Starting ASPs for RSPs

I read Robert Brown’s Wealthing Like Rabbits, over the Christmas holidays. For a personal finance book, it was a really easy and quick read. I picked it up because it was recommended on Jessica Moorehouse’s podcast and I really like Brown’s interview.

One of the things I haven’t done in a while is set up RSP ASPs. I used to do this, but in the past few years, I’ve just been throwing chunks of it money once in a while, which is really just making more work for myself than i need.

Since reading the book, I’ve realized I need to restart an ASP at the same time as my biweekly paycheques come in, because it at least allows time for my investments to grow. If my contribution room is approximately $8000 (based on last year’s contribution room), then $8000 divided by 12 months, over two biweekly pay would be about $333. If I transfer it from my chequing account right away, then I also won’t be tempted to think I have lots of money to spend stupidly :/

Thank goodness for Tangerine though. It’s so easy to just click and make it happen!

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The only thing I don’t like about the ASP setting within Tangerine is that you can’t make them go to external accounts. I might give them a call to see if I could do this, because it would great to put it in my TD Canada account when I make my car and car insurance payments.

TD Reward Rebate 2016

It’s January! That means I get my cash-back rebate on my TD Rewards Rebate Visa credit card. It’s not the best reward card, but here are the conditions:

  • Earn a 0.5% cash reward on the first $3,000 in net annual purchases charged to your Card
  • Earn a 1% cash reward on your net annual purchases over $3,000 (to a maximum annual purchase limit of $25,000)

TD no longer issues new cards for this no-fee program. I have been itching for a replacement but have not been able to find another Visa program that would be better right now.

This year, I received $133.39. Not a huge hunk of cash, but it’s always a nice boost at the beginning of the new when you’re feeling poor!

Checking in on TSFAs

The past few months, I’ve been trying hard to get back into managing my finances better, especially on the investing front. Investing has been a weakness of mine, an area that I ignored for a looooong time, despite the fact that my late father basically did investing for a living*.

I’m confident that I’m getting a better sense of the “couch potato strategy“. I had heard the term a lot when I first started reading PF blogs, but never really made an effort to learn about it until the past few months.

To be honest, I am still stunned by how amazingly simple it is. With the sudden availability of roboadvisors, even dummies – like me – have no excuse not to invest.

So currently, I am in the process of selling off the last of my mutual funds and rebalancing everything. It’ll likely take a few more months before I feel good about having everything lined up.

For now, I’m reassessing how much TSFA contribution room I have left. When the Conservative government initially started TSFAs in 2009, I had no problems maxing out each year. This year, for 2017, Canadians will have a total of $52,000 contribution room. That’s a whackload of money that can be invested tax-free and is definitely a privilege for the privileged.

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The past few years, with my lifestyle inflation – obvious by my many international adventures – have made it a bit harder for me to max them out. I currently only have contributed $41,050**.

Of course, I’m not looking for pity. Having the ability to purchase plane tickets and try new foods in far away lands makes me very, very happy. It’s one of the few joys in life that have to give up when my financial situation won’t be so stable. But for now, even if I’m not maxing out my TSFAs, I’m happy to spend some money for some far-off fun.

Also, as there has been a lot of money moving around – paying off my credit cards, resettling debt with my travel buddies, liquidating MFs – I’ve decided to hold off on calculating net worth for December. I don’t normally skip any entries, but if it happens here or there, I’m okay with it. I’ll recalculate in January.

Do you contribute to TSFAs? How are your finances in this new year?

*I am still the only person in my family who has never worked in finance.

**I received free $50 from opening a WealthSimple account back in 2016. I like to keep numbers round so it’s easier to track.

Money Research: Podcasts and Articles

A few months ago, Rogers announced that it would stop printing MoneySense Magazine. NOOOOOOO!!! WTF!?!?!

Sigh. That is the way of things, I suppose.

