Money market funds are great for my short term goals but NOT for long term investing! If you want quality ETFs for building LONG TERM wealth, check out my ETF video here 👇 th-cam.com/video/3q4Y22MzkIA/w-d-xo.html
Oh absolutely! I have only ever done 2 sponsorships in 5 years (Questrade and BMO ETFs) both are companies that I have loved and praised for free for many years!
Now it's nice that I get a chance to work with them and get paid for a change! But of course, you MUST always disclose it right away. No paycheque is worth losing the trust and credibility with your audience!
@@CanadianTShirt Why does BMO charge an additional "Management fee" on ALL their ETFs? There is 0.14% MER fee whish is for managing the ETF, what is the 0.28% "Management fee" for?
Sponsorships make sense when you’re actually investing in the products that they’re offering. Those that don’t really show that they’re after monetary reward more than educating their audience on products they believe in. Good on you sir!
Thanks buddy! That's my rule, I would NEVER take on a sponsorship unless I personally use them and find value in them. Sincerity and authenticity are the most important things to me and I would never trade that in for a paycheque!
Glad to see you get another sponsorship! You're one of the few creators I trust. I started heavily investing 8 months ago and have built my portfolio to about 80k at 24 years old (huge thanks to my parents for letting me live with them at this age lol). Keep up the great work! This sponsorship is much deserved.
Thank you so much for those kind words! I am still very new to sponsorships, I've only done 2 in 5 years and I definitely want to be extremely selective and limit who I work with. But with BMO ETFs, I've been a fan of their products for over 10 years so it's a great fit to be paid by them =)
And congratulations, that's INCREDIBLE! You are doing the right thing, stay with parents as long as you can mentally endure lol it will save you a TON of money to invest with! Keep it up bud! =)
All good options for short term investing! They are different though since ZMMK focuses on short term bonds rather than cash deposits at banks. Just be mindful that bank savings rates can change at a moment's notice so keep that in mind! =)
Although it's makeup is quite different, rather than short term bonds and bills, it focuses on cash deposits from the banks. And those are susceptible to change so keep that in mind!
Congratulations on getting sponsorships on your channel and thank you for your openness and transparency. I just joined a FB group on dividend investing and send people your way as you're so educational. I'm far from being a millennial and am from the generous that adhered to David Chilton's first book on mutual funds, as well as many other authors. Thank you for being on here and educating on ETFs, as well as anything, really. I even suggested to a brand new immigrant to turn to your channel as you talk about the new FHSA, as well as other financial vehicles available to us Canadians. As most content on TH-cam are all geared to Americans, it is refreshing you have your channel and are so generous with your time. Thank you.
Thank you Enid, as always! Ya I have a feeling that most investors have never even heard of money market funds, we're lucky that we have more options than ever when it comes to investing products! Especially now when it comes to short term investing! =)
Appreciate the transparency but wouldn't the audience be better served by showing all available Money Market ETFs and doing a pros and cons comparison? Although the BMO product served us well to walk the scenario, I am left wondering if there are better or worse competing products from the other banks?
That would be a separate video! But in the spirit of transparency, ZMMK is the short term investing product that I am personally using, in addition to savings and GICs. That's why I agreed to this sponsorship and why it was a perfect fit!
But naturally, in a sponsored video it wouldn't be right to do a comparison of other products. That comparison video is certainly coming and that will certainly not be sponsored =)
Indeed. Sponsorships will always have viewers wondering about integrity and bias of the endorser. Oh well, at least he's not present at BMO ETF's TSX opening bell. LOL.
@@funkspinna But you're absolutely correct, I definitely do NOT want to overdo sponsorships and paid endorsements. That's why I'm extremely selective and I've only done 2 of them in over 5 years! No paycheque is ever worth losing the credibility with my audience! =)
Hello from St. John's, Newfoundland. That's a very interesting topic. I always feel we have inferior options than the US, but I'm thrilled we have someone like you to keep us to date with the Canadian options.
There are Cashable 1 year or 2.year GICs with some banks but their interest rates are not as high as the yield on this money market fund from BMO. Great Video!😊
That's true! Cashable GICs usually offer lower interest rates than the fixed ones. That's the price you pay for the flexibility, but for short term goals like this, that flexibility is SO important!
Ideally the TFSA should be used for long term investing but if you have $50K worth of room and you have no chance of maxing it out in the next few years, then sure, you can use some of that TFSA room for your short term investing goals
That way you save yourself on taxes on these monthly distributions but if your TFSA is close to maxing out, then I would stick to the non-registered account. Great question! =)
Great info! Thanks Adrian! I've been focusing on longer term investing in my TFSA and RRSP but now I want to save some money for a dream vacation I've been planning for. This seems like just the thing I would use to get the most out of my saving for the short run.
Thank you, Adrian, for another amazing video. Please keep up the fantastic work! I have a few questions and would greatly appreciate your help: 1-I have two children, and I would like to start investing some money for their future studies. However, there's always the uncertainty of whether they will decide to pursue higher education. In that case, assuming they choose not to study in 20 years, what would be the best account to start investing in their future right now? 2-Upon reaching the retirement age of 65, can I withdraw all my money at once? 3-How long do I need to stay in Canada to ensure I don't lose my pension benefits? 4-Can I invest in U.S. stocks and ETFs without penalties through my FHSA, or is there a 15% penalty? Thanks in advance
@@billyrock8305 For 1 -3 months, ZMMK would still work! You would lock in 1-3 of those monthly distributions and it's fully liquid. You can cash out at any time, unlike a GIC!
@@billyrock8305 And there's no minimum investment. You only need $50 to purchase one share! You should also compliment this with a high interest savings account so that the money is there when you need it. I would avoid GICs since you are locked in and you have such a short timeline! Hope that helps! =)
Greetings from Lethbridge Alberta! This is great timing! I'm looking at turning my house into a rental property sooner than later and therefore will be looking for a new home to live in so I'll definitely be investing in ZMMK. Thanks Adrian 👊
@@CanadianTShirt thank you, I will have to do some research into all that it takes to be a landlord/claiming rental income at tax time, but either way I'm looking forward to some solid passive income!
ZMMK focuses on short term bonds and bills whereas CASH holds savings deposits with the big banks, and those are susceptible to change so keep that in mind!
@@CanadianTShirt I would definitely like a follow-up comparison video. I think this is also a hot topic on the PersonalFinanceCanada subreddit as well.
It's not something that I touch. They can serve a role in a sideways or even downward market but only in shorter time horizons. For long term investing, I would rather buy quality stocks and ETFs. That way I get both dividends AND long term capital growth =)
Adrian, nice concise video. Can you tell me how the monthly payout is treated tax wise in Canada? Is it treated as interest income? If so, is their a similar ETF that is treated as a capital gain? Thanks for the videos.
In the case of ZMMK, the majority of that money comes from bonds so it's taxed as interest income. Thus it is taxed heavily, the same as GIC or savings
BMO has many ETF options and yes some of them are structured differently where you will receive less distributions (taxable monthly income) but more capital appreciation for the same underlying investments
I got roped into something similar with an inheritance. It guaranteed 6% every year but cost of living went up and I need to rework my situation. I look at S&P ETFs and see a year return of 24% and it makes me want to vomit... Heqvily considering moving the limp sum into VFV instead and let it ride. If the entire market sags then O expect I will sag with it anyway heh I have another large lump sum into US Cannabis that sadly has been very hard to look at. But I i expect it will blossom soon(next few years). But I'm planning on then converting that into S&P 500 shares, and create a money battery within the TFSA. And then look to the limp sum in my regular account as livable income while the battery charges. I hope it works...life sideswiped me and I'm trying to insulate myself. I appreciate this video today for that simple fact of realizing what the bank sold me on vs the reality of the actual markets. Thanks for you videos bud, I appreciate it.
