Financial Chit Chat

[wtom]

A lot of us hate the fact that quite a percentage of our generation have little value in \"savings\" at all ... this thread allows elaborations on the said topic, amongst other items you\'d like to voice.

[majic]

Originally posted by wtom


A lot of us hate the fact that quite a percentage of our generation have little value in \"savings\" at all ... this thread allows elaborations on the said topic, amongst other items you\'d like to voice.

nice.. Fang.. you go first :D Marcelino second.. lets keep this in order ;)

[iconicrocket]

ING Direct 90-days GIC account 3.5%

Enuf said. :)

[ds2chan]

Originally posted by iconicrocket


ING Direct 90-days GIC account 3.5%

Enuf said. :)

do u need a certain amount before u get that 3.5% interest rate?? also, u would have to do all ur banking over the phone, correct?? as in, u can\'t just go to an atm machine or do banking over the internet.. thanks..

edit, I\'m currently using PC Financial.. u need over 25k (I think it\'s 25k) for the 2.x% interest.. but it\'s still better than what the banks are currently offering..

[jimdragon8]

I have always been a fan of setting up a RRSP account that deducts money from your paycheque. You don\'t see it and it\'s a good way to save. Some employers will actually deduct the RRSP contribution from your Gross pay which means you get taxed less. 1st time homebuyers can then use that RRSP for a downpayment without penalty.

ING is good, I personally us PC, free groceries!! :D

[majic]

Originally posted by ds2chan

do u need a certain amount before u get that 3.5% interest rate??



why don\'t you check (http://ingdirect.ca/en/acct_rate/pd_shorttermgic.html)?

[majic]

Originally posted by jimdragon8


I have always been a fan of setting up a RRSP account that deducts money from your paycheque. You don\'t see it and it\'s a good way to save. Some employers will actually deduct the RRSP contribution from your Gross pay which means you get taxed less. 1st time homebuyers can then use that RRSP for a downpayment without penalty.

ING is good, I personally us PC, free groceries!! :D

the shitty part about RRSP is that they WILL grow tax \'free\' .. meaning you will not pay tax on your GAINS but when you withdraw the $ as pension you will pay full tax as if you were making that income.. sux0rz

[MaxRPM]

It\'s not enough said. Saving is great but it\'s not going to make you rich anytime soon. With inflation at 1.9% or what ever it is these days, that 3.5% is now 1.6%.

I know people who save money and are happy with their 3.5% (1.6% in reality) savings that have CC debt in the thousands and paying 18%. I tell them to stop saving and put it toward their CC but no no, they still think it\'s important to save. What they don\'t realize is if they put their money towards their debt they\'re getting 18% on their money.

This is the current problem with North America right now, with such low interest rates people are getting in over their heads and the shit will hit the fan as interest rates start getting higher. It\'s bad in Canada and even worse in the States, Who the hell gets an interest payment only mortgage for 30 years? An idiot that is who.

Anyhow, I\'ve ranted a bit here, if you are saving, good for you, you are ahead of most people. But you need to do more then just save you need to drop your money into something that will earn more then 3.5%. If you don\'t know anything about investing then go learn and make it a life long learning experience. BTW, my return in the last 3 months is about 115%, and about 75% since 2003.

[MaxRPM]

Originally posted by jimdragon8


I have always been a fan of setting up a RRSP account that deducts money from your paycheque. You don\'t see it and it\'s a good way to save. Some employers will actually deduct the RRSP contribution from your Gross pay which means you get taxed less. 1st time homebuyers can then use that RRSP for a downpayment without penalty.

ING is good, I personally us PC, free groceries!! :D

The home buyers plan is good, (i used it) but remember you do have to pay it back into your RRSP.

[wtom]

Originally posted by majic

the shitty part about RRSP is that they WILL grow tax \'free\' .. meaning you will not pay tax on your GAINS but when you withdraw the $ as pension you will pay full tax as if you were making that income.. sux0rz

You wouldn\'t be withdrawing the RSPs until retirement anyway which by then you\'d be making less than you are at this younger age, thus the tax deducation would be more in your favour as your income will be in a lower tax bracket... unless you\'re lucky and still raking in as much or more than present. ;)

Single best tip to minimize the owing on your income tax (or increasing your refund) is to buy as much RSP as your contribution room allows. You can get more than just a couple mods with the refund you\'d get back. :D

Sure you\'d lock away that contribution amount but hey, it\'ll add up to a nice retirement bonus and we\'d all hate to have to struggle during our senior years to come.

[majic]

Originally posted by MaxRPM

The home buyers plan is good, (i used it) but remember you do have to pay it back into your RRSP.

you don\'t _HAVE_ to.. BUT whatever you take out for HBP, divide by 15 (or 13 if you take the 2 yr grace) and that amount will be added to your salary yearly..

[wtom]

Damn you regular full-timers... *shaking fist*

[MaxRPM]

Well if Harper keeps his promise and the main reason I voted for him, RRSPs will almost be pointless if he allows capital gains to be tax free if you reinvest the funds within 6 months. I\'ll be pissed if they don\'t!

[MaxRPM]

Originally posted by majic



Originally posted by MaxRPM

The home buyers plan is good, (i used it) but remember you do have to pay it back into your RRSP.

you don\'t _HAVE_ to.. BUT whatever you take out for HBP, divide by 15 (or 13 if you take the 2 yr grace) and that amount will be added to your salary yearly..

You do have to if you want to do it without PENALTY which is what I was addressing. And just to be picky, it gets added to your income, not salary! ;)

[Whos ur dadd]

All I can say is that if any of you have dreams of being an entrepreneur and have a good product/service/idea, then early in your life is the time to do it. If you wait too long, it\'s a lot harder to start your own business as the mortgage, wife, kids, education money, etc., may take priority (as it should).

[majic]

Originally posted by MaxRPM



Originally posted by majic



Originally posted by MaxRPM

The home buyers plan is good, (i used it) but remember you do have to pay it back into your RRSP.

you don\'t _HAVE_ to.. BUT whatever you take out for HBP, divide by 15 (or 13 if you take the 2 yr grace) and that amount will be added to your salary yearly..

