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Discussion Starter #21
Excellent that you're already with Scotia, that should make it easier. Check their web site for promotions and ask if they would give you a $100 incentive to bring new money into iTrade.

You might want to still keep some amount of cash at credit unions or high interest savings accounts elsewhere. This is what I do as well. For example, 200K cash at a credit union and 800K into iTrade.

There are fees for GICs but they are baked into the price/yield so whatever interest rate you see is what you get, and there are no additional fees beyond that. The great thing about a discount brokerage like iTrade is that many GIC issuers are available, so you can spread the deposits over each and get 100K CDIC coverage with each one. An example, using 800K

100K at 2.13% in Montreal Trust Co of Canada, 1 year
100K at 2.18% in National Trust Co, 2 years
100K at 2.24% in Concentra Bank, 3 years
100K at 2.20% in Scotia Mortgage Corp, 4 years
100K at 2.36% in Royal Bank of Canada, 5 years
100K at 2.37% in Bank of Nova Scotia, 5 years
100K at 2.37% in ADS Canadian Bank, 5 years
100K at 2.40% in Canadian Western Bank, 5 years
-----------------------------------------
Total 800K fully CDIC insured. Actual issuer names at iTrade and actual rates.

That's just a rough example of a GIC ladder but you'd want to build that more carefully and stagger the maturities more. Takes some time to build up a ladder. You'll see that rates are not necessarily higher than a credit union savings accounts, which is a reason why you'd probably want to still keep some cash at the credit union.

But the above is very safe as all those deposits are government backed through CDIC. This is stronger safety than credit union deposit insurance, which is provincial.

Separate from my GICs, I also keep a healthy amount of cash with Outlook Financial at 2.40%. Note that if interest rates decline further (which they might) the 5 year GICs are a benefit.

Both GICs and XSH can be held at iTrade. But note that for non-registered, XSH is less tax efficient than GICs. You may still decide it's worth it for the liquidity.
Thanks for the hint about asking for the $100 and examples. Lots to think about and decide here shortly.
 

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If you are truly interested in Scotia iTRade discount brokerage, as compared to its competitors out there, it would behoove you to spend some time at https://www.scotiaitrade.com/en/direct-investing-and-online-trading/why-scotia-itrade.html to become familiar with types of accounts, commission & fee schedule, account fees, etc. iTRade is competitive with the other major brokerages but if you want to have a more rigorous look, you can compare with MoneySense and Rob Carrrick reviews of the discount brokerages.

Added: It seems to me you may ultimately have a pretty large brokerage account. iTRade should be willing to provide some financial incentive to get your business if you indicate the approximate value.
 

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Discussion Starter #23
If you are truly interested in Scotia iTRade discount brokerage, as compared to its competitors out there, it would behoove you to spend some time at https://www.scotiaitrade.com/en/direct-investing-and-online-trading/why-scotia-itrade.html to become familiar with types of accounts, commission & fee schedule, account fees, etc. iTRade is competitive with the other major brokerages but if you want to have a more rigorous look, you can compare with MoneySense and Rob Carrrick reviews of the discount brokerages.

Added: It seems to me you may ultimately have a pretty large brokerage account. iTRade should be willing to provide some financial incentive to get your business if you indicate the approximate value.
I Opened a practice account and purchased TD, GWO, FTS, XBAL and a five year GIC-ladder. Seemed pretty simple although it doesn't show the fees. I wonder if they will show once the practice trades occur? Comparing XBAL to my existing RRSP managed portfolio, XBAL outperformed it by between .5 and 1% depending on the term, so I am considering moving it all over to XBAL. I am going to reach out to TD to see what they are able to do regarding the fees etc. Sounds like you are familiar with I-Trade, do the dividend checks come through them and is there a fee at each distribution?
I really do appreciate all the help, my wife was commenting on how helpful everyone is and then stated "I expect you will be able to do the same for someone else down the line once I understand more".
 

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Discussion Starter #24
To each of you that has been so gracious with your time answering my questions - A HUGE THANK YOU!!
 

