Comments on: Investment Plan – Long and Short Term http://www.milliondollarjourney.com/investment-plan-long-and-short-term.htm Building Wealth through Saving and Investing Sun, 12 Feb 2012 23:42:26 -0330 http://wordpress.org/?v=abc hourly 1 By: cmjxj http://www.milliondollarjourney.com/investment-plan-long-and-short-term.htm/comment-page-1#comment-11052 cmjxj Mon, 27 Aug 2007 02:11:44 +0000 http://www.milliondollarjourney.com/investment-plan-long-and-short-term.htm#comment-11052 Q, You mentioned paying your mortgage off first was your number one priority. Given your age, you must have used a lump sum payment plan to quickly pay your mortgage off. I’m interested to know what method you used. I’ve started a plan of my own to pay off my mortgage ASAP (6 years). Sounds very difficult I know. I started in September with a $214k balance on mortgage. My goal was to find the quickest possible way to get rid of all my debt (mortgage included). I read an e-book titled "Mortgage Cycling" which helped me come up with a plan. First I use the ‘pay it first’ method as described in the “Wealthy barber”. Every two weeks $750 is transferred to a money market account (paying it first), which earns on avg 3% (balances over $5k). Every 6 months I make a lump sum down payment of $9750 on my mortgage from the money in the mortgage account (always maintaining a $5k balance). In addition, I pay my regular mortgage payments bi-weekly with $200 extra each payment. The results are astonishing. My total interest paid once the mortgage is paid off (6.38 years) is $37,470 compared to a whopping $152,255 interest I would pay if I made over the life of the mortgage at normal payments. I totally agree with the pay down mortgage first. A couple of points though, I’m paying a large amount of money that is currently available, some may not be able to contribute this much. Know that any bit extra you can pay on your mortgage, the greater the interest savings. There are other ways this can be achieved (without using a money market account). Another common method is using a heloc and visa to “cycle” money around to pay off your mortgage. Another thing to watch out for is penalties from the mortgage loaner, know your limits for excess on principle each year Any thoughts? FT, this is a brilliant idea. This is something I’ve been looking for awhile now. We share a lot of similarities, age, rental property, financial freedom goals. I’ve started from the start and will eventually get through all the posts. Cheers Q,
You mentioned paying your mortgage off first was your number one priority. Given your age, you must have used a lump sum payment plan to quickly pay your mortgage off. I’m interested to know what method you used. I’ve started a plan of my own to pay off my mortgage ASAP (6 years). Sounds very difficult I know. I started in September with a $214k balance on mortgage. My goal was to find the quickest possible way to get rid of all my debt (mortgage included). I read an e-book titled “Mortgage Cycling” which helped me come up with a plan. First I use the ‘pay it first’ method as described in the “Wealthy barber”. Every two weeks $750 is transferred to a money market account (paying it first), which earns on avg 3% (balances over $5k). Every 6 months I make a lump sum down payment of $9750 on my mortgage from the money in the mortgage account (always maintaining a $5k balance). In addition, I pay my regular mortgage payments bi-weekly with $200 extra each payment. The results are astonishing. My total interest paid once the mortgage is paid off (6.38 years) is $37,470 compared to a whopping $152,255 interest I would pay if I made over the life of the mortgage at normal payments.

I totally agree with the pay down mortgage first. A couple of points though, I’m paying a large amount of money that is currently available, some may not be able to contribute this much. Know that any bit extra you can pay on your mortgage, the greater the interest savings. There are other ways this can be achieved (without using a money market account). Another common method is using a heloc and visa to “cycle” money around to pay off your mortgage. Another thing to watch out for is penalties from the mortgage loaner, know your limits for excess on principle each year

Any thoughts?

FT, this is a brilliant idea. This is something I’ve been looking for awhile now. We share a lot of similarities, age, rental property, financial freedom goals. I’ve started from the start and will eventually get through all the posts. Cheers

]]> By: FrugalTrader http://www.milliondollarjourney.com/investment-plan-long-and-short-term.htm/comment-page-1#comment-503 FrugalTrader Sat, 17 Feb 2007 20:42:27 +0000 http://www.milliondollarjourney.com/investment-plan-long-and-short-term.htm#comment-503 <b>Ron:</b> If you are going to invest in an actively managed fund, make sure that it has outperformed the market over the past 5-10 years. I think the stat is that 85% of all actively managed funds <b>do not</b> beat the market. So the odds are you'll do better investing in low cost index funds instead. TD has a great set of low cost index funds. No, there is no way that you can make your RESP contributions tax deductible. Not that I know of anyways. There is nothing special about Derek Fosters portfolio. He basically focuses on Canadian dividend paying stocks that have increased their dividends throughout their history. Stocks like RBC have been paying a dividend since the 1800's. Strong dividend paying stocks have been known to be resistant to market down turns, which is the reason why I like them. Another thing is these strong stocks keep paying their dividends even in a market crash. FT Ron: If you are going to invest in an actively managed fund, make sure that it has outperformed the market over the past 5-10 years. I think the stat is that 85% of all actively managed funds do not beat the market. So the odds are you’ll do better investing in low cost index funds instead. TD has a great set of low cost index funds.