You do have to if you want to do it without PENALTY which is what I was addressing. And just to be picky, it gets added to your income, not salary! ;)

ahahah.. lol.. FINE.. i was going to say \'income\' but this is finance 101 right :p

PM me your email addy pls :) Neil is in teh server room and doesn\'t have it on him.. heh

[ds2chan]

Originally posted by majic



Originally posted by ds2chan

do u need a certain amount before u get that 3.5% interest rate??



why don\'t you check (http://ingdirect.ca/en/acct_rate/pd_shorttermgic.html)?

cuz I\'m too lazy right now.. :D:p

[Whos ur dadd]

Originally posted by ds2chan



Originally posted by majic



Originally posted by ds2chan

do u need a certain amount before u get that 3.5% interest rate??



why don\'t you check (http://ingdirect.ca/en/acct_rate/pd_shorttermgic.html)?

cuz I\'m too lazy right now.. :D:p

and because someone just did it for him already...

it\'s in your nature majic, you just can\'t help it.

[SourcE]

ING is an online banking service, you can transfer funds to and from their accounts online. You can also use the ATM card at a couple of locations throughout the GTA.

I recommend using their ASP service, it allows you to automatically set up a withdrawal from your chequing account to your ING Saving Account on a daily/weekly/monthly basis.

[ds2chan]

Originally posted by Whos ur dadd



Originally posted by ds2chan



Originally posted by majic
why don\'t you check (http://ingdirect.ca/en/acct_rate/pd_shorttermgic.html)?

cuz I\'m too lazy right now.. :D:p

and because someone just did it for him already...

it\'s in your nature majic, you just can\'t help it.

thanks majic.. greatly appreciated.. :)

I would\'ve looked it up sooner or later but I figure if somebody had first hand experience it would be better to hear from them.. sometimes companies will use paraphrasing techniques to make things seem more amazing than they actually are..




Originally posted by SourcE


ING is an online banking service, you can transfer funds to and from their accounts online. You can also use the ATM card at a couple of locations throughout the GTA.

I recommend using their ASP service, it allows you to automatically set up a withdrawal from your chequing account to your ING Saving Account on a daily/weekly/monthly basis.



thanks.. I was thinking that if I am going to buy RRSPs in the next few months I\'m going to want easy access to my money.. and I\'m not sure how easy it is to transfer my money from ING to the bank/investment company that will be investing my money for me.. my friend told me once that it can be a pain in the ass.. plus, if I need my money for something I might have to wait a few days to be transferred over to me..

with PC I just go to any CIBC atm and voila..

[iconicrocket]

Originally posted by ds2chan



my friend told me once that it can be a pain in the ass.. plus, if I need my money for something I might have to wait a few days to be transferred over to me..


Only hassle I see is having to send a cheque to them, so they have the authorization to transfer from your ING account to your bank account.

[iconicrocket]

Originally posted by MaxRPM


It\'s not enough said. Saving is great but it\'s not going to make you rich anytime soon. With inflation at 1.9% or what ever it is these days, that 3.5% is now 1.6%.


I was just simplifing it a bit, still better than the regular interest in your chequing and savings account.


Originally posted by MaxRPM

If you don\'t know anything about investing then go learn and make it a life long learning experience. BTW, my return in the last 3 months is about 115%, and about 75% since 2003.

Wow 115%, spectacular returns. Which stock did you put it on? And what\'s the next hot stock?

I got my eyes on WED.T and PGX.UN, waiting for them to drop before I load up.

[Domokun]

Only 3 things are for sure in life.

1. Death
2. Tax
3. Mazda 3 :p

[RedRaptor]

ds2chan...you want everything spoon fed to you, don\'t you?

MAXRPM, you make some very good points about the 3.5% and inflation. I agree with you that GIC isn\'t the way to go if you want to get rich anytime soon. However it does offer a GUARANTEED interest rate and for first home buyers and newbies, thats pretty important.

115%? Nice. But I am guessing you aren\'t going to share that stock or fund name, are you? :hoho

[Broli]

i am so confused!
i just for some reason can\'t wrap my head around this kind of stuff!

it annoys me, cause it is the only thing, that no matter how hard i think about it

i just dont get it!

tell me if i am stupid or not
this is what i do

since i was 18, i have been putting money away every month into a mutual funds, i started doing like 300 a month or so, and have been doing that for a few years, they bank picks what to invest in based on my risk profile, based on a questionairre of risk taking behaviour.

should i be doing this?
would u financial wizards have any suggestions for me?

[ds2chan]

Originally posted by RedRaptor


ds2chan...you want everything spoon fed to you, don\'t you?


no, like I said already I just want to hear how things work from ppl with first hand experience..

[wtom]

Originally posted by ds2chan
... my friend told me once that it can be a pain in the ass..

Dude, one day a friend will tell you father-hood is a PITA. So you will take that and not give it a shot?

Not exactly the best analogy but close enough.

Also your perception of ING Direct is TOTALLY off.

Broli, what you\'ve been doing since you were 18 is hella a lot better than me in my past. I just made money and spent money.

Money is something you should really listen to your parents as well as Frederik about. :D

http://www.ingdirectfunds.ca/en/images/homefrederik.gif

[majic]

Originally posted by ds2chan



Originally posted by RedRaptor


ds2chan...you want everything spoon fed to you, don\'t you?


no, like I said already I just want to hear how things work from ppl with first hand experience..

what makes us any more credible than an accountant, finacial planner/advisor, anyone at the bank? are you going to be asking how to raise your kids and change diapers on the forum too? grow some balls and look into stuff youself.. life is about risk man..

[ds2chan]

Originally posted by majic



Originally posted by ds2chan



Originally posted by RedRaptor


ds2chan...you want everything spoon fed to you, don\'t you?


no, like I said already I just want to hear how things work from ppl with first hand experience..

what makes us any more credible than an accountant, finacial planner/advisor, anyone at the bank? are you going to be asking how to raise your kids and change diapers on the forum too? grow some balls and look into stuff youself.. life is about risk man..


but those guys will say anything to get your money.. enough said..

[ds2chan]

Originally posted by wtom



Originally posted by ds2chan
... my friend told me once that it can be a pain in the ass..

Dude, one day a friend will tell you father-hood is a PITA. So you will take that and not give it a shot?

Not exactly the best analogy but close enough.


everything can be a pain in the ass but if you can hear from people with first hand experience then u\'ll have a better understanding of what u\'r getting urself into..

