I'm glad I found this site a couple of weeks ago. Great posts and great people. I had fun with FireCALC and www.flexibleretirementplanner.com
, read Bernstein, expecting Bob Clyatt's book anyday.
I've been very lucky in my life and had a great business opportunity when I was really young. The business grew and I got great experience in IT and management over my 16 years (only 6 full time since I was studying too) until it was time for me to leave and sell. I left a year and a half ago and decided to take a break, travelling and doing painting and photography more seriously. This way I would also see how the share sale went (the payment is progressive) and have time to calculate things a bit. If all goes as planned, I'll receive a big part of my payment next week. Deducting the taxes I'll have to pay on this, I should be in the following situation (all in Cdn $)
200k: taxable investment account
140k: deferred tax investment account
400k: cash (to be invested...)
350k: remaining sale balance to be paid over the next two years
My 200k condo is paid off, and as a single guy with no kids and no car (and no plan to get either), my expenses are reasonable at around 35k/y, although I spend an additional ~10k travelling.
I actually like programming, but I love my current freedom and I'm the kind of guy to always have new projects, things to learn, places to visit, etc..., so I never get bored. I plan on taking some programming contracts and should be able to get some revenues from art sales too. My programming knowledge is quite out of date, actually, but I believe I can learn any technology by myself fairly quickly, so I think I could land a decent job within a 6 months time period if I needed and wanted to. Even with offshoring, I'm confident that very talented developers will continue to be sought after in the future, so I think I'll be able to adapt if my conditions change. In the meantime, I'll invest wisely (good thing I'm not afraid of numbers), I'll stick to 4% withdrawal rate, and won't spend more than 50% of whatever other income I make extra, after taxes.
(Some of) my questions
1) Fees in Canada vs US
Everything seems more expensive in Canada than in the US. It costs me $30/trade (more if > 1000 shares!) using TD Waterhouse, while it's $10/trade on TD Ameritrade. iShare has ETFs in Canada, which have a 0.50% mer instead of 0.35% for the US counter part. Vanguard's 500 US index has a 0.09% mer (100k min), but for non-Americans, their offshore version (same minimum) has fees of 0.38% (that's more than 4 times the price!). TD Bank actually has that index with fees of 0.33%, but maybe slippage is bigger, I don't know. Anyways I can't find better. Actually, broadening my search to all equity funds with low expenses yield only some more TD index funds (0.30% - 0.60%) and Acuity pooled funds (0.10% - 0.25%, 150k min). I never heard of Acuity before (nor of pooled funds in general), and these don't appear to be index funds, so I'm very surprised at the low fees.
a) Any particular reason why all fees are so much higher here?
b) Anybody knows Acuity? What's the catch with these low fees?
c) Am I missing something?
FireCalc ignores taxes, and the effects of taxes appear to be slim on www.flexibleretirementplanner.com
, although I'm not sure how to configure it for taxes here in Canada (well, Quebec actually). I'm not even sure of the differences in taxation and how they impact retirees. I know the question is pretty vague, but anyone has clues here?
Thanks for reading, and comments welcomed!