Financial Plan for a Young Investor (and a thank you)

Asset allocation, risk, diversification and rebalancing. Pros/cons of hiring a financial advisor. Seeking advice on your portfolio?
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Re: Financial Plan for a Young Investor (and a thank you)

Post by dusty2 »

As far as I know there are two ways to get rich by doing basically nothing in Canada. The first is to buy and pay off a home. The second is even easier, no MERS, no etf's, no tfsa, nothing complicated, simply buy the 5 big Canadian banks and don't sell them. This year RBC up 26%, TD/NS up 18%, plus a nice dividend. Don't like market crashes? ,in the 2009 crash BMO was paying a 10% dividend. Next year they're calling for increased earnings/share. One of the few investments where, with a $50-$100 thousand initial investment, in 10 -20 years the investor will get rich.
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Re: Financial Plan for a Young Investor (and a thank you)

Post by Quebec »

Nothing is guaranteed to work in the ideas outlined by the previous poster. House prices may go down, and canadian banks may or may not high returns in the future. Just because housing and banks had good returns over some period does not means this performance will be repeated. Also, maintenance on a house counts as "work" i.m.o.
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Re: Financial Plan for a Young Investor (and a thank you)

Post by BRIAN5000 »

The job has nothing to do with what I studied and the tasks I perform don't even require an advanced education. All the exposure to typing, MS Word and Excel, and hard work ethic learned during university does translate over to the work, but not the subjects I studied.
Gee hoepfully somewhere down the line all that time, hard work and money spent on you education will pay off?
Yes we are in sync and agreement with all things financial. I've just taken the initiative to start learning and I talk with her everyday and teach and discuss all sorts of finance related stuff. We will be allocating our assets together, with decisions made together.
Well you TOGETHER then have $40,000 in cash and $40,000 in debt there could be some ideas on how to use that. I'm not sure why there were no suggestions on that :?:
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Re: Financial Plan for a Young Investor (and a thank you)

Post by SkaSka »

BRIAN5000 wrote:
The job has nothing to do with what I studied and the tasks I perform don't even require an advanced education. All the exposure to typing, MS Word and Excel, and hard work ethic learned during university does translate over to the work, but not the subjects I studied.
Gee hoepfully somewhere down the line all that time, hard work and money spent on you education will pay off?
Yes we are in sync and agreement with all things financial. I've just taken the initiative to start learning and I talk with her everyday and teach and discuss all sorts of finance related stuff. We will be allocating our assets together, with decisions made together.
Well you TOGETHER then have $40,000 in cash and $40,000 in debt there could be some ideas on how to use that. I'm not sure why there were no suggestions on that :?:
I hope so too. But, like I stated previously, coming out of grad school with a boatload of debt and no job prospects was a very frightening experience. To go through 8 months of unemployment with almost no call backs was very discouraging. I've read stories and heard anecdotes that are even worse. Then to suddenly find employment with good pay and good benefits... I don't think I could let this go, at least until my loans are paid off. But to actually accept the golden handcuffs, I don't think I could do it; I have too much drive to settle for office work for the rest of my life :thumbsup:

As for the $40,000 that's on hold. Well I guess I have too much pride to ask for that to pay for my loans. Even though we will be married and what is mine will be hers and what is hers will be mine, I'd still like to pay this myself. And it is money that she has saved up before we will be married, so I feel it's more hers rather than ours.
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Re: Financial Plan for a Young Investor (and a thank you)

Post by SkaSka »

dusty2 wrote:As far as I know there are two ways to get rich by doing basically nothing in Canada. The first is to buy and pay off a home. The second is even easier, no MERS, no etf's, no tfsa, nothing complicated, simply buy the 5 big Canadian banks and don't sell them. This year RBC up 26%, TD/NS up 18%, plus a nice dividend. Don't like market crashes? ,in the 2009 crash BMO was paying a 10% dividend. Next year they're calling for increased earnings/share. One of the few investments where, with a $50-$100 thousand initial investment, in 10 -20 years the investor will get rich.
The funny thing is that I have a friend in a similar situation as myself who has taken this particular approach. Well, he hasn't purchased a home but he has been investing steadily into RBC stocks for the past few years. I do worry that he is collecting up all his eggs in one basket and I feel it would be wiser to just pay off the student loans first. I've been nudging him towards contemplating paying off the loans at 5.5% variable first, so we'll see how that goes :)
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Re: Financial Plan for a Young Investor (and a thank you)

Post by AltaRed »

SkaSka wrote:As for the $40,000 that's on hold. Well I guess I have too much pride to ask for that to pay for my loans. Even though we will be married and what is mine will be hers and what is hers will be mine, I'd still like to pay this myself. And it is money that she has saved up before we will be married, so I feel it's more hers rather than ours.
There is nothing wrong with that approach even if it is not necessarily the most cost effective. Personal pride and responsibility has value. Divisions of property are considerably more common today than they have been in the past, and there are even more pre-nups amongst younger couples about sharing, or not, of finances, expenses, housekeeping, child rearing, etc. That is especially so today with dual working spouses, high divorce rates, etc. The boomer generation probably should have thought that through more too, but we had our heads in the clouds during the 60's and 70's.
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Re: Financial Plan for a Young Investor (and a thank you)

Post by SkaSka »

I haven't been too active around here lately so I thought maybe some people (on this forum or lurking) might be interested in a brief update.

