The Loonie Bin: Mutual Fund? More like Commission Fund!

The Loonie Bin: Mutual Fund? More like Commission Fund!

Mutual Fund? More like Commission Fund!

I remember when I was 18 and started putting money into an RRSP. We had a family “friend?” who was an advisor and he came over one night to set everything up. I told him how much I was going to contribute each month and he entered the figures in his laptop. I had no idea about investments and thought that since he was a friend of my parents that I could totally trust him; hell I went to school with his daughter from K-12. I should have known better when he started messing around with the interest rates. “Here’s how much you would have if you made 17% each year till you reached 60. I was blinded by ignorance and only saw the millions of dollars on the screen. I’m sure he made a lot of money from selling me junk funds.

Later on in my life I stopped paying the monthly contributions from my account and instead had them matched and deducted from my pay cheque by my employer. I was 23 and did not give and I quote, “two shits” about my retirement. I met with the advisor set up by my company and he put my money into some mutual fund that “Seemed to be doing well”. I agreed and never thought twice about it. Every year I would buy more mutual funds near tax time from my bank. The dealer… I mean “Investment Consultant” would sit me down and show me 10 different mutual funds that were deemed appropriate for me. I would take their word and sign for mutual funds that, in the end, made them a decent commission. They had seen me coming from a mile away…and thinking back I probably could have smelled the plastic from their newly formed name tag.
(Words of wisdom; never go to a “Free” Advisor. They will only sell you what they want you to buy. Find a financial advisor that charges by the hour to get an honest, unbiased opinion.)

Fast forward 7 years and after getting married and buying my own place, I started actually opening statements and tracking my finances. I realized that after 12 years of investing, I should have way more money in my rrsp’s then I did. I learned about MER’s and how my mutual funds were being taken advantage of. These guys in suits were taking 2-3% of my hard earned retirement savings each year and all they had to do was make their measly quota. I read that it was as much as $1300 on a mutual fund with $55000 in it. That’s when I said to myself, ” I can do that for free and do a helluva a lot better job too!”

I started researching through the internet and found a few good blogs and sites chalk full of investment how-to. And then after clicking a link about dividend investing, my life took on a whole new meaning. I opened a discount trading account and started selling off all my mutual funds and started investing in the companies that were making money off of me all these years. Have at you!

I found something that I am passionate about. When I hear people talking about dividends I light up and chime right in. Although I am new to the whole investing world, I have learned so much in the past 6 months and everyday I learn something new. I’m like a sponge… an old, moldy sponge some would say. But a sponge non the less and I want to help others learn what I have learned. The hardest part is to get people to actually listen to me.

When I tell people that I started investing in dividend paying stocks the first thing they say is, “Sounds like a ponzi scheme to me!”. Buying solid companies with solid dividend growth is a proven strategy that actually does work. No fancy gimmicks; no pay and pray techniques. It just takes patience…. lots of patience and a cool head when markets go south. It doesn’t matter what the stock price is, it’s all about the dividend that gets deposited every 3 months… money you can actually see for yourself. And with strong dividend growth, you can actually stay ahead of inflation. Try that with a bond or GIC.

I wasted 12 years of prime investing time and there’s nothing that I can do about it. The only thing I can do is help others to help themselves and get the middleman out of their pockets.


About EdR

Tant que les lions n’auront pas leurs propres historiens, les histoires de chasse continueront de glorifier le chasseur. (proverbe africain)

Posted on February 7, 2011, in training tips. Bookmark the permalink. Leave a comment.

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