mean they’re not very flexible. Typically, at worst, they’re really just savings accounts. You can buy GICs or the bank’s mutual funds, which usually have very high management fees.

From what I can tell so far, TD Waterhouse is the only trading partner or trading house that has an RDSP where you can actually buy whatever you want like ETFs. But even the TD plan is not very well set up. It’s pretty cumbersome to put money into.

Q: What’s cumbersome about it?
A: Well, I can’t set up a weekly automatic withdrawal. I have to put money aside into another TD trading account. Then I have to phone up every once in awhile and transfer the money from the trading account into the RDSP. And then I have to call back after the money’s cleared to say, “And now I want to buy these ETF’s or index funds.”

Q: Why is that?
A: I don’t know. I’ve asked TD that a whole bunch of times. It’s just the way the system works. I’ve poked at them as best I can. I’ve asked a few other people to poke at them, but I haven’t really received a satisfactory answer.

Q: Are there legislative rules about how you can invest RDSPs?
A: Not, necessarily. It’s just the banks are putting that kind of limit on things because it’s not a big money maker for them. They’re not going to make a fortune on amounts people deposit into RDSPs.  Whereas with RESPs, there are more people with kids going to university.

Q: What are the contribution limits on RDSPs?
A: The overall lifetime limit for a particular beneficiary is $200,000. Contributions are permitted until the end of the year in which the beneficiary turns 59. Up to a certain amount every year, depending on how much money you make, will be matched by the government.

Based on parental income, an RDSP can get a maximum of $3,500 in matching grants in one year, and up to $70,000 over the beneficiary’s lifetime. A grant can be paid into an RDSP on contributions made to the beneficiary’s RDSP until December 31 of the year the beneficiary turns 49.

Q: Do you have a favorite personal finance blogger that you read religiously?
A: I’ve got a couple. I like reading Michael James “On Money”, but he’s a friend of mine. I really like the Canadian Capitalist, but he’s sort of taken a hiatus. “Boomer & Echo” and the “Canadian Couch Potato” are quite good and so is “My Own Advisor.” I’ve met most of these guys at various conferences. I also read Squawkfox and have had extensive correspondence with her on Twitter.

Q: What, if any, money making opportunities or spin-offs have there been as a result of your blogging career?
A: Well, I don’t do this for the money which is obvious given how little I make at it. This is more of a cathartic thing for me.

Q: If you had only one piece of advice to readers or listeners about getting their finances in order, what would it be?
A: Get out of debt. Debt is a bad thing. There’s no such thing as good debt. It’s all bad. Don’t fool yourself into thinking there’s livable debt like a mortgage or maybe paying for your university. Somehow carrying debt has been normalized in the last 30 years or so but it’s still really not ok.

Thank you very much, Alan. It was a pleasure to talk to you.

Thanks for the opportunity Sheryl.

This is an edited transcript you can listen to by clicking on the link above. You can find the Canadian Personal Finance Blog here.

October 28: Best from the blogosphere

By Sheryl Smolkin

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This week we have random posts from some of our favourite bloggers that consider how you can save for retirement, invest your savings and spend your money after retirement.

Robb Engen on Boomer & Echo thinks that many media money makeovers are unrealistic, and that we really need to prioritize our financial goals. He shares his portrait of the ideal saver.

When it comes to spending and saving money, for many of us monthly mortgage payments take the biggest chunk out of our earnings. From the archives of the Canadian Finance blog, Nelson Smith offers 6 ways to save thousands on your next mortgage.

Saving is not enough. You have to invest your money in a way that both minimizes risk and maximizes growth of your account. A Young and Thrift blogger explains how he finally overcame his inertia and invested the $100,000 cash he had in his accounts. Spoiler alert: He topped up his TFSA and RRSP and then invested in ETFs.

But the Canadian Capitalist says we can learn a thing or two on how to invest our own money from the manner in which the CPPIB invests our surplus Canada Pension Plan contributions.

And finally, however much you save and whatever your plans are, Kevin Press tells us how you choose to spend your retirement will be a compromise. That’s because recent Sun Life research revealed seven ways men and women disagree about retirement.

Do you follow blogs with terrific ideas for saving money that haven’t been mentioned in our weekly “Best from the blogosphere. Share the information with us on http://wp.me/P1YR2T-JR and your name will be entered in a quarterly draw for a gift card.