GET OUT OF DEBT TODAY!
THE BUDGETING TOOL - $50 USD
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Category Archives: Money
I’ve FINALLY (after a year and a few months) found the perfect name to describe my blog.
It hit me like a thunderbolt:
- Save your money first.
- Spend it on what you need.
- Splurge on what you love.
It sounds like a YOLO blog right? Not really.
I’m advocating the idea (as I always have) to save your money to spend it where you NEED to spend it, and then where you really WANT to spend it.
Or to not spend it at all if what you want to do is basically never have to work again.
Anyway, expect a blog overhaul coming up. I’m excited!!
I’m sorry, but better late than never (especially if I start building a cache of thousands of posts).
I will start posting over at Save. Spend. Splurge. but this blog will continue to be archived and I will re-direct all permalink posts and relevant pages to the other blog.
New RSS Feed URL: http://feeds.feedburner.com/SaveSpendSplurge
I should have ported everything over correctly by Wednesday. *fingers crossed*
Posts will resume on Wednesday.
This domain will continue to serve as The Budgeting Tool but will no longer have the blog.
Thanks for your patience & understanding!!!
This is a part of the Investing Series.
If you want to invest in index mutual funds or index ETFs, and you want to track how much you are paying as well as your own personal investing strategy or allocations in each fund, I suggest making the following chart, and updating it once or 4 times a year, each time you decide to rebalance.
EXAMPLE OF A MUTUAL FUND PORTFOLIO / CHART
Name of Index Mutual Fund or ETF
Pretty self-explanatory. It can be redundant for people who have memorized the symbol or ticker, but I like having a name put to it.
This is helpful so that you know WHICH one you’re buying. There may be variations of the same mutual fund, held in different currencies (e.g. CAD versus USD), or have a slight twist to them (e.g. being currency neutral).
This lets you know exactly which one it is.
This is your personal allocation to each index mutual fund or ETF.
I put these generic averages up there, but you might want to put less in International, and more in your own country, etc etc.
Listed MER %
You can find this on the website, of what the Listed MER % is for the fund or ETF you are buying. Just look for something that says “MER”, and that percentage is what you should enter.
Weighted MER %
This is the Listed MER % multiplied by your portfolio %, and it lets you know how much you’re really paying, no matter what the listed MER says.
Note: It is tricky to figure out MERs because they may change on a daily basis, and you need to do a rather complicated calculation of the assets of the fund each day, multiplied by the MER, and then trickling down to what you actually have to pay as an investor. This is why I like having a rough idea of what I’ll pay, but it may not necessarily be very accurate.
More details can be read here: What makes up an MER?
Effective MER %
This tells you how much you are paying in dollars (a rough amount), based on where your portfolio is allocated, and how much MER is being charged.
You can get to the same number without having to break it down by each mutual fund, but I like seeing more detail than is necessary.
I’d like to give a big thanks to Canadian Couch Potato for having made many charts similar to this one, which I have since used as my model, with a very small tweak.
THE CHART’S FORMULAS IN DETAIL
STEPS AND CALCULATIONS THAT WENT INTO THE CHART
( 1 ) CREATE YOUR PORTFOLIO PERCENTAGE
Choose your strategy of where you want your money to be, this is the most time-consuming part because you have to do your research to find ALL the index funds offered by your bank/brokerage, and then choose which ones you want to buy.
I really suggest not putting all your eggs into any one basket.
Few things to consider:
- Stick to holding either all index mutual funds at a bank, or all ETFs; to have an efficient portfolio
- Invest in your own country (mine is Canada, hence the Canadian Index fund)
- Invest in another stable trading market and/or major trading partner (U.S. is a global benchmark)
- Don’t forget the world – Europe is an international index to consider
- International indexes can also be emerging markets (BRIC*) but are considered riskier
- Allocation of bonds depends on age and how close you are to retirement.
*BRIC = Brazil, Russia, India, China; all generally considered “emerging markets”, that aren’t quite stable for various reasons, but have a strong potential for future growth.
( 2 ) FIND ALL THE LISTED MERS FOR YOUR CHOSEN FUNDS
Now that you’ve chosen your funds and what percentages you want them to be, go to their pages, read through them thoroughly and find the MER %.
It is usually on the first page of most mutual fund or ETF pages, and may be pictured in a box that looks like this:
Or sometimes on each individual fund, it looks like this:
If you are using Excel, do not make the mistake of typing in “.33″, and expecting it to be a percentage.
To be accurate, you have to format the cell as a % first with the Excel % button, and then type in “0.33″ in the cell.
( 3 ) WEIGHTED MER & ( 6 ) TOTAL WEIGHTED MER
For each mutual fund, multiply the numbers from ( 1 ) Portfolio % x ( 2 ) Listed MER %
Calculations from the above chart:
- TD Canadian Index e-: 30% x 0.33% = 0.10%
- TD U.S. Index -e: 30% x 0.35% = 0.11%
- TD International Index -e: 30% x 0.51% = 0.15%
- TD Canadian Bond Index -e: 10% x 0.05% = 0.01%
The total weighted MER is just a sum of each individual weighted MER.
( 4 ) INDIVIDUAL PORTFOLIO AMOUNT & ( 7 ) TOTAL PORTFOLIO AMOUNT
I do this backwards, going from the total up to the individual.
Instead of going from each mutual fund down to the total, I enter a ( 7 ) Total Portfolio Amount at the bottom (e.g. $10,000), and then do a formula for each mutual fund by multiplying it with the ( 4 ) Portfolio %
( 5 ) EFFECTIVE MER %
Another simple multiplication of : ( 2 ) Listed MER x ( 4 ) Individual Portfolio Amount.
DO NOT FORGET TO ADD IN THE COST OF TRADES PER YEAR
If you have to pay for buying ETFs, or you have a no load mutual fund, it will cost you money to buy and sell each fund.
(Questrade, I might add, does not charge you commissions for buying ETFs, but they charge you for selling them.)
Add that trading cost to your total MER cost, and you will have a rough idea of how much it costs to hold your portfolio in index funds.
COPY METHOD A. COPY AND PASTE THIS CHART (NO FORMULAS ENTERED)
You can also try and copy and paste this example Excel chart, and put in the formulas listed above (might make things easier).
- Highlight this entire table.
- Right-Click and Copy
- Go into Excel and open any blank sheet
- Right-Click and Paste as Special
- Select Text
|Name||Symbol||Portfolio %||Listed MER %||Weighted MER %||Portfolio Amount||Effective MER|
|TD Canadian Index -e||TDB900||30%||0.33%||0.10%||$3000||$9.90|
|TD U.S. Index -e||TDB952||30%||0.35%||0.11%||$3000||$10.50|
|TD International Index -e||TDB911||30%||0.51%||0.15%||$3000||$15.30|
|TD Canadian Bond Index -e||TDB909||10%||0.05%||0.01%||$1000||$0.50|
You will see the values appear in their proper columns.
Aside from customizing it for yourself, and you will need to adjust the following columns to add in the multiplication formulas listed above:
- Weighted MER %
- Portfolio Total and Portfolio Amounts
- Effective MER
Still too much work?
Here’s the laziest way possible:
COPY METHOD B. COPY AND PASTE THIS CHART (FORMULAS ALREADY ENTERED)
Copy and paste this table with the formulas in it, into cell A1:
Note: May be a bit tricky to get your cursor right to the edge of the last bottom-right cell.
So I suggest going backwards, and trying to highlight it from the bottom-right cell (just before the X) up to the beginning of Name in the top-right corner.
|Name||Symbol||Portfolio %||Listed MER %||Weighted MER %||Portfolio Amount||Effective MER|
|TD Canadian Index -e||TDB900||30%||0.33%||=D2*C2||=$F$6*C2||=F2*D2|
|TD U.S. Index -e||TDB952||30%||0.35%||=D3*C3||=$F$6*C3||=F3*D3|
|TD International Index -e||TDB911||30%||0.51%||=D4*C4||=$F$6*C4||=F4*D4|
|TD Canadian Bond Index -e||TDB909||10%||0.05%||=D5*C5||=$F$6*C5||=F5*D5|
You can copy this table with the formulas in them by highlight the entire table above from my blog post as pictured below:
Now right-click on the highlighted section and select Copy.
Now go into Excel, and right-click in the cell A1 (the first upper-left column), and select Paste Special.
Select Text, or else the columns, spacing and formulas won’t work properly, like so:
It should look like this in your Excel when you’re done.
POST-COPYING CLEANUP REQUIRED
1. You may decide you want to format the cells with $ or % formulas (note how the weighted MER is at 0.00099 instead of 0.10%)
(When you do the above for percentages, it will look like 0% because they’re fractions of a percentage. Use the little blue arrows to the left and right to increase or decrease decimal points)
2. You will have to delete out the “.” in the bottom row one they’re in there and the “X” (if you copied it by accident), I only needed them as column/text spacers so it would be easier to copy.
3. You will also have to adjust the columns out to fit the words (just double-click on the column lines up by the A, B, C, D, E sections, and it’ll do it automatically.)
4. [Optional] Beautify it with some colours and borders (I’m a freak for pretty charts).
If you buy ETFs, or are not buying no-load mutual funds, don’t forget to add the cost of trading to your final “Effective MER” total, to get the full picture.
Anything that is a flat or static number without any formulas in it, you can change/touch, e.g.:
- Portfolio %
- Listed MER %
- TOTAL Portfolio Amount (at the bottom, the $10,000)
So you have a budget and you want to see where you can chop it, but everything looks just so.. NECESSARY, doesn’t it?
(I hear you on that, my necessities include boxes of macarons.)
There are a 3 ways you can trim your monthly budget: Trim, Chop and Shave.
They all work only if you’ve already done the best you can with your debt as in:
- You are currently making payments on your debt
- You haven’t accumulated MORE debt
- You have called your debtors and asked for a lower interest rate or else you’ll default
- You are slowly paying down the debt with the HIGHEST interest rate first
- You are not also saving money aside for some fancy vacation you can’t afford to take
The following tips are for people who are in debt and really think that they can’t find anywhere to chop in their budget.
You don’t have to chop everywhere all at once, but slowly reducing one category one month, and another the next, might just be the way to get ‘er done.
LEVEL 1: TRIM THE BUDGET
This is the easiest level because you just have to go through your truly frivolous variable expenses and trim them down.
Follow or don’t follow the advice, but hopefully it’ll get you thinking about it.
Go through the following budget categories:
- Eating Out — Always a money sucker; you have to become more organized and meal plan!
