Need some advice

A

animal-inside

Well-known member
Trusted Member
We have been saving to build a house. We've got a good chunk of money in our savings account, but with the economy it doesn't look like we are going to be building soon.

I'd like to put this money (and more each month) somewhere that I can make more money off it than just interest from the bank, but I have to able to withdrawl it easily and not get penalized by withdrawling it to put a down payment on a house. I'm thinking it will be 3-5 years before we build.

What's my options?
 
A really simple option is place it in GICs... You can choose anywhere from 30 days to 5+ years. Just treat the GIC like your bank account and get anywhere from 2-5% on your money.

Look up "GIC Ladder" for a simple strategy that keeps you from tying up ALL your money for long periods but maximizes your average return.

Also depending on how much cash you have - negotiate with your bank. My bank has posted rates of 1.5% for 30 days - I was able to get 4% by negotiating.
 
I have a registered and unregistered account in questrade. This is a great option if you are comfortable investing in financial vehicles and your money is virtually always available depending on your strategy. If not, just keep it in short gic.

@El Ronero 4% 30 days??? 😱 Wth 5+ million dollars or what?
 
Rolls roydz said:
I have a registered and unregistered account in questrade. This is a great option if you are comfortable investing in financial vehicles and your money is virtually always available depending on your strategy. If not, just keep it in short gic.

@El Ronero 4% 30 days??? 😱 Wth 5+ million dollars or what?
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I have investing accounts as well, but I think you get dinged hard when you withdrawl it because its considered income no?
 
Look at HISA ETFs.

They are ETFs that invest in literally the highest interest savings accounts on offer in the various banks.
Completely liquid, like having your money in a savings account. The only risk is they are not insured like the money would be in a bank account.



www.stocktrades.ca

The Best High-Yielding Canadian HISA ETFs for April 2024 - Stocktrades

For the longest time, record-low interest rates made things like high-interest savings accounts and high-interest savings ETFs on the Toronto Stock
www.stocktrades.ca www.stocktrades.ca
 
animal-inside said:
I have investing accounts as well, but I think you get dinged hard when you withdrawl it because its considered income no?
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What do you mean? Taxed? Everything outside the tfsa is tax at my marginal. I am not a day trader. I certainly try to keep my investments at least 3 years.

Other circunstancial opportunities like COVID let make some money and withdraw lol.
 
Heraclitus said:
Look at HISA ETFs.

They are ETFs that invest in literally the highest interest savings accounts on offer in the various banks.
Completely liquid, like having your money in a savings account. The only risk is they are not insured like the money would be in a bank account.



www.stocktrades.ca

The Best High-Yielding Canadian HISA ETFs for April 2024 - Stocktrades

For the longest time, record-low interest rates made things like high-interest savings accounts and high-interest savings ETFs on the Toronto Stock
www.stocktrades.ca www.stocktrades.ca
Click to expand...
70% of my portfolio is in ETFs. They are the best tool for diversification without too much knowledge.
 
Rolls roydz said:
70% of my portfolio is in ETFs. They are the best tool for diversification without too much knowledge.
Click to expand...
Just let it a ride on option callsfor tqqq. Lol, just kidding, dont. Im still thinking market callapse is on the horizon. I pulled out of the market last fall. Things were up and down with no direction. I got fed up and pulled the plug.
 
deeknows said:
Just let it a ride on option callsfor tqqq. Lol, just kidding, dont. Im still thinking market callapse is on the horizon. I pulled out of the market last fall. Things were up and down with no direction. I got fed up and pulled the plug.
Click to expand...
"The stock market is a device for transferring money from the impatient
to the patient"

-Warren Buffet.
 
@animal-inside

Do you have a TSFA and if so is it maxed out? If not that is your best bet as there is no tax on the interest. Once that is flushed up it's cash time.

If you can handle the risk any mutual fund in an RRSP account can be purchased outside the shelter however that increase in value is subject to taxation- there is a lot in this sentence but will leave it out for this reply.

