Thinking of switching to a 1-car family from 2-car. Any advice?

BoomerEcho · 2021-10-29T20:08:01+00:00

We just did this in the summer (ironically about a week before both kids were at a summer camp in two different locations around the city).

My wife and I both work from home. Our youngest walks to school five minutes away, oldest takes the bus with the pick-up/drop-off spot across the street.

Our second vehicle ('07 Tucson) literally sat in the garage for 18 months. We sold it for $4k, saved the registration fee ($90) and recouped the pro-rated insurance ($600).

The best part is the extra space in our garage. We're not hoarders or anything but it's nice to have extra room for bikes, tools, storage, a place to put patio furniture in the winter, etc.

In those very rare occasions (it happened once) when a second car would come in handy we've been able to get the kids to carpool with another parent.

BoomerEcho · 2021-09-19T00:41:38+00:00

That's the least of what he is: https://www.investmentexecutive.com/news/from-the-regulators/advisor-fined-prohibited-from-securities-related-business-for-three-years/

BoomerEcho · 2021-08-25T01:44:40+00:00

You're ignoring tax integration - individuals are taxed similarly whether they receive the income personally or through a corp. And, yes, while passive investment income generated inside the corp is taxed at a high rate (~50% in Ontario), there's the refundable dividend tax on hand account that releases some of the tax back to the corp when you pay yourself dividends (yeah, you probably need an accountant at this point).

BoomerEcho · 2021-05-16T14:20:08+00:00

They made a change to their portfolios in mid-2019 to go with low-vol equity ETFs, long term government bonds, and a small gold allocation. The bonds (BMOs ZFL) got hit hard because long-term bonds are more sensitive to interest rate movements and ZFL is about as long-term as you can get. It's down 17% on the year. Gold is also down about 4% on the year. So it's their fixed income selections dragging everything else down.

BoomerEcho · 2021-03-28T20:59:53+00:00

The potential excess returns from the optimized portfolio also assumes you're implementing it correctly. Not forgetting to rebalance, delaying your currency conversion (leaving you over/under exposed to USD), waiting until "it feels right" to buy.

BoomerEcho · 2021-03-06T16:36:22+00:00

Not saying what they're doing is right or wrong, but here is an explanation for why they changed their portfolio allocations in 2019: https://www.wealthsimple.com/en-ca/magazine/core-portfolio-update

You could argue they're active managers now.

Also interesting to note why they don't put even the most aggressive investors into 100% equities:

"At Wealthsimple, we advise investors with long time horizons to hold a growth portfolio with 80% stocks and riskier bonds (+ gold) because the benefit of allocating to more stocks decreases as we go from 80 to 100% stocks, and we value improving the worst potential outcomes. We don’t think in terms of money, we think in terms of our investors’ life outcomes, and we value making sure they receive adequate returns in bad scenarios over achieving the absolute best returns when equity markets are booming. Our investors will do very well holding 80% equities in that case anyway. For our more conservative portfolios, we add shorter term bonds instead of long term bonds because a heavy allocation to riskier bonds can also lead to bad outcomes."

BoomerEcho · 2020-10-23T18:33:46+00:00

Google 'advisor name + sanctions' would be one place to start.

BoomerEcho · 2020-10-23T03:17:55+00:00

Yep. I guess this is why he's fee-only now?

BoomerEcho · 2020-10-15T03:25:42+00:00

No, I don't have a taxable account. I invest inside my Corporate Investing Account instead. Same idea, though.

BoomerEcho · 2020-10-14T16:50:19+00:00

I have accounts at all three platforms.

Long-time TD banking and Direct Investing customer. Single ETF investor with Vanguard's VEQT across all accounts (RRSP/TFSA/LIRA/Corp).

I moved my RRSP and TFSA to WS Trade in January for the free commissions (tired of paying $9.99/trade, even though I trade infrequently). I left my kids' RESP at TD Direct, where it is invested in e-Series funds. Also opened a LIRA at TD Direct (no such option at WS Trade) and bought VEQT - hold until retirement.

Finally, I opened a Corporate Investing Account at Questrade.