- Lunches Out — It’s too easy to nip down to the local subway shop, so make your own lunch
- Alcohol — You can always cut down on this budget somehow; Drink less and your liver will smile
- Clothes — Unless you’re a super minimalist with a 10-piece wardrobe, you may not need more
- Makeup — Ditto. Basic makeup should do for now, and I’m fairly sure you already have enough
- Tea/Coffee — You have probably heard this one to death, but a $3/day coffee is $90/month
- ATM fees — Taking money out of a third-party ATM because you’re too lazy is unacceptable
- Candy/Snacks — Going to the convenience store to pick up some chips almost nightly is a waste
- Fancy Vacations — Think about not taking one this year and save the cash instead
- Books/Magazines — Know where your nearest library is? No? Find out where it is & get a card
- Gifts — Nice to have a big heart, but you have to take care of yourself before you can help others
- Charitable Contributions — See above; How can you help others when you’re in $$ trouble?
YOU CAN STILL HAVE FUN, BUT IN MODERATION
I am not saying to not have ANY fun at all, but if you can’t make your budget balance to the point where you have a comfortable amount that you’re saving in addition to covering your bills, then you do need to:
- make a sacrifice and/or
- make more money
Sacrifices include not taking a vacation, buying less clothes, and in general, less luxuries.
If you say to me: But what will I do if I DON’T go out and party all weekend? I’ll be SO BORED!
Get a part-time job.
An extra job will cure that boredom because it makes you tired, you don’t want to go out after putting in long hours at your regular job and your part-time job. You’ll want to stay in.
Any free time you have, you’ll want to spend it buying groceries, running errands, napping and cleaning your place.
On the plus side, you get more money to clear that debt faster.
TREAT THOSE ABOVE CATEGORIES LIKE LUXURIES
They’re little, daily luxuries.
Treat them as such because once you get used to them, they stop being luxuries and turn into habits.
So until you get to the point where you really don’t need to freak out about spending $3/day at Starbucks, you really can’t afford to be frittering money away like that.
Get out of debt first, have a safe financial cushion in your retirement accounts, and then you can enjoy your money, stress-free.
Photograph I took in London, England (2011) of a typical English day
WHY DO YOU SAY NO FANCY VACATIONS!?
Because you’re in debt.
Want another reason? Because you wanted to get out of debt quicker, no?
Note: What you consider “debt” is up for debate. If you have a house and a mortgage, but are otherwise financially responsible, by all means, save for that vacation.
If you’re paying 30% interest rates on your credit card debt, and desperately want to be free of those plastic shackles, yet you feel like you deserve a $2000 vacation then you simply have to accept that you will take longer to clear your debt, pay more interest in doing so, and you aren’t allowed to whine.
Another point I will bring up is that vacations are a wonderful escape from reality. I myself, escape from reality when I go on vacations.
It is really a downer if you go on a great escape to another dream life for only 2 weeks, only to have reality smack you hard in the face 50 weeks of the year with 30% interest to boot.
I’m putting my money where my mouth is because until I was out of debt, I didn’t take a single vacation, and I was a lot happier to be out of debt sooner versus going to Paris.
I wanted to enjoy my vacation, not go there, rack up more debt (how can you NOT shop in Paris!?) and then come back only to face a bigger pile of debt.
Granted, I’ve always been more of a “work now, play later” sort of person, but this ”treating yourself” business or that you “deserve a break for working so hard” can be a slippery slope to justifying things you can’t afford. (I know of what I speak of. )
Think of your being debt-free as the vacation, the break, and the reward from financial stress which will drag on your mood more than you know.
LEVEL 2: CHOP THE BUDGET
These areas are a lot harder to trim because it takes a little effort, perhaps on the phone and/or in-person:
- Banking Fees — You better not be paying any bank fees but if you are, you should switch banks
- Cellphone — Consider lowering down your data plan, or getting a very low-cost phone altogether
- TV — Eliminate those fancy channels except the ones you actually watch; or stick to basics!
- High-Speed Internet — You can probably go down to the lowest tier in terms of High-Speedy-ness
- Telephone – If you have a Home phone, why have a Cellphone? Or vice versa?
- Groceries — About $200/person is considered reasonable to most folks; otherwise, it’s chop time!
- Life Insurance — If you don’t have any dependents (kids), you’re basically wasting your money
- Utilities — Start turning off the lights; shutting down laptops and using less of everything
LOOK FOR BUNDLING OPPORTUNITIES
Look for a competitive provider in your area, and give your provider a call every 3-6 months to threaten to switch. They’ll generally give you a pretty good rate to try and get you to stay.
This probably only works in big cities, so use with caution.
There are so many no-fee options out there! Why are you still paying an account fee?
Consider at least keeping the minimum in your bank account so that you can have that fee waived.
CELLPHONE VERSUS TELEPHONE
BF and I use a cellphone between us. We treat it like a portable home phone. It works out great because he doesn’t need a cellphone for his personal life, and frankly, neither do I.
We’re just more organized as a result, and we make plans ahead of time.
As a result, we don’t have a home telephone. If we had an apartment for more than a year, I’d consider getting a home telephone and scrapping the cellphone.
For us, it’s one or the other. We’re currently with Virgin Mobile and we pay $21 a month for the whole bill, or about $10.50 each.
I don’t like chopping Groceries because I value good food a lot, but most people find that $200/month is sufficient for a single person.
For fancier foods, we spend about $300/month each, going up to $400/month if you include the alcohol that goes into cooking it, or other fancy treats.
As a result of our fancier budget, we don’t eat out as much.
In fact, it’s near $0 in Eating Out between the two of us as a couple.
I only eat out if I am out with friends for a meal, and that is not a weekly, let alone monthly expense.
You know, little things like shutting down your computer, turning lights off and not leaving the water running while you’re doing something, using your dishwasher on off peak hours… it actually all makes a difference.
We did an experiment when we were living in an apartment, and we had $20 for utilities every month.
Not much, right?
Well we started turning everything off (the microwave was on a switch, we turned it on, only to use it), we unplugged every electronic device or put it on a power bar, and lo and behold, our utilities budget came in at $10 the next month!!
$5 of that was service fees (we couldn’t avoid paying the flat charge), and the other $5 was our usage, down from $15/month.
Now it sounds like small potatoes, but this was in a small studio. Can you imagine the savings if you’re living in a 2000 square foot house?
You don’t need to go to extremes as we did in our experiment, but just remembering to turn off the lights, or being conscious of your usage can make a difference.
LEVEL 3: SHAVE THAT BUDGET
This is when you really want to get serious.
You’re thinking: I have done all of those levels, and I AM STILL in need of a budget boost somehow.
Aside from going out and just earning more money at a part-time job, I only have two areas that tend to eat a lot of money:
- Rent — Sell & move to a cheaper and/or smaller apartment farther away; Or get a roommate
- Car — Sell it altogether and save on gas, car insurance, maintenance; Take public transportation
People spend about 35% of their budget on Housing. It’s the biggest part of your expenses, and no one wants to move, let alone have to go through all that work of finding a new place to live.
That said, maybe you bought a house that is simply too big for you.
Or you’re living in a shoebox, paying sky-hight rent prices, when if you just commuted about 15 minutes to half an hour a day, you could cut that in half.
Sell the car if you can’t afford to maintain it. You’ll save on gas, car insurance, maintenance and accessories, not to mention parking, tolls and other things that come with the convenience of the car.
Frankly, we only use our car for groceries because it’s a lot to carry and there’s no direct bus to the grocery store.
For that, we could actually just rent a car for the day or use a car-sharing program where we can rent it by the hour, and not have to worry about paying for a full-time car.
Figure out how much your car is costing you, and make the decision. I know it isn’t easy in some cities, but mid-sized cities and larger, tend to have a public transportation system of some kind, even if it isn’t convenient and easy.
IT’S YOUR LIFE AND YOUR MONEY
Some of these decisions can’t be taken lightly, because it means an upheaval of your life, but once you make the change, you can start seeing the money roll in.
Start slow, and make it happen.
Find a place to cut each month (perhaps making your lunch every day?), and get used to that change before embarking on another.
If you try and do all of these changes at once, you’ll feel overwhelmed, upset and probably abandon this (valuable) exercise altogether.
Sacrifices may have to be made, and it’s up to you to choose which ones to take — do you want to sacrifice your time, or your expenses to clear your debt quicker?
I’m always curious about my and other people’s spending habits (what? I’m NOSY!), and it’s interesting to learn what people spent in the past.
In the 1930s, there was a basic wardrobe list that every woman could follow, and every year would have cost approximately $191.81 for clothing and $46.21 for upkeep and personal care.
If we add inflation to today’s 2012 dollar*, it would mean: $2516.55 for clothes and $606.27 for personal care, which I am assuming includes haircuts, and spa-anything.
*$1.00 in 1930 had the same buying power as $13.12 in 2012. Annual inflation over this period was 3.19%.
That means you could expect to spend about $209.71 for clothes per month, and $50.52 for personal care.
That actually sounds quite reasonable. More reasonable than MY spending, anyway.
A BASIC WOMEN’S WORKING WARDROBE IN NEW YORK CITY IN 1937
(Source: ‘Clothing’ (Latzke and Quinlan, 1940))
Note: This wardrobe would have been updated each year, so 8 dresses would turn into a bit more every year if the dresses didn’t fray or wear out.
Medium quality fur-trimmed coat, every third year
Wool spring coat, every other year
4 felt hats, two heavy, two light
- 2 cotton, for summer street wear
- 4 rayon, 3 fair quality, one inexpensive
- 1 wool dress, medium
- 1 rayon party dress
1 wool skirt
1 sweater, every other year
1 smock (I put an apron here)
- 2 undervests (rayon) (Used tank tops instead)
- 3 knit rayon bloomers
- 2 panties, 1 rayon, 1 silk
- 4 slips, 3 rayon, 1 silk
- 2 corsets or girdles
- 3 brassières
- 3 nightgowns, 1 cotton, 1 rayon, 1 cotton flannel
Flannel bathrobe (every 3 yrs.)
Rayon kimono, every other year
20 pairs medium silk stockings (I didn’t put all 20 in here)
- 2 pairs medium quality street shoes
- 1 pair medium quality dress shoes
- 1 pair evening slippers, every other year
- 1 pair inexpensive white shoes
Rubbers 1 pair every other year
Overshoes 1 pair every other year (I took some liberty here, not knowing what overshoes are…)
House slippers 1 pair every other year
Umbrella, every other year
Raincoat, every 3 years
3 pairs gloves, 1 leather, 1 fabric
3 handbags at $1 each (or fewer and better)
Via shared by reader ES
MODERN TIMES HAVE CHANGED FOR A FEW THINGS
I don’t think anyone owns or wears bloomers, or stockings to require 20 pairs of medium silk stockings, nor do we wear corsets, girdles on a regular basis.
