Financial health - any advice appreciated

**bjl584** · 02-07-2018, 03:51 AM

You're doing just fine.

Some people will not agree with the car lease, but it doesn't seem to be burying you. If a new car every few years is your thing, and you can afford it, then carry on.

I do wonder why you have so much cash sitting in a savings account. $145K is a lot unless you are planning something big in the future. I'd look into getting some of that money invested someplace other than an account earning a little over 2%.

**disneysteve** · 02-07-2018, 06:48 AM

Originally posted by Sunnybunny View Post

How am I doing?

Welcome to the site.

It sounds like you're doing fine but you haven't told us much about your expenses except for your rent and car lease. What are your total monthly expenses? What percentage of income are you saving for retirement?

I also wonder why you have 145K in a savings account.

Count me among those who are 100% opposed to leasing cars. I had my last car, which I bought used, for 14 years. I've had my current car, also bought used, for 6 years and have no plans to replace it anytime soon. I've saved many thousands of dollars as a result of that one simple thing.

All of that said, you are young and have nearly $200,000 in savings which is amazing! So again, it sounds like you're doing great. There are just a few details missing that would firm up that opinion.

**msomnipotent** · 02-07-2018, 06:52 AM

I would keep 6 months of expenses in the high interest account and start investing the rest. If you have $145,000 in one account, it is only insured up to $100,000. I know that the risk of the bank defaulting is low, but why risk it? At the very least, open some new bank accounts if they offer bonuses and spread the risk around.

**scfr** · 02-07-2018, 06:58 AM

Edit - Looks like you are in Canada. What is the bank insurance coverage limit? If $100,000 then yes, I agree it's a good idea to split between 2 banks. In the USA, FDIC insurance is $250,000 per depositor.

**msomnipotent** · 02-07-2018, 07:02 AM

Originally posted by scfr View Post

If in the USA, FDIC insurance is $250,000 per depositor.

Press Releases | FDIC.gov

https://www.fdic.gov/news/news/press/2010/pr10161.html

That is a great rate you are getting on the savings account by the way!

I think the OP is Canadian. Last time I checked, and I don't know why I checked, they were insured up to $100,000. It might have changed.

**scfr** · 02-07-2018, 07:03 AM

Originally posted by msomnipotent View Post

I think the OP is Canadian. Last time I checked, and I don't know why I checked, they were insured up to $100,000. It might have changed.

Yep - I Googled RRSP and realized they were probably in Canada, thus my edit. Thanks.

**Sunnybunny** · 02-07-2018, 07:47 AM

Yes, am Canadian

I live in BC.

Thank you so much for the responses.
I guess the reason I have that money in a high interest savings is because I'm just learning about investments.

I have started with $100.00 in a Tangerine portfolio. I chose medium risk. I won't lie, I'm terrified of seeing my assets go up and down with the market, and feel safer with most of my money in savings.

I have to get over this fear. I will be spending a lot of time on the forum learning and I hope to get over the fear of losing my hard earned money.. Inflation will reduce its worth greatly over time, I know..

Oh, I believe someone asked about other incidentals in my budget.

I save $400.00 a month in savings, will be saving $100 a month to the investment portfolio, and the rest of my funds on general stuff-groceries, etc.
My one large splurge is a personal trainer - $300.00 a month. It's part of a transformation goal I have to get the leanest I can physically get.

Rent - 1250.00
Trainer - $300.00
Car - $319.00
Tenant insurance - $35.00
Cable & Internet - $99.00
Cell : $89.00

My take-home varies from $1500-$1800 a paycheque (stat holiday pays and overtime). A yearly bonus is coming up next month.

Thanks again for reading. I'll do the best I can.

**snafu** · 02-07-2018, 03:16 PM

Welcome to SA. We're a diverse bunch with different backgrounds and experiences. We really want to do the very best we can to mindfully, manage our money and help others who care.