I'm sorry to hear about your troubles... we can never predict or fully prepare for the future, especially when the market changes as quickly as we've seen
The best we can do is have a plan and diversify our money through various ETFs and stocks. And it's imperative to have an emergency savings fund plus other stockpiles of cash and ETFs like ZMMk for those short term goals. That way, you should be able to handle anything life throws at you! Best of luck! 😊
Hi Adrian, thank you for your videos, ALWAYS helpful. Is it possible to get the ZMMK inside my Questrade FHSA account? I was so sorry to have missed meeting you on your July 2nd Montreal conference, I truly appreciate all your videos. I wish there was a way to have an online advise session with you, ofcourse your time is very respectful and must be renumerated. I have an important decision to make and truthfully I don't trust anyone as much as you. And I understand you might not be a licensed financial advisor but I really need your advice, is there any possibility of an hour or if not half hour of a consultation? IF not don't worry at all, I am sure if I re-watch All your videos I will have a lot of valuable information but an hour with you would be an incredible privilege.
yes you can certainly use ZMMK inside your FHSA! Just as long as you are buying a house within 1-3 years! Any longer than that, and you're better off with other equity ETFs or stocks =)
I've already got you covered! Check out this video from many years ago showing step by step how to buy stocks or ETFs in Canada =) th-cam.com/video/_V2yBWwOZX4/w-d-xo.html
In the case of ZMMK, the majority of it is interest income so it will be fully taxed like a GIC or savings... no tax credit like a dividend unfortunately...
Hi. Thanks for your videos! I have a question regarding what to do after buying an etf. My rich aunt passed away and she gave me U$ 100k. I invested most of the money in the VOO etf. Now what? I leave it alone for 5-10 years? Do I sell some positions and take out partial profits? There is not much information on what to do after putting in money in the stock market. Thanks
I am sorry to hear about your aunt passing but I'm sure she would be proud to hear that you are investing that inheritance rather than spending it on trivial things
When it comes to investing, you NEED to keep a long term mindset. The money you invest with is money you will NOT touch or need for a minimum of 5 years, ideally longer. So forget about this money, let it grow and invest and years down the line, then you can start to withdraw it when you need it
I do all my budgeting with Excel! I give a FREE Budget Template that you can download and use for yourself! I go over my template in detail in this video, How to BUILD WEALTH =) th-cam.com/video/L10wfYl3_Qs/w-d-xo.html
But for ZMMK, the vast majority of the distributions come from interest income (from the bonds) so it will be fully taxable... no tax credits unfortunately.
This is the same as interest you would get from a savings account or GIC. Of course this only affects you in a non-registered account, in a TFSA it would be tax sheltered =)
Hello Adrian, good video, big fan of the channel here, I'm new to investing but if I understood this right, with this fund it returns around 4.8% per year on average, right? If that's the case a GIC that pays more, let's say 5.25% would be more advantageous for the earning with the cons of the money being locked in for the term of the plan, correct?
Remember the whole point here is saving money for a short term goal. So we NEED that flexibility to pull the trigger and withdraw that money when the time comes. That's why I prefer savings and money market funds instead of a GIC =)
Awesome video😊 Thanks Adrian I have one doubt about dividends earned in my TFSA in Cash.I am not eligible for drip yet. If I buy stocks/ETF from the cash earned through dividends will there be a penalty for extra contribution since my TFSA is maxed out for this year
Sorry, back here again. Thank you for doing this review (on the fence, but I may take a position later). Does BMO have something similar for your USD? Thank you in advance.
It's the same with any dividend paying stock or ETF, as long as you buy the ETF before the ex-dividend date, you WILL receive the dividend! (or distribution) =)
@@CanadianTShirt You guys should host a more advance one. Talk about patterns in the market for day trading, swing trading, or shorting the market. Maybe forex, or even legal tax loop hole advantages. I know you guys are very smart!
But yes opportunities are still there, but the numbers will definitely be tighter with these higher interest rates. But remember these rates won't stay this high forever! I'll be covering my entire strategy in my upcoming real estate series so stay tuned! =)
Amazing video as usual Adrian! So, would you say this is a good option for parking your Emergency Fund? Given the liquidity and cash flow distribution beating not just inflation but most of the HISA in Canada it seems a good option…
Hmmm I wouldn't say that, maybe at most a portion of your emergency fund. Your emergency fund is money that is always there with ZERO risk so a High Interest Savings account is the best choice for that
I say money market funds are better for "savings" that are going towards a big money goal in 1-3 years, like saving up for a house or a car. But if you have a large emergency fund, I could see the case for putting a portion of it into these money market funds!
Thanks for the video! This sounds like a great short-term option to park some cash. Do you know if there are any unique tax implications to consider with investing in a money market fund?
But for ZMMK, the vast majority of the distributions come from interest income (from the bonds) so it will be fully taxable... no tax credits unfortunately.
This is the same as interest you would get from a savings account or GIC. Of course this only affects you in a non-registered account, in a TFSA it would be tax sheltered =)
ZMMK contains short term bonds but CASH contains savings accounts from banks and those interest rates can change at a moment's notice so keep that in mind!
Hello again, is there a catch to this( 6:07 )? It seems to me that if a person already has a LOT of wealth then they can just put in a lot at the beginning of the month to get a big return at the end of the month, and then repeat every month, unless I'm not understanding something.
So yes if you put in $1Million into this fund, you could reasonably expect to receive 5% or $50K a year but remember you would be sacrificing the much GREATER returns you can expect from the stock market, about 8-10% per year for LONG term investing! =)
But it's different in their composition. ZMMK contains short term bonds whereas CASH contains cash deposits with the banks, and those interest rates can change suddenly so keep that in mind! =)
Would you hold these investments in a Cash account? I'm using my TFSA for long-term goals, and obviously RRSP might not be the best place to hold these. Appreciate any input, thanks!
And once you eventually withdraw, that will be tax-free in the TFSA and then you will regain that contribution room in the new year. But again, only if you have a ton of available room. If you're close to maxing it out, prioritize long term investing in the TFSA =)
And the RRSP would only work if you are planning on buying a house and using the Home Buyers Plan in the next 3 years, otherwise only use the RRSP for long term, retirement planning =)
Great video as always. I hold CASH etf but that is not insured by CDIC. Since this BMO money market etf offers the same kind of returns as CASH then I guesss it makes more sense to pick this one over CASH etf? If comparing the two, does CASH etf have certain plus points over this BMO one at all?
CASH is also a great option but it's different since it focuses on bank deposits vs short term bonds, and those interest rates are more susceptible to change
But it's also a great pick! But keep in mind that neither CASH nor ZMMK would be insured under CDIC since it's not savings, it's an investment. But as long as you are investing with a good brokerage, you would be insured under CIPF
Check out this video here to learn the details on CDIC vs CIPF insurance and how it relates to bank closures in the US =) th-cam.com/video/FZjOEIBM-_Y/w-d-xo.html
Hey Adrian, great video as always! I was wondering since Questtrade (your favourite broker of course) charges commission on selling ETFs, how much return would you consider worth the fee? Or due to the short tern nature + low return, would you suggest a broker without the selling fee? Appreciate your transparency about the sponsorship, and happy for you for it! I would second a video comparing money market funds in the future!
