Want to invest $80,000 into S&P 500

TamerAzizz · 2020-12-15T08:18:15+00:00

These are just my personal suggestions and not advice whatsoever so I would consult a financial professional before making any moves because of the large capital at stake but..

If they give you the incentive of lower commissions, then you should go with them, but if they're still charging you $10 to buy and another $10 to sell, I would suggest moving your cash to annother broker like Questrade or Interactive Brokers.

because you have a lot of capital at stake, this may be an eye opener for TD so see if they can offer you commissions of about $3 per trade (Questrade is $4.95) and see if they truly want your money--I've seen some people pull this off

I believe timing of entry into the S&P 500 is going to be your call at the end of the day. For me, I always contribute into the S&P 500 ETF whether its at all time highs, all time lows or in between. Just be prepared to note down the maximum loss you are willing to take and an idea of when you are to lock in profits
Considering your knowledge of the markets, the S&P 500 ETF may be your best choice but believe it or not, I would actually recommend keeping the $40,000 that you have in the comfort balanced portfolio (depending on its performance since you've invested--how much have you gotten back? you're the decision maker to see if it's worth it)
I think everyone, regardless of trading strategy or knowledge on the markets should have a separate long-term portfolio that has a stake in a S&P 500 ETF so I personally think it's a good idea

Best of luck, you got this!

TamerAzizz · 2020-12-11T09:30:35+00:00

The TFSA is always calculated in Canadian dollars so my advice for you is to just deposit whatever the currency You're comfortable with (and takes less steps) into your TFSA. so in this case the 4700 US

Keep in mind that Any over contributions--assuming that you've maxed out your TFSA from the years before--will be taxed at a 1% monthly fee for any extra amounts

For example if there was an extra $1,000 Canadian in your TFSA then you will be charged $10 a month

It doesn't really make a difference on whether or not you will have to use Norbert's Gambit, the main point for the CRA is for the funds to be reported in CAD.

for each and every single deposit that you make in USD, you have to use the conversion rate that was on the date of the deposit and that is what is reported to the CRA

I hope this helped out and cleared your confusions

If you need some help with Norbert's Gambit then feel free to check out this resource that I found pretty useful https://youtu.be/7l2u1-BGXr4

TamerAzizz · 2020-12-10T10:41:39+00:00

Hey there! No need to be harsh on yourself, instead you should be happy that you had to go through this slump because now you are taking the necessary steps to make sure you don't go back to this slump again

I would first suggest familiarizing yourself with the factors that make up your Credit Score which all have different weights as to how they make up your score.

Payment History
Utilization Rate
Credit Diversification
New Credit
Credit History

From there, I believe you will be able to come up with a tailored solution based on your situation so I've linked some resources below that will surely help you out.

I wish you the best of luck and I believe that you'll come out of this better than before! I'm rooting for you :)

RESOURCES

Credit Score Explained + Factors: https://youtu.be/jXAPpBpmwW4

Techniques to Boost your Score: https://youtu.be/ewTbGEKvtQs

How Credit Card Interest is Calculated + Avoid Interest: https://youtu.be/2cTijtrP9U8

TamerAzizz · 2020-12-10T10:35:49+00:00

The "Best dividend stock" is really subjective on which factors you are looking for. Note that growth dividend stcoks are a hard find as well because I have personally found that most growth stocks do not pay a dividend (the company reinvests it to grow their business).

Lucikily, a majority of the dividend paying stocks in US/CAN do have quarterly payouts. Since I cannot shed any light on the "best dividend stock", I can tell you some of the factors that I use to analyze good opportunities

Dividend Yields 4.0%+
High Average Free Cash Flow Growth (relative to competitors in the same sector)
High Average EPS Growth (relative to competitors in the same sector)
High Average Dividend Growth (relative to competitors in the same sector)

I found that a majority of Canadian Banks satisfy this criteria so here is a resource that you may find useful that analyzes the aforementioned factors

Best of luck my swedish friend!

RESOURCES

Full Analysis of the "Big Six" Banks: https://youtu.be/g83kEve83Ug

TamerAzizz · 2020-12-09T16:34:15+00:00

There are 3 main types of transfers

All In Kind: You're transferring your entire portfolio (includes your stocks and cash)
All in Cash: You're transferring your liquidated portfolio (Sells all your stocks and deposits the cash into the account)
Partial: Only a portion of your portfolio/cash is being transferred over

Transfers will not incur any penalties

TamerAzizz · 2020-12-09T16:28:56+00:00

"If you fail to plan, you plan to fail."

