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Cost of Active Fund Investing

Before getting into which of the products are suitable for you, there are some aspects that need to be considered so that you understand what the variations are among the products.

Active investing is when someone (a portfolio manager) picks the stocks that are in the fund and decides how much of each one to hold (the weighting). This portfolio manager would also monitor the portfolio and decide when a security should be sold off, added to or have its weighting decreased. Since there is ongoing research, meetings and analysis that must be done to build and monitor this portfolio, this fund manager would have research analysts and administrative personnel to help run the fund.

Passive investing has the same setup as active investing, but rather than someone deciding what securities to buy or how much of each one to buy, the portfolio manager would copy a benchmark. A benchmark is a collection of securities which the fund is compared against to see how well it is doing. Since everything in investing is about how much money you can make and how much risk it takes to make that money, every fund out there is trying to compare to all of the other funds of the same type to see who can make the most money. The basis for the comparisons is the benchmark, which can also become comparing between peers or funds managed the same way. Comparisons are general in done only for returns. The risk aspect of the equation is handled by looking at what type of securities the fund holds or how specialized the fund is.

The short answer is that you have to get to know how the fund manager operates the fund. Some clues to know more quickly if the fund is active or passive are given next. If they are intentionally trying to pick securities according to some beliefs that they have about the market, this is active management. If the fund description talks about “beating the benchmark” or “manager skill” then it is actively managed. Looking at the return history, if the returns vary versus the index by different amounts each year, then the fund is actively managed. Lastly, the fees may be expensive and have sales loads.

If the name of the fund says “Index” or “Index fund” there is a good chance that the fund is passively managed. If the name of the fund says “ETF” or “Exchange Traded Fund” this could be a passive fund, but you need to make sure of this because some ETFs are actually active funds, but they are managed in a certain way. Most of the passively managed ETFs are provided by BMO, iShares, Claymore, Vanguard and Horizons in Canada and Powershares, Vanguard and SPDR (or Standard and Poors) and others if the holdings are from the U.S. Most of the other companies would have actively managed funds only. If the fund description states that the fund is trying to “imitate” the performance of an index or benchmark, then this implies that it is copying the index and this is passively managed. From the return perspective, passively managed funds will be very close to the index that they claim to imitate, but slightly less due to fees each year. The amount that the returns are under the index will be close to identical each year unless there are currency conversions or variances in cost which may come from currency fluctuations or hedging that the fund may do. Passive funds typically do not have sales loads as they are geared toward people who invest for themselves.

Start a Savings Plan

Once upon a time, people saved for things before they were able to buy them. However, we have gradually drifted from being savers to spenders and being in debt, due to the easy availability of credit. For many people, their expenditure is more than their earnings, which means they are using credit to purchase things. Put another way, they are using tomorrow’s income to fund today’s consumption.

But another and better way is to live within your means and save for the things you want, particularly consumable items. While interest rates are low it may seem like a good idea to buy what you want now and pay for it later. Unfortunately, with the possible exception of housing, most items purchased are what’s known as depreciating items or assets, where the value of the good decreases over time. If this item has been purchased on credit, it is most likely that by the time the item has been paid off, the value of the good is far less than when it was purchased.

In addition, there has usually been interest charges applied to the loan, which means the actual cost of the item ends up being far more than the initial purchase price. Wouldn’t it be better to save the cash for the item, save on the interest expense and be in a better negotiating position to obtain a discount because you’ll be paying in cash?

The easiest way to start saving is to have this happen automatically without much or any effort required. This can be done by establishing a special savings account, preferably one that you can’t access easily or penalizes you, for example with lower interest rates, for withdrawals.

Then set up an automatic transfer to move a set amount from your regular account into this new savings account. Or you might be able to speak with your payroll department about having your salary paid into two accounts, your regular and your savings account.

How much should you put into your savings account? It’s completely up to you! A good rule of thumb is 10% of your income, but you can change this figure to suit you. Ten percent might be a bit much to begin with, especially if you do have outstanding debt. Start with whatever you can comfortably afford to begin with. This percentage can always be increased over time.

