Who knew?

People think they’re so smart, and aren’t. They buy crypto on credit cards (at least until this week). They roll the dice on weed startups. They flip individual stocks in companies nobody’s heard of. They buy condos with huge loans to rent out for negative cash flow. Or they stuff money into dodgy online banks which front for subprime mortgage lenders, just to get an extra half point in interest.

Sad. Because sitting right in front of them is a gift so powerful no government would ever offer it again, yet prays you will not utilize. And it’s over tomorrow.

Yup, the registered retirement savings plan. How else can you transfer $26,000 from one bank account to another and, for the simple act, save a potential $14,000 in tax? In the days of eat-the-rich liberalism, how did the RRSP slip through the cracks? After all, the more money you make, the greater the benefit. It allows 1%ers to contribute huge sums of cash, to write that off taxable incomes, then grow assets for decades without ever being taxed. Finally, if they’re crafty, they can retrieve a lot of that wealth without exit tax.

So the deadline to make a contribution deduct it from 2017 taxes is midnight tomorrow. The maximum amount possible is 18% of what you earned last year, to that limit of twenty-six grand. Plus add in all contributions you never made in the past. Plus an overcontribution of $2,000.

If you lack the money, borrow it. Banks will loan at prime (3.45%) and usually not require payments until your refund arrives. Use it to pay off a chunk of the loan. Now you’ve created instant equity. Or, as mentioned, transfer money (or assets) now owned into a self-directed RRSP – called a ‘transfer in kind’ – and the government will send a refund for selling yourself stuff you already owned.

If you earn more than your squeeze, open a spousal plan, stuff it up to your contribution limit and write it off your income. After three years s/he can withdraw it and pay tax at the lower rate. Presto. You’ve income-split. Ditto for a mat leave. Just plan to have a baby three years after you contribute (c’mon, let’s show a little discipline here…) and the plan can be collapsed to fund the time at home.

Sadly, most moisters don’t get any of this. Four in five, surveys indicate, have no intention of using an RRSP whatsoever – mostly because ‘retirement’ is a fuzzy, far-away, hazy thing and they’re cynical, suspicious little hipsters, anyway. What a fail. The biggest use of an RRSP is not for funding your wheelchair or boxes of KD in old age but rather for tax-shifting.

Get laid off? Use the cash in the RRSP to live on. You got a big refund when you contributed and pay little or no tax when you take it out. Sure helps.

Want a sabbatical between gigs? Then live off the RRSP money, travel the world and don’t stress about income.

Got pregnant? An RRSP is perfect for saving and growing money when you’re working, then using it to finance the pregnancy at little or zero tax.

There’s more. Like putting a mortgage inside an RRSP and make payments to yourself. Or (of course) using the RRSP bonanza to fund your TFSA. Or utilizing accumulated RRSP room to soak up the cash portion of a pension you’re commuting. Or making a contribution, getting a refund, then using both to buy a home with a bigger down payment – without triggering tax.

So why are RRSP contributions going downhill? (The average is under $5,000.) Why are so many people taking money out of their plan instead of putting it in? (As mentioned here a while back, one bank found 40% of us are raiding the plans, mostly to buy a house or pay for general living expenses.) And why are people so piteously ignorant of what this thing is, and can be used for. (Another survey found 60% of moisters think they can use RRSP money to pay for daycare.)

Simple. Nobody teaches this. Most people think an RRSP is a thing that you buy, not an investment vehicle to be filled with cool stuff that grows. (Thanks [email protected] for that.) But, mostly, real estate has sucked off so much cash flow that half of Canadians say they have no money to invest with. And many are already starting to regret it.

In summary: the RRSP is a tax shelter and tax-avoidance vehicle blatantly skewed to benefit higher-income earners. The TFSA, in contrast, is purely democratic and universal. And guess which one the government clipped?

Nice hair, though.

259 comments ↓

#1 For those about to flop... on 02.28.18 at 6:40 pm

At this stage ,I’m just hoping not to be deported back to Tasmania for being caught on the Jumbotron accidentally mouthing the words -in all thy sons command…

M43BC

#2 For those about to flop... on 02.28.18 at 6:41 pm

Recent Sale Report/ Realtor Assistance Needed.

This one could be a good indicator of how crazy the condo market still is in Vancouver.

3 bed/3 bath. 2200sq ft. Penthouse.

They paid 2.18 and the last time I saw they were chasing 3.58 and it sold 8 days ago.

Not sure what the new owners intentions are or what they are hoping to get out of it but I wish them luck.

Burnaby Renter,I don’t know the result and I know your looking for detached ,but at a guess this is probably not a good one to show your mother-in-law…

M43BC

512 105 w 2nd st North Vancouver paid 2.18 ass 2.12 ask 3.58 condo

https://www.zolo.ca/north-vancouver-real-estate/105-w-2nd-street/512

#3 Screwed Canadian Millenial on 02.28.18 at 6:42 pm

So why are RRSP contributions going downhill?

Because wages are stagnant. Duh

#4 Shawn on 02.28.18 at 6:43 pm

That TSX tho…

#5 active on 02.28.18 at 6:47 pm

people don’t max out their RRSP’s and TFSA’s each year? lol. that’s funny.

#6 Chuck U Farley on 02.28.18 at 6:47 pm

First

#7 Clueless on 02.28.18 at 6:48 pm

Why is our loonie flirting at 77.5 cents US after Morneau released his upper class feminist Budget which ignores seniors, the poor and our veterans?

#8 Nick B on 02.28.18 at 6:49 pm

First!

How do you put a mortgage inside an RRSP account? This I’ve never heard of.

#9 Tim on 02.28.18 at 6:51 pm

No deadline rush is needed if you plan ahead. I made my 2017 tax year RRSP contribution last year as soon as I had the figure from the CRA of what my RRSP limit for the year would be. I use my tax refund to fund the year’s RRSP contribution plus a top-up to get to my maximum each year. When the refund comes, into the RRSP account it goes and there is no worries about missing any deadlines the following February.

The sooner you get it into the market, the sooner your money goes to work for you.

For the same reason, get your TFSA contribution in each January. I hold off on regular December investment contributions to be sure I have TFSA cash ready to go on Jan. 2.

Tim
ON46M

#10 Nik on 02.28.18 at 6:52 pm

Couple of questions

RESP, as per my research, can only be bought through an agent. Is that right? I want to move my kid’s RESP from a financial adviser (the kind who sells “products”) to a self managed account. if this is possible what kind of penalties am I looking at?

RRSP – I have a TD trading account. any idea whether ETF RRSP products have high “bank” MERs or more competitive MERs

#11 Debtslavecreator on 02.28.18 at 6:53 pm

All very valid reasons and technically correct. But the history of financial crises and cycles show without doubt that ALL governments eventually attack savings and the RSP in the past was subject to the foreign content limit which is a form of capital control
This out of control left wing criminal enterprise is certain to come after “big” RRSPs when the inevitable sovereign debt crisis hits our shores within 3-5 years
The definition of big will come down as the financial squeeze gets tighter as these prostitutcians try to steal what’s left to help keep this corrupt and rigged game going
Massive out of control borrowing to help sustain big civil service salaries and pensions
So RRSP is great but if you are fortunate to have a big one watch out you will be befriended
By the way the government can apply a full tax rate to s RRSP investment it deems “speculative “ as confirmed in a communication documented in a blog post by Moody’s Gartner

#12 A Yank in BC on 02.28.18 at 6:54 pm

Okay.. maybe slightly off topic, but this was the first down month for a 60/40 since October 2016. Fifteen consecutive up months. Wow.. quite a ride.

#13 crowdedelevatorfartz on 02.28.18 at 6:54 pm

Garth!
Is this your masochistic side?
Have you gone “Smoking Man” on us?
Or do you just miss the Screwed canadian Millenial abuse?

Shhhhh the gubmint may be listening.

#14 Smartalox on 02.28.18 at 7:00 pm

A couple of other things to think about with RRSPs:

1. RRSP contribution room accumulates every year. This means that even if you can’t contribute the full amount early in your working life, if you keep a handle on your spending, you can contribute a lot more later, when you might be earning in a higher tax bracket, receive an unexpected bonus, or windfall, or even if your rental properties turn cash positive – stick the extra in your RRSP, and avoid getting bumped into a higher tax bracket.

2. if you can budget your household spending and know that you’re going to contribute to your RRSP ahead of time (in addition to your payroll deduction) fill out a T1213 form (available from revenue Canada) to reduce the taxes deducted off each paycheque, instead of loaning the government your money interest free until they give it back to you as a tax refund. You spread what would be your tax refund out over the course of the year, but the money that you don’t pay in taxes improves your weekly cash flow. Note T1213 also allows tax reduction for other expenses you’d deduct on your taxes, like court-ordered alimony, child support, child care costs, and medical expenses. If you know that you’re going to be paying those costs anyway, why pay tax on them?

Now, a question, instead of an answer: does anyone know how much you can pull out of an RRSP before triggering taxes? I assume that this is the same as the no tax cut off for income?

#15 TH on 02.28.18 at 7:00 pm

So what is better, contributing biweekly (every paycheck) or an RRSP loan? Or do you do both?

It’s too late now, but I can plan for next year.

#16 Pink Snow Okanagan Edition on 02.28.18 at 7:02 pm

760 CANTINA CRT KELOWNA

Last Purchase Price
$1,180,000

Current BC Assessed Value
$1,289,000

Current Listing Price
$600,000

Profit Loss (excluding transfer costs – buying/selling)
-$580,000

Profit Loss %
-49.153%

https://www.kijiji.ca/v-house-for-sale/williams-lake/save-40-and-buy-the-house-for-sale-in-760-cantina-court-kelowna/1333072271?enableSearchNavigationFlag=true

#17 Reximus on 02.28.18 at 7:03 pm

My neighbor sold last week for 175k over asking…10 bids and the new owners are 28 and 31.

Most of their competition were similar, per the neighbor.

The new owners, apparently, will have no mortgage on this 950k purchase, but they were/are each condo owners.

That’s all i know

#18 Smartalox on 02.28.18 at 7:04 pm

I’m hoping when I retire to melt my RRSP into my TFSA account: spend the contents of the TFSA, then top up the TFSA with funds from the RRSP every year, plus whatever additional contribution room we receive.

#19 Greg on 02.28.18 at 7:05 pm

“The maximum amount possible is 18% of what you earned last year,”

By last year do you mean 2016 or 2017 tax year?

#20 FOUR FINGERS WATSON on 02.28.18 at 7:06 pm

The mal-investment in housing and non-investment in rrsps and tfsas will have far reaching consequences. With limited or low investment in business or industry the economy will not grow as it should. There will be less jobs for our kids and grandkids. Our economy will stagnate. Not a rosy prospect for Canada.

#21 Cdn Mom on 02.28.18 at 7:06 pm

Shared link with the young ‘uns.

We did this spousal RRSP thing in 2016, just $10,800, to reduce the hubby’s tax owed that year. In just two years I’ve been able to trade it up to over $53,000. Will carefully withdraw it after 2019, to reduce tax to nil, or near nil.

Just be aware, if contributing to a spousal RRSP, each new year you contribute restarts the 3 calendar year clock on the whole amount being withrawn in spouse’s tax hands.

#22 islandgirl on 02.28.18 at 7:06 pm

Yes, ditto what Nick B said, how do you put a mortgage inside and RRSP?

#23 Raincouver on 02.28.18 at 7:08 pm

The Pacific by Grosvenor: At Pacific and Hornby downtown Vancouver:

1) 1 bed , 1 bath from 564sf, $890,900.00
2) 2 bed,2 bath, from 884sf, $1,475,900.00
3) 3 bed,2 bath, from 1,236sf, $2,875,900.00
4) 3 bed, 3bath, from 1,590 sf, $3,625,000.00
5) Sub Penthouses, from 2,683sf, $9,750,00.00!!!

Just what foreign criminals want to invest their capital in!

#24 Andrew on 02.28.18 at 7:10 pm

RRSPS are not for everyone. If you are self employed, up to 2017, dividends were a way to go. This means no earned income for RRSP purposes. Also, the trajectory of marginal personal tax rates is up. This means that if you are in the top marginal tax bracket, the rrsp withdraw will attract higher tax than savings (ignoring the tax free earning potential). Also, for all persons, if you happen to be last to die, the Receiver General will get a tax windfall at the top tax bracket, while your refunds were most likely at the middle bracket. The minimum RRIF payments from very large rrsps result in an inflexible retirement income that can push you into the top tax bracket as well. The inflexibility of that income makes the rrsp potentially unattractive for the 1%. So, it does not work for all AND IN SOME CIRCUMSTANCES IT IS ACTUALLY A VERY BAD ALTERNATIVE (tax refund notwithstanding).

#25 Trocxi on 02.28.18 at 7:10 pm

3 Screwed Canadian Millenial on 02.28.18 at 6:42 pm

HE/SHE IS BACK???!!!
Just like this? What the heck?

#26 Ian on 02.28.18 at 7:13 pm

Garth, right on the money!

Borrowing for RSP contributions is about the best borrowing you can do. What an ROI. Why every T4 earning employee doesn’t do it is beyond me.

Especially this time of year when you get your tax refund pronto. Ca-ching.

#27 Frank on 02.28.18 at 7:14 pm

You’re being totally disingenuous.

RRSPs aren’t valuable to the 1% because they don’t earn income from working, they earn it from wealth. Therefore their income doesn’t drop at 65 making RRSP withdrawls tax advantageous.

RRSPs are for working income earners, true that the more you earn the more you benefit but I think most people are okay with doctors making more than bus drivers. It’s the millionaire and billionaire family/corporate/hedge fund wealth type that have disproportionately captured more of the global wealth over the last 30 years and RRSPs don’t do shit for them.

TFSAs however do benefit the 1% due to the universality that you mentioned. However the $5K cap keeps it from being significant. You seem to be for increasing the TFSA cap which would purely benefit wealthy people. Fact is that more people can’t save more than $5500/year so why up the cap when that money is just going to wealthy people?

#28 Andrewski on 02.28.18 at 7:14 pm

When the average Canuck owes $1.70 for every $1 they bring in, we have a problem.

#29 kommykim on 02.28.18 at 7:15 pm

RE: After three years s/he can withdraw it and pay tax at the lower rate. Presto. You’ve income-split.

———————————–

True. But you cannot contribute at all to a spousal during that 3 year period or the additional money will be attributed to you at your marginal rate and not your spouse’s. ie: Last money in is the first money out as far as the CRA is concerned.

#30 Ian on 02.28.18 at 7:16 pm

Did anyone happen to notice the last 1.5 hours of trading today?

Last business day of the month. Sell off late like that usually means next month will be BAD!

I was channeling Trump there, except he says SAD!

#31 Stone on 02.28.18 at 7:16 pm

#3 Screwed Canadian Millenial on 02.28.18 at 6:42 pm
So why are RRSP contributions going downhill?

Because wages are stagnant. Duh

————-

Well, that didn’t last long. Boy is it persistent. Like a bad rash.

Garth, you’re getting soft.

#32 Mortgage inside rrsp on 02.28.18 at 7:16 pm

Isn’t it the case that the mortgage investment vehicle for rrsps only applies for providing a mortgage to an arms-length party/property? I guess the trick is to set things up so they comply with the ITA definition of “arms-length”?

#33 Ian on 02.28.18 at 7:17 pm

Why is SCM back please make it stop

#34 Here is how to do it on 02.28.18 at 7:18 pm

Mortgage inside RRSP:

https://www.thestar.com/business/personal_finance/spending_saving/2011/10/11/how_to_use_your_rrsp_to_pay_your_mortgage.html

#35 young & foolish on 02.28.18 at 7:21 pm

Quick … what sinks faster, a McMansion in the exburbs, or the TSX?

#36 Dan on 02.28.18 at 7:21 pm

Considering the deduction limit is shared between your and spousal RRSP, the value of the spousal RRSP is pretty limited.

#37 Retired Canadian Millennial on 02.28.18 at 7:23 pm

Great RRSP info! Wish I had it in December…

I am no longer earning a wage, so am pulling some RRSP $ out this year. I can take $11k out without paying a cent in tax as long as my other investment incomes stay inside their vehicle.

