On Jan 9, 7:35*am, "The Henchman" <don'tas...[at]iampoor.net> wrote:

- quote -

It looks like the Canadian TFSA is like a Roth Account with no penalty
for early withdrawal, so I don't see any problem with your taking full
advantage of that program and a mixture of stock and bond funds should
be good for your situation.

The TFSA can act as an emergency fund and as that gets built up, you
can reduce your cash (checking and demand savings).

There are two types of emergencies: One is where you need a large sum
of money immediately (say to replace a motor vehicle); and the other
is where you need a cash flow for managing on going expenses (food,
rent, etc.) due to a lay off or incapacitation.

--
Ron

"Ron Peterson" <ron[at]shell.core.com> wrote in message
news:00e5a9dc-ffca-4e5e-b915-f010bd1ae410[at]g1g2000pra.googlegroups.com...
- quote -

the 7 or 7.5% is from Stock funds plus income funds after MERS.

I already have 7 months living expenses set aside in cash. Do you think I
need more for an emergency expenditure. Do people keep about 12 months
worth? or maybe an amount equal to their salary?

On Jan 8, 9:02*am, "The Henchman" <don'tas...[at]iampoor.net> wrote:

- quote -

Yes, don't bother with the fixed income component. You should have
more liquidity so that you can make an emergency expenditure.

I don't think that you would get close to a 7% return with the fixed
income funds offered.

--
Ron

"Ron Peterson" <ron[at]shell.core.com> wrote in message
news:689c994e-fa60-4d4d-8019-1af0028c7b17[at]r15g2000prh.googlegroups.com...
- quote -

I am a renter, 32, and not interested in homeownership, but cottage
ownership in the next 5-7 years. All my net worth is in registared and
non-resgistared index stock funds (and that amounts to $20 000). and 6 or 7
months living expenses in a taxable savings account in cash. I have decent
income but no high school diploma so my earning ability is limited.

I have no debt, no car payments, no school debts, no credit card debt. 4 or
5 years ago I had $32 000 in these sorts of debts including 28% interest
credit cards and I paid every cent of it back without a single missed or
late payment. I now avoid consumer debt altogether even though my credit
score shows over 800.

I wanted to contribute up to 36% of my take-home pay into the following 3
accounts: Retirement, Mid-term, Cash. I'll need about $10 000 cash to
purchase a replacement automobile in the next 18 months. My health is good
and universal medical care is afforded to me.

I'll use the tax-free savings account to hold half of my mid-term
investments with the primary goal of cottage ownership. So I wanted to
preserve equity in these mid-term investments because I'll be using it for a
goal that'll still build equity. The way I figured it roughly 30-50% of my
monthly contributions towards this goal should be in a fixed income type
fund(s) but there are not alot of options for small incremental purchases,
say biweekly.

So should I forget about contributing to the fixed income component of this
tax-free savings plan account and just keep that portion set aside in cash,
or is it still worth it to buy fixed income funds incrementaly, say $25 or
$35 a week? My goal is to get a 7 or 7.5% return overall.

On Jan 7, 2:15*pm, Douglas Johnson <p...[at]classtech.com> wrote:
- quote -

Yes, I am guessing that he isn't already heavily invested in energy
stocks. He won't have any more than $25,000 in the account at the end
of 5 years which probably won't be more than 50% of his annual income.
I would guess that home equity and other investments are at least
$100,000, which would make the energy fund only 20% of his investment
which is reasonable amount to have in the energy sector.

--
Ron

Ron Peterson <ron[at]shell.core.com> wrote:

- quote -

Without knowing his other investments, do you really think it is smart to put
all his money in one sector fund for a 4-5 year period? Sector funds are
volatile by nature and that one seems particularly so. -- Doug

On Jan 7, 11:49*am, PeterL <po.n...[at]gmail.com> wrote:

- quote -

The Madoff situation wasn't under any sort of supervision.

--
Ron

On Jan 7, 9:05*am, Ron Peterson <r...[at]shell.core.com> wrote:
- quote -

That's what everyone was saying about Bernard Madoff.

On Jan 6, 6:32*pm, "The Henchman" <don'tas...[at]iampoor.net> wrote:

- quote -

You aren't going to gain much by diversifying in your tax-free
account. Put your fixed income funds in your taxable account and stock
funds in the tax-free account.

- quote -

Just put it all into the TD Energy fund because the managers of that
fund should be knowledgeable. You should be safe with that strategy
over the next 5 years.

--
Ron

Not sure if people can help me with this but maybe there are others who face
a similar plan or advice needed...

I am taking advantage of the new Tax-Free Savings accounts and will be using
this account for 4-5 year goals. I've decided on 60% stock funds and 40%
fixed income funds

For those not in Canada this TFSA allows up to $5000 per year to be
deposited into a special account. The investments in this account can earn
capital gains free of tax (and do not qualify for capital gains losses on
your tax forms )and you can withdrawl from this account without penalty.

Any usused limit room can be carried forward for the following tax year so
in 5 years I "could" have $25 000 in this account earning a return tax free,
withdrawlable pentaly free.

I've opened an account with my national bank cause they offer the lowest
cost MER index funds and I can't afford the commissions on ETF's as I will
be putting money into this accout biweekly (12% of my paycheque).

The problem is I've never invested into fixed income funds before and I have
no idea how these work. My retirement plans are at least 25 years away and
my mid-term investments are in stock index funds as well. This particular
account cannot hold cash as it's a fund account. In order to hold cash I'd
have to open another type of Tax-Free Savings account. Besides the interest
paid on cash is really pitiful these days.

What I can get access to is from this list:
http://www.tdcanadatrust.com/mutualfunds/prices.jsp

The E-series are the low cost funds but they only offer one e-series for all
of fixed income. The rest have standard MER's. There is no admin fees or
commission's etc. Just MER's.

Can anyone help show me how to construct a fixed income portfolio using
small biweekly contributions? The Balanced funds are also available but
they have higher MERs. Maybe those are the way to go? The remaining 60% of
this account will be 1/3 CDN indx, 1/3 US indx Currency neutral and 1/3
International Currency neutral if this helps...

D.