Money Investing/Growing Advice

[MikeVic]

I talked to a friend of mine last night, and he apparently just bought a house... he's kind of in a similar position as me, so that got me thinking about investing and house-buying again. I haven't had a chance to speak with a bank representative yet, but I wanted to try for this weekend.

I'm not in a house-owning mind-set yet, but I do want to start growing money. Maybe in a year I will start looking for a house. I don't really want to pay rent for an apartment if I can help it. Hopefully the bank person can steer me in the right direction.

[MikeVic]

Anyone ever use a financial consultant? I spoke to the friend that bought a house, and he said about a year ago he talked to one that helped save the money necessary, and that they take a certain percentage of money they helped you gain.

I'm talking with him through e-mail, so it's taking awhile to get responses back and forth... but I was wondering what you all know about consultants? Not worth it? Worth it?

[Flasch186]

i have no idea if theyre worth it or not but if you have any questions about real estate, and even more specifically need to know something about the new homes market Id be glad to give you some advice that you can bounce of even more people. I too am looking at buying a new home and selling/renting out my old house.

[MikeVic]

Well, I don't see myself buying a house until next summer at the earliest, but I want to start looking soon to see if it is feasible for myself.

I wouldn't be buying a new home, since the price would be way too high for my single income.

[Fidatelo]

Mike, not sure what areas you're looking at, but here's a rough guide based on friends who are looking or have just bought:

- nice home in a bad area: 100k
- crappy home in a decent area: 130k
- nice, but small, home in a decent area: 160k
- nice, mid-size home in a decent area: 200k

[MikeVic]

Originally Posted by Fidatelo

Mike, not sure what areas you're looking at, but here's a rough guide based on friends who are looking or have just bought:

- nice home in a bad area: 100k
- crappy home in a decent area: 130k
- nice, but small, home in a decent area: 160k
- nice, mid-size home in a decent area: 200k

Thanks, much appreciated. My friend paid 130K for his ok-looking home (just saw pictures, but it looks cozy) in an ok area.

[lordscarlet]

Originally Posted by Fidatelo

Mike, not sure what areas you're looking at, but here's a rough guide based on friends who are looking or have just bought:

- nice home in a bad area: 100k
- crappy home in a decent area: 130k
- nice, but small, home in a decent area: 160k
- nice, mid-size home in a decent area: 200k

[MikeVic]

Originally Posted by lordscarlet

Yeah, but we also seem to make less per year... although houses are still affordable here right now. A friend's brother bought a nice house in a nice area for around $220-240K a couple years ago.

[Kodos]

Are those Canadian or US dollars?

[lordscarlet]

Originally Posted by MikeVic

Yeah, but we also seem to make less per year... although houses are still affordable here right now. A friend's brother bought a nice house in a nice area for around $220-240K a couple years ago.

I bought 650 sq ft for $320k a couple years ago.

[lordscarlet]

Originally Posted by Kodos

Are those Canadian or US dollars?

Wow. I didn't even think about that. That's like a $50k house.

[Flasch186]

Originally Posted by Fidatelo

Mike, not sure what areas you're looking at, but here's a rough guide based on friends who are looking or have just bought:

- nice home in a bad area: 100k
- crappy home in a decent area: 130k
- nice, but small, home in a decent area: 160k
- nice, mid-size home in a decent area: 200k

wow, not accurate for all municipalities or areas, at all.

[Fidatelo]

Originally Posted by Flasch186

wow, not accurate for all municipalities or areas, at all.

Umm, MikeVic and I live in the same city...

[MikeVic]

Originally Posted by lordscarlet

Wow. I didn't even think about that. That's like a $50k house.

lol, I've seen some cheap listings around 100K, but I don't think I'd want those houses because of the area... need I remind you that Winnipeg is somewhere at the top in per-capita murders and car theft... I believe like top 5 or 10 in North America (Canada for sure, but I thought I heard the murder thing for all of North America).

[Fidatelo]

I think our U.S. American friends are also forgetting that the exchange rate isn't quite so bad up here anymore.

[MikeVic]

Originally Posted by Fidatelo

I think our U.S. American friends are also forgetting that the exchange rate isn't quite so bad up here anymore.

I think U.S. Americans will forever poke fun at the Canadian currency... I'm happy with it thought right now. I can go to Albertville and buy clothes for the next year or two at a big savings.

[Fidatelo]

Dola

Here's the scary thing: 7 years ago you could buy a really nice house in a nice area for about 120k. That same house now would be 275k. And in lots of places it would be like 500k or higher. I honestly don't understand how people afford houses in those places, even 275k seems like a king's ransom and my wife and I both have good jobs.

