(Part 2) Top products from r/PersonalFinanceCanada

Your rent is really quite high, but it's Vancouver so I get it.

One thing that looks possibly missing is budgeting for longer term or infrequent regular expenses. This might be things like:

1. Saving up to buy gifts for people at Christmas. Or just saving up because you know you will spend more at restaurants around the holidays.
   
   
2. Saving up for yearly vacations.
   
   
3. Any regular bills that are yearly rather than monthly. For me this is my rental insurance, but it sounds like you have this covered. A lot of people have yearly car registration fees as well, but I think you don't own a car? Either way, make sure you budget for any expenses like this so you aren't blindsided in January when you get a large bill that you didn't plan for.
   
   
4. Clothing purchases? Maybe this is falling under "personal enjoyment" for you, but clothes wear out.. You're going to need to replace them.
   
   
5. When you get a new cellphone every 4 years or whatever, do you buy a cheaper one on contract so there is no up front cost? Otherwise, you should budget monthly savings for this. And similar regular long-term purchases (Computer?).
   
   
   Perhaps not high on your list, but if it's your thing, setting some monthly budget for charitable donations is a good idea. Alternatively, just have a budgeted "flex" category that can include this, so that you aren't off-budget for random purchases ( within reason ).
   
   Move-out expenses: I've got about a $1000 bill for IKEA furniture in the 1 bedroom place I live in now. This did not include a bed ( additional ~$800). You can certainly do this cheaper (kijiji etc.), but budgeting $2000 or so would be a comfortable start. It sounds like you have the savings to do so. You'll want a good set of cookware, cutlery, plates, and kitchen knives as well, which could set you back a couple hundred, depending on quality and sales.
   
   Retirement savings: Typical suggestion is 10-20% of your pre-tax income. Since you have a defined benefit pension, you could aim for the low end, if you expect to stay in this position long enough to get full value out of the pension. $600 / month would not be a bad starting point. At 7% yearly growth, starting from zero, this would get you to savings of 1.5 million at age 65. 4% withdrawal rate gives a retirement income of $63,000 a year which inflation adjusts to about $30,000. Disregarding the DB pension, if you include CPP of ~$7000 / year, this would give you enough in retirement to more than cover your current expenses.
   
   For your current savings, you should keep an emergency fund of about 3 - 6 months income in a regular savings account that is easy to access. This is to cover you if something unexpected happens like you lose your job, or have to take extended time off to help a family member, or have some unexpected bills. As somebody who owns neither a car nor a house, your "unexpected bills" are likely to be less frequent and smaller, so you could aim for the lower range of this. I would keep at least $20,000 for an emergency fund though.
   
   For the rest of it, you need to decide what your long term goals are. If you intend to buy a car in near future (5 years), then you should keep an appropriate amount of money in a savings account, or other guaranteed instruments (such as GICs). GICs often (sometimes?) pay more interest than savings accounts, but have specific maturity dates. If you pull the money out before then, you forfeit all / some of the interest (depending on the terms of the particular GIC). If you think you will buy a car in 3 years, don't buy a GIC with a 5 year maturity date. If you intend to buy a house in the future, basically the same story. Keep the appropriate down-payment savings in a savings account or GIC so that there is no chance of losing it before you need it. Stock market investments are great in the long term, but for short term savings there is too much fluctuation, and you could be underwater when you need the money.
   
   If a car, house, or other large purchase (Planned big vacation, wedding, etc?) is not coming in the near future, then you should invest the rest for retirement. I recommend you pick up the book "A random walk down wall street" for more information about how you should be investing for retirement. The short version is to get a low-fee online brokerage account (I use TD direct investing), buy ETF index funds, and just hold them. No day-trading or "I think this will go down tomorrow, I'm going to sell and buy it back then!".
   
   