And so, since reopening my Questrade account last month, moving some of my TSFAs to a robo-advisor* instead, I’ve been spending more and more time reading about personal finance from other sources. Here are some of the articles and podcasts which I’ve been reading and listening to:

Articles

  • Nest Wealth vs. Wealthsimple: A Tale of Two Robo-Advisors via Boomer and Echo – A quick and dirty comparison of the two leading robo-advisors in Canada. I recently started an account through WealthSimple after listening to Jessica Moorhouse’s podcast. I’m kind of sick of hearing that Canadians pay some of the highest MERs in the world, so 0.35% – 0.50% through WealthSimple sounds like a pretty good deal to me. Nest Wealth charges a monthly subscription fee of $20/month, capped at $80/month; this would be more enticing if I had a big chunk of change.
  • The Complete Guide to Canada’s Robo Advisors via Young and Thrifty – A really good breakdown of the all major robo-advisors in Canada. Still a fantastic read, although longer read than the last article.screen-shot-2016-12-14-at-10-04-45-pm
  • The Best Financial Advice I Ever Got via ModernAdvisor – Yes, this article comes from a robo-advisor but they are pieces of advice from Canadian PF bloggers. Found this article posted on Twitter. Short read but a great one! Going through these quotes, I found myself nodding in agreement. Of course, all those tips and tricks that probably took me the last 5 years to learn …screen-shot-2016-12-14-at-10-05-46-pm

Podcasts

  • Jessica Moorhouse’s Mo Money podcast – The podcast I had mentioned a few posts ago. I’ve been hooked ever since my friend, Sarah Li-Cain of High Fiving Dollars, recommended it to me. Jessica originally hails from Vancouver, B.C., but now runs her business out of Toronto, Ontario.
  • Canadian Couch Potato podcast – If you’re a personal finance blogger or you read MoneySense magazine, than you’ve likely heard of Dan Bortolotti, CFP, CIM and the term, “The Couch Potato Strategy”. Dan is most well-known for his blog on teaching Canadians about investing in index mutual funds and exchange-traded funds (ETFs). His podcast was just released in November 2016 and new shows will be posted every two weeks. Check out his first episode!

Alright! Now it’s off to bed. My brain is loaded with lots of new info and I hope I’ve inspired you to learn more about investing towards your own future. Please share if you enjoy these sources and you have some good leads too.

*Questrade’s Portfolio IQ

New Credit Card from Tangerine

Back in October, J. and I finally set up a joint account Tangerine. The purpose of this is to make our shared expenses more fair, rather than arbitrarily taking turns to pay for things.

Therefore, I now have two separate chequing / debit accounts within Tangerine. On the website, you can label one account as ‘chequing’ and one as ‘saving’; when you pay at the machine at the check-out, you simply select the account that you pay with. This makes it unnecessary to have two separate debit cards.

Also, I had applied for the cash-back Mastercard credit card on Tangerine. It finally arrived in the mail last week. Now I have 3 credit cards (this has never happened before in my life). Normally, you can 2% cash-back in two selected areas (i.e. groceries, gas, travel, etc.) and 1% in. As a bonus for the first 4 months, your two money-back areas go from 2% to 4% cash back!

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Today, I tested it out at the Northern Supermarket. We made a $34 purchase, which means that we would get $0.68 cash back.

Ehhhhhh, not a huge lot in the long run, I realize. Guess it’s more of a convenience as J. and I would eventually like to start budgeting our groceries and track how much we spend. Future goals!

Tangerine: New Joint Checking Account

Tomorrow will be November. I am declaring that the upcoming month the month of Doing Shit I Have Been Putting Off.

Most of us have a few to-do lists: our dailies, weeklies and monthlies. Some of us also have a checklist of big tasks we want to achieve within the calendar year. However, lately I feel the pressure of seeing many tasks I’ve put off.

Over the weekend, I finally crossed off one task that has been bugging me for a while: setting up a joint checking account with my boyfriend. We’ve been living together for at least 3 years now, just sharing the expenses here or there but not doing any tracking. Naturally though, it’s time to start merging our finances.

We had both brought up the idea of setting up a shared account, but being far away from any banks* made it difficult just to talk to anyone about our options. Eventually, seeing that most of the big Canadian banks have the same interest rates – that is, pennies a year – I decided that the credit union Tangerine seemed like the best choice. While the interest rate is still an appalling 0.25%, at least I can set the money in my savings account (0.8%) and move it around easily. The website is also amazingly easy to use and their customer service is quite good. You can even chat with a staff member online without picking up the phone!

Anyway, it took a while few months** for us to complete the entire process … getting Canada Post to approve of his identification took a few weeks. Then we’d forgotten about this over the summer, but FINALLY, we got it done yesterday!

It was really easy to set up. Both of us simply had to put in our account numbers and send requests to each other. And yes, today I finally got the $50 bonus for sharing my Orange Key!