To minimize risk there are a few ways to go. Presently I purchase a portion of mortgages in first position on high ratio. This one runs just over 10% however there is some mitigated risk. Next for me is high interest savings accounts. I negotiate a rate after the initial "promotion offer" rate that is the same rate. CIBC is cool with it as I simply need to draft out the funds then the next day deposit it again.

Many more options out there for you however my suggestion is to take the TSFA golden egg from the government first then work with cash paying the taxes as you go accordingly. This way 100% of everything is yours tax implication free.

Knowing that you are in mid-term (well over 1yr and less than 5yrs) you have A LOT of options available.

Keeping cash allows for the ultimate flexibility for any quick moves should they be necessary- ie: I find some smoking deal on (what I feel now that I am looking for my third house a very important factor) the "house I've always wanted" then I can pull the trigger fast or say find some land I can pay that cash now and it's taken care of. Cash is king in my mind
 
Rolls roydz said:
@El Ronero 4% 30 days??? 😱 Wth 5+ million dollars or what?
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not as juicy as it sounds... If a GIC is posted at 4%, that means 4% per year. But if the GIC is only 30 days, it's 4% / 12.

So $300,000 @ 4% = $12,000 per year in interest.

If it's a 30-day GIC that works out to $1000


The upside is, the funds are guaranteed (to a certain amount), the rate of return is locked in and it's much better than sitting on cash.

Not the only option, but it's a good option if you're not willing to play the stock casino.
 
I know how rates work. I had never seen such a good rate for 30 days, not even in private banking. Keep doing it as much as you can then. It is too juicy.

Unless you are out of Canada ?
 
El Ronero said:
not as juicy as it sounds... If a GIC is posted at 4%, that means 4% per year. But if the GIC is only 30 days, it's 4% / 12.

So $300,000 @ 4% = $12,000 per year in interest.

If it's a 30-day GIC that works out to $1000


The upside is, the funds are guaranteed (to a certain amount), the rate of return is locked in and it's much better than sitting on cash.

Not the only option, but it's a good option if you're not willing to play the stock casino.
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So I did the homework and yeahhh 😱 economy is so troubled!! You can find even 5% not big banks of course.
 
Rolls roydz said:
So I did the homework and yeahhh 😱 economy is so troubled!! You can find even 5% not big banks of course.
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I am getting 5.25% at Scotia bank. Now I need to leave 100,000 in the account min for the month to get it though, but I can pull; the money anytime I want.
 
Sorbate said:
I am getting 5.25% at Scotia bank. Now I need to leave 100,000 in the account min for the month to get it though, but I can pull; the money anytime I want.
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That’s very good man. Shit, before all this economic tantrum you had to cry for a 3% with 200k. Not good sign overall for the whole economy and inflationary pressure but what hell that’s why we work hard. Either we complain or we work harder 💪🏼
 
I still haven't figured out what to do with our savings account that we'd like to build a house with.

Right now we are locked in at 1.79% interest on our mortgage until 2026.. IT's a closed mortgage so I am limited how much I can pay on top of it, but would it be worth it to try paying that mortgage down with the extra cash instead of invest it?

MY reaosning is, when we resign out mortgage we could be facing 7-10% interest.. No investment I know of is promising me a 10% return right now.. so if I pay the mortgave down it would be better than tyring to earn money with my money?
 
Simplify this.

Someone is offering you a loan for 1.79% for the next 2 years, after which they want 7%

You can take the the money and invest it risk free for 5% for the next 2 years, then pay off the loan with money you earned.

Clearly anyone would borrow 1 billion of they could.

Same principle, but in this case investing with money you're not paying down your mortgage with.
Consider yourself a winner with a loan the bank is losing money on.
 
A new fund came out Ive been parking some cash in. Its a preferred share all in 1 etf. ticker SPLT
Seems pretty safe to me. 6.25% dividend with very little movement in price. Please do your own due diligence since this is very new and unique
 
Cheapshot said:
A new fund came out Ive been parking some cash in. Its a preferred share all in 1 etf. ticker SPLT
Seems pretty safe to me. 6.25% dividend with very little movement in price. Please do your own due diligence since this is very new and unique
Click to expand...
I'll look into it thank
 
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