If I convince my wife to set foot in a bank, she can contribute $11k to me in a spousal RRSP, then BANG! It’s like paying 0% on that $11k of her earnings.

Now, my only question is, can l pull out $11k tomorrow as a 2017 withdrawal? I think I know the anawer…
It only occurred to me this month that I should draw down my RRSP a bit while I have no income. Wish I had thought of it in December.

#38 Spreadsheet Doc on 02.28.18 at 7:25 pm

Your RRSP is also very helpful in reducing your net income so you qualify for CCB even when your gross income is above the threshold and JT thinks you make too much to receive free money. Instead 5+% return – risk free.

#39 Dave on 02.28.18 at 7:26 pm

You never know what the government will do 10 years time. They could increase the tax rates on retirement savings. You squirrel enough away and then you are forced to take it out yearly. I have over 400K in mine and have another 10 years left. I max out the TSFA but its only 5.5k/year. If you don’t put it into an RRSP you pay tax in the short term, but at least you have more control over your money. Look what happened when the government said they wouldn’t tax income trusts and then they reversed their decision. God knows what they will do with RRSPs. THey’ll probably say “oh, we have so many people with no retirement savings, so we’ll have to tax the hell out of those with big RRSPs to subsidize those that didn’t think ahead.

#40 Doug t on 02.28.18 at 7:28 pm

How bout those Canada Savings Bonds eh

RATM

#41 conan on 02.28.18 at 7:28 pm

Anyone else watching the ON Con leadership debate?
I need popcorn.

#42 LivinLarge on 02.28.18 at 7:33 pm

Nick, it’s all in at least one of Fearless Leader’s recent books if not all his books. It centers on having a mortgage balance less than available cash value in other investments. Not at all hard to set up but there just aren’t that many folks in the equity position to pull it off if the bank studies of unencumbered assets are correct. A lot of wonderful things can be accomplished if you are already flush.

On a different note, was the TFSA clipping mentioned today the same “gutting” referred to here in relation to T2 rescinding the doubling that Helmet Head tossed into the mix for the last election vote buying season, or something new I missed recently?

#43 dakkie on 02.28.18 at 7:34 pm

Why Real Estate Is Going To CRASH Globally!

http://investmentwatchblog.com/why-real-estate-is-going-to-crash-globally/

#44 I’m stupid on 02.28.18 at 7:36 pm

It’s just optics… Registerd Retirement Savings Plan sounds better than Tax Free Savings Account. Most are too stupid to know which one actually helps the rich. Might be why they’re poor.

#45 NEVER GIVE UP on 02.28.18 at 7:37 pm

Garth!
Letting SCM back in is the right thing to do no matter how many cranky old men want to own this blog.
Let them scroll past his posts.
I would like to read them occasionally.

#46 greyhound on 02.28.18 at 7:38 pm

Terrific articles like this are exactly why I keep coming here.

#47 Running for the Exits on 02.28.18 at 7:39 pm

Hear all of that real estate money running out of BC right now?

#48 NEVER GIVE UP on 02.28.18 at 7:39 pm

Hang out with young people like SCM and you’ll add 20 years to your life!

#49 Darryl on 02.28.18 at 7:40 pm

#3 Screwed Canadian Millenial on 02.28.18 at 6:42 pm
So why are RRSP contributions going downhill?
Because wages are stagnant. Duh
————————————————————–
Garth
Did you just let a fart slip through? . Are you in an elevator

#50 Chaddywack on 02.28.18 at 7:43 pm

But now if I’m a new father I get 5 weeks of use it or lose it parental leave!

Gotta love the hair and gender equality :)

Don’t think India likes “the hair” much now though…..

#51 Cici on 02.28.18 at 7:43 pm

Garth, I thought you said RRSP mortgages weren’t worth it unless interest rates were really high, because they were very costly to set up. Or something like that? Any insights would be appreciated…or a whole blog on the subject?

#52 NEVER GIVE UP on 02.28.18 at 7:43 pm

Read Smoking man and you’ll add 30 years! Just trying to figure out what he is saying is like doing the Sunday Times crossword!

#53 PastThePeak on 02.28.18 at 7:45 pm

#3 Screwed Canadian Millenial on 02.28.18 at 6:42 pm
So why are RRSP contributions going downhill?

Because wages are stagnant. Duh
++++++++++++++++++++++++++++++++

Garth – you didn’t…..!!!

The weasel slipped through. New gate installed. – Garth

#54 FOUR FINGERS WATSON on 02.28.18 at 7:49 pm

Nice hair, though.
…………………….

Nice hair, empty suit.

#55 Grey Dog on 02.28.18 at 7:49 pm

I really didn’t know that online banks were dodgy!

However, I grew up with all those Freedom 55 commercials and we have invested in RRSPs for years and years, let that RRSP investment compound for forty years. (Yeah, we were on the Freedom 65 wagon.)

One more point…[email protected] did my RRSP investments no favours!!! Find an honest Financial Advisor outside of your bank now you young pups, or you will end up working to 65 too!

#56 Ian on 02.28.18 at 7:52 pm

Atlanta Fed downgraded Q1 GDP from 5.4% to 2.6% today.

How did they come up with 5.4%?? Were they hanging out with Jimi Hendrix?

The press was all over the 5.4%, but no one is talking about the fact that they just chopped their absurd estimate IN HALF.

I will be surprised if the final Q1 number is much over 2%.

#57 PastThePeak on 02.28.18 at 7:52 pm

I started RRSP contributions my first year on the job out of uni, and have always maximized to what I could. The only retirement savings our company offered was RRSP matching (50c for each $ we put in, to a max limit).

Our RRSPs are the core of our retirement (no work pensions for either of us), now with TFSAs and some growing non-registered holdings.

Not living in the GTA and being a Gen-Xer, my house is not part of my retirement planning, except as a place to live, and as a last resort.

#58 CHERRY BLOSSOM on 02.28.18 at 7:53 pm

I guess T2 and his family showed us how he could spend thousands and thousands of Canadian Middle Class Taxes on his family vacation in India. He flew over a chef to prepare one meal. Sure held up the index finger to the veterans whom he told were asking too much, to the seniors who can barely afford their rent, to the homeless etc etc. I hope he goes down in flames.

#59 Biddy on 02.28.18 at 7:53 pm

Gawd, I love seeing people post ‘First!’ when they’re so not. Gold.

Anyway, Garth (you’re like an old friend: must be the name or the dawgz) for once I listened.

And acted.

Just dumped a shyte load into a self directed RRSP. I’ll figure out what to do with it later, but with three clicks of a mouse, I went from a 3K tax bill to a 7k refund.

Take that, you Liberal c-n-s!

#60 TFS on 02.28.18 at 8:02 pm

What is even harder to comprehend is lack of uptake in our company matched retirement plans . Hey Mills it’s free money I want to shout! Put down that breakfast bun you just bought for 5 bucks and the company will give you another 5 bucks! It’s magical

#61 joblo on 02.28.18 at 8:03 pm

Michelle Rempel wants you to get ANGRY!
https://youtu.be/5qxpTLx7rRg
$200 million for what?
Who’s not angry?

#62 joblo on 02.28.18 at 8:06 pm

https://youtu.be/nyPoXrb_3cQ

It’s all India’s fault?
Michelle Rempel outs Trudeau

#63 Musty Basement Dweller on 02.28.18 at 8:07 pm

Garth what age should someone stop buying RRSPs at? I’m 60 and have been retired for 2 years. I have a decent provincial gov’t pension for income. I haven’t bought any RRSPs for 5 years or so, actually am pulling out 1k per month from RRIF. This was what I was advised by [email protected]

#64 TSX on 02.28.18 at 8:12 pm

Averaged just over 4% over the last decade

I have no idea why Canadians think
1/4 of equity allocation is fair game . Some have as high as 50%!

I’d have less than 5 % if not for the tax advantages in non-registered accounts

#65 Screwed Canadian Millenial on 02.28.18 at 8:12 pm

GONE

#66 Smoking Man on 02.28.18 at 8:16 pm

#65 Screwed Canadian Millenial on 02.28.18 at 8:12 pm
GONE
…..

I’ll do it for you. Die Bommers Die!!!!!

#67 Still banned for hurting boomers feelings... SAD! on 02.28.18 at 8:17 pm

GONE

#68 D.D. Corkum on 02.28.18 at 8:21 pm

#10 Nik on 02.28.18 at 6:52 pm

Nothing prevents a Retired Education Savings Plan (RESP) from being self-directed. Major institutions offer such products in Canada.

#69 Trocxi on 02.28.18 at 8:22 pm

#65 Screwed Canadian Millenial on 02.28.18 at 8:12 pm
GONE

The new gate works fine. The weasel is GONE.
Thank you.

#70 Ronaldo on 02.28.18 at 8:28 pm

#16 Pink Snow Okanagan Edition on 02.28.18 at 7:02 pm

760 CANTINA CRT KELOWNA

Last Purchase Price
$1,180,000

Current BC Assessed Value
$1,289,000

Current Listing Price
$600,000

Profit Loss (excluding transfer costs – buying/selling)
-$580,000

Profit Loss %
-49.153%

https://www.kijiji.ca/v-house-for-sale/williams-lake/save-40-and-buy-the-house-for-sale-in-760-cantina-court-kelowna/1333072271?enableSearchNavigationFlag=true
—————————————————————
Someone’s idea of a joke or a marriage gone bad.

#71 90sMoney on 02.28.18 at 8:29 pm

Someone correct me if I am wrong.
If one was to withdraw ~$11,500 from their RRSP this year and have no other earnings. They would pay a withdraw tax, however they would get it back at tax time since they are within the amount you are allowed to earn in a given year without paying income tax.
Furthermore if you had contribution room left you could withdraw the $11,500 and earn as much as you have room left put it all into an RRSP and pay no tax?

#72 TalkingPie on 02.28.18 at 8:30 pm

#27 Frank

“You seem to be for increasing the TFSA cap which would purely benefit wealthy people. Fact is that more people can’t save more than $5500/year so why up the cap when that money is just going to wealthy people?”

—————————————————————–

It’s not “just going to wealthy people;” it’s going to people who aren’t idiots with their money.

Girlfriend is a year out of university, makes under $40k/year. She maxes $5,500 easily. I’m a flight attendant, and am putting more than 3 times that amount aside every year for the past few years, while also living a comfortable, independent life. I don’t even have to whine about being a screwed millennial while doing it.

The reason that middle-class people don’t take advantage of the TFSA is that they’re too busy buying more car than they should, “investing” in granite counter tops, blowing $5k on that annual vacation they “deserve,” or any number of other non-essential things that people who claim to be financially stressed blow their money on.

#73 crowdedelevatorfartz on 02.28.18 at 8:30 pm

@#64 Sneaky Canadian Weasel

A Male weasel is referred to as a “dog” ironically enough.
A Female weasel is referred to as a “Beeyatch”

It will be up to the blogdogs to determine the gender of SCW

#74 Hairhead on 02.28.18 at 8:30 pm

SCM – I know you’re reading this.

Look, I like most of your postings. There needs to be a contrary opinion or two against this echo chamber.

But.

You can’t break the house rules. Don’t crap on the carpet!

I went too far once. Garth asked for an apology and I gave it. And since then, no problem.

You could have been a valuable commenter, but you’re not housebroken, and it’s Garth’s house.

#75 mark on 02.28.18 at 8:31 pm

SCM I hear they are related to a top ranking politician so you know how that goes.
He is here forever…..

#76 Jeremy Amott on 02.28.18 at 8:31 pm

#58 CHERRY BLOSSOM on 02.28.18 at 7:53 pm

” I hope he goes down in flames.”

Instead, he wins another couple of terms. Then the Liberals will continue, in government, under someone else.

Harper will be a sad footnote in history.

#77 Newcomer on 02.28.18 at 8:32 pm

#27 Frank on 02.28.18 at 7:14 pm

Fact is that more people can’t save more than $5500/year so why up the cap when that money is just going to wealthy people?
—–

Saving more than 5500/year is considered wealthy now? We’re in trouble.

If someone buys a home, they get to benefit from the rent that they save without paying taxes on it. They invested their capital and they get a return, without being taxed on that return. Nowadays, people of modest means can’t afford to buy homes. It’s only fair that the benefits of some of their capital investments should also be sheltered from taxes. Either that or homeowners should have to pay tax on the rent-equivalent benefit that their housing purchase returns.

#78 Stone on 02.28.18 at 8:35 pm

#49 Darryl on 02.28.18 at 7:40 pm
#3 Screwed Canadian Millenial on 02.28.18 at 6:42 pm
So why are RRSP contributions going downhill?
Because wages are stagnant. Duh
————————————————————–
Garth
Did you just let a fart slip through? . Are you in an elevator

———-

I can’t stop laughing. At least Garth’s slippage provided some entertainment. I think Crowdedelevatorfarts is going to sue you for trademark infringement.

#79 buttercup on 02.28.18 at 8:36 pm

In summary: the RRSP is a tax shelter and tax-avoidance vehicle blatantly skewed to benefit higher-income earners. The TFSA, in contrast, is purely democratic and universal. And guess which one the governmental clipped?

Great post! In reality the RRSP is a tax DEFERRAL plan, as income tax must eventually be paid for almost all annuitants. It only shelters income earned while INSIDE the plan, not forever, like the TFSA.

I started making RRSP contributions in 1985. Sure wish we had the TFSA back then! The RRSP was flawed for many of my early earning years due to “home bias” rules where 90%, then 80%, had to be invested domestically. That, along with high mutual fund fees really hurt my “tax free” growth. And that was after being smart enough to say No to Investors Group who wanted a 9% front end load!!! and instead going self-directed in favour of DSC deferred sales charge fund company offerings.

Today the RRSP is not a good plan for most of the people I help, who aren’t in a high enough income bracket to make it worthwhile, especially since the TFSA came about!

I bookkeep for a Millennial sole proprietor (not incorporated) small business owner who got way in over their head in privately funded debt (8.5% and 9%) to buy the business’ (somewhat obsolete?) clothing inventories. [email protected] convinced her to take out loans to make RRSP contributions two years running. There was, of course, no ‘tax refund’ to pay down the debt (a commonly touted way to benefit). Why not? Simply because there had been no tax withholding during the year! Rather, the refund simply reduced the total tax payable. Instalment payments were not required until her third year in biz.

I showed her why this was really not in her best interest as her cash flow didn’t cover the RSP loan payments and all that was happening was her credit card debt was increasing (18.9%) to make up for the shortfall. The marginal tax rate? 30% So much for “know your client” rules.

#80 mike from mtl on 02.28.18 at 8:38 pm

#10 Nik on 02.28.18 at 6:52 pm

RRSP – I have a TD trading account. any idea whether ETF RRSP products have high “bank” MERs or more competitive MERs

//////////////////////////////////////////////////////////////////

Shouldn’t make any difference whether RRSP, non-reg or TFSA containers. You’re probably looking at green machine funds which probably are still high MER regardless.

Just go with Vanguard or Blackrock funds like normal people.

#81 TEMPLE on 02.28.18 at 8:38 pm

In summary: the RRSP is a tax shelter and tax-avoidance vehicle blatantly skewed to benefit higher-income earners.

Except, you forgot compound interest. Whatever, though- the RRSP and TFSA both pale in comparison to the tax gift associated with real estate.

Anyways, don’t forget to mention all this next time you bag on “gold plated” civil servant pensions. What’s that, Temple? Oh, right, you always leave out that every penny a civil servant pays into a pinko pension plan is a penny less they cannot pay into an RRSP. In other words, civil servants basically lose “a tax shelter and tax-avoidance vehicle blatantly skewed to benefit higher-income earners”. Quid-no-quo.

#82 Mattl on 02.28.18 at 8:38 pm

This is phenomenal advice! Great post.

#83 Loonie Doctor on 02.28.18 at 8:42 pm

For the question regarding delay to take out a spousal RRSP.

It can be 2-3 years chronological years depending on when in the calendar year the last contribution was. There needs to be two full calendar years without any contributions. For example, if you contributed in December of 2015, your spouse could take it out in Jan of 2018. That is two chronological years and a few days apart, but 3 calendar years. If you contributed in Jan 2015, your spouse could not take it out until Jan 2018 (3 full years). If they take it out sooner, it will be attributed back to you and taxed at your higher rate. Many find it confusing.

