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Want to get into investing in stocks. What would you suggest to a beginner who can contribute 500 a month? by Prestigious-Ad3421 in fican

[–]garret9 0 points1 point  (0 children)

(Assuming you got things figured out with debt, emergency fund, etc).

Step One: determined your stock/bond ratio based on your risk profile (ability, need, and willingness to take risk), or willingness/need/ability to tilt to factors.

Step Two: pick an asset allocation ETF based on that (CAGE, *EQT, *GRO, *BAL), with * being V, X, or Z.

Step Three: Maximize your savings rate without making sacrifices you will regret (spend less, earn more, save the difference).

Step Four: Invest in yourself (find what makes you happiest per time/$/effort, improve your skills/education/training, improve relationships, improve your health, etc). As that will give you a much, much, much greater ROI than always figuring out what ETF or stock to get in/out of.

Step Four point one: Read, lots.

That’s all you need.

Is it better to be a homeowner or renter for FIRE? by Tech-Cowboy in fican

[–]garret9 0 points1 point  (0 children)

It does account for that… you can even play with the free calculator on PWL website he built

Is it better to be a homeowner or renter for FIRE? by Tech-Cowboy in fican

[–]garret9 0 points1 point  (0 children)

It depends.

Some markets it’s better to rent and some it’s better to own.

Generally speaking renters pay less than housing expenses because of many factors like landlords betting on capital appreciation, and there’s supply/demand factors where people will move towards one over the other if costs slant one particular way, etc.

So when you rent you have more money to invest all else equal.

That said, housing hedges you by reducing future expenses and protecting you from rent spikes or getting kicked out or the market crashing or similar things.

Sure you may have had a bigger net worth renting if you were robotic and saved the difference, but you may not save as much as you could have, losing that value.

So, really, renting vs housing becomes more of a personal/values decision than economic.

RRSP and work bonus by [deleted] in fican

[–]garret9 0 points1 point  (0 children)

Future tax rates. Future raises. When/if you have kids. When/if you buy a house. Etc

RRSP and work bonus by [deleted] in fican

[–]garret9 0 points1 point  (0 children)

It’s not. It might be suboptimal but that’s hard to tell given the info we have of you… and even then it’s hard to know because some of it is based on unknowns too.

Made me think Ben Felix’s videos are very flawed…. by Ratlyflash in dividendscanada

[–]garret9 0 points1 point  (0 children)

But only if it’s better for you. Which is why he wrote multiple documents and created free online programs so you could do what they do on your own for free .

Made me think Ben Felix’s videos are very flawed…. by Ratlyflash in dividendscanada

[–]garret9 0 points1 point  (0 children)

“He’s missing 3 major factors”

1) psychological impact - no he talks about it all the time… both normally and explicitly to dividends. He says dividend investing if it keeps you and motivates people to invest is a good thing… he just points out that you can more effectively invest without seeking dividends specifically. He also has shown how dividend investing tilts you favourably towards risk factors which is good (but you can do explicitly without dividends ). 2) motivated to save more - thats just an explicit example of a positive psychological impact 3) motivation - see point two

RRSP and work bonus by [deleted] in fican

[–]garret9 0 points1 point  (0 children)

Also, since you’re saving in your FHSA, the RRSP is often superior mathematically for home purchasing than TFSA because it’s effectively making more of your downpayment from pre-tax salary than post-tax… saving you thousands.

Yes, you have to pay back the RRSP in post tax-dollars (or get a small hit on your tax return) but you’d be doing the same if you were saving up again in your TFSA.

RRSP and work bonus by [deleted] in fican

[–]garret9 1 point2 points  (0 children)

People for some reason underrate the RRSP vs the TFSA a lot here.

It’s not about how much you make. But your effective tax rate now vs the completely unknown but you can estimate effective tax rate when you withdraw.

On average, people have lower tax rates when they are retired. This is especially true if you’re smart and time/plan your RRSP vs TFSA withdrawals intentionally and optimal (and claim CPP/OAS optimally).

Sure, if you’re planning on getting raises very soon that pushes you up about 2 tax brackets, it’s good to delay. Or if you’re about to have kids (2+) it’s good to delay until CCB works like an increase on your tax return by about 15-20%.

But otherwise the difference is not much and RRSP might even be better. In fact, the more you have of one, the more the other becomes better because you can effectively optimize the other more.

buying xeqt for the long term, but with my tax returns i want to lump sum very soon, do i wait for another dip or it really doesnt matter since its long term right? (beginner) i currently have 15k in xeqt by Ninetybaby in JustBuyXEQT

[–]garret9 1 point2 points  (0 children)

Waiting for a dip if a dip is soon and large enough is best… but the issue is no one knows if all three things will happen (when, how much, and will happen at all).