We also do more than just take dictation or calls as secretaries these days. Women are in what were traditionally men’s roles in the past.
Wardrobe basics I see missing for me in there are:
- 1 suit — Just for the rare interview to be pulled out and dusted off
- Jeans — Skinny, bootcut
- Pants — Cropped legs (just an inch or two above the ankle)
- Work pants
- More work shoes — At least one other pair
- Work blouses
- At least another sweater or two
My basic minimalist wardrobe would look more like this, if I had to pick 20-items:
Images above all created via Polyvore
What do you think? Anything missing in there for you?
This is a part of the Investing Series.
VANGUARD IS NOW IN CANADA!
So I’m pretty excited to tell you that Vanguard is NOW IN CANADA!
Not only that, their Management Expense Ratios (MERs) for their ETFs are at about half of TD E-Series Index Mutual Funds, and significantly lower than iShares ETFs.
COMPARISON BETWEEN TD E-SERIES, ISHARES AND VANGUARD FOR INDEX FUND INVESTING IN CANADA
(In case you’re wondering, a mutual fund is the same as an ETF, the only difference is in the way it’s bought, priced, and sold. More on that topic is available in my Investing Series.)
You can click to make it larger:
NOTE: This chart is valid as of February 1st 2013.
Buying ETFs on Questrade is now commission-free. You will only pay commissions on selling them. Other fees not related to commissions, still apply in buying or selling.
(Scroll down further to read more about buying ETFs commission-free.)
Now the savings with Vanguard at $248 a year may not seem like a big deal to you, but over the course of 30 years, and with a portfolio that will only continue to grow in size, the savings will be enough to want to make a change today, when it doesn’t cost you an arm and a leg.
I mean, why would you waste money on fees when you can just do a little work ONCE a year and save?
AT WHAT AMOUNT SAVED DOES THIS MAKE SENSE FOR ME TO SWITCH?
Before, you had to have about $120,000 saved before it became interesting or worth your while to switch over to index fund ETFs rather than an index mutual fund at a bank.
Now, you only need about $60,000 before it becomes interesting.
At $60,000 invested in TD E-Series Mutual Index Funds, the cost is about $244.80.
This is equivalent to Vanguard Index ETFs, being rebalanced once a year (buying ETFs only, not selling any in this rebalancing), costing about $241.60.
If you wanted to sell an ETF, it would cost $9.95 each time you sell.
I TRADE ONLY ONCE A YEAR, WITH 4 INDEX FUNDS
You may be wondering why I only put 4 trades, it’s because I balance once a year. I either buy or sell once a year, but now with commission-free ETFs, I’m going to just be BUYING ETFs if I can help it.
Commission-Free Buying of ETF with Questrade starting Feburary 1st 2013, Selling ETFs will still cost you money
It is even CHEAPER now, you can do the trades with index fund ETFs COMMISSION-FREE with Questrade.
That means that if you buy ETFs with Questrade, you won’t pay their $4.95 – $9.99 commission fee (other fees may still apply, applicable by the government).
- You’ll pay the ETF commission at the time of purchase, but we’ll rebate you in two business days
- There are no minimum number of shares you have to buy. Hold them for as long as you’d like
- Buying ETFs for free is only available if you’re trading on one of the Questrade IQ platforms
- ECN fees or any other incidentals charged by the markets are your responsibility
- Your standard commissions will apply when you sell an ETF
So basically, if you sell your ETFs, you WILL pay a fee or if there are ECN fees and so on, but you can use your $50 in free Trades because of my referral ID.
However, you can avoid fees altogether, if you buy ETFs every 3 months (or once a year), and rebalance your portfolio at the same time.
Something along this strategy:
- Put money into the ETFs you want in March (pay no commissions)
- Check your portfolio in June to see where you need to rebalance
- Put more money into ETFs to rebalance out the portfolio without selling any ETFs
- Check your portfolio in September to see where you need to rebalance
- Put more money into ETFs to rebalance the portfolio without selling any ETFs
- Check your portfolio in December to see where you need to rebalance
- Put more money into ETFs to rebalance the portfolio without selling any ETFs
Or, just do all of this rebalancing and buying (not selling, if you can help it) ONCE, at the end of the year (December).
You can basically not pay $20 – $40 a year, which is easy pickings, and adds up over time.
It’s also a great way to direct your paycheque towards investing and buying ETFs on a regular basis, especially if it’s commission-free with purchases at Questrade AND you pay lower MERs.
WHERE CAN I GET $9.95 PER TRADE AT A DISCOUNT BROKERAGE?
Questrade is where I’m at if you haven’t noticed.
I think they’re awesome, and have thought they were great since I started investing.
If you use my referral ID with Questrade, you can get up to $50 in free trades.
You can enter this code o0soehds when you open your new account.
After pressing “Enter”, it should immediately display what the deal is ($50 in free trades!!).
You can also hold RRSP and TFSA accounts in Questrade as well, and trade stocks or more ETFs in them. I personally use my TFSA contribution room for stocks.
The minimum is $4.95 a trade up to $9.95 as a maximum.
After the $4.95 charge, it is $0.01 (a penny) a stock as a fee.
So between $4.95 to $9.95, you can buy about 500-ish stocks (at a penny each), before the $9.95 charge always applies and it becomes the standard charge.
Oh, and I get $70 in cash if you do decide to go with them (don’t ask, I didn’t make up the rules.)
IF YOU GO WITH TD WATERHOUSE HERE ARE THEIR PRICES:
I emailed and got this:
Investors executing more than 150 trades per quarter will pay a flat rate of only $7.00 per Canadian or US equity trade.
Investors executing 30 – 149 trades per quarter will pay a flat rate of only $9.99 per Canadian or US equity trade.
No matter how often you trade.
Clients with household assets of $50,000 or more with TD Waterhouse Discount Brokerage will pay a flat rate of $9.99 per Canadian or US equity trade. You must also sign up for eServices to qualify for this rate.
Trades for Canadian or US Options will be subject to the same flat rates plus $1.25 per contract.
It’s pretty expensive to pay about $7 – $9.99 PER trade, flat, not even depending on the number of shares you buy.
IT IS CHEAPER TO GO WITH VANGUARD AT THIS POINT, ESPECIALLY WITH QUESTRADE’S NO-COMMISSION ETFs
I mean if you just look at the near-$500 it costs to stay at TD e-series, it is cheaper to buy Vanguard Index ETFs by a long shot.
If I had a million dollars, the savings with Vanguard would be $2100 just in fees each year compared with TD E-Series Index Funds!
Sounds like small potatoes to you (what’s $2100 a year!?!?), but it’s actually $175 a month back into your pocket for pretty much the same index fund strategy.
Even if you sell ETFs let’s say 4 times in a year, that’s $40 out of the $2100 you’d be saving. It’s still $2060 in your pocket.
It’s like paying bank fees for nothing, I’d basically be burning my money out of sheer laziness.
They haven’t added all the funds in either, so the list is pretty slim right now, but I have total faith they’ll create something as robust as iShares, or as their U.S. ETFs.
A NOTE ON U.S.-BASED ETFS THAT PAY DIVIDENDS
Please note that if you do invest in U.S.-based ETFs and receive dividends, you WILL be indirectly taxed 15% on any dividend gains, that is, they take out the money in the U.S. for dividend taxes before you get them in your portfolio in Canada.
The only place where you won’t get the 15% dividend tax is if you hold index ETFs in your Registered Retirement Savings Plan (RRSP) because it is recognized by the tax treaty between U.S. and Canada as being a tax-sheltered account, in which case, you can simply apply for a dividend tax refund when you do your taxes.
For Americans, Canada only recognizes 401Ks as a tax-sheltered account.
Finally, Tax-Free Savings Accounts (TFSAs) are not under this tax treaty, and if we were in the U.S., the Roth IRAs would not be under this Canada-U.S.A. tax treaty either.
I was reading through my Lone Wolf & Cub manga the other day and I thought about a sentence in one of the books that goes along the lines of:
Poor man, half a mat, one bowl of rice a day.
Rich man, half a mat, one bowl of rice a day.
(By the way, Lone Wolf & Cub is one of the best samurai series I’ve ever read, if you’re into comic books.
It made such an impression on me as a kid of 10 reading them for the first time, that I credit them to having made me long to live up to those kinds of values: justice, equality, indifference to opinions, and staying true to what I believe in among other things)
It wasn’t until about the time that I eventually turned into becoming a selective minimalist, that it finally sunk in and made me realize what it meant and how I could use it for my own life.
Being richer just means you can afford to sleep in a fancy bed rather than on a cardboard mat on top of a warm grate on the streets.
Being richer, just means you eat higher quality food and can afford to buy organic.
Rich or poor, we all basically use the same amount of space to sleep on, and basically eat the same amount of food (you can’t eat more than what your stomach will hold, I’ve tried..!)
But how much space do we REALLY need?
Photograph I took of crammed together apartments in Macau
HOME BUYERS IN NORTH AMERICA SEEM TO BE IN NEED OF REALITY CHECKS
I’ve always gravitated towards watching Home and Garden Television (loving HGTV for me, started at a very young age) and over the years, I have wondered what is going on in the heads of people who say things like:
“3000 square feet? That is WAY too small for us [2 people and a dog]. We need at least 3 bathrooms and 5 bedrooms.”
“I DEFINITELY need a game room, an office for each of us, and a wine cellar, his and her walk in closets, his and her sinks, with a playroom for the kids, and a full guest house…”
“OMG look at how tiny this bedroom is! You can barely fit a California King-sized bed and all my furniture in here!”
[Reality check: The bedroom was the size of my studio apartment where I lived with BF, which was around 600 square feet]
My face during all of this: O_o
NOT FAULTING PEOPLE WHO CAN AFFORD THIS AND WANT IT
To be clear, I don’t really care if you want to spend 90% of your paycheque on a house you can’t really afford without the interest rates staying so low, and without that 20% down payment that you should really save up for before buying a home.
It’s your money, not mine.
(It’s also to your financial ruin, not mine.)
Did you know that the average long-term mortgage rate is 8.69%?
If you can’t afford a home that has an interest rate higher than current rates around 3.88% – 4%+, then you can’t afford that home.
Just look at the historical rates (we humans have short memories!)!
~30 years ago in 1983: 11.45% – 12.71% as a mortgage interest rate
Today’s numbers are positively shocking, considering how low they are.
If you know all of the above, and you are STILL able to afford that huge house even at an 8.69% interest rate over a period of 30 years, and you’re still able to save 25% of your income into retirement, by all means, go ahead!