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Commission fees for stock trades are $9.99 to buy or sell. Not sure how realistic practice accounts are, but they should show that commission on top of the actual price you paid for each of the trades. There are no other fees for GICs or mutual funds.

The primary rationale for Scotia iTRade is that you will see all your banking and investment accounts on Scotia's home page, whereas if you go to another brokerage like TD Direct Investing, you will have to make arrangements to move funds by EFT method. Hint: Moving funds from a bank account to a brokerage account can be done by setting up a Bill Payee for that brokerage account from your bank account. I don't know how you would move funds out of TD Direct Investing back to another institution's (like Scotia) bank account. Caution about TDDI: As I understand it, you cannot yet purchase GICs online. You have to phone in the order to a rep.
 

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I opened a couple of accounts with EQ and have been getting 2.3% in a HISA, one each for the wife and I. Everyone says they could cut the rate but they haven't in the 3 years since I opened them. There have also been a couple of 3-3.3% 90 day GIC's along the way. The nice thing is the cash is always readily available so its like an emergency fund that also generates over $5k year. I also just opened another with 3.3% at B2B. I'm not a big fan of tying up money in GIC's at today's lousy rates, especially when I can get 2.3 -3.3% in a HISA with no restrictions.
 

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I'm not a big fan of tying up money in GIC's at today's lousy rates, especially when I can get 2.3 -3.3% in a HISA with no restrictions.
The rates could get a lot lousier than they are now. Canada has some of the highest interest rates of any developed country today. Imagine the Bank of Canada cuts rates by another 0.5% to 1.0%.

I recently bought a 20K GIC at 2.37%
 

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I opened a couple of accounts with EQ and have been getting 2.3% in a HISA, one each for the wife and I. Everyone says they could cut the rate but they haven't in the 3 years since I opened them. There have also been a couple of 3-3.3% 90 day GIC's along the way. The nice thing is the cash is always readily available so its like an emergency fund that also generates over $5k year. I also just opened another with 3.3% at B2B. I'm not a big fan of tying up money in GIC's at today's lousy rates, especially when I can get 2.3 -3.3% in a HISA with no restrictions.
You have been around here long enough to know those rates could easily drop 25-75 bp if BoC reduces short term interest rates. Sure, rates have held for 3 years and they probably should given 3 plus years of BoC rate increases https://tradingeconomics.com/canada/interest-rate Easy to gloat? be cocky? By all means go for it, but how sure are you that we won't see 2 years of decreases coming along, as early as Spring 2020 when the economy stalls? Of course when they do, you are too late to the game to lock in a reasonable 5 year GIC rate that exists today.

FWIW, I also have an EQ Bank account and grab their short term GIC offers as well, but a larger proportion of my fixed income is in a 5 year bond/GIC ladder as it should be. I only gamble in Vegas.
 

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Discussion Starter #30
Hadn't really thought about the fact rates could decrease and the 5yr GIC hedging against that: as i was getting more in HIS I thought it made sense for the cash to be there. Kinda dumb it hadn't occurred to me, grew up in the days of 12-14% and struggle imagining the rates can go lower yet. So much to learn! I am running various simulations now as I plan on where to relocate everything in January. Again thanks for all the great info.
 

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Hadn't really thought about the fact rates could decrease and the 5yr GIC hedging against that: as i was getting more in HIS I thought it made sense for the cash to be there. Kinda dumb it hadn't occurred to me, grew up in the days of 12-14% and struggle imagining the rates can go lower yet. So much to learn! I am running various simulations now as I plan on where to relocate everything in January. Again thanks for all the great info.
One thing I've struggled with through all my years of investing is reconciling the short term or immediate situations against the long term tendencies or averages. I still struggle with it!

For example, in the immediate situation, high interest cash earns more than GICs and bonds. However the long term average is (virtually guaranteed) that bonds and 5 year GICs outperform cash. Therefore, you should bet on the latter because that's usually the way things go. It's not feasible to keep jumping around in reaction to the market.

Similarly, with stocks. The stock indexes are at all time highs and it feels too high to buy stocks. In the immediate situation, that's tough to buy. However the long term average tendency is of course for stocks to rise.