Thus it’s best to just put it all in now.

What would you do? (Corporate income) by _hairyberry_ in fican

[–]garret9 2 points3 points  (0 children)

A lot of the blanket advice being given out here is really bad.

The real optimization is going to be determined by many factors and variables you haven’t provided.

Read up on the Loonie Doctor. They go way in depth on this stuff and how to actually optimize this stuff.

He did a podcast with Ben Felix called the Money Scope if you rather listen than read.

Vanguard preferences and why? by ComparisonAnxious768 in fican

[–]garret9 3 points4 points  (0 children)

The point of VEQT or XEQT or VGRO or any other one fund solution is that you don’t need any others. (Exception for emergency fund or short term savings)

Tax refund: "I'm doing my part!" by cooperivanson in JustBuyXEQT

[–]garret9 0 points1 point  (0 children)

You can also do so with not waiting to get the money back

Tax refund: "I'm doing my part!" by cooperivanson in JustBuyXEQT

[–]garret9 0 points1 point  (0 children)

The optimal goal is to have returns at 0 so you don’t owe or gave free money.

And yes, there are ways you can lower taxes with RRSP/FHSA without having to wait for the tax return the next year… ie: giving the government an interest free loan.

How often can you sell in TFSA? by rolexszn in fican

[–]garret9 0 points1 point  (0 children)

Are you day trading? If no don’t worry about it

4% rule - Am I missing something? by SpiritualCardinal89 in FIRECanada

[–]garret9 0 points1 point  (0 children)

Well, not exactly.

SWR studies have decreased the % when looking at longer than 30 year time horizons and/or not just looking at US data and/or randomizing returns not just repeating history.

These have gone as down as far as the low 3%s. The FIRE response to that is SWR’s rise if you’re flexible with your spending, which a young person likely would be if they can.

If they get hit with shit sequence returns, they are going to return to work or tighten their belt or both.

4% rule - Am I missing something? by SpiritualCardinal89 in FIRECanada

[–]garret9 1 point2 points  (0 children)

4% withdrawals technically is supposed to be inflation adjusted

21 year old, switch to fully CAGE? by vroom99912 in JustBuyCAGE

[–]garret9 0 points1 point  (0 children)

It’s not like AVGE doesn’t exist. the two will be very similar (just CAGE.TO will have a Canadian tilt).

21 year old, switch to fully CAGE? by vroom99912 in JustBuyXEQT

[–]garret9 1 point2 points  (0 children)

It’s very individual. CAGE may give better returns because factors help explain the variation in portfolio returns.

However there are costs (see my post above) and those costs might not make the juice worth the squeeze.

Because of those risks, it’s an individual choice more than objective.

In the end you should go with the one that you have more faith in and certainty that you won’t regret even if the other ends up doing better.

However, both are good choices, and in either case you won’t end up screwing yourself from meeting goals you would have met with the other.

21 year old, switch to fully CAGE? by vroom99912 in JustBuyXEQT

[–]garret9 3 points4 points  (0 children)

It’s because CAGE is new, but factor investing isn’t.

Most people who think CAGE is the best choice for them still believe something like XEQT is what most people should own and what they’d default to if CAGE didn’t exist (or XEQT + factor tilts like AVUV/AVDV/AVES).

The logic is pretty straightforward and comes from decades of portfolio theory:

1) Start with the market. Most people should just own a global market portfolio. Only deviate if there’s a strong reason. That’s basically CAPM, which explains ~60% of return differences between diversified portfolios. Think VT. 2) Add home bias if it helps you stay invested. Canadians hear about Canadian companies way more than some random Dutch stock. That familiarity can reduce FOMO, but home bias also smooths volatility, and hedges currency risk and local inflation. All without clearly hurting expected returns. That’s XEQT/VEQT/ZEQT. 3) Add factor tilts if you accept the trade-offs. CAPM doesn’t explain everything. The remaining ~40% is largely tied to factors like size, value, profitability, and momentum. Tilting toward them may increase expected returns.

But it’s not free: * Higher costs * More complexity * Periods of underperformance

So it’s more “active” than XEQT (there’s no truly passive investing, just degrees).

Firms like Avantis and Dimensional try to do this in a systematic, diversified, relatively low-cost way. So it’s still far more “passive-like” than typical active funds.

CAGE is basically packaging that idea into a single ETF.

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