[wtom]

Money GIC for ds2chan - Money Guaranteed in Closet - safest place to put your money ;)

[Broli]

lol

take it easy!

ds2chan . . . lol
ur in trouble here buddy!
double whammy!
hell triple!
welcome to the club man!


thx wtom
meh, i just don\'t get it, i only started that up so i wouldn\'t spend every cent i take in . . .
every other cent not put there, is put to the 3!

[majic]

Originally posted by ds2chan

but those guys will say anything to get your money.. enough said..

yes and no.. sometimes advice is free.. you also have the option to shop around and someone correct me if i\'m wrong but various portfolios will cost you more/less (MER fees .. look it up)

they WANT your portfolio to grow at a GOOD pace b/c the more YOU make the more THEY make (in layman\'s terms)

[majic]

Originally posted by wtom


Money GIC for ds2chan - Money Guaranteed in Closet - safest place to put your money ;)

guaranteed to be X % points worse each year due to inflation as maxRPM said..

besides.. RRSPs aren\'t for d2c.. he needs access to money and well that\'s not really \'savings for the future\' that\'s more like.. make $1 and spend $100 when i need to.. :sarc

[wtom]

It requires a bit of motivation to really make you save your money. Set a short term goal and keep referring back to it. ie. Buy your first home in one year. Budget all available money each month. There are tons of sites out there that offer advice, tips, calculators, investment vehicles, etc.

Saving money ain\'t hard ... it\'s knowing what to do with that savings in terms of investment for growth and income. I don\'t even know yet. There\'s a lot of reading for me to do yet.

[iconicrocket]

Things that you can do that are super easy and informative - ROBTV or MadMoney with Jim Cramer if you want to be entertained, and do your due diligence. ROBTV has a website ROBTV.com, pretty much canadian content and relevant to us.

[iconicrocket]

Originally posted by Broli


ds2chan . . . lol
ur in trouble here buddy!
double whammy!
hell triple!
welcome to the club man!



LOL... I remember being like that a long while back when we had USRobotics HST modems and BBS.

\"Welcome to the club man!\"... LOL :D

[ds2chan]

Originally posted by majic
besides.. RRSPs aren\'t for d2c.. he needs access to money and well that\'s not really \'savings for the future\' that\'s more like.. make $1 and spend $100 when i need to.. :sarc

and what\'s that suppose to mean??

[majic]

Originally posted by ds2chan



Originally posted by majic
besides.. RRSPs aren\'t for d2c.. he needs access to money and well that\'s not really \'savings for the future\' that\'s more like.. make $1 and spend $100 when i need to.. :sarc

and what\'s that suppose to mean??

let me spell it out..

rrsps aren\'t what YOU are looking for (now)
you want to make your money grow BUT yo want access to it..
for example (from ING\'s site)
$1,000 x 3.70% x 270/365 = $1,027.37 paid at maturity. BUT if you have say 1K and want to buy something after 30 days.. or earlier.. that\'s only $3.04 more in your account.. so you buy a pack of gum and some pop.. you\'re below your 1K you had originally.. anyway.. bleh.. do what you want and remember COMPOUND interest is where it\'s at..

[wtom]

Originally posted by majic

$1,000 x 3.70% x 270/365 = $1,027.37 paid at maturity. BUT if you have say 1K and want to buy something after 30 days.. or earlier.. that\'s only $3.04 more in your account.. so you buy a pack of gum and some pop.. you\'re below your 1K you had originally..

That\'s a 270 day GIC but where did the $3.04 come from? If you withdraw from your GIC before maturity, you waive all interest.

[majic]

Originally posted by wtom



Originally posted by majic

$1,000 x 3.70% x 270/365 = $1,027.37 paid at maturity. BUT if you have say 1K and want to buy something after 30 days.. or earlier.. that\'s only $3.04 more in your account.. so you buy a pack of gum and some pop.. you\'re below your 1K you had originally..

That\'s a 270 day GIC but where did the $3.04 come from? If you withdraw from your GIC before maturity, you waive all interest.

sorry my bad.. YOU are correct.. but i forgot to mention i was basing my calc on 3.7% 30 day GIC.. i was just illustrating a point..

[RedRaptor]

ds2chan, stop being so paranoid and go see a financial advisor about this. This isn\'t a thread on \"How to paint my calipers\" or \"How to put on winter tires\". This topic is much more important than that and its going to impact your future. So my advice is stop being old school Chinese by keeping all your money underneath your bed and do some research (with help from your bank) and invest some of that money.

I saw that you were really keen on finding out and getting a flip key in the other thread.

Use that same energy here and you\'ll do fine buddy.

[Marcelino]

Save your Money, Invest it! Cuz as soon as WWIII begins that money will help our government provide for our soldiers! Whenever that happens!...

I love how self centered alot of the folks at tm3 could be, its easy to have an opinion, but it\'s easier to critize it.

Maxi, since when does your \"though process\" indicate how well your grammer is in writing?

Cardinal\"you expect me to believe they could keep this elaborate plan under raps?\"
Maxi\"It makes them feel special when they convince themselves that they know something that others don\'t.\"

Doesn\'t Bush feel special!?

If he doesn\'t then we have MAJIC stick to help him out:p

[TheProfessor]

You guys all suck.....I say blow all your money now and worry about your future when it arrives :p




Disclaimer: the above was a joke you douchebags ;)

[MaxRPM]

A very helpful thread just went to shit....ah the joys of BBs.....

[wtom]

Originally posted by PSIVIC


You guys all suck.....I say blow all your money now and worry about your future when it arrives :p



Unfortunately quite a lot of people live that way, intentionally.

[TheProfessor]

What really scares me the most is how over-extended some people are. My friend and his wife just purchased a house that is at the limit of their budget and now have a child on the way. Sure they might be able to squeeze by for the first year or so, but when their fixed mortgage comes up for renewal in a couple of years then what? I think too many people got excited with these low mortgage rates and started buying even if they weren\'t ready......I really wonder what\'s gonna happen over the next five years.

[wtom]

^^^ the back up plan kicks in ... \"ask parents\" :sarc

[TheProfessor]

Originally posted by wtom


^^^ the back up plan kicks in ... \"ask parents\" :sarc

Yeah, I hate that mentality that some people have, though thankfully my friend from the post above is too proud to do that (unless he was on the verge of being evicted and had a child to support).

