You Can Save Some Green.. Definitely
So in part 1 of this series I wrote about basically how easy it was to open up an account with Questrade, and told you step by step on how to go about doing it. In this part, I’m going to show you how to fund your account, make it automatic and how to start buying mutual funds.. whether it be on a monthly, bi-monthly, yearly basis. I mean unless you’ve got some loose diamonds hanging around which needs selling, you’re going to need to save. I’ve already talked about dollar-cost averaging before, so if you haven’t read that article.. it’s a pretty good primer as to why regular contributions and purchases are better than all at once buying.
So that’s what we want to setup in this step, to make it as automatic as possible. After you get your account setup, if you bank with any online banker which you can pay bills with – you can setup Questrade as a payee and set up an automatic transfer.
It can be as little as $20 a month but just so you know, the minimum required to start trading I believe is $1000 for a new account. This is fine really, as if you to set up an automatic transfer for say $50 a month or $25 a check, it would start building up and building up, and you wouldn’t even realize the money was gone out of your bank.. next thing you know, you’ve got $1000 to start investing! Most of the major banks offer all kinds of different pre-authorized transfers or bill payments, you can choose whatever you like.
Personally, what I find works for me is to have $50 transferred out the day I get my paycheck deposited into my account, then I don’t miss it.. it’s gone before I even knew I had it – which makes “missing it”, a lot easier as I can’t miss what I didn’t know I had!
So now that we’ve started that, and if you’re actually going to take the plunge and try this out, I suggest you start taking a look at a series of mutual funds. Check out my blog article on why you should buy your Mutual Funds with Questrade.. trailer fees alone could make the difference, I know it did for me.
Currently, Questrade doesn’t offer a regular mutual fund purchasing plan yet. I actually just received word this morning they don’t offer it – but what I like about their service, is that they said “yet”. I can’t imagine it will be too long, especially with others asking about it.
Ironically enough, they DO offer a pre-authorized cash contribution plan for Claymore Funds. This is sort of the exception to the rule I guess. With this setup you don’t even have to setup the automatic bill payment. You can simply fill in your banking information and they will debit your bank on whichever day for a pre-authorized amount which is even easier! I would certainly suggest you take a look at the Claymore funds – I wrote about one that which I thought was excellent (and provided monthly dividends) awhile ago as well.
Ok, so now that we have it all setup to withdrawal and funding the account.. our next step is to do the DRIP. (Part 3 coming up)