Be aware of all facets of your income which can include overtime, commissions, bonuses, tax returns, cash gifts, sales of assets and myriad other things. If your automatic transfer only transfers a set amount of your fixed base salary every pay cycle, you might need to manually transfer your percentage amount to your savings account on any additional income.

Use the miracle of compound interest. It is said that Albert Einstein referred to it as the eighth wonder of the world. This is when you start earning interest on your previously earned interest, although its most dramatic effect is after a longer period of saving.

Eventually you might think about setting up a number of savings accounts such as a consumable items savings account (there’s that TV, car and holiday we were talking about) and what you might want to call your “wealth account”. This is your investing account and from where you purchase income producing assets.

How much you earn has no bearing on your ability to save. It’s not about how much you earn, it’s what you do with what you earn that’s important. The point is, it doesn’t matter how much you save or when you start saving, what matters is that you start.

Selling Gold For Cash

This is the big question! There are a few choices available to those that want to sell their gold. For those that own scrap gold, the refineries or pawn shops are the first two choices. On the other hand, if you have old jewelry made of gold, you can also try at jewelry stores, collectors, refineries etc. First decide what you are going to sell and afterwards decide which buyer might pay more.

This is one of the options. There are a lot of sites (eBay for example) that can allow you to show your metals to the world. Of course, this is not the most common place when it comes to selling worthy metals, but it works, because there are a lot of interested people.

This is the greatest thing about displaying your stuff online. Some might not pay the price you want, but this does not mean that you have no chances in getting the price you had in mind. A good tip is to do some research and discover the price that people are willing to pay. Either way, be prepared to get a different offer from what you had in mind.

It is important to know that the majority of buyers might not offer you the price of your dreams. So try to have realistic expectations on the price that you will have to receive for your gold. Prices that vary between five and ten percent less than what gold is really worth are quite common. This happens because the person buying needs the chance to get a profit when they are reselling your gold.

For instance, think about a scrap jewelry where you want to sell for the price of $100, because this is how much the market says it is worth. The person buying this will not be able to offer you this price because they will not manage to sell the piece for a profitable deal. Buyers seldom pay more than the price offered by the market.

The place of the transaction is not the only one that is important in this situation. You also have to be careful on the manner of payment. Cash or certified checks are the only methods which you should accept. This way you will avoid getting scammed. The most usual scam is the one with the credit card. Buyers who purchase with their credit cards can easily reverse all the charges and get all their money back. Losing your gold and your money does not sound like a good deal to anyone.

Profitable Options for Gold Investors

Physical Gold

The simplest way to buying physical gold is to procure bars and coins. The practice has been widespread for a long time and continues to be a favorite of many people that enjoy having physical possession of this precious metal as a kind of investment. Possessing gold in its physical form brings peace of mind to many.

However, one must be careful and do some homework when buying gold. It is reported that Chinese-made counterfeit gold coins are in circulation in the US market. So, you should stick to buying gold coins produced in government-owned mints only. Often, these are sold at a premium. Some of the recommended gold coins worth buying are the American Eagle, Canadian Maple and South African Krugerrands.

Gold Mutual Funds

The benefits of buying mutual funds are well-known. Investing in gold mutual funds allows you to expand or restrict your risks. When considering to invest in such mutual funds, look for funds that have stocks in companies using modernized techniques of mining and purifying the metal. You stand to profit more through such companies, compared to old companies following the traditional style of mining, or those that are rather new in this business.


The latest trend is to buy stocks of SPDR Gold Trust ETF. This is an exchange traded fund (ETF) and its working is just like any other stock or a mutual fund. The main benefit of this kind of investment is the fact that you are saved the hassle of looking for a source for the gold and you also avoid any expense for its safe storage.

Junior gold stocks

If you have the capacity to take more risks, you can invest in these stocks, which are most likely not to have their own mines. Generally, they are occupied with the exploration of gold and thus more prone to incur loss. Their capital is quite low, compared to matured gold companies.

