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Garth hates GIC's
July 30, 2019
8:24 pm
Joe
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Of course, all of the above is lost on those who fixate on preserving capital. They want no risk, a guarantee and think 3% is fabulous, even when inflation’s 2.5% and they’re fully taxed on interest. If you already have enough money to finance the rest of your life, GICs or a high-interest savings account might work. You don’t need growth. But that’s not most people.

So GICs with their high-tax profile, lack of liquidity, inadequate returns and inability to deliver a capital gain are a poor choice. The fact 80% of all TFSA money sits in GICs or cash savings says a lot about and how emotion dictates finances. No wonder there’s a retirement crisis about to hit. People need to stop thinking with their pants. But won’t.

https://www.greaterfool.ca/2019/07/29/debts-embrace/

July 31, 2019
7:07 am
Bud
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If you have $100,000 in savings and earn 3% interest annually and you save another $5,000 from your job, your return on investment or ROI is 8% annual.

Your job is an investment!

GIC King

July 31, 2019
8:29 am
Koogie
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I long ago realized the only "fool" is the one who takes Garth seriously.

He is often disingenuous and sometimes downright dangerous with his advice.

To my mind the only part of his patter worth listening to is the basic advice (planning/saving/debt) but you can get that from a lot better sources if that is what you need. To say nothing of his convenient short term memory and his political turncoatism.

I don't need it so I tuned him out a long time ago.

July 31, 2019
8:34 am
Bud
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I trust Garth over Trudeau economics

GIC King

July 31, 2019
10:38 am
Vatox
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Hotmony is correct. It’s not just about making gains from your money, it’s about contributing to your savings. Way too many people need To use the big gain risks because they spend all of what they earn and even borrow credit to get more stuff. In other words, most people are unable to live within the guarantee of GICs. It’s simply because of lack of personal restraint and self control. The world has become a feel good, do anything you want, mess.

July 31, 2019
3:09 pm
Rick
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hotmony said
If you have $100,000 in savings and earn 3% interest annually and you save another $5,000 from your job, your return on investment or ROI is 8% annual.

Your job is an investment!  

Working for me.

July 31, 2019
4:20 pm
Kidd
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Hotmony.... to me, this sounds like a "new" math thing again.

If your job pays $150,000 and you save $5,000 of that and on your $100,000 investment you make $3,000?

From $250,000 you've made/saved $8,000.

You are back to a 3% return. NOT 8%.

July 31, 2019
4:45 pm
mechone
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I earn 12,000 a year in interest ,put 6000 of that in tfsa and the other half in rrsp.
I save 500.00 per week, 26,000 per year and put 100 a week into company pension
From the 26,000 I put about 10,000 (16000 total) in rrsp and get back around 3000 in tax return.
I listened to someone like Garth and lost over 100,000 in 2008 and it took until 2014 to get the money back.
Investing in stocks dividend paying about 20% and 80% in GIC's I've saved over 1.2 million and my house is paid for...GIC's work for me. I got burnt once never again

July 31, 2019
7:01 pm
pooreva
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Where can I apply for job paying $150,000??? Please let me know.
No, I do not want to be useless politician nor idiotic PM nor paper pusher. Something where brain can be used and not only tongue without brain...

July 31, 2019
9:21 pm
Bud
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Have to think about that kidd

GIC King

August 1, 2019
2:20 am
Kidd
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Removed by me

August 1, 2019
3:44 am
Briguy
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Garth is right that if you are willing to leave your money in a balanced fund that doesn't charge too much MER, you will do better than a GIC in the long run, as long as you never need to access the money immediately since it may be during a down time. For example if I invested my money in Saskatchewan Pension Plan in 2007 just before the crash, and left it there till the end of 2018 ( which was another bad year ), I would have still earned 5.3% overall. He's wildly inaccurate though, suggesting you will earn 9% by investing in a balanced ETF, since that doesn't take into account market crashes. He also completely missed the real estate downturn by many years,predicting it something like 8 years ago, so people who listened to him and rented instead of buying missed many years of real estate growth.

August 1, 2019
6:24 am
Saver-Mom
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Agree with Vatox and Mechone
Live well within your means, spend less, save more, GICs protect the capital without much risk, I sleep well at night.
Consumerism is death.

August 1, 2019
7:03 am
davidgeorge
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I am wondering what the return looks like if you leave fund with a financial service representative of big banks, better than GIC for sure?

August 1, 2019
2:11 pm
Briguy
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davidgeorge said
I am wondering what the return looks like if you leave fund with a financial service representative of big banks, better than GIC for sure?  

The big banks' funds tend to have very high service fees, insurance policy fees to guarantee you won't lose money etc., so I'm pretty sure you'll make more money in a GIC that pays around 3% interest.

You are better off getting a discount broker and buying a self balancing ETF like VGRO ( new so only shows 1 yr return of 4.42 % ) or XGRO ( 1 yr return of 3.45 % ) or even better, a low fee mutual fund from Mawer ( 1 yr return of 7% for MAW104 ).

August 1, 2019
6:16 pm
Norman1
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If one had invested in no-load Investor Series units (TDB970) of the TD Balanced Growth Fund, through a TD Investment Services mutual fund representative at a local TD Canada Trust branch, one would have returns like these:

TD Balanced Growth Fund
Investor Series units
Periods ending June 30, 2019
YTD 1 year 3 years 5 years 10 years
+13.51% +5.46% +7.30%
per annum
+5.49%
per annum
+6.30%
per annum
August 1, 2019
6:47 pm
Briguy
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Those rates are good, I was thinking more about those market growth GICs they try to sell you.

August 1, 2019
8:21 pm
toto
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In my experience, Gics and saving have catapulted us into wealth.
We're a one income family, I started reading this blog and setting up ladders, moving money to promos, living well but not over the top. It worked for us.

August 1, 2019
8:37 pm
Joe
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Briguy said
Garth is right that if you are willing to leave your money in a balanced fund that doesn't charge too much MER, you will do better than a GIC in the long run, as long as you never need to access the money immediately since it may be during a down time. For example if I invested my money in Saskatchewan Pension Plan in 2007 just before the crash, and left it there till the end of 2018 ( which was another bad year ), I would have still earned 5.3% overall. He's wildly inaccurate though, suggesting you will earn 9% by investing in a balanced ETF, since that doesn't take into account market crashes. He also completely missed the real estate downturn by many years,predicting it something like 8 years ago, so people who listened to him and rented instead of buying missed many years of real estate growth.  

I've never seen him claim 9%....6 to 7, yes, many times and that is accurate. He has been wrong about real estate for 10 yrs, and the only downturn is in Vancouver, where they're back to 2017 prices. He loves to wind up the millennial's, and that alone is worth following his blog imo.

August 1, 2019
8:42 pm
Joe
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Briguy said

or even better, a low fee mutual fund from Mawer ( 1 yr return of 7% for MAW104 ).  

That is a great fund....have owned it for 10 yrs.

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