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First of all, definitely read the first post in this thread. Here's a link, if your PGUP, Home, and Up arrow keys are broken: http://forums.somethingawful.com/showthread.php?threadid=3256838&pagenumber=1#post371326560 Vestral posted:Okay, let's take a look: CBA 18%: $500 Suncorp 11%: $1300 Possible plan: Balance transfer the $1300 to the higher interest card.  DON'T DO THISCredit cards are set-up specifically to make money off of you. If you made that transfer, you would be paying $1300 (or more!) at 18% and you would likely be charged interest retroactively on the $1300 because you didn't clear it all. Here's my recommended plan of attack: 1) DO NOT USE YOUR CREDIT CARDS You need to stop using credit cards. I would seriously recommend taking a portion of your pay (like $100, whatever) as soon as you get paid and put it an envelope. Then put that envelope somewhere out of the way. This is your "oh no I need gas at the end of the month" money. Cut up your CBA card. You're not using it for awhile. Take your Suncorp card and make it as annoying to use as possible. Freeze it in a block of ice, bury in your cat's kitty litter, whatever. You're only allowed to use your Suncorp card if it's a 100% emergency -- something that threatens your survival like a big medical bill or a vehicle disaster that would completely prevent you from getting to work. I would recommend that you create an emergency savings account and set up an automatic transfer to fund it, if possible. Having some money in the bank to protect you in case something goes wrong will give you peace of mind. A lot of people seem to have problems actually doing this, so it might be better for you to just work on the cards rather than getting bogged down trying to put money aside for savings. 2) Pay off the CBA card. Make minimum payments on the Suncorp card. Pay as much as you can to the CBA card. Set up some sort of automatic transfer (can you do online bill payments?) that trigger right after you get paid. Pay it off as fast as you can. If it has an annual fee, think about closing the account (or changing card types) when you pay it off. 3) Pay off the Suncorp card. Same idea as before. Pay off the Suncorp card as quickly as you can. Don't charge more stuff to the card! A new couch is not an emergency! A dented fender is not an emergency! Some nice shoes are not an emergency! Here's some quick articles I just Googled for you to get up to speed on credit cards: http://www.daveramsey.com/article/get-out-of-debt-with-the-debt-snowball-plan/lifeandmoney_debt/ http://www.creditcardfinder.com.au/credit-card-management-guide http://www.creditcardfinder.com.au/balance-transfer-credit-cards#howtouse Again, make sure you check out the first post in this thread. Feel free to ask questions, especially in the megathreads. Lots of the posters here are really knowledgeable and helpful. 
Chernori fucked around with this message at 18:06 on Jan 26, 2010 |
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Jan 26, 2010 18:01
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Kobalt posted:I have a substantial debt going on right now. (~$12k @ 20% APR)  indeed!You need to get that interest rate down as soon as possible. It's currently costing you nearly $200/month just to tread water and your balance would double in less than four years at the current rate. Try and find a low-interest credit card on to which you can balance transfer the 12k. Here's a Canadian card that my bank offers: https://www.tdcanadatrust.com/tdvisa/emerald.jsp It offers you a low variable rate that would save you a substantial amount of money without any special gimmicks. Think carefully about balance transfers that start with a 0% rate and will reset to a high rate, like 19%. You won't be any better off if you can't pay most of it off afterwards. Also, be very wary of balance transfers in general. Sometimes the contract has stipulations like "if there's a balance left after the 0% period expires, you will be charged retroactive interest on the entire balance transferred." You might want to look into getting an unsecured line of credit or a regular loan and use that to pay off the card. You'd probably be looking at 8% to 12% interest, which wouldn't be ideal, but it's better that 20% compounding. Another issue is the feast/famine cycle you're going through. While it always makes sense to cut out stuff that you can't afford or isn't worth it (gaming sites?), make sure you aren't unsustainably denying yourself and setting yourself up for a destructive binge. Just like for weight loss, slowly adjusting your lifestyle works way better than crash-dieting. Good luck!