[MaxRPM]

This thread can be very informative for everyone. Lets keep it going and everyone please avoid the silly jokes and one-liners. Lets keep it to real questions and answers, that way everyone benefits.

RRSPs, someone mentioned earlier that they want to \"buy\" an RRSP. That always irks me when I hear/read that and it\'s not their fault, it\'s the industry\'s. You don\'t buy RRSP or even invest in them. An RRSP is just an account like any other but it is registered with the Gov for tax purposes.

What you do with the money you have in that account is what you use to invest with.Myself, I have a Self Directed RRSP account with TDW. Within it I can transfer cash in at anytime and get the refund at the end of the year and ideally put right back into the account. Once the cash is in there I can buy Stocks, Bonds, Options, Mutual Funds etc.

Don\'t put money into an RRSP if you need it soon and by soon I mean within the next 5 years. The main reason is it will taxed as income rather then capital gains which is taxed at a much lower rate. Currently it is 25% of half the gains.

Explore this site for more info, http://www.canadianbusiness.com/my_money/planning/retirement_rrsp/index.jsp

[majic]

Thanks for getting it back on track... Can a mod that hasn\'t posted here pls clean up some of the chatter? I can do it but I may be a tad harsh (remove looots of posts (this thread only)) - ie.. Remove wrong answers or redundant questions..m

[Cardinal Fang]

I\'m like others that have selected to do monthly withdrawals that go directly into my RRSP. My financial planner and I will lay the groundwork of what to invest in with the RRSP. I\'m not an expert when it comes to the business world and where exactly to invest. I am reasonably savvy to what goes on in the market but I use my financial planner’s experience and expertise to guide me and focus me on where I need to be. I can\'t complain. My financial planner has made some pretty shrewd decisions that I first thought were too conservative for my tastes but later has panned out to be just right. I can\'t stress enough the need to have a good solid financial plan and a planner can help you with this.

Being married I\'m a staunch proponent of RRSP. I go as far as to take out loans at the end of the year to make sure I have contributed the maximum for my wife and I. The income tax refund we receive goes back to pay off the loans. Worst-case scenario is that we carry the cost of the loan for one or two months before paying it back. My wife and I have even used our RRSP money to buy our first home. With it we managed to push our down payment to 45% of the house reducing our mortgage cost significantly. After 5 years we sold the home, paid back the RRSP to our account and had money left over for a down payment on our new house.

I think people are too focused in living for the moment and not planning for the future. Debt ratio is at an all time high. This in part is due to banks allowing people to borrow more money than they should. Just because a bank says you can handle a mortgage of $450,000 doesn’t mean you should. I also find fault with the pervasive mentality of people today. Consumers have a huge appetite are willing to ignore the “bill” that comes at the end as long as they can order whatever they want from the menu. The true value of money has been lost and I do think it’s a generational thing. The future will be kinder to those that have prepared for it. Sweat the details now so you don’t have to in the future.

The comment about credit cards was bang on. With the interest rates they charge you\'d be a fool to carry forward any balances. I love my credit cards! I use them constantly and pay them off just as constantly at the end of every month.

[MaxRPM]

Let\'s start with the basics. Fat people are like people in debt except the opposite way. To lose weight it\'s a simple formula, spend (burn) more calories then you earn (eat). People in debt spend more then they earn. To get ahead financially you have to do the opposite and spend less then you earn. Which for our society, it\'s much harder then losing weight. I bet there are more broke people out there then fat people.

SPEND LESS THEN YOU EARN to get ahead.

In order to get there you have to know what the f&*%^ is going on with your finances. I use Quicken QG 2005 like a teen girl obsessed with The OC. Every morning I log on and download all my bank information and categorize every withdrawal and deposit. Every trade I make I enter it into Quicken. I can tell you exactly how much gas I spent on which car and who paid for it on what day and compare it weekly, monthly, quarterly and yearly.

It seems crazy and time consuming but it\'s worth it. My girlfriend thought it was crazy until I showed her that she spent twice as much on clothes as I did the last two years. In the beginning of Feb, for the first time since the first day of high school (I\'m 35 in May) I started bagging my lunch. Because I tracked my spending I realized I withdrew about 8g a year from the ATM, I\'d say about 80% or more of it was spent on food at work. That\'s 8G of after tax money!

If you\'re in school or living at home and in your first job, Excel will work great. If you are on your won and own a house and investments, I highly recommended using Quicken or MS Money. It\'s a pain to get started but if you stick to it, you will wow yourself and start doing it religiously.


You need to be ORGANIZED!

[MaxRPM]

Here is an excellent article. While I don;t personally subcribe to everthing she says (mainly the buy and hold stocks forever) it\'s good advise brings a so called expert into the realm.

http://moneycentral.msn.com/content/Savinganddebt/Savemoney/P33729.asp

So you want to be a millionaire
Me, too -- in fact, I\'m already there, and so are a lot of folks who shun lightning-strike fantasies about wealth. You can do what we did.
By Liz Pulliam Weston
The day my husband and I became millionaires was a lot like any other day.

He went off to work, grumbling about the commute. I was fretting about our utility bill and decided to check our personal finance software to see how much more we were paying than the previous year. While I fiddled with the numbers, I told the software to update our account balances. Lo and behold, the net worth column showed seven figures where before there had been six.

There was no popping of champagne corks, no trips to the Continent, no quitting of jobs. The fact that the experience was so mundane speaks volumes, both about how millionaires are really created and what it means to be one.

We didn\'t, for example:
• Win the lottery.
• Score a big win in the stock market.
• Inherit a huge pile of cash.
• Appear on any reality shows.
We do, however:
• Make financial security a priority.
• Spend less than we earn.
• Save and invest regularly.
• Pay down our debt.
• Own a home.
• Maximize our incomes.

If you want to be a millionaire someday, I hope that our experience -- and those of millions of others who have achieved this goal -- might provide some insights and inspiration for getting there.
First, though, let\'s deal with the obvious: a million ain\'t what it used to be. But that\'s nothing new. Except for brief periods of deflation, such as during the Great Depression, the generally rising level of prices has always chewed away at the value of a buck. That means you need $1.85 million today to match the buying power of $1 million in 1986, or $7.44 million for the equivalent of a million in 1956.