Feel free to use my Orange Key if you’re interested in setting up a Tangerine account.

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The purpose of the account will mainly be for gas, basic car repairs, groceries and travel expenses.

When we last went to DisneyWorld in April 2016, I charged everything to my American Express to nab the points. However, when we came home, I had to go through my statements and separate all the shared charges from my own (I bought a lot of Disney souvenirs). Having the debit card will save me a bit of that headache, but obviously we won’t be able to make big charges.

So the next step? To apply for the Tangerine 2% cash-back credit card!

*Bank of Montreal (BMO) is the only option in town, but they don’t even have the facilities to set up a PIN on a debit card.

*Embarrassingly, in between the past 6 months, a family had independently decided to start an account as well. I gave her my Orange Key and the whole matter was settled in a couple of days.

Looking into Investment Vehicles for RRSPs: Part 1

Back in March, I started reading Bruce Sellery’s The Moolala Guide to Rockin’ Your RRSP, and when I got to this page, I felt like I got a much-needed figurative slap in the face.

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I have a RRSP savings account. And I do have more than $25,000, but never even figured to look at my interest rates. I checked and found that it was an appalling 0.8%, not even matching the average rate of inflation, which, in Canada during 2015, was 1.13%. Since then, I’ve been trying to figure out how I should invest my RRSPs.

Investing is one of my biggest weaknesses, and I now I drag my feet when it comes to researching investments, therefore, it’s a task that I have to hit head on. Sellery suggests, as a rule of thumb, that the percentage of your RRSPs allotted to fixed income investments should be similar to your age. The remainder should be dispersed amongst equities.

This morning, I mapped it out in my new Rocketbook*, then digitized it to Evernote through my mobile app.

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While I need to do some research for the equities, I decided to start with a 2-year GIC with a return of 1.6%. Yeaaaaahh, it’s not very high, but it’s decent** and I’m forcing myself to, within the next 24 months, to research better options. And setting this aside first also allows me to put my energy into the harder task of finding where to invest in equities.

More work will need to be done, but I figure this is a start and I was able to complete it fairly quickly. The next five days, I’ll be packing and wrapping up some work projects, so I won’t have much more time for this before I head down south for my vacation. Anything else will have to be handled when I come back to work in May.

Now off to make some Red Lobster cheddar biscuits for a dinner party tonight!*** These are definitely not vegan, but they are delish!!

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*A cloud-connected microwavable notebook from Kickstarter.

**Taking a quick look at GIC options through Bank of Montreal, there’s nothing that matches Tangerine’s 2-year term.

***Costco sells these in packs of 4.

Ruminations on Banks, Credit Cards and Reward Programs

Back in October 2015, I canceled my old American Express and switched over to an American Express Gold through the Ontario College of Teachers’ perks program, which normally has an annual fee of $150/year, but is $100/year for teachers.

Officially, this is the first charge card, but the annual fee is waived in the first year. With the bonus points for opening a new account, I’ve already cashed in one $100 Esso gas card. And recently, after having charged my DisneyWorld vacation to my account, I ordered another $100 Esso gas card with 13,000 points*. I ordered it last week and it just arrived in Toronto, which will be perfect for my upcoming 2-week holiday when I’m feeling broke! So until October 2018, the card has covered its own fees.

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As for my TD Rewards Rebate card, I’m still assessing whether I want to keep it or not. In 2014, I got $182.04 in rebates and in 2015, I got $150.36. For now it’s okay, but I see that Tangerine has come out with a Mastercard that gives a much better rebate program than my TD Rewards Rebate.

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Hmmm, should I switch over? I’ve never had a MasterCard before.

The more I think about it, the more it seems that I really don’t profit from having a TD Canada account. But the more I think about it, I feel like I should just close this account and use Tangerine:

