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Dear Rob: 'Am I headed for financial ruin?' Add to ...

Ever wondered whether you're making smart choices when it comes to your money? Maybe you're fresh out of school and have just started making some money but don't know where to put it. Or you've been burned by the stock market and you're wondering whether there's a good time to get back in. Should you stick with GICs? Mutual funds? A high-interest savings account? What about online brokers? Are some better than others?

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Rob Carrick has been writing about personal finance, business and economics for close to 20 years. He joined The Globe and Mail in late 1996 as an investment reporter and has been personal finance columnist since November 1998. He is the author or co-author of four investing books, including Rob Carrick's Guide to What's Good, Bad and Downright Awful in Canadian Investments Today, which will be published this December.



Globe and Mail personal finance columnist Rob Carrick joined us online to take your questions on a broad range of personal finance topics.

Read through the live discussion using our Coveritlive tool below, or scroll down to read questions and answers organized by topic.



<iframe src="http://www.coveritlive.com/index2.php/option=com_altcaster/task=viewaltcast/altcast_code=633cece83c/height=650/width=600" scrolling="no" height="650px" width="600px" frameBorder ="0" ><a href="http://www.coveritlive.com/mobile.php?option=com_mobile&task=viewaltcast&altcast_code=633cece83c" >What to do with your money</a></iframe>




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Claire Neary, Reportonbusiness.com: Rob, In your Let's Talk Investing videos with blogger Preet Banerjee a couple of weeks ago, you talked about people in their mid-twenties who may be starting to earn a decent income for the first time in their lives. For some, student debt payments may be a huge weight that prevents young workers from accumulating any savings. For others lucky enough to graduate debt-free or who were able to pay their loans off quickly, this may be the first time they have any cash to consider investing. In your opinion, what should a person's priorities be in these situations? What's the best way to tackle student debt? If you are able to save, is it time to start an RRSP? Should you be looking at trying to buy a home as soon as possible? What kinds of investments would you recommend to someone who's finally making some money, and really, really doesn't want to lose any?



Rob Carrick: People in their mid-20s who are just entering the work force represent the great void in personal finance. So much of what is written and recommended is for people who are established and have lots of money. So let's dig into the question of what someone in his mid-20s should do. I would say that clearing student debt is the top priority. Keep up with the required re-payment schedule and see if anything is left over. If so, a house- or condo-saving fund would be a good idea. Use something super-safe like a high-interest savings account. Next priority should be to start saving through either an RRSP or a tax-free savings account. Both would be ideal, but you have to take things in steps. For the RRSP or TFSA, someone in their 20s could afford to get pretty aggressive, which is to say a focus on stocks would be just fine. But you say you really, really don't want to lose any money. So how about a 50:50 split between some mutual funds or exchange-traded funds that invest in stocks and a ladder of GICs (that's where you divide you money five ways and buy GICs with maturities of one through five years). One step safer would be to only use GICs or high-interest savings accounts. Problem is, returns are super low for now. They may be higher in a year's time, though.



Declan in Toronto: When a company I own splits its stock, what kind of effects can this have on its dividend?



Rob Carrick: Hi Declan, a stock split means a dividend split. So if you have a $100 share paying $3 in dividends on an annual basis and the share splits two for one, you would end up with two $50 shares each paying $1.50 in dividends. Don't know of any companies that could afford to split their shares and keep the same dividend as before.

Stephen, from Nova Scotia: Hi, two recent articles have decried the large amounts of savings sitting on the "side lines". Given the uncertainty in the economy and assuming a debt-free circumstance, what's wrong with holding cash and near-cash investments?

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