I was lucky enough to be given a copy of Beat The Bank by Larry Bates as a Christmas present from my wife. I added the book to my wish list after listening to an interview with Larry on the Canadian Couch Potato podcast.
The book was a very fast and easy read. The first few chapters were geared more towards the novice investor, there was a lot to learn from the book. My main takeaways were:
- Wealth builders include: amount, time, rate
- Wealth killers are: fees, tax, inflation
- "Old Bay Street" kills investments with their ridiculously high MER fees.
- Beat the Bank three rules of fees: find fees, reduce fees, repeat
- Use the T-REX calculator to determine the REAL cost of owning a mutual fund.
- T-REX scores need to be as close to 100% as possible. Mutual funds are not the way to achieve this.
- ETFs have T-REX scores in the high 90s which will help keep more savings in your account.
- Always use tax sheltered accounts whenever possible (TFSA, RRSP, RESP)
- Interest rates must be higher than inflation or your money is worth less than it was when it was first added to the savings account.
- A "free" plan from an "Old Bay Street" advisor is NOT free. They make their money selling high MER mutual funds.