In the end, I did end up taking Pickles's advice and I have placed the majority of my focus on paying down my student loans rather than trying to pay them off and investing money into TD E-Series index funds simultaneously.

However, the slightest of compromise was that back in December 2012, I put $100 each into 4 E-Series funds: US, CAN, CAN BOND, and INT for a total of $400 invested. I see it is a little experiment to see what this $400 will do over the course of a year (and beyond). It satisfied my curiosity to invest in index funds enough to allow me to hold out on investing until the student loans are fully paid off.

In a complete calendar year (12 months), $16,646 has gone towards paying down my student loan debt. I hope to match or exceed that total in 2013-2014.
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Re: Financial Plan for a Young Investor (and a thank you)

Post by parvus »

SkaSka wrote:However, the slightest of compromise was that back in December 2012, I put $100 each into 4 E-Series funds: US, CAN, CAN BOND, and INT for a total of $400 invested. I see it is a little experiment to see what this $400 will do over the course of a year (and beyond). It satisfied my curiosity to invest in index funds enough to allow me to hold out on investing until the student loans are fully paid off.
Experiments -- dipping in a little at a time -- are often useful learning experiences.
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Re: Financial Plan for a Young Investor (and a thank you)

Post by Pickles »

Thanks for updating us, SkaSka. I hope your debt continues to shrink; I hope your invested savings continue to grow! :thumbsup:
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Re: Financial Plan for a Young Investor (and a thank you)

Post by sorbet »

SkaSka wrote:In a complete calendar year (12 months), $16,646 has gone towards paying down my student loan debt. I hope to match or exceed that total in 2013-2014.
Congratulations from a fellow young investor SkaSka! :thumbsup:

In my opinion, savings allow for the flexibility to pursue whatever goals you have. Debt does the exact opposite by limiting your time and money. And so, I think your objective to kill your debt is great!

In fact, I think it is essential. Here's more motivation: I talk to people in my workplace every day who worry about job cuts, who fuss over delayed paychecks, or who are deeply unhappy to be doing what they're doing but need the money. In a lot of cases, it's because of debt. Living within your means, you are free from those concerns and others.

I am around your age and in a similar life situation, so I don't have much knowledge or experience to share, but I can confidently say this: saving up is entirely worth it :).
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Re: Financial Plan for a Young Investor (and a thank you)

Post by SkaSka »

Apologies for being so inactive on these forums!

I swear I've become more of a lurker than a regular poster recently - I've not even bothered to sign in regularly!

Quick update since April 2013: Still following the wise advice that was shared here. Focus has been exclusively on student loan repayment.

As of September 2013, I have $28,100 left of an original $52,154.95 student loan debt.

I guess that works out to $24,054.95 in principal payments over a 20 month period. There's some interest in there somewhere (I believe $1,274.80 over 20 months).

Yes I know, everything I've learned from here is to not to try and predict the future. However, I do project this loan being paid off by January 2015. That will be a true day for celebrations.

I've also been inspired by this forum to try and take on some financial writing myself. So thank you to everyone here.

Additionally, Gummy has been a huge influence in rekindling an avid interest in Excel and plotting charts and tables and all that spreadsheet stuff. I've looked through more of his excel spreadsheets than I can remember and I try to tell anyone half interested (not many) to go check out his spreasheets.

I wanted to give him a personal thanks for inspiring this rekindled interest, but I haven't been able to find any sort of contact information for him. Perhaps he reads this forum on occasion and will see this? I just wanted to say thanks!

I'll try to be a little more active around here, I swear!! :)
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Re: Financial Plan for a Young Investor (and a thank you)

Post by kcowan »

I have sent you his email address in a PM.

I am sure he would appreciate a thank you.

Good luck on your plan to pay off the remaining loan.
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Re: Financial Plan for a Young Investor (and a thank you)

Post by SkaSka »

The next time I post in this thread will be when I am student loan debt free. It will be celebration time.

I have $13,800 left to go.

I want to thank FWF for the advice given back in the winter of 2012 that helped focus my thinking.
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Re: Financial Plan for a Young Investor (and a thank you)

Post by Pickles »

SkaSka wrote:The next time I post in this thread will be when I am student loan debt free. It will be celebration time.

I have $13,800 left to go.

I want to thank FWF for the advice given back in the winter of 2012 that helped focus my thinking.
Good to hear from you that all is going well.

BTW, you made a wise choice not to invest in silver. The spot price at the end of November 2012 (when you were considering buying some) was about $34.20 per oz. This month, silver is going for $21 per oz....
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Re: Financial Plan for a Young Investor (and a thank you)

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So this will be my final post in this thread.