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Mar 2, 2010 09:12
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Hurricane Jesus posted:Would it be worth it to get a low-interest credit card (4%, 25$ annual fees) in order to transfer a balance of 1600$ from an 11%, 25$ annual fee card? I've mentioned this before in these threads, but be careful to read the fine print of the balance transfer. Some cards have stipulations like "we'll charge you retroactive interest on the whole balance if you fail to pay it off when the grace period expires" or something like that. Of course, you should always read credit card contracts closely anyway. I don't think there's a really good reason not to switch cards, though. Ultimately, you don't want to pay an annual fee unless the card offers some sort of amazing rewards program (usually you need to be spending a huge amount of cash to make it worth it). If you don't have much attachment to your current card, you could balance transfer and ditch the old card. There's not a whole lot of incentive to do so, either way. You would probably take a small hit to your credit score for opening a new card and possibly when closing your old one. If you're planning to get a big loan soon (or mortgage), it might be better to just pay the old card off and accept the small interest difference as a learned lesson, then close the card after you get the loan and pay off the card.
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Mar 6, 2010 09:37
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Hurricane Jesus posted:It's actually a variable interest card (TD Emerald Visa, in Canada) at prime + 1.9% being the lowest possible rate -- prime is 2.26% right now so it comes to 4.15%. It has no balance transfer fee and no "introductory offer" or any of that, just a 25$ annual fee, a 4.15% interest rate and "TD Visa Checks" that you can use for anything, including for paying off part or all of the balance on another card. Visa cheques count as cash advances and almost always have a higher associated interest rate. Also, you don't get any rewards or cash back for using them.
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Mar 7, 2010 05:43
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Hurricane Jesus posted:You're right -- don't know how I even missed this. I have this card already (and don't have another with a 1600$ balance), it was for someone else, but it seems largely useless to transfer balances then. I missed that the first time I read through the contract myself. As for your card, make sure the annual fee is less than the interest you'd otherwise be paying on the balance you're carrying. It would make sense to switch to the Rebate Rewards card if you don't carry balances month-to-month.
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Mar 8, 2010 05:37
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Hurricane Jesus posted:I don't normally carry balances but one reason I originally got the card was that I might at some point have to. I'm a student, work part-time and receive support from my parents. I have another card at around 19.5% interest which I still have but don't use much -- I haven't carried in a balance in months but I have had to in the past and 25$ seems like a small price to pay for that interest rate. It might be worth opening a line of credit, possibly a student line of credit. I've got a regular unsecured line of credit with TD at 6.5%. A friend of mine has a student line of credit for 4.5%. You could keep that as your "emergency credit": if you need to carry a balance, you could carry it with the line of credit, instead of the credit card. Remember that you'll need to carry a $250 charge for an entire year (the difference between 8% and 18% that would equal $25) to justify paying that annual fee. In general, relying on credit cards for a hypothetical carried balance is a bad idea. Having an emergency fund is best, but having other kinds of unsecured credit available would be preferable. Credit card companies are more than happy to adjust your rate or limit when it's least convenient.
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Mar 9, 2010 07:39
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moana posted:This is stupid. Now, I like smoking up as much as the next person, but if you can't secure your retirement because of it it has to go. This is a huge huge huge expense that is entirely a luxury, unless there's some sort of medical condition you didn't mention. Heh, yeah, when your "weed" category has a larger allotment than everything else except food and shelter...
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Mar 26, 2010 06:55
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Verism posted:Our biggest goal is to buy a house as soon as possible. You can't afford a house. When you're out of debt and have a 20% down payment saved up (ie ~$30,000+), then you can probably afford one. Your credit scores are fairly low as well: most banks are going to only offer you less-than-stellar interest rates. You'll want to get over the 750 line if possible to get the best rates. Your credit score will rise as you acquire history, but you also need to get your debt utilization ratio down. Two months ago, your debt utilization ratio was nearly 100%: you were using ~2500/2600 of your Chase card and 1159/1250 of your Cap One card, while your girlfriend was using 478/500. That's a big red flag for creditors. Your score has probably improved a bit since you've paid off two of those cards, but keep that in mind.