#84 Hairhead - I apologized for bad pic 100x - SCM on 02.28.18 at 8:44 pm

GONE

#85 Ronaldo on 02.28.18 at 8:45 pm

#27 Frank

”Fact is that more people can’t save more than $5500/year so why up the cap when that money is just going to wealthy people?”
—————————————————————–
The yearly amounts one could contribute accumulate so if someone without the income at this time could say receive an inheritance or some other windfall and in the case of an elderly retired person who sells their home to live in a retirement home, they can contribute whatever amount has accumulated in one whack.

In the case of the elderly person who may be entitled to the GIS, they would at least have some of the funds from sale of house sheltered from tax and earnings in the TFSA would not reduce their GIS entitlement.

#86 Bob on 02.28.18 at 8:45 pm

#3 Screwed Canadian Millenial on 02.28.18 at 6:42 pm
So why are RRSP contributions going downhill?
Because wages are stagnant. Duh
____________________________________________

Good to see that Garth has a firm belief in free speech in letting this character back on-line.

SCM…don’t blow it.

#87 Stone on 02.28.18 at 8:46 pm

#65 Screwed Canadian Millenial on 02.28.18 at 8:12 pm
GONE

———-

Garth, could you maybe change it from GONE to I LOVE BOOMERS FOREVER AND EVER as well as I LOVE THE 1% and BIG HUGS AND KISSES TO EVERYONE?

#88 John Dough on 02.28.18 at 8:47 pm

#198 Loonie Doctor on 02.28.18 at 8:48 am
#144 John Dough on 02.27.18 at 10:14 pm

Sorry to keep you waiting … (I missed your post this am)
I actually like your writing style, it’s the content I don’t enjoy as much. You are able to craft a seemingly coherent argument from a very shaky foundation. I stated that the tax rules for a small business is justified because they are risky ventures and failure is very common.

You equate bankruptcy with the risks of:
A. not getting into med school,
B. not getting the specialty/residency you want
C. acquiring $100k of school debt
D. getting paid 4 -5 % less for some of your work

Agree that healthcare rationing is a major problem that needs to be addressed. It would help if Doctors were more open and vocal about the criminally hapless administration of our medical system.

I hesitate to ask, but how does sprinkling income to your spouse and children alleviate any of this ? Physicians have managed to struggle along for centuries without incorporating. My naive view is that professionals incorporating ruined a good thing. Your view will differ, but maybe turn the light on and look around you.

PS Stan – get back in your corner!

#89 Bob on 02.28.18 at 8:48 pm

The weasel slipped through. New gate installed. – Garth
______________________________________________

I spoke to soon….have to refresh the browser more often!!!

#90 Mark on 02.28.18 at 8:50 pm

“I bookkeep for a Millennial sole proprietor (not incorporated) small business owner who got way in over their head in privately funded debt (8.5% and 9%) to buy the business’ (somewhat obsolete?) clothing inventories. [email protected] convinced her to take out loans to make RRSP contributions two years running.”

On the flip-side, if the small business owner manages to avoid bankruptcy long enough (ie: 1 year), even the money that was borrowed to buy RRSPs will become creditor-exempt.

So while all your ‘math’ makes perfect sense, there is some value to putting money in a RRSP even if a tax windfall isn’t anticipated, merely to protect assets from creditors.

This is something the small business owners should be doing more of, contributing to personal RRSPs with creditor protection, instead of whining and complaining that the government is cracking down on excess retained earnings.

#91 tccontrarian on 02.28.18 at 8:50 pm

Meanwhile, the Dow closed down 380 points today (and now the 50 day MA is resistance) – but don’t worry about a thing, everything will turn out alright (straight from Bob himself):

https://youtu.be/L3HQMbQAWRc

TCC

The Dow is 5,000 points above where it was a year ago. Keep your pants on. – Garth

#92 For those about to flop... on 02.28.18 at 8:52 pm

For those about to flop…18 at 8:23 pm

Greater Fool Troll Olympics.

Gold…Mark

Silver….Smoking Man

Bronze….SCM

Honourable mention….Leo Trollstoy…

M43BC

///////////////////////

Looks like my little buddy is going for the silver…

M43BC

#93 ETFingGoodTime on 02.28.18 at 8:52 pm

TSX… after today’s performance, you’re done. When the S&P does great, it does half as great – if that. When the S&P gets clobbered, the TSX gets clobbered twice as bad.

Today I’m at 8% XIC. Tomorrow I’m closing out my entire position. Canadian equity exposure… 0%.

Please, anyone give me one reason not to…

#94 tccontrarian on 02.28.18 at 8:52 pm

Good advice on RRSP’s by the way. You just reminded me to make a contribution – if some not aware, you can make the contribution ‘in-kind’ from an investment account (deemed a ‘sale’).

TCC

#95 Randy on 02.28.18 at 8:57 pm

Nice hair still blames Harper.

#96 Adam Jenkins on 02.28.18 at 9:01 pm

What about transferring assets in-kind from a TFSA to an RRSP to generate a big refund (which gets put back in the TFSA, the following year, of course)?

Pointless?

#97 Drew Peacock on 02.28.18 at 9:10 pm

I have read blog posts about
1. holding a mortgage in the RRSP account, and about

2.tax-efficient melting down of an RRSP account by using withdrawals to cover leverage borrowing costs for a non-registered account.

I am doing the second, and, I only wish I had figured this scheme out sooner (thanks!).

The first might make sense when my present term is up in a few years, but, I think this is one where I need a lawyer and an account administrator with a bit of brains, guts, and imagination……this is not a usual thing.

Couple of questions for the host:

-Are there any other tactics to limit the tax hit on RRSP withdrawals, or RRIF income streams?

-If I manage to create the mortgage within the RRSP account, what might happen if I was to stiff myself on the payments and go into ‘default’? I guess the obvious answer is whatever the mortgage agreement says happens, but, I expect that there are stringent limitations on what sorts of terms a mortgage agreement can include, and, some very nuanced tax consequences.

#98 Itemus on 02.28.18 at 9:11 pm

#8 Nick B

FYI with your SDRSP money, you can use the money towards the purchase of a house and the loan is to you and you pay back the RRSP with interest so it grows tax free. If you look at a mortgage repayment documents, that is what your RRSP would read like long term.

#99 C7.R on 02.28.18 at 9:12 pm

#10 Nik on 02.28.18 at 6:52 pm
Couple of questions

RESP, as per my research, can only be bought through an agent. Is that right?
>> No, you can buy from any bank, account types vary.

I want to move my kid’s RESP from a financial adviser (the kind who sells “products”) to a self managed account. if this is possible what kind of penalties am I looking at?
>> Depends what kind of “products” you bought. If you have no-load mutual funds you can moved after 30 days at not cost. If you have back-end loads, you may have fees to pay. Worst case you own, deferred sales charge mutual funds that have a sliding 7 year scale of steep penalties. Call your dude and ask for quote.

RRSP – I have a TD trading account. any idea whether ETF RRSP products have high “bank” MERs or more competitive MERs.
>> I am a TD customer with a Direct Investing self-directed account. Both RRSPs and RESPs can hold stocks, bonds, mutual funds and ETFs in the TD DI account. Look up the fact sheet of any fund to see its MER. Tip#1: If you have over $15k in all of your accounts combined, all TD DI account fees are waived. Tip#2: If you are a monthly index investor, $9 trading fees are annoying when buying in small amounts. So instead, buy TD e-Series mutual funds monthly (~0.35-0.55% MER) which are free to buy and sell, accumulate a lump sum, then sell the e-Series and buy an ETF (~0.05% MER). Over time build your balanced and diversified low cost ETF portfoilio in your self-directed RESP and RRSP.
Tip #3: If you have over $200k, skip Tip #1 and #2 and call Garth. Have a scotch. Celebrate.

#100 Nick on 02.28.18 at 9:17 pm

February’s TREB report should be very interesting. Hope Garth has some prelim info for us tomorrow from some of.his buddies

#101 Westcdn on 02.28.18 at 9:27 pm

I agree with GT’s view of RRSPs. I have done well by them. I banked my eligible contribution amounts to shield financial windfalls such as capital gains on real estate. My employers always had defined benefit pension plans so my annual contribution limits were minimal. However, I favour TFSA contributions for the average pleb because of marginal income tax rates. You can always take money out of a TFSA to make a RRSP contribution.

T2’s latest budget doesn’t seem to extract more marginal incomes taxes from me although I have issues with direction he is taking Canada. I think a better future lies with more entrepreneurism and less social engineering. I just find governments are inefficient at the interpersonal level until plebs are dumbed down to drones.

Today, the Fed reiterated its resolve to raise their bank rate and the markets dived – ouch. To me, the front runners of Wall/Bay Street(s) got spooked. The current economic fundamentals may not be as glorious as some pronounce but they are good enough at least. I don’t see the need to head to a bunker yet so I choose to continue to muddle along with my decisions. I believe my investments will deliver my planned income stream despite market volatility. I only expect my house to cost me but provide a place to be content.

I managed to create dry powder over the last few months. I am looking for cash flow that has been mispriced, in my opinion. Putting some money into US$ is working out for me. Alberta in February was cold in more ways than one. Is it hunting season on cowpersons?

I found this little gem dissing Alberta from T2’s past. It is an excerpt so the context is unknown but it serves as a warning to me – the 49 second mark
https://www.youtube.com/watch?v=oA1yCIHMJwY

#102 DON on 02.28.18 at 9:30 pm

#87 Stone on 02.28.18 at 8:46 pm

#65 Screwed Canadian Millenial on 02.28.18 at 8:12 pm
GONE

———-

Garth, could you maybe change it from GONE to I LOVE BOOMERS FOREVER AND EVER as well as I LOVE THE 1% and BIG HUGS AND KISSES TO EVERYONE?
*******

LMAO – Priceless!

#103 DON on 02.28.18 at 9:37 pm

Sorry dogs…I left the gate open. I was sitting pining for the return of Josef and Devil’s advocate. SCM must have slipped by when I was day dreaming. At least the hounds picked up the scent.

#104 ChrisU on 02.28.18 at 9:41 pm

#CHERRY BLOSSOM

Well all politicians do the same thing. Harper spent tax payer dollars visiting Afghanistan and sending Canadian troops to Afghanistan. It is a small perks of the job as a prime minister. It is the same south of the border and most countries around the world.

#105 Yvrmc on 02.28.18 at 9:55 pm

Heyyyyy how did SCM get back on here ?

#106 Lisa on 02.28.18 at 10:02 pm

Hey Garth!
Thank you for banning that dud, SCM. I have been reading this blog for almost 6 years and his/her comments are more suited to YouTube than the witty, sophisticated repartee one finds here.

All joking aside, you did the right thing.

#107 Risktopia on 02.28.18 at 10:08 pm

Year-over-year declines across the GTA are looking especially ugly in certain areas.

http://www.risktopia.com/2018/02/ugly-year-over-year-prices-changes.html

#108 domain on 02.28.18 at 10:09 pm

Garth,

The Mrs. and I are gearing up to buy a place in the next year or two. I’m in BC, and I suffer at the hands of the NDP for their additional 2.1% income tax on amounts over $150k.

So I call revenue Canada to ask them how it would work if I buy a $25k spousal RRSP, then my Wife pulls it out after 89 days to use for a purchase of a house. The kind lady could not answer my question, and neither could anyone else who was there that day, so they said they would call back.

2 days later I get a voicemail on my cell. The answer is that once the money is removed under the HBP, the repayments or taxable income of the annual repayment over 15 years is attributable to her, not me. Even if the money hasn’t been parked for the three years – it only needs to marinate for 89 days.

So, I get to dump some of the extra capital I have floating around, reduce my income close to the $150k mark and tell Horgan to get his greasy hands off my extra 2.1% income tax. Plus I get the taxes on the $25k back. And, without much of a pause, the Mrs. and I can use the money for a house when the opportunity is right, and income split the amount ‘immediately’ when we she participates in the HBP.

To top it all off, the ladies at the CRA were exceptionally friendly, and they called me back just as they said they would. It’s been a while since I have called the CRA to ask a question, and I was pleasantly surprised by the customer service they gave me.

#109 n on 02.28.18 at 10:12 pm

SCM – 1 BOOMERS – 0

Lets toughen up a bit!
You can’t take the kid to school if you don’t let him in!
Sufferin Succotash!

#110 akashic record on 02.28.18 at 10:16 pm

Or utilizing accumulated RRSP room to soak up the cash portion of a pension you’re commuting.

Can one use for this purpose the RRSP room of the spouse (similar to spousal RRSP contribution) or only the RRSP room of the person commuting the pension?

Just yours. – Garth

#111 Nice hair on 02.28.18 at 10:19 pm

https://2.bp.blogspot.com/-Ty2q7OaSJTg/WpXv6pp7kOI/AAAAAAAC0pQ/RfXLS7mfptEoYg-Ih-lZlL-mQ4eXqxquACLcBGAs/s1600/CANADA%2B%252810%2529.jpg

#112 Tony on 02.28.18 at 10:39 pm

Re: #18 Smartalox on 02.28.18 at 7:04 pm

The whole idea is to contribute to your TFSA before you contribute anything to your RRSP.

#113 ShawnG in TO on 02.28.18 at 10:39 pm

pink snow in Richmond Hill (GTA)

https://twitter.com/ExtraGuac4Me/status/968644096561696768

– bought for $1.5M in April 2017
– sold again for $1.12M this month
– for a loss of $380k + $45k (realty fees) + $26k (LTT)= $451k total minimum loss

#114 akashic record on 02.28.18 at 10:41 pm

Can one use for this purpose the RRSP room of the spouse (similar to spousal RRSP contribution) or only the RRSP room of the person commuting the pension?

Just yours. – Garth
—-
Merci beaucoup

#115 PastThePeak on 02.28.18 at 10:41 pm

#27 Frank on 02.28.18 at 7:14 pm
You’re being totally disingenuous.

RRSPs aren’t valuable to the 1% because they don’t earn income from working, they earn it from wealth
+++++++++++++++++++++++++++++++++

I am not sure you quite grasp the 1%, at least here. It refers to the top 1% of income earners, as determined by tax filings.

In Canada, this is just over $200K in annual income. A very good income to be sure, but not exactly the millionaire/billionaires (the .1% & .001% perhaps) you are wanting to take down. The bulk are more like your directors at a large company, doctors, lawyers, high end engineers, etc.

These people indeed need to save money for retirement, and for many the RRSP is a good vehicle. And their marginal tax rate – the tax they pay on each $ earned above that $200K level – is 53% in a number of provinces.

#116 Slowly Boiling Frogs on 02.28.18 at 10:41 pm

#8 Nick B on 02.28.18 at 6:49 pm
First!

How do you put a mortgage inside an RRSP account? This I’ve never heard of.
————————————————–
Your RRSP must be a self-directed version like those offered by all major brokerages.

You simply set it up with the help of someone at the brokerage and lend yourself the cash from your account backed by the property.

For example, if you had $350,000 in investments in your Scotia Itrade SDRSP and chose to lend yourself $300,000 then you sell $300,000 of them to get the cash.

Then set up the mortgage for that much money, pay the $300 set-up fee, pay an annual administration fee of $60, and charge yourself a rate of interest that is equivalent to the amount that you would have paid any bank for the same type and term of mortgage.

If the going rate for a 5 year fixed was 5% then you’d have to charge yourself roughly the same (and the CRA will check that you’re not giving yourself a sweetheart deal with something like a 1% rate).

The monthly mortgage payments will be no different than if you’d borrowed it from any other financial institution except your are earning the interest from the mortgage in your SDRSP instead of losing it to that financial institution.

One benefit is that you do not have to stress test yourself, but lets face it, you do need to have a lot of cash in your SDRSP to make it worth while.

#117 Mark on 02.28.18 at 10:42 pm

“If I manage to create the mortgage within the RRSP account, what might happen if I was to stiff myself on the payments and go into ‘default’? I guess the obvious answer is whatever the mortgage agreement says happens, but, I expect that there are stringent limitations on what sorts of terms a mortgage agreement can include, and, some very nuanced tax consequences.”

