Some Tough Financial Questions Answered By’s Mark Seed Part Two

Part two of Mark’s interview is more of a focus on the personal finance side of things. The average Canadian is in debt to the tune of about $21,348 dollars, not including mortgages. So we know that consumers have a TON of questions about debt. Lets hear what Mark has to say regarding mutual funds, mortgages, purchasing a vehicle and more.


With all the publicity about mutual funds and their outrageous fees costing investors thousands, what is your opinion on the issue? Are mutual funds a suitable investment, or should buyers be migrating to ETFs?

My opinion is ideally, in a perfect world, there would be a great deal more disclosure about all investing products – mutual funds included. Retail investors should be able to find out, easily and transparently what they are paying for to buy investment products in the first place (load fees); what the ongoing costs of ownership are (management expense fees); what the back-end fees will be to sell the product; how their financial advisor is compensated and much more. The reality is, you have to dig to find this information. It’s pathetic. Even if most investors ask for this data they have no appreciation now much high fees and transaction costs will absolutely kill their portfolio over time. I wrote as much here – high fees are just one way investors will sabotage their portfolio.

To answer the question, mutual funds remain a suitable investment for many investors:


  • Mutual funds can provide instant diversification.   Many people don’t have the cash to invest individually in a large number of companies so a mutual fund allows investors to own positions in a bunch of companies.  If a few of these companies don’t do well, no problem, the rest in the fund should offset poor performers.

  • Mutual funds can provide built-in professional money management services.  Many people don’t have the time, energy or desire to research good stocks, when to buy them, where to hold them, etc. so professionally managed money helps people in this regard. Time has always been precious in our busy world.

  • Mutual funds can provide liquidity.  Many people, probably everyone at some point, invariably find themselves in some financial emergency and need money for something.  Shares of mutual funds can be easily sold and you can get access to the cash; especially if you kept your mutual funds outside an RRSP where tax-deferred issues don’t exist.

  • Some mutual funds can be rather inexpensive to buy.  No-load mutual funds exist.  These funds don’t charge any fees to buy or sell units but they do have operating expenses.

There are more positives about mutual funds but there are also negatives – some mutual funds cost you money, lots of it, in the form of huge money management fees.  This is largely why I left the mutual fund industry – the costs and the fees were too much for what I needed.  

Ultimately investors need a financial plan before investing in products. Once they have a sound financial plan in place, they’ll know what to invest in – mutual funds, Exchange Traded Funds (ETFs) or other investments – to meet their long-term investing goals.


What would be the most valuable tip for taking on a mortgage?


Avoid too much house. This means you only ever take on the amount of mortgage that you can comfortably carry. I wrote a detailed post about some mortgage tips for homeowners of all ages – there are lots of great tips here.


How can Canadians, especially with the state of the economy right now cut down on their cost of living?


Geez, where do I begin? I suppose you can sweat the small stuff and coupon clip for things (which is fine) but I think most people should get the big money decisions in life right first. That means avoiding too much house (and therefore too much mortgage), avoiding credit card debt, avoiding new car purchases every few years (drive your car into the ground instead), and not taking any vacations or trips you can’t pay off before you leave.

Here are 25 ways to be a cheapass – simple things we can all do (to save more money).

Too many Canadians seem to be in a never ending amount of debt, what would you suggest as the most efficient way of paying it down?


I’m a big fan of killing all high-interest debt first since those borrowing costs are hurting your cash flow the most. The most efficient way of paying down any debt is making your debt payments automatic. Define a set schedule and make debt repayments automatic. Every bit helps. Automation will take all emotions and bad behavior out of your money management practices.

Am I better off to lease or buy a car?

Why rent (lease) a new car when you can buy a used one for a few thousand bucks? Then you own it. You can re-sell it if you want. You’ll get some of that money back. You can donate your old car to charity – and usually get a tax credit for doing so. I will probably do that myself. Just so you know, I drive a 17-year-old car.

I suppose you need to do the math for you, and for your situation, but I don’t know many people who come out ahead by continually leasing cars. I’ve always found leasing is great for the car dealership, not good for the car owner. Your money, your call though.


To a Canadian who is struggling with debt, when is it smart to go bankrupt?

I don’t think it’s ever smart to go bankrupt but I can appreciate it happens. Avoid it if you can.

That concludes the interview. We would like to thank Mark for taking the time to answer our questions and providing excellent links to his website to dive even deeper into these subjects. Personal finance doesn’t need to be complicated. More often than not you simply need to be steered in the right direction. Thank you for reading the article, and don’t forget to like and share. You can follow us on Twitter at @Stocktrades_CA and @myownadvisor.

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