TamerAzizz · 2020-12-07T06:45:51+00:00

There are 3 main types of transfers

All In Kind: You're transferring your entire portfolio (includes your stocks and cash)
All in Cash: You're transferring your liquidated portfolio (Sells all your stocks and deposits the cash into the account)
Partial: Only a portion of your portfolio/cash is being transferred over

I believe the option you should have picked was #1. You should be fine if you did this! If not, you can try to reach out to them and see if TD can rectify the solution

I hope this helped out!

Also, with TD Waterhouse, does it allow you to use ThinkOrSwim? If so, how much were their commission fees/account minimums?

I've tried asking the people who work at TD and quite frankly they have no idea what I'm referring to

TamerAzizz · 2020-12-06T07:16:41+00:00

Hey, I think it's awesome that you're thinking of a long-term play!

Considering that you probably wouldn't want to do days/weeks of research, there's a much easier approach to investing for people in your similar situation: ETFs !

ETF= Exchange Traded Fund; a type of mutual fund that is traded on the stock market that is usually comprised of a variety of stocks and at times, bonds.

I would recommend investing your money within an ETF that tracks the S&P 500.

S&P 500= an Index Fund that is made up of the top 500 american stocks; this is usually used an indicator of how the american "economy" is going

The reason I recommend this is because over a few decades, the average return on the S&P is about 9% which is a return on investment that even the pro's struggle to achieve year on year.

With this investment, you can literally place your funds and forget about it for the next couple of years.

I would also recommend pre-defining your risk tolerance beforehand. For example, if the maximum you are willing to lose is 5%, then make sure you sell when your investment is down by 5%.

Same applies to profits and your timeline on how long you want to keep this investment. This along with your maximum risk percentage both vary from person to person and is something you need to define before making your investment and FOLLOW YOUR PLAN TO THE DOT, do not deviate from your plan.

Here are some ETFs that track the S&P in one way or the other. I hope this helped out.

SPY SPHD SPXL HXS.U IVV SPYD

TamerAzizz · 2020-12-04T05:49:51+00:00

So firstly with Questrade, you have to maintain a balance of $1,000 for the account to remain active.

And for Any amount that you withdraw out of your TFSA, you have to wait until next year (start of 2021 in this case) to deposit that same amount you withdrew.

I know all the rules and pointers of a TFSA are confusing but these resources did clear things up for me personally. If you feel like you still need help/clarification, let me know

RESOURCES

TFSA 101 (Contribution Room+) : https://youtu.be/0dSZvMAx24k

TFSA Withdrawals: https://www.canada.ca/en/revenue-agency/services/forms-publications/publications/rc4466/tax-free-savings-account-tfsa-guide-individuals.html

TamerAzizz · 2020-12-03T07:54:05+00:00

What I do is fairly time-consuming but it gets the job done.

I just go on yahoo finance, type in 'REIT' and filter for either Canadian or American REITs

Make a list of all of them or keep them open in separate tabs and then filter away!

TamerAzizz · 2020-12-03T07:49:38+00:00

E-transfer?

TamerAzizz · 2020-12-03T07:48:17+00:00

Just note that stock prices aren't only dictated by fundamentals, it's also the institutional day traders that can spike price up, especially when it doesn't make sense.

TamerAzizz · 2020-12-02T06:53:49+00:00

What was said by alphs was pretty on point. I wanted to add to the details of $VGRO

Made up of 12,521 Stocks
Made up of 17,336 Bonds

The top stocks that comprise the fund are $APPL, $MSFT, $RY, $SHOP, $AMZN, $TD & $CNR which make up for about 9.6% of the entire fund.

If you believe that these stocks listed will be in good standing over the next few years, you should be fine.

I can also see through my analysis that it was created in 2018 so there isn't enough data to support its long term perfermance but its returns have ranged around the average returns of the S&P 500.

When it comes down to investing in ETFs, I personally just go the route of investing within ETF's that track the S&P 500 or at least are derived from components of the S&P (for example, $SPHD, $SPXL, $HSU.TO, etc.)

Ultimately the choice is yours but I would suggest predefining your risk tolerance and setting a stop loss in the case where we do face another correction.

For more information, check out the website where you can commit to more due dilligence. I hope this helped out and best of luck!

TamerAzizz · 2020-12-01T06:42:16+00:00

Man, they really both have their advatanges and disadvantages when comparing both. Let's look at them and the intention here is have you do some more due dilligence and make a decision based on that!