There are always drawbacks to any investment. If you know how to properly evaluate individual securities (and perhaps have access to an algo or two highlighting the proper buy and sell signals) then there are a whole range of additional options available. Yes, REIT ETFs tend not to be correlated with stocks in general but during extreme events, many different types of investments will fall in unison. Remember though, correlation does not equal causation. If your time horizon is long and your main objective with holding REIT ETFs is to have some "rental income" that doesn't get taxed as rental income and be diversified owning a fraction of a portion of thousands of different properties; then they are great. Massive market downturns are perfect times to buy more REIT ETFs and increase your average monthly dividend as a result; just keep DCA and market dips (especially flash crashes like the 2010 one or the August one) are silly little things that you simply ignore. Not much the average investor can do about those anyway unless you're running your own HFT firm and have a server in the basement of the NYSE or TSX. I might be a tad naive but since there's no way that I can ever beat an HFT at individual trades (don't know how quickly you're able to fill your orders but I don't operate in nanoseconds on my end) I figured that I might as well ignore them. Just avoid market orders (stick to basic limit orders) and if you're really paranoid you can limit your trades to specific exchanges thus avoiding most darkpools. But we're talking about "scalping" fraction of pennies per share or even per trade here. Not really something the average person, especially not the long-term investor will ever really worry about. And unless you have millions of dollars, you're likely uninteresting to HFT algos anyway. Anyway, as you said... off topic from the original stuff but wanted to point out that I'm aware that I'm over-simplifying many of my statements (but in reality, most people don't need to know about the plumbing how their trades are executed and how flash crashes can occur etc in order to invest for the long-term). So despite finding the topic very interesting, I tend to stay away from it. For those wondering what on Earth u/FFrozen1 and I are speaking about, have a look at this data from Nanex looking at how many quotes are created sent out by HFTs vs. how many actually get filled. Also, there are a few great books on the subject: Dark pools and Flash Boys to name but two. These are slightly more advanced than "The Wealthy Barber Returns" for example but they make for a good read for anyone interested in learning more about how the market operates.

If only I would have been aware that Behavioural Finance existed as a field before starting my studies, I would have most likely pursued that instead. At least I'm in a related field so I can always do some research in that area. Time will tell... As for leverage and ETF effects on volatility (those are future post ideas so stay tuned :)

Thanks for the extra suggestions!

1. Immediately locate a good tax accountant. You're going to need to keep accurate records of your business: income, and all related expenses, which are deductible. You're likely going to have to start paying your tax in installments. You might need to charge GST, that's why you need the accountant to help you figure that out.
   
   
2. Hire a lawyer too. Discuss the nature of your business, and anything you should be doing to cover your ass, such as setting up a limited company, appropriate Terms of Service to your customers, liability insurance, etc.
   
   
3. Put 30% of your earnings in a dedicated high-interest savings account, for your tax bill.
   
   
4. Put everything else in another high-interest savings account, while you educate yourself on investing. Don't start spending yet. Read Personal Finance for Canadians for Dummies, and the Boglehead's Guide to Investing
   
   
5. Set up a personal budget. I recommend getting YNAB. Decide where your money will go, and don't be tempted to start buying fancy houses and sportscars with the money you're making. If you're smart, you could basically set yourself up for life in the next couple years. Visit this sub and /r/personalfinance for more budgeting tips.
   
   
6. Set up 3 accounts at a brokerage like TD Waterhouse or QuestTrade: an RRSP, a TFSA, and an unregistered account.
   
   
7. Max out your RRSP and TFSA, based on your available limits. Use your tax returns/CRA account to determine those limits. Talk to your tax accountant from #1 about other tax-saving strategies.
   
   
8. Invest in a mix of index funds or ETFs in each account, based on principles from Bogleheads. /r/personalfinance, /r/portfolios, and /r/investing will help here.
   
   
9. Keep reading, learning, and decide how to leverage your money to the best advantage for your future. Education? New business ventures?
   
   Congrats on the truly awesome start in life!
   
   Oh, and don't tell people around you how much you're making. It will affect your friendships/relationships, and you'll have people asking you for money constantly.
   

The one I bought is the Merkur 34C, it is pricy and if you have larger hands. The Merku4 34C will feel small. Select the 38C, as it has a longer handle.

The other one I have seen people recommend it the Edwing Jagger DE89lbl. I think either one will work fine. If you can get to a House of Knives or a Tommy gun's I think they will have them on display so you can handle them.

Please note, unlike your normal cartridge razors, these razors are top heavy. It takes a bit of practice to be able to shave well, quickly and not cut yourself. Since the weight is at the top, you need less overall pressure to shave. Also I would really recommend that you sign up for one of those razor blade clubs, that way you have a large selection of blades to try. Not all razor blades are the same. I use feather because I read they are really good but aggressive blades. I had no idea what that meant. It just means you gotta be careful. My SO kept going "i see you cut yourself again" for a good 3 months. While I learned how to shave with both the razor and the blade combination. The razor itself will come with a blade, and the others you will have to try on your own. Looking back, I should have signed up for a "gift box" of blades to try a couple of brands instead of just going "I'll just use Feather because the internet said it was good."