For example, CNBC this moment runs this news item: "according to UBS, half of all S&P 500 stocks are technically over-valued" -- obviously that pushes people into short term thinking.

In both these situations, generally a person loses out on performance by responding to the immediate situations. It's definitely counterintuitive and one might even feel stupid doing this, but sticking to the long term tendencies really does work out better.
 

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Discussion Starter #32
One thing I've struggled with through all my years of investing is reconciling the short term or immediate situations against the long term tendencies or averages. I still struggle with it!

For example, in the immediate situation, high interest cash earns more than GICs and bonds. However the long term average is (virtually guaranteed) that bonds and 5 year GICs outperform cash. Therefore, you should bet on the latter because that's usually the way things go. It's not feasible to keep jumping around in reaction to the market.

Similarly, with stocks. The stock indexes are at all time highs and it feels too high to buy stocks. In the immediate situation, that's tough to buy. However the long term average tendency is of course for stocks to rise.

For example, CNBC this moment runs this news item: "according to UBS, half of all S&P 500 stocks are technically over-valued" -- obviously that pushes people into short term thinking.

In both these situations, generally a person loses out on performance by responding to the immediate situations. It's definitely counterintuitive and one might even feel stupid doing this, but sticking to the long term tendencies really does work out better.
I agree, counter intuitive but I plan on jumping in come January either way. I may hedge my bets on the stocks and buy 50% in January and then plan bi-monthly purchases until the remaining 50% is bought over the following 12 months. The GIC's made perfect sense as soon as I read it!
 

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One thing I've struggled with through all my years of investing is reconciling the short term or immediate situations against the long term tendencies or averages. I still struggle with it!

For example, in the immediate situation, high interest cash earns more than GICs and bonds. However the long term average is (virtually guaranteed) that bonds and 5 year GICs outperform cash. Therefore, you should bet on the latter because that's usually the way things go. It's not feasible to keep jumping around in reaction to the market.

Similarly, with stocks. The stock indexes are at all time highs and it feels too high to buy stocks. In the immediate situation, that's tough to buy. However the long term average tendency is of course for stocks to rise.

For example, CNBC this moment runs this news item: "according to UBS, half of all S&P 500 stocks are technically over-valued" -- obviously that pushes people into short term thinking.

In both these situations, generally a person loses out on performance by responding to the immediate situations. It's definitely counterintuitive and one might even feel stupid doing this, but sticking to the long term tendencies really does work out better.
LOL, it's called greed james4beach and everyone has to deal with it, it's normal human behaviour. I get a bit of a laugh when I read a comment by someone in their 30s writing about 'all my years of investing'. You're just a tyro yet james4beach. Wait till you've been doing it for 50 years and you still struggle to reconcile a short term return vs. a long term safer bet.

I think where most people get it wrong and you are right to warn of is when they are 'chasing things'. Generally, that happens when as you say they are reacting to immediate situations like the CNBC news item you quote.

However, if you read a news item that said, 'the aging Baby Boomer generation is projected to result in a 100% increase in the sale of mobility scooters in the next decade', you might think about investing in mobility scooters, based on that news item. That isn't likely to change over the short term at all.

As a Baby Boomer not yet ready for a mobility scooter I do have to say that looking down the road and if I ever needed one, here is a model I could get excited about.
https://www.daymak.com/boomerbeast-2-news.html Look at the tires on that beast, go anywhere. Kinda like the SUV of mobility scooters. Now if someone said, 'wanna invest $50k in our company?' I might be tempted with that one.

https://www.marketwatch.com/press-release/at-79-cagr-travel-mobility-scooter-market-size-is-expected-to-exhibit-us-1070-million-by-2024-2019-05-23
 

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Hadn't really thought about the fact rates could decrease and the 5yr GIC hedging against that ...
This suggests the basics are lakcing ... the GIC guaranteed rate versus deposit rates that float around has been around a long time with minimal changes. It's also part of the beginner's introduction to what types of investments are out there.


Cheers
 

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Discussion Starter #35 (Edited)
This suggests the basics are lakcing ... the GIC guaranteed rate versus deposit rates that float around has been around a long time with minimal changes. It's also part of the beginner's introduction to what types of investments are out there.