I threw 1000 into an FHSA in wealthsimple last year with the idea that imma do a bunch of research to invest it... I have been read and seen so much on peoples suggestions, and so many different routes and peoples opinions. What do yall think I should hold into my FHSA? I want to actually hold something and not just have it sit there making $0. XEQT? XBAL? CASH? ZMMK? I dont have a range of when I want to buy a house just know its ASAP, say maybe 2 years? Idk if i should dump all my holdings into 1 stock/etf/gic or diversifiy it. thoughts?
Hey Adrian, just considering this fund even more now that the Gov. is cutting interest rates and GICs are starting to become less attractive. Any way you could comment on this? Perhaps a video with suggestions for short term investments or emergency funds? Btw, would you say SCHD could also be a good dividend investment for short term at this point? Thanks
Good point! As interest rates fall, savings accounts and GICs will become less attractive. That's one of the benefits of this bond-focused fund. Those bond interest rates are fixed until maturity, but yes as the months go on and new bonds are issued, we expect the interest income to drop here as well but we get the benefit of some extra time! =)
And I love SCHD, one of my favourite US dividend ETFs but that's a long term investment! Even dividend stocks CAN drop and face volatility in the short term so if you invest in SCHD, that should be with money you will NOT need or touch for at least 5 years, ideally even longer =)
@@CanadianTShirt Thank you so much for your replies and insights. I was considering SCHD for the EF, but you're right, better not to chance with the swings of the market, even that fund being considered low risk.
Unfortunately in the case of ZMMK, the majority of the distribution yield is taxed as interest income. So it's fully taxable, just like a savings account or GIC
I got room in my tfsa for another 20k, i have 12k in hsa im saving it for house down payment, 1-2yrs out. Should i just put it in my tfsa and invest in etf? And Withdraw it next year? I will gain the contribution room again next year anyway right? What am i missing here?
Since you're buying a house, are you using your FHSA (First Home Savings Account) It's even BETTER than the TFSA and you definitely want to max that out first! You need to put in $8000 a year into the FHSA, you lock in tax refunds (free money) and you can withdraw tax free. Watch my FHSA Explained video for all the details =) th-cam.com/video/l-vFR14I12k/w-d-xo.html
But assuming you've already maxed out your FHSA, since you have $20K of TFSA room then it should be fine to put your savings in there and save on the taxes on this interest income. But if there's a good chance that you'll be able to max out your TFSA, then I wouldn't do this. The TFSA is meant for long term investing
I only suggest using the TFSA for saving if you have a ton of room and are no where close to maxing it out! In your case, maybe put half of it, $6K into the TFSA and the rest outside? That way you give yourself extra room for investments =)
True! Remember they contain short term bonds and as the interest rate has dropped by 0.5% in the past few months, those new bonds will be issued with a lower interest =)
Would you recommend allocating my emergency fund into this ETF? Currently, I have it in a Manulife TFSA banking account that earns 1.85%. From what I understood from your video, both options are equally liquid
Yes ZMMK is extremely liquid and very, very low risk but it is not ZERO risk! That's where a savings account comes in. A savings account is literally zero risk, it can't possibly go down and it's insured by the federal government through CDIC. That's super important when it comes to emergency savings
Now if you have a huge emergency savings fund, then sure you can probably allocate a portion of it into this ETF and then keep the rest in a secure savings account. But the majority of your emergency fund should be in savings, that's what I do =)
Since you will be withdrawing this money in 1-3 years, ideally you want the non-registered account. You want to prioritize the TFSA for long term investing instead!
Fantastic work again! Big fan of yours! Which type of account ( RRSP/TFSA/FHSA/unregistered account) will be more tax effective for ZMMK and ZUS.U respectively ??
So technically, the TFSA would be a good spot to avoid that tax however the point of this fund is to withdraw in a short timeframe, 1-3 years. So I would suggest the non-registered account instead
Yes you pay more taxes on that income but you can withdraw at no cost and no impact on your future contribution room! So definitely do not use the RRSP (unless you are retiring)
I would suggest the non-registered account! Remember with ZMMK, you are only using this for SHORT term goals, 1-3 years! So you will be withdrawing this money soon!
Hello , I recently transferred my RRSP account (which is currently invested in mutual funds) into my TD investment account. I want to sell off all stocks from my RRSP now in my investment account and purchase dividend ETF’s. My question is, if I sell my mutual funds inside my RRSP, and immediately purchase dividend ETF’s and keep them in my new self directed investment account, will I have triggered a RRSP withdrawal and pay a penalty. I really hope this is not too confusing. Any help is appreciated.
ZMMK contains short term bonds whereas CASH is just bank's savings accounts, which can change at a moment's notice especially as interest rates change so keep that in mind
The main difference is the composition. ZMMK focuses on short term bonds whereas CASH contains cash deposits from a bank, and those interest rates can change at a moment's notice so keep that in mind!
@@CanadianTShirt oh great to hear from you! Didn't expect you would reply back to me. I've been following for 4 years, great useful content. And yes I get your point what you're saying
@@justinpatel8751 That's what I do! I try my best to respond to everyone's comments! It certainly gets tough sometimes, especially as my channel grows but I LOVE this engagement with you guys and I never want to lose that! 😊
Yes you can use it in any account but I would not recommend the RRSP. Remember these funds are for short term, so you plan to withdraw in 1-3 years. The RRSP you do NOT want to withdraw until retirement!
In the case of ZMMK, it's not dividends since this doesn't contain stocks, it contains bonds. So most of it is interest income and thus taxed fully, just like a GIC or savings account
Always look up the ETF itself to see the breakdown of the distribution but in the case of ZMMK, the majority of it is interest income and so it is fully taxed, the same as savings or a GIC
You do not mention brokerage fees where most are charging Buy 9.99 Sell 9.99 so you need to deduct the cost of doing business also to get a real return and CRA taxes
Yes if you use a big bank brokerage and pay $10 in commission fees every time, that's very expensive.... That's why I've been investing with Questrade for over a decade!
With Questrade you can buy ETFs commission free! And when it comes to stocks, they are literally half the price of the banks. And they have all the features you want. Nowadays there are even more low-cost alternatives so there's no reason to pay $10 for every trade =)
I’m considering purchasing ZMMK. But it would be my first time buying a money market fund etf. Would these monthly distributions work as a dividend that would get me a small cash return in my account every month?
You receive that monthly income as if it was a dividend but this is an ETF so it's called a distribution and it will be taxed differently than a regular dividend
So yes you would receive about 5% income and you receive it every month but you have to look up the distribution breakdown from the ETF website to see the tax implications
In the case of ZMMK, those distributions are taxed as interest income, just like a bond. So you don't get the preferential tax treatment of dividends. But in a TFSA for example, it will be tax sheltered. Hope that helps! =)
If you are saving up to buy a house in the next 3 years, then absolutely use the FHSA! For longer than 3 years, don't buy ZMMK, invest in your FHSA with long term investing assets like stocks and equity ETFs =)
But if you have a TON of TFSA room and you're nowhere near maxing it out, then you can use the TFSA as well! Just remember, ZMMK is only meant for short term: 1-3 years. Any longer than 3 years, and you're wasting your growth
But it's different in their composition. ZMMK contains short term bonds whereas CASH contains cash deposits with the banks, and those interest rates can change suddenly so keep that in mind! =)
But remember, those savings rates won't last forever. I remember years ago when WealthSimple gutted their savings rate at a moment's notice so keep that in mind! Especially as we expect to see interest rates start to come down
Interest rates offered by banks can always go down, mainly due to interest rates and bond yields. It's never guaranteed or locked in so keep that in mind!
