Vanguard Canada Launches 5 New ETFs

Five New Vanguard Canada ETFs

First Published Date: September 5, 2013

Low cost ETF guru Vanguard Investments Canada Inc. launched 5 more new ETFs in August. Vanguard entered the Canadian ETF market in December 2011 and currently its total ETF portfolio consists of 16 ETFs, including these 5 newcomers. Let’s look at these 5 new ETFs briefly.

VCN – FTSE Canada All Cap Index ETF MER 0.12% – VCN tracks (net of expenses) the performance of the FTSE Canada All Cap Index. The difference between VCN and Vanguard’s other similar ETF VCE FTSE Canada Index is in its holdings. VCE holds about 77 large and mid-cap stocks. On the other hand, VCN offers more diversification by holding 277 large, mid, and small cap stocks.

VDU – FTSE Developed ex North America Index ETF MER 0.28% – VDU tracks (net of expenses) the performance of the FTSE Developed ex North America Index. The difference between VDU and Vanguard’s other similar ETF VEF FTSE Developed ex North America Hedged CAD Index is that unlike VEE, VDU has no currency hedging. The FTSE Developed ex North America Index provides exposure to developed countries excluding North American or emerging market stocks. If you remember my older posts on iShares 5 New ETFs, XEF – iShares MSCI EAFE IMI Index ETF MER 0.30% offers broader diversification by holding 2479 stocks, while VDU holds 1338 stocks.

VUN – U.S. Total Market Index ETF MER 0.15% – VUN tracks (net of expenses) the performance of the CRSP US Total Market Index that holds about 3582 large, mid, small and micro cap stocks. VUN is basically the non-hedged version of Vanguard’s VUS.

VGG (Non-Hedged) and VGH (Hedged) U.S. Dividend Appreciation Index ETF MER 0.28% – These ETFs track (net of expenses) the NASDAQ US Dividend Achievers Select Index that holds about 146 U.S. companies that have increased dividends over time. Some other U.S. dividend ETFs listed on TSX are XHD, CUD, ZDY.

There are about 281 ETFs trade on the Canadian TSX. The number is much higher in the U.S. at 1490 ETFs. Vanguard has about $2.5 trillion global assets under management ($285 billion in ETF). BlackRock iShares is the world’s largest asset manager and the world’s largest ETFs provider with about $3.6 trillion global assets under management ($645 billion in ETF).

Teaching Kids Not To Spend All Their Money

Kids Should Not Spend All Allowances At Once

First Published Date: April 25, 2012 ADawnJournal.com

Teaching kids about money should start at an early age. The money management skills you teach them today will go along a long way and can make the difference between a well-managed financially successful adult or someone who is living paycheque to paycheque.

Giving kids an allowance should start at an early age. However, the art is to teach them how not to spend it all and save some for the future. The basics of budgeting should be considered while talking to kids about not spending all their money. Instead of leaving them without any guidance after giving allowances, it is recommended that you break down their allowances into pieces in terms of how it should be used. For example, 10% should go to charity, 10% should go to buy a science magazine, 10% should go to the piggy bank, and so on.

Some of the biggest challenges parents will face managing allowances or saved money from past allowances are misbehaviour and identifying the distinctions between wants vs. needs. Misbehaviour can be managed by applying a few rules for violating a good behaviour. Try to explain first that this is (a misbehaviour) something not acceptable and there will be consequences if it happens again next time. If kids do the same misbehavior again, stopping allowances for a few weeks or a deduction can be tried. However, be careful not to implement something too harsh. The differences between wants vs. needs can be addressed by talking to them. If they are asking for something unnecessarily, have a conversation if they are willing to give up (spend) their allowances to buy this, and this is something they need it enough to buy right away.

Parents play the most important role to instill right money habits on kids from the beginning. Whatever you are teaching them now will become a lifetime habit. Habit from childhood is something very hard to break. So it is important to give kids some positive money habits that will lead them to the highway of financial success.

Should You Pay Off High Balance or Low Balance Debt First?

Tips For Paying Off High Balances or Low Balances First

First Published Date : May 13, 2012 ADawnJournal.com

Paying off debts involve making plans and sticking to them vigorously to get rid of all debts. One simple question always comes to mind while making debt payment plans, whether to start paying off low balances or high balances, low interest or high interest debts first. Today, I will discuss which strategies to pick and what to consider in terms of getting rid of your debts.

Let me tell you right up front that there is no best right answer. Paying off high balances and paying off low balances – both strategies have positive and negative sides. I personally like starting with low balances without looking at interest rates.

Pros and Cons of Paying Off Low Balances Without Looking At Interest Rates

– If you start with paying off lower balances, seeing those smaller debts evaporate will keep you motivated to stay on your debt management plan.