Cheers
It is true, my investing until now has been, pay off my home, pay off my rentals, steadily contribute to my managed RRSP's and build the business. My business income has more than sustained me and while I should have, I didn't pay much attention to my investments. Hence my sudden and intense interest I almost everything on this and other sites. Luckily I am a relatively quick learner LOL
Sold the business now I need to make that money work.
 

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Discussion Starter #36
Update - I have a bit of down time and thought I would post an update on our first four months of retirement.
1) To all of you that said take the retirement plunge, you could not have been more correct. 4-1/2 months in I wonder why I waited this long.
2) Our spending (less planned for one time expenses) has been much lower than when I was working, our income is 1/3 but our spending has fallen to 30 percent less than I had planned on, once you deduct the taxes and savings I no longer have to pay we are spending about 45% of our pre-retirement spend.
3) Invested my new RRSP money in MAW104 and been very happy, haven't moved my managed RRSP money yet but I am planning to as it just hasn't performed will for the 2% fees.
4) Opened a Scotia on-line investing account and have been able to make some great dividend paying stock buys, to say my timing was lucky would be a huge understatement.
5) With the reduced spending we are living easily on the returns from less than half of our savings which gives us a great safety cushion.

Now we spend our time going for a morning walk, then a quick swim, do some renovation work on the house, watch BNN at lunch and have the afternoon free :)

So I can easily say retiring at 56 was a great move for us, I was concerned about it as I was making the decision but have no regrets at all now. In fact I was offered a very good consulting job last week and said no thanks!

Cheers,
 

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Why do you swim 'quick' Tayls77? You gotta learn to slow down. :)

When I first started living on a Greek island, I used to go to my local kafenion (coffee shop) in the morning and have a coffee. I spent perhaps 15 minutes on that. The locals probably got a good laugh watching me. Gradually as time went on, I discovered that it actually takes a couple of hours to have a cup of coffee and join in the discussions of how to solve all the world's problems.

So, just for fun, let's see how many Retirement 101 lessons you have learned so far.

Rule 1. There is no RUSH to do anything anymore.
Rule 2. Never go to the supermarket on a weekend when all the working class have to go.
Rule 3. You don't need to shave every day.
Rule 4. You can dress like a bum but if you do your wife may leave you. Appearance does still count.
Rule 5. We all need some structure in life but your 'To Do' list for the day doesn't have to include everything today.
Rule 6. Realize that 'work expands to fill time available'. In other words, all tasks take more time when you have time.

That's a start, how many can you check off already? Perhaps others here will give you some more to think about.
 

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Discussion Starter #38
Why do you swim 'quick' Tayls77? You gotta learn to slow down. :)

When I first started living on a Greek island, I used to go to my local kafenion (coffee shop) in the morning and have a coffee. I spent perhaps 15 minutes on that. The locals probably got a good laugh watching me. Gradually as time went on, I discovered that it actually takes a couple of hours to have a cup of coffee and join in the discussions of how to solve all the world's problems.

So, just for fun, let's see how many Retirement 101 lessons you have learned so far.

Rule 1. There is no RUSH to do anything anymore.
Rule 2. Never go to the supermarket on a weekend when all the working class have to go.
Rule 3. You don't need to shave every day.
Rule 4. You can dress like a bum but if you do your wife may leave you. Appearance does still count.
Rule 5. We all need some structure in life but your 'To Do' list for the day doesn't have to include everything today.
Rule 6. Realize that 'work expands to fill time available'. In other words, all tasks take more time when you have time.

That's a start, how many can you check off already? Perhaps others here will give you some more to think about.
LOL, true, quick was just an old often used term, I am actually covered all 6 to one degree or another. I had a military hair cut for 36 years, haven't cut it since I retired. I once again have "flow". My wife doesn't mind the beach bum look luckily. Other than keeping ahead of some contractors I seldom feel rushed. In fact my body and mind have never felt better. Played golf today and then went for lunch and a beer, use to rush home after the game. I remember reading your posts on retirement and you are so right, it is the best thing ever! Cheers.
 