Good Luck.

Also not using alcohol based aftershave and shaving foam has been great for my face. I use shaving soap, and some baby oil.

Sounds like you need to determine what is your passion and your interest. Dont get hung up about education, qualifications. The best book I ever read to help align me was https://www.amazon.com/Could-Anything-Only-Knew-What/dp/0440505003

Get yourself settled on what you want to try and then focus on how to find a job. Start talking to friends, colleagues, update LinkedIn profile and looking for good connections in the field you are looking for. The key is to pick up the phone, go meet people and put yourself out there!

Be sure to keep in mind that TFSAs are limited in the sense that you can only contribute a fixed amount in a given year, I believe the limit today is $5,600/yr, originally it was $5,000. So if you've never contributed to your TFSAs you've got $57,500 in accumulated contribution room as of today. Also, keep in mind that your losses do not "free up" additional contribution room. Eg, let say you've never contributed to any TFSA before and you invest $57.7k (the max) in an ETF and 2 days later its market value drops by $10k leaving you with $47.5k as the accumulated value. You can't top up your TFSA with an extra $10k. Also, remember with RRSPs even though they help you to reduce taxes for your current tax year, it is not truly reduced. Instead, it is "differed" until you retire and, at that time, when you make withdrawals from your RRSP account you will then be taxed at whatever your taxable rate was before retirement.

For this reason, some people prefer to invest in their TFSAs first by "maxing out their contribution room" before contributing to their RRSPs. If you'd like more knowledge I'd recommend reading this book on TFSAs and how they can make you rich by Gordon Pape. It's very informative and will help you to optimize/prioritize between the two.

Now in relation to investing in ETFs in either of these accounts. If you go the DIY route, I'd recommend that you review the following resources this article, this guide, these 10 videos and the PFC Wiki.

Edit:

Hey dude, kind of in a similar position as you. Started reading about PF a little more than 2 months ago and wish I had started 10 years earlier, haha!

Take some time and read before jumping into anything! Here's what I started with:

Wealthy Barber

then read

Millionaire Teacher

and now I'm working through

Guide to Investing

and

Random Walk Down Wall Street

You will learn a crazy amount about investing with these few books.

I also keep my eye on the RFD Personal Finance forum along with Canadian Money Forums, the latter being a lot more mature.

Cheers!

What you need is something like this
https://www.amazon.ca/Automatic-Millionaire-Canadian-Powerful-One-Step/dp/0385660308
Basically he recommends just automating everything. Make all your payments automated. Make automated money transfers to one of those maintenance-free investments accounts like that offered by Tangerine. Just basically set and forget. This way you only have to think about this once and a while to tweak things and make sure that you don't spend more than you earn. Then Bob's your uncle.

Here is a blurb about the book

• You don't need to make a lot of money
  
• You don't need a budget
  
• You don't need willpower
  
• You don't need to be that interested in money
  
• You can set up the plan in an hour this one little audiobook has the power to secure your financial future. Do it once, the rest is automatic!
  
  Also, maybe speak to a therapist to get to the root of this anxiety?

To reference [Think Like a Freak by Stephen Levitt & Stephen Dubner] (http://www.amazon.com/Think-Like-Freak-Authors-Freakonomics/dp/0062218336) - People often say that they are motivated by social and moral issues, however in practice - neither of these are effective in spurring action. (The relevant chapter described a promotion campaign in CA to reduce electricity consumption, where appealing to citizens social and moral conscience was less effective than other options)

Credit Unions (in my experience) are a great option for most consumers, and it often doesn't become evident why you would ever want to switch to a bank until you can't do something (or can't do it easily). For example, you are in the USA, and want to take out cash - the person with a local CU account suddenly finds it all a lot less convenient. Additionally, I have found (and perhaps I have just stumbled across a few bad apples) that the level of service provided at a CU is terrible in comparison to larger financial institutions.

I recommend reading Common Sense on Mutual Funds by John Bogle. Lots of research and support that proves mutual funds are not working in your favour.

https://www.amazon.ca/Common-Sense-Mutual-Funds-Bogle/dp/0470138130

There's this weird misconception we all have that we have to spend money to enjoy life. Reading this really crystallized things for me: http://www.amazon.ca/The-High-Price-Materialism-Kasser/dp/026261197X - people who spend lots of money are doing so as distractions, not pursuits of contentment.

You don't have to - and in fact, the most content/happy people around probably spend very little trying to be happy.

