What to do with Extra Cash?

[jjz]

Hey All,

I would like to see what your opinions are on having extra cash.
I paid off my mortgage, just have a bit of line of credit left.
What should I do with the extra cash that I have, about 1600 a month.

Invest it? I am thinking I should open an investment account with my Financial advisor and let him do his thing.

Have fun with the money? More vacations, see more ladies buy toys (Watches, Motorcycle, or other fun Shit)?

Save for a down payment for a house?

What did you do when you had the extra cash?

 

[K Douglas]

To celebrate the paying off of a property I'd first recommend seeing a lady on your TDL.
With the newfound monthly cash I'd let it work for you. The markets are headed for a meltdown, we are seeing the inflation concerns creeping back in with the Fed there's no better place to be than precious metals as far as I'm concerned. Gold and silver whether it be physical, stocks or ETF's that is your best play. How much credit do you have available on the credit line?

 

[jjz]

To celebrate the paying off of a property I'd first recommend seeing a lady on your TDL.
With the newfound monthly cash I'd let it work for you. The markets are headed for a meltdown, we are seeing the inflation concerns creeping back in with the Fed there's no better place to be than precious metals as far as I'm concerned. Gold and silver whether it be physical, stocks or ETF's that is your best play. How much credit do you have available on the credit line?

I was thinking of Gold and Silver, I have stacked some silver but not so much gold.

I have a pretty significant credit line.

Ya I think I will definitely celebrate with a lady either from my TDL or a regular.

 

[HungSowel]

Pay off your credit line, get totally debt free. Max out your RRSP and TFSA. After that then you move onto investing into a non-registered account.

For someone new to investments I suggest a very broad market ETF like XEQT. Gold and Silver are decent options but probably more volatile than XEQT. Do not use your line of credit to invest unless you are a savvy investor.

 

[Ponderling]

Pay off your credit line, get totally debt free. Max out your RRSP and TFSA. After that then you move onto investing into a non-registered account.

For someone new to investments I suggest a very broad market ETF like XEQT. Gold and Silver are decent options but probably more volatile than XEQT. Do not use your line of credit to invest unless you are a savvy investor.

I second going the index route. Depending on the age of the OP a bond fund for some part of the new money might be prudent.

We paid off our mortgage in 2009. Kept investing the 'mortgage money' in a non reg account, as were already fully funding RRSP and TFSA accounts
Doing this, by 2018 my wife retired from a stressful job at age 54.
Then we cut funding the non reg acct.

And by 2021 I was able to cut back to working 3 days a week

We have gone on three overseas 2-3 week vacations about every other year.
So investing early certainly can pay off in the modest longer term.

I plan to retire from work full time in a year or two when I turn 61.
Then work to drain RRSP so I do not see all OAS clawed back after I turn 71.

 

[richaceg]

Put 600 on the ladies....life is too short.

 

[richaceg]

I was thinking of Gold and Silver, I have stacked some silver but not so much gold.

I have a pretty significant credit line.

Ya I think I will definitely celebrate with a lady either from my TDL or a regular.

Get a hobby that would get you busy on down time. You already paid off your mortgage... time to spend your hard work money. See the world. Be spontaneous. Put aside some emergency funds....never getting hitch.

 

[jjz]

Pay off your credit line, get totally debt free. Max out your RRSP and TFSA. After that then you move onto investing into a non-registered account.

For someone new to investments I suggest a very broad market ETF like XEQT. Gold and Silver are decent options but probably more volatile than XEQT. Do not use your line of credit to invest unless you are a savvy investor.

Thanks!
Ya only have about 8G to pay off on the credit line so I expect to pay that off by May.

I have a DCPP so that ate up most of my RRSP Room, but I definitely need to catch up on my TSFA, I still have a lot of room left.

Ya I need to set up an non-registered account.
I have done self directed register accounts before, managing it my self, I found I don't have time to pay attention to it. So have I have someone managing it now.

I am not going to use the line of credit to invest.

 

[jjz]

Get a hobby that would get you busy on down time. You already paid off your mortgage... time to spend your hard work money. See the world. Be spontaneous. Put aside some emergency funds....never getting hitch.

I may save up for a House as I am in a Condo. I want the back yard space.
Not married, and at my age, it's getting difficult.

 

[Indiana]

 

[HungSowel]

If it all works out then eventually your investments generate more income than working and you will realize that hoarding money and assets is the best way to make money. Working is for poor people.

 

[jjz]

If it all works out then eventually your investments generate more income than working and you will realize that hoarding money and assets is the best way to make money. Working is for poor people.

Most definitely!
I am hoping to retire in like 10 years.

 

[richaceg]

I may save up for a House as I am in a Condo. I want the back yard space.
Not married, and at my age, it's getting difficult.

I'd buy a bungalow by the water...I myself is looking for a smaller place for myself and leave the property I have to my kids.