BUYING THE HOME TO FIT THEIR FURNITURE
Another thing that made me snort in disbelief is when people say things like:
“This house has GOTTA fit my 60-inch wide screen TV!”
“This bedroom is NOT going to fit all of our furniture”
It makes me laugh because it seems like they’re buying a house to fit the furniture and their things, not the other way around.
It amuses me to no end.
IN SOME PARTS, A NORTH AMERICAN BEDROOM IS THE SIZE OF A HOME
In New York City, space is a premium — we rented a 500 square foot apartment for $5000 a month about a block away from Central Park.
That’s $10 per square foot in renting alone. Can you imagine BUYING it?
To put that into perspective, we stayed in a very nice area of Montreal in a 600 square foot apartment, paying $700 a month. That’s $1.17 per square foot, or about 9X less than in NYC.
Of course, true New Yorkers put up with either a long commute or a closet to call their home because they want to live in the “greatest city on Earth”.
(For the record, I didn’t enjoy living in NYC as much as I thought I would. It was exciting for the first few months but then became just like any other city, just with more places to spend your money (shops & restaurants), ill-maintained cabs with squealing brakes and trying to sidestep the constant rush of gawking tourists standing in your way when you’re trying to get to work.)
In addition, having traveled to Europe and Asia, and having stayed in what they called a “bedroom” because there was a tiny window in the 120-square foot hotel room, it makes you realize just how distorted our view of how large a home should be these days.
Note: These tiny hotel rooms were formerly APARTMENTS. Actual APARTMENTS of 120 square feet. They had a second level I think (loft), with a ladder.
Even a nice apartment in Paris with about 800 square feet of space came at a premium, not unlike NYC.
We may have all heard the statistics but it bears repeating again:
Homes have increased exponentially in the past, and in the 1950s, an average of 1100 square feet.
Today, an average home size is about 2349 square feet.
Can you imagine if you’re poor and living in the slums?
Whole families live in 400-square foot abodes, which includes a counter for the “kitchen” and a space in the corner for a “bathroom”.
Privacy? You can has none.
Beijing China: A photograph I took of someone working outside of her home.
Her restaurant is literally on the street. Note the menu to the left, and the water to the right.
SO HOW MUCH SPACE DO WE REALLY NEED?
Obviously my opinion doesn’t matter when it comes to how much space YOU think you need for yourself, but I reviewed my own needs and came up with this number as a guess from the way we’ve been living for the past while:
600 square feet for 2 people (quite a comfortable size in a studio apartment with a separate kitchen and bathroom).
Perhaps 800 square feet if we had 2 kids, which would include at least one separate bedroom for us (the kids can sleep in the living room and learn how to share).
Maximum: 1000 square feet if we want to get fancy and give 2 kids a room each.
(Right, like THAT is happening… Just kidding.)
This doesn’t sound like a lot of space to many, but it’s more than enough.
1000 square feet would do it.
I mean, it was certainly enough for folks in the 1950s!
WAIT, BUT YOU’RE AN ECCENTRIC MINIMALIST, SO THIS ISN’T A FAIR COMPARISON TO NORMAL PEOPLE!
I’ve stayed in plenty of homes and visited plenty of friends’ homes who have had about 1000 square feet for their entire family.
It felt rather spacious and “just enough space” rather than too much.
To further prove my point, my parents’ have a home that’s about 1500 square feet (er… perhaps more now that I think about it, closer to 2000 square feet, but let’s just say 1500 because I don’t know for certain other than the room sizes themselves), and they are definitely “normal”, with the emphasis on “normal” being that they’re certified border-line HOARDERS.
Note: This doesn’t include the garage, front yard or the backyard but no one lives there, because it’s part of the lot size.
From what I can see, at least half of it goes unused in terms of regular living purposes. The rest of the space is just storage for all their JUNK.
I’ve been casually observing their habits over the past few years, and came to this conclusion:
- Kitchen/Dining Area: 375 square feet
- Master Bedroom: 145 square feet
- Bathroom: 120 square feet
TOTAL USED SPACE: 640 square feet
The Kitchen/Dining Area is the hub of the house. My parents have an office in there, and basically spend about 80% of their waking hours in that room, doing work, eating, watching TV, etc.
( I too, spend 80% of my waking hours in the kitchen, because it’s near all the food and cooking going on, but that’s neither here nor there )
But let’s say that my parents use another room just to escape from each other once in a while, or maybe that room is for guests or an office space.
- Escape Bedroom / Office Space / Guest Room: 120 square feet
TOTAL USED SPACE WITH BONUS BREATHING ROOM: 760 square feet
About 750 square feet should do it nicely for a family with 2 kids, or a couple like my parents who need a little extra space to avoid having to bite each other when they’re feeling snarly.
Not including the hallways which probably add another 240 square feet.
Beijing China: A photograph I took of a family’s dining room on the street.
They live just inside that alley but there isn’t enough space to eat inside.
YOU’RE PAYING FOR THAT EXTRA SPACE, YOU KNOW..
That means that they’re paying about double the amount of room that they need (1500 square feet) to house their junk, when they only use about half, or 760-1000 square feet to live.
If you consider the price of houses these days around the $500,000 mark reasonably close to downtown Toronto (e.g. a half hour away), that’s $250,000 for storing your junk, and $250,000 to live.
Interesting, don’t you think?
I came to about the same space needs as a minimalist, versus my parents the Hoarders, the only difference is that I could be flexible and live with less space than 750-800 square feet (if I needed to, not that I might choose to do so), whereas they have too much junk to do that.
I think this is a pretty interesting exercise to go through, to see which rooms in the house you use, and how much space that is (if you’re anything like me, you should measure it and not eyeball the space..)
HOW MUCH SPACE DO YOU REALLY NEED?
Disclaimer: I am not posting this in an attempt to ram this Anti-China bit down your throat in a militant manner.
I am doing it because I didn’t know about it before, and I wish someone had informed me.
Or if I had been smart enough to have taken initiative to inform myself.
As always, do your own research, come to your own conclusions and decide for yourself.
It doesn’t matter to me either way, but I am sticking to my convictions and what I think is correct by putting my money (literally) where my mouth is.
There is an excellent blog post from Rants from The Rookery that has been updated over the years called: Tell me why we should trust anything made in China?
I won’t repost the entire list of what has been linked to in there, but here are the really scandalous ones:
- China’s poor treated to fake plastic rice (made from potatoes and plastic)
- Pulverized lime (inedible product) used to bleach flour from China (makes it heavier = more $$)
- Melamine in baby food, pet food chocolate and animal feed
- Asbestos found in children’s toys
- Tainted animal feed with wheat gluten from China given to farmed fish in North America
- Tainted toothpaste with diethylene glycol (used in car engines)
And the list goes on.. and on… and on.
You will also notice that either on purpose or not, a lot of the article links that The Rookery has linked to, have mysteriously disappeared or are “unavailable”.
Come to your own conclusions on that.
Here are a few more articles I found on my own just by searching for about 2 minutes:
- Carcinogens found in Chinese-made sauces
- Cheap $2.44 Flip Flops from Wal-Mart caused chemical burns (…allergic reaction my butt!)
- Cadmium and Lead found in drinking glasses made in China
- Lead and Cadmium in your pretty pottery and tableware
- Can you get lead poisoning from old dishes?
- Arsenic found in Mott’s Apple Juice with concentrate from China
Photograph I took in Beijing
Then you read this on forums:
“Would you hang plates in your home if they had lead-based paint on them?
Someone just asked me if I wanted some decorative plates and a plate rack that she didn’t want anymore. I said, “Sure!”
And they are pretty. Then she told me they had lead paint on them, and it felt awkward to say I didn’t want them after all.
She made a big deal about washing her hands after she touched them. :confused: One of her kids has a mild delay, and she seems to be getting rid of toxins in her home.” (Source)
My highlights are in red. AND SHE STILL TOOK THEM!
Read the response to the others who said: Yeah hang them up but don’t use them…
“Good. :001_smile: They’re hanging on the wall now, and I love them! I want to redecorate now...“
I would NOT be taking lead-anything from anyone. In fact if I had lead-done stained glass windows, they’d be gone in a heartbeat.
It’s like saying:
Oh yeah, just a little toxicity is fine. You won’t die RIGHT AWAY, maybe in 20 years, or with other toxins, get brain tumours, but .. hey, we all die some time right?
If you read the notes and the instructions carefully, you might even find a company that says: Hey we never asked you to EAT FROM or COOK WITH those pretty plates. They’re just for decoration, not for use.
In addition, I’d like you to understand that they don’t mention “China” in many reports, but they say “Imported”, because it sounds better than “China” or “PRC / People’s Republic of China”.
WHAT THE SUPPLY CHAIN OF A COMPANY ‘SOURCING’ IN THIRD WORLD COUNTRIES LOOKS LIKE
- Open a company
- Design things in the U.S. or Canada
- Find a Chinese factory to make your stuff
- Receive a sample from said Chinese factory that is undoubtedly perfect
- Be absolutely THRILLED that it costs 90% less to make the product in China vs North America
- Get a report / test on the sample to make sure it meets health and safety standards
- Give your business to the Chinese company
- Import in and sell your designs to your fellow citizens
- [Non-Existent] Obtain regular, random checks on your imported products to ensure standards
- Continue selling, until someone gets sick and then another, and another.. and another…
- Bleat repeatedly about how it is “Designed in California” or “Designed in Toronto”!!!!
- Become surprised when your Chinese supplier started cutting corners to make more money
- Deal with the PR nightmare that has blown up in your face
- Go out of business or Switch Chinese suppliers and do it all over again
Samples from companies are going to be perfect. They want your business.
Photograph of the RMB stack we had before going to China
Once they have your contract and your money, they’re doing what they want behind closed doors, unless there are independent, non-Chinese managers wandering about, questioning them every minute of the day if they see something suspicious.
How likely does that sound?
Even worse, if you’re searching for a bargain, they’re going to give you a bargain, but it won’t be the same product. If it’s too cheap, it is too good to be true, and this applies to everything, not just purchases:
- Potential employees or freelancers who ask for significantly less $$$ to do “exactly the same job”
- Services that claim to do everything you asked for, for only $10
WHAT THE SUPPLY CHAIN OF OUR GOVERNMENT DOING THE CHECKS LOOKS LIKE
Frankly, with all the reports of all the crap that has been imported from China making it through our “health and safety checks”, I am not convinced that the government does more than read the import label of ingredients for “Lead” and “Cadmium” or other toxins.
I wouldn’t doubt it if 50% or more of things “Made in China” that have made it to the U.S. and Canada are tainted, and we don’t even know it.
I don’t trust our government to be able to be THAT diligent in checking.