Still, reaching the million-dollar mark put us in the top 10% of all U.S. households. (The minimum net worth to join that 90th percentile, according to the Federal Reserve\'s latest Survey of Consumer Finances was $831,600 in 2004.) In global terms, we\'re near the very pinnacle of wealth when you consider that billions of people live on just a few dollars a day.

Of course, we live here in the good old U.S.A., where a million-dollar net worth may be \"enough,\" or not. As I wrote in \"The myth of the $1 million retirement,\" some people need a lot less to say goodbye forever to work. Others, with more expensive lifestyles and expectations of living a long time, may need a lot more. Hubby and I have a bunch of long-lived ancestors as well as some costly goals ahead, so we\'re not going to retire just yet.

I\'m confident, though, that the habits and strategies that got us to the million-dollar point will get us the rest of the way, regardless of what happens in the short run to the economy, the markets and real estate.

So here they are:
You\'ve got to want it -- and plan for it
There are few accidental millionaires in the world. People who achieve financial independence, however they define it, make getting there a priority in their lives, according to Thomas J. Stanley and William D. Danko, authors of the groundbreaking book, \"The Millionaire Next Door.\"

That doesn\'t mean you have to live for money, but you need a clearly defined goal and a plan to achieve it. If your goal is retirement, for instance, you might try MSN\'s calculator to see what you need to do to get there.

If you haven\'t got a plan, it\'s way too easy to lose your way: spending money on stuff that isn\'t important, taking on debt that\'s toxic rather than helpful, giving in to despair when markets turn against you. Having a long-term goal, and a long-term view, are essential to keeping your balance.

I started planning for retirement in my mid-20s by signing up for my company\'s 401(k) plan. Every year or so since then, the plan gets reviewed and adapted to suit changing circumstances: marriage, new jobs, new house, new baby. Knowing where we\'re headed has made it much easier to make dinner at home when we\'d rather eat out, or to opt for a camping weekend with friends rather than a trip to Hawaii. We still go out and have nice vacations, just not as often as we might if we weren\'t also focused on our futures.

Live within your means
I bless my Depression-era mother, who grew up poor, knew how to pinch a penny and put a high priority on savings. She understood the importance of \"paying yourself first,\" so from my first job I\'ve been in the habit of saving at least 10%, and often 20%, of my gross pay.

She taught me to use credit cards as a convenience, not an excuse to buy stuff I couldn\'t afford. She viewed people who carried credit card balances with the same suspicion and displeasure with which she regarded people who didn\'t keep a tidy house.

Even if you weren\'t raised by a parent like that, you can still incorporate those two lessons and be miles ahead financially in a few years. The thousands of dollars you\'ll save on credit-card interest can be redirected toward your investments and speed you to your goal.

We’re also big believers in automating financial decisions wherever possible. Money is transferred like clockwork from paychecks to retirement accounts, and from our checking account to our savings plans. If we can\'t see it, we tend not to spend it, so we don\'t have to constantly make decisions about where our money should go.

\"Unless your plan to pay yourself first is on automatic, you will fail,\" declared David Bach, author of best-selling finance books, including \"The Automatic Millionaire \" and \"The Automatic Millionaire Homeowner.\" \"Discipline and budgeting is too hard and too time consuming. ... Trust me, if you want to be rich, or simply not poor, save automatically through systematic savings programs.\"

Invest regularly, and don\'t stop
I\'ve talked to a bunch of folks who, in the late 1990s, insisted they were risk-tolerant investors with a long-term view but who nonetheless bailed out of their stock holdings during the 2000-2001 bear market. Some of them started to dip their toes in the markets again as stocks strengthened, but I\'ve no doubt they\'ll be scared off again by the first big downturn.

Weaving in and out of the market like that is a great way to buy high and sell low -- the exact opposite of what successful investors do. These flighty folks would have been much better off just staying the course with a balanced portfolio of stocks and bonds -- which is what we did, and do.

Again, automated investing plans really help. We invest regardless of whether the market is up, down or sideways. We know that, in the long run, a well-diversified portfolio of stocks beats out every other investment, even if there are some bumpy times along the way. Others are convinced as well: in the 10% of households with the highest incomes in 2004, the Fed says, stocks -- and mutual funds that invest in stocks -- comprised 53.6% of all financial assets.

Another key: Don\'t cash out your 401(k) when you leave a job. About half of all workers do, and that\'s nuts. It\'s not just the taxes and penalties that eat up a quarter to a half of your withdrawal. More importantly, every $1,000 cash-out costs you $10,000 or more in future retirement income. So roll the money over into an IRA or your next employer\'s plan.

Be smart about debt
Net worth equals what you own minus what you owe. So in addition to building up your assets, reducing your debt over time helps build your net worth.

That doesn\'t mean you should avoid debt entirely. Few of us could swing a home purchase without a mortgage, and many people need student loans to finance their educations or business loans to expand their companies.

It also doesn\'t mean you should race to be debt-free at all costs. Most people, for instance, will be much better off if they use extra cash to beef up their retirement savings rather than paying down low-rate, deductible mortgage debt.

But it does mean you should avoid high-rate debt and be cautious about your total debt load. Keeping your housing expenses to 25% of your gross pay, for example, will help ensure you\'ve got enough left over to fund your other goals and have some fun once in awhile.

We chose an old-fashioned, 30-year, fixed-rate mortgage because the low payments allowed us to invest more for retirement while still allowing us to gradually pay off our debt. I\'m not saying it\'s the best mortgage for everybody, but it\'s working for us.

Own a house -- and don\'t waste it
There\'s no question that owning a home in Southern California got us to the million-dollar mark a few years earlier than I\'d projected.
But I\'ve lived through a couple of real-estate recessions and know that home prices can drop as well as climb. That\'s why I\'ve valued our home conservatively for our net worth statements, and why we\'ve avoided tapping our equity for frivolous spending.

Despite the ups and downs, owning a home has long been the cornerstone for wealth for most people, as I explained in \"Why it\'s smarter to buy than rent.\" Consider:

• The median net worth of all homeowners in America in 2004 was $184,400. For renters, it was $4,000.
• Among the richest 10% of households, 96.9% are homeowners, compared with 69.1% of all households.
• Among that richest 10%, primary homes account for about a quarter of the median net worth.
• Homeownership isn\'t a no-brainer. You can always mess up by buying more home than you can afford, draining your wealth away with home-equity loans or trying to speculate in an unstable market. But for most people in most circumstances, owning a home is a smart long-term strategy.

