For the first 30 or so years of working, saving and investing, you’ll be first in the mode of getting out of the hole (paying down debt), and then building your net worth (that’s wealth accumulation.). But don’t forget, wealth accumulation isn’t the ultimate goal. Decumulation is! (a separate category here at the Hub).
Can a Registered Retirement Savings Plan (RRSP) ever get too large? From time to time, you’ll hear certain financial advisors say so and propose “melting down” RRSPs in a tax-effective manner.
One year ago I opened up an investment account with one of the new online portfolio management companies that have been taking the financial services landscape by storm. I wanted to see how these type of Robo Adviser services work and more importantly perform. I deposited $5,000 of my own money and decided to track how it performed and capture any notable observations on my blog.
So let’s dive in and check how much money my ROBO made for me this past year. First let’s look at the portfolio returns.
My ROBO portfolio lost money last year. 2.15 per cent to be exact. Then again, many stocks and ETFs lost money last year. The learning point here is that ROBO services can lose money just as well as other portfolio management services. Don’t expect any marketing campaigns to tell you this. The thing is … it’s OK. To expect ROBO advisers to be perfect and make money on every holding is unrealistic.
In terms of asset allocation of my ROBO portfolio, below is the breakdown at year-end January 28, 2016. Remember, when I setup my account, I answered a series of questions that assessed my risk tolerance and subsequently determine the type of portfolio the Robo Service would create and manage for me. In my case, because I have a high proficiency and literacy about stocks and investing, ROBO proceeded to rate me as a 9 out of 10 on the risk tolerance scale.
Almost half of married couples say their investing styles differ from that of their spouses, and about one-quarter of couples fight over money, according to a BMO survey.
While your romantic Valentine’s Day dinner may not be the best time to discuss finances, most of us agree that these discussions really do need to happen between couples. Here are a few tips that will help contribute to a sound financial future for couples.
Keep it open and honest
It’s important for couples to be on the same page when it comes to goal planning and how you intend to achieve these goals together. Adopt the “yours, mine and ours” approach and make your finances visible to your spouse so that you both will be in a better place to plan together for the future. For example, some advisors offer a consolidated household online view of their portfolio, which provides easy access to investment accounts for each spouse. Not only does that allow you to have a more holistic view of your position, but having it all in front of you at once can make it much simpler to digest.
Talk about your goals
Surely they’re not reading Findependence Day for this special night out?
Finances may not seem like fun dinner conversation, but talking about your goals can be. Start the conversation with questions like “what are your top goals/dreams?” or “where do you see yourself/us in 10-20 years”? The more you have that conversation, the better you can visualize what your goals are, and the easier they are to quantify.
Once you have identified your goals, start talking about how you will achieve them. It’ll make those goals seem less like a dream and more like a reality. Taking the first steps towards achieving those goals is one of the most rewarding feelings you can get. Continue Reading…
Seems a common reaction to watching a sea of red on financial terminals is simply not to look at the carnage. And, depending on how you set up your portfolio, this may not be as bad a thing as it may seem.
So says The Stingy Investor’s Norman Rothery. The blog also features a couple of occasional Hub contributors, Steve Lowrie and Aman Raina, both of whom look at the behavioural finance aspects of such “ostrich” behaviour.
Over the last decade or more Canadian banking customers have had to accept two inevitable truths: interest rates on savings deposits would plummet and stay at historic lows, and banks would continue to raise fees on everyday bank accounts and services. All of this occurred while Canada’s big five banks hauled in record profits.
Savvy bank customers had to invent complicated workarounds to keep their hard-earned money safe, free of fees, and to earn a decent interest rate. That meant limiting transactions, maintaining high minimum balances, and bouncing from bank-to-bank chasing the latest short-term high-interest rate promotional offers.
If only there were a bank that offered one solution: a hybrid chequing-and-savings account that paid market-leading interest rates with no monthly fee, and no extra charges for moving your money around via e-Transfer or for paying bills.
EQ Bank
Enter EQ Bank – a new digital bank and offshoot of Equitable Bank – with its unique EQ Bank Savings Plus Account. Launched on January 18th, 2016 Continue Reading…
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Can a Registered Retirement Savings Plan (RRSP) ever get too large? From time to time, you’ll hear certain financial advisors say so and propose “melting down” RRSPs in a tax-effective manner.
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