Wednesday, August 7, 2013
Canadian High Interest Savings Accounts
There are lots of places for Canadians to stash free cash. I have been using ING but keep up to date with other offerings. I have previously looked at this topic but thought I would share the most up to date information, rates, and links. Rates are current as of August 7th 2013.
ICICI Bank 1.45%
PC Financial Interest Plus 1.35%
Achieva Financial 1.80%
Outlook Financial 1.80%
Altamira High Interest Cash Performer 1.25%
ING Direct 1.35%
ING is the bank that I'm currently with. See my sidebar for an orange key and current ING sign-up bonus. (Right now it's $25 and bonus interest to 2.5%). ING frequently offers savings promotions that up the overall interest rates.
Manulife 1.55%
RBC 1.1%
There are lots of banks in Canada with high interest savings accounts. What do you use? Do you have a separate account, or keep one at your main bank?
Tuesday, August 6, 2013
Should I Use An Investment Advisor?
As my networth has been increasing, I have been considering getting an investment advisor instead of my DIY approach.
I met with an investment advisor to discuss moving some of my portfolio over to his services. At the time, I had approximately $100,000 in assets that I was willing/able to move into a full service portfolio. Assuming that I was invested in a mutual fund type of portfolio, the advisor would earn around 0.9% in commission. For my $100,000 portfolio, the advisor would get around $900. From the $900, the advisor would have to pay rent, staff, taxes, and then be left with a small profit.
How much advice would $900 get me? The advisor said he would do an initial review of my portfolio, determine an asset mix, and then we would probably meet once a year.
As my portfolio would only offer $900 in revenue, I would be one of the smaller clients, and wouldn't gain the attention or the advice I was looking for. I decided to keep growing my portfolio, until I can offer the revenue to really interest an advisor into working with me.
Do you use a DIY approach, a fee-based advisor, or a commission-based advisor?
This post was included in: Finance Carnival for Young Adults – Check Yourself Before You Wreck Yourself
I met with an investment advisor to discuss moving some of my portfolio over to his services. At the time, I had approximately $100,000 in assets that I was willing/able to move into a full service portfolio. Assuming that I was invested in a mutual fund type of portfolio, the advisor would earn around 0.9% in commission. For my $100,000 portfolio, the advisor would get around $900. From the $900, the advisor would have to pay rent, staff, taxes, and then be left with a small profit.
How much advice would $900 get me? The advisor said he would do an initial review of my portfolio, determine an asset mix, and then we would probably meet once a year.
As my portfolio would only offer $900 in revenue, I would be one of the smaller clients, and wouldn't gain the attention or the advice I was looking for. I decided to keep growing my portfolio, until I can offer the revenue to really interest an advisor into working with me.
Do you use a DIY approach, a fee-based advisor, or a commission-based advisor?
This post was included in: Finance Carnival for Young Adults – Check Yourself Before You Wreck Yourself
Monday, August 5, 2013
Is a Super Premium Credit Card Worth It?
I wrote earlier about how I selected a no-fee cash back credit card over a fee based cash back credit card. Is a Premium Credit Card Worth It?. So it would be logical that I would also elect a no fee card over a super premium card. Or is it?
I got an American Express AeroplanPlus Platinum Card, with an annual fee of $499. Why?
A super premium card like this Amex card offers many more features than the one or two enhanced rewards of a fee based card.
I get 1.25 Aeroplan miles for every dollar spent, a 2 for 1 companion flight on a short haul flight, car rental insurance, medical insurance and baggage insurance.
In my case, the 2 for 1 companion flight is enough of a benefit to outweigh the annual fee. In addition, I travel for work, and the combination of the travel rewards with my airline status gives me more chances to use the card. I also make use of the various travel insurances provided with the card.
The decision to select this card was difficult, and I spent a lot of time considering the options available, and if I would truly use the features. At the end of the year, I will add up the benefits to see if they outweigh the annual fee, and if I will decide to renew.
If you are considering one of these super premium cards, I urge you to do the math for yourself, and add-up the benefits against the much higher cost.
What credit card(s) do you have and what made you chose them?
I got an American Express AeroplanPlus Platinum Card, with an annual fee of $499. Why?
A super premium card like this Amex card offers many more features than the one or two enhanced rewards of a fee based card.
I get 1.25 Aeroplan miles for every dollar spent, a 2 for 1 companion flight on a short haul flight, car rental insurance, medical insurance and baggage insurance.
In my case, the 2 for 1 companion flight is enough of a benefit to outweigh the annual fee. In addition, I travel for work, and the combination of the travel rewards with my airline status gives me more chances to use the card. I also make use of the various travel insurances provided with the card.
The decision to select this card was difficult, and I spent a lot of time considering the options available, and if I would truly use the features. At the end of the year, I will add up the benefits to see if they outweigh the annual fee, and if I will decide to renew.