Heck, even in Germany which is pretty organized as a country and part of the EU, found toxic chemicals in bubble tea (tapioca balls).
If in Europe, they’re unable to fully protect their countries with their stricter laws and regulations, how can we expect to top that?
HOW THE CHINESE GOVERNMENT HANDLES THE PROBLEM
This is a trick question right? Because they don’t.
The problem does not exist, and it is all in your head. Want a few examples of sheer ignorance being bliss for the Chinese government?
- China turns to a Madison Avenue agency for a ‘makeover’ — Right, because it’s just the marketing of your poisonous products that we care about… /sarcasm
- China forced the Pollution Report from the World Bank to be modified
- Plus countless of other articles about how they keep promising to “do better” and do “checks” — can you really believe anything the Chinese government says?
The everlasting smog cloud in Shanghai (my photograph) and this was a “CLEAR” day..believe it or not
I believe it, but I’ve also experienced it. When I visited, on my second day my throat was hoarse, I fell sick and I really felt disoriented and fatigued.
From all the reports I’ve heard, and things I’ve read, they’re so poor that they’ll pretty much do anything for money, and this can indirectly transfer to us by way of cheaper, more toxic substitutes added to food and products that shouldn’t be there.
I don’t want to believe that they are malicious, but perhaps ignorant about safety is the better word. Anyway, who can blame them with a government that pretends things never happened?
YOU’RE JUST PARANOID, IT ISN’T ALL CHINESE PRODUCTS THAT ARE TAINTED
Yes I know, you’re right. It is also products from Third World countries like Bangaldesh that are tainted, and other countries that companies outsource to.
I have to be vigilant on anything that sounds too cheap and too good to be true, and I am aware that I sound paranoid (hell I sound paranoid even to myself), but do you really want to believe that what you’re using is not tainted or cheaply made to some extent?
Have you ever asked yourself: What is the cost of that?
Take a whiff of that Dollarama bag full of goodies you purchased recently for only $5.
Do you smell anything unusual? Let’s say… a kind of stink, embedded in the plastic?
What do you think that is – the smell of properly made plastics (if there is such a thing)?
I had this Nexxtech Universal Charger set (for when I travel), and even after 3 years of being among my things, it smells like the kind of nauseating plastic odour I have come to hate in all dollar stores.
(It’s in the garbage now.)
WE ARE ONLY HEARING WHAT HAS BEEN REPORTED
Can you imagine that if we are only hearing what has been reported, what has gone UNREPORTED?
They say that people tend to underreport things, some other examples include: victims of rape, victims of scams and phishing, etc.
We don’t want to say how stupid or how bad things are because we feel bad for whatever reason — shame, guilt, or sheer gullibility.
…. so can you imagine these layers of secrecy?
- The Chinese government doesn’t let the news leak
- If the news HAPPENS to leak, they try to clamp down on it or blame other countries
- We may or may not pick up on the story to be able to report on it (or not at all due to politics)
- Our governments try and get the Chinese to get on board with safety standards
- The Chinese government says they’ll do it and vow to NEVER do it again (read: get caught)
All of that, trickling down to consumers is just a SMALL PERCENTAGE of what has actually happened behind the scenes.
We consumers are outraged but then our short memories forget all about it.
We go about our day, practically ACCEPTING that Chinese-made goods will always carry a potential of killing us from toxins and additions of crap and poisons to cut costs and save money, and we seem to be totally fine with that.
OKAY … FINE….. BUT IT ISN’T ALL THE COMPANIES DOING THESE THINGS!!
Yes, I’d agree that it isn’t 100% of companies, but … WHICH ONES ARE THEY?
I don’t know, you don’t know.
As a result, I’ve been making a list of everything I own with its Manufacturing Country of Origin, and for the most part, they’re all being a bit cagey.
You get a lot of emails that aren’t specific, and don’t list where they have their manufacturing plants or how they source their fabrics.
Photograph I took of rice in a grocery store in China. Is it fake plastic rice? Who the hell knows?
The worst, are the ones without ANYTHING written on their products.
On their websites, only a few companies (mostly European), such as Stabilo from Germany for highlighters, pencils and writing instruments actually have an FAQ and a whole list of questions that state:
Where are our products manufactured?
How are they manufactured?
What do you use in them?
Examples from Stabilo:
- FAQ: Dangerous substances such as formaldehyde, benzene or trichloroethane are not used in STABILO products
- FAQ: Where are Stabilo pens manufactured?
MAC makeup brushes are also able to be checked on the brush handle if they are made in France, Japan or China. Source
I checked my MAC brushes and saw this very faint stamp at the bottom of the handle: (The other two handles were a lot more faded, and less prominent, but you can still see faint traces of the country of manufacture.)
Those are really properly-run, careful, and trustworthy companies in my opinion. I mean, I’ll avoid any brushes from MAC made in China, but still.
I appreciate them being honest about it so I can make a choice as a consumer afterwards.
Otherwise, you’d be hard pressed to find the answer.
Only when you email them, do you get a response.
ARE WE REALLY GOING TO ONLY TRUST “OFFICIALS” OR THE MEDIA TO HELP AND WARN US AHEAD OF TIME?
We have come to the point where we ignore our own basic human rationality and instincts because we have been told to always trust what officials say.
They’ve even done studies on this that we are SO trusting of people who are official-looking and sounding, that we will follow them, even if they aren’t really in charge.
A study was done by “Bickman in 1974 that had research assistants “order” people passing by on the street to do something. When they wore security guards uniforms, almost 9 out of 10 people obeyed.“ Source
Other officials include the government, news reports, things you see on TV, hear on the radio or any kind of official-sounding body or organization.
I know this sounds hypocritical because I am practically citing all of those sources, but I also have a personal, suspicious, spidey-human sense that this is not all hogwash in addition to listening to the reports and news.
Photograph of a common British saying during the War
The media is also controlled by a few people. This really sounds like a paranoid, conspiracy theory, but it’s true. I only managed to find Rants from the Rookery by Googling the correct keywords: “Can we trust products made in China“.
I tried clicking on their links, and a lot of them have mysteriously vanished for whatever reason (I’ve started saving and PDF’ing key articles as a result).
How is it that only someone like an amateur blogging website, can list out and put together all the cases over the years of suspicious, repetitive reports of China NOT handling the problem?
HOW ABOUT OTHER PAST EXAMPLES OF BEING SILLY TO TRUST OFFICIALS?
Blood-letting as a life-saving measure.
Lead in makeup
Cocaine in “medicinal” drinks (e.g. Coca-Cola, hence “Coca” in the brand name; no cocaine in it today)
What do all of the above things have in common?
They are things that everyone who was official — the government, doctors — kept saying were fine and dandy for your health.
Doctors were recommending patients with nervousness to smoke cigarettes to help their voice and calm them down. (Source: Watch The King’s Speech. Or just Google it.)
What else do they have in common?
They’ve all been proven to be hazardous to your health, or just plain addictive and not good for you.
Oh wait, except Teflon in Canada.
We’re still allowed to heat up Teflon here, and release 16+ chemicals into our food to kill ourselves, even though the FDA in the U.S. has ordered all companies to stop producing that PFOA chemical by 2015.
Still think we are infallible humans who should trust official people without taking any kind of hefty grains of salt?
OKAY… SO MAYBE OUR GOVERNMENT ISN’T BEING PURPOSEFULLY MALICIOUS
Maybe our governments aren’t being specifically malicious and in denial as the Chinese government, but let’s all agree that our governments do NOT have the resources or the capability to check and test everything that is imported, to ensure it is safe for their citizens.
Our taxes would increase, and NO ONE wants to pay more taxes.
Do you really think they want to tell you: Hey everyone, we’re going to start testing and checking stuff purchased overseas, and your taxes will go up about 30% as a result. Are we cool with that?
Plus, they are leaving the responsibility of being a conscious person UP TO YOU.
You are your OWN PERSON.
Just as they don’t meddle in your finances, or tell you how to raise your kids, it is your job to be a vigilant consumer, and if you want to continue your practices of being cheap and living off Dollarama goods, who are they to stop you?
“It’s a free country.”
I heard 2 other interesting points from a rather cynical commentator (a doctor) on the French-from-France radio (Les Grosses Tetes):
- Governments like France are secretly kind of happy that people die earlier
- People who work there and see the problems, only tell their immediate friends & family
He had a point.
It’s actually better for governments that give government pensions to citizens, that we don’t last very long past the age of 65.
After we stop working and we retire, we are a burden on society.
We use universal healthcare, we have to obtain an income of sorts to live in retirement, and we aren’t producing any more.
This is the harsh reality that I think we sometimes forget to acknowledge, because we want to believe that other people care for us as if they’re our immediatefamily.
This is not all hogwash, because they care …. but only to a certain extent, which is why they tell their family and friends about what they discovered at work, but we are essentially nameless and faceless.
I guess they aren’t really allowed to blow the whistle independently on anything without an official, rather non-descript bulletin such as this one issued by Health Canada about lead-tainted crystalware. They have to go through official channels. If you read the bulletin carefully you will notice 2 things:
- No mention of which countries that do this — China is one of our, if not THE biggest trading partner
- A short vague “hint” about tableware: “Use lead-free tableware when serving children or pregnant women ” — How about when serving ANYONE?
If children or pregnant women can be affected by this, so can adults.
We are all humans part of the same race, after all. I don’t believe in this “trace amounts are fine” crap.
No amount of toxins are acceptable because everyone reacts differently, and perhaps MOST healthy adults would be fine, but what about my family members with destroyed immune systems after years of chemotherapy?
They can’t even get a cold, without a fear of dying from it now.
THE ONES WHO KNOW ALL THE DIRTY DETAILS, MAY BE THE ONES WITH THE MOST RESOURCES TO STAY SAFE
The ones who are REALLY in the know at the government, are rich enough to purchase non-tainted items at exorbitant prices.
They don’t need to worry about the problems of middle-class folks who are working on budgets, and seeing that something for $1 is far better for their pockets than $10.
As an example: Who the heck can afford to buy Cosabella panties at $32 a pair? Or Cosabella bras at $100 a pop?
At La Senza, Victoria’s Secret, Forever 21, Old Navy and other such stores, underwear comes at $3 per pair, or $30 for 3-5 of them, and bras are only about $15. I know, because I bought my underwear there, thinking: HOW CHEAP!
Recently, I tossed them all in the garbage and I purchased Cosabella panties at $32 a pair, but I am only planning on buying 7 at the most, and doing laundry every week, and 2 pairs of bras.
I’ll be out about $479.12 after sales taxes, just for BASIC women’s underwear.