Gold futures

Unless you are a highly experienced investor, you should refrain from this activity. This is easily the most difficult form of investing in gold and it is very risky. Trading in gold futures is too difficult to be understood by majority of investors.

Laws Affecting Money

Growing up I think it’s safe to say that, we all learned how to earn money. Go to school, do well then get a good job. A good job with benefits that pay well and has security. Then there are jobs that aren’t secure and most times don’t require good education. They are the jobs that are based on commission. For many people, it’s a bad word that they run away from but for the ones that work at it, it pays well. Dividends. Whichever way you choose to earn money, your goal should be to earn as much as possible when you’re young. Earning money is simpler than making money but the result is the same, you would have obtained money that needs to be managed. The choice to make money instead of earning money will most times depend on how you were raised. Employees earn money and the self-employed or business owner make money. Either way we choose to get money, we are all subject to laws that regulate the various methods. If you are an employee then your concern should be the Employment Standards Act, which protects the rights of employees. The ESA sets out the minimum you should be paid, how you should be treated and a few benefits that you are entitled to such as vacation pay and holiday pay. If you’re self-employed or own a business then Income Tax Act and various Municipal By-laws should be of more concern for you.

Managing money, not a lot of us were taught this or it wasn’t emphasized. Managing your money is all about budgeting it. Simple, yes but a difficult habit for many to adapt. Most people just think of their bills when they get paid. Now the tools for creating a budget can be as simple as a piece of paper and a pen or a software like excel or even more advance Microsoft Money. Whichever you choose it is important that you make it a habit. Don’t worry too much about staying on track because that comes with time. Just start. When you start try to create budgets that are one to two months ahead only till you get better at staying on track. If you are not paying your bill on time you may end up in collection where a collection agency starts calling you to get you to pay your debts. In this case you would be affected by Consumer Protection Act and the Collection Agency Act. “The average Canadian’s consumer debt load hit $27,485 at the end of 2012, a six per cent increase over the previous year’s level and the first time the figure has been above $27,000.”, according to This amount doesn’t include mortgage debt but things like credit cards, car loans and lines of credit. Here is a tip about dealing with collection agencies, you can request that they only contact you by mail and not call you anymore. If they don’t comply with your request then you can report them to Consumer Affairs which would issue them a fine. Individuals whose income and other assets are not sufficient to pay their financial obligations as they come due are insolvent. At this point you might have to declare bankruptcy. In which case, you would be affected by the Bankruptcy and Insolvency Act. This act performs 3 functions: protect creditors, give debtors a clean slate and help debtors and creditors compromise. So it is important that you manage your money well.

Now if you can do a decent or great job at the former two then you have some money to invest. Now you’re ready to have money work for you instead of you working for money. At this point I suggest you speak to a financial professional. Make sure they are qualified. It’s best to talk to your bank. Make your banker your friend. Have a regular dialogue with an account manager at your bank. Do your own research on investments but keep it simple. If the book starts out with formulas then put it down and look for another book. There are 4 basic things you should know about investing. One, start now. Long-term compounding is one of the most powerful tools available to investors. With compounding, your savings generate earnings, which are then reinvested to generate their own earnings. It’s never too late to start, but the sooner you begin, the better. Two, don’t avoid risk; manage it. A well-balanced portfolio divided among asset classes such as stocks, bonds and cash equivalents may help you manage risk and reduce the ups and downs of the market. This is where your banker plays a big part when you’re starting. Three, maintain a long-term outlook. Investing is not a sprint, it’s a marathon. Four, Avoid or postpone taxes when possible. This means deposit heavily into your RRSP then into your TSFA then if you got any left over to invest talk to your banker. The Securities Act protects investors from unscrupulous investment professionals and other investors.

