submitted 2 years ago by [email protected] to c/[email protected]

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[-] [email protected] 1 points 2 years ago

Would be nice to get a sanity check: I'm planning my portfolio as 40% CASH, 40% VEQT, 10% private credit and 10% managed portfolio (Wealthsimple). Is that reasonable? Am I silly for using those WS offerings and would be better to just focus on CASH/VEQT? Should I balance 1/2 CASH and 1/2 VEQT on all self directed (TFSA, FHSA, RRSP, non-registered) or is there a more efficient allocation?

[-] [email protected] 1 points 2 years ago

10% managed portfolio (Wealthsimple)

Depending on your risk level, it should be equivalent to 50% VEQT-50% CASH, but with more fees. IMO, you're better off with CASH/VEQT, as I hate WS habit of tinkering every few months with their managed portfolios in order to justify their higher fees.

10% private credit

One question: why? What are you trying to achieve? The fees are quite high (asset management fee of 1.25% + Wealthsimple’s standard managed account fees + a 15% performance fee on returns over 5%), and the results are completely unproven at the moment.

is there a more efficient allocation?

There is indeed a more efficient allocation: basically, you're better off keeping your equities in registered accounts, and your CASH in NREG, but the math get quite complicated quickly. Justin Bender has had a few articles on the topic, for example here and Ben Felix has a great video on this topic.

[-] [email protected] 1 points 2 years ago

IMO, you’re better off with CASH/VEQT

Sounds plausible, thank you for your input!

One question: why? What are you trying to achieve?

An experiment. I believe in the power of index funds but I also believe that we're living weird times and I'm curious to see if they can deliver on the promise.

There is indeed a more efficient allocation: basically, you’re better off keeping your equities in registered accounts, and your CASH in NREG, but the math get quite complicated quickly. Justin Bender has had a few articles on the topic, for example here and Ben Felix has a great video on this topic.

Amazing, that's what I was looking for. Thank you!

[-] [email protected] 1 points 2 years ago* (last edited 2 years ago)

I have a truck loan(50k), 3 lines of credit(140k combined), and a visa (6k).

I make ~[REDACTED]/year total income from all sources. But I am not getting ahead. At least it doesn't feel like it to me.

Should I be seeking a debt consolidation expert? a financial advisor? a tea-leaf reader?

[-] [email protected] 1 points 2 years ago

It depends : do you thing you can do it all by yourself?

Do you have a budget? This is usually the first step we'll recommend here, as knowing where your money goes is important to understand why you're aren't getting ahead. If you can post more details here on your income, your spendings and your current debt (amount, rate, minimum payment), we may also be able to point you toward the right direction.

[-] [email protected] 1 points 2 years ago* (last edited 2 years ago)

I definitely can't do it on my own. There are so many intricacies involved in all the different options.

Without going into much detail. My debts grew when I was making much less salary. Like... less than a quarter of what I make now - and now that I am in a new position I think I need to speak to an expert and give them access to everything.

The stupid part of my question really is: Who should I be talking to? Does the expert I need have a single title/role? Or are they multiple people?

[-] [email protected] 1 points 2 years ago* (last edited 2 years ago)

A debt consolidation expert will usually look at how to reduce your debt payments, and a financial advisor will usually try to sell you investments, which may not be appropriate here.

While that's not the right wording, I think you need some kind of money coach (please do not search that on Google, you'll mostly get grifters and scammers): I feel a financial planner (CFP or maybe QAFP) would be better suited for your needs, but not all of them go as far as you seems to be interested in. You could still identify a few of them in your area, and check if that's something they'd offer. I have also met a few accountants/CPA that offered these kind of services: going through your spendings and debt with you, making a budget and a savings plan, and following up every now and then to see that the plan was executed correctly, but I haven't seen it offered recently, as CPA have been in quite a high demand these last few years.

this post was submitted on 24 Jul 2023

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