Starting to invest.

As you can see from my last few posts on wednesday, I am a big believer in investing. I regret not investing earlier , but that hasn’t stopped me from jumping in head first and trying to learn as much as I can. While I recognize that not everyone will share the same outlook of actively managing their investment portfolio, I am hoping that most has a need to save something, anything, for their future.

Its funny to note that I would have never been considered a poster child for being financially saving. I have common sense, but I have made quite a few (ne many) financial decisions that has left me poorer than I started. Needless to say, I learned from those mistakes and sought out different yet easy to manage avenues for my networth growing ventures.

Case in point, I started looking into E-series by TD Canada Trust a bit ago. I liked the fact that they have the lowest MER rates going and that I virtually have to do nothing but sometimes check in and rebalance it (this is more than I can say about my RRSP’s, or 401k for my American friends). The only problem with setting up an E-Series account is the sheer amount of work that is involved. TD, the bank, does not make it easy for you to give them money, or you to take your money out.

As I am starting to tell friends and family about this blog and my interest in personal finance, I keep having to answer questions about a few products that I endorse (not paid) such as Wave Accounting and E-Series funds. The problem with telling people about these funds is once I’ve sold them on the product, I am the first person they call when they need to figure out  how to open their accounts.

Here is the step by step process.

 

  • Step 1. Go the bank. Yes, I know, it is common sense but still. I am very happy with the hours of operation for TD.
  • Step 2. Open up a TD Mutual Fund account. You need to bring 2 pieces of government ID and it helps if you have a general idea of your networth.
  • Step 3. I opened up a Bank account with it as well, just in case. I remember the days when TD was offering IPODs to bring customers over. I miss those days.
  • Step 4. Register your account online.
  • Step 5. You will have to link another account to it to transfer funds in your TD account. I have this coming from my ING account.
  • Step 6. Print out the Mutual Funds to E-series conversion form, fill it in and attach a void for the link another account. (see above)
  • Step 7. Mail the form in.
  • Get familiar with the 4 different funds that are available and allocate your investments that way. If you are not comfortable with jumping right in, start with a mock portfolio.
The only thing I cant help with is which finds to invest in. That, my friends, depends on what you feel comfortable with and what your level of knowledge is.
My contributions to these funds are bi-weekly set up to come out automatically.
On a final note- I can not stress the importance of not only saving, but saving the smart way.

 

 

 

24 Comments

  1. I am a long time investor and I have known many investors. I think one of the most important things in investing is to use common sense.

    The other thing is not to invest in something you do not understand.

    1. EXACTLY! The only problem here is that I can’t invest in a lot of different things since I don’t understand a lot.

  2. That amount of work to just to open an account would probably turn me off to be honest, unless what they offer really blows the competition out of the water. I don’t think some things should be difficult, stuff like opening an account should be a cinch.

    I like good customer service and ease of use.

    Anyways, it’s good you’ve written out the steps, now anyone who is thinking about it would have a guide.

  3. Mutual funds are a very good and relatively safe way to kick off your investment experience. Someone else helps you make decisions, but you get to learn along the way. If you find that you really get into it, you may even want to try some direct investing yourself. If not, at least you are still in the game 😉

    1. I already direct invest, but I like the idea of the automatic investing that is involved in mutual funds. Less thinking.

  5. I think that it is a necessity to inform people about investing for the future. I don’t agree that Mutual funds are the best way to make money with your investments. On average mutual funds make slightly more than a CD (Certificate of Deposit). I would agree that it is the safest way to invest, for now. If any kind of inflation kicks in (and it will, but that is a completely different discussion) the mutual funds will not be making any gains. More realistically they will be losing you money.

    I recommend learning about the financial markets and learn how to invest. Honestly, it is something that should be learned and has been neglected for many years now. Find a class, and start training. I have many recommendations, if you would like contact me.

    1. Thanks for your input. I have been brushing up on my investment knowledge. 🙂

  6. Very basic investment options and alternative to increase worth which most are ignorant or ignore until they are heavly indebt.

  7. You have a great sense of humor. Go to the bank “Yes I know it’s common sense but still..” I think I know what would follow if you dared. Yes I know it’s common sense but there are a lot of uncommon senseless people. 🙂

    1. Oh my goodness, are there ever…. 🙂

      I try to bring the funny and keep up with you.

  8. Great website. A lot of useful information here. I hope it help us very much. THANKS!

  9. “Those who are unwilling to invest in the future haven’t earned one.”
    ~H.W. Lewis

  10. I am going to have to follow your progress. The only investing I currently do is RRSPs, but I realize that is not good enough. I am going to have to make a point of learning more about investing and expanding to some better options. It’s about time I got more serious about my future.