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Mar 26, 2010 11:07
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alreadybeen posted:How important is liquidity to you? I have about $10,000 as well I am probably going to be using in a year or two when buying a house, so I dont want to be too risky with it. I put it in VFIIX vanguard bond fund. I think the minimum time to hold without a penalty is 60 days. I am currently at about 4.5% APY mostly due to the dividends it has returned. A time horizon of a "year or two" should really only be in the least volatile assets. If interest rates spike or equities continue to rally, bond prices could be depressed. You might be stuck selling at a loss or forced to delay your house purchase.
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Apr 11, 2010 18:21
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DuckConference posted:Vancouver. poo poo is crazy around where I work. http://www.vancouversun.com/business/Vancouver+severely+unaffordable+study/2482683/story.html “Vancouver is the most unaffordable of the 28 housing markets measured in Canada and the most unaffordable of the 272 metropolitan markets ranked in Ireland, the U.K., New Zealand, Australia, the U.S. and Canada,” the Frontier Centre for Public Policy concluded in its sixth annual Demographia International Housing Affordability Survey. 
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Jun 15, 2010 09:41
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Goddamn posted:I wasn't sure where to ask this, so if this isn't the right place please point me in the right direction! Hello fellow Canagoon! Here's a wall of text for what you need to know about investing in Canada (as far as I know, please do your own research and check with professionals!): TAXES! To start off, let's talk about taxes. Part of every dollar you make goes to the government to run the country. Usually this is done automatically by your employer. At tax time, you figure out if you paid too much tax or too little tax. Canada has a progressive tax structure, which works like this: your income is divided up into brackets and the dollars in each bracket pay a different percentage to the government. Imagine you have a series of cups which represent the brackets and a jug of juice, which represents your income. You fill up the cups one at a time. When you're done, each cup has a different amount of juice removed (the first cups have very little taken, while the later cups might have up to 40% taken out). What's left is yours, also known as your after-tax income. This matters because investments that do well count as income when you sell them or get interest, so you have to pay tax on them as well. Basically, you have to think about tax when you invest -- that's why people talk about 401ks and IRAs all the time. So let's talk about investing in Canada. Investments go into accounts, which I'll refer to as holding accounts from now on (to differentiate them from individual places to put money, like bank accounts and savings accounts). Holding accounts are like baskets where you can put investments -- you can put stocks, bonds, GICs, even regular savings accounts inside a holding account. There are two major types of investment holding accounts that you should know about : RRSPs and TFSAs. If something's not in a holding account, it's unregistered. Unregistered: This is the simplest status for investments, because it doesn't have any special rules about what you can do with it. It's what most stuff is by default. For example, your chequeing account would be unregistered, because you can take out or put in as much money as you want without affecting anything else. If something's not in a basket, it's unregistered. You already paid tax on the money, so the government doesn't care what you do with it at this point. Why is it good? You can do whatever you want with it. What's the catch? You get taxed on any profits. How much can I put in? As much as you want. TFSA: These accounts are pretty new and really useful for someone in your position. Any investment (which could be anything from a savings account to stocks) in a TFSA holding account won't be taxed when you sell it or generates interest. This makes TFSA accounts pretty much great for everybody. The only catch with TFSAs is that you can only put in a certain amount of money and that if you take money out, you can't put it back until January of the next year. You almost certainly want to max out your TFSAs. Why is it good? No tax on profits! You can take money out any time. What's the catch? If you take money out, you have to wait until January to put the money back in. How much can I put in? $5000/year. RRSP: RRSPs can hold almost anything, just like TFSAs. RRSPs affect your taxes in a special way. Any money you put in an RRSP is deducted from your income. So if you made $30,000 and put $10,000 into your RRSP, the government would tax you like you only made $20,000 which could mean you get a whole bunch of money back when you file your taxes. It's not exactly free money though -- you're actually just delaying the taxes you pay. When you take the money out when you're older, the money is added to your income and you pay taxes on it then. Even though you pay tax later, it's usually still worth using your RRSP. If