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/biz/ - Business & Finance

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2082157 No.2082157 [Reply] [Original]

Hi, /biz/.

Financial illiterate canuck here, parents have a combined 500k cad/ 366.5k usd sitting in the bank doing nothing. They are asking me about investment option to generate passive income, we aren't touching it any time soon.

Could you please share some advice?

>> No.2082162

ETH

>> No.2082187

>>2082162

I think they'd be more comfortable with something conventional, I don't know anything about crypto-currency myself. I don't want to fuck them over.

>> No.2082189

>>2082157
You could probably set up a pretty basic portfolio full of firms with very large market cap and be relatively safe. I don't know that, say popular companies like GOOG, AMZN, NFLX, etc., would generate very much income, but those are some obvious guys that have been around for a while and aren't going anywhere. I would start with what I believe to be the safest, least volatile investments and then move from there based on your account growth.

>> No.2082198

>>2082187
Do yourself a favor. Read up and get yourself informed. Only advice.

>> No.2082212

Maybe an ETF mate have a look around. Dunno what the housing market is like nor the tax regs for you canucks either but look into rental properties.

>> No.2082226

>>2082189
How do I go about setting up the said basic portfolio?

Do I tell them to go to their perspective bank and ask to buy stocks from Google, Amazon, and Netflix (or some safest least volatile investment)?

>>2082198

I can do that, I'm also picking up java and going over calculus again this summer.

>> No.2082261

>>2082212
Okay, I'm reading what an ETF is on Investopedia. The real restate price in my city has been going up about 3-4% a year for the last couple of year.

>> No.2082286
File: 32 KB, 500x376, bitcoin_laughing_girls.jpg [View same] [iqdb] [saucenao] [google]
2082286

>>2082157
I'm a certified financial advisor.

In your case I would invest that money into a moderate, conservative portfolio consisting of the following

20% Bitcoin (stable value, first mover advantage)
20% Ethereum (best technology, possible massive growth)
20% second best technology (rivals ethereum)
20% DigiBytes (Minecraft is adopting it in 2 weeks, massive growth due to gaming industry)
20% PIVX (free money from staking, best privacy coin so far)

Youre welcome

>> No.2082317

>>2082286
Thank you very much, I don't know much about crypto-currency. I will read up on it.

>> No.2082357

>>2082157
You want safe? Buy I bonds and EE bonds. I bonds are indexed to inflation while EE bonds are guaranteed to double in value after 20 years (works out to 3.5% a year). Both are backed by the full faith and credit of the U.S. government.

EE bonds work well with Roth IRAs, since Roths make it so you don't have to pay taxes when you cash in the bond and EE bonds defer taxes until you cash in the bond.

If you want to buy what everyone else is buying, throw your money into a Vanguard S&P 500 index fund.

>> No.2082437

>>2082226
Open a brokerage account. Read about the popular ones, differences between them, etc. Pick what works best for you, study up on companies you see as reasonable long-term investments. Learn about Roth IRAs and stuff. Basically just spend time learning about what to do with the money and then pull the trigger, hahaha.

>> No.2082446

If you decide to take the index fund route go check out vanguardcanada.ca they would probably be your best bet mate

>> No.2082475

>>2082157
Do your parents a favour and advise them to seek professional advice. Don't listen to the idiots here shilling cryptocurrencies. I decided to check out this board because I'm an accountant by trade, and as far as I can tell pretty much everyone here is either trolling, stupid, or both. You want to mess around with cryptocurrencies with spare cash? That's fine, and you might even make a decent amount of money. Don't bank everything on it though - it's asking for trouble.

>> No.2082565

>>2082357
>>2082446

Vanguard S&P 500 index fund is something that I've heard a lot. From my very limited understanding, it invests into the 500 biggest american companies and adjusting the amount for each base on their performance. I have no idea about I or EE bonds though, nor Roth IRAs. Can I buy them like an american do?

>>2082437
Okay, I will have to look up a lot of stuff, a lot of things I haven't even heard before.

>>2082475

They are already doing that, but they would like to get some second opinions from me. I think they want me to learn about personal finance and investment which wouldn't hurt.

>> No.2082636

>>2082565
>they want me to learn about personal finance and investment

You won't learn it here mate.

>> No.2082666

>>2082636
Could you please tell me where I can learn it?

>> No.2082785

>>2082666
That's a bit like asking where you can learn about the law. First, some basic principles apply pretty much everywhere, but a lot of the detail varies from place to place. Second, no matter how much you learn a professional will know more and your goal should be to understand them rather than be a substitute for one.

If you want a grasp of the basics, pick broad first year textbooks in accounting and economics, read them, understand them, and you'll be more financially literate than 95% of the population. Then start reading the business section of the newspaper and looking up anything you don't understand. You only really pick up a good sense of this stuff by being constantly immersed in it.

>> No.2082929

>>2082286
>I'm a certified financial advisor.
>advisor
>not adviser

Almost.

>> No.2083013

>>2082565
Roth is American, we have RRSPs and TFSAs.
Sign up for My CRA on Revenue Canada's website - it'll have everything there so you know your contribution limits.

TFSAs have a misleading name as they don't have to be savings accounts - they can be GICs, mutual funds, ETFs or individual stocks, pretty much any type of growth account. These are after-tax accounts, so you never get taxed on earnings of any kind, but you can't claim contributions on your tax return.

RRSPs are before-tax accounts that you can claim contributions into on your return, but if you ever take money out you get taxed AND lose the contribution room forever, with two exceptions.

Both have their uses, and if you can, do both.

>> No.2083074

>>2082929
Its spelled both ways idiot, one is just more old timey than the other

Almost.