Invest in yourself
Other couples talk about the kids, or the boss, or the neighbors. We do, too, but you\'ll also catch my husband and I talking about \"developing new revenue streams.\"

We’ve discovered (duh) that it\'s easier to meet your goals, and have money for fun, if your income is rising. So we\'ve invested in education, launched our own businesses and looked for new ways to generate cash. In today\'s ever-changing economy, you have to be ready to learn new skills and take new directions.

My husband, an artist, has retooled several times as technology transformed his fields of commercial illustration and animation. I went to night school to complete the Certified Financial Planner training program and watched my pay double, and then double again, in just a few years.

Our businesses, which were both started as sidelines to regular W-2 employment, also have added to our income. Running your own show can be risky, but done right it can be a great way to build wealth. Indeed, most of the people interviewed for \"The Millionaire Next Door\" owned their own companies. According to the latest Fed numbers, 40.8% of the richest households had some equity in a business (the median value was $527,400).

Finally, and maybe most importantly: My husband and I don\'t live just for tomorrow. Our long-term goals are important to us, but we also want to enjoy life today. The fattest bank account in the world wouldn\'t be worthwhile to us if we didn\'t have a chance to enjoy each other, our daughter and our lives. So we appreciate the financial mileposts when we achieve them, but we know there\'s more -- a lot more --to life than money.

[majic]

very nice summary.. it\'s just like any other habit.. hard to drop.. like buying coffee daily.. well that\'s $1.25 at tims (everyone wants to win that rav4 eh) :p or you can buy BETTER quality coffee at 2nd cup for example.. bring it home, grind it and make your own FRESH tasty cup \'o joe.. takes effort but saves ya \'some\' money.. and that LITTLE some adds up here and there..


Originally posted by MaxRPM

In order to get there you have to know what the f&*%^ is going on with your finances. I use Quicken QG 2005 like a teen girl obsessed with The OC. Every morning I log on and download all my bank information and categorize every withdrawal and deposit. Every trade I make I enter it into Quicken. I can tell you exactly how much gas I spent on which car and who paid for it on what day and compare it weekly, monthly, quarterly and yearly.

If you\'re in school or living at home and in your first job, Excel will work great. If you are on your won and own a house and investments, I highly recommended using Quicken or MS Money. It\'s a pain to get started but if you stick to it, you will wow yourself and start doing it religiously.

You need to be ORGANIZED!

this is why i have the spreadsheet for my fuel tracking purposes.. if anyone cares, i can send it to them, just PM me since we can\'t link xls files :sarc

as for tracking of regular purchases, i use one credit card for pretty much everything from $0.89 halls to $6400 for lasik.. why? well, it\'s logged online (albeit for 6 months only); i know that at month\'s end i have roughly $XXX to pay up on my cc bill; i use ONE card to maximize my points on that card (i use 2 other ones for point combos such as airlmiles card at LCBO/sportcheck/shell etc); the purchases made have doubled warranty (upto 1 year) and 30 or 90 day theft protection; oh yah and deferred payment

[SourcE]

Originally posted by Cardinal Fang


After 5 years we sold the home, paid back the RRSP to our account and had money left over for a down payment on our new house.



I too used my RRSP for first time buyers on our house.
We are selling the house now, and whilst ideally I would like to pay off the RRSP, I was wondering I have to or not.

btw, This should be STICKIFIED, great thread with tonnes of useful info that\'s really got me thinking about my finances.

Thanks :)

[SGT06]

What question needs to be answered ? - how to get rich ? how to save ? how to get by without working ? how to get rich without working ? how to get the most in life without doing anything ?

The questions and answers differs for almost everyone and trying to give a general answer to a general question and having it taken as word of god is a very bad idea.

Having said that, take the following advice at your own perils:

1) Take stock in your priorities - what to you want to achieve?
2) Assess your asset base - what do you have to put at risk?
3) Assess your risk tolerance level - can you stand to lose it all ?
4) Assess your capabilities - can you get to where you want with what you current have given what you know? seek professional help if you are not capable and not willing to learn/research the subject.
5) Live life.:)

[MaxRPM]

I have only one CC, TD Gold Travel card. Anyone who spends into the thousands/mth should have a points card. For retail purchases I charge anything over 20 dollars to it. I pay any bill that I can to it, Cable/Internet/Phone/Insurance/Cell etc. The points add up! With this card every 5000 points equals $75 towards plane/car/hotels purchases.

[majic]

Originally posted by SGT06


What question needs to be answered ? - how to get rich ? how to save ? how to get by without working ? how to get rich without working ? how to get the most in life without doing anything ?


all i have to say to those with questions like above is (unless you get a large inheritance or wn a lottery):

\"There is no such thing as a free lunch.\"
\"If it sounds too good to be true, it probably is.\"

[torpedo20]

Originally posted by MaxRPM


I have only one CC, TD Gold Travel card. Anyone who spends into the thousands/mth should have a points card. For retail purchases I charge anything over 20 dollars to it. I pay any bill that I can to it, Cable/Internet/Phone/Insurance/Cell etc. The points add up! With this card every 5000 points equals $75 towards plane/car/hotels purchases.

I do the same with my CC ;)

On the side note,
this is an excelleent dicussion and I\'ve added this thread to my favourites.
I \'m just asking folks who like to fool around to refrain from making any silly comments on this subject. We have enough of those floating around already.

Thanks to all of you who has contributed to this discussion and keep \'em coming, guys!

Cheers,

[majic]

Originally posted by MaxRPM


I have only one CC, TD Gold Travel card. Anyone who spends into the thousands/mth should have a points card. For retail purchases I charge anything over 20 dollars to it. I pay any bill that I can to it, Cable/Internet/Phone/Insurance/Cell etc. The points add up! With this card every 5000 points equals $75 towards plane/car/hotels purchases.

this is a good way of getting the cc to work for you but NOT everyone can spend $8000 to break even on the $120 annual fee plus spending more to actually earn the points.. a no fee card would be preferred.. i personally use citibank drivers\' edge platinum that features a 2% cashback towards ANY car purchase and that card is NO fee so after spending $8000 on that card you would get $160 towards a new car.. it all depends on how much you spend and what you want your card to do for you :)

EDIT: the advantage of the travel card is that it\'s used for smaller purchases so it\'s easier to accumulate 10% off a 2K trip rather than 10% off a 30K car

and if you act now, TD will give you 15000 points ($225) so that pays off the first 2 years ;)

EDIT2: MaxRPM, what can you purchase at the \"TD Visa Travel Rewards Centre\" trips? hotels? flights? just inquiring b/c it says $1 spent = 5 TD travel points.. that\'s nice! :)

[majic]

Originally posted by torpedo20

On the side note,
this is an excelleent dicussion and I\'ve added this thread to my favourites.
I \'m just asking folks who like to fool around to refrain from making any silly comments on this subject. We have enough of those floating around already.

