• (20%) goes to iShares Canadian MSCI EAFE Index Fund [TSX: XIN].

Both the fourth and fifth piles

• (A total of 40%) go in the iShares Canadian Bond Index Fund [TSX: XBB].

Once a year, buy and sell your ETFs (or add new money) to get your portfolio back to its 20%-20%-20%-40% split.

The net result of all this is a very low-cost portfolio that has 60% of its money invested in a wide range of stocks in Canada, the U.S. and around the world, and 40% invested in Canadian bonds.

Monthly contributors: For purposes of illustration, we’ll use TD eFunds, because they’re particularly cheap. As above, you start by transferring your money into the account and splitting it up into five piles:

One pile

• (20% of your money) goes in the TD Canadian Index Fund.

The second pile

• (20%) goes in the TD U.S. Index Fund.