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Hello Tayls77
My advice FWIW
With one million + in cash/investments you should be with PH & N "wealth mangement", offered through RBC
The fees are all upfront and visible. The funds offred are "zero" based mangement fees.
The more you have the less % of fees, but for a milllion or so, would be about 1.1% annual.
Most importantly , they will spnd the time upfront to analyze your situation.Listen to your goals, risk level, and expected returns.
Then, set out a complete cash-flow/RRSP/RRIF/CPP/OAS draw-down model.

That function alone can save people thousands in taxes & lost income.

Can you do better on your own? Unless you are market savy, and have a handle on the global economies, past present & future ..not even close.
RBC Investments manages many billions of $$ Globally and have the best economists, stock pickers etc etc in the world working for them.
Give them a shout, worst case you dont like what you hear and move on.
I have been with RBC/PH & N for 6 years. We set up a meduim balanced portfolio. with a target of 5.9% ( after fees), annualized.
Even after the recent Covid crash, and recovery , we are sitting at 5.8%, annualized over the 6 years.
Back to my point: You need to look broader at your whole finanical picture & best use of assests for your long, years ahead.
The retirement question you have already answered.
Not to promote only RBC: CIBC and Scotia also offer what is known as "wealth mangment" functions.
Minium buy-in is one million, which you have. Average client base is $3 million in investable assets.

For me? Just like you I worked my whole life to accumulate my $ for retirment> now I want it to be available for me. Not a burden for me.
very happy with having a hands off approach.
 

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Discussion Starter #40
Hello Tayls77
My advice FWIW
With one million + in cash/investments you should be with PH & N "wealth mangement", offered through RBC
The fees are all upfront and visible. The funds offred are "zero" based mangement fees.
The more you have the less % of fees, but for a milllion or so, would be about 1.1% annual.
Most importantly , they will spnd the time upfront to analyze your situation.Listen to your goals, risk level, and expected returns.
Then, set out a complete cash-flow/RRSP/RRIF/CPP/OAS draw-down model.

That function alone can save people thousands in taxes & lost income.

Can you do better on your own? Unless you are market savy, and have a handle on the global economies, past present & future ..not even close.
RBC Investments manages many billions of $$ Globally and have the best economists, stock pickers etc etc in the world working for them.
Give them a shout, worst case you dont like what you hear and move on.
I have been with RBC/PH & N for 6 years. We set up a meduim balanced portfolio. with a target of 5.9% ( after fees), annualized.
Even after the recent Covid crash, and recovery , we are sitting at 5.8%, annualized over the 6 years.
Back to my point: You need to look broader at your whole finanical picture & best use of assets for your long, years ahead.
The retirement question you have already answered.
Not to promote only RBC: CIBC and Scotia also offer what is known as "wealth management" functions.
Minium buy-in is one million, which you have. Average client base is $3 million in investable assets.

For me? Just like you I worked my whole life to accumulate my $ for retirment> now I want it to be available for me. Not a burden for me.
very happy with having a hands off approach.
Thanks Canadafan, I am happy to hear you are doing well with RBC Wealth management, I have a friend who's daughter works for them in TO she does VERY well. I am on my second wealth advisor over the past 20 years and while they were/are both nice people, neither are as concerned about my money as I am. My current IA had laid out a complete "plan" for me a few years ago that would have me drawing down from principal. I spent the time to look at alternatives and decided to create and follow my own plan, something I review weekly. I never mind paying anyone, but if I am paying them they better outperform me and so far that has never been the case. The local wealth advisor at my Scotia branch is always after me, but so far I just don't feel the need. I have started buying into MAW104 with my RRSP room and will likely end up transferring the money with my current advisor in there as well.
I enjoy following the alternative investments I am involved in as well as stock picking so maybe when it becomes a chore I will move back to an advisor. I also keep in touch with some Investment bankers and PE guys I know and look for unusual opportunities.
The surprising thing I have found is how little we are spending, we are living nicely on the income from our rentals, alternative investments and dividends, so not only are we not drawing down principal, over half of our money is just sitting their growing. Guess my kids will be happy LOL. Now if something happened to me my wife would most definitely need an advisor as she has no interest in learning any of this.
 
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