Thanks to all of you who has contributed to this discussion and keep \'em coming, guys!

Cheers,

now that we\'ve resumed a more mature conversation ;) i will keep an eye on this thread and ask other mods to do the same.. :p

[TheProfessor]

The biggest thing IMO anyone can take out of this is to just be smart about your finances. Do homework, speak to somebody at your bank, or even ask a family member. Remember though that not everyone will save every penny they can and that\'s okay. Enjoy yourself, as long as it\'s within reason. We all drive MZ3\'s when we could be taking the TTC or driving KIA\'s for far less money. Remember, some people \'work to live\' while others \'live to work\' ;) Which category do you want to be in.

I\'ll be the first to admit that I spend more money than I have to on a monthly basis, but hey, I enjoy life and can afford to since I make my money work for me by investing wisely (doesn\'t hurt that the wife is a financial advisor for a major bank ;) )

All I\'m saying is it\'s not ALL about saving every penny.......everything in moderation.

[MaxRPM]

Originally posted by majic



Originally posted by MaxRPM


I have only one CC, TD Gold Travel card. Anyone who spends into the thousands/mth should have a points card. For retail purchases I charge anything over 20 dollars to it. I pay any bill that I can to it, Cable/Internet/Phone/Insurance/Cell etc. The points add up! With this card every 5000 points equals $75 towards plane/car/hotels purchases.

this is a good way of getting the cc to work for you but NOT everyone can spend $8000 to break even on the $120 annual fee plus spending more to actually earn the points.. a no fee card would be preferred.. i personally use citibank drivers\' edge platinum that features a 2% cashback towards ANY car purchase and that card is NO fee so after spending $8000 on that card you would get $160 towards a new car.. it all depends on how much you spend and what you want your card to do for you :)

EDIT: the advantage of the travel card is that it\'s used for smaller purchases so it\'s easier to accumulate 10% off a 2K trip rather than 10% off a 30K car

and if you act now, TD will give you 15000 points ($225) so that pays off the first 2 years ;)

EDIT2: MaxRPM, what can you purchase at the \"TD Visa Travel Rewards Centre\" trips? hotels? flights? just inquiring b/c it says $1 spent = 5 TD travel points.. that\'s nice! :)

Agreed, it\'s not for everyone, that is why I said \"Anyone who spends into the thousands/mth should have a points card\"

Yes, you can book anything with your points, you just have to do it with TD Travel Rewards. In 04 I flew us to Vegas with the points. Last Sept it paid for a week long one way car rental. A big bonus was in 02 when I was traveling the world with work, I put about 80g on the card. I also collect Aeroplan which I have a trip or two of points. It\'s the best card out there IMO.

[JMAK74]

This is an interesting read (in a positive sense). Finances are very interesting - depending on how you want to look at it - they are strongly tied to personal feelings, perceptions, logic and time & place (IMHO) - each of which drives a person (depending which ones is affecting you the most at that moment) to behave in a certain manner with your finances/money.

Some of my thoughts on finances/money:

- It\'s not necssarily how much you make, but how you spend it - think Michael Jackson and Neverland or closer to home (so I\'ve heard) - Casa Loma - when being built, the guy (can\'t remember name) would basically say yes to the first price he got for a job (he didn\'t shop around/bargin) - word got around to Toronto\'s contractors and he was paying top dollar (or more) when he didn\'t have to - he went broke (stock market crash of the 30\'s didn\'t help him either) - that\'s why for some of us in our younger days that have been there may recall the indoor swimming pool was not finished.
- From the Rich Barber book - saving is like a good hair cut - a little off every time consistently - you don\'t notice it as much.
- Come up with a budget and stick to it (I\'m guilty of not being the greatest at this). It\'s not easy, but think of it - if a big company comes up with budgets, why shouldn\'t you? Size is relative.
- If you\'re gonna take on debt - it should be \'good\' debt - a house, an investment - borrowing money for the RRSP (you mentioned this one C.Fang) - these are things, so long as it\'s been planned as best you can, will yeild more value/security in the end.
- Be watchful of CCards that give you \"points\" (i.e. Airmiles/Aeroplan) - if it is costing you to have a card like that (yearly fee) or the places you get the points from cost more than purchasing from a place that doesn\'t give \"points\" for a purchase - remember this Simple Rule - Cash is King - more so when it\'s in your hands. Remember the points may limit you to where/how you can spend them - you can spend cash anywhere.
- CCards are MONEY, and they can be a good thing - so long as you pay them off every month - they give you the Time Value of Money (again C.Fang thank you).
- Come up with a plan - where do you see yourself in a year, two years, five years, etc. Figure out what is feasable and see what you can do.

Some Caveats:
- Reward yourself every so often - be reasonable.
- Money is not everything

Just my $0.02 in a $1,000,000.00 world.

JK

[SABIO]

Don\'t rely on banks to make you money. One of the worst places to save and invest. There is a reason the banks make Billions a year. They keep all the money for themselves and give half-ass returns to their customers.
e.g I have 2 RRSP\'s going right now. One @ my bank, Scotiabank and one @ Sun-life.
Scotia gave me a return of 7% last year...yippee:(
Sun-life handed me a nice 20.5%....I have earned over 25% a few times. I just recently cancelled my Scotia RRSP and transfered it into my sun-life account. No sense in Scotia keeping all my interest for themselves.

$5,000 with $1,000 annual addition @ 7%...in 10 years = $24,000
$5,000 with $1,000 annual addition @ 20%...in 10 years = $62,000:D

See what I mean...