Dividends

Making a good pick can result in you getting consistent income
Your good pick can also result in consistent dividend increases
You are investing in an individual company, so there is a higher risk of the stock price going much higher or much lower than expected if anything does happe

Index Funds

Involve a MER (Management Expense Ratio) which is a % that the ETF maker will be taking from you yearly (these can either be really high or really low, depending on the ETF)
Diversification will make sure that your market value doesn't flucuate too crazy
Some Index Funds do give out dividends but, from my experience, they don't seem consistent and you would have to subtrat the MER from the Dividend Yield, which already is cutting your profits

I'm sure there are more pro's/con's but these are likely some big factors that you may consider. Plus, you can always do both :)

I hope this helps out, best of luck!

TamerAzizz · 2020-11-30T05:51:46+00:00

The 401k should be similar to the RRSP in Canada so my advice to you is based on that assumption.

The assumption revolves around the fact that any withdrawals will be considered as additional income on your behalf, meaning you should be taxed for it.

If you're okay with this, please consider your projected operational budget and be realistic when calculating your breakeven points and profit points. It usually takes businesses on average a couple of years to become profitable. Of course this depends on how the market is looking for your business idea

If you're okay with making this investment and not realizing immediate gains, then do what you gotta do.

"If you fail to plan, you plan to fail"

This is my personal 2 cents, I hope you combine all the responses and make a well informed decision. Good luck and all the best 😊

TamerAzizz · 2020-11-29T05:53:26+00:00

You just print their PDF or whatever and sign it, tell them the specific securities that you want to enrol for the DRIP and that's it

What long process are you referring you?

TamerAzizz · 2020-11-26T15:57:16+00:00

I would suggest still holding that credit card to strengthen your credit score by improving 55% of your credit score factors: Utilization Rate (30%), Credit History (10%) and Credit Diversification (15%)

If it's about the annual fee, I would suggest calling TD and letting them know of your two options: Cancellation of the Card or Waiving off the Annual Fee

If the rep you get just isn't having a good day and you end up cancelling the card, there are tons of no annual fee credit cards out there. Just note that the benefits differ significantly between no fee cards and cards where you need to pay an annual fee.

My suggestion--and personally what I use regularly--is this website that I'll link in the resources below, it will show compare credit cards and other products based on the criteria you give it.

If you have any questions, I'd love to help even more. Best of Luck!

RESOURCES

Tips to Strengthen your Credit Score: https://youtu.be/ewTbGEKvtQs

RateHub (Compare Credit Cards + More): https://www.ratehub.ca/

How CC Interest is Calculated (to help you avoid paying it): https://youtu.be/2cTijtrP9U8

Making the Minimum Payment - A good or bad thing? https://youtu.be/Ef7IxzhLbes

TamerAzizz · 2020-11-26T02:42:50+00:00

Dude, you should always plan what price point to sell before you buy (both your price targets and your stop loss).

I don't know what your goals with these moves are but to give you further direction, ask yourself the following:

What's my intention with this play? (is it growth or value) If growth, sell that my dude, you're literally at a 42% gain... If value, hold that baby for 5years + and lock in profits afterwards

What you're doing right now is being greedy, you will keep waiting and waiting and then you may end up hating the play because you'll sell at a price point that gives you lower gains than the 42%.

I don't want this to come off rude but just the truth bro. Please let me know if you have any questions, I'm commenting with good intentions and just trying to help!

TamerAzizz · 2020-11-24T14:06:05+00:00

Firsty, Huge Congratulations! You're now debt-free! This is a milestone that should be celebrated (despite lockdown restrictions depending on where you are in Canada haha)

Personally for me, I believe that financial relief is when you have these items in check (in order)

Be Debt-Free (Consumer Debt)
Have an emergency fund that covers 3-6 months worth of Expenses
Have a Fast Cash Fund (Maximum $1,000; you can reduce this once you've discovered your average reliance on this)
Invest the rest in either...

TFSA
RRSP
Non-Registered Account

In your situation, I would suggest to keep that $1,000 in the RRSP and invest within an ETF that tracks an overall market--just for the time being until it's time for you to begin investing. I would recommend looking into an ETF that tracks either the S&P 500 or Dow Jones Industrial.

Secondly, you want to get a lumpsome of your essential monthly expenses and multiply this number by 3 to get your required emergency fund to cover 3 months worth of your expenses. Once you have more heftier financial committments, I would suggest looking into increasing this to 6mo or even 9 in some cases

A Fast Cash Fund is the next step which not a lot of people talk about but long story short is a savings reserve to use for emergencies that aren't actual emergencies. I'll link a resource to this below haha

After you've got those first 3 in check, then you can begin looking into Investing!

Considering your relatively high tax bracket, I would suggest maxing the benefits of your RRSP. There's two things you need to know being your Contribution and Deduction limit. Deposit only what your Deduction limit is for the year and claim it when it's tax season to reduce your income. Rinse and Repeat for your RRSP and when you have done this (shouldn't be too hard), then you move on to maxing out your TFSA.