I can afford it without breaking the bank, but how many people aside from me, can afford that?
THIS IS REALLY A CASE OF MONEY VERSUS YOUR LIFE
It’s just money.
You can’t use your savings if you’re dead.
You can’t bring your children back to life if they’re poisoned as a result of it.
We can be excited that we bought $1 worth of goods at a dollar store that would “normally” cost $5 in another store, but that excitement is unfounded.
Photograph I took of the (probably tainted) yuan/RMB money when I visited China
We’re only happy that we saved $4, but we don’t ask ourselves basic questions like:
- How is it possible that they can make something for $1 that costs $5?
- It looks the same, feels the same, but is it really? (Probably not, will break in no time)
- How did they make it so fast for so cheap?
I am absolutely guilty of this, and it is stopping as of yesterday.
I am shaking my head and feeling rather sick at the whole thing.
But trace amounts or not, I am not taking a risk for a few bucks or more.
I will willingly spend $10,000 to replace all the basic essentials I need (underwear being one, tableware being another), and suck it up as my CHOICE to not buy cheap crap and take the risk of killing myself.
NOT USING ANYTHING OR KEEPING ANYTHING FROM CHINA
I went through all my things, and am currently making a list of what is Made in China.
I will be posting a follow-up of what I find if it’s interesting, and at the very least, how many things I actually own, what I kept and what I got rid of.
I also went through all of my parents’ items, and tossed all the tableware and things that we put our food on, and heat up our food on, right into the garbage.
The most important things are what you use to put your food on and heat up.
The second most important, are your clothes and jewellery, but you can use your own discretion for this part.
Underwear for instance, is more easily absorbed into your blood stream being near private parts, than clothing on your arm, although your skin is an organ and can absorb everything.
So far, we have done research and come to the following brands who have stated on their websites that they do not use toxins; is it any surprise that most of them are French?
They’re all expensive brands, so don’t squawk about the price.
I warned you.
- Le Creuset — $515 for the large pot; Watch out for their ceramics, they are made in Asia
- Staub — All Made in France, but who knows, they could be moved to China soon
- Alpico — Fantastic tableware from France (e.g. $30 a plate)
- Duralex — Glassware from France (about $4.50 – $7 per glass tumbler)
- Pillivuyt — Porcelain from France
- Emile Henry — Bakeware from France
- Wolford Tights — Made in Austria
- Stabilo Stationery Products — Germany
- Equipment Clothing — After 2010, they are all produced in China
- Cosabella Intimate Clothing — Made in the USA of European Cotton
Other things to remember:
- Painted and decorative items are just for decoration; unless it states explicitly: Safe to eat and use, assume it isn’t.
- If a mug has lead-based paint on the outside, but you think it’s safe because you drink the water on the inside of the glass, then you better be careful to wash your hands for 15 seconds each time you touch that glass because lead can transfer from your hands to your mouth
My Macbook Pro keyboard (tainted, I’m sure..)
I also know that ALL my Apple iThings come from China (really, what doesn’t?).
I am trying to see what I can do to avoid prolonged exposure to these items that I can’t get rid of (need a laptop to work), and to try my best to lower my exposure.
If you can come up with anything else that I should be aware of, or may not have mentioned, please let me know.
P.S. Expect my budgets to be well-broken this month and until we go through and replace all the major things we need to.
We obviously will not replace the car (I’m sure things are made in China in there too), so we aren’t going to extremes and becoming hermits living on an untouched mountain, but we will be making a great effort to change our things.
Edit: This post was written before my other one where I asked if anyone felt guilty for their success.
Some great points & comments came up in the post, and I realized I wasn’t clear enough regarding my position (blame it on amateur writing!!).
Hopefully this post helps clarify a bit.
This BBC World News – Changing Fortunes (New Patterns of Wealth), had a great Episode #4 on Feminine Power.
You can see clips from the episode, but I wasn’t able to get the full episode, although I watched it on TV on February 23rd 2013.
STATS FROM THE VIDEO:
- The #1 vector for global growth for the past 10 years has been women
- Globally, $20 trillion is now controlled by women, which will rise by 40% over the next 5 years to $28 trillion
- The richest women in the world are by virtue rich from inheriting or marrying into it, but the number of self-made women, is on the rise
The video profiles 3 amazing women with their incredible rise from poverty:
- Zhang Lan – South Beauty Restaurant Chain Founder and Owner
- Natalia Vodianova – Top supermodel
- Kalpana Saroj – Real Estate magnate owner
ZHANG LAN (CHINESE)
She used to be part of the Imperial Family but during Chairman Mao’s “Great Leap Forward”, her entire family (she was a baby), were banished to the mountains.
They had nothing to eat, no milk for her as a baby, and she got rickets at the age of 3 from malnutrition.
She ended up picking and eating mushrooms that grew on people’s graves after the rain.
The family was eventually allowed to return to Beijing, and in 1989 she moved to Canada to live with her uncle. She made in one hour, the equivalent of one month’s salary in China.
She saved $20,000 2 years later, and moved back home to Beijing to follow her dream.
NATALIA VODIANOVA (RUSSIAN)
She lived in an 18 square foot room with 4 others in her family in Russia and if they had something to eat the next day, living day to day, that would be great.
For instance, they 1 box of apples and 1 box of bananas to sell on the street – they had to manage the Russian mafia, police, and pay everyone off.
Then they got into debt, and faced eviction, and at 16, she got a lucky break from an international modeling scout and went to an audition, and 6 months later she was in Paris.
After landing a Calvin Klein contract, she knew she had made it.
KALPANA SAROJ (INDIAN)
She now owns about $270 million in real estate in India, but in the 1990s she grew up with nothing in the slums, and her daughter still remembers the days when they had nothing.
She had her parents, her 2 sisters, and her brother, for a total of 6 people living in an area of 400 square feet, which included a counter for the “kitchen” and a wall in the corner to indicate it was a bathroom.
She wanted to be educated but the society she was in, it wasn’t important to educate girls, especially in India.
In the 7th grade she got married at the age of 12; her in-laws swore and beat her. Her father took her back 6 months later, and she tried to commit suicide by taking poison. She was saved by a doctor, and decided to change her life by starting a small sewing business and saving enough money ($5000) for a downpayment on a building that was overrun with gangs in the area, which later grew to $100,000 in value.
In a meeting, 4-6 men wanted to assassinate her, but one well-wisher went to her home, and told her to get out before she got hurt. She refused and bought a revolver (gun), which is why people call her “The Iron Lady”.
MANY WOMEN GROW UP WITHOUT NARY A CHANCE TO SUCCEED
I am very, VERY lucky to live in a country, and to have grown up in a society that allows women to work and climb the ranks if they choose to.
$0.78 to a $1.00 or not, I am happy that there is a chance to make anything, considering that many countries don’t even acknowledge women as citizens.
It was even in the most recent times that we were allowed to work, and I think sometimes we forget that.
They’re in the background, covered, and/or non-existent in terms of economic power.
From what I’ve observed in reading about them, and watching documentaries, women in Africa, tend to do 90% of the work. They cook, clean, raise the kids, grow food, harvest it, and try to make a living selling what they’ve grown.
The men? They seem to sit around doing jack squat under the trees most of the time, blabbing to each other about their situation while their wives work their butts off.
Of course, this differs from country to country in Africa, but the main message I get from African women is:
In Africa, it is better to have been born a boy than a girl.
That’s just heart-breaking that something like whether you have reproductive organs or not, and something so natural and not at all decided by anyone, determines and colours the rest of your life.
Then you look at the Middle East where young girls are being beaten, raped and harassed for wanting to go to school and get an education, being called ‘sluts’ for showing their ankles, and you are ever more grateful for what you have, no matter how little it may seem to you.
Finally, you look at India.
In the video above of Kalpana Saroj who rose from devastating poverty, even she admits that they’re misogynists as a culture there. Women aren’t allowed to rise above their station, so to speak.
It’s tough to be poor, it’s even tougher to be poor in a country like India.
LOOKING AT MY OWN MOTHER, THE ROLE MODEL
She’s not a millionaire by any means, and doesn’t even think she’s that lucky, but she grew up very much like those women, living hand-to-mouth, in the same kind of country with that kind of mentality of women being subpar to men.
There were many hungry days, she said, and I think her rather matter-of-fact stories stuck with me when I was a kid, growing up, and listening to how she lived.
There’s no posturing, there’s no whining, just .. matter-of-fact re-telling.
I couldn’t fathom not having anything to eat, and I would prod her and prod her to tell me what they REALLY ate, because having grown up with a full belly pretty much my entire life, it boggled my mind to think that someone could go hungry and not have the cash to even buy a banana to eat.
She could just look at me, shrug, laugh and say:
Whatever we could find, whatever we could steal from the neighbour’s trees, and what was given to us by the church and countries bringing food rations for the poor.
It only struck me just recently that I can’t even go 12-hours without eating to take a blood test, and she went days without food. I think I would have had to make do and accept the fate while trying as hard as possible, as most people in poverty end up doing, but just to imagine no food at all, is painful enough.
This is the reason why I am a bit soft-hearted to those who grow up in poverty (believe it or not).
They don’t have the same life opportunities to be with people who are all going to go to college too, and the groupthink is so different at that level. You aren’t thinking about going to college, you’re thinking about what you’re going to eat tomorrow, if your brother will be able to make some money, if you can sell those vegetables you grew for more money to be able to help feed your family.
When you take all of the above into account, it is a stellar accomplishment of my mother to have made it out of such dire, horrible poverty to a middle-class kind of life.
She made it, and I tell her how amazing that is each day that she did.
Her leap out of poverty is far greater than if I, a middle-class-reared kid, will reach the echelons of the upper-middle-class, even the 1% in Canada.
It is nothing for me to move from middle-class to upper-class, because the hard work has already been done by my mother moving from dead-end poverty to middle-class.
That is attainable, which is also why I am so hard on fellow middle-class folks who whine and bitch about their situation, and how they’ll NEVER become rich, without really knowing that it could be a lot worse (and it is, for a lot of women).
They don’t even need to think about where to even earn an income to buy food, and if they don’t want to sacrifice their little luxuries like driving a car instead of walking to the corner store, then they don’t get to bitch about it, if the solution has already presented itself.
All they have to do is save by sacrificing the unnecessary to reach their goals.
All of the above, makes me even more grateful for what I have.
Investing Series: What is the difference between an Exchange-Traded Fund (ETF) and a Mutual Fund (MF)?
This is a part of the Investing Series.
A common question that I had when I started investing years ago was what the difference between a mutual fund and an exchange-traded fund was.
QUICK & DIRTY ANSWER:
If you’re familiar with mutual funds and how they work, Exchange Traded Funds (ETFs) are basically the same thing.