One of the requirements is that the RRSP mortgage be CMHC subprime mortgage insured (they charge a small fee for this for a low ratio mortgage). So if you default on it, the trustee will collect the deficiency from the CMHC such that the RRSP is made whole. The CMHC will in turn, turn around and sue you for the deficiency and costs as would a ‘normal’ mortgage lender.

So no, defaulting on a “RRSP mortgage” is not a fancy way in which you can transfer value out of a RRSP without paying taxes on it. But you certainly can use the proceeds of a “RRSP mortgage” to create tax-deductible financing of other investments. Someone who has a very large RRSP, a house, but little other assets might want to consider such an arrangement, but only after receiving proper professional advice that is free of conflict-of-interest.

#118 young & foolish on 02.28.18 at 10:49 pm

Of course the Liberals will win the next election ….. they are already raiding the NDP cookie jar. What are conservatives going to run on? Good fiscal stewardship? Hahaha!

Get used to gender equity and other post-modern “narratives”.

#119 Spac on 02.28.18 at 10:52 pm

To be at least relevant to the topic…my RRSPs have been lower the past few years since I’ve willingly been part of the fast-growing gig/contractor workforce. The dynamics of this means a great hourly pay, but in aggregate lower overall income depending how much you work you take on (I make a bit more from my portfolio). And fortunately or unfortunately this has been and will likely continue to be a lifer job.

Re: TSX – it does feel like it’s getting quite spooky and gloomy. Talk of turning into a broken 2nd-world country popping up. A charming PM who more and more feels like he’s playing if not trolling Canadians. I almost want to throw in the towel as well, unfortunately I went way overweight TSX which went well last year, not so well this year but not material damage for me, I can still salvage nicely if I wanted to.

The only glimmer of light is that this feels like we’re close (weeks, months?) to starting a Wave 3 (not entirely by the EW book). Similar to mid 84-mid 87, 95-97, and 04ish-06ish. That is unless the gloomy, spooky scenario plays out (that’s the great thing about anonymous predictions…no accountability)…with the TSX making us stare into the abyss as it likes to do. Last 8 years or so is a bit trickier to “read” than the 80s, 90s, and 00s as it’s quite mutated.

#120 Chico on 02.28.18 at 10:58 pm

#53 PastThePeak on 02.28.18 at 7:45 pm

#3 Screwed Canadian Millenial on 02.28.18 at 6:42 pm
So why are RRSP contributions going downhill?

Because wages are stagnant. Duh
++++++++++++++++++++++++++++++++

Garth – you didn’t…..!!!

The weasel slipped through. New gate installed. – Garth

———————————————–

Thank you!

#121 Chico on 02.28.18 at 11:02 pm

#53 PastThePeak on 02.28.18 at 7:45 pm

#3 Screwed Canadian Millenial on 02.28.18 at 6:42 pm
So why are RRSP contributions going downhill?

Because wages are stagnant. Duh
++++++++++++++++++++++++++++++++

Garth – you didn’t…..!!!

The weasel slipped through. New gate installed. – Garth

————————————————————

I said thanks earlier, but I’m going to have to call an animal rights group to report your verbal abuse of weasels. How dare you compare a weasel to that thing?!?! ;)

#122 Nonplused on 02.28.18 at 11:11 pm

And they say that dogs can’t smile.

Of course they clipped the TFSA some wonk with a spreadsheet ran the numbers and realized no tax now and tax later is better than tax now and no tax later depending on the growth assumption. The whole idea with an RRSP is that the government will eventually get the tax on both the principle and the growth when it is withdrawn, whereas with a TFSA they only get the tax on the principle.

#123 slick on 02.28.18 at 11:15 pm

#10 Nik;
An RESP can be opened in a self directed plan like your RSP. You may be locked into your current RESP, promising to keep contributing, hopefully not. There is no reason you can’t open a second plan and leave the first behind until needed, to avoid exit fees, if the penalties are too high for withdrawals. Get a family plan at a discount broker, buy good blue chip stocks and DRIP the dividends. Worked for me 20 years ago.

#124 Lead Paint on 02.28.18 at 11:18 pm

Because SCM is no more (stuck in a stinky elevator somewhere), but most here do appreciate alternate point of views, I’d like to point out that Australia has a $20/hr minimum wage and according to the Globe the sky has not fallen:

https://www.theglobeandmail.com/report-on-business/small-business/talent/australia-pays-fast-food-workers-20-an-hour-and-the-sky-hasnt-fallen/article38026876/

“Entry-level fast-food workers, for example, are paid $20.08 an hour as a base hourly wage. Pay goes up to $25.10 on Saturday, $29.12 on Sunday, and overtime hours are $30.12 for the first two hours and $40.16 for each hour thereafter”.

Oh yes and…. die boomers die. Thank you smokey.

#125 Foo Fighter on 02.28.18 at 11:25 pm

#27 Frank on 02.28.18 at 7:14 pm

FSAs however do benefit the 1% due to the universality that you mentioned. However the $5K cap keeps it from being significant. You seem to be for increasing the TFSA cap which would purely benefit wealthy people. Fact is that more people can’t save more than $5500/year so why up the cap when that money is just going to wealthy people?
———–
Most people can’t contribute 18% of their gross annual income to a RRSP either. Take that away too I guess, right Frank? Right?

#126 slick on 02.28.18 at 11:30 pm

#27 Frank;
Re: TFSA’s, think long term. True that the TFSA doesn’t benefit those that cannot afford to contribute now, but the room keeps growing. So in 30 years when Mom & Dad kick the bucket, the house gets sold , the kids get the inheritance, THEN they have a place to put $200K, to grow tax free.

I agree with your RRSP points. I’m self employed, on paper have a low income, and they make no sense for my situation. That is where more TFSA room would benefit those in my situation.

#127 Smartalox on 02.28.18 at 11:51 pm

@Tony #112:

There’s a neat rule with the TFSA: if you take money out in one year (tax free) you can put the same amount of money back in the following year, plus a contribution to that year’s limit.

What I am thinking about is building up a hefty TFSA in the 25 years before I have to start melting down my RRSP, then spending a little tax-free, non-reportable money from the TFSA, and then flowing low tax dollars from the RRSP into the TFSA in the following year.

Then repeating until the RRSP is gone, instead of incurring a big tax bomb by taking large amounts of money out of the RRSP at one time. Or having to convert to an RRIF.

#128 Hiding On the Backstreets on 03.01.18 at 12:11 am

#27 Frank on 02.28.18 at 7:14 pm

Fact is that more people can’t save more than $5500/year so why up the cap when that money is just going to wealthy people?
————

Spoken like a true Lib. T2, the coloured socks-wearing drama boy loves you.
The Lib line: Wealthy people don’t deserve their wealth (unless they’re govt. Libs of course); some people can’t save money to max out their TFSAs, envy is eating them. Let the nanny state government redistribute more prosperity from the successful. They know best.

#129 buttercup on 03.01.18 at 12:12 am

#90 Mark on 02.28.18 at 8:50 pm
“I bookkeep for a Millennial sole proprietor (not incorporated) small business owner who got way in over their head in privately funded debt (8.5% and 9%) to buy the business’ (somewhat obsolete?) clothing inventories. [email protected] convinced her to take out loans to make RRSP contributions two years running.”

On the flip-side, if the small business owner manages to avoid bankruptcy long enough (ie: 1 year), even the money that was borrowed to buy RRSPs will become creditor-exempt.

So while all your ‘math’ makes perfect sense, there is some value to putting money in a RRSP even if a tax windfall isn’t anticipated, merely to protect assets from creditors.

This is something the small business owners should be doing more of, contributing to personal RRSPs with creditor protection, instead of whining and complaining that the government is cracking down on excess retained earnings.

You seem to have missed the point that this is an unincorporated business. Meaning NO retained earnings and personally responsible for all debts of the business!

The Point being… The RRSP loans were “paid”, ultimately, with additional new credit card debt. So not really paid off. Plus those RSP loan payments only further burdened cash flow badly needed to make the business’ private loan and credit card-LOC payments, in order to keep the business afloat! In fact the spouse is also on the hook for the debt since it is a joint credit card/LOC that ended up being increased in the third year, presumably secured by their home. See what the bank did there? That is NOT financial planning in my books!

#130 YVR Renter on 03.01.18 at 12:15 am

NO SCM, NO! Thank you for installing new gate.

#131 Indostani on 03.01.18 at 12:17 am

To #10 Nik,
Dude, you need to work harder on your research.
You can open resp account at any of the banks that you can manage but they won’t tell you. Check questrade. You can open resp account there with no fees. You can buy ETFs of your choice in your resp account.

#132 buttercup on 03.01.18 at 12:39 am

“#87 Stone on 02.28.18 at 8:46 pm
#65 Screwed Canadian Millenial on 02.28.18 at 8:12 pm
GONE

———-
Garth, could you maybe change it from GONE to I LOVE BOOMERS FOREVER AND EVER as well as I LOVE THE 1% and BIG HUGS AND KISSES TO EVERYONE?”

I second…. LMAO

#133 morrey on 03.01.18 at 12:43 am

The greatest sin against yourself is NOT to maximize your RRSP contributions.

Paid off big time for my family.
(and many times i borrowed to make the limit)

#134 zappperz on 03.01.18 at 12:45 am

#219 Howard on 02.28.18 at 10:55 am

Our friend who left Toronto for Quebec City has made the MSM :

https://www.theglobeandmail.com/globe-investor/personal-finance/genymoney/why-this-family-is-done-with-toronto/article38110212/

Guess the Globe reads this pathetic blog, too. – Garth”

If that is the MSM, then are we on the GFSM?

#135 zappperz on 03.01.18 at 12:46 am

#7 Clueless on 02.28.18 at 6:48 pm

Why is our loonie flirting at 77.5 cents US after Morneau released his upper class feminist Budget”

Women always cost money dude!

#136 zappperz on 03.01.18 at 12:50 am

#59 Biddy on 02.28.18 at 7:53 pm

Gawd, I love seeing people post ‘First!’ when they’re so not. Gold.”

Wow, people get excited over the smallest things….let’s try some therapy….get on your yoga pants and breathe deeply as a I say Fiiiiiiiiiiiiiiiiiiirrrrrrrrrrrrrrrrrssstt!

#137 Smoking Man on 03.01.18 at 12:55 am

Next book. Interviews with salad eaters and Starbucks philosophers.

The epa center of post modetinism wisdom. The brainless through no fault of there own.

The curriculum by ravenous jealous haters. Why the bleeding heart liberal council on planet Nictonite never took the threat from the beasts from planet Lesbetron seriously is beyond me.

I’m just a other drinkin shy pilot that gets no respect.
Shlong Zumanga had the feeling too.

That’s why he wants to kill you all.

Not on this Nectonites shift.

Go humanity. I gave you Trump.

#138 Jon on 03.01.18 at 12:56 am

You would be surprised how many don’t max rrrsp I talk to my employees about it because company matches four percent of salary. For many years I max it usually get aabout 5k refund then dump that in TFSATooltip easy forced savings over 20 years my rrsp has ended up doing really well but just did it because my father told me glad he did. So set up that automatic deposit into funds like Garth suggests and you will be shocked at what you have ten twenty years down the road. And don’t dip into it, sure job loss or something yes but save, you don’t even need a great job to amass a lot of money over 20 years

#139 Stan Brooks on 03.01.18 at 12:56 am

#88 John Dough on 02.28.18 at 8:47 pm

PS Stan – get back in your corner!

=========================

There have been tons of discussions on the topic, including my posts here on this blog.

You represent the backward limited elitist ideology of a person who has no practical knowledge of business and thinks all business incomes is employement income.

You represent no evidence or facts supporting your view except sheer arrogance and stupidity.

Buzzwords like income sprinkling do not exist in other tax jurisdiction, that practice is actually encouraged in US and normal countries with normal taxation policies, i.e. Germany.

Income sprinkling was invented as a term by the chateau kid/maybe you without any thinking.
Why are you allowed to get your dividends from ownership of public corporations and not from ownership of private corporations.

Because your elitist billionaire brain thinks it is just (to whom, your pension company profits?) and you force it on everyone without thinking?

How about a doctors wife who bankrolled her husbands education, should she not be entitled to proceeds from his Business?

If you bankroll a successful IPO you expect payout , correct?

What is the damage from such stupidities though is the complete loss of trust in governments.

Any idiot and we see plenty of them/including you justifying it/ lined up for power can do whatever they want with no consultation, renege on promises and openly steals your money/investments.

This is not how a free country works. Counting down the days to liquidating any fund in this place.

#140 Nick B on 03.01.18 at 1:01 am

#116. Slowly Boiling Frogs. Thanks for the detailed example. Didn’t realize you could do that. I may actually use that when are ready to buy a house. We are sitting on a down payment and a bunch of RRSP money. Now just waiting for things to correct a bit more.

#141 Stan Brooks on 03.01.18 at 1:02 am

GT, nice summary of what RRSP is at the moment, not of what it could become.

Knowing the imbeciles in power, including the likes of John Dough, I would be hugely surprised if there is no attempt to steal these funds in one way or another at some point in time, and I think it could be rather early considering our fiscal and monetary situation.

Imagine some arrogant elitist prick making statements on what the RRPS intend is/something entirely different from what everyone thinks it is and forcing his view approved by the guy with fancy socks on everyone.

#142 Bob Dog on 03.01.18 at 1:07 am

Shit. I was walking to work this morning on Burrard and was wondering why so many people were gathered inside the big glass debt prison.

I better get that done:

#143 Linda on 03.01.18 at 1:12 am

Here is the thing with RRSP’s, TFSA’s or any other voluntary program. Even knowing the advantages, many people will choose to spend their money on the ‘now’ rather than defer spending to ‘later’. If CPP were voluntary, the outcome would be the same. Sad but true.

#144 Karlhungus on 03.01.18 at 1:15 am

#93 don’t do it because you are basing your decision on emotion

#145 Leo Trollstoy on 03.01.18 at 1:28 am

I didn’t notice that scm was back

And then realized scm actually wasn’t back

I missed it

Shame

#146 Leo Trollstoy on 03.01.18 at 1:29 am

When Toronto and Vancouver real estate prices peaked last year, what proportion of people sold out into cash?

#147 jane24 on 03.01.18 at 3:20 am

Garth the reason that so many Canadians don’t put money into RRSPs and that other post-tax saving vehicle that you have over there is that they don’t have the money. My Canadian family are not frittering their money away on granite or posh cars but on household bills. There is a huge group of just making it middle class in Canada that know they should save for retirement but just don’t have the spare funds. So they close their ears to the RRSP push every year. Why get upset over something you can’t fix.

Add to that observation a second one that younger folk don’t trust any govt. They are afraid that a big RRSP pot will attract govt attention in the future as they have noted that all the rules change every few years anyway. There is no long term planning with the govt so why should they bother.

Will it be a mess? For sure but you and I will be dead.

Snow today on the South coast of England. A once every 5 years event. I went out and measured 1/2 inch in the drifts but everyone is freaking out. Tulips look put out through.

#148 buttercup on 03.01.18 at 3:38 am

“#19 Greg on 02.28.18 at 7:05 pm
“The maximum amount possible is 18% of what you earned last year,”

By last year do you mean 2016”
——————
yes. The contribution for 2017 income tax RRSP deductions is based on the prior year’s (2016) “earned income”. To see what that includes just google it.

You can find your allowable contribution amount on your 2016 Notice of Assessment. That is the two or three page document the Canada Revenue Agency sends out to you after their computers have processed (assessed) your T1 tax return. If you can’t find that you can get it online (or by phone 1.800.959.8281 if you have all day, press* to get an agent). You will need to provide some info so have your 2016 tax return on hand when you do either.

Everyone should make sure to keep that Notice together with your tax return this year eh! ;)

That means you will know how much you can contribute for the 2018 RRSP tax deduction when your 2017 taxes are calculated in the next two months! So you can more easily plan ahead.

#149 BillyBob on 03.01.18 at 4:03 am

I don’t get the sense SCM was banned or disliked for his views, per se. Contrary opinions have always been tolerate and debated. Clever, humorous dissenters welcomed in fact.

Pretty sure SCM is gone because well, he’s a dick. There is no humour, no irony, it actually believes what it’s selling. Plenty of other sites to visit if you want to hear someone spew venom. He/she was a one-trick pony: blame everyone and everything else.