This is such an amazing video, thank you so much!! I’ll definitely be doing this. I have a question about US version of this ETF (ZUS.U). Currently I have some US money saved in a US Savings Account that give me 2%. If I wanted to invest in ZUS.U for the higher interest return, I wouldn’t buy inside my RRSP account (to save withholding tax) since it’s for short term. So if I buy ZUS.U inside my TFSA, I’ll still get charged 15% withholding tax for ZUS.U, correct? In that case, would it be better to just leave the US cash in the savings account it currently is? Or am I missing something?
Planning a vacation to the Canadian Rockies for next year, ZMMF might be a good for comparison between WealthSimple CASH (promo bonus interest + regular interest is about 5%)
Money market funds are great for my short term goals but NOT for long term investing! If you want quality ETFs for building LONG TERM wealth, check out my ETF video here 👇
th-cam.com/video/3q4Y22MzkIA/w-d-xo.html
I appreciate you disclosing your sponsorship. Your transparency is refreshing. I'm a big fan of money market funds myself.
Oh absolutely! I have only ever done 2 sponsorships in 5 years (Questrade and BMO ETFs) both are companies that I have loved and praised for free for many years!
Now it's nice that I get a chance to work with them and get paid for a change! But of course, you MUST always disclose it right away. No paycheque is worth losing the trust and credibility with your audience!
@@CanadianTShirt Why does BMO charge an additional "Management fee" on ALL their ETFs? There is 0.14% MER fee whish is for managing the ETF, what is the 0.28% "Management fee" for?
Also, I'm guessing its best to hold ZMMF in a Brokerage Accunt (non-registered tax free)?
Sponsorships make sense when you’re actually investing in the products that they’re offering. Those that don’t really show that they’re after monetary reward more than educating their audience on products they believe in. Good on you sir!
Thanks buddy! That's my rule, I would NEVER take on a sponsorship unless I personally use them and find value in them. Sincerity and authenticity are the most important things to me and I would never trade that in for a paycheque!
Glad to see you get another sponsorship! You're one of the few creators I trust. I started heavily investing 8 months ago and have built my portfolio to about 80k at 24 years old (huge thanks to my parents for letting me live with them at this age lol). Keep up the great work! This sponsorship is much deserved.
Thank you so much for those kind words! I am still very new to sponsorships, I've only done 2 in 5 years and I definitely want to be extremely selective and limit who I work with. But with BMO ETFs, I've been a fan of their products for over 10 years so it's a great fit to be paid by them =)
And congratulations, that's INCREDIBLE! You are doing the right thing, stay with parents as long as you can mentally endure lol it will save you a TON of money to invest with! Keep it up bud! =)
Wow video released just in time. Was trying to decide where to park my money for a downpayment in 1-2 years
Perfect timing! I'm in the same situation, but I'm saving for the next 2-3 years!
I'm doing a combination of money market ETFs (ZMMK) plus savings and short term GICs =)
@@CanadianTShirt Why you want to go for a GIC over ZMMK?
PSA, HISA, CASH and HSAV are also good ones.
All good options for short term investing! They are different though since ZMMK focuses on short term bonds rather than cash deposits at banks. Just be mindful that bank savings rates can change at a moment's notice so keep that in mind! =)
So if Rates go down CASH vs ZMMK?
I use CASH ETF for my short term savings, yield is about the same.
That's another great option for short term investing
Although it's makeup is quite different, rather than short term bonds and bills, it focuses on cash deposits from the banks. And those are susceptible to change so keep that in mind!
Congratulations on getting sponsorships on your channel and thank you for your openness and transparency. I just joined a FB group on dividend investing and send people your way as you're so educational. I'm far from being a millennial and am from the generous that adhered to David Chilton's first book on mutual funds, as well as many other authors. Thank you for being on here and educating on ETFs, as well as anything, really. I even suggested to a brand new immigrant to turn to your channel as you talk about the new FHSA, as well as other financial vehicles available to us Canadians. As most content on TH-cam are all geared to Americans, it is refreshing you have your channel and are so generous with your time. Thank you.
Thinking of where to allocate my funds... this is just the video I needed!
Thanks Joyee! It's a great one to consider for short term money goals! =)
Great video again! Interesting as I never considered money market funds before. I might store the next vacation money in it. Thanks!
Thank you Enid, as always! Ya I have a feeling that most investors have never even heard of money market funds, we're lucky that we have more options than ever when it comes to investing products! Especially now when it comes to short term investing! =)
Appreciate the transparency but wouldn't the audience be better served by showing all available Money Market ETFs and doing a pros and cons comparison?
Although the BMO product served us well to walk the scenario, I am left wondering if there are better or worse competing products from the other banks?
That would be a separate video! But in the spirit of transparency, ZMMK is the short term investing product that I am personally using, in addition to savings and GICs. That's why I agreed to this sponsorship and why it was a perfect fit!
But naturally, in a sponsored video it wouldn't be right to do a comparison of other products. That comparison video is certainly coming and that will certainly not be sponsored =)
Indeed. Sponsorships will always have viewers wondering about integrity and bias of the endorser. Oh well, at least he's not present at BMO ETF's TSX opening bell. LOL.
@@funkspinna haha imagine the scandal! 😉
@@funkspinna But you're absolutely correct, I definitely do NOT want to overdo sponsorships and paid endorsements. That's why I'm extremely selective and I've only done 2 of them in over 5 years! No paycheque is ever worth losing the credibility with my audience! =)
Hello from St. John's, Newfoundland. That's a very interesting topic. I always feel we have inferior options than the US, but I'm thrilled we have someone like you to keep us to date with the Canadian options.
There are Cashable 1 year or 2.year GICs with some banks but their interest rates are not as high as the yield on this money market fund from BMO. Great Video!😊
That's true! Cashable GICs usually offer lower interest rates than the fixed ones. That's the price you pay for the flexibility, but for short term goals like this, that flexibility is SO important!
Thank you for watching and sticking with my channel over all these years! I appreciate it! 😊
Unrelated but I love how your saying Zed instead of Zee 🇨🇦
Haha there's a reason why I'm called the CANADIAN in a T-Shirt 🇨🇦
Just confirming that we should be buying these in a non-registered account if we need to liquidate the assets within 1-3 years?
I would say non-registered account or the TFSA but only if you have a LOT of available room!
Ideally the TFSA should be used for long term investing but if you have $50K worth of room and you have no chance of maxing it out in the next few years, then sure, you can use some of that TFSA room for your short term investing goals
That way you save yourself on taxes on these monthly distributions but if your TFSA is close to maxing out, then I would stick to the non-registered account. Great question! =)
@@CanadianTShirt Thanks, you're the best! I am maxed out in my TFSA with VEQT :)
Way to go! Maxing out your TFSA is an amazing achievement! So yes, absolutely go with the non-registered!
Great info! Thanks Adrian! I've been focusing on longer term investing in my TFSA and RRSP but now I want to save some money for a dream vacation I've been planning for. This seems like just the thing I would use to get the most out of my saving for the short run.
Sounds like a plan! As long as your dream vacation is less than 3 years away, I think these money market ETFs would be a great option!
In addition to a high interest savings account and short-term GICs as well! A hybrid approach is often the best approach =)
Thank you, Adrian, for another amazing video. Please keep up the fantastic work!
