Entering the CF and YOUR Money....

[Long in the tooth]

The banks I had dealt with were the Royal and Bank of Montreal.  A second mortgage seriously reduces the percentage you have down and may lower your ratio to less than 25% which means you have to pay the CMHC penalty.  Conversely, if you have a primary residence that's say, 50 - 60% paid off, then go for it.  Just remember you now have the obligations of a Landlord!

 

[annemarielyman]

Does anyone currently own some mutualy funds at RBC?   If so, what one(s) are you in and how has the perfromance been on that fund in the past little while?

My husband has had a Royal Balanced Mutaul Fund for 9 years and can't wait to pull it out this summer. He has made nothing. Actually he's down and he has never gone above the initial investment by more that a few dollars.

Hope this helps.

 

[Armymedic]

If your investing at the beginning of your career, then you should be looking in the long term, 10+ yrs. Its best to find a no load RRSP and maintain a monthly amount for a long period of time. Don't follow the media because the media is a step behind where the money is.

Because of patriotic purposes, go with Can Equity, as those types of funds invest in Canadian companies....

and thats the extend of my financial advice.

 

[Sundborg]

My husband has had a Royal Balanced Mutaul Fund for 9 years and can't wait to pull it out this summer. He has made nothing. Actually he's down and he has never gone above the initial investment by more that a few dollars.

Hope this helps.

That's too bad.  Hopefully it will go up eventually, most ones do over time.  I am currently in the Monthly Income Fund, and so far it has done me well.  I havn't been in it too long, but I've made some profit so far.
Here is a link to the RBC funds page :  https://www1.royalbank.com/cgi-bin/rbaccess/rbunxcgi?F6=1&F7=5g&F21=IB&F22=5g&lblLanguage=EN&lblTabClicked=Price&lblSeries=A&lblSorted=CATG_ORDER&lblPubAccess=Y&

Each day they are updated and shows how much each fund has gone up or down aswell it shows the units and prices and % change.
I was just taking a look at the RBC Energy Fund and I was amazed at how much it has gone up over the past few years.  I'm thinking about getting into that one if I get a few bucks together I just may.  The only thing about that one it is prety high risk and one could lose a lot of money on something like that over just a short time.  To me it looks on a pretty steady incline though over the past little bit.

 

[Garbageman]

Each day they are updated and shows how much each fund has gone up or down aswell it shows the units and prices and % change.
I was just taking a look at the RBC Energy Fund and I was amazed at how much it has gone up over the past few years.   I'm thinking about getting into that one if I get a few bucks together I just may.   The only thing about that one it is prety high risk and one could lose a lot of money on something like that over just a short time.   To me it looks on a pretty steady incline though over the past little bit.

A couple of points:

1.  If you're investing in an RRSP, then theoretically this is a long-term move, so looking at your fund's performance every day will only drive you to drink.  2-5 year returns are far more useful indicators.

2.  That Energy Fund has already made a pile of money.  This means that you're now going to be buying high.  Although the fund will likely still make more money for you over the long-term, getting in now when the fund is peaking could mean that it'll be many years before you start to see any real gains.

Just remember that buying even "low-risk" funds is a speculative move.  The only thing guaranteed are GICs and bonds, and they aren't going to make you rich any time soon.  If you're going to put your money in something with some risk, you'll likely make more, but you have to ask yourself "can I afford to lose this?" (I'm a once proud Canada 3000 shareholder).

 

[Sundborg]

Of course looking at the ups and down could make one drive to drinking, but myself, I like to see daily activity.  I also lke to keep an eye on other funds too.  I do agree that one should watch the 2-5 year growth rather than just a day to day basis.

Buying into the engergy will likely still make one money over time due to shortages of natural resouces and the rise of prices. If one were to buy some of the energy fund today, you will still gain the same amount in returns like someone who bought it previously at a lower cost if it were to go up the same %.  These gains, however, would be respective to your amount invested.

 

[Long in the tooth]

I owned some of the energy fund long ago when Royal Trust still existed.  I made 40% in one year and bailed, but if I had the nerve to stay in would've seen it go up another 80%!  It did crash after that though...

I had been very lucky as I moved funds out of the Japaneses market just before the crash of 87.  I put the cash in the Bank of Montreal Mortgage fund and made a good return as the market lost 25% that year.  On the flip side, I had a chunk of change in Bre-X, and the lawsuit keeps going.

 

[undecided]

I am starting bmq in a couple of weeks and wth my Fathers help I have been trying to outline what I am going to do with my money from the get go. My Dad is a self proclaimed financial advisor, mostly because he has 'been there and done it all'. Anyways, I don't have any idea how much money is taken off of my pay cheques for such things as room and board, taxes (what percentage), the CPP and the forces pension plan. If anyone can enlighten me it would be most helpful. Also any other deductions and vacation pay would also be appreciated. Thanks

 

[Armymedic]

Don't worry about producing an actual budget until you are complete you training and at your first posting for atleast 3 months.