No, there is no way that you can make your RESP contributions tax deductible. Not that I know of anyways.

There is nothing special about Derek Fosters portfolio. He basically focuses on Canadian dividend paying stocks that have increased their dividends throughout their history. Stocks like RBC have been paying a dividend since the 1800’s.
Strong dividend paying stocks have been known to be resistant to market down turns, which is the reason why I like them. Another thing is these strong stocks keep paying their dividends even in a market crash.

FT

]]> By: ron M. http://www.milliondollarjourney.com/investment-plan-long-and-short-term.htm/comment-page-1#comment-502 ron M. Sat, 17 Feb 2007 16:02:23 +0000 http://www.milliondollarjourney.com/investment-plan-long-and-short-term.htm#comment-502 Looking for a good investment for RESP brand new child any suggestions. Was looking at something like Trimark fund SC. or just buying TD Bank or other long term good performing stock. I take it there is no manuever to make the investment tax deductible to the parent or grandparent? On another vain where do i get info on this Derek Foster portfolio and why do you think it is so good? Looking for a good investment for RESP brand new child any suggestions. Was looking at something like Trimark fund SC. or just buying TD Bank or other long term good performing stock. I take it there is no manuever to make the investment tax deductible to the parent or grandparent?

On another vain where do i get info on this Derek Foster portfolio and why do you think it is so good?

]]> By: Q Cash http://www.milliondollarjourney.com/investment-plan-long-and-short-term.htm/comment-page-1#comment-27 Q Cash Mon, 18 Dec 2006 03:16:18 +0000 http://www.milliondollarjourney.com/investment-plan-long-and-short-term.htm#comment-27 FT You asked a couple posts back what my savings strategy was. Essentially, I was (am until the end of the year) paid weekly with a direct deposit. I set up an ING transfer weekly and then after 3 months, reinvested that money. At the beginning of each year, I max out my RRSP contribution as soon as I know what it is. Usually with some of my tax return, sometimes with my savings. Most of my RRSP is in mutual funds and non-exciting stuff. Next, I max out my kids RESP contributions. That is in monthly income mutual funds through BOM. We have two kids and can contribute $4000K each per child. With the CESG, we get an immediate 10% boost ($400 on $4000). We can only put $44,000 per child total, but I figure if I can get it all in the first 11 years, that leaves 6-7 years of pure growth. Our kids are young, so people ask me why I am not in a super aggressive fund, but that is my wife's conservative nature winning through. We actually use a dividend fund, monthly income fund and equity fund to try to achieve some balance. Finally, when we first bought our house, paying off the mortgage as soon as possible was priority one because we both knew that by being mortgage free, the choice to stay home with the kids was easy to make. And we were right. Q PS I can give you a breakdown of my overall investments in another post. But I have been trying to adopt Derek Foster's portfolio. I just haven't moved too many stocks/funds over because I am going to get hit with huge capital gains and I would rather do that in the new year, when my income will be lower. FT

You asked a couple posts back what my savings strategy was. Essentially, I was (am until the end of the year) paid weekly with a direct deposit. I set up an ING transfer weekly and then after 3 months, reinvested that money.

At the beginning of each year, I max out my RRSP contribution as soon as I know what it is. Usually with some of my tax return, sometimes with my savings.

Most of my RRSP is in mutual funds and non-exciting stuff.

Next, I max out my kids RESP contributions. That is in monthly income mutual funds through BOM. We have two kids and can contribute $4000K each per child. With the CESG, we get an immediate 10% boost ($400 on $4000).

We can only put $44,000 per child total, but I figure if I can get it all in the first 11 years, that leaves 6-7 years of pure growth. Our kids are young, so people ask me why I am not in a super aggressive fund, but that is my wife’s conservative nature winning through. We actually use a dividend fund, monthly income fund and equity fund to try to achieve some balance.

Finally, when we first bought our house, paying off the mortgage as soon as possible was priority one because we both knew that by being mortgage free, the choice to stay home with the kids was easy to make. And we were right.

Q

PS I can give you a breakdown of my overall investments in another post. But I have been trying to adopt Derek Foster’s portfolio. I just haven’t moved too many stocks/funds over because I am going to get hit with huge capital gains and I would rather do that in the new year, when my income will be lower.

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