I have a few questions and would greatly appreciate your help:
1-I have two children, and I would like to start investing some money for their future studies. However, there's always the uncertainty of whether they will decide to pursue higher education. In that case, assuming they choose not to study in 20 years, what would be the best account to start investing in their future right now?
2-Upon reaching the retirement age of 65, can I withdraw all my money at once?
3-How long do I need to stay in Canada to ensure I don't lose my pension benefits?
4-Can I invest in U.S. stocks and ETFs without penalties through my FHSA, or is there a 15% penalty?
Thanks in advance
Thank you for the video Adrian
You're welcome Lynda! I hope it helps with your short term money goals! =)
@@CanadianTShirt Yes actually I am going to look into BMO'S ETF
Happy to help! They have some of the best ETF products in Canada 🇨🇦
Interesting, thank you.
You're welcome! I hope it helps with your short term goals! =)
Awesome video! 👍 🇨🇦
Under 10 minutes too! 😊 👍
Thanks buddy! I'm glad you found it helpful! =)
@@CanadianTShirt
Best 30-90 day cash parking? Minimum investment?
@@billyrock8305 For 1 -3 months, ZMMK would still work! You would lock in 1-3 of those monthly distributions and it's fully liquid. You can cash out at any time, unlike a GIC!
@@billyrock8305 And there's no minimum investment. You only need $50 to purchase one share! You should also compliment this with a high interest savings account so that the money is there when you need it. I would avoid GICs since you are locked in and you have such a short timeline! Hope that helps! =)
@@CanadianTShirt
Thanks !! 😊
Can you please do an updated 2024 stock video please. What to buy, how to get started, how to stay motivated etc. new subscriber! Thanks :)
You bet! That updated video is certainly on the way! =)
Greetings from Lethbridge Alberta! This is great timing! I'm looking at turning my house into a rental property sooner than later and therefore will be looking for a new home to live in so I'll definitely be investing in ZMMK. Thanks Adrian 👊
Perfect timing indeed and congratulations on your new strategy! It can be incredibly powerful to convert your home into a rental property!
As long as you are buying in less than 3 years, I think ZMMK is a great option. That's what I'm doing! =)
@@CanadianTShirt thank you, I will have to do some research into all that it takes to be a landlord/claiming rental income at tax time, but either way I'm looking forward to some solid passive income!
You got it! There is a TON to learn about rental income but I'll be covering all that in an upcoming real estate series =)
@@CanadianTShirt o nice looking forward to it!
What do you think about similar ones like CASH and PSA compared to ZMMK?
Those are great options as well, they serve a similar role although their composition is quite different
ZMMK focuses on short term bonds and bills whereas CASH holds savings deposits with the big banks, and those are susceptible to change so keep that in mind!
I can definitely make a follow-up comparison video if interested!
@@CanadianTShirt I would definitely like a follow-up comparison video. I think this is also a hot topic on the PersonalFinanceCanada subreddit as well.
@@aswqe338 thanks for the feedback! =)
What are your feelings on High Yield Covered Call ETFs as a vehicle for retirement income?
It's not something that I touch. They can serve a role in a sideways or even downward market but only in shorter time horizons. For long term investing, I would rather buy quality stocks and ETFs. That way I get both dividends AND long term capital growth =)
@@CanadianTShirt thanks for the quick and detailed reply. 😁👍
That's what I try to do! =)
Adrian, nice concise video. Can you tell me how the monthly payout is treated tax wise in Canada? Is it treated as interest income? If so, is their a similar ETF that is treated as a capital gain? Thanks for the videos.
Great question! For any ETF, you have to see the distribution breakdown to see how it gets taxed
In the case of ZMMK, the majority of that money comes from bonds so it's taxed as interest income. Thus it is taxed heavily, the same as GIC or savings
BMO has many ETF options and yes some of them are structured differently where you will receive less distributions (taxable monthly income) but more capital appreciation for the same underlying investments
I got roped into something similar with an inheritance. It guaranteed 6% every year but cost of living went up and I need to rework my situation. I look at S&P ETFs and see a year return of 24% and it makes me want to vomit... Heqvily considering moving the limp sum into VFV instead and let it ride. If the entire market sags then O expect I will sag with it anyway heh I have another large lump sum into US Cannabis that sadly has been very hard to look at. But I i expect it will blossom soon(next few years). But I'm planning on then converting that into S&P 500 shares, and create a money battery within the TFSA. And then look to the limp sum in my regular account as livable income while the battery charges. I hope it works...life sideswiped me and I'm trying to insulate myself. I appreciate this video today for that simple fact of realizing what the bank sold me on vs the reality of the actual markets. Thanks for you videos bud, I appreciate it.
I'm sorry to hear about your troubles... we can never predict or fully prepare for the future, especially when the market changes as quickly as we've seen
The best we can do is have a plan and diversify our money through various ETFs and stocks. And it's imperative to have an emergency savings fund plus other stockpiles of cash and ETFs like ZMMk for those short term goals. That way, you should be able to handle anything life throws at you! Best of luck! 😊
@@CanadianTShirt Cheers man...I hear ya 🤘
Hi Adrian, thank you for your videos, ALWAYS helpful.
Is it possible to get the ZMMK inside my Questrade FHSA account?
I was so sorry to have missed meeting you on your July 2nd Montreal conference, I truly appreciate all your videos.
I wish there was a way to have an online advise session with you, ofcourse your time is very respectful and must be renumerated.
I have an important decision to make and truthfully I don't trust anyone as much as you. And I understand you might not be a licensed financial advisor but I really need your advice, is there any possibility of an hour or if not half hour of a consultation?
IF not don't worry at all, I am sure if I re-watch All your videos I will have a lot of valuable information but an hour with you would be an incredible privilege.
yes you can certainly use ZMMK inside your FHSA! Just as long as you are buying a house within 1-3 years! Any longer than that, and you're better off with other equity ETFs or stocks =)
Thank you
You're welcome! I'm glad you found it helpful! =)
Full video on How to buy this stocks like beginners friendlyvideo . Am new
I've already got you covered! Check out this video from many years ago showing step by step how to buy stocks or ETFs in Canada =)
th-cam.com/video/_V2yBWwOZX4/w-d-xo.html
are these money market fund distributions counted like interest income of GIC, or are they eligible dividends like an equity?
Great question! For any ETF, you have to look up the distribution breakdown from the website to see how they're taxed
In the case of ZMMK, the majority of it is interest income so it will be fully taxed like a GIC or savings... no tax credit like a dividend unfortunately...
Thanks!🎉
I'm happy to help! Thanks for watching! =)
I want my ETF so big, the Emergency Task Force is at my door.
Haha that's a good problem to have
Love your videos Adrian! Do you have one that explains the excel spreadsheet?
You bet! I go over my spreadsheet in detail in my DRIPs EXPLAINED video here =)
th-cam.com/video/ouyXwaTOfhU/w-d-xo.html
@@CanadianTShirt Thank you!