Reason I say this is because until your done training, you pay will vary depending on where you are. Once you are posted you can track you first 3 pay guides for all the pay and deductions more accurately.

Until then, plan to save $50-$200 a month, depending if you have any other debts/family who need you money as well.

I am starting bmq in a couple of weeks and wth my Fathers help I have been trying to outline what I am going to do with my money from the get go. My Dad is a self proclaimed financial advisor, mostly because he has 'been there and done it all'. Anyways, I don't have any idea how much money is taken off of my pay cheques for such things as room and board, taxes (what percentage), the CPP and the forces pension plan. If anyone can enlighten me it would be most helpful. Also any other deductions and vacation pay would also be appreciated. Thanks

To answer you question, the CF will do your deductions for you, taking of at the source. You need to be concerned about your net (take home) pay.

If you have an place to put the money, then bring the RRSP or investing acct number to Basic with you and ask your clerk to transfer money from your pay direct to your account, that way whatever pay you get into you spending acct is yours.

 

[Sundborg]

I am starting bmq in a couple of weeks and wth my Fathers help I have been trying to outline what I am going to do with my money from the get go. My Dad is a self proclaimed financial advisor, mostly because he has 'been there and done it all'. Anyways, I don't have any idea how much money is taken off of my pay cheques for such things as room and board, taxes (what percentage), the CPP and the forces pension plan. If anyone can enlighten me it would be most helpful. Also any other deductions and vacation pay would also be appreciated. Thanks

As a recruit on your first pay scale  you will be making around $600 each pay cheque, that is of course after all deductions have been taken off, including rations and quarters.  Once you are taken off rations after basic training sometime, you will be makeing around $750 each pay cheque.  Keep in mind this is all money in your pocket to spend.

 

[mkymk]

Unfortunately, it's such a huge topic and people have spent lifetimes discussing the art of investing. I've been an independent investor for the past 10 years. I have a degree in business and I've also completed the Canadian Securities Course. (This doesn't mean I'm smart though. There's so much to learn out there but I can think of a few key things.)

1) Diversify - this is key. Never put all your eggs in one basket (just look at Nortel)
2) Know your risk and adjust your portfolio accordingly. riskier investments usually have a higher return. Build a portfolio that suits you and only you! you'll have to know 3 categories of investments.
a) T-Bills (almost like cash); easily liquidated; lower risk; low return
b) Bonds; higher risk and higher return than T-Bills.
c) Stocks; highest risk of all, but highest return usually.
Most portfolio usually have a percentage of all 3 depending on your age and risk tolerance level. Those closer to retirement age usually holds much less stock than someone young who can afford the risk.
3) If you are starting out, stick with mutual funds because they are diversified already, plus they allow you to invest smaller amounts.
4) when buying mutual funds, check the MER (Management Expense Ratio) on the fund, over time, your investment will suffer with a high MER.   MER is how the fund manager makes a living.   Lower MER means more money working for you.
4b) There's no reason why you should be buying a no No-Load fund. Buy from a competitor that offers No-Load funds.
5) I recommend index funds because it is extremely difficult to beat the market. Over time, index funds (TSE 300, Dow Jones, S&P 500) tend to perform better than most actively managed funds. Plus the MERs on index funds are much lower.   Another bonus is you can simply watch TV to see how your stocks are doing!!
6) invest regularly. Timing the market is another very difficult thing to do. Also, stick with a "buy and hold" strategy. You are investing for the long term.
7) don't buy individual stocks unless you are an expert and have a lot of "fun money". whatever information you see on stock quotes (like mergers and acquisitions) are 20+ mintues delayed plus commission on trading can be expensive if you're dealing with small amounts
8) Arm yourself with as much knowledge as you can (who's got the time right?). The more you understand, the more you'll be able to reach your investment goal.

 

[Long in the tooth]

If I can throw out some last free advice -

1.  Pay yourself first  - 10%.  Put that 10% into RRSPs which will be a tax deduction, you'll get 30%+ back.

2.  If you are single put another 5% into unsheltered mutual funds.  Low fees/admin costs.  Look around.

3.  Watch for the dam*ed credit cards with the fine print!!!!

 

[Michael OLeary]

3.  Watch for the dam*ed credit cards with the fine print!!!!

learn to use your credits cards sensibly while you ae young and have the disposable income to play with. Plan your expenses to pay them off completely whenever you can, in order to avoid any interest charges if possible. Remember that banks will happliy provide you credit to the point where you can only afford to pay the interest, and little more.

