RRSP Overhaul

The number one rule for saving for retirement is to pay yourself first and to squirrel away no less than 10% of your income. The best way to pay yourself first is to have the money come off your paycheque before it gets to you so you never see it and can’t spend it. The second best way is to set up automatic transfers.

When you save only what’s left over the money just seems to disappear before reaching your savings account.

This week I took two big steps.

  1. automated my savings
  2. consolidated my RRSP and sold all my mutual funds

2009 to 2014 has been one of the biggest bull market periods. Looking back at my account balance history (cause I track it every month) shows that I missed out on most of the potential.

  • $100 invested in Apple in 2009 would be worth $950 today.
  • S&P 500 is up 120% + dividends
  • TSX 60 is up 70% + dividends

My portfolio did 10% annualized returns. Biggest bull market and I missed out. 🙁

Problem is that mutual funds eat up the bulk of the gains in fees and pass on the scraps. My portfolio would have been MUCH better off with simply purchasing some low cost ETFs. So I decided to close my Sun Life account, sell all my mutual funds and move everything to Questrade where I have the flexibility to buy better investments. Looking back with new eyes it feels like I’ve been robbed.

Lesson learned the hard way: I will never buy a mutual fund ever again.