Considering investment options for my first RRSP

I have been fortunate enough to not have to think about taxes for the longest time. Unfortunately though, that is because of my long stay in academia plus a couple of years of a low salary research position. I didn’t have to pay much income taxes, if at all. Things are different now that I am working in a full time job with a decent pay. I am reminded of the impact of our high Canadian taxes from the missing chunk on every paycheck. That is why I am looking into what to do with my RRSP contribution lately.

Last month, I analyzed the cost-benefit of a Tax Free Trading Account. I concluded that a TFSA trading account is not worth my while for the moment. So I will probably just stash my TFSA contribution in a good old savings account for now.

That is not the case with a RRSP. One big difference that change the whole argument around with RRSP is that any contribution that I make into it is tax deductible! I won’t go into details here because I hate taxes. Refer to the Wikipedia entry on RRSP if you are unfamiliar with it.

Essentially, I am guaranteed about 30% (or your marginal tax rate) of “profit” by way of tax refund for the amount of money which I put into my RRSP account. I don’t know about you, but 30% is a massive return for me! And it’s risk free! (Technically it’s just a refund of my own money, but still)

The benefit of having a RRSP is obvious.

What I have been pondering about is where should I put my money in my RRSP? As I discussed in Benefits of trading in a TFSA account, there are many limitations to a self-directed registered account. Although there are certainly other options than just trading stocks in a registered account.

Here are the options that I have considered.

1. Savings account
2. Fixed income
3. Mutual funds
4. Exchange traded funds
5. Individual stocks

In my next post, I will rank my preferences for each retirement investment option.

A sign that you are truly enjoying what you do

When was the last time that you were working on something and you were so immersed in it that you have forgotten about the hours that gone by? That feeling of timelessness while doing something for hours. Not the type that you’re stressed and feel that you don’t have enough time to do a job. I am talking about the other kind of feeling. The positive one. The feeling that is serene and content. If you know what I’m talking about, then congratulations! You have found what you’re born to do.

There are a handful of activities that I am passionate about. I sometimes get that zen-like feeling when I am cycling through a mountain path or snowboarding down a hill.

But what I truly like to do is problem solving. In particular, I find that programming quantitative trading systems is a perfect outlet for this side of my personality. Programming is one of the few ways in which you can create something out of nothing. Very much like a composer or a poet. But unlike those trades, you can solve practical problems with just your sheer mental capacity by programming your thoughts into codes.

To problem solve, you also need a source of inspiration. And what better field can there be than the capital markets. It is basically an ever-changing chess game in which you are playing against the entire world. Talk about setting a bar high.

As you may have read, I’ve run into a few obstacles with my trading lately. I need to develop a new trading program to let me regain my edge. So I got up early this Saturday to program my new trading software. Next thing I know, it was 4pm already.

It was a blissful day.

And that, is my reason for wanting to trade for a living.

Twitter Weekly Summary for 2010-03-15

• From @steenbab free webinar "How to get to the next level of your trader development" en reditum: http://ning.it/aAIzb0 #
• #FF #Traders @Ancient_Warrior @fx_13 @InEgoVeritas @faithmight @JS_Trader @tradercisco @BladeTrading @brysown1 #

Twitter Weekly Summary for 2010-03-07

• just bought some exercise resistance bands online, will start P90X in a couple weeks when they arrive #
• with the #market being squeezed at an imp junction, I find strangles to offer the best odds atm for a breakout either way $$ #
• good intro resources on Complex Event Processing http://ow.ly/1f3j9 #
• spent the morning at the vet with my pet, quickest $1k bill that I signed… those vets can really rake the $$$ in! #
• Thx 4 #FF #forex #traders @fx_13 @Ancient_Warrior @JS_Trader @FXDIRK @LisaCNolen #

40 monitors, 6 computers, 1 day trader

I’m still recuperating from my food poisoning from last week. Meanwhile, I came across this unbelievable trading workspace showcase from LifeHacker.

40 monitors trading workspace

I have no idea how this trader can juggle 40 monitors during his day trading. I am satisfied with just one 24″ monitor on my desk. However, I’m neither a day trader or a professional trader, so perhaps I’m missing something?

What do you think of this 40 monitors setup? A dream come true or a charts nightmare?

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