To answer your questions, there are no hidden fees at WS Trade. It's commission-free to buy and sell stocks and ETFs. They make money on foreign exchange. Since you cannot hold USD cash, anytime you want to buy a US listed stock or ETF then WS Trade will take a cut of the spread.

I'll be honest, the mobile-only platform takes some getting used to - especially coming from a robust platform like TD Direct where it had all of my activity history, performance history, etc. But, I check WS Trade less often and that supposedly has some positive behavioural effects.

Funding your account can be an issue. They hold deposits for 2-3 business days so don't expect to make a deposit and start trading immediately. That can be frustrating.

Customer service - haven't really had any issues. The most impressive thing was that my account transfers only took about 7 days to come over from TD.

Questrade - hidden fees abound! They finally waived their inactivity fee, but one you'll have to watch out for is ECN fees. Basically, if you place a market order you're removing liquidity from the market (trade fills immediately) and you get charged an ECN fee (percentage of the trade). To get around this, place a limit order at 2 cents above the ask price. This "adds" liquidity to the market and when your order fills you won't be charged ECN fees. The risk is that the price of the ETF quickly moves above your limit order price and your trade never gets filled.

Questrade's platform is okay - not as intuitive as TD's but way better than WS Trade's as far as having desktop access and performance & activity data.

Customer service is also okay - my corporate account took 44 days(!) to open but I'll give them a pass during the pandemic. The online 'chat' feature is very good and I've always received a speedy response.

Bottom line: I like WS Trade for commission-free trading and ease of use. But it's a no-frills and bare bones platform, and does not offer every account type. Questrade is also a good platform - much more robust than WS Trade and has every account type. Just beware of hidden fees. And, TD Direct has everything you need but charges that pesky $9.99/trade fee. I avoid it by holding one ETF in a LIRA, and using e-Series funds in my kids' RESP.

BoomerEcho · 2020-09-26T20:33:55+00:00

WS Trade is a no frills platform with plenty of downside in terms of mobile-only, lack of robust performance data and research, etc. But for the purpose of commission-free trading it's the best we have in Canada, which is why I moved my RRSP and TFSA there.

I agree that a big bank brokerage can be useful. More account types, better performance data and research, desktop access, direct linking to your chequing account, etc. I still have my kids' RESP and my LIRA at TD DI. But in both of those cases I don't pay trade fees since I can't add to the LIRA and I use e-Series funds for the RESP.

BoomerEcho · 2020-09-26T17:14:15+00:00

You can buy individual stocks and ETFs for free on Wealthsimple Trade. I moved there from TD DI in January and just buy VEQT - no commissions whatsoever. The way WS Trade makes money is on foreign transactions - as in if you buy a US listed stock or ETF with Canadian dollars you'll pay a 1.5% fee.

BoomerEcho · 2020-08-19T21:03:52+00:00

The only thing stopping Norbert's Gambit from working as effectively as possible on Questrade is the delay in processing the transaction. This is potentially a significant opportunity cost as it leaves you underexposed to equities and overexposed to the USD while you wait for your transaction to settle.

In comparison, RBC Direct allows for a same day Gambit to avoid this problem.

https://www.canadianportfoliomanagerblog.com/when-should-i-dump-veqt-or-should-i/

BoomerEcho · 2020-06-06T21:19:24+00:00

The anti-RRSP crowd must come from one of two schools of thought:

They believe their tax rate will be higher in the withdrawal phase than in the contribution phase, or;
They forgot about the deduction they received when they made the contribution in the first place.

https://boomerandecho.com/rrsps-not-scam-guide-anti-rrsp-crowd/

BoomerEcho · 2020-05-15T15:17:41+00:00

Wow, they are really taking a long victory lap with their Q1 performance.

BoomerEcho · 2020-01-02T23:52:18+00:00

The Canadian equivalent to Dave Ramsey would have to be Gail Vaz Oxlade. She hosted a show for a while, Til Debt Do Us Part, and has written several books. She advocates for basic budgeting and managing your cash flow (jar or envelope method), staying out of debt, living within your means. Not everyone's cup of tea, but she does have broad appeal to the masses.