Really recommend this book. It's a fantastic read:

http://www.amazon.ca/When-Bubble-Bursts-Surviving-Canadian/dp/1459729803/ref=sr_1_1?ie=UTF8&qid=1427140405&sr=8-1&keywords=when+the+bubble+bursts

home ownership in the GTA and Vancouver is overrated. i would recommend reading this book: The Wealthy Renter and possibly this one if you're more inclined When the Bubble Bursts. they at least provide you with less biased advice than your friends, family and the real estate industry.

(I posted this in the other thread) I am pretty familiar with the U.S. version of this software, and hope to be able to pull together my thoughts on the Canadian version at some point...

See http://www.amazon.com/Spend-Til-End-Raising-Standard/dp/1416548912 for the software creator's basic take on lifecycle economics in a non-academic format

More on the software creator: http://en.wikipedia.org/wiki/Laurence_Kotlikoff

http://www.kotlikoff.net/

Basic Economics by Thomas Sowell.

Before you bother with getting rich, see if you understand economics... its more fundamental.

P.S Thanks for the links!

https://www.amazon.ca/Reminiscences-Hedge-Operator-Julian-Klymochko-ebook/dp/B07ZQVF6BP/ref=sr_1_1?keywords=reminiscences+of+a+hedge+fund+operator&qid=1573750993&sr=8-1

IMO, this book gives the best, most practical advice on alternative investments coming from a Canadian investor and an experienced hedge fund manager himself.

> passive income approach which dividend growth investing will get me there and broad market ETFs will not.

"Dividend income" is an illusion, or at least mathematical sleight-of-hand:

> What many investors don’t grasp is the direct relationship between share prices and cash dividends. If a company’s stock is trading at $20 and it pays a $1 dividend, its share price will fall to $19 on the ex-dividend date. This price drop may not be penny for penny, because it will be combined with normal fluctuations in the daily markets. But there is always a trade-off. The failure to understand this point is the reason that so many investors think of dividends as “free money.”

• https://www.moneysense.ca/columns/debunking-dividend-myths-part-1/
  
  > Why do shareholders believe so strongly that a $1 dividend is preferable to a $1 capital gain? Meir Statman looked at this question in a 1984 article called Explaining Investor Preference for Cash Dividends, co-authored by Hersh Sheffrin. He also reviews the idea in his new book, What Investors Really Want, pointing out that receiving $1,000 in dividends is no different from selling $1,000 worth of stock to create a “homemade dividend.”
  
  
• https://canadiancouchpotato.com/2011/01/18/debunking-dividend-myths-part-1/
  
  There is some details when it comes to taxable accounts on capital gains versus dividend income that may need to be considered, but at least in a TFSA (or RRSP) these considerations do not apply.

Buy this book first and read it for all the money it is going to save you.

I bought the first edition of this when it came out. I've never sat in front of a car salesman since and bought half a dozen cars since that moment.

Give this a perusal sometime - https://www.amazon.ca/Thieves-Bay-Street-Brokerages-Canadians/dp/0307359638

My Uncle worked at CIBC Wood Gundy, he retired at 48. It wasn't accomplished by giving his clients the best return for their money, let me put it that way. The things they did and said were frankly criminal, I have no respect for the guy.

And no, there is no affiliate link there nor am I associated with the author. It's just a good book with helpful material on this subject.

Buy a merkur 34c, you won't regret it.

https://www.amazon.ca/Merkur-Heavy-Classic-Safety-Razor/dp/B002A8JO1Q/ref=sr_1_1_sspa?gclid=Cj0KCQjw3uboBRDCARIsAO2XcYDn4rxQm7NrMkHAJnjWGVVbOrrqvy8sMpRrtcRE0PrBPhjFXqa_oR4aAu6FEALw_wcB&hvadid=208482290840&hvdev=c&hvlocphy=9001215&hvnetw=g&hvpos=1t1&hvqmt=e&hvrand=6617579443206802455&hvtargid=kwd-488387101592&hydadcr=19768_9260447&keywords=merkur%2B34c&qid=1562005128&s=gateway&sr=8-1-spons&th=1

Here is the mobile version of your link

How much money do you have? If it's enough - I don't know how to define that - you should quit your job, build a boat in your yard, and sail the world while you're young and tough and willing to put up with anything.

Buying a yacht is for suckers. Start saving again when you come home; you'll have achieved in your youth what most people wait their entire lives to accomplish, and are forced to enjoy it through all the inconveniences and indignities of age.