 

[Sundborg]

I've had a credit card for 4 months and have only used it 3 times.  If I have cash to pay for something in the bank, no point using the card.  I've only used to for purchases online using paypal or something over the phone.

Credit cards are good and bad.    There's no reason to use it unless you can pay it off, that's how I look at it.

 

[FredDaHead]

I've had a credit card for 4 months and have only used it 3 times.   If I have cash to pay for something in the bank, no point using the card.  

Actually, the advice I've been given over and over and over and over is that when you start using credit, you should use it regularly and always pay off the card either completely as much as you can, or at least pay more than the minimum payment. That way, it establishes that you're responsible, etc, and you end up getting higher credit margins over time, and it basically just helps you build a better file.

But that's just what I've been told, might've been wrong.

 

[Griswald DME]

I've been using my cradit card a few times this month and for the last few payments I've paid it all off, so it's all good.

My wife and I use our credit cards for anything and everything - but we don't use it for anything frivilous.  We pay off our credit card every month - we have had it for over two years and haven't paid one penny in interest.  We receive over $500/yr in travel credit (not air miles) we can use towards any vacation we choose.  If it wasn't for this bonus we would pay cash for everything.  I don't like the idea of paying 18% or more of my hard earned cash to some mega corporate banking institution.

 

[BernDawg]

I saw the light, perhaps a little too late, and have been paying $200 a month into mutuals for ten years.   It was a big chunk of pay especially when we were starting our family at the same time but, as my wife says, "I don't plan on eating catfood when we retire!"  We have managed to buy a starter home and will make a tidy profit on it when we get posted again but I started paying into the funds too late.  I have reached 20 yrs of service and even if I wanted to I can not yet retire although the funds are doing quite well.  Give early and give lots!  You are putting money into your own pocket in the long run.



 

 

[Island Ryhno]

My mother in law is one the best financial advisers in Canada and has been recognized as such, here are some of the things that I have learned from her, free of charge, otherwise it would cost about $100 dollars an hour  8) Pay down stupid debt, don't carry it with you i.e. credit cards at 18% if you do have to carry debt get a PLC (personal line of credit) which brings the interest rate down to between 4-8%. Don't lease, buy, think about it, if you get your vehicle on a 48 month buyout, you have a 4 year old perfectly good car, and can be car payment free for 2-3 yrs if you mantain your vehicle well, it adds up (say an average of $450 per month) Buy a house ASAP, it's the best investment anyone could ever make, it's called equity! RRSP's need to be started ASAP as well, doesn't matter if you can only afford to put $50 in a month for the first while, the secret is compound interest and the earlier the better. 

 

[schutz]

OK, I like how people are giving investing advice on here that are not financial advisors.

Personally I am a financial planner with an accounting degree, and many investment courses from institutions accross Canada.

RRSPs are decent investment tools, but not the greatest out there. The problems with RRSPs is that the government has control over them, and every penny coming out is taxed. To make it worth while, you have to throw the tax deduction into your RRSP as well. So lets say I put $8,000 per year into an RRSP, and get a tax savings of $3,200. Well, instead of using the $3,200, you should throw the $3,200 into your RRSP. So your real contribution would be $11,200. There's an even better way to work with RRSPs involving gross-up loans and such, but I won't get into that here. There is another investment tool out there that is far superior to RRSPs, but since this website can be viewed internationally, I cannot talk about it on here.

When dealing with investments, such as mutual funds, avoid companies like Clarica, Banks, Investors Group etc. because they have proprietary products (their own investments), and as a result they can only market those products, and usually they are inferior to other ones. So find a company/broker to deal with which is totally independent. Same goes with insurance products. term4sale.ca is a good website for comparing term insurance. Note that amongst the cheapest providers are: Transamerica, and Equitable Life, neither of which can be sold by Clarica advisors for example. I don't want to get into detail here either, because it is actually AGAINST THE LAW TO PROVIDE INVESTMENT/INSURANCE ADVICE IN AREAS THAT YOU ARE NOT LICENSED FOR!

Find a good advisor in your area and work with them. Don't go off of other peoples' advice out there, because are they financially independent? I think not. However, making some sort of investment is far better than none at all. Fortunately for those who stick it out and retire with a pension in the military are better off than the average civilian, but the general population is still in the dark when it comes to sophisticated investments.

Schutz

 

[schutz]

Real estate does not rise every year, it can fluctuate. Over the long term, without something to drive up the land values, values should match inflation over the long haul. Which means unless you buy in an area that later on becomes wanted, you really wont make any money.

Most people say to get into real estate, but that is based upon the consumer demand from the baby boomers in the late 70's early 80's. Where there were not enough current houses to satisfy the demand for the drastic increase in population. Thus inflation, and interest rates went through the roof at the time.

Schutz