If you are considering one of these super premium cards, I urge you to do the math for yourself, and add-up the benefits against the much higher cost.
What credit card(s) do you have and what made you chose them?
DRIP Update in Carnival of Personal Finance #425
Jacob at My Personal Finance Journey hosted this week's Carnival of Personal Finance.
You can find my DRIP Update article there, as well as, many other articles about Personal Finance.
You can find my DRIP Update article there, as well as, many other articles about Personal Finance.
Sunday, August 4, 2013
DRIP Update
I have held a DRIP (Dividend Reinvestment Plan) in a few stocks since 2008. So time for an update.
China Mobile - CHL
I purchased 5.22 shares for $240 in 2008 and have reinvested the dividends. I now own 6.07 shares worth $326. 14% of the shares are from DRIP shares, and the return on my original investment is 36% (7.2% per year).
General Electric - GE
I purchased 73.75 shares for $1216 in 2008. I now own 85.81 shares worth $2119.48. 14% of the shares are from the dividend reinvestment plan, and the return on my original investment is 75% (14.9% per year).
My strongest performing investment in this group of DRIPs is ABV. The increase in shares is about the same, but a very strong increase in the stock price has made this a real winner for me.
Ambev, formally Companhia de Bebidas das Américas - ABV
I purchased 4.94 shares (24.7 shares after a 5:1 stock split in 2010) for $215 in 2008. I now own 28.36 shares worth $1088.90. 13% of the shares are from DRIP, and the return on my original investment is 506% (101% per year).
I chose to invest in ABV after visiting Brazil and finding their product everywhere. I recognized the company name when screening for available DRIP programs and chose to invest a few hundred dollars.
Overall, the stocks are adding 2.8% in new shares through DRIPs, plus the increase in the share price. As time goes on, more and more of the shares will be from DRIPs. At some point down the road, I could either stop the DRIP, and take the dividends in cash, or sell the stocks entirely.
This post was featured in: The Wealth Builder Carnival #137, and Carnival of Personal Finance #425.
China Mobile - CHL
I purchased 5.22 shares for $240 in 2008 and have reinvested the dividends. I now own 6.07 shares worth $326. 14% of the shares are from DRIP shares, and the return on my original investment is 36% (7.2% per year).
General Electric - GE
I purchased 73.75 shares for $1216 in 2008. I now own 85.81 shares worth $2119.48. 14% of the shares are from the dividend reinvestment plan, and the return on my original investment is 75% (14.9% per year).
My strongest performing investment in this group of DRIPs is ABV. The increase in shares is about the same, but a very strong increase in the stock price has made this a real winner for me.
Ambev, formally Companhia de Bebidas das Américas - ABV
I purchased 4.94 shares (24.7 shares after a 5:1 stock split in 2010) for $215 in 2008. I now own 28.36 shares worth $1088.90. 13% of the shares are from DRIP, and the return on my original investment is 506% (101% per year).
I chose to invest in ABV after visiting Brazil and finding their product everywhere. I recognized the company name when screening for available DRIP programs and chose to invest a few hundred dollars.
Overall, the stocks are adding 2.8% in new shares through DRIPs, plus the increase in the share price. As time goes on, more and more of the shares will be from DRIPs. At some point down the road, I could either stop the DRIP, and take the dividends in cash, or sell the stocks entirely.
This post was featured in: The Wealth Builder Carnival #137, and Carnival of Personal Finance #425.
Is A Premium Credit Card Worth It?
I had a BMO Cashback MasterCard, no fee, earning 0.5% cash back. As my spending increased, I began to look at a fee based card. The BMO Cashback World MasterCard offers 1.25% cash back, but with a $79 annual fee.
At some point, the premium card will return more than the free card. In this case, with a spend of $10535/year or $878/month, the premium card returns more. At this spending rate, the free card will give $52.68 back at the end of the year, and the premium card will give back $131.69, less the $79 annual fee, or $52.69.
Since my annual credit card spend is much less than $10535, I elected to remain with the free card.
At some point, the premium card will return more than the free card. In this case, with a spend of $10535/year or $878/month, the premium card returns more. At this spending rate, the free card will give $52.68 back at the end of the year, and the premium card will give back $131.69, less the $79 annual fee, or $52.69.
Since my annual credit card spend is much less than $10535, I elected to remain with the free card.
RBC Access USA
I have been a long time user of RBC Access USA. This is a great cross border product for Canadians looking to access funds in the US.
When I applied, I was set up with an account in Canada, and an account at a US bank. The Canadian account is at RBC Royal Bank, and the US account is with RBC Bank.There is an easy web service to move funds between the two accounts with one log-in. RBC has two versions of the account RBC Access USA, and RBC Access USA Preferred. There was a no fee product when I first signed up, but now, the first has fees of $2.95/month and the second $19.95. Both accounts offer no fees on the PNC Bank ATM Network, and no RBC bank fees on Visa, NYCE or PLUS ATM.