– Easier to manage your finances, as you are reducing smaller debts one-by-one.

– This strategy can cost you more money in the end, as you may be carrying higher balances with higher interest longer.

– Makes your life stress free, as you are dealing with less debt accounts day-by-day.

Pros and Cons of Paying Off High-Interest Debts Without Looking At Balances

– Best strategy to save money on interest charges

– You may get discouraged to stay on debt management plan seeing debts not going away soon enough.

– If you have higher balances with lower interest charge, this strategy does not make managing your finances simpler, as you are dragging the low interest debts longer.

Last Word

Which strategy is best to follow? It depends on your situations and objectives. Before deciding on anything, look at the pluses and minuses for both of the strategies and pick the one that makes sense for you. And yes, don’t forget to stop taking on new debts. No debt management plans will work if you don’t stop accumulating new debts first.

5 Tips To Financial Minimalism

What Is Financial Minimalism?

Published Date: July 2, 2012 ADawnJournal.com

Financial minimalism can translate to different things to different minds – depending on how you interpret it. My own basic interpretation of financial minimalism would be to get rid of financial clutter that you don’t need to make life simpler and stress free financially.

5 Things You Can Do Right Now To Be A Financial Minimalistic

Get Rid of Bank Accounts You Never Use – Most of us keep 3 to 4 bank accounts, but we usually use only one on a day-to-day basis. Identify the bank account you can’t live without and close all other bank accounts. Better yet, if you need to keep a chequing and a savings account, keep it with the same bank and it will be like keeping one bank account without dealing with two banks.

Keep Credit Cards To A Minimum – There is no reason to keep 5 to 10 credit cards you never use. Keep only 2-3 credit cards and maintain these cards at zero balances by paying the amounts you charge in full every month.

Automate All Your Bill Payments – Arrange all your monthly bills such as electricity, water, telephone, Internet, mortgage, etc. to come out of your bank account or credit card automatically every month so you don’t need to spend time paying these bills again. Better yet, if you have a reward credit card, use it to pay your bills and collect reward points.

Keep Investments Minimal – Holding 20 stocks, 15 mutual funds, and numerous other investment products in your portfolio makes life complicated. The time and hassle you will go through to maintain all these investment products are not worth it, and having limitless products will not make you rich. Read reputable financial sites regularly to get ideas on how to make your financial life simpler and a better one.
 
Get Rid of Debts – Get rid of all your bad debts and keep only good debts. Bad debts are those which are costing money and making no money for you such as credit card debts, car loan debts, vacation loan debts, etc. Good debts are those which are giving you more returns after subtracting interest payments such as investment loans, mortgage, education loans, etc.

These are only some, but not all of the tips that can get you on your way to financial minimalism. There are so many other steps you can take to become a financial minimalist. The art is to find out which steps work for you and apply them one-by-one to live a clutter and stress free rich life.

Advantages and Disadvantages of Electronic or Online Statements (eStatements)

Advantages and Disadvantages of Electronic or Online Statements (eStatements)

First Published Date: July 15, 2012 ADawnJournal.com

Financial institutions and all other institutions, whoever needs to send you a statement monthly, quarterly, or annually, are moving towards eliminating paper statements and encouraging customers to subscribe or access statements online. Some banks will charge you if you still want to have paper statements. I am slowly switching from paper statements to online statements. Today, I will discuss some advantages and disadvantages of having statements delivered online.

Advantages of Electronic or Online Statements

– When I moved in the past, I was always scared that my paper statements would arrive after I had moved and it would go to the wrong hands. With online statements, this is not possible as you will have access to it anywhere on earth 24/7 – regardless how many times you move or wherever you go.

– Easy to manage and keep organised. With paper statements, I always had statements piling up and sometimes I missed deadlines because some statements went missing or were underneath so many other statements. Online statements make your life a lot easier and never miss a payment again if you know how to keep your email organised and tidy.

– No more waiting for the mail to arrive. Better yet, no need to worry if your mail goes missing. Electronic statements are available and accessible instantly as soon as your institutions release them.

– Saves trees and saves money. Feel good about yourself knowing you are doing your part to protect the environment.

Disadvantages of Electronic or Online Statements

I don’t think there are really any disadvantages using online statements. Some may argue that online statements are not secure, lots of hassle to access, and lacking the ability to have physical records. All these disadvantages are actually depend on how you handle it. If you are knowledgeable enough to secure your digital life, online statements are actually more secure than paper statements. And if you still like to have paper records, online statements give you the option to print it off to file it for your records. I recommend you go through some articles I wrote regarding Internet security here: Internet & Investment Fraud and Scams

NB – Online or electronic statements may also be known by other names such as electronic or online documents (eDocuments or eDoc), electronic or online invoices (eInvoices),electronic or online billings (eBillings), and so on.