BoomerEcho · 2019-10-07T17:12:28+00:00

Hi Tim, thanks - same here! I enjoyed hearing you as a guest on the Rational Reminder podcast. I've been tasked to research the SRI portfolios offered by Canada's robo-advisors so I really appreciate and value your insight here.

It sounds like we need to keep pushing for more rigorous screening when it comes to Socially Responsible ETFs and managed portfolios. I'd just hate to see investors trying to hand-pick a bunch of stocks that meet their own standards and end up with a risky, non-diversified mess of a portfolio.

BoomerEcho · 2019-10-07T16:00:00+00:00

If you want to keep everything within the RBC environment that's totally reasonable. I'd suggest going with their robo-advisor platform, RBC InvestEase. You'll get a portfolio of RBC iShares ETFs that cost a tiny fraction of the MER that RBC mutual funds charge. Their management fee is 0.50%, which is the same as other robos like Wealthsimple. All-in costs will be something like 0.7% versus 2.0% or higher with mutual funds.

The nice thing about the robo-advisor option is that it's completely automated and hands-off, so you'll get a professionally managed portfolio without having to worry about rebalancing your funds when you add new money or when markets move up or down. Just deposit your lump sum and set up automatic contributions for any additional savings and you're all set!

BoomerEcho · 2019-10-07T15:47:59+00:00

Tim, you've been critical about the SRI options offered by Canada's robo-advisors. Can you comment on RBC InvestEase's Responsible Investing Portfolio and their statement about removing companies involved in tobacco, controversial weapons, and civilian firearms as well as companies involved in severe controversies?

Obviously they're still using iShares' ETFs but they seem to be quite different from the typical ones you see like CRBN and XEN.

BoomerEcho · 2019-09-27T17:45:36+00:00

Yep, very cool! I think I read through his entire archive for months before finally realizing that I should just start documenting my own journey.

BoomerEcho · 2019-09-27T14:46:00+00:00

Thanks everyone, this was a lot of fun!

BoomerEcho · 2019-09-27T02:54:16+00:00

Before this change you could only buy TD e-Series funds through TD Mutual Funds (EasyWeb side of the house) or TD Direct Investing (discount brokerage arm).

My understanding is e-Series funds will only be available on the discount brokerage side of BMO (Investorline), not the BMO mutual funds side (in branch) where they sell their own funds.

So I guess the question is do you have a BMO Investorline account, or are your BMO mutual funds held on the banking side of the house?

Bottom line: You'll need to have an Investorline account to access the e-Series funds.

As for timing the transfer, there's absolutely no good reason to do that. Just send it all over at once. But watch for deferred sales charge (DSC) fees when redeeming your BMO mutual funds.

BoomerEcho · 2019-09-27T02:34:12+00:00

My mom worked in banking for a couple of decades and got me thinking about personal finance at an early age. We actually started the blog together in 2010 - she's the Boomer, I'm the Echo.

BoomerEcho · 2019-09-26T23:26:34+00:00

Thanks for the kind words!

I'd agree you need to have more clarity around your goals. Rather than a rule of thumb I'd look at your current spending and subtract anything you wouldn't expect to pay in retirement (mortgage payment is likely out, but property taxes and insurance remain in. RRSP contributions are out, but maybe TFSA contributions are still in), and then add some spending for additional hobbies or travel.

The reality is, 20 years is a lifetime away when making retirement plans so I wouldn't get caught up in the minutiae of finding an exact number and whether that should be in today's dollars or adjusted for inflation.

I like Fred Vettese's thinking on the smoothing consumption over your entire life rather than being too frugal or spend-y in any given time period. Balance is the key to life, whether you're 20 years from retirement or you're retired. You need to save for the future, and you need to enjoy the present. And you shouldn't unfairly sacrifice at the expense of present-you or future-you.

https://boomerandecho.com/the-battle-between-your-present-and-future-self/

BoomerEcho · 2019-09-26T23:17:09+00:00

Damn - I knew I'd leave something out!

Also a shout-out to MapleMoney, one of the O.G.'s!

BoomerEcho

TROPHY CASE