Yawn. Won’t be missed.

#150 Howard on 03.01.18 at 5:08 am

#27 Frank on 02.28.18 at 7:14 pm

TFSAs however do benefit the 1% due to the universality that you mentioned. However the $5K cap keeps it from being significant. You seem to be for increasing the TFSA cap which would purely benefit wealthy people. Fact is that more people can’t save more than $5500/year so why up the cap when that money is just going to wealthy people?

————————————–

Good grief.

Are you seriously saying that only wealthy people are capable of saving more than $5500 PER YEAR??

$5500…..PER YEAR.

Think about that for a second.

#151 Howard on 03.01.18 at 5:25 am

#104 ChrisU on 02.28.18 at 9:41 pm

#CHERRY BLOSSOM

Well all politicians do the same thing. Harper spent tax payer dollars visiting Afghanistan and sending Canadian troops to Afghanistan. It is a small perks of the job as a prime minister. It is the same south of the border and most countries around the world.

——————————————-

Fake news.

It was the Chretien Liberals that sent the troops to Afghanistan, and continued by Martin. Harper was handed that mission when he took office in 2006.

Get your facts straight. Don’t let PM Dingbat do your thinking for you.

#152 under the radar on 03.01.18 at 5:41 am

1) If you lend to yourself through your sdrrsp , your mortgage must be CMHC insured. you are paying interest to your for rrsp which accumulates tax free. I like that strategy but in a low rate environment it made no sense ,except it was safe as you bet on yourself to make the payments.
2) You can lend to unrelated arms length third parties through your sdrrsp. You need a trustee , there are a few , not many , Canadian Western Trust, Olympia trust , Community Trust. They are the plan administrators and collect the payments. Generally 1st and 2nd mortgages are permitted, you will need an appraisal. Make sure you use a good lawyer who knows mortgages and find an honest mortgage broker (lol). Know what your doing because in a market that is wobbly you could get burned easily.

#153 Mike in Toronto on 03.01.18 at 6:01 am

People bought cryptocurrency by credit card because it’s the easiest way to buy crypto on an exchange. The alternative is to upload your passport, driver’s license, sign papers and wait a few weeks. If your identity is worth less than the conribution, they’ll open the account and you can use bank transfers.

People don’t contribute to their RRSP because they’re either going broke paying for their house, or trying to save for a downpayment for a house.

RRSP based schemes to buy houses are either feeble and worthless at today’s housing prices or complex, risky and do nothing for your monthly payments.

Childcare being ruinously expensive, I’ve been recently stashing enormous amounts of savings into an RRSP to lower my income and qualify for some kind of assistance. It’s a profoundly stupid system.

#154 ImGonnaBeSick on 03.01.18 at 6:07 am

NeverGiveUp – If you miss SCM so badly, just head over to your local McDonald’s. You two can talk about how unfair it is nobody will give you a house or their money and trade your Magic cards… Hurry up now, so the grownups can get back to talking.

#155 Howard on 03.01.18 at 6:49 am

#76 Jeremy Amott on 02.28.18 at 8:31 pm

#58 CHERRY BLOSSOM on 02.28.18 at 7:53 pm

” I hope he goes down in flames.”

Instead, he wins another couple of terms. Then the Liberals will continue, in government, under someone else.

Harper will be a sad footnote in history.

———————————-

On the contrary. Under your nightmare scenario, Harper will be famed as the final Canadian PM. What comes after is a kind of Orwellian, dystopian, post-national, globalist sh*thole formerly known as Canada (Cannot-ada?)

#156 Howard on 03.01.18 at 7:04 am

DELETED

#157 Howard on 03.01.18 at 7:14 am

As much as I don’t miss SCM, I actually do find his attempts to communicate through his screen name to be hilariously entertaining. I hope Garth continues to at least allow those through with the requisite GONE.

#158 jess on 03.01.18 at 7:35 am

who knew?
By 2016, the most recent year for which there is complete data, companies spent $536 billion on purchasing their own shares, according to data from S. & P. Dow Jones Indices.

2005-$300 billion came back to the United States that year. But economists estimated that as much as 92 percent of it may have been paid out to companies’ shareholders — mostly in the form of buybacks.

Warren E. Buffett said in his annual letter to investors on Saturday that his company, Berkshire Hathaway, enjoyed a $29 billion gain thanks to the new tax law.

Trump’s Tax Cuts in Hand, Companies Spend More on Themselves Than on Wages

By MATT PHILLIPSFEB. 26, 2018

https://www.nytimes.com/2018/02/26/business/tax-cuts-share-buybacks-corporate.html

#159 maxx on 03.01.18 at 7:59 am

#27 Frank on 02.28.18 at 7:14 pm

“You’re being totally disingenuous……”

Totally? Not very nice to our gracious host.

“……..It’s the millionaire and billionaire family/corporate/hedge fund wealth type that have disproportionately captured more of the global wealth over the last 30 years and RRSPs don’t do shit for them.”

“Don’t do shit”. That would include savers/investors, while so many others were doing what? Hanging themselves with debt and now react like 1. stunned peckers, 2. quickly followed by a wtf reaction, and 3. get riled up real quick-like that the “rich”, who have been beavering away for decades, now have something to show for it.

“TFSAs however do benefit the 1% due to the universality that you mentioned. However the $5K cap keeps it from being significant.”

“You seem to be for increasing the TFSA cap which would purely benefit wealthy people. Fact is that more people can’t save more than $5500/year so why up the cap when that money is just going to wealthy people?”

Gawd, yet another one. Tell that to all of the people who stand to inherit, who will see their earnings increase over time, who save and invest (unlike some who display the contents of their wallets by bitching and moaning about the “rich”) empty nesters who then have much more contribution room……the list goes on. YOU NEVER LOSE THE CONTRIBUTION ROOM! Get it?

The gargantuan stupidity and ignorance of those who believe that TFSAs “only benefit the rich” is only exceeded by the Libtard’s ability to capitalize on that jealous rage.

#160 SimplyPut7 on 03.01.18 at 8:01 am

Before your new blog post, I was explaining to a 25 year old yesterday who thought that RRSP was only for saving money to buy a house, that the money they take out has to be paid back, and RRSP are meant to be used to save for retirement as CPP and OAS will not be enough to cover monthly expenses when they stop working.

Did anyone see the buried news report about the best place to invest in housing on CTV Toronto? It’s now Ottawa! Followed by Waterloo region and Hamilton and Toronto is 7th on the list.

It was only 30 seconds long near the end of the news. CTV Toronto probably wanted to cover their butts and make sure no one can’t say they didn’t inform the public that investing in new condos in Toronto when the total monthly cost of the condo is unknown is not a great idea. (e.g. how much will maintenance fees rise over the next 5 years).

I’m sure most condo speculators missed it, so here it is:

40:53 min – 41:23 min
https://toronto.ctvnews.ca/video?clipId=1332612&binId=1.3378531&playlistPageNum=1

#161 crowdedelevatorfartz on 03.01.18 at 8:05 am

@#152 Mike in Airdrie
“I’ve been recently stashing enormous amounts of savings into an RRSP to lower my income and qualify for some kind of assistance. It’s a profoundly stupid system…..”
+++++

And yet.
You use it to your advantage.

Dont RRSP’s lower your taxable income as opposed to your income?
To qualify for income “assistance” you need to show your annual income from a T4 yes?
Prove you’re making poverty wages?
Dumping “massive amounts” into an RRSP still doesnt change your take home pay.
Perhaps Mom could apply for welfare/child care while you continue to game the system?
But not to worry.
Trudeau/Morneau have your back. Gender equality childcare will be coming soon.
Right after they get the Pheonix payroll system issues worked out…..2 years late and a billion dollars later.

#162 turdeau on 03.01.18 at 8:11 am

To all you jacka$$es that voted in the current party, the rest of us forgive you. Intelligence isn’t the default for most. Just don’t let it happen again.

#163 Rooster on 03.01.18 at 8:12 am

#147 jane24 on 03.01.18 at 3:20 am
Why get upset over something you can’t fix.
***********

The answer to the question of why women live longer than men.

Keep calm and carry on gang.

#164 Ezzy on 03.01.18 at 8:25 am

#118 young & foolish:

Indeed. While I normally am supportive of women (and etc) I begrudgingly agree with you because what Trudeau, et al are doing is buying votes, and not much else. That being said, we have to remember that society functions like a pendulum in that its swing to the left is always matched by the rightward one. After all, the current Feds only received %40 of popular vote, which means, at best, they only speak for that portion of Canada. Notwithstanding mainstream medias current narrative, the federal Liberals do not speak for the majority of Canadians and what they do now can be undone later, for better or worse.

#165 Steven Rowlandson on 03.01.18 at 8:30 am

The masses quite likely prefer the tax free savings plan they understand Garth. Real estate. The trouble is it makes life impossible for Canadians by virtue of price appreciation.

#166 IHCTD9 on 03.01.18 at 8:34 am

If you lack the money, borrow it. Banks will loan at prime (3.45%) and usually not require payments until your refund arrives.
______________________

Don’t know if this was mentioned already, but some banks offer an “RRSP top up” LOC. Or at least they used to. I have one and it was a lower rate than a run of the mill LOC – sub prime IIRC.

Have not used it since mortgage rates were over 6%, but if they still exist as they did 20 years ago, a guy could save a few bucks on interest compared to a regular loc.

#167 John Dough on 03.01.18 at 8:36 am

#139 Stan Brooks on 03.01.18 at 12:56 am
#88 John Dough on 02.28.18 at 8:47 pm
PS Stan – get back in your corner!
=========================

There have been tons of discussions on the topic, including my posts here on this blog.
[could you be more specific?]

You represent the backward limited elitist ideology of a person who has no practical knowledge of business and thinks all business incomes is employement income.
[You’d be surprised. Do Doctors now have to fix cars as well as people to make ends meet?]

You represent no evidence or facts supporting your view except sheer arrogance and stupidity.
[Just the tax laws, histories of incorporation and medicine]

Buzzwords like income sprinkling do not exist in other tax jurisdiction, that practice is actually encouraged in US and normal countries with normal taxation policies, i.e. Germany.
[I’d be happy if income splitting became universal. Until then I adhere to the law.]

Income sprinkling was invented as a term by the chateau kid/maybe you without any thinking. Why are you allowed to get your dividends from ownership of public corporations and not from ownership of private corporations.
[Can I buy a share of Loonie Doc’s practice?]

Because your elitist billionaire brain thinks it is just (to whom, your pension company profits?) and you force it on everyone without thinking?
[I sometimes think too much, but I abhor elitism and tyrannical leaders. Not even close to a 1/10000th of billion]

How about a doctors wife who bankrolled her husbands education, should she not be entitled to proceeds from his Business?
[They usually snag them after they graduate – sunna cum Audi]

If you bankroll a successful IPO you expect payout , correct?
[Are you suggesting that it wasn’t love at first sight?]

What is the damage from such stupidities though is the complete loss of trust in governments.
[Only by those affected – doctors and lawyers comprise 25% of the 1% – so 0.25%. The rest of us are OK with it. The real small business owners are probably pissed at the Pros for ruining their good thing. ]

Any idiot and we see plenty of them/including you justifying it/ lined up for power can do whatever they want with no consultation, renege on promises and openly steals your money/investments.
[The Provinces let the Pros incorporate, the Pros forgot who collects the taxes. Whose the idiot?]

This is not how a free country works. Counting down the days to liquidating any fund in this place.
[Me too! You’re no fun.]

#168 dharma bum on 03.01.18 at 9:02 am

#72 Talking Pie

The reason that middle-class people don’t take advantage of the TFSA is that they’re too busy buying more car than they should, “investing” in granite counter tops, blowing $5k on that annual vacation they “deserve,” or any number of other non-essential things that people who claim to be financially stressed blow their money on.
——————————————————————-

BINGO!

Winner winner chicken dinner!

#169 LivinLarge on 03.01.18 at 9:05 am

“The whole idea with an RRSP is that the government will eventually get the tax on both the principle and the growth when it is withdrawn, whereas with a TFSA they only get the tax on the principle.”…all well and true but there’s even more involved. Using an “average Joe” as the baseline, most Canadians will increase their gross earned income over time and inflation. So, for maybe more than 1/2 the time you are contributing to the RSP you are in a lower marginal bracket than when you eventually withdraw the funds therefor you pay a higher marginal rate on both the contributed portion and on the accumulated growth portion as well.

If inflation worked equally on income/wages as it does on the real cost of living then it might not be too bad but the unfortunate reality is that most Canadians today simply can’t and won’t choose to live on an income level of 20+ years ago when they retire in the future.

This is the heart of the RSP scheme for the government. When RSPs were invented in about 1955 and for every subsequent government, there is the absolute assurance that if they allow a deferral of taxes to a future date then they collect more tax revenue in the future than they would now. This is also the heart of the roll over in to a RRIF, the gov want an assurance that they are going to get their enhanced taxes in an orderly and predictable fashion.

I know that there are a plethora of blog dogs who will tell us that they are living in retirement at an income level they experience 20+ years ago and it certainly is mathematically possible. It’s just not what the vast majority of Canadians want to or will eventually end up doing due to inflation. Ignoring future reality in favor of best case mathematical projections is just a recipe for paying the maximum tax possible in retirement rather than the least.

Domain, what number did you call CRA at in order to get such great customer service? Virtually all the live CRA telephone agents have been assigned other duties and even the private numbers for tax preparers aren’t being answered…at least for callers from Ontario. The Feds are determined to require all inbound enquiries be handled online or on paper. CRA made a clear and simple error in data entry on my 2016 return of $10,000 and even my preparer can’t get a live CRA agent on the phone to make the correction that would take less than a minute to make.

#170 Craig Richardson on 03.01.18 at 9:09 am

My wife and I agreed long time ago that we would really try to maximize our RRSP, TFSA each.

We don’t make a high income, we both work for not much more than minimum wage, $15.25 an hour but because we live in a smaller town, city, we have a lower cost of living. The only other real benefit we have gotten over the years is a $750 annual bonus each. We both work for a small business, 10 total employees for now.

We managed to put aside $62,000 in RRSP’s, $70,000 in TFSA’s until this year 2018 since married 10 years ago.

We have another $20,000 in reserve savings and rent. Buying house now seems a real, risky move.

Most people we encountered are too financial irresponsible and lazy these days. They want something for nothing and easy money.

It is not how much you make, it is what you keep and save that counts.

#171 Another Deckchair on 03.01.18 at 9:10 am

@147 Jane24:

“… don’t have the money. My Canadian family are not frittering their money away on granite or posh cars but on household bills.”

I can really believe that. Business fine-tunes itself to extract every last penny from people.

If you Canadian family were to step back and analyze their lives, without emotion, I wonder what they’d see?

What my partner and I have done over the last few years is to keep track of where every last dollar goes.

Yes, a BIG exercise, but:

1) the act of writing it down encourages both of us to think before we purchase;

2) we can sit down and make it a game of “shave a hundred bucks off the monthly average”.

Interesting things found in 2017?

1) $1400.00 per year on the odd bit of take-out food, like Pizza.

2) Booze – average $250.00 per month. (down from $270 the year before) – $6,000.00 per year.

The funny thing is, that we don’t particularly like the pizza, and have been thinking of drinking less and going out for more walks…

Talk about a kick in the backside to actually turn our thoughts into action.

I wonder what your Canadian family could do to shave $100.00 per month off of their expenses? (that’s less than $5.00 per day).

#172 Reynolds531 on 03.01.18 at 9:17 am

If you read the fine print on putting your mortgage in your rrsp, you need to meet all standard credit criteria for the bank you’re using. So it’s likely you would have to pass the stress test.

It’s expensive from both a real and opportunity cost perspective. And complicated. But you do get the satisfaction of paying yourself, and telling the bank to eat crow. (If you’re into that sort of thing)

#173 Old Ron the Realtor on 03.01.18 at 9:33 am

TREB February sales stats report likely released Monday 5th.