  1. Accessing ATMs: I always preferred being with TD because I could walk into a branch nearly anywhere in big cities and be able to get cash. But being in the north, I don’t live near any of the branches. In fact, I go through most of my days not buying anything at all. I barely use cash, ever.**
  2. Cashing cheques: Again, I don’t live near any TD branches. The Tangerine app works pretty damn fine when it comes to depositing cheques. And my employer has started to streamline their system more and more, so I rarely get cheques anymore.
  3. Investments: I don’t use TD to invest at all. It also irked me to see that, as of March 31st, 2016, they are implementing a $75 fee for any TSFAs that are transferred out of their bank! Not cool!
  4. Paycheques: Yep, I could switch this over to Tangerine. I don’t have to be paid through TD.
  5. Fees: No fees in Tangerine at all. For TD, while I just need to maintain $1500. But it’s $1500 that gets no interest … UGHHHH!!!! And while interest rates are at a record low, even if they’re sitting in my Tangerine ISA, I’d get 0.8% on that $1500, which would be $12. Last year, in Tangerine, I got $42 in interest alone. In TD, NADAAAAA!!! I hate paying fees, it does happen, because of the next point …
  6. Auto payments: This is where my payments are coming out of right now. Sometimes I forget how much is in my checking account and when the payment is withdrawn, it goes under $1500 and I pay the monthly fee, even if I spot it the same day and top it up. I could call up Honda and ask if it could be switched over to another financial institution.
  7. Auto insurance: Meloche Monex keeps charging me more and more. They jacked up my monthly insurance by $20 last year!!! I need to shop around for a better rate.

Soooooooo … why am I even with TD, still?!?!? Funny, I started this blog post simply on credit cards and now I feel like I’ve realized I need to end a dysfunctional and manipulative relationship that’s been going on too long!

I guess what concerns me is that my tax rebates comes through TD right now. While I could close the account, I would need to be in Toronto to deal with some of the loose ends and make sure everything is transferred over properly if I do decided to shut it.

*Under the old points system, this would have had a monetary value of $162.50. So take note, even if the deal is good to start, things might change on you!

**Except for donuts, now that Tim Horton’s has opened up a branch at our local supermarket.

TSFAs Fees with Tangerine

I’ve spent a lot of money the past few months, both on travel (i.e. India) and fitness (i.e. gear, Cody programs, yoga props). Since it was payday today and I haven’t started contributing to my TSFAs yet, I thought I might as well throw some money for 2015 before deciding if I want to shift them elsewhereI.

Then I noticed an unread message in my Tangerine inbox:

TFSAs have no fees while you’re saving with us. If at some point you decide to transfer your funds to another financial institution, a $45 fee will apply.

GRRRRRRR. Good thing I read this.

I really really really REAAAAAALLLY should put more effort into trading, as I put my 2014 TSFAs into Questrade to play around. But I just don’t feel comfortable knowing what to buy. I always default to the priority of RSPs and car payments out of laziness, but I still need to learn more about trading …

Big News!

I bought my first car on Thursday!

I’d been looking for the past 2 weeks for a used Toyota RAV4, but ended up buying the first Honda CRV I tried out. Previously, I was looking at older cars, from around 2006. As I considered the unusual driving conditions*, I went with J.’s suggestion to get a newer car for better reliability and safety.

On Thursday morning, we visited a local Honda dealership, and my mom helped me negotiate a 2009 CRV from $17,999 down to $16,500**. This is definitely much more than my original budget of $12,000, thinking I was going to get a beater. At the advice of the Honda sales rep, I am putting down $5000 – withdrawing from my TFSAs – and finance the rest at 4.99%. As it’s an open loan, I could put payments on the principal at any time (without penalty). The additional bonus of financing is that it will help boost my credit rating**** in the long run.

Rather than my mom’s current insurance company, today I purchased car insurance from TD Meloche Monnex as a University of Toronto alumni. I was hoping my rate would be much lower, but in the end, including all the bells and whistles and accident forgiveness, I went with a monthly premium of $198.75/month. The costs add up so quickly! And as I will be given a furnished home with a bed, I decided to transfer the $1200 from my mattress savings account and use it towards my car funds instead***.

That’s it for now. My mom is going to pay for my snow tires and my grandmother will help me grab a first-aid kit, a snowbrush and some utility mats. Pick-up is on Monday! It’s exciting to finally have my own car!

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*It’s approximately 1250 km from Toronto to Waskaganish. There is no cellphone service on the last 400 km of the James Bay Highway. If I’m stuck, I sit there until someone passes me by, or I can walk to an emergency phone, which are spaced approximately 70 km apart from each other. Snowdrifts get quite high and I might pass one vehicle every hour. 

**Kelly Blue Book was quoting the same price.

***I will eventually purchase my own mattress, but at this time, it’s not a financial priority.

****When I checked through TransUnion, back in April, my credit rating was still sitting at 723.