[Fidatelo]

Originally Posted by MikeVic

I think U.S. Americans will forever poke fun at the Canadian currency... I'm happy with it thought right now. I can go to Albertville and buy clothes for the next year or two at a big savings.

Yep, I'm still waiting for companies to properly reflect the higher currency in our prices here.

[Fidatelo]

Awesome I totally ended up with the Dola on the wrong post. I'm blaming the timestamp bug.

[lordscarlet]

Originally Posted by Fidatelo

I think our U.S. American friends are also forgetting that the exchange rate isn't quite so bad up here anymore.

The joke is still funny to us, though.

[Vinatieri for Prez]

Originally Posted by lordscarlet

The joke is still funny to us, though.

Yup, pretty funny. Wait to you here the joke about the U.S. national basketball team winning games blindfolded and one arm tied behind their backs.

[Hammer]

Wow, cheapest house on the market where I live in the U.K. is in the region of $250,000. A decent one is $400,000 american dollars. Think I might retire over there!

edit:

need I remind you that Winnipeg is somewhere at the top in per-capita murders and car theft

maybe not then

[k0ruptr]

become an expert in college football and make a lot of bets.

[JAG]

Originally Posted by MikeVic

Anyone ever use a financial consultant? I spoke to the friend that bought a house, and he said about a year ago he talked to one that helped save the money necessary, and that they take a certain percentage of money they helped you gain.

I'm talking with him through e-mail, so it's taking awhile to get responses back and forth... but I was wondering what you all know about consultants? Not worth it? Worth it?

Hey Mike,

I asked the same question (sort of) as you did a few years back: http://www.operationsports.com/fofc/...ad.php?t=24400

There was a lot of great advice for me there. To give 'the rest of the story', in the end we did go with someone professionally and my wife and I are quite happy with the results and with him, still three years later. I don't fully know your financial situation, but our situation was more complicated than the average person and so it was a great help to us, to give us organization and direction. It also depends on what level of involvement you want, if you're looking for a financial plan to be put together (it sounds like this is where you might be) or actually want them to invest your money for you (in which case you will likely need a good-sized chunk). From what I read about your situation, I think you might be able to come up with a basic idea of what you need to do by following the info on some of the sites listed in the linked thread.

[MikeVic]

I have an appointment on Saturday with my bank. I'll take to the lady about my situation and what the best course would be. I'm thinking a house in a year or two is do-able. I was going to start an RRSP next year too (since my company matches after a year's employment).

I'll probably ask about mineral mutual funds and Canadian money market funds... a friend used something called an RSP, that can be used towards a mortgage too. So I hope the bank can help me out with a decision.

[Ryan S]

Originally Posted by Hammer

Wow, cheapest house on the market where I live in the U.K. is in the region of $250,000. A decent one is $400,000 american dollars. Think I might retire over there!

I have a friend who has just bought a two bedroom apartment on the outskirts of London for $650k. He tells me that the identical show flat a few miles closer to the city centre was going for around $850k.

[Vinatieri for Prez]

The best money advice I could give you is: Always bet on black.

I feel better now.

[MikeVic]

I ended up putting a few grand into a fixed 1-year thing. 4.3% at the end of a year, but I can't touch it until then.

I also put twice the amount into a mutual fund (that I'm hoping provided a 5-6% rate). I was told by the bank person that I can take this money out at any time if I wanted to put it towards a down payment for a house, and we also talked a bit about saving for a house.

She said to have about 20% ready for a down payment, in order to avoid some kind of percentage fee (forgot the name of it).

One thing that struck me though, was that she talked about RRSPs, and using that money as a down payment. So I said my company does matching after a year of employment, and I will open an RRSP then. She then said that most places like that need you to do the RRSP through the company, so you can't use the RRSP as leverage in things like mortgages and stuff. It's the downfall of RRSP matching by a company.

Does this sound right?

[MikeVic]

Dola,

I'll be reading more about index funds and stocks before I take a plunge into that!

[Radii]

Originally Posted by MikeVic

I ended up putting a few grand into a fixed 1-year thing. 4.3% at the end of a year, but I can't touch it until then.

A CD? I'm assuming you know you won't need it during the next year so that's ok, but some online savings accounts(like ingdirect.com) do as good or better than any bank CD, so you may want to look at that more for near term safe investments.

She said to have about 20% ready for a down payment, in order to avoid some kind of percentage fee (forgot the name of it).

PMI, Private Mortgage Insurance, if you put less than 20% down you have to pay 'insurance' that covers the lender b/c you're more of a risk to default(I think that's the rationale at least)...