Drumroll, please… – Garth

#174 IHCTD9 on 03.01.18 at 9:37 am

#18 Smartalox on 02.28.18 at 7:04 pm
I’m hoping when I retire to melt my RRSP into my TFSA account: spend the contents of the TFSA, then top up the TFSA with funds from the RRSP every year, plus whatever additional contribution room we receive.
_________________________________________

It’s tough to decide what to do. I just love getting that fat refund cheque every year, but what is in my RRSP’s now is already too much when thinking about expected future numbers and tax implications (will be worse 20 years from now 100%)

I’ve still got to hang my hat on a plan yet, but frankly; at the point where the RRSP nest egg is big enough to grow to the “specified” size, it seems better to just max both the TFSA’s and dump whatever surplus we have into straight up taxable investments if the idea is to keep taxes down in retirement and the transfer of wealth to our kids as easy and as tax free as possible.

#175 Another Deckchair on 03.01.18 at 9:49 am

Can’t multiply in the morning, I guess:

“2) Booze – average $250.00 per month. (down from $270 the year before) – $6,000.00 per year.”

Make that $3,000 per year….

#176 };-) on 03.01.18 at 9:50 am

I tend to agree with #39 Dave on 02.28.18 at 7:26 pm

I don’t trust the government not to change their stance on RRSPs and tax the crap out of them.

Governments and Banks, the worlds gone crazy. The highest job growth, by a long shot, has been banking, insurance, real estate and leasing. There’s something wrong with that.

As Thomas Jefferson said some 200 years ago, “I fear banking institutions a greater threat to our civil liberties than standing armies”. 200 years ago! Too few, if any, listened then and so too is it so today. We are enslaved by our economic paradigm.

An irrational fear. – Garth

#177 Federal Phlebotomist on 03.01.18 at 9:51 am

Taxes are indeed high in Canada, but you enjoy third-world healthcare at first-world prices.
If you can find a doctor.

https://journal.practicelink.com/vital-stats/physician-compensation-worldwide/

http://thepatientfactor.com/canadian-health-care-information/world-health-organizations-ranking-of-the-worlds-health-systems/

#178 };-) on 03.01.18 at 10:07 am

Good morning Garth:

An irrational fear? Maybe.

But seriously, when you consider we allow ourselves to be ruled by the likes of Trump, Kim Jon-un, Putin, and (as much as I might appreciate his social conscious) Trudeau for his absurd economic how possibly can one have confidence in our futures?

Our economic paradigm is such that we are, as you so eloquently phrase it, “Shepple” waiting to be fleeced over and over again, if not nuked or shot with an AR-15.

#179 IHCTD9 on 03.01.18 at 10:08 am

#170 Another Deckchair on 03.01.18 at 9:10 am
_________

That is exactly the way to look at things. A little here and there adds up over time with spending – but also with saving too.

I crunched my weekly habitual/wasteful spending two years ago and it was horrifying. I’ve made some big changes since then and continue to do so.

We started saving at only 400.00/month and worked our way up. We set it up as an automatic withdrawal and let it run.

If we ran short in a month we did the dance to sneak by. Sometimes we just plowed into overdraft. No matter what happened though, that investment transfer was made every single month since the mid 90’s without fail.

I highly recommend setting up your investments as an auto withdrawal if you’re in it for the long haul.

#180 TheWonk on 03.01.18 at 10:18 am

“Great post! In reality the RRSP is a tax DEFERRAL plan, as income tax must eventually be paid for almost all annuitants. It only shelters income earned while INSIDE the plan, not forever, like the TFSA.”

This is wrong. The key benefit of the RRSP is that it allows for the accumulation of investment income tax free (not tax deferred).

While there are substantial benefits that can be derived from lifecycle income smoothing and tax rate arbitrage, all of these things being equal, an RRSP provides the EXACT same tax free return on investment income that a TFSA would provide to an equivalent investment.

#181 Sound as a Pound on 03.01.18 at 10:26 am

#175 };-) on 03.01.18 at 9:50 am
I tend to agree with #39 Dave on 02.28.18 at 7:26 pm
I don’t trust the government not to change their stance on RRSPs and tax the crap out of them.
An irrational fear. – Garth
***********
I keep everything in cash. $1000 dollar bills stuffed in my mattress. The Feds won’t be screwing over my retirement savings.

#182 Robbie Robertson on 03.01.18 at 10:31 am

Just a quick ‘thank you’ for the lovely photo accompanying “Who Knew”. My significant other, a passionate dog lover, went in for surgery today and she really enjoyed the picture. Be well.

#183 Dobermanduke on 03.01.18 at 10:31 am

#137 Smoking Man on 03.01.18 at 12:55 am

Next book. Interviews with salad eaters and Starbucks philosophers.

The epa center of post modetinism wisdom. The brainless through no fault of there own.

The curriculum by ravenous jealous haters. Why the bleeding heart liberal council on planet Nictonite never took the threat from the beasts from planet Lesbetron seriously is beyond me.

I’m just a other drinkin shy pilot that gets no respect.
Shlong Zumanga had the feeling too.

That’s why he wants to kill you all.

Not on this Nectonites shift.

Go humanity. I gave you Trump.

________________________________________

you took the words right out of my mouth

#184 Mike in Toronto on 03.01.18 at 10:34 am

#160 crowdedelevatorfartz

I’m not gaming it, it’s right on the CRA website, line 236 net income is used to calculate Canada child benefit etc.

It’s a profoundly stupid system.

#185 Deplorable Dude on 03.01.18 at 10:39 am

So my son turns 18 in August. I wanted to open a TFSA for him and start it off with $5K.

However once he is 18 I can’t just gift him this money…think it counts as a loan?

Can I give him the money before he turns 18 to open a TFSA without any tax consequences?

#186 Smoking Man on 03.01.18 at 10:41 am

To all the salad eating Starbucks philosophers who dream of a socialist utopia.

https://youtu.be/fNjtpksJD4s

#187 bort on 03.01.18 at 10:52 am

RE People can’t save $5500 a year

I feel most people could easily do it and then some.

I don’t believe that the issue is a lack of education about savings accounts and finances, they in fact do have entire courses and math units in highschool on the topic, and most millennials can google a topic for a few hours an become proficient.

The problem is a lack of stoicism. Can this be taught? Or is it an “either you have it or you don’t” kind of thing?

#188 IHCTD9 on 03.01.18 at 10:57 am

#169 Craig Richardson on 03.01.18 at 9:09 am

It is not how much you make, it is what you keep and save that counts.
____________________________________

Excellent. You are a walking example of what I preach here on an almost daily basis.

#189 McLovin on 03.01.18 at 11:01 am

Garth,

Never understood the logic of overcontributing $2000. Sure, it’s allowed, but you don’t get a deduction for it as it exceeds your contribution limit. Plus when you eventually withdraw it (plus any accumulated increase), you’re taxed on it 100%. Wouldn’t it be better to attribute that $2000 to a non-reg account in a quality stock or dividend fund that qualifies for the dividend tax credit?

#190 IHCTD9 on 03.01.18 at 11:02 am

#185 bort on 03.01.18 at 10:52 am

The problem is a lack of stoicism. Can this be taught? Or is it an “either you have it or you don’t” kind of thing?
________

IMHO, it can be taught to the young, but not the old.

Then when you give it up, it’s gone for good.

#191 Penny Henny on 03.01.18 at 11:05 am

#174 Another Deckchair on 03.01.18 at 9:49 am
Can’t multiply in the morning, I guess:

“2) Booze – average $250.00 per month. (down from $270 the year before) – $6,000.00 per year.”

Make that $3,000 per year….

///////////////////

Must have been the hangover

#192 Renter's Revenge! on 03.01.18 at 11:10 am

I think it’s worth repeating, that assuming a 7% rate of return, your money doubles every 10 years, so after 40 years your money doubles 4 times, or grows to 16 times it’s original value (2^4=16).

It’s probably preaching to the choir here, but that means every $5000 vacation you go in your 20’s costs you sixteen (16!) $5000 vacations in your 60’s.

#193 Gonkman on 03.01.18 at 11:10 am

#179 Sound as a Pound on 03.01.18 at 10:26 am
#175 };-) on 03.01.18 at 9:50 am
I tend to agree with #39 Dave on 02.28.18 at 7:26 pm
I don’t trust the government not to change their stance on RRSPs and tax the crap out of them.
An irrational fear. – Garth
***********
I keep everything in cash. $1000 dollar bills stuffed in my mattress. The Feds won’t be screwing over my retirement savings.

*******************************************

Might want to hit the bank..

http://www.cbc.ca/news/politics/bank-notes-legal-tender-1000-bill-1.4554758

The Feds are making your $1000 Bill Not Legal Tender. Cash em in for $100’s and fill up your walls first.

Don’t even need to wrap em in plastic… they 100’s are like tupperware now.. LOL.

Good luck… I like my 6-8% a year return. I doubt you will catch up on your -2% a year on your 100’s..

#194 Gonkman on 03.01.18 at 11:12 am

#173 IHCTD9 on 03.01.18 at 9:37 am
#18 Smartalox on 02.28.18 at 7:04 pm
I’m hoping when I retire to melt my RRSP into my TFSA account: spend the contents of the TFSA, then top up the TFSA with funds from the RRSP every year, plus whatever additional contribution room we receive.
_________________________________________

It’s tough to decide what to do. I just love getting that fat refund cheque every year, but what is in my RRSP’s now is already too much when thinking about expected future numbers and tax implications (will be worse 20 years from now 100%)

I’ve still got to hang my hat on a plan yet, but frankly; at the point where the RRSP nest egg is big enough to grow to the “specified” size, it seems better to just max both the TFSA’s and dump whatever surplus we have into straight up taxable investments if the idea is to keep taxes down in retirement and the transfer of wealth to our kids as easy and as tax free as possible.

*******************************************

Nah just follow your plan and Vote Lib in Ontario.. Ford likes the idea of the first $30K Income being tax free.

I doubt feds will follow suit but..

I hope they do.. I can live on $30K a year tax free + TFSA money + CPP… :)

#195 For those about to flop... on 03.01.18 at 11:19 am

#281 morrey on 03.01.18 at 12:49 am
hey Flop
You have never posted link to the BC assessment BUT once.

///////////////////////

Good boy Morrey,you found ONE!

Now all you have to do is open the other 2999.

Why do you think everyone else is so appreciative?

They don’t read my posts for the free ham sandwiches…

M43BC

#196 Tony on 03.01.18 at 11:21 am

Re: #183 Deplorable Dude on 03.01.18 at 10:39 am

Why would you want to do that!!?? If he doesn’t work he won’t pay any income tax. If you gifted him 5k and he made less than about $26,000 in capital gains on that year off of that 5k he’d only have to pay the alternate minimum tax for that taxation year. By taking out a TFSA of 5k you just use up his TFSA room he could have used in future years.

#197 PastThePeak on 03.01.18 at 11:25 am

#124 Lead Paint on 02.28.18 at 11:18 pm
Because SCM is no more (stuck in a stinky elevator somewhere), but most here do appreciate alternate point of views, I’d like to point out that Australia has a $20/hr minimum wage and according to the Globe the sky has not fallen:

https://www.theglobeandmail.com/report-on-business/small-business/talent/australia-pays-fast-food-workers-20-an-hour-and-the-sky-hasnt-fallen/article38026876/

“Entry-level fast-food workers, for example, are paid $20.08 an hour as a base hourly wage. Pay goes up to $25.10 on Saturday, $29.12 on Sunday, and overtime hours are $30.12 for the first two hours and $40.16 for each hour thereafter”.
++++++++++++++++++++++++++++++++++++

Well, that was certainly a better way to post such a counter point that what the other person would have done. It is possible to have civilized debates without deliberately trying to be inflammatory and trolling.

Interesting article. The G&M is competing to be left of the TO Star now, so you can be sure such an article was looking at the rosiest-of-rosie outcomes. There is no doubt more to the story. But clearly the min wages there are much higher than in Canada ($40/hour for overtime, for unskilled labour!!!). I would say there isn’t much overtime at the barista bar.

The article focused the service sector, but said min wages are different by industry. Wonder if the service sector are the highest (since all you earn is the min)?

One clear difference between Australia and Canada – our proximity to the lower taxed and lower cost USA right next door. Australia has no such elephant. In Canada it would be possible to pay higher wages in the food service industry, provided the populace accepted the higher costs, but not really possible to do so in any industry which competes with USA products/services.

#198 IHCTD9 on 03.01.18 at 11:26 am

#168 LivinLarge on 03.01.18 at 9:05 am

This is the heart of the RSP scheme for the government. When RSPs were invented in about 1955 and for every subsequent government, there is the absolute assurance that if they allow a deferral of taxes to a future date then they collect more tax revenue in the future than they would now.
__________________________________

This is true, but in reality – both sides win. And a guy has options too.

If I built a portfolio of 1.1 Million by saving 600.00/month at 6.0% for 40 years, my total deposits would have been only 288,600.00. The deposits would obviously have been tax free as well.

The taxes returned to me on those deposits would have not been a huge sum of money. The taxes paid against that 1.1 mil would far exceed whatever they gave back to me on the 288K.

The reason for this is obviously that the government is now taxing 4 decades worth of capital gains alongside the principal value of the investment, and of course they are doing it as income now as opposed to capital gains at 50%.

If you get CPP/OAS/Pension alongside your RRSP withdrawals, your taxation goes even higher. If I were to put everything into RRSP’s and do no planning, our taxable retirement income (and taxes) could well exceed our working income due to the wife’s DB pension.

BUT: I’m not going to care a whole lot about paying standard income taxes on a nice paycheque derived from a solid 7 figure portfolio that cost me less than 288K, and for which zero taxes were paid in 40 years :).

You make a good point: the government wins big taxing RRSP income. But if a couple starts early enough, and contributes every month – they win too.

#199 Victor V on 03.01.18 at 11:27 am

Canadian millennials, Gen Z piled on consumer debt at fastest rate in 2017: Report

https://www.bnn.ca/canadian-millennials-gen-z-piled-on-consumer-debt-at-fastest-rate-in-2017-report-1.1013994

Canadians’ average consumer debt climbed to $29,312 in 2017, with the country’s youngest generations leading the way in piling on more debt, according to a new report released Thursday.

The debt load for a typical Canadian rose by 4.3 per cent last year, but borrowing by millennials and Generation Z increased by 12.6 per cent and 22.9 per cent, respectively, said the report by credit monitoring agency TransUnion.

“As consumer debt continues to increase, it’s clear that the youngest generations are playing a critical role in the consumer credit market,” said Matt Fabian, TransUnion Canada’s director of research and industry analysis, in a press release.

Individuals born between 1980 and 1994 are considered millennials, while those born 1995 or later are part of Gen Z.

#200 LivingLarge on 03.01.18 at 11:50 am

“Why are you allowed to get your dividends from ownership of public corporations and not from ownership of private corporations.”…extremely simple…public corps are arms length relationships and that makes all the difference in the world. No government wants the tax payer to write the rules AND reap the benefits as well.

Ezzy, all democratically elected government’s actions are in the end “buying votes” or the government wouldn’t enact anything they figured threatened their reelection chances.

As for draconian changes to RSP rules being unlikely, yea, of course that’s so because the gov knows to an almost mathematical certainty that they will make more in taxes tomorrow by keeping the RSP fundamentally unchanged than they miss out on today. I feat that TFSA however is less secure as time goes on and the cumulative maximum contributions begin to be serious coin. We’ve seen on government goose that comtribution limit to buy votes and a year later the subsequent government just cut it back to the previous level. As long as the proportion of Canadians maxing out their TFSA contributions remain low then the issue is moot and likely no big moves on TFSAs but once a gov dicks with the TFSA and finds there was no blow back then dicking with it again become easier to contemplate.

#201 SimplyPut7 on 03.01.18 at 11:57 am

#183 Deplorable Dude on 03.01.18 at 10:39 am

You can give your child the money but it’s not like a RESP account where you control what goes in and stays in the account.

If you give the money, and he takes it out – you can’t stop him.

It’s his money.

https://www.theglobeandmail.com/globe-investor/investor-education/when-you-should-and-shouldnt-gift-money-to-adult-kids/article20814410/

#202 LivingLarge on 03.01.18 at 12:03 pm

1HCTD9, I have never asserted that RSPs are “bad” investments, just on a scale of more lucrative and less lucrative, there are better options for “most” Canadians but that still requires the average Canadian to understand the fundamentals of investing for minimum taxation and that it turns out is a truly huge expectation.