>> No.2083158

>>2083074
One is governed by law and has a fiduciary responsibility to do best for the client (e), the other is a salesman for the bank (o) and does not have to have the client's best interests in mind.
Banks and credit unions are all being exposed for this shit the last few months, the spelling of the word is the technicality that allows use of a loophole because the law explicitly refers to Adviser in the title of it, not Advisor.
Commonality of usage now has no bearing on the law as it was written, and so it gets abused.

>> No.2083187

>>2082286
>I'm a certified financial advisor.
You're roleplaying on 4chan. Fuck you. There's shitposting and then there's fraud.

And fuck OP for being too stupid not to know it.

>> No.2083196

>>2082785
That really sounds like some good advice, I will put in whatever time I can to get more of a feel. Seeing that you are an accountant with years of dedicated time studying finance/accounting/economics, how financially literate is your average /biz/ user? l I'm totally illiterate.

>>2083013
I see, thank you for the comparison. What does losing contribution room to RRSPs forever mean, is it that you can never put money into it ever again?

>>2083074
I don't know much but there are apparently some differences:http://www.moneysense.ca/save/investing/financial-advisor-or-adviser/

the article doesn't state that the certified ones have to be called adviser tho, so I don't know.

>> No.2083216

>>2083187
Hey, I'm taking everything with a grain of salt here.

>> No.2083709

>>2083196
RRSP contributions have a soft cap of 15% of your yearly income and a hard cap of $26,010 this year. If you make over $173,400 you hit the hard cap.
Each year you get room based on your income. If you don't use it, it carries forward.
If you withdraw from an RRSP you do not get the withdrawn contribution space back, unless you borrowed against it under two programs.

TFSAs have a hard cap of $5500 per year right now, it changes every few years with inflation. Your total room depends on when you turned 18 compared to when the program started.
If you withdraw from a TFSA you regain the contribution room in the next calendar year.

>> No.2083731

>>2083709
Ah, I see. So essentially if you withdraw, all the unused room to contribution you've accumulated before that point in time becomes unusable. But, you can still put money into it, like starting from zero in term of room.

Thank you anon, do you get to pick what kind of investment you have in your RRSP account? I read up a bit on wikipedia, it's essentially anything I've heard of.

>> No.2083771

>>2083731
No.
Say you have $50,000 of room in an RRSP. You put in $10,000 one year, $5,000 the next two years you have put $20,000 in, and have $30,000 space left.

If you then take out $2500 you now have $17,500 in and $30,000 space left. You can't re-deposit the withdrawn amount - contribution space can be added to but not recovered.

>> No.2083795

>>2083731
You can pick what you invest your RRSP in. I have some in GICs, individual stocks, and mutual funds.

>> No.2083831

>>2083771
So, that maximum deposit will be $47,500/50,000 and that $2500 blank cab never be filled again.

Let's say you put in $50,000 and then it grows out of the $50,000 limit, can you withdraw the excess with no penalty?

>>2083795
Got it.

>> No.2083927

>>2082286
>DigiBytes
>PIVX
don't listen to this scammer, OP

>> No.2083948

>>2082157
Look into a canadian ETF dividend fund? Set it up so the dividends automatically reinvest for compounding gainz

Avoid real estate in big Canuck cities like the plague.

>> No.2083973

>>2083948
Does Montreal count into the big city list?

If it does, then I'm afraid it's too late.

>> No.2083981

>>2083831
Your contribution room will grow each year, so yes you can put more money in.

>> No.2083991

look into bonds and government backed securities (i don't know how this works in canada). at least in the states the government is good at paying them back.

otherwise index funds are a good bet for basic,not too involved investing.

do not invest in crypto, do not invest in random companies, be conservative with your investments and learn about how this all works

>> No.2084004

>>2083981
Understood, thank you for answering anon.

>>2083991
I'll look that up.

>> No.2084231

if you had invested in any crypto 3+ months ago you could have made more than you'll make in any traditional investment in 3 years

>> No.2084331

>>2083991
They're killing off Canada Savings Bonds this November because of how costly the program is and how poor the ROI has become.

>> No.2084410

>>2084231
I was only asked yesterday. I only have a very vague idea of what a cryptocurrency is at this point still.

Do I have a future going into software engineering and not knowing the first thing when it comes to cryptocurrency? My understanding is that it based on brute-forcing encryption or something which gradually gets harder and requires more computing power.

>> No.2084526

>>2082157
Go 3x long on BTC and ETH.

>> No.2084599
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2084599

>>2082157
If you are looking for passive income you are looking for high dividend stocks /ETFs, bonds, money market funds, CDs,

You are not likely to get a great rate on any of these, but I like REITs and high dividend ETFs. You can also do the Dogs. It is traditionally what people with money do. You could also try to find some type of turnkey business that you don't really have to manage.
Since you have a relatively large amount, you can also try silent partnership or equity interest in LLC. You could buy a royalty or license a patent you own. You can buy someones annuity. There is peer to peer lending like moneytree.
This is a very open ended question.

>> No.2084884

>>2084526
I'm still reading up on cybercurrency.

>>2084599
Thank you for the advice, I'm saving this thread. Maybe my question is too vague, there are so many options out there. I feel a bit overwhelmed atm.

>> No.2084899

>>2084884
go for some canadian reits

>> No.2085026

>>2084899
I'll look into it, I don't even know what REITs stands for at this point.

>> No.2085616

Invest in my gambling system

>> No.2085667

>>2085026
I'm more or less in the same boat, have about $200k sitting in the bank and will get another $100k in the near future; not sure what the fuck to do with it all.

There's more bullshit than help here, you need to self-educate yourself on everything investing...mutual funds, index funds, etf's, reits, ira's,annuities, etc etc etc. before you or your parents should do anything. If you do hire someone....hire a fiduciary for a one time consultation.