I dunno about RRSPs or other things Canadian

[Vinatieri for Prez]

Some additional Canadian stuff to help you out MV. The fee is mortgage insurance (not private but through Canadian Housing Mortgage Co (CHMC)), necessary for all high ratio loans.

I also agree on the bank CD. I don't like it. That 4.3% is no better than you could probably get for a one-month term deposit or even some high rate savings accounts at some banks. Shop around.

Finally, with the RRSP, all she is talking about is that you can "borrow" from your own RRSP for a down payment and still keep its tax-deferred status, provided you are a first time homebuyer and replenish that amount back into the RRSP over the next 15 years. So, yeah load up on that RRSP as much as you can and that way you can delay paying income tax on it until retirement even though you are using it now to buy a house. They're the Canadian version of an IRA. I don't know about the company RRSP thing though.

[damnMikeBrown]

Hell man, and I want to qualify that I'm drunk right now, but the company I work with has a no shit money market (no B.S. about it, no oh you owe us xxx) rate now of over 5%. Granted the rate drop of earlier this week has not yet really taken effect on money markets. CD's, yes, they've been mauled, but no money markets yet, however they are MUCH more adjustable from the issuers side.

[MikeVic]

The CHMC was exactly it. I recognize the name. The 1-year thing was actually called a GIC. Well, I guess you live and learn. 4.3% sounded alright so I took it. After a year I'll try out something else.

I want to find out about how company RRSPs work first before I start a bank RRSP. I guess the downside (besides risk) of mutual funds is that when you take the money out, yu're taxed on it as income... I should find out about how the company RRSP thing works.

[MikeVic]

So apparently the company I work for allows you to put YOUR contributions towards a mortgage (but not the amount they match with, which makes sense). This is apparently not common for companies to do, as they will usually not allow you to put money towards anything.

I'm thinking since that's so far away (after a year's employment), I'll start an RRSP with my bank... Nothing wrong with having that until next year, I think? Maybe put $100 a month towards it.

[MikeVic]

I have a question that I wanted people's opinions on... So it seems like RRSPs help you in that you can claim them on your taxes, and not pay tax on whatever you put in there. While mutual funds are not like that.

I was going to start an RRSP with my bank next weekend, and deposit around $75-100 biweekly into it. When I set up my mutual fund, I was asked if I would like to regularly deposit $50 biweekly into it too. I said I'd think about it, but am considering it right now too.

My question is do you think it's smart to deposit $100 into an RRSP, and $50 into a mutual fund biweekly? Or should I just put $150 into an RRSP and not the mutual fund (let it grow on its own), or not start an RRSP right now (and wait for my company's matching next year), and put $150 into my mutual fund?

[Fidatelo]

Your RRSP can contain mutual funds. If you don't plan to touch the money until you retire, go RRSP.

[MikeVic]

Originally Posted by Fidatelo

Your RRSP can contain mutual funds. If you don't plan to touch the money until you retire, go RRSP.

Hmm interesting. I don't plan to touch the money until I buy a house, and then use the RRSP money as a down payment. So that could work.

[Vinatieri for Prez]

Originally Posted by MikeVic

Hmm interesting. I don't plan to touch the money until I buy a house, and then use the RRSP money as a down payment. So that could work.

Yup. That's the way to do it. I would suggest that you put everything into the RRSP, and forget about a separate broker account for mutual funds. If you're socking it away for the house, then go for it.

That's the purpose of an RRSP. It's not only tax deductible, but you're earning your 8-12% annual on it (with compounding interest), not 3-4% for a CD or term deposit.

[Flasch186]

Originally Posted by Flasch186

BTW upgrade today on GME....I hope this fall is big for Gamestop

so far so good, and Sirius (SIRI) has had the fight back I needed. pretty happy thus far although im staring down the barrel of 2 new cars this fall. Used '07 models to get the new car loan rates, but its still the opposite direction that I like going.

[MikeVic]

Ok, so the mutual fund I put money into was doing good at first but not so great now. I'll keep it in for a few more months to see what happens (unless it does very poor).

I wanted to start an RRSP right now though (this weekend or next). I was told I could transfer any of that money to my company's RRSP once I'm eligible for that, in case the plan that allows you to use RRSP money towards a house only allows you to take from one RRSP (which I'm sure is the case).

I was talking to a co-worker and he mentioned that what he did was to just save up enough money for a down payment in some liquid account (even something like a chequing account), because he didn't want to have to pay back the RRSP. I'm thinking putting into an RRSP is better, if only because it's tax deductible.