My personal plus is the ability to write cheques on a US bank account. This comes in handy for direct investing where a US cheque is required (more than simply a cheque from a Canadian Bank in US funds).
Find out more from RBC here: RBC Access USA
When I applied, I was set up with an account in Canada, and an account at a US bank. The Canadian account is at RBC Royal Bank, and the US account is with RBC Bank.There is an easy web service to move funds between the two accounts with one log-in. RBC has two versions of the account RBC Access USA, and RBC Access USA Preferred. There was a no fee product when I first signed up, but now, the first has fees of $2.95/month and the second $19.95. Both accounts offer no fees on the PNC Bank ATM Network, and no RBC bank fees on Visa, NYCE or PLUS ATM.
My personal plus is the ability to write cheques on a US bank account. This comes in handy for direct investing where a US cheque is required (more than simply a cheque from a Canadian Bank in US funds).
Find out more from RBC here: RBC Access USA
The Blog Returns
After a long hiatus, I have decided to return to blogging. I hope to continue with the same content that I had in the past, give an update on some of the stocks mentioned in previous postings, and share my progress towards my investing and life goals.
I have moved my financial goals forward in the last four years. My career is advancing, and a combination of higher salary and higher networth is allowing me more choices and more to write about.
I look forward to dialoging with you on this site.
I have moved my financial goals forward in the last four years. My career is advancing, and a combination of higher salary and higher networth is allowing me more choices and more to write about.
I look forward to dialoging with you on this site.
Friday, November 20, 2009
Ooops QSR.UN Priszm Income Fund
I've held Priszm Income Fund, QSR.UN, through two distribution cuts, from $0.10 to $0.01 and now to $0.00. The company is cutting the distribution to shore up the balance sheet. However, my initial attraction was a high yield, and have decided to sell my shares and reinvest elsewhere.
In this tough market, income funds are showing some strain, trying to maintain distributions in the face of falling income. I'm gravitating away from retail stocks and am now moving towards more stable sources of distributions and dividend income. I took the funds that I recovered from my sale of QSR.UN and invested in Transalta, TA.
TA is a more stable electricity and utility company that has in recent months taken action to improve its green credentials by acquiring Canadian Hydro.
In this tough market, income funds are showing some strain, trying to maintain distributions in the face of falling income. I'm gravitating away from retail stocks and am now moving towards more stable sources of distributions and dividend income. I took the funds that I recovered from my sale of QSR.UN and invested in Transalta, TA.
TA is a more stable electricity and utility company that has in recent months taken action to improve its green credentials by acquiring Canadian Hydro.
Wednesday, October 28, 2009
TFSA - Tax Free Savings Accounts
The TFSA (Tax Free Savings Account) introduced by the Canadian Government in 2009 has become a cornerstone of my new investing philosophy. A TFSA is similar to a Roth IRA in the US; after tax monies are contributed, investments gains are tax sheltered within the account and withdrawals are tax free.
Some background on the rules:
Canadian residents age 18 or older can contribute up to $5,000 annually to a TFSA.
Investment income earned in a TFSA is tax-free.
Withdrawals from a TFSA are tax-free.
Unused TFSA contribution room is carried forward and accumulates in future years.
Full amount of withdrawals can be put back into the TFSA in future years.
Choose from a wide range of investment options such as mutual funds, Guaranteed Investment Certificates (GICs) and bonds.
Contributions are not tax-deductible.
Neither income earned within a TFSA nor withdrawals from it affect eligibility for federal income-tested benefits and credits, such as Old Age Security, the Guaranteed Income Supplement, and the Canada Child Tax Benefit.
Funds can be given to a spouse or common-law partner for them to invest in their TFSA.
TFSA assets can generally be transferred to a spouse or common-law partner upon death.
Current investment amounts are only $5000 a year, but in 10 years this will provide an account of $50000 plus any investment growth. This is a significant sum and will be a significant part of any portfolio.
Some background on the rules:
Canadian residents age 18 or older can contribute up to $5,000 annually to a TFSA.
Investment income earned in a TFSA is tax-free.
Withdrawals from a TFSA are tax-free.
Unused TFSA contribution room is carried forward and accumulates in future years.
Full amount of withdrawals can be put back into the TFSA in future years.
Choose from a wide range of investment options such as mutual funds, Guaranteed Investment Certificates (GICs) and bonds.
Contributions are not tax-deductible.
Neither income earned within a TFSA nor withdrawals from it affect eligibility for federal income-tested benefits and credits, such as Old Age Security, the Guaranteed Income Supplement, and the Canada Child Tax Benefit.
Funds can be given to a spouse or common-law partner for them to invest in their TFSA.
TFSA assets can generally be transferred to a spouse or common-law partner upon death.
Current investment amounts are only $5000 a year, but in 10 years this will provide an account of $50000 plus any investment growth. This is a significant sum and will be a significant part of any portfolio.
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