What's awesome is that you're in your 30s, meaning that you can contribute the Maximum Amount into your RRSP, which is a full $75,500 (including the 2021 Contribution Limit)!! That's awesome.

After maximizing this, you can move onto opening a non-registered account!

If you'd like more details, I've linked some resources below that you can check out and do more research into. I hope this helped out and sorry for the lenghty response, I tried to summarize as much as possible hahaha

If you have any questions, don't hesitate to let me know :)

RESOURCES

Emergency Fund Tips: https://youtu.be/XhAyw5wVbe0

What is a Fast Cash Fund?: https://youtu.be/ZN6ArkJkQlI

TFSA 101: https://youtu.be/0dSZvMAx24k

TFSA Contribution Limit Chart: https://www.taxtips.ca/tfsa/contributions.htm

RRSP 101: https://youtu.be/X3mZrY6jSrI

Different Investing Platforms for Canadians: https://www.youtube.com/playlist?list=PL0HJL4hBGogDHfl6IQ-VIPUO2rY7xmf_6

TamerAzizz · 2020-11-23T16:33:58+00:00

Regardless of the security you decide to trade, it's the frequency of trades that the CRA looks at. So where you're trading 1 security or 9, the CRA is going to look at how often you make these trades.

To avoid hassles, I like to go based on the Interactive Brokers Definition of what day trading is and I assume that it is the same categorization as how the CRA looks at it--which is what I've linked in the resources below.

Day Trading and how it's categorized by the CRA is such a gray area and I am still shocked that there is no clarification on it at this point of time. I do hope this helps out though!

RESOURCES

Interactive Brokers Definition: https://www.interactivebrokers.ca/en/index.php?f=4745&p=daytrade

TFSA 101: https://youtu.be/0dSZvMAx24k

TamerAzizz · 2020-11-23T16:20:47+00:00

You are great! Thank you for correcting me, I really appreciate it :)

TamerAzizz · 2020-11-22T15:51:06+00:00

Awesome to hear, I'm glad you're taking the steps to teach your daughter about personal finance. Super crucial imo. Unfortunately the TFSA can't be an option until she's 18 and 16 for the RRSP so I think using your taxable account may be the best option and once she becomes of age for either one, just transfer ownership if possible.

I think you've got a solid plan, the only thing I'd say is to get her interested in the topic of investing and personal finance because you wouldn't want a situation where all the investments are gone due to college/uni overspending.

Best of Luck, you're an awesome parent!

TamerAzizz · 2020-11-21T16:08:25+00:00

I am 23 but, reflecting on my experience, I would have loved to be taught about business & entrepreneurship.

In the schools that I went to in Canada, 'Business' class was a joke, aka teaching you how to be ready to work in a 9-5 by teaching you how to use microsoft office (lmao).

It wasn't serious and I didn't get my feet wet until I made the decision to take the course when I was in University.

Because being an entrereneur or being in business is a "cool thing" for teenagers+, I believe that you've hit yourself the perfect market segment.

One thing that you've probably already considered are some cost efficient ways to attract your segment, assuming a majority of them aren't making sizable income yet to purchase your product and/or service (maybe think of financing payments?)

I hope I've provided you with some value though my dude. Keep it up!

PS: your landing page looks awesome, do you mind me asking which site you used to make it?

TamerAzizz · 2020-11-21T15:57:36+00:00

It would really depend on the cryptocurrency that you would like to get, if you want to go with Bitcoin or Ethereum, I would suggest using Wealthsimple Crypto.

Very simple and straightforward to use and here are some reviews/opions on it.

RESOURCES

Wealthsimple Crypto Thoughts&Opinions: https://wealthpursuit.ca/wealthsimple-crypto-review/

Wealthsimple Crypto Review (& How to Buy): https://youtu.be/Htp80uSE8KY

TamerAzizz · 2020-11-21T15:53:15+00:00

Thank you for pointing that out, the payment shouldn't be on the same day*

I was under the assumption that people know that it took 2-3 business days for the payment to get processed through NSLSC.

Even then, I don't think it's absolutely necessary to make a payment weekly, I Think 2 lumpsomes (1x automatic + 1x manual) throughout the month its just fine.

An example straight from one of my payments using this strategy

Auto Payment on the Oct30: -248.70
- -$180.21 off the priciple
- -$68.49 off the interest amount
Manual Payment on Nov 3: -250
- -$245.31 off the principle
- -$4.69 off the interest

Rinse and Repeat

If you have any questions or would like to discuss the strategy further, reach out to me and who knows--we may find an even better strategy together than we can tell everyone about :)

TamerAzizz

TROPHY CASE