Here's my bank's RRSP options (I think these are the only ones... only ones I could find):
http://cibc.com/ca/rates/rrsp-rates-group.html

I have no idea which one to put into. It seems like anything that gives a decent amount back (and even then, it's only ~4%) requires the money to be locked away for a period of time? Help please?

[Vinatieri for Prez]

Definitely go the RRSP route. I can't believe your buddy used a checking account. That gets like basically zero interest. He could have stayed just as liquid going with a high rate savings account or 30-day rollover term deposit.

[MikeVic]

Yeah, I figure any % is better than 0. I guess I should find an RRSP option with CIBC that just lets me take the money out whenever I want. Looks like a shitty %, but at least the money won't be counted towards my income either.

[MikeVic]

I'll be calling my bank tomorrow to see if I can talk to someone about RRSPs this weekend.

However, my mutual fund keeps dropping. I've lost over $200 on it now. I don't want to sell it because I'm hoping it goes up... it's had a decent history, but maybe I just bought high. Not sure if anyone's looked at my bank's site, but it seems like most of their mutual funds are pretty damn crappy in terms of return rate. Maybe I should start dabbling in an index fund.

[chrisj]

Originally Posted by Fidatelo

Mike, not sure what areas you're looking at, but here's a rough guide based on friends who are looking or have just bought:

- nice home in a bad area: 100k
- crappy home in a decent area: 130k
- nice, but small, home in a decent area: 160k
- nice, mid-size home in a decent area: 200k

Really?? Those are the prices in Winnipeg.

*quickly glances at the prices in Edmonton*

- nice home in a bad area: 350k
- crappy home in a decent area: 350k
- nice, but small, home in a decent area: 400k
- nice, mid-size home in a decent area: 500k

Makes me want to sell my condo and move to Winnipeg. I could live almost mortgage free!

[Logan]

Yeah, but those are in Canadian dollars!

(wishes it was still a year ago )

[Flasch186]

Originally Posted by MikeVic

I'll be calling my bank tomorrow to see if I can talk to someone about RRSPs this weekend.

However, my mutual fund keeps dropping. I've lost over $200 on it now. I don't want to sell it because I'm hoping it goes up... it's had a decent history, but maybe I just bought high. Not sure if anyone's looked at my bank's site, but it seems like most of their mutual funds are pretty damn crappy in terms of return rate. Maybe I should start dabbling in an index fund.

Thats what Im looking to do over the next month. Average my entry into some Index funds and spread the money 75/25 into ex-us. A little throughout as Im bullish for the next 10 years or so globally and I was thinking today, and I could be wrong and you need to do your own due diligence, that perhaps we're seeing a moment where the markets take a breather and then run up to 20,000DJI over the next 5-10 years. This could be an opportunity to get on the train we missed 15 years ago.....could also be the time to lose everything, hrmmmmm.

Been reading 2 books, The Intelligent Investor which in and of itself is a bear and The Little Book of Common Sense Investing, which promotes the idea of ETF's and diversification.

still playing SIRI for the merger though and plan on getting back into Gamestop when a few other trades settle....I see GME at 75+ next year. People cannot stop buying games, recession or no recession and each new platform game they sell can be sold for 200% profit when you average the tradein and turnaround!! There problem may actually be that their shelves aren't big enough!! Although when Im in the store I do NOT like seeing all of the used DVD's....reminds me of Blockbuster and that is NOT a good thing.

[Fidatelo]

Originally Posted by chrisj

Really?? Those are the prices in Winnipeg.

*quickly glances at the prices in Edmonton*

- nice home in a bad area: 350k
- crappy home in a decent area: 350k
- nice, but small, home in a decent area: 400k
- nice, mid-size home in a decent area: 500k

Makes me want to sell my condo and move to Winnipeg. I could live almost mortgage free!

There are definitely a lot of Albertans moving to Winnipeg for exactly the reason you state, they wipe out their mortgage and pocket some cash as well. Even after over 5 years of large increases the housing market in Winnipeg is still 'cheap' in comparison to most places in Canada (even Regina has a higher average house price).

[Cringer]

Anyone have experience with Municipal Bonds? 6.25% interest paid tax-exempt, 10 year term. I don't have the details about the repayment except the 10 years. Was just curious if this type of thing was any good or not? Would just dumping the money into an IRA or Mutual Fund be better (obviously much more long term then the MB)?

[Cringer]

Investing in a municipal bond with Lily Allen, yay or nay?

Perhaps I get some feed back now.

[SportsDino]

You brought up a thread from 2007 to ask that? I know someone on here will probably give you a better low down on municipal bonds than I could, so I'll keep my trap shut.

Interesting to open the time capsule though, at the same time as this thread I was doom and glooming about how to start my own investments.