The major difference lies in mostly in how and where you buy or sell it.
You can buy an ETF on the stock exchange like a stock, but you can only buy certain mutual funds at the banks that created those mutual funds.
If you want to know what index mutual funds and index-ETFs to buy for U.S. or Canada, scroll to the bottom of this post.
LONG & DRAWN OUT ANSWER:
I like to start with the basics instead of assuming everyone knows everything, so here goes.
Skip sections as you see fit.
WHAT IS A MUTUAL FUND?
Already wrote a post on this.
Read: What is a mutual fund?
WHAT IS AN EXCHANGE-TRADED FUND?
It’s the same idea as a mutual fund: people pooling their money together to buy stocks.
The difference is that while mutual funds are usually only offered by the banks themselves, ETFs are traded and readily available to anyone on the stock exchange.
This matters because since mutual funds are only offered and “professionally managed” via banks, you can only buy a TD Mutual Fund at TD Bank and only if you are a TD customer.
Likewise, you can only buy a ScotiaBank Mutual Fund at ScotiaBank and if you’re a ScotiaBank customer.
ETFs are different in that anyone can buy them because you can buy them on the stock exchange, which is open to one and to all, and theoretically speaking you can sell them when they start to go down in price, and buy them again when they’re on the upswing.
(However I would just suggest buying them and not trying to time the market or trade them often)
Take for instance Vanguard or iShares ETFs that are based in the U.S. — Canadians can buy them on the stock exchange, even though we don’t live in the U.S., we are still able to buy them in U.S. dollars (although Vanguard is now in CANADA!! Yay!! Vanguard CANADA!!).
Vanguard also issues mutual funds directly on their site, that are the exact copies of what they offer as ETFs as well.
Same stuff, but with a different way of buying into it.
SO WHY WOULD I BUY A MUTUAL FUND AND NOT AN ETF?
Taking index-tracking funds out of this particular answer, and looking at actively managed funds, you’re presumably buying expertise and experience.
Actively managed mutual funds run on the idea that you are buying into the expertise of the managers who have been hired by these big banks, and these bank managers secretly kind of look like this**:
**Okay so while they don’t really look like this toy, I see their ‘expertise’ as such — all fun and games, in your face, and delivering flashy returns but when things go down south, they shrug and say “Ooops”, because it wasn’t their money in these funds.
They’re banking the sweet, sweet bonus that they earned that year from SELLING those funds.
It kind of goes like this:
So-and-So at Bank Whoozit has this-and-that degree in Whoo Finance, and she is such a dynamo, she can pick amazing stocks in this actively managed mutual fund and get you a return of 50% a year, guaranteed.
In contrast, if you went to a different bank, Bank Whizzit who claims to have THE BEST fund managers you can find, you’d find another So-and-So there, who claims to be able to get you a return of 51% a year!
You get the drift.
If you bought an ETF, you’re also buying into the same expertise, possibly with another person or company, and probably with someone who doesn’t work at your bank.
It just depends on what kind of expertise and whose expertise you trust more with your nest egg and how much you’re willing to pay for it.
WHAT ABOUT IF I JUST WANT TO INVEST IN INDEX FUNDS?
If you’re only investing in index funds, it basically works out to be the same thing whether you are with an index mutual fund at a bank, or an ETF that tracks an index on the stock exchange.
As I mentioned above, sometimes it’s exactly the same thing — it’s just how you want to buy it (with an account, or on the stock market).
I mean, if you’re already thinking of index funds rather than actively managed funds because in the very long-term it always outperforms actively managed mutual funds, it means you’re already on the right track.
Photograph I took of the Shanghai Maglev train station
So assuming you invest in these 4 categories for index funds:
- Canada (or your country’s index fund; I put Canada because I’m Canadian)
- U.S. (generally a standard country to invest in, as it drives a big part of the world economy)
- International (I classify this as: “Not North America” ; includes Europe, Asia, Africa, Australia)
- Bonds (your country’s bonds)
You can find these types of index funds at basically any bank (just look for the ones that say words like “this fund seeks to track the index of…“, and they’re available as ETFs as well.
ETFs may have lower MERs or fees than index funds at your bank*, but you shouldn’t neglect the fact that it will also cost you money to buy and sell ETFs, because they’re traded like stocks.
*This is very true with TD Canada Trust mutual funds, even with their their e-series mutual funds.
I should note that some banks may charge you a fee to buy and sell mutual funds (also called a “load fee”), but from my experience with mutual funds, generally they’re no-load at banks, and essentially free to buy and sell if you’re the bank customer.
The main difference between choosing index mutual funds or index-tracked ETFs comes in when you look at the FEES you pay which of course, hinges on how much you have in assets.
SO HOW MUCH DO I NEED IN ASSETS TO BUY ETFS OVER INDEX FUNDS?
Where it generally matters is if you have about $120,000 in assets or more, but this has changed with the entrance of Vanguard Canada.
Now you need maybe about $50,000 – $60,000 in assets for you to buy ETFs and gain lower MERs than index mutual funds.
You can get a little bit of a deal by buying an index-tracking ETF instead of an index mutual fund at a bank.
You save slightly more money in terms of fees over the long-term, about $500 – $750/year if you’re willing to dive in to a slightly more complicated situation, and by that I mean:
- you have to sign up for another account altogether, which also leads to more paperwork
- you have to learn how to buy and sell an ETF on the brokerage system like Questrade Canada (which by the way, now lets you BUY them for free; Selling is another story.)
- you have to know what you’re doing in when you go to re-balance your portfolio (buy/sell ETFs)
- you can only rebalance about 3 times a year (assuming you buy 4 index funds) for these savings
The last point is especially important because if you touch your ETFs more than 3 times a year, either buying or selling those 4 index funds (which costs you money each time), you’ll lose out on any benefits in terms of fees, than if you just stayed at your bank with their index funds.
WHY THIS HAS CHANGED WITH THE ENTRY OF VANGUARD CANADA
However with the NEW entry of Vanguard Canada into the market for Canadians, their MERs are a lot lower than iShares or TD E-Series, think: 0.15% as an MER instead of 0.35%!
I have a post coming up on this next week in my Investing Series, and you save a significant amount of money even if you trade more often than 3 times a year with 4 ETFs.
WHAT ABOUT U.S.-BASED ETFS LIKE VANGUARD?
CAN I BUY THOSE IN CANADA?
Yes, you can.
In fact, the ETFs I am listing below from iShares, are U.S.-based.
There are two main points I want to bring up for this:
1. IF YOU BUY AND TRADE IN US DOLLARS, YOU’LL NEED US DOLLARS (and vice versa!)
If you buy and trade in U.S. dollars (this goes for buying stock, like Starbucks SBUX for instance, only trades in USD), you need to already hold USD in your account.
Otherwise, if you buy a USD stock or ETF, you will NOT have your CAD money convert automatically into USD to purchase the stock. They’ll let you buy it on margin (a.k.a. “credit”), and at the end of the month they usually ask for you to pay it back.
I really want to warn you to be careful about buying on margin because they WILL ask for the money at the end of the month to square up your account.
If you need to convert $CAD to $USD, they’ll charge you about 1% in currency exchange fees. It’s a bit of a headache.
That said, to avoid headaches, you can do what I do, and hold a U.S. dollar chequing account at a bank, and just link that up to your account.
Then you can just funnel in U.S. dollars into your brokerage account, and as they’re already converted, they’re ready to use.
I usually do a conversion of $CAD to $USD in my bank account (at TD who charges a fee for this) before I create a Pre-Authorized Debit (PAD) request in Questrade to take the $USD.
2. BE AWARE THAT U.S.-BASED ETFS HAVE AN APPLICABLE DIVIDEND TAX OF 15%
One thing I will point out for Canadian investors is that to be careful with ETFs that are based in the U.S. such as iShares or Vanguard, because any dividends you may be eligible to receive, will be subject to a 15% tax withholding by the U.S. government if they are not held in retirement savings plans such as an RRSP or a 401K.
This 15% tax is taken out before it reaches your account, even if you buy the Canadian version of this ETF (it’s just the U.S. ETF held in a Canadian shell).
You can recover this 15% tax as a partial credit if you’re conscientious and keen on keeping track of all this, but you have to fill out some tax forms to do so, which may not be your cup of tea.
That said, American-based ETFs are generally cheaper so it may be worth your time and trouble.
I have a post coming up in this Investing Series on dividends as an investment strategy that you might want to wait for, to learn all the Canadian tax implications of buying U.S.-based ETFs.
WHAT IS AVAILABLE FOR ME TO INVEST IN CANADA OR THE U.S. FOR INDEX MUTUAL FUNDS OR ETFs?
DISCLAIMER: The following is by no means a comprehensive, or detailed list of all the Index Funds or ETFs available in Canada or the U.S..
When reading the lists below, you are still responsible for doing your own research and asking a third-party professional to assess your situation if you need help.
WHAT ARE SOME INDEX MUTUAL FUNDS IN CANADA?
From my experience, TD Canada Trust E-Series is the best and cheapest set of index mutual funds you can purchase. No load fees (you don’t get charged to buy or sell them), and they have the lowest MERs I’ve found (in the e-Series only).
It is also the easiest way to deal with index fund investing in Canada, but not the cheapest depending on how much you have to invest.
Here’s the list of TD Canada Trust E-Series Mutual Funds.
If you’re already a customer (either with TD Canada Trust or TD Waterhouse*), you can buy these index fund names:
- CANADIAN BONDS = TDB909 TD Canadian Bond Index – e
- CANADA = TDB900 TD Canadian Index – e
- U.S. = TDB902 TD U.S. Index – e
- U.S. = TDB952 TD U.S. Index ($US) – e ***
- U.S. = TDB904 TD U.S. Index Currency Neutral – e **
- INTERNATIONAL = TDB911 TD International Index – e
- INTERNATIONAL = TDB905 TD International Index Currency Neutral – e **
*You do NOT need to open another account with TD Waterhouse to buy TD Canada Trust E-Series funds.
**Currency-neutral means it takes into account currency exchange fluctuations and takes into account the risk of that currency losing its value (also known as the practice of “hedging”). Generally speaking, the NON-Currency Neutral Mutual Funds are more volatile, and currency-neutral are less volatile.
***When it says ($US) like that, it means it’s held in U.S. dollars. Again, the fund hinges on how the USD fares.
WHAT ARE SOME INDEX EXCHANGE-TRADED FUNDS (ETFs) IN CANADA?
Remember, with the new policy that Questrade has going into effect for February 1st, you can buy ETFs FOR FREE. No commissions on the purchase, but if you decide to sell them, you will have to pay something, so try and save your $50 rebate in free Questrade trades to put them to good use.