  11. I’ve been keeping my eye on TD’s e-Series for a while now – especially since every PF blogger seems to rave about it! I’m still getting my Emergency Fund established and compiling a respectable pool of RSPs, but I’m definitely getting eager to try my hand at investing. Perhaps in the second half of 2012.

    Appreciate the tips!

    1. After you get over the initial legwork of setting up an account, its super easy to set it and forget it with E-series!

      Thanks for stopping by!

  12. The amount of work it took to open up a TD e-series account is ridiculous. They really don’t want us to save money!! 🙂

    But I think it’s so worth it. They’ve probably got the lowest MERs on the market right now.

    When I first applied, I sent in a copy of a void check (the ones that you can print off from ING’s website) and that got rejected. I had to send a REAL void check. I hate wasting checks that way.

    1. Me too! I have a very limited amount of checks that I hold on to for dear life.

  13. I think you’ve got the right idea. I always tell people to go to Vanguard or Fidelity and open an account themselves. But then I remember that can be overwhelming for some people. Every investor needs to do what they are comfortable with. The point is that they do “something”. And someday when you learn how to do what the banker is doing for you (and you will), you will find that it is cheaper to do it yourself. But no rush. We all have to start somewhere.

  14. I would like to suggest a simple way of investing in exchange traded funds and closed end funds that can greatly increase returns while at the same time lower risk. I believe this method because of its simplicity can enable even those with limted financial knowledge to become rich with considerable less risk.
    Anyone that has any doubts as to the Accuracy and validity of the information provided below feel free to check it out with any competent financial advisor. I feel totally confident that my analysis will withstand any serious security.
    Im am speaking about exchange traded funds and closed end funds from the perspective of a citizen of the united states. The following may not apply to investors worldwide.
    Their are now over fifty single country funds available and maybe over 100 narrow sectors like airlines steel solar so why the concern for the nasdaq or the standard and poor five hunderd each one of these countries and sectors is a index of and by itself The solar exchange traded fund {TAN} is now down 90% from its high in 2007. If I were a investor or trader I would simply look for any exchange traded fund or closed end fund that does not use any leverage in their porfolios and start buying in the ratio of 0.50 percent of your cash on hand in my account after their is a 75% decline from its all time high and than buy twice as much in the ratio of 1.00 percent of your cash on hand in my account if that exchange traded fund or closed end fund declines another five percent an 80% decline from its all time high buy twice as much in the ratio of 2.00 percent of your cash on hand in my account at a 85% decline from its all time high buy twice as much in the ratio of 4.00 percent of your cash on hand in my account at a 90% decline from its all time high and finally buy twice as much in the ratio of 8.00 percent of your cash on hand in my account at a 95% decline from its all time high. Now I know that some of these funds will not decline 90% from their all time highs. Another thing that you might be wondering about I would run out of money. If I followed that method right wrong example take one hundred thousand dollars. Example Buy 500 dollars of xyz fund at 25 dollars off 75% from its all time high of 100 dollars buy 1000 dollars of xyz at 20 dollars off 80% from its all time high of 100 dollars. Buy 2000 dollars of xyz at 15 dollars off 85% from its all time high of 100 dollars Buy 4000 dollars of xyz at 10 dollars off 90% from its all time high and finally Buy 8000 dollars of xyz at 5 dollars off 95% from its all time high This way you will have your biggest positions in the funds that have declined the most and the smallest positions in the funds that have declined the least. Also keep in mind that if your cash position in your account is say one hundred thousand dollars to start this will gradually decrease as the equity portion of your portfolio increases. Example If your cash position is fifty thousand dollars of your one hundred thousand dollar portfolio you would invest one half of one percent to start which would be two hundred and fifty dollars. Also keep in mind when you buy an exchange traded fund you are buying a basket of stocks so the fund cannot go to zero unlike a stock. Than when any fund has regained three quarters of its value that would be say fund XYZ which traded at 100 dollars five years ago. It now trades at 75 dollars in the case of XYZ. Now you would use a 15% trailing stop loss to protect your gains. So if XYZ declines to 63.75 from 75.00 you would be stopped out insuring that you retain most of your gains. If XYZ continues to rally without correcting by 15%. Who knows you may sell out of the stock within 85% of its all time high. Its all time high could be 150 dollars..
    And their you have it a simple but brilliant strategy for exchange traded fund and closed end fund investing.

  15. The only thing I got out of mutual funds were some painful lessons… The lesson being that most mutual funds are horrible contraptions designed by big financials to keep big financials busy.

    In theory the mutual fund sounds great… But in reality they are ALL too expensive. They get paid even when they lose all your money.

    I decided why not own the banks rather than the stuff they sell? (And that’s where my investing story began)

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