My pleasure! I hope you enjoy my Excel template! =)
Hi. Thanks for your videos! I have a question regarding what to do after buying an etf. My rich aunt passed away and she gave me U$ 100k. I invested most of the money in the VOO etf. Now what? I leave it alone for 5-10 years? Do I sell some positions and take out partial profits? There is not much information on what to do after putting in money in the stock market. Thanks
I am sorry to hear about your aunt passing but I'm sure she would be proud to hear that you are investing that inheritance rather than spending it on trivial things
When it comes to investing, you NEED to keep a long term mindset. The money you invest with is money you will NOT touch or need for a minimum of 5 years, ideally longer. So forget about this money, let it grow and invest and years down the line, then you can start to withdraw it when you need it
I break down the important of long term investing in this video here:
th-cam.com/video/PelyIDPVoyw/w-d-xo.html
Would you be able to do a video on best budgeting apps we can use to keep track of spending please! Thanks in advance 😊 @
I do all my budgeting with Excel! I give a FREE Budget Template that you can download and use for yourself! I go over my template in detail in this video, How to BUILD WEALTH =)
th-cam.com/video/L10wfYl3_Qs/w-d-xo.html
Learned something new today, great video. What are the tax implications on the monthly distributions ?
Great question! Always look up the distribution breakdown from the ETF website since it's more complicated than pure dividends
But for ZMMK, the vast majority of the distributions come from interest income (from the bonds) so it will be fully taxable... no tax credits unfortunately.
This is the same as interest you would get from a savings account or GIC. Of course this only affects you in a non-registered account, in a TFSA it would be tax sheltered =)
Hello Adrian, good video, big fan of the channel here, I'm new to investing but if I understood this right, with this fund it returns around 4.8% per year on average, right? If that's the case a GIC that pays more, let's say 5.25% would be more advantageous for the earning with the cons of the money being locked in for the term of the plan, correct?
Correct there are a few long term GICs that pay out even higher in interest income BUT the big downside is that money is locked in!
Remember the whole point here is saving money for a short term goal. So we NEED that flexibility to pull the trigger and withdraw that money when the time comes. That's why I prefer savings and money market funds instead of a GIC =)
Awesome video😊 Thanks Adrian
I have one doubt about dividends earned in my TFSA in Cash.I am not eligible for drip yet. If I buy stocks/ETF from the cash earned through dividends will there be a penalty for extra contribution since my TFSA is maxed out for this year
Nope! Any income you earn INSIDE the TFSA (dividends, capital gains, DRIPs etc) is NOT considered a contribution so it will NOT affect your room!
So even if your TFSA is maxed out, those dividends or DRIPs will NOT push you over the edge!
I break this down in detail in my TFSA MISTAKES video here =)
th-cam.com/video/s4cBibLATOU/w-d-xo.html
Thank you so much Adrian😊Appreciate it! You always clear our doubts 👍
@SuccessSpirit7 that's what I try to do! 🙌
Are ETFs better or worse than GICs going into a recession (e.g., currently)?
I don't mind locking in GICs.
Again really depends on your time horizon! I only recommend GICs for very short term goals and when you have a FIXED deadline
Otherwise, I prefer getting similar returns (or better) and keeping that flexibility and liquidity! =)
thanks
I'm happy to help! =)
Sorry, back here again. Thank you for doing this review (on the fence, but I may take a position later). Does BMO have something similar for your USD? Thank you in advance.
Great question! Yes BMO offers a very similar USD version called ZUS.U
For me personally, all of my income and savings etc is in CAD so ZMMK works for me. But if you have USD income, then that could be a good option! =)
@@CanadianTShirt Thank you!
My pleasure! =)
I’m in etf called CASH. It has a 5% dividend rate.
Nice informative video, do you get the distribution if you buy the ZMMK mid month? when is the best time to purchase, beginning of the month?
It's the same with any dividend paying stock or ETF, as long as you buy the ETF before the ex-dividend date, you WILL receive the dividend! (or distribution) =)
I break this down in detail in my DIVIDENDS EXPLAINED video here =)
th-cam.com/video/6xzfgObXxvU/w-d-xo.html
It was so sweet meeting you in Toronto. Thank you agian for helping me with Taxation 1😂
Thanks man for coming out! The Toronto event was EPIC!!! 😁
@@CanadianTShirt it was, but I found it was for very new investors getting into the market.
True the majority of our attendees are beginners or intermediates but we had investors from all levels! =)
@@CanadianTShirt You guys should host a more advance one. Talk about patterns in the market for day trading, swing trading, or shorting the market. Maybe forex, or even legal tax loop hole advantages. I know you guys are very smart!
What is your criteria for buying rental property? Is it possible to generate cash flow given that interest rates are still high ? Thanks
It's MUCH tougher than it used to be, even 2 years ago!
But yes opportunities are still there, but the numbers will definitely be tighter with these higher interest rates. But remember these rates won't stay this high forever! I'll be covering my entire strategy in my upcoming real estate series so stay tuned! =)
Amazing video as usual Adrian! So, would you say this is a good option for parking your Emergency Fund? Given the liquidity and cash flow distribution beating not just inflation but most of the HISA in Canada it seems a good option…
Hmmm I wouldn't say that, maybe at most a portion of your emergency fund. Your emergency fund is money that is always there with ZERO risk so a High Interest Savings account is the best choice for that
I say money market funds are better for "savings" that are going towards a big money goal in 1-3 years, like saving up for a house or a car. But if you have a large emergency fund, I could see the case for putting a portion of it into these money market funds!
@@CanadianTShirt Thanks Adrian! Certainly risk is a big factor to consider when moving Emergency Funds. Makes sense. Appreciated the quick turnaround!
I'm happy to help! Best of luck! =)
Thanks for the video! This sounds like a great short-term option to park some cash. Do you know if there are any unique tax implications to consider with investing in a money market fund?
Great question! Always look up the distribution breakdown from the ETF website since it's more complicated than pure dividends
But for ZMMK, the vast majority of the distributions come from interest income (from the bonds) so it will be fully taxable... no tax credits unfortunately.
This is the same as interest you would get from a savings account or GIC. Of course this only affects you in a non-registered account, in a TFSA it would be tax sheltered =)
How is money market etf different from $CASH ? And which one would you recommend ?
They are similar in the sense that they both serve short term money goals! But they are quite different in their composition!
ZMMK contains short term bonds but CASH contains savings accounts from banks and those interest rates can change at a moment's notice so keep that in mind!
Hello again, is there a catch to this( 6:07 )? It seems to me that if a person already has a LOT of wealth then they can just put in a lot at the beginning of the month to get a big return at the end of the month, and then repeat every month, unless I'm not understanding something.
The "catch" is that you know what returns you will get. You will just get that 5% interest every year through those distributions
You can't get more than that since you won't see any capital growth. Your shares will remain fixed at $50, you just get that monthly income
So yes if you put in $1Million into this fund, you could reasonably expect to receive 5% or $50K a year but remember you would be sacrificing the much GREATER returns you can expect from the stock market, about 8-10% per year for LONG term investing! =)
is this the same as CASH or SGOV?
It's similar, both serve short term investing goals!
But it's different in their composition. ZMMK contains short term bonds whereas CASH contains cash deposits with the banks, and those interest rates can change suddenly so keep that in mind! =)
Would you hold these investments in a Cash account? I'm using my TFSA for long-term goals, and obviously RRSP might not be the best place to hold these. Appreciate any input, thanks!
Correct! Ideally you would hold these in a cash account since you are withdrawing in a short timeline, 1-3 years!
But if you have a TON of TFSA room and you're nowhere close to maxing it out, then you can also use the TFSA as well!
And once you eventually withdraw, that will be tax-free in the TFSA and then you will regain that contribution room in the new year. But again, only if you have a ton of available room. If you're close to maxing it out, prioritize long term investing in the TFSA =)
And the RRSP would only work if you are planning on buying a house and using the Home Buyers Plan in the next 3 years, otherwise only use the RRSP for long term, retirement planning =)
Thanks Adrian!
