How much do you know about financial independence?

Yep we changed beneficiaries to successor holders on our TFSAs last year. Recommended.

We recently had a discussion - why don't we get ourselves some jobs that provide a pension? Government, teacher, union, etc... Some of our parents have one or several, hell my mom gets some money from Germany for when she was a bricklayer for a year after highschool!

I can't picture what that job would be. Outside of CPP/OAS, my 3 jobs have matched 5% to my RRSP, that's it. The better half is fully self-reliant on her own future, given the jobs held.

Nor would I want to work the next ten years to get a pension! The past 8 years of being a mini-capitalist has been sufficient to get the snowball rolling - that's evident to me this past year.

PS - yesterday was N.B.D., so still "investing" in carbonium too. But also sitting at 48% Net savings rate this year. It plummeted from a one-year peak of 75% in 2018 when my RSP maxed out.

Issue is finding a DB pension outside of the public sector. You can do the math on how much of a paycut you'd have to take going private to public to make the DB pension worth it (depends on your age, expected DB benefit, expected market returns etc). Depending on your field you are probably better off making more money in the private sector and managing your retirement. Some people hate anything to do with financial planning and the peace of mind of DB is worth a lot to them.

I'm lucky, my employer contributes 7% of my gross salary/bonus to a DC plan. I contribute nothing as they don't match further contributions and I'd rather the rest goes into my self directed portfolio.

Canadian version of 2021 asset class returns periodic table, one of my favourite chemistry lessons.

https://www.franklintempleton.ca/en-ca/planning/investor-education/why-diversify

(see the Download the Why Diversify investor flyer, which they seem to have protected from sharing somehow)

A buddy of mine drove a school bus for not very long maybe a couple years so recently  he quit in disgust and he gets a pension or he can take a 6K  payout so he took the cash

Posted by: grambo

Issue is finding a DB pension outside of the public sector. You can do the math on how much of a paycut you'd have to take going private to public to make the DB pension worth it (depends on your age, expected DB benefit, expected market returns etc). Depending on your field you are probably better off making more money in the private sector and managing your retirement. Some people hate anything to do with financial planning and the peace of mind of DB is worth a lot to them.

I'm lucky, my employer contributes 7% of my gross salary/bonus to a DC plan. I contribute nothing as they don't match further contributions and I'd rather the rest goes into my self directed portfolio.

I think private sector DB pensions are long gone, also some of those private sector DB pensions are now underfunded so there is not enough money to take care of the retirees

I had to do the math & choose between DB and DC quite awhile ago ( I think 25yrs ago ) I was young/had enough years so the DB was the obvious choice and that particular pension fund is still close to 100% funded

I think you are right tho about paycut, that cradle-to-grave model had to be funded somehow so while I honestly didnt really make a lot of money there were a lot of benifits included and its looking like a pretty good deal right now

but that model and those days are long gone so take the money and run

Bill C-228 is an important one for old fucks with a DB pension becuz it helps adress the underfunded pension for insolvent companies eg Nortel, Sears

and its already in the Senate, I think it will pass unanimously

Have you investigated the interest rate being offered on your savings lately?

I found my big blue canuck bank "Smart Saver" account kept offering a paltry 0.5%, but they stopped offering it to new clients, instead created a new "Savings Amplifier" account which offered a whooping 1.6%. So, if you were a lazy banker and just kept your "Smart" money where it was, they didn't have to increase your interest rate, whilst happily increasing your mortgage rates!

I have a name for them that rhymes with "duckers".

I dug deeper, and the investment arm of the same bank also offers a 3.65% "High Interest Savings" account that sells like a mutual fund (today offering 3.9%, where the Savings Amplifier is at 1.8% and the good old Smart is 0.8%!).

Lesson learned - shop around and move around, even if it's within your own bank. They will duck you over for any penny of interest if you let them.

Quack.

Posted by: heckler

Have you investigated the interest rate being offered on your savings lately?

I found my big blue canuck bank "Smart Saver" account kept offering a paltry 0.5%, but they stopped offering it to new clients, instead created a new "Savings Amplifier" account which offered a whooping 1.6%. So, if you were a lazy banker and just kept your "Smart" money where it was, they didn't have to increase your interest rate, whilst happily increasing your mortgage rates!

I have a name for them that rhymes with "duckers".

I dug deeper, and the investment arm of the same bank also offers a 3.65% "High Interest Savings" account that sells like a mutual fund (today offering 3.9%, where the Savings Amplifier is at 1.8% and the good old Smart is 0.8%!).

Lesson learned - shop around and move around, even if it's within your own bank. They will duck you over for any penny of interest if you let them.

Quack.

All the banks have their own version of these HISA "mutual funds" that you can buy through their brokerage.

If you use an independent brokerage you can also buy HISA ETFs with even higher interest rates: https://www.pwlcapital.com/high-interest-savings-account-etfs/

I've never used them. We use EQ Bank for our cash buffers, they consistently have a reasonable interest rate (2.5% currently) although never the highest but their HISA is convenient because you directly pay bills from it etc.

We also both hold the minimum chequing account balance to waive fees at TD so that's pretty inefficient at todays interest rates but again convenience is worth something.

The good thing about the big banks screwing their loyal customers over with interest rates on their cash savings is the profits flow through to the shareholders in the form of dividends. The big 5 banks make up ~20% of VCN.

Posted by: [email protected]

The good thing about the big banks screwing their loyal customers over with interest rates on their cash savings is the profits flow through to the shareholders in the form of dividends. The big 5 banks make up ~20% of VCN.

Ha! I feel bad, but every time I hear about big banks gouging their customers I think about the next fat dividend I'll get from my bank stocks.

I looked at HISA ETFs like CASH but they would cost me at $9.95 commission unless I set up yet another trading account.  Neither is gonna happen.

Posted by: Vikb

Posted by: [email protected]

The good thing about the big banks screwing their loyal customers over with interest rates on their cash savings is the profits flow through to the shareholders in the form of dividends. The big 5 banks make up ~20% of VCN.

Ha! I feel bad, but every time I hear about big banks gouging their customers I think about the next fat dividend I'll get from my bank stocks.

tou.to and Gear Energy are close to 10% divy right now.  Great returns in the O & G.

Bottom line I don't worry too much about 1% more or less on the little cash I hold. In the big picture it's insignificant.

I think once you have >90% optimized your finances, that last 10% there is a rapidly diminishing return on time invested and you need to weigh against the value simplicity has to you. Everyone will have slightly different thresholds but for me I'm OK with some leakage in exchange for minimizing the time I spend on managing my finances.

Posted by: LoamtoHome

tou.to and Gear Energy are close to 10% divy right now.  Great returns in the O & G.

Although I enjoy it when my quarterly dividends hit my brokerage account [only ~3 more weeks!] I don't hunt for high dividend yields in particular. I'm a boring total return index fund investor. It's a snooze-fest, but it's a dead simple and effective strategy over the long haul.