you add money when you're making a lot and take it out when you're not making as much (say when you've retired), you pay less tax per dollar (say 20% instead of 30%). Also, you can invest the extra money you get at tax time, letting you grow your money before paying tax on it. Most importantly, your investments can grow without being taxed every year, so you'll end up with a lot more. RRSPs have one serious caveat to them: any money you take out cannot be readded later on, unlike a TFSA. Why is it good? Money can grow untaxed! It reduces your taxes! What's the catch? Any money you take out is added to your income, so you pay tax on it then. Also, you can't put money you take out back in. How much can I put in? 18% of your income from last year (unless you're rich). That just about covers the holding accounts! INVESTING! Congratulations on your nest egg! I'm glad to see that you're saving lots, even if you don't have much idea what to do with it yet. Being thrifty savers will make it much easier to secure your future. Before you start buying anything though, you need to decide what you're doing with the money. The sooner you need the money and the less flexible the withdrawal date, the less risk you should take (which means reducing or eliminating the amount of stock you own). As the "money is needed" date approaches, you should scale back your risk level (so you might start off 50% stocks/50% bonds and end up all GICs. Of course, if the goal was something like "buy ALL the ice cream" that you could easily delay a couple years, you can take on more risk because you can delay if there's a bad year or two. If you need the money in five years or less, you should probably just invest in GICs, savings accounts, and bonds. With that time horizon, you don't have time to make up for a bad year, so you need a near-guarantee of your principle being intact. If you're looking at 5 to 10 years, you can take a bit more risk with your money, so you could look at having a bit of stock exposure (at least for the first few years), while still relying mostly on bonds and guaranteed stuff. If you're looking at investing for retirement or for a far-off goal (a baby's university education or a trip around the world when you're 45), you can start getting fully into stocks. Index investing is a great idea for almost all investors. It's easy, protects you from your worst enemy (yourself), and guarantees that you won't do much worse than the overall market (which has drifted upwards for the past 100+ years). In case you're not clear on the concept, index funds are investments that pool the money of many people to buy stocks or bonds that represent a certain part of the market (like, say, all Canadian stocks). Because they're only trying to mirror the market, they're cheap to run and don't charge much in the way of fees (as opposed to active mutual funds, which might charge 2.5%/yearly or more). Let's say you're looking at saving for retirement and you guys are 25. People commonly say that you should take 100 and subtract your age, and that gives you about what percentage of stocks you want to be in (with the other portion being bonds). So you'd have 75% stocks and 25% bonds. I'm a big fan of the "Couch potato" style portfolio, where you divide up your money into a few index funds and just rebalance them yearly or every few months to keep them near your target percentages. Canadians actually have a few good ways to invest in indexes. You can either get a brokerage account and buy ETFs (which have lower fees and which you buy like stocks and cost money when you buy and sell them) or you can buy index funds (which usually cost nothing to buy, but tend to have higher fees). I really like (and use) TD bank's index e-funds. There's no trading commissions (so you can add money as often as you want) and the fees are very low (though higher than index ETFs). You just need to sign up at the bank and then register for the e-funds, which you can buy and sell online using TD's EasyWeb banking interface. It's simple to use and can hold RRSPs, TFSAs, and unregistered stuff as well. For myself, I have 25% TD Canadian Bond Index-e, 25% TD Canadian Index-e, 25% TD U.S. Index-e, and 25% TD International Index-e. I have the bonds in my TFSA, since bond interest counts as regular income and gets fully taxed. If you wanted to use ETFs instead (which would mean you would be trading only a couple times a year, lest commissions devour your profits), you could either trade at the big banks (most are $30/trade unless you have a lot of assets with them) or with a discount brokerage (which charge about $5 to $10 per trade). I have an account with Questrade, though I don't use it for ETFs. Conclusion That should give you a pretty good overview of investing here in Canada! Keep saving and investing and you'll be all set when you're older. If you want a good general purpose finance book to read, check out The Wealthy Barber by David Chilton. If you have any questions, feel free to ask here or in the long-term investing thread. Here are some good links for more information: Good blogs! TFSAs! RRSPs! Couch potato portfolios TD's Easyweb online banking Questrade Discount Brokerage
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Nov 6, 2010 14:57
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