 

[K Douglas]

I was thinking of Gold and Silver, I have stacked some silver but not so much gold.

I have a pretty significant credit line.

Ya I think I will definitely celebrate with a lady either from my TDL or a regular.

If you invest using the credit line you can write off the interest as an investment expense. I would only use it in case there was an imminent buying opportunity and you didn't have enough cash. I think that buying opportunity will come in later 2026 early 2027.

 

[jjz]

If you invest using the credit line you can write off the interest as an investment expense. I would only use it in case there was an imminent buying opportunity and you didn't have enough cash. I think that buying opportunity will come in later 2026 early 2027.

Awesome Thank you for the advice! I will check with my advisor on how to do that.

 

[Ceiling Cat]

Invest it? I am thinking I should open an investment account with my Financial advisor and let him do his thing.

My opinion on investment advisor is that they will do a little better than an interest savings account. They will not get you 10-12% a year because you will want that every year. Your best bet is in an ETF if you cannot invest it yourself.

 

[fall]

Thanks!
Ya only have about 8G to pay off on the credit line so I expect to pay that off by May.

I have a DCPP so that ate up most of my RRSP Room, but I definitely need to catch up on my TSFA, I still have a lot of room left.

Ya I need to set up an non-registered account.
I have done self directed register accounts before, managing it my self, I found I don't have time to pay attention to it. So have I have someone managing it now.

I am not going to use the line of credit to invest.

And what exactly do you want to pay attention to? Go with a broker that has no trading fees (if you plan to contribute small amounts monthly) e.g., Simplii Financial, buy a passively managed fund with the lowest MER (I suggest VCN with only 0.06% MER), and never look at it. So, what you need to do is:

1) When you have money to invest: transfer it to your investment account, place a market order to buy shares of your ETF (same one all the time)
2) When you need money: place a market order to sell shares of your ETF, transfer money to your checking account
3) When you are curious how much money you have: go to your investment account and see your balance
4) All other times: live your regular life

If you want to spend extra money to pay someone to do the above things: ask your family physician to check if your cognitive abilities are deteriorating.

P.S.: For advanced account management, check with banks/brokers if they have any offers for account transfer (usually 1-2% bonus, and then you will have to hold it there for a year or two), and transfer from bank to bank each year or so. Note that a financial advisor/manager will not help you with that.

 

[jjz]

And what exactly do you want to pay attention to? Go with a broker that has no trading fees (if you plan to contribute small amounts monthly) e.g., Simplii Financial, buy a passively managed fund with the lowest MER (I suggest VCN with only 0.06% MER), and never look at it. So, what you need to do is:

1) When you have money to invest: transfer it to your investment account, place a market order to buy shares of your ETF (same one all the time)
2) When you need money: place a market order to sell shares of your ETF, transfer money to your checking account
3) When you are curious how much money you have: go to your investment account and see your balance
4) All other times: live your regular life

If you want to spend extra money to pay someone to do the above things: ask your family physician to check if your cognitive abilities are deteriorating.

P.S.: For advanced account management, check with banks/brokers if they have any offers for account transfer (usually 1-2% bonus, and then you will have to hold it there for a year or two), and transfer from bank to bank each year or so. Note that a financial advisor/manager will not help you with that.

Thanks!

I have an RBC DS Advisor. I decided to let someone else manage my money for me.

 

[williammartin]

My advice begins with a question: what's your current tax bracket? If you're in the top-end, consider that over time, your yearly tax liability will dominate the Expense side of your ledger, particularly given you've already paid your mortgage and your RRSP is maxed out.

With the usual tax saving tactics exhausted, how are you attacking the growing tax liability?

As others have called out, consider borrowing to invest, using the interest paid on the loan to create a durable tax credit machine, that provides a certain amount of tax savings today and into the future provided you don't pay off the loan completely.

Indeed, assuming you can get the standard Investment Loan Rate (namely P+1%) the 1600 monthly cashflow funds a ~350K investment loan (assuming interest-only payments).

You could really add rocket fuel to this by re-borrowing against your mortgage and use the "found" money to drop more into the market.

Food for thought!

Wills.

 

[Muchadoaboutnothing]

Hey All,

I would like to see what your opinions are on having extra cash.
I paid off my mortgage, just have a bit of line of credit left.
What should I do with the extra cash that I have, about 1600 a month.

Invest it? I am thinking I should open an investment account with my Financial advisor and let him do his thing.

Have fun with the money? More vacations, see more ladies buy toys (Watches, Motorcycle, or other fun Shit)?

Save for a down payment for a house?

What did you do when you had the extra cash?

Top up Tfas and rrsp. Have half a year of expenses put aside for an emergency fund (you never know).
healthcare always seems to take my money living with chronic pain. I like to give to Charity otherwise. Going on a vacation always had a good effect on yourself and those around you as you come back with a fresh look on life.