[DavidRoman]

Hello Everyone! Im a little late to the investing game but my wife and I have started to save a very small amount every month in a TD TFSA account. We have a tonne of contribution room in both our TFSAs and RRSPs. We currently have just under $900 in the account and I haven't invested the money in anything so far. I want to start but I was under the impression that I needed a minimum of $1000 to start.
I looked at WealthSimple a couple of days ago but couldn't get any info on what they would charge me to transfer over the TFSA account ($5000 and over they say they will wave the transfer fees - but Im not there yet). My thoughts were to keep the TFSA at TD until I reach $5000 and then maybe transfer over to Wealthsimple. Maybe I should just stick with TD?
I do have some basic knowledge about investing but not any real life experience so I just really wanted to get my feet wet and start regardless of how "little" Im working with. Im interested in long term investing, riding out highs and lows and continually investing steadily through every season. I want to invest as "high risk" as possible because its for the long term so I want to just ride out a group of index funds or ETFs until my portfolio grows a bit bigger and I get a feel for the process.

Questions:
1) Ive heard TD Direct Investing is different than just buying a simple investment (buy and hold) but I don't understand how to just purchase an investment directly out of my TFSA without getting into managed funds (managed by TD that is). I don't really want an advisor at this point until I feel more comfortable and have more info
2) Wealthsimple (or other ROBO) better investment vehicle than TD? Any idea what the fees are to transfer to another institution? (tried contacting both TD and WealthSimple and either got hung up on after on hold for an hour or not responded to by email.... this also kind of concerns me but I do understand this is a crazy time)
3) Borrowing to invest during a market downturn (like Coronavirus)? We have a LOT of available credit but I know its very risky to borrow money to invest

 

[Money172375]

I worked for TD for 20 years so keep that in mind. all the major banks offer account options that can meet the needs of self serve or advisor based accounts. You’ll find Forums such as those are heavily opinionated towards self-serve investing. keep in mind, most here are very experienced investors. While it’s an option for you, I would suggest that you start with a retail based mf account. This will give you a taste and a little education about risk tolerance, time horizons and investment goals. You can simply request that you want a low fee (index fund solution) and they will recommend an appropriate solution.

you can go a bit further On the self-serve continuum by opening an e-series account with td.
the management fees on e-series funds may be slightly lower than the branch based index funds, but I don’t recall exactly. I would suggest that be your first bit of research. If you’re not up to that level of research....then in my mind, you are best suited to remain within a brand based account.....for now.

in my opinion, your comment about not wanting an advisor is incorrect. It’s my belief that all novice investors should seek the advice of an advisor in the early stages....doesn’t mean you need to commit to them.....but they are the “professionals” and despite what others may say, have more education, experience and exposure than you do.....at this particular time in your investing journey.

one of the biggest mistakes novice investors make, is asking about what others are doing And blindly following their actions. Do a little research, read some forums, talks to some bank advisors (only suggesting that at this point given the investment size and knowledge). You should quickly come to realize that investment A or product B (while an appropriate solution for one person) does not meet everyone’s needs. Everyone’s needs are different and can be met by most banks/investment firms. The differences in my opinion are not that different...other than familiarity.

I would not recommend a novice investor with less than 5 years of investing experince, even consider borrowing.

finally.....you’ll see what follows is a wide degree of opinions......take them all in....enjoy it....investing should be fun, education and fruitful!

 

[DavidRoman]

I worked for TD for 20 years ... fruitful!

Wow! Thanks so much for the quick reply... really appreciate that. This is all a little intimidating so thats why I'm leaning towards more of a simple option (to start) -- but I'm encouraged by your advice. Definitely not against getting "advice" ... just get an icky feeling sometimes when hearing about expensive advisors, hidden fees, etc... Ive been listening to quite few financial podcasts over the last few years so Ive kind of been considering them my "advisors" (so many different characters and opinions out there), but I do understand that everyone's situation/goal is unique so working one on one with somebody on my specific goals -- especially until I get more educated -- is a great idea.

 

[Danny]

Welcome. I have a TD direct investment account and when I started out like you are with smaller amounts I would recommend the e -series. There is no fee to buy them so if you wanted to buy say a$100 worth there is no fee to purchase these.(the mer is a little higher but still good if you are buying an index fund. Do you know what you would like to purchase (example S and P 500 fund, or TSX fund)?

 

[DavidRoman]

Hey Danny thanks . Yeah this E-Series seems like the right thing for me to start with. From all I’ve gathered (info mostly from podcasts and articles online) I think I might prefer the S and P only because I’ve assumed that it has a longer track record and better returns, however if they are both “general” market indicators Maybe now I’m thinking they would be similar? Pros and cons of TSX vs S&P I’m unaware of except that there may be a US conversion possibly?
Also if you don’t mind me asking — how do I go about buying an E-Series fund without having a TD direct account— assuming I have to talk to someone over the phone (no in person meeting right now) or can it be done through the TD website?

 

[Danny]

I you would need a Td direct investing account and I do believe you are correct that you need to make an appointment at a branch and have them set it up. After you meet with them it takes a few days and then you should be good to go. May be 3 or 4 weeks before you can meet with them because of the shut down.

 

[scorpion_ca]

I started with TDDI but I moved to Questrade last year since they offer commission free ETF purchase which has lower MER than e-series. TDDI is good for research but Questrade is good for plain vanilla account. You can start with all equity ETF such as XEQT and VEQT. I manage my friend's account too and buy XEQT for him.

And you don't need to visit any branch. Everything can be done online, chat or over the phone.

 

[Spudd]

You don't need a direct investing account for e-series, you can set up your existing TFSA to buy e-series.

How to Open a TD e-Series Funds Account

TD e-Series Funds are an excellent way to invest in a TFSA, RRSP, or RESP. This is because they have one of the lowest Management Expense Ratios available for mutual funds. I have detailed two ways to purchase TD e-series funds and the steps for setting up a TD mutual funds account and...

www.savvynewcanadians.com

 

[DavidRoman]

I started with TDDI ....

Thanks Scorpion Ill have to be aware of those MERs -- any idea what the difference was percentage wise?

 

[DavidRoman]

You don't need a direct investing account for e-series, you can set up your existing TFSA to buy e-series.

How to Open a TD e-Series Funds Account

TD e-Series Funds are an excellent way to invest in a TFSA, RRSP, or RESP. This is because they have one of the lowest Management Expense Ratios available for mutual funds. I have detailed two ways to purchase TD e-series funds and the steps for setting up a TD mutual funds account and...

www.savvynewcanadians.com

Oh thats great news!! I thought Id have to wait for a few weeks

 

[scorpion_ca]

Thanks Scorpion Ill have to be aware of those MERs -- any idea what the difference was percentage wise?

It depends on the fund. I would say around 0.20% to 0.25%. It's significant for a large portfolio though.