Ways to Make Extra Cash Today

  • Babysitting
    Babysitting is a very easy to make some extra cash when you are in need. If you have a young neighbor or young brother or sister you can probably make about $15 an hour to watch them for short periods of time. Offer to watch your friends kids so they can go out on a date, it is fairly easy to find a kid who needs a babysitter.
  • Return Past Purchases
    Recently bought some electronic or got a crappy gift and still have the receipt? There’s a good chance that you can take the product back to the store you purchased it at and get that money back for yourself. A very easy way to get some extra cash for yourself.
  • Recycle Scrap Metal
    Have a car? You can go around your town during trash day and take scrap metal from people’s trash, like copper piping, and sell the metals to scrap metal yards. A very easy way to make some cash today and it offers a great opportunity to make a lot of it.
  • Sell Roadside Items
    You can buy a $5 30 pack of water and sell the bottles for a dollar a piece on hot days. It is a quick and easy way to make an extra buck for those desperate times. While it may be embarrassing, chances are you can sell a few packs of water in under an hour, making you a lot of cash.
  • Make Things to Sell
    If you are crafty you can make your own business and sell things such as t-shirts, soaps or perfumes. You can sell your product on websites like Etsy and make a lot of money for yourself.

Protect Yourself From Fraud

Secure Servers

The way most online identity thieves acquire your private information is by making fake wi-fi hotspots or creating dummy shopping sites. When you are online shopping, make sure that you know the site, know the server and make sure the site looks real. Is there comments, reviews, photos of the products? Do they have a secure log-in space with functions to weed out automated bots? Is there a “Contact Us” section? Are there other reviews of the site online that you could be looking through? These are a few of the things you can look out for before you enter in all your payment information. In addition, do not log-in to a wi-fi network that you don’t know. If you are at public place using their wi-fi, make sure your firewall is in place and do not go shopping or pay bills while on a public server.

Shredding Sensitive Documents

Another way frauds get a hold of your financial information is by going through your trash. Yes, all those bank statements and credit card bills that you throw away without a second thought, people can go through your garbage, collect these documents and construct new accounts under your name. With a simple credit card application and a change of address form, they can begin using your name to make big purchases without you ever knowing about it. And you’ll be none the wiser, until you go to buy your dream house and your credit is very bad. Instead, tear up or shred those documents so they cannot be reconstructed.

Look Closely at Statements

Most people just do a cursory glance at their bank statements and then throw them away. But if you look closer you may be able to see the fraud. If you notice charges that you don’t remember making or the purchase location cannot be determined, you could have a problem on your hands. As stated earlier, many thieves use untraceable servers to steal money, so be sure that you can remember making any and all purchases on your account. Often, they will make small purchases, less than $10. The charges are so small so you’ll just brush it off as a coffee stop or snack break that you forgot. But when it happens a few times a week for a year, those charges add up. Sign up for online banking apps so that you can see your accounts at any moment as well.

Online Payday Lender

Monthly budgets are meant to be monitored. It is important to know where your money is going and to be aware of the balance throughout the month. Too many overdraft charges eat away at income because an individual ‘though’ that they had enough money in the bank to cover the bill. These types of charges are often caused by the lack of financial awareness. Along with this charge, a merchant whose payment did not go through will also charge their own fee. Late fees and NSF fees only add to the cost of a money mistake. Anytime you can avoid these types of fees, the better off you will be. Avoid embarrassment with businesses and prevent future repercussions by maintaining enough money in your account to cover approved payments.

Some people use online direct payday lenders to keep fees out of their bank accounts. The simple transaction of getting extra money into the bank in order to cover scheduled or emergency costs is cost effective when the loan is paid quickly. The key to a short-term loan’s effectiveness relies on being able to pay back the lender on time. Look closely at the next paycheck and what demands are placed on it within your budget before you commit to using a portion of your payday to pay off the direct lender. The last thing you would want to do is to pay more than what is necessary.

There are many repeat short-term loan customers who appreciate the cost effective quick money option. They use them for emergencies when other options are no longer available. This often means that credit cards are no longer an option. The majority of Americans would normally use credit cards to pay for unexpected bills rather than turn to a payday lender online. Not all people continue to have credit as an option. The search for a best direct lender is often the next step in finance solutions.