Great video as always. I hold CASH etf but that is not insured by CDIC. Since this BMO money market etf offers the same kind of returns as CASH then I guesss it makes more sense to pick this one over CASH etf? If comparing the two, does CASH etf have certain plus points over this BMO one at all?
CASH is also a great option but it's different since it focuses on bank deposits vs short term bonds, and those interest rates are more susceptible to change
But it's also a great pick! But keep in mind that neither CASH nor ZMMK would be insured under CDIC since it's not savings, it's an investment. But as long as you are investing with a good brokerage, you would be insured under CIPF
Check out this video here to learn the details on CDIC vs CIPF insurance and how it relates to bank closures in the US =)
th-cam.com/video/FZjOEIBM-_Y/w-d-xo.html
Any etf suggestions for parking usd for the short term?
Yup! BMO offers a similar ETF in US dollars called ZUS.U =)
Hey Adrian, great video as always!
I was wondering since Questtrade (your favourite broker of course) charges commission on selling ETFs, how much return would you consider worth the fee? Or due to the short tern nature + low return, would you suggest a broker without the selling fee?
Appreciate your transparency about the sponsorship, and happy for you for it! I would second a video comparing money market funds in the future!
I threw 1000 into an FHSA in wealthsimple last year with the idea that imma do a bunch of research to invest it... I have been read and seen so much on peoples suggestions, and so many different routes and peoples opinions. What do yall think I should hold into my FHSA? I want to actually hold something and not just have it sit there making $0. XEQT? XBAL? CASH? ZMMK? I dont have a range of when I want to buy a house just know its ASAP, say maybe 2 years? Idk if i should dump all my holdings into 1 stock/etf/gic or diversifiy it. thoughts?
Hey Adrian, just considering this fund even more now that the Gov. is cutting interest rates and GICs are starting to become less attractive. Any way you could comment on this? Perhaps a video with suggestions for short term investments or emergency funds? Btw, would you say SCHD could also be a good dividend investment for short term at this point? Thanks
Good point! As interest rates fall, savings accounts and GICs will become less attractive. That's one of the benefits of this bond-focused fund. Those bond interest rates are fixed until maturity, but yes as the months go on and new bonds are issued, we expect the interest income to drop here as well but we get the benefit of some extra time! =)
And I love SCHD, one of my favourite US dividend ETFs but that's a long term investment! Even dividend stocks CAN drop and face volatility in the short term so if you invest in SCHD, that should be with money you will NOT need or touch for at least 5 years, ideally even longer =)
@@CanadianTShirt Thank you so much for your replies and insights. I was considering SCHD for the EF, but you're right, better not to chance with the swings of the market, even that fund being considered low risk.
@@raphaelventura8465 exactly! For 5+ years, sure SCHD is a great choice. But for 1-3 years, I wouldn't take that risk!
When saving for a rental property I understand you cannot use the FHSA. Are you using your TFSA for to save for real estate or some other account?
So in terms of taxes, is the 5% considered as dividends or interests? both are taxed differently. Thanks
Great question! Always look up the distribution breakdown from the ETF website since it's more complicated than pure dividends
Unfortunately in the case of ZMMK, the majority of the distribution yield is taxed as interest income. So it's fully taxable, just like a savings account or GIC
@@CanadianTShirttoo bad.. would be great if it’s considered as dividends.
I hear you! That's why it's important to look up these distribution breakdowns to understand how they're taxed!
I got room in my tfsa for another 20k, i have 12k in hsa im saving it for house down payment, 1-2yrs out. Should i just put it in my tfsa and invest in etf? And Withdraw it next year? I will gain the contribution room again next year anyway right? What am i missing here?
Since you're buying a house, are you using your FHSA (First Home Savings Account) It's even BETTER than the TFSA and you definitely want to max that out first! You need to put in $8000 a year into the FHSA, you lock in tax refunds (free money) and you can withdraw tax free. Watch my FHSA Explained video for all the details =)
th-cam.com/video/l-vFR14I12k/w-d-xo.html
But assuming you've already maxed out your FHSA, since you have $20K of TFSA room then it should be fine to put your savings in there and save on the taxes on this interest income. But if there's a good chance that you'll be able to max out your TFSA, then I wouldn't do this. The TFSA is meant for long term investing
I only suggest using the TFSA for saving if you have a ton of room and are no where close to maxing it out! In your case, maybe put half of it, $6K into the TFSA and the rest outside? That way you give yourself extra room for investments =)
it's 4.8 now
True! Remember they contain short term bonds and as the interest rate has dropped by 0.5% in the past few months, those new bonds will be issued with a lower interest =)
Great video! What would be the USD equivalent to ZMMK?
Great question! Yes BMO offers a very similar USD version called ZUS.U
This is useful if you have a source of USD income, for me though I'm all Canadian for my savings =)
Hi Sir, can you please do a video about private Health insurance for people below 30.
Thank you
Would you recommend allocating my emergency fund into this ETF? Currently, I have it in a Manulife TFSA banking account that earns 1.85%. From what I understood from your video, both options are equally liquid
Personally, I don't use money market funds as my emergency fund, I use this for short term pre-defined goals in the next 1-3 years
Yes ZMMK is extremely liquid and very, very low risk but it is not ZERO risk! That's where a savings account comes in. A savings account is literally zero risk, it can't possibly go down and it's insured by the federal government through CDIC. That's super important when it comes to emergency savings
Now if you have a huge emergency savings fund, then sure you can probably allocate a portion of it into this ETF and then keep the rest in a secure savings account. But the majority of your emergency fund should be in savings, that's what I do =)
Hi Adrian, Is it wise to do this through the TFSA?
Since you will be withdrawing this money in 1-3 years, ideally you want the non-registered account. You want to prioritize the TFSA for long term investing instead!
However if you have a TON of available room and you're nowhere close to maxing out your TFSA, then sure you can use the TFSA to save on those taxes!
And once you withdraw, you would regain that contribution room in the following January =)
Fantastic work again! Big fan of yours! Which type of account ( RRSP/TFSA/FHSA/unregistered account) will be more tax effective for ZMMK and ZUS.U respectively ??
Well the distributions come from interest income and thus they are taxed fully (no dividend tax credit sadly)
So technically, the TFSA would be a good spot to avoid that tax however the point of this fund is to withdraw in a short timeframe, 1-3 years. So I would suggest the non-registered account instead
Yes you pay more taxes on that income but you can withdraw at no cost and no impact on your future contribution room! So definitely do not use the RRSP (unless you are retiring)
The FHSA could be used if you are buying a house in the next 1-3 years =)
@@CanadianTShirt Thank you!!! Answers to the point. Like it! I follow you on Blossom too.
It will still follow the T+1 process, right? Thank you!
Yes, it would.
Correct! You are still buying an ETF, nothing special so it will be the same process =)
Can you please share me What happens with idex stock ? Thanks 🙏
That looks like a tiny micro-cap stock, I don't invest in those. Too risky
I only invest in well established companies or in ETFs, that's my strategy =)
Hello. I just wanted to ask, you never mentioned if ZMMK should go into a TFSA or in a non-registered investment account. Which would you recommend?
I would suggest the non-registered account! Remember with ZMMK, you are only using this for SHORT term goals, 1-3 years! So you will be withdrawing this money soon!