There are times and cirumstances that most Canadians can expect to be in at some point in life that make RSP contribution very lucrative indeed and for most Canadians, having a knowledgeable and skilled advisor to steer them through the timing paradigm is incredibly important.

There’s also a big element of personable choice here too. Personally I want my estate to be taxed at cap gains rate rather than earned income rates. Since we all have a statistically significant chance of dying at any given moment, I personally want the best outcome calculation to include that actuarial potential.

#203 Dave Ahem on 03.01.18 at 12:11 pm

Garth,

Self-directed mortgages are basically dead.

In October 2016, the DoF changed the rules on insured mortgages. No refi’s are eligible for any sort of insurance whether it be transactional (where the customer pays the commission) or portfolio (where the bank insures pooled mortgages after funding, aka. securitization)

All self-directed mortgages require insurance by the lender to ensure repayment to the RRSP in the event of default. Hence the only time they can be used anymore is on a purchase. How many people have enough cash in an RRSP to buy a new house? CMHC will not insure your self-directed mortgage if it is done as a refinance which was the case 99.9% of the time. Typically for those looking to consolidate some debt who were low risk investors with good incomes.

If you don’t believe me, call CMHC and ask. Just FYI.

#204 Ian on 03.01.18 at 12:18 pm

The online voting for Ontario PC leader is going really well, no one has received their letter with the verification PIN. At least I haven’t and nor have any members I know.

What a gongshow.

Maybe Russia will hack the online process too :(

#205 James :) on 03.01.18 at 12:19 pm

#137 Smoking Man on 03.01.18 at 12:55 am
Next book. Interviews with salad eaters and Starbucks philosophers.
The epa center of post modetinism wisdom. The brainless through no fault of there own.
The curriculum by ravenous jealous haters. Why the bleeding heart liberal council on planet Nictonite never took the threat from the beasts from planet Lesbetron seriously is beyond me.
I’m just a other drinkin shy pilot that gets no respect.
Shlong Zumanga had the feeling too.
That’s why he wants to kill you all.
Not on this Nectonites shift.
Go humanity. I gave you Trump.
———————————————————
Take that large narcissistic, self absorbed, offensive sexual predator back please. We have enough drama here with you.

BTW If you keep slogging your Smutty little book here you are going to be hoisted with your own petard. I’m not sure this Garth’s type of rag magazine he wants promoted, that is unless he is interested in bird cage liners?

#206 Ian on 03.01.18 at 12:20 pm

#281 morrey on 03.01.18 at 12:49 am

hey Flop
You have never posted link to the BC assessment BUT once.
———————————–
Really?

Flop is one of the hardest working and best analysts on here.

#207 KLNR on 03.01.18 at 12:36 pm

@#190 Renter’s Revenge! on 03.01.18 at 11:10 am
I think it’s worth repeating, that assuming a 7% rate of return, your money doubles every 10 years, so after 40 years your money doubles 4 times, or grows to 16 times it’s original value (2^4=16).

It’s probably preaching to the choir here, but that means every $5000 vacation you go in your 20’s costs you sixteen (16!) $5000 vacations in your 60’s.
___________________________________

Money can’t buy your youth back

#208 Wrk.dover on 03.01.18 at 12:36 pm

#190 Renter’s Revenge! on 03.01.18 at 11:10 am
I think it’s worth repeating, that assuming a 7% rate of return, your money doubles every 10 years, so after 40 years your money doubles 4 times, or grows to 16 times it’s original value (2^4=16).

It’s probably preaching to the choir here, but that means every $5000 vacation you go in your 20’s costs you sixteen (16!) $5000 vacations in your 60’s.

———————

Too bad vacations inflate 7% / year though.

Take that vacation right now, while your $ is still worth 77 1/2 cents….

Because of the civil unrest in MoBay, Jamaica is on a one time 10% reduction this season.

#209 nah on 03.01.18 at 12:42 pm

It is not how much you make, it is what you keep and save that counts.

………

it’s how much you make. Someone making $775,000 doesnt need a savings rate of 40%

#210 Ian on 03.01.18 at 12:52 pm

Dogs,

That appeals court loss by TREB back on 1 December, where it was supposed to mean that realtors must make sales figures public…what has happened with this since?

The articles from that time says TREB will appeal the appeal…does anyone have an update?

https://www.ctvnews.ca/business/realtors-must-make-sales-data-public-appeals-court-1.3702578

http://www.cbc.ca/news/business/treb-court-ruling-1.4428262

#211 Ray on 03.01.18 at 1:01 pm

Stats Can Annual report released yesterday is not complementary to Canada’s economic prospects. An article quote ” Investment in Canada has fallen steadily since 2014, with a total decline of almost 18 per cent. Once the strongest in the G7, it has been the weakest over the past four years.”
The BOC wants the economy to shift from debt fueled investment to business investment before it will feel comfortable raising future interest rates. An article quote ” Most importantly, in the current economic environment, persistent weakness in investment means that the Bank of Canada cannot wean the economy from its addiction to debt-fuelled growth in household and government demand by shifting to exports and business investment.” The Liberals anti -business attitudes, or at best not pro- business policies, is having an impact, and it is crushing business investment in Canada. My personal portfolio is over weight Global and US ETFs, and we are financially liquid, so we could weather this. It is the implications this means to my three grandsons when they are adults in 10 to 20 years looking to start an adult life and family that bothers me.
http://business.financialpost.com/opinion/philip-cross-statscans-latest-report-shows-how-badly-the-governments-demolished-business-investment#comments-area

#212 Josh in Calgary on 03.01.18 at 1:04 pm

#10 Nik on 02.28.18 at 6:52 pm
Couple of questions

RESP, as per my research, can only be bought through an agent. Is that right? I want to move my kid’s RESP from a financial adviser (the kind who sells “products”) to a self managed account. if this is possible what kind of penalties am I looking at?

RRSP – I have a TD trading account. any idea whether ETF RRSP products have high “bank” MERs or more competitive MERs
——————–
Here are my answers:
An RESP can for sure be set up in a self directed account. You’ll have to wade through filling out a couple of government forms, but you should be able to call your support desk if you have any issues. You can then transfer any RESPs you have into this account (the SIN numbers need to match though in the event it’s a family plan with multiple members). As for the penalties that probably just depends on the LOAD of the mutual fund you’re in (the number one reason to hate mutual funds). If it has a back end LOAD you’ll be on the hook for that regardless of when you cash it. And your bank sometimes layers on fees for transferring funds. I’ve found that transferring from RBC to RBC Direct Investing they don’t though.

ETFs are ETFs. There are no separate RRSP ETFs. So the MERs will be the same

#213 IHCTD9 on 03.01.18 at 1:07 pm

#124 Lead Paint on 02.28.18 at 11:18 pm

_________

From the linked article:

“Of course, poverty continues to exist, usually as a result of unemployment, underemployment or insecure employment, which covers a large and growing number of Australians. Wage inequality has increased in recent years as the wealthy have benefited disproportionately from increases in asset prices. Wage growth in Australia is at historically low levels. These problems are, however, far from unique to Australia.”

Obviously there is more to the story. 20.00/hr should be enough for any frugal individual to get by, and for couples to do well. Looks like the high minimum wage has produced no improvements in their society at large.

Did employers cut the number of positions? Cut hours? Invest in automation? Did some businesses just throw in the towel? They probably did all of the above.

Lots of good questions not asked, and not answered.

This article asserts that high minimum wages do nothing bad to society, but also essentially admits they do nothing good either.

#214 Mark on 03.01.18 at 1:13 pm

“CMHC will not insure your self-directed mortgage if it is done as a refinance which was the case 99.9% of the time.”

Interesting. What about the other mortgage insurers, are they an option?

The whole requirement of mortgage insurance is rather ridiculous, given that a low ratio mortgage on a property owned by a related entity is likely far less risky than many other RRSP-eligible investments. But such is the messed up paternalistic country we live in, where “the government” thinks they know everything and needs to ‘protect’ us.

#215 Smoking Man on 03.01.18 at 1:25 pm

While T2 was in costume doing additions for the next Ballywood Hit movie.

The USA was getting ready to Imposes 10% Traiff on Alum. 25% on Steel. They just dropped the hammer. USDCAD on fire.
Good bye Hamilton real estate.

Oh well thank our lucky stars , atleased we have a woman and indigounous budget.

#216 Peter Pan on 03.01.18 at 1:26 pm

@#190 Renter’s Revenge! on 03.01.18 at 11:10 am
I think it’s worth repeating, that assuming a 7% rate of return, your money doubles every 10 years, so after 40 years your money doubles 4 times, or grows to 16 times it’s original value (2^4=16).

It’s probably preaching to the choir here, but that means every $5000 vacation you go in your 20’s costs you sixteen (16!) $5000 vacations in your 60’s.
___________________________________

Money can’t buy your youth back
___________________________________

You may not live that long, or may not have the health and mobility to travel while you are at your 60s.

#217 IHCTD9 on 03.01.18 at 1:29 pm

#207 nah on 03.01.18 at 12:42 pm
It is not how much you make, it is what you keep and save that counts.

………

it’s how much you make. Someone making $775,000 doesnt need a savings rate of 40%
__________________________________________

So only the 1% can retire?

What is the income cut off where retirement becomes impossible?

#218 Newcomer on 03.01.18 at 1:30 pm

A friend recently renewed her mortgage. Shortly thereafter the rate on one of her credit cards doubled. They told her that the inquiries on her credit report lowered her score. My interpretation would be that their metrics showed that she didn’t have any options for transferring the balance and so they saw an opportunity for milking. You would expect to see things like this in a tightening credit environment. In this kind of environment, people are less likely to ask the bank for an RRSP loan.

#219 IHCTD9 on 03.01.18 at 1:35 pm

#205 KLNR on 03.01.18 at 12:36 pm
@#190 Renter’s Revenge! on 03.01.18 at 11:10 am
I think it’s worth repeating, that assuming a 7% rate of return, your money doubles every 10 years, so after 40 years your money doubles 4 times, or grows to 16 times it’s original value (2^4=16).

It’s probably preaching to the choir here, but that means every $5000 vacation you go in your 20’s costs you sixteen (16!) $5000 vacations in your 60’s.
___________________________________

Money can’t buy your youth back
______

That’s why you want to get your young virile ass back to work before you can’t get anything done anymore. :)

Work (and save/invest) when you’re young, take it easy when you’re old.

#220 For those about to flop... on 03.01.18 at 1:35 pm

#204 Ian on 03.01.18 at 12:20 pm
#281 morrey on 03.01.18 at 12:49 am

hey Flop
You have never posted link to the BC assessment BUT once.
———————————–
Really?

Flop is one of the hardest working and best analysts on here.

///////////////////////////

That’s nice Ian,a little over the top, but I know you were being kind and so I will take it.

Even when I show a condo like the one at post number 2 ,where the owners most likely made a million dollars on the same day they come to bust my balls because I show negative real estate news.

People want to know why Vancouver is essentially flat.

You can go to zolo and get quick numbers ,but it won’t show you who,what,where and why.

That’s where I come in handy.

I got a lecture the other day from a guy after I joked that a house went for less than recommended retail price ,detailing how this doesn’t exist and I show know this.

They can’t handle the truth, have no sense of humour, don’t want anyone to know that anything has changed and yet they read every post like a junkie.

There is no fix for the truth…

M43BC

#221 IHCTD9 on 03.01.18 at 1:38 pm

#213 Smoking Man on 03.01.18 at 1:25 pm

Good bye Hamilton real estate.
____________________________

…and the Soo too.

#222 Ponnaps on 03.01.18 at 1:48 pm

In regards to all the great posts on SDRRSP mortgages..

Can my wife and I both take money out of our respective RRSPs and set this up for our current mortgage which is in both our names?
Both RRSPs are under a single brokerage account.

Not worth the trouble. – Garth

#223 Pre-retiree on 03.01.18 at 1:50 pm

#24 Andrew
I am with you Andrew. Good points made there.
Make sure you look at your own situation before you jump.
For sure, in my case, that would be a bad decision indeed.

#224 SoggyShorts on 03.01.18 at 2:05 pm

#195 PastThePeak on 03.01.18 at 11:25 am
#124 Lead Paint on 02.28.18 at 11:18 pm
Because SCM is no more (stuck in a stinky elevator somewhere), but most here do appreciate alternate point of views, I’d like to point out that Australia has a $20/hr minimum wage and according to the Globe the sky has not fallen:

https://www.theglobeandmail.com/report-on-business/small-business/talent/australia-pays-fast-food-workers-20-an-hour-and-the-sky-hasnt-fallen/article38026876/

“Entry-level fast-food workers, for example, are paid $20.08 an hour as a base hourly wage. Pay goes up to $25.10 on Saturday, $29.12 on Sunday, and overtime hours are $30.12 for the first two hours and $40.16 for each hour thereafter”.
++++++++++++++++++++++++++++++++++++

Well, that was certainly a better way to post such a counter point that what the other person would have done. It is possible to have civilized debates without deliberately trying to be inflammatory and trolling.

Interesting article. The G&M is competing to be left of the TO Star now, so you can be sure such an article was looking at the rosiest-of-rosie outcomes. There is no doubt more to the story. But clearly the min wages there are much higher than in Canada ($40/hour for overtime, for unskilled labour!!!). I would say there isn’t much overtime at the barista bar.

The article focused the service sector, but said min wages are different by industry. Wonder if the service sector are the highest (since all you earn is the min)?

One clear difference between Australia and Canada – our proximity to the lower taxed and lower cost USA right next door. Australia has no such elephant. In Canada it would be possible to pay higher wages in the food service industry, provided the populace accepted the higher costs, but not really possible to do so in any industry which competes with USA products/services.
****************************
Also worth noting is that everything costs significantly more in Australia:
http://www.nationmaster.com/country-info/compare/Australia/Canada/Cost-of-living

#225 TalkingPie on 03.01.18 at 2:14 pm

#207 nah on 03.01.18 at 12:42 pm

it’s how much you make. Someone making $775,000 doesnt need a savings rate of 40%

——————————————————————-

Not really. Someone making $775k and spending more than 60% of it will need to save up a lot of money to maintain that same lifestyle in retirement. Needless to say, someone with that kind of <1% income isn't going to have many financial worries unless they're really idiotic with their finances.

But let's say their savings rate is 20%; using the 4% rule, they'll need to work for 29 years to save up enough money to maintain the same spending in retirement, same as someone who's living off of $50k and saving the same percentage. Or do you believe that people will suddenly want a dramatically less lavish lifestyle after they retire?

If you look at any model of retirement savings, the savings rate is by far the most important factor. Consider Garth's household-rejecting millennials, who started from nothing and managed to retire in their early 30s with a very-healthy-but-not-stratospheric household income of under $300k by saving 70% of their income.

#226 Stan Brooks on 03.01.18 at 2:14 pm

This is unfortunately very, very bad.

Trump promises big tariffs on steel, aluminum; impact on Canada still unclear.

https://ca.finance.yahoo.com/news/trump-itching-announce-tariffs-steel-135635681.html

WASHINGTON — U.S. President Donald Trump has declared his intention to impose sweeping tariffs on steel and aluminum, with potentially wide-ranging implications for the global economy, not to mention cross-border uncertainty.

After a suspense-filled few weeks the president released some details about his plans Thursday: a 25 per cent tariff on steel, and a 10 per cent tariff on aluminum, numbers in both cases higher than expected.

Canada is the No. 1 supplier of both steel and aluminum to the U.S.

Canada exported about C$9.3 billion of aluminum to the U.S. last year, and C$5.5 billion of steel. For the U.S., Canadian steel represented an important share of imports, at just over 15 per cent of overall imports. For Canada, the U.S. meant almost everything in its export picture — almost 90 per cent of Canadian steel exports went south.

————————————

All budget contingency will be gone and some more in this case.

#227 Dave Ahem on 03.01.18 at 2:27 pm

Mark on 03.01.18 at 1:13 pm

Interesting. What about the other mortgage insurers, are they an option?

To answer your question, no, Genworth and CG will not insure either. DoF sets the rules for all insurers. Nobody will insure a mortgage that has been refinanced. This is why a high ratio mortgage has a better rate than a customer with 75% equity these days.