I'm sorry to learn you believe you are afraid of investments but I point out you are truly experienced riding the investment roller coaster for the entire time you have been contributing to your employer's RRSP program. More worrisome, CIDC insures the value of each of your accounts only to $ 100,000. The chances of any of the top 5 banks crashing are extremely low but it's a risk you need not/should not take. You can split an account or transfer to any no cost, low cost electronic institution as preferred.

As an aside, I mention our banks charge very high fees so it is in your interest to review all your bank's charges from Jan. - Dec. 2017. BC's Credit Unions are popular because they offer benefits that may, or may not be of specific benefit to you.

I believe you would find it helpful to read [Canadian author] David Bach's, 'The Automatic Millionaire'; if you can tolerate two, 'Smart Women Finish Rich' to feel more comfortable in this new to you area of money management. These are available electronically, free, from your library.

I suggest you identify the percentage of income you are contributing to your RRSP, what percentage your employer contributes and most import the allocation you chose and the Mutual Fund firms used. You would likely have received an end of year statement that also shows the sums you were charged
{MER} for management fees. If you are planning to invest going forward, it's best for your choices to mesh with existing holdings.

You may not realize Canadian investments represent only 3% of the world's market and worse is overweighted in only a few sectors [Banks & Natural Resources]. That's why the newscasts talk about money issues in so many other countries.

Finally, it's important to know how much of your income you are saving. That's SIN, CPP, RRSP [employer], RRSP personal Savings accounts & TFSA.

**Jluke** · 02-07-2018, 03:55 PM

In addition to snafu�s reading list here is a �pamphlet� that you can read as well.

It focuses on some good basics for investing.

Just a moment...

https://www.etf.com/docs/IfYouCan.pdf

**Sunnybunny** · 02-07-2018, 04:18 PM

Thanks guys.

I obviously have no control over the MER's on the Group RRSP, and the contribution my employer (a credit union) makes is a grandfathered plan that takes into account how long I've been employed and how much I make.

Taking a look at Sunlife, my employer currently deposits $164.47 per paycheque, and it equates to roughly over 4K per year recently... It's free money and I won't complain

The reason I have the 145K in one institution is because it's the highest interest savings account I could find, and I move funds accordingly based on rates. Currently it's at Tangerine making 2.4%
Working at a financial institution, the CDIC insurance is considered a non-issue. Bank failures in Canada are exceedingly rare, but I will keep that in mind.

I think the consensus is that I have to start investing those savings and it's definitely my future plan, whether it's a robo-advisor, or perhaps even venturing into self-directed investing.

Thanks guys.

**scfr** · 02-08-2018, 06:55 AM

Given your interest in both physical and fiscal fitness, you may find it worth your time to read the book "The Net Worth Workout" by Susan Feitelberg.

It's an "older" book (written in 2006), so it's not up-to-date on the latest technological advancements such as robo-advising, but it offers solid advise and you might find it especially relatable.

As an older book, it may not be available at your local library, but there are used copies available cheap.

Don't feel the need to rush to invest, or to invest in a way that isn't in conformance with your true tolerance for risk.

Good luck.

P.S. I envy your 2.4% rate!

**Sunnybunny** · 02-08-2018, 12:39 PM

Thank you for the book recommend!

And the encouragement

I am happy about my savings balance, but I know at some point, something will need to change. I am working on it slowly by opening my first portfolio and depositing a bit of funds. I will also be moving my smaller RRSP to Tangerine to invest in a portfolio as well. Baby steps

2.4% is pretty great for a savings account, I thought so too. With my 145K sitting there, it's making me approx $300.00 a month in interest, so it's not bad at all (well I thought)...

**james.hendrickson** · 02-08-2018, 12:42 PM

Two point four percent interest is an excellent rate in current conditions.

Can you post a link to the product for all the savers here on the forums?

**Sunnybunny** · 02-08-2018, 01:23 PM

It's with Tangerine. Tried posting the link to the page but I'm too new to post links.
It states on the page that new customers are getting 2.5% now.

Cheers

Financial health - any advice appreciated