The TFSA is best for long term investing! Especially if you have a limited amount of contribution room! I hope that helps =)
Thank you for clearing that up. I appreciate your reply. I will keep that in mind. Many thx, Adrian.👍🏻
@diegoolivera6081 happy to help! Best of luck! =)
Hello , I recently transferred my RRSP account (which is currently invested in mutual funds) into my TD investment account. I want to sell off all stocks from my RRSP now in my investment account and purchase dividend ETF’s. My question is, if I sell my mutual funds inside my RRSP, and immediately purchase dividend ETF’s and keep them in my new self directed investment account, will I have triggered a RRSP withdrawal and pay a penalty. I really hope this is not too confusing. Any help is appreciated.
So, how long would you keep say, and investment of 1000 in ZMMK?
It depends on what I'm using it for but maximum 3 years!
I'm only holding ZMMK for 1-3 years. In my case, my short term goal is buying a property. Anything longer and I would rather buy stocks and ETFs =)
For US dollars,which Monney Market ETF do you recommend ?
All of mine are in CAD but there are USD versions of money market ETFs!
As an example, look at ZUS
What about 2 or 3 months ?
Yup it would still work for 2-3 months! You would collect 2 or 3 distributions in that case!
And you can withdraw at a moment's notice, you're not locked in!
Your videos are incredible, do you offer online training courses?
@@Lachancecalls.2010 I made a decision many years ago not to make a course. I would rather give away these lessons for free!
@Lachancecalls.2010 but if have specialized questions, reach out to me on IG =)
@@CanadianTShirt really appreciate that, learn daily watching your videos, you are a godsend!
That is so kind of you to say! Thanks for sticking with me! 🙏
Can you tell me good Money market ETF like ZMMK in USD?
What about CASH ETF??
It's another option for short term investing, it serves a similar purpose but it's actually different
ZMMK contains short term bonds whereas CASH is just bank's savings accounts, which can change at a moment's notice especially as interest rates change so keep that in mind
It's got the same yield as cash or psa or hisa.
Yup they're all very similar and great options for short term goals!
The main difference is the composition. ZMMK focuses on short term bonds whereas CASH contains cash deposits from a bank, and those interest rates can change at a moment's notice so keep that in mind!
@@CanadianTShirt oh great to hear from you! Didn't expect you would reply back to me. I've been following for 4 years, great useful content.
And yes I get your point what you're saying
@@justinpatel8751 That's what I do! I try my best to respond to everyone's comments! It certainly gets tough sometimes, especially as my channel grows but I LOVE this engagement with you guys and I never want to lose that! 😊
@@justinpatel8751 And wow! Thank you SO MUCH for sticking with me over these past 4 years! That truly means the world to me! 🙏
EIT.UN is pretty dope too, little more risk than these money market ones.
Can you buy this from Questrade? From rrsp or tfsa?
Absolutely! I bought mine on Questrade! =)
Yes you can use it in any account but I would not recommend the RRSP. Remember these funds are for short term, so you plan to withdraw in 1-3 years. The RRSP you do NOT want to withdraw until retirement!
So I would suggest the non-registered account or the TFSA but only if you have a ton of room and are nowhere close to maxing it out =)
Is the distribution here considered dividends or just seen as interest to the tax man?
For any ETF, you have to look up the distribution breakdown to see how it's taxed!
In the case of ZMMK, it's not dividends since this doesn't contain stocks, it contains bonds. So most of it is interest income and thus taxed fully, just like a GIC or savings account
Does this get taxed?
Yes in a non-registered account, the distributions will be taxed!
Always look up the ETF itself to see the breakdown of the distribution but in the case of ZMMK, the majority of it is interest income and so it is fully taxed, the same as savings or a GIC
You do not mention brokerage fees where most are charging Buy 9.99 Sell 9.99 so you need to deduct the cost of doing business also to get a real return and CRA taxes
The fees will depend on your brokerage, there's nothing special about ZMMK in this regard, it's treated like any other ETF
Yes if you use a big bank brokerage and pay $10 in commission fees every time, that's very expensive.... That's why I've been investing with Questrade for over a decade!
With Questrade you can buy ETFs commission free! And when it comes to stocks, they are literally half the price of the banks. And they have all the features you want. Nowadays there are even more low-cost alternatives so there's no reason to pay $10 for every trade =)
I’m considering purchasing ZMMK. But it would be my first time buying a money market fund etf. Would these monthly distributions work as a dividend that would get me a small cash return in my account every month?
You receive that monthly income as if it was a dividend but this is an ETF so it's called a distribution and it will be taxed differently than a regular dividend
So yes you would receive about 5% income and you receive it every month but you have to look up the distribution breakdown from the ETF website to see the tax implications
In the case of ZMMK, those distributions are taxed as interest income, just like a bond. So you don't get the preferential tax treatment of dividends. But in a TFSA for example, it will be tax sheltered. Hope that helps! =)
Would you hold zmmk inside of a fhsa or more tfsa or doesnt matter?
It’s doesn’t matter you can hold it within both accounts
If you are saving up to buy a house in the next 3 years, then absolutely use the FHSA! For longer than 3 years, don't buy ZMMK, invest in your FHSA with long term investing assets like stocks and equity ETFs =)
But if you have a TON of TFSA room and you're nowhere near maxing it out, then you can use the TFSA as well! Just remember, ZMMK is only meant for short term: 1-3 years. Any longer than 3 years, and you're wasting your growth
@@CanadianTShirtthank you :)
Happy to help! =)
Is cash (global X) is similar etf?
I have it in my FHSA
It is quite similar in the sense that it serves the same short term investing goal
But it's different in their composition. ZMMK contains short term bonds whereas CASH contains cash deposits with the banks, and those interest rates can change suddenly so keep that in mind! =)
@@CanadianTShirt thank you for the information
I'm happy to help! =)
I have a bank account at 4.5% thru wealthsimple comes with a bank card.
That's a fantastic savings rate! Definitely take advantage of that! =)
But remember, those savings rates won't last forever. I remember years ago when WealthSimple gutted their savings rate at a moment's notice so keep that in mind! Especially as we expect to see interest rates start to come down
@@CanadianTShirtwhy will they go down?
Interest rates offered by banks can always go down, mainly due to interest rates and bond yields. It's never guaranteed or locked in so keep that in mind!
What do you think about BABA?
It's not a stock that I hold directly but I have a bit of exposure through international ETFs
he thinks these returns outrun inflation? what a steaming load of crap. our economy is broken.
How high do you think inflation is?.... I'd love to hear your opinions
But numbers are numbers and the CPI inflation report last month was 2.7% so yes... a 5% yield is certainly beating inflation. Even in the short term!
This is such an amazing video, thank you so much!! I’ll definitely be doing this. I have a question about US version of this ETF (ZUS.U). Currently I have some US money saved in a US Savings Account that give me 2%. If I wanted to invest in ZUS.U for the higher interest return, I wouldn’t buy inside my RRSP account (to save withholding tax) since it’s for short term. So if I buy ZUS.U inside my TFSA, I’ll still get charged 15% withholding tax for ZUS.U, correct? In that case, would it be better to just leave the US cash in the savings account it currently is? Or am I missing something?
Planning a vacation to the Canadian Rockies for next year, ZMMF might be a good for comparison between WealthSimple CASH (promo bonus interest + regular interest is about 5%)
Banana bread in a t-shirt 🍌🍞👕
Don't make me hungry lol
With or without walnuts?
@@stuartbrown8069 with walnuts and chocolate chips !
@@stuartbrown8069 Banana Bread with Walnuts is tasty for sure 🙂
@@CanadianTShirt 'Banana Bread in a T-Shirt' is your unofficial nickname in my livestream chat lol
Thank you
You're welcome! I'm glad you found it helpful! =)