#228 SunShowers on 03.01.18 at 2:32 pm

So why are RRSP contributions going downhill? (The average is under $5,000.) Why are so many people taking money out of their plan instead of putting it in?

————————————-

Because wages are stagnant while the cost of living has continued to increase, obviously.

Not exactly. We’ve been in a low-inflation world for almost a decade. Meanwhile real estate has sucked the oxygen out of the room (and the money out of your bank account). – Garth

#229 crowdedelevatorfartz on 03.01.18 at 2:33 pm

@#205 KLNR
“Money can’t buy your youth back”
+++++

Well.
In that vein(vane?) of anti RRSP thought.
Enjoy the annual holidays in your 20’s, 30’s, 40’s 50’s
But…..
Working til you die in your 60’s, 70’s is no fun either……..

#230 Overheardyou on 03.01.18 at 2:39 pm

It’s true that moisters don’t use an RRSP because we think it’s for retirement only. However, it doesn’t help that [email protected] and accountants tell us we’re too young to lock up our funds in said account. Thanks to your post I will be opening an RRSP and contributing this year.

#231 SimplyPut7 on 03.01.18 at 2:49 pm

#202 Ian on 03.01.18 at 12:18 pm

I haven’t received mine either, and a couple I know, the husband received theirs but the wife didn’t.

The verification was extended until Monday, March 5th at 11:59pm.

The party should wait another 2 weeks. I don’t think they understand that if their base doesn’t get to vote, and the person they wanted to vote for loses, that those people may vote for another party in frustration come election day.

#232 NoName on 03.01.18 at 2:54 pm

#160 crowdedelevatorfartz on 03.01.18 at 8:05 am

Right after they get the Pheonix payroll system issues worked out…..2 years late and a billion dollars later.

spending keeps economy going. but when you are scared that your paycheck can get screwed you decline reise/promotion and retirement…

http://www.itprotoday.com/hybrid-cloud/canada-scrap-ibm-payroll-plan-gone-awry-costing-c1-billion

The Phoenix project was originally chosen by Prime Minister Justin Trudeau’s Conservative predecessors 10 years ago to centralize the government payroll. International Business Machines Corp. won the contract to install and help run the system, which uses Oracle Corp. software.

It went live in 2016, just months after Trudeau won office. From the beginning, it didn’t work like it was supposed to. Some people were paid too much, others not at all. Those issues snowballed with the deluge of requests to fix incorrect paychecks. The fear of not getting paid still hangs over the country’s more than 260,000 federal public servants. Some put off major financial decisions. Others declined promotions or retirement, fearing any change in their pay could cause more trouble.

Two years later, some employees are still having problems. The latest data showed a backlog of 384,000 cases linked to the program.

#233 SimplyPut7 on 03.01.18 at 2:58 pm

#208 Ian on 03.01.18 at 12:52 pm

TREB is going to the Supreme Court.

From article

In its latest filings to the Supreme Court on January 30, TREB argues the decision regarding anti-competitive practices was made without any “quantifiable evidence” that publishing the disputed data online would give realtors a competitive edge. Such evidence might include a count of how many visitors to the data portal on the realtor’s website actually converted into active clients.

“Without quantifying the effects on competition, it becomes a matter of speculation or blind inference as to whether the business practice has an effect on competition that is substantial, or any effect at all,” TREB’s documents state.

http://business.financialpost.com/real-estate/treb-takes-housing-data-dispute-to-supreme-court-says-federal-ruling-violates-rights-of-real-estate-clients

#234 jess on 03.01.18 at 3:08 pm

“If you want to rebuild in an area where there’s a good chance your home is going to burn down again, go for it. But I don’t want to be subsidizing you.”

read more @
https://www.bloomberg.com/news/features/2018-03-01/why-is-california-rebuilding-in-fire-country-because-you-re-paying-for-it

#235 Ian on 03.01.18 at 3:13 pm

#231 SimplyPut

wowzers! thanks!

I sure hope there is a win for freedom on this one.

Given the current state of our universities, I have to wonder.

#236 Ian on 03.01.18 at 3:15 pm

#229 SimplyPut

I actually went to the Adelaide office late this am and basically lost it on them. Told them how disorganised this whole process is and how frustrated I am.

For something this important, the party looks like a clown festival. Just embarrassing.

#237 Newcomer on 03.01.18 at 3:21 pm

#170 Another Deckchair on 03.01.18 at 9:10 am
…….
What my partner and I have done over the last few years is to keep track of where every last dollar goes.

Yes, a BIG exercise, but:
——

Good move! And it doesn’t have to be a big exercise if you don’t use much cash. Free services like Mint or paid ones like YNAB keep track of it all. It takes a bit of discipline to open up the web browser and tidy up the software’s take on it, but not a lot of time. I was amazed by how much waste I found once I knew where every dollar was going. I’m not talking about making lifestyle changes here. There were lots of cases where I was paying for things that were available at half the price, or for free. I just never gave it much thought until it was all laid out in black and white.

#238 ALFRED E. NEUMAN on 03.01.18 at 3:38 pm

#170 Another Deckchair on 03.01.18 at 9:10 am
@147 Jane24:

“… don’t have the money. My Canadian family are not frittering their money away on granite or posh cars but on household bills.”

I can really believe that. Business fine-tunes itself to extract every last penny from people.

If you Canadian family were to step back and analyze their lives, without emotion, I wonder what they’d see?

What my partner and I have done over the last few years is to keep track of where every last dollar goes.

Yes, a BIG exercise, but:

1) the act of writing it down encourages both of us to think before we purchase;

2) we can sit down and make it a game of “shave a hundred bucks off the monthly average”.

Interesting things found in 2017?

1) $1400.00 per year on the odd bit of take-out food, like Pizza.

2) Booze – average $250.00 per month. (down from $270 the year before) – $6,000.00 per year.

The funny thing is, that we don’t particularly like the pizza, and have been thinking of drinking less and going out for more walks…

Talk about a kick in the backside to actually turn our thoughts into action.

I wonder what your Canadian family could do to shave $100.00 per month off of their expenses? (that’s less than $5.00 per day).

“GOOD FOR YOU FOLKS ..!! WE HAVE DONE THIS AS WELL FOR YEARS AND IT MAKES A HUGE DIFFERENCE TO A WORRY-FREE RETIREMENT ..!!

https://en.wikipedia.org/wiki/Microsoft_Money

#239 jess on 03.01.18 at 3:51 pm

-suitcases full of cocaine or replaced by flour or were they rlly?

https://www.bloomberg.com/view/articles/2018-02-28/putin-s-problem-are-freelancing-profiteers-building-a-mob-state

#240 Pancho Villa on 03.01.18 at 3:57 pm

#212 Mark on 03.01.18 at 1:13 pm
“CMHC will not insure your self-directed mortgage if it is done as a refinance which was the case 99.9% of the time.”
Interesting. What about the other mortgage insurers, are they an option?
The whole requirement of mortgage insurance is rather ridiculous, given that a low ratio mortgage on a property owned by a related entity is likely far less risky than many other RRSP-eligible investments. But such is the messed up paternalistic country we live in, where “the government” thinks they know everything and needs to ‘protect’ us.
*************

The original intention of mortgage insurance was to protect the poor sap with limited means from the Western lending practice of charging higher interest on those who can least afford it. In my next budget I’ll be enacting Sharia-compliant measures to keep the interest rates at 0 %

#241 Adam J on 03.01.18 at 4:01 pm

Hi Garth,

You mentioned there are ways to get money out of RRSPs on retirement without paying too much tax. Could you elaborate? Either in a comment response or in a subsequent post?

Much appreciated.

#242 PastThePeak on 03.01.18 at 4:16 pm

#227 crowdedelevatorfartz on 03.01.18 at 2:33 pm
@#205 KLNR
“Money can’t buy your youth back”
+++++

Well.
In that vein(vane?) of anti RRSP thought.
Enjoy the annual holidays in your 20’s, 30’s, 40’s 50’s
But…..
Working til you die in your 60’s, 70’s is no fun either……..
+++++++++++++++++++++++++++++++++

Balance folks. You have to have some fun when you are young…just don’t go overboard. Put some savings away for retirement and rainy days, and keep some to enjoy the day. I remember doing lots of fun things in my 20s, but it didn’t need to involve an all inclusive down south every year.

Maybe it is just the MSM, but the younger generation (meaning some, not all) seems to have a desire to “have it all right now”. They want a new car, a condo of their own, and to travel to far off places for vacations, right after starting that first post college/uni job. Not one of those 3 – all of those.

Yesterday we had the discussion on Gen-X, and if we were delusional, dimwitted, or lucky. What I can say is that I didn’t buy a new car until into my 30’s, I rented with friends for 5 years before buying first house with spouse, no personal cell phone or computer until 30 as well. Trips were more long weekends, going skiing, visiting family, with a few of those more expensive getaways on odd years.

I had a good job in the Ottawa tech industry, and could have afforded more, but have never spent more than I earn. Just upbringing in that case – my parents didn’t have much money.

#243 Bytor the Snow Dog on 03.01.18 at 4:24 pm

Methinks TREB doth protest too much.

Wonder what they have to hide?

#244 Alistair McLaughlin on 03.01.18 at 4:25 pm

#216 Newcomer

A friend recently renewed her mortgage. Shortly thereafter the rate on one of her credit cards doubled. They told her that the inquiries on her credit report lowered her score. My interpretation would be that their metrics showed that she didn’t have any options for transferring the balance and so they saw an opportunity for milking.

Carrying a balance on a credit card is by definition an opportunity for milking.

#245 James on 03.01.18 at 4:26 pm

#213 Smoking Man on 03.01.18 at 1:25 pm

While T2 was in costume doing additions for the next Ballywood Hit movie.
The USA was getting ready to Imposes 10% Traiff on Alum. 25% on Steel. They just dropped the hammer. USDCAD on fire.
Good bye Hamilton real estate.
Oh well thank our lucky stars , atleased we have a woman and indigounous budget.
__________________________________________
Dow plummets more than 400 points after Trump announces tariffs and you are making light of the consequences? You are really the biggest piece of $hit I have ever seen Smoking Twit. You are a SAD SAD gloating, failed old man who has wasted his life in drunken states at local Casinos. Instead of gloating you should be worried about the impact this could have on thousands of hard working people and their families as a consequence of this completely incompetent old dirt bag in Washington. Every time he open his mouth people everywhere suffer.
My sincere condolences to anyone in the Hammer and the Sault whom could suffer due to one mans craziness in Washington. As for you Smoking Twit you truly are despicable warped sick old man.

#246 Alistair McLaughlin on 03.01.18 at 4:34 pm

@197 Victor, I’m not sure that study means much. Gen Z debt levels should be the fastest growing, as they’re just hitting the age now where they are about to take on debt The oldest Gen Z’s would be 23 right now (born in 1995). Meaning most of that cohort is younger. But, more and more of them are coming of age each year, using credit cards for the first time, taking out student loans and car loans for the first time, and some starting to get mortgages.

I’m not dismissing consumer debt growth as inconsequential, but I don’t think a high growth rate for Gen Z is all that surprising considering they are just starting to enter their prime debtor years.

#247 Stan Brooks on 03.01.18 at 5:01 pm

#243 James on 03.01.18 at 4:26 pm

My sincere condolences to anyone in the Hammer and the Sault whom could suffer due to one mans craziness in Washington.

——————————

I have many friends at Sault Ste., Marie/Algoma.

They survived few privatization attempts, but this.. not sure.

#248 Duke on 03.01.18 at 5:04 pm

#227 crowdedelevatorfartz on 03.01.18 at 2:33 pm
@#205 KLNR
“Money can’t buy your youth back”
+++++

Well.
In that vein(vane?) of anti RRSP thought.
Enjoy the annual holidays in your 20’s, 30’s, 40’s 50’s
But…..
Working til you die in your 60’s, 70’s is no fun either……..

=================

Not true for everyone. Working past 70’s certainly good in many cases. I have someone at my work still working as a part-time contractor after he retired at 74, and he really enjoys coming to work. He has no financial need as he has over 20,000 company shares at $240 but still wants to work and hang out with people. Instead, he takes 2-3 months of vacation. He is my role model and I plan to do the same.

Imagine you make a decent income and spend all of it just for you and your spouse without touching any of your retirement fund. That sounds awesome.

It isn’t easy to live on a limited budget, and you can’t play golf or travel everyday. What’s important is a good work-life balance.

#249 Headhunter on 03.01.18 at 5:06 pm

#243 James on 03.01.18 at 4:26 pm

chillax dude. Smokey is right in essence, Trump is putting america 1st maybe our politicians should put Canada 1st?

Maybe we should innovate instead of just relying on a cheap CND$$$ to even things out?

Call Trump all the names you want he is doing what the voters asked him to. Its called “Democracy” Ever heard of it? #freesmokinman

#250 Stopwhiningstartliving on 03.01.18 at 5:12 pm

Garth,

SCM needs professional help and you are enabling. . Help us and SCM by making the ban permanent!

#251 tccontrarian on 03.01.18 at 5:29 pm

The Dow is 5,000 points above where it was a year ago. Keep your pants on. – Garth

Another down day…a series of lower highs, IMO. So, when exactly are people supposed to ‘worry’??
Personally (as I’ve indicated in the past), I’m not worried – I’m short and happy to see the US markets go down.
BTW, my pants are on…it’s people’s shirts I’m worried about. -TCC

#252 Stan Brooks on 03.01.18 at 5:33 pm

Screwed Canadian Millenial epitomizes this place.

It will be sad to lose its character.

#253 IHCTD9 on 03.01.18 at 5:41 pm

#200 LivingLarge on 03.01.18 at 12:03 pm
——-

I agree. When I said “a guy has options”. I was talking about the same stuff you posted.

I too don’t want to croak with a million sitting in an RRSP!

#254 Stan Brooks on 03.01.18 at 5:41 pm

#249 tccontrarian on 03.01.18 at 5:29 pm

I bet on 25-40 % decline from the top. Giving it 70 % chance if they/the Fed continue with rate hikes.

Hedged with USD, Euro, gold, some commodities.
No shorts.

US is very afraid of inflation, they know something we don’t.

I won’t be surprised if we get some horrific shakedown on the market.

It will wipe us/Canada from the map with our policies.
I expect 50 % (total) inflation in Canada in the next 3-4 years.

0.5 % direct Canadian exposure, some through commodity ETFs.

#255 domain on 03.01.18 at 5:48 pm

#42 LivinLarge,

I just called the individual tax inquiries line (1.800.959.8281). I did have issues getting through the week before when I was calling in the afternoon, but I put a call in this time at 6:45am Pacific and I got through.

#256 KLNR on 03.01.18 at 5:50 pm

@#227 crowdedelevatorfartz on 03.01.18 at 2:33 pm
@#205 KLNR
“Money can’t buy your youth back”
+++++

Well.
In that vein(vane?) of anti RRSP thought.
Enjoy the annual holidays in your 20’s, 30’s, 40’s 50’s
But…..
Working til you die in your 60’s, 70’s is no fun either……..
___________________________

since when is enjoying your youth while you have it anti RRSP? It is possible to take a nice yearly holiday, own a decent ride, a home and max your RRSP.
Why such a curmudgeon? Didn’t enjoy your youth eh?

#257 Ronaldo on 03.01.18 at 6:30 pm

#190 Renters Revenge

”It’s probably preaching to the choir here, but that means every $5000 vacation you go in your 20’s costs you sixteen (16!) $5000 vacations in your 60’s.”
—————————————————————–
Just keep in mind that the $5000 dollar vacation today could be 16 x more expensive 40 years from now if costs rise at the same rate of 7%. Take that vacation now and enjoy it while you are still young.

#258 M on 03.01.18 at 7:29 pm

A kid worth listening to:
https://www.youtube.com/watch?v=ywelSxtcrKE

0.0001 of millennials are actually brilliant. Kudos to their parents.

#259 slick on 03.01.18 at 11:48 pm

Re: #183 Deplorable Dude
#196 Tony

I set up TFSA’s for my 4 kids.
I supplied the contribution, on the condition the money came back to me when they wanted to put their own money in.
They gave me back the total, and they have use of the room that is left.
My eldest has over $60K of contribution room.
The biggest favour you can do for them is set up the TFSA in their name, and show them how to use it.
Lending them the money is at your option.