I officially have no student loans left :thumbsup: but with an asterisks.

As of July 2014, I had $6000 left to pay off. My wife suggested that since A) We had a big surplus of cash sitting around in our regular savings accounts and B) That cash was only garnering 1.2% compared to the student loan at 3.5%, it probably made most mathematical sense to just pay off the rest of the student loan.

Therefore, I have no student loans left as of this month but if I were to have continued with my regular old monthly payments, I would have reached this point in November 2014.

It either took me 2 years and 3 months or 2 years and 7 months to pay off $52,000 of student loans. I leave that up to the reader.

I can only hope that this thread provides some motivation/inspiration to others who are burdened with student loan debt and looking to pay it off relatively quickly.

Again, I must commend FWF for its vibrant community and excellent resources. I have, and continue to learn, so much here. Thanks for the guidance back in November 2012!
Pickles wrote:BTW, you made a wise choice not to invest in silver.
:oops: Haha thanks for the guidance on that one too!
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Re: Financial Plan for a Young Investor (and a thank you)

Post by MALDI_ToF »

Congrats!!! Great achievement paying off $52k in under 3 years! :thumbsup:

Now you can start to accumulate money and watch your net worth grow over the years.
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Re: Financial Plan for a Young Investor (and a thank you)

Post by Flaccidsteele »

Congrats SkaSka. Fantastic job. You are well on your way!
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Re: Financial Plan for a Young Investor (and a thank you)

Post by Pickles »

Well done, Ska Ska. You surveyed a number of approaches, chose one, stuck to it and executed it with complete success!

As you start to save (or as I prefer to say: "accumulate") you will need to work out your comfort level of risk in choosing investments. You'll find lots of perspectives and ideas on asset allocation, worthy investment possibilities and tax considerations in this sub-forum as well as the sub-forums on Stocks and Bonds and Taxing Situations. For the cash component of your investments, see the HISA/GIC thread in the Under the Mattress sub-forum. The current highest rate in a CDIC insured TFSA account is 3% (Peoples Trust) and -- in a non-registered account -- 1.8% (also Peoples Trust).

But first, you and your wife deserve to celebrate your accomplishment. Perhaps a fun vacation away together?

All the best and looking forward to your continued participation in this forum!
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Re: Financial Plan for a Young Investor (and a thank you)

Post by gsp_ »

FWIW CDF is at 1.9%.

Not that I can bank there.
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Re: Financial Plan for a Young Investor (and a thank you)

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Pickles wrote: But first, you and your wife deserve to celebrate your accomplishment. Perhaps a fun vacation away together?
In another thread, they said that they are planning to go to Omaha for the Berkshire weekend! :)
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Re: Financial Plan for a Young Investor (and a thank you)

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I know I said I had finished posting in here, but I thought I'd do one more update on a symbolic milestone.

As of the start of December 2015, our equity holdings have surpassed what I used to owe in total student loans at the start of September 2011 (when I was finally out of school). Since the equity holdings have only been accumulating for ~1.5 years, it is almost entirely contributions vs. gains.

While I knew very little, or even knew I had an interest, in anything to do with finance and investing in September 2011, I have learned quite a bit since then (although there is still much, much learning to do).

Again, I have to thank the FWF community for existing and providing a tremendous amount of knowledge, experience, and wisdom.

FWF definitely was one of the catalysts that got me on the path to learning so much about finance and investing. I did not know back then I had such an interest in the process. For now, it really is an activity that I thoroughly enjoy learning and doing.

I tip my hat to the FWF community :thumbsup:
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Re: Financial Plan for a Young Investor (and a thank you)

Post by AltaRed »

And you have been a quick study because you have made many, many sound contributions of your own in your posts. A win-win for everyone. :thumbsup:
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Re: Financial Plan for a Young Investor (and a thank you)

Post by longinvest »

SkaSka wrote:As of the start of December 2015, our equity holdings have surpassed what I used to owe in total student loans at the start of September 2011 (when I was finally out of school). Since the equity holdings have only been accumulating for ~1.5 years, it is almost entirely contributions vs. gains.
Congratulations on reaching a nice milestone!
:thumbsup:
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Re: Financial Plan for a Young Investor (and a thank you)

Post by ghariton »

longinvest wrote:Congratulations on reaching a nice milestone!
:thumbsup:
Yes. And thank you for the kind words about FWF.

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Re: Financial Plan for a Young Investor (and a thank you)

Post by MALDI_ToF »

SkaSka wrote:As of the start of December 2015, our equity holdings have surpassed what I used to owe in total student loans at the start of September 2011 (when I was finally out of school). Since the equity holdings have only been accumulating for ~1.5 years, it is almost entirely contributions vs. gains.

While I knew very little, or even knew I had an interest, in anything to do with finance and investing in September 2011, I have learned quite a bit since then (although there is still much, much learning to do).
Sounds like a lovely way to wrap up the year. BRAVO!!! :thumbsup:
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