[MaxRPM]

Sabio, you failed to mention what investment your RRSP money was invested in. You can\'t make a blanket statement that Scotia bank sucks and SunLife is good. Your investment at Scotia just didn\'t perform as well as Sunlife did and I would think it\'s safe to assume that they were in different investments, I.E one fund vs another. Go to any one institution and you can pick two funds and have the same difference in performance.

Kinda like when people say Hawk pads are better then EBC. Well it has nothing to do with the brand per se, but what pads specific pads (compounds and application) are you comparing. OR that Nissan cars are faster then Toyota, of course the 350 is faster then the Sentra.

[SGT06]

all i have to say to those with questions like above is (unless you get a large inheritance or wn a lottery):


\"There is no such thing as a free lunch.\"

How about those lucky soul who managed to ride the techboom and got out of the bust in 2000? There are those who are very lucky in life and managed to make it big in though a gamble. Some are smart in that they do it consciously, and some are not so smart and they loose the gain just as quickly.

\"easy come easy go\"

[SGT06]

You can\'t make a blanket statement that Scotia bank sucks and SunLife is good. Your investment at Scotia just didn\'t perform as well as Sunlife did and I would think it\'s safe to assume that they were in different investments, I.E one fund vs another. Go to any one institution and you can pick two funds and have the same difference in performance.

Very true. Perfomance of funds depends largely on the fund manager. One company can have many funds and just as many managers. Some are good or not so good.

PS. The forums on canadian business links that someone provided has very good info as well and they are posted by people who specialized in these matters. Granted that there are some who are not so good but their collective knowledge is way beyond what most of us would ever need.

[SABIO]

True true... Funds are different. I guess my statement could use a whole lot more info.:)
Not that I am lazy, I just didn\'t want to sit here and type for 45 minutes.
Both actual funds from both institutions are Canadian Equity based..they do share some common investments. They are slightly on the medium to med-high risk side.
It is amusing to note that of the top 10 investments....4 of them are other canadian banks. Seems like banks make money off of other banks...interesting.
I put my money in the same type of fund for each institution...True, I can\'t expect the same returns, but the difference is huge.

[SourcE]

OK, so here\'s the rub....

We put our house on the market 2wks ago, we had an open house today and have recieved 2 offers.

That aside, we are now both thinking that maybe we don\'t want to move anymore......! :sarc

If we were to stay, we need to pay off a debt of around 40k, when we initially bought the place, we put 25% down, so we were thinking of re-mortgaging the house with only 5% down and using the rest to pay off the debt.

We are in a rush as the offers are limited to 24hrs, but neither of us really know much about finance etc....:p

Anyone know if re-mortgaging would allow us to do this, are there any clauses, or hidden things that we should be aware of when re-mortgaging.?

Any help would be very much appreciated and this is VERY URGENT.

Thanks all,

[SABIO]

I have done that before. Using equity in your home to pay off debt.
e.g $200,000 house with a $100,000 mortgage you have $30,000 in loans/credit.
You re-write your mortgage for $130,000 and use the extra to pay of the Debt.
You increase your mortgage payment minimally but reduced your monthly payments on your other loans to Zero! You just freed up a lot of cash.

Yes, the downside is it will take a little longer to payoff that mortgage. But your house isn\'t going anywhere and it\'s value only goes up. And not having to pay that $500+ towards other loans will feel incredible :)

A bank usually would require an appraisal of the home before remortgaging (theirs of course), there shouldn\'t be a penalty. If you go with 5% there will be an insurance fee from CHMC. approx 3%.
Always easier to deal with the original bank.

My mother and I bought a home years ago. And we actually did that twice... each time it was no prob...no hassle...walked in...explained what the plan was. They typed out a few numbers. Filled out some papers, some guy looked at the house....bingo Money in the bank.

I\'m no expert but it shouldn\'t be a prob....well except that it is sunday tomorrow...and you can\'t talk to your bank :(

[SourcE]

Thanks, we decided to go that route and re-mortgage.
We must of changed our minds like 50 times this evening..! :sarc

Thanks again, tough decision made a lot easier

[SourcE]

So, after talking my to Mortgage advisor and getting the green flag on the re-mortgaging idea, what\'s the best place to put the remainder after paying off my debt.

I still want access to the money so no GIC\'s for me.

I was looking at ING and ICICI, and get the impression that ICICI is the better choice with an interest rate of 3.5% compared to ING\'s 3%.

Any thoughts? Anyone know of a better option?

[SGT06]

ICICI gives the best rate and $20 for opening an account.

ING is better if you need easy access to your money but their rate is always behind ICICI.

So for maximum payoff, ICICI is a better choice.

[SABIO]

?? Remainder... Hello... Turbo!!! Tell the wife there was a little less left over than you thought...about $5K :D

[wtom]

Anyone look into or signed up with ING Direct\'s unmortgage plan? Twenty-five percent of principle as downpayment and then an additional 25% on each month\'s payment.

[majic]

Originally posted by wtom


Anyone look into or signed up with ING Direct\'s unmortgage plan? Twenty-five percent of principle as downpayment and then an additional 25% on each month\'s payment.

just an FYI.. i came across this article one day and i figured i\'d share with you guys on \'unmortgage\'.. bottom line.. everyone has their own pitch but MOST mortgages will be the same and offer you SIMILAR options.. it\'ll be up to you to decide which one is best..

article (http://www.lendingmax.ca/artman/publish/unmortgage_by_INGDIRECT.php)

[MaxRPM]

Here is a good article on Debt. All common sense, but most people find it hard to grasp or ignroe it anyways because they MUST have said product and ignore the true costs. Been there done that, luckily it\'s all behind me now. What\'s the old saying, if I only knew then what I know now...


http://moneycentral.msn.com/content/Savinganddebt/Managedebt/P150813.asp

[JMAK74]

Originally posted by MaxRPM


Here is a good article on Debt. All common sense, but most people find it hard to grasp or ignroe it anyways because they MUST have said product and ignore the true costs. Been there done that, luckily it\'s all behind me now. What\'s the old saying, if I only knew then what I know now...


http://moneycentral.msn.com/content/Savinganddebt/Managedebt/P150813.asp

My dad did, and still does, remind me of this - good debit vs. bad debit - and probably like any son/child - what their parents \'told\' them, in the end, was far more true than not.

I think I forgot to mention that one in my $0.02 in a $1,000,000.00 world post...

JK