These fast cash loans will not support all money problems. Most often these loans are processed for a few hundred dollars. The high interest is then limited by a small balance as well as a fast payoff. In order to insure that you keep the costs low, it makes perfect sense to pay the loan off as fast as possible. Some borrowers choose to spread the cost out over a few paychecks while paying the balance down each time. Lowering the balance with each payment keeps the extra cost of interest declining as well.

What can your budget afford? Make sure you understand the answer before you obtain any outside money. If the cost of the loan is a burden, then don’t do it. Talk to family or possibly a close friend who may be able to lend you money or at least point you in a direction you can afford. Getting help for a money emergency should set your budget back on track not knock it off completely.

Personal Financial Self-Improvement

  • List your income and expenses. List where the income and expenses come from, whether the expenses are fixed or variable, and what expenses you know will be coming up in the future. This will give you an overview of what you have to work with.
  • Create a Wants and Needs list. Please ensure you know what the differences between the two are because they can easily be mistaken when we really want something. For example, that cup of Starbucks coffee every morning is really a want… the first step to recovery is admitting you have a problem. I gave up my Starbucks addiction because I realized I was spending nearly $100 (give or take a few days) a month there. That’s $100 that can be better spent on things I need, like new shoes for my kids, food for my animals, laundry soap, etc.
  • Get rid of the credit cards. They are evil, horrible things that try to rule our lives. If you can’t purchase something with cash, then save up for it, but please, please, please don’t put it on credit! Ask anyone who has credit cards… it’s a black hole that you continuously drop money into every month. For example, say you have a $2,500 credit card that you accidentally maxed out (we never really mean to max it out… we just found more stuff we need). Say your APR is around 18% (average); you’d be paying about $38 per month in interest. So, maybe you’re paying $50/month toward this credit card debt… you’re only paying $13 toward the actual debt, which would take you 334 months (27.8 YEARS) to pay off, and you’d have actually ended up paying $8,397 for the $2,500 worth of purchases. Again… a black hole that you drop your money into. Don’t do it!!
  • Create an emergency fund. No, I’m not talking about an emergency fund for things like a new pool table, or a new outfit (unless, of course, it’s a necessity). I’m talking about an emergency fund to live off of in the event of an actual financial emergency (i.e. your refrigerator goes out, your car needs new brakes, you need to pay your homeowners deductible to fix the AC in the middle of summer). Ideally, you’ll want to have three to six months of your monthly income put up. I know it’s hard to get there (I’m still working on it), but budget in a little money each month to get started.


Money Market Accounts


Money market accounts are usually subject to higher interest rates. This means that you get more for doing essentially the same thing as keeping your money in a classic savings account. This is because money market accounts are pooled in a different fund used by investors to produce higher profits. This more aggressive form of investing can potentially open up to loss of funds, but this is highly unlikely and has never actually occurred. With the risk being this low, the higher interest rates are widely accepted as a smart trade off.

Access to Funds

Another benefit is that you have more access to the money you deposit into it. Unlike a savings account where you may withdraw a maximum of three times per month, you are allowed to withdraw or transfer out six timers per billing statement. Additionally, most banks will allow you the option to write checks directly from it. Even better, many banks will also allow you to pair a debit card with the account for easier withdrawals and spending. This allows for greater flexibility than a standard savings account.


As mentioned above, these accounts have never lost any money. This makes them a safer place to leave your money while still receiving a decent return. With the volatile nature of the stock market, this is certainly a better guarantee to maintain and build your funds.


While a money market account is more appealing than traditional savings in terms of returns, it certainly does not compare to the returns of a mutual fund or other stock options. If your primary interest is to generate greater income, then this safer option might not be for you. To put it into comparison, a stock can return on average 8-10% while these bring closer to 2-4%. At best, you are looking at making half of the amount.