This makes it even juicier of a purchase.
These are just some of the U.S.-based ETFs available in Canada to purchase.
They are pretty much the same as the U.S. ETFs offered by iShares (BlackRock) listed below, they just have a different ticker symbol and trade on the TSE.
- BONDS = XBB.TO – iShares DEX Universe Bond Index
- CANADA = XIC.TO – iShares S&P/TSX Capped Composite Index
- U.S. = XSP.TO – iShares S&P 500 Index C$-Hedged
- INTERNATIONAL = XIN.TO – iShares MSCI EAFE Index C$-Hedged
New entrant into the Canadian Index ETF market, and they’re cheaper.
Post coming up next week on the comparison.
- BONDS = VAB — Vanguard Canadian Aggregate Bond Index ETF
- BONDS = VSB – Vanguard Short-Term Bond Index ETF
- CANADA = VCE — Vanguard MSCI Canada Index ETF
- U.S. = VSP — Vanguard S&P 500 (CAD-hedged) ETF
- U.S. = VFV Vanguard S&P 500 Index ETF
- INTERNATIONAL = VEF — Vanguard MSCI EAFE ETF (CAD-hedged)
WHERE YOU CAN BUY STOCKS OR ETFS IN CANADA – QUESTRADE
If you use my referral ID with Questrade [ o0soehds ], you can get up to $50 in free trades, but you can buy those ETFs for free as they are now commission-free. If you sell them afterwards or change your purchase order, you will have to pay a fee.
You can enter this code [ o0soehds ] when you open your new account and after pressing “Enter”, it should immediately display what the deal is ($50 in free trades).
You can also hold RRSP and TFSA accounts in Questrade as well, and trade stocks or more ETFs in them.
Seeing the “.TO” at the end of Ticker Symbols:
Stocks or ETFs on the Toronto Stock Exchange, may have a .TO at the end of their ticker symbol depending on who you use to trade with, so don’t be surprised if you can’t find “XBB” on Questrade, but you find “XBB.TO“.
This is to differentiate between the same company ticker symbol being traded on different stock exchanges.
Questrade for instance, uses .TO in its ticker symbols.
Photograph I took of NYC
WHAT ARE SOME INDEX MUTUAL FUNDS IN THE USA?
What I will say is I’d really suggest looking outside your bank towards Vanguard or iShares, because they’re more than reasonably priced especially if you’re based in the U.S. with such a wide range of cheap index funds to purchase from.
Otherwise, talk to your bank, or poke around the internet to find some U.S. bloggers who might be able to help you specifically.
I really didn’t like the banks in the U.S., to be honest. They were throwing all these books and pamphlets at me of ALL THE FUNDS that they re-sell under the bank name, and if they thought I was going to sift through 300 funds in a book to pick a few that I wanted, they were crazy.
They didn’t have them available online to look at either. You NEEDED their books.
But I guess that was the point.
They wanted to confuse me with all this nasty paperwork so that I would tell them: Do whatever you want with my money! Just make it grow!
Then they’d erode my money over the years like a bunch of locusts…….
So if your bank offers mutual funds, they are sure to offer index funds as well but they may not be the cheapest in all of the U.S. in terms of MERs.
WHAT ARE SOME INDEX EXCHANGE-TRADED FUNDS IN USA?
Here are some index fund ETFs you can look at for the U.S. It is DEAD EASY to set up an account with them and ABSOLUTELY worth it.
All of their funds are listed online so you can peruse them on your own time.
- U.S. = VOO Vanguard S&P 500 ETF
- U.S. = VTI Vanguard Total Stock Market
- BONDS = BND Vanguard Total Bond Market ETF
- INTERNATIONAL = VEA Vanguard MSCI EAFE ETF
- INTERNATIONAL = VT Vanguard Total World Stock ETF
- U.S. = ITOT – iShares Core S&P Total U.S. Stock Market ETF
- U.S. = IVV – iShares Core S&P 500 ETF
- INTERNATIONAL = IEFA – iShares Core MSCI EAFE ETF
- INTERNATIONAL = IXUS – iShares Core MSCI Total International Stock ETF
- BONDS = AGG – iShares Core Total U.S. Bond Market ETF
- BONDS = ISTB – iShares Core Short-Term U.S. Bond ETF
- BONDS = ILTB – iShares Core Long-Term U.S. Bond ETF
I think that does it.
I hope I’ve given a painless (as possible) overview of mutual funds, ETFs and the differences and benefits between the two, taking into account some Canadian and American perspectives.
If anyone sees any discrepancy or problem with the above information PLEASE TELL ME IMMEDIATELY!
- The difference between mutual funds and ETFs are how they are sold and bought, but they’re essentially the same concept
- Mutual Funds are funds you can buy either directly with the institution or the bank
- Many bank mutual funds are only offered at your bank, and only if you’re their customer, but may contain the same stocks as other banks who offer their flavour of mutual funds as well
- ETFs can be purchased by pretty much anyone with a brokerage (stock market) account
- ETFs (true in Canada) are generally cheaper in terms of MERs than mutual funds at a bank, but may cost you more in terms of how much it costs to buy and sell them (Questrade charges no commissions on buying ETFs; only on selling them)
- Mutual Funds (with no load fees), don’t cost you anything, but almost definitely take a higher MER cut
I’ve been requested several times to write a post on how to do this, so here it is. I will be posting on how to cut your budget later.
FIND OUT YOUR NET INCOME
Gross income is what they tell you that you make when you’re negotiating a job offer.
Net income, is what you actually get in the bank account after everyone dips their paws into your honey pot and takes out their cut, and this would include:
- Prepaid taxes (also known as ‘tax withholdings’ in the U.S.
- Health insurance
- Social Security (also known as CPP or Canadian Pension Plan)
- Employment Insurance (EI in Canada)
- ..and whatever else you have to pay for out of your cheque
If you don’t know your net income, you should at least know how often you get paid*, so look at the NET amount that gets put into your bank account or is printed on your cheque, then figure out what it should be monthly.
So if you get $2000 in your bank account bi-weekly (every 2 weeks), you earn $4000 net a month.
THAT is what you should budget with.
*Because everyone loves payday. It’s my favourite day of the week.
You also do not have to break it down the way I have with categories.
Pick and choose what works for you.
FIND OUT WHAT YOU SPEND AS FIXED EXPENSES
Now you’re wondering WTF a “fixed” expense is. It’s basically anything you MUST pay each month that doesn’t change as an amount.
This is stuff like Rent, or even your Cellphone if you don’t go over your minutes or data plan.
If you want a general idea of what fixed expenses are, here’s it is.
A GENERAL LIST OF FIXED EXPENSES
Just make a list of all the categories.
- Mortgage Payments
- Car Payment
- Debt Repayment (your minimums, assuming you aren’t incurring more debt)
- Cellphone (assuming you don’t go over your minutes and/or have an unlimited plan)
- Health Insurance
- Car Insurance
- Home Insurance
- Transportation — This can be a fixed expenses if you buy a metropass for instance
FIND OUT WHAT CATEGORIES YOU HAVE LEFT THAT ARE VARIABLE EXPENSES
Just like fixed expenses, you have variable ones that are under your control each month.
For the second part of your budget, figure out what your NECESSARY variable expenses are. This does not include eating out or entertainment.
I’m even debating putting Cellphone/Telephone/Internet on there as “necessary”, but for the sake of normalcy, let’s call them necessary.
Those are UNNECESSARY variable expenses for the purposes of setting budget priorities.
A GENERAL LIST OF NECESSARY VARIABLE EXPENSES
- Utilities to run the home — Electricity, Gas, Water, Heat
- Office — Postage, Delivery, Paper, Pens, Pencils and so on
- Household Supplies — Toilet paper, Cleaning supplies
- Toiletries — Toothpaste, Soap, Toothbrush, Floss, Shampoo, Conditioner
- Medicine — Vitamins, prescriptions, pills
- Parking/Gas — If you have a car
- Pet Food
- Basic Clothing
- Grooming — For a haircut twice a year
- Home maintenance
- Furniture purchases
Now that you have fixed expenses, you should list all the rest that is technically “fun” and unnecessary.
A GENERAL LIST OF UNNECESSARY VARIABLE EXPENSES
- Eating Out
- Alcohol — Drinking
- Clothing — Beyond Wardrobe Essentials (even my list is a bit over the top..)
- Starbucks/Teavana — Buying coffee outside, or other drinks
- Spa — Facials, Massages
- Grooming — Beyond just a haircut, includes Manicures, Pedicures
- Books/Magazines — There is a library for a reason
- Fees — They’re generally unnecessary if you avoid ATMs and incurring fees
THE CATEGORIES ARE FINISHED, NOW ESTIMATE ALLOCATING MONEY TO THEM
You will notice that you have separated your budget categories out by Fixed, Necessary Variable and Unnecessary Variable.
Those are your PRIORITIES of where you should think about adding or cutting money as required.
The actual budgeting comes in, when you apply percentages to them — here’s an ideal household budget with its percentages.
So if for instance, you’re spending more than 35% on Shelter, and more than 25% on Life (going out, eating, having fun), you need to either cut back in one or the other.
I’d actually try and cut back on ALL the expenses, including fixed ones (get a roommate, move to a cheaper apartment that’s a studio not a 1-bedroom), and see what you end up with.
You can’t have everything if you don’t have the net income to pay for it and save money.
Remember to use your net income against those percentages.
You probably haven’t been tracking your expenses at all, so in the meantime just estimate what you THINK it costs, track your expenses, and see what the actual cost per month turns out to be.
At the end of the first month, you will probably notice (as I did), that what I THOUGHT I spent, was way off from what I actually spent. In a bad way.
Once you continue to diligently track your expenses, and learn where you make mistakes, adjust your budget accordingly.
SOME BASIC BUDGETING NUMBERS TO START WITH
Here are some basic personal amounts to start with, and you can adjust as you go along your budgeting path:
(Real numbers are better, especially for fixed expenses like rent or mortgage or your debt.)
Note: These numbers are for a single person renting an apartment in Canada without a car and no debt.
- Rent: $700
- Apartment Insurance: $15
- Cellphone: $50
- Transportation: $130
- Groceries: $200
- Utilities: $50
- Household Supplies: $25
- Toiletries/Medicine: $25
- Parking/Gas: $250
- Internet: $50
- Clothing & Gifts: $50
- Eating Out: $50
Total = $1595 a month
As you run through the list, you may be thinking: Hey I pay more/less than that!
That’s where you have to adjust for yourself, and add in or remove categories that don’t apply to you.