Big things

UGLY modified

Big things can change in a wee amount of time. For example, yesterday I mentioned oil fell 3% on Monday. On Tuesday is gained 3%. Understanding you have no clue what comes next is why investing is different than gambling – a lesson most people never learn.

Buying options, futures, gold or even individual stocks (especially the ‘juniors’ that a friend of your BIL’s  cousin is hyping) constitutes gambling. The people who roll the dice and occasionally score come to blogs like this to brag about it. The 98% who lose their shorts never utter a peep. This is human nature. Almost everybody blows their money when they buy a lotto ticket. You ever only hear about the winners.

Investing, on the other hand, is making money slowly, predictably, tax-efficiently and with substantially less risk. Success is within everyone’s grasp. This blog has often extolled the virtues of balance (between fixed income and growth assets) as well as global diversification (be careful about maple). Hell, I’ve even broken down a model portfolio with weightings by asset class, and told you all about ETFs. If you’re still dicking around with high-fee mutual funds or a bank-brokerage portfolio of 28 stocks, you have nobody else to blame. Not even [email protected] or the advisor with the nice Porsche.

Today let’s review ways The Government actually makes investing easier and more profitable. Yes, I realize I’ve been a little querulous about the Hot One lately, but that’s simply because I’m too gnarly to fall for the hopey-changey thing. I’ll await proof T2 was a good choice and not merely the anti-Harper. Meanwhile here are five things I doubt he’ll screw up much more:

The TFSA. This is still a gift, even though the contribution limit was imperiously, politically and needlessly bobbed. So starting on Friday you have $46,500 in available contribution room, which is damn near a hundred grand between a couple. It boggles the mind that millions have billions in mutual funds sitting in online brokerage accounts, and 93% of all TFSAs have not been maxed.

Do they think these are savings accounts? Or that you can’t make a contribution in kind? Meh.

Well, two key points. The TFSA is gold if you are young, or old. For the kids it’s the best way of growing money for the future – maxing it yearly and investing in moderate growth ETFs will yield a great result. Start with $5,500 and add a hundred bucks a week for 30 years at a 7% return and you end up with $576,000 of which $414,000 is taxless growth.

This brings us to the old part. Money taken from a TFSA as income (the amount above will yield $3,300 a month in non-reportable cash flow) is not considered taxable. It doesn’t exist to the feds. It won’t diminish your CPP or OAS or be added atop pension income and shove you into a higher tax bracket. This is the sole reason every smart person needs to max their TFSA. And 93% of Canadians are not smart.

Second, the RRSP. No, it is not for retirement. Forget that. This is a device for tax-shifting.

The more money you make, the more massive the advantage of making an RRSP contribution, since this is a tax shelter 100% geared to the wealthy. (And T2 attacked the TFSA, which is completely egalitarian. Weird.) So you can deposit up to $25,370 in a plan, get $12,700 back as a tax refund (in the top bracket), then take the money out later when your income falls. No, that doesn’t have to be in retirement. It can be a sabbatical, a lay-off or a year when you are preparing to launch a billion-dollar business writing a daily pathetic blog.

This is shifting tax from a high-income year to a low-income one. And in an uncertain economy it’s why everyone should have a fat RRSP.

Third, marriage. Conjugal financing alone make it worth the effort. The feds have a slew of ways allowing this to happen – like joint investment accounts. With one in place all the gains accruing from a non-registered portfolio can be divided between spouses, instead of being attributed to the person in the higher tax bracket. Or a spousal RRSP, which lets the higher-taxed spouse reap the tax benefit while the less-taxed one gets the money. Or, as above, you can fund your spouse’s TFSA. Or pension split when you start to dry up. And all the while, you get your socks washed.

Fourth, free cash for kids. It always stuns me how many parents don’t open an RESP for their kids, since it’s possible to get a 20% return on the investment before you actually invest anything. If you pony up $2,500 a year, the feds will throw in $500 – no questions asked. Year after year after year.

Just remember to open a family plan for multiple tots and avoid the Baby Vultures who hang around hospitals with their sleazy, high-fee RESPs. Do a self-directed instead. And remember, if your kid turns into Justin Bieber most of the RESP can be rolled into your own RRSP. Or, you can use it for his bail money.

Finally, earn the right way. When you take income working, collect interest from a dead-end GIC or scoop rent from a tenant, that cash is taxed at the highest level. For example, if you have a job paying $90,000 your average tax rate is 24%, but your marginal tax rate will be 43%. That means if you then clear $12,000 renting out a condo, every dollar will be subject to that higher tax – and you lose more than five grand.

But if you earned that extra $12,000 in the form of capital gains on investments (like a portfolio of ETFs, for example) the total tax payable would be just $2,600 – because half a cap gain is tax-free and the other half is subject to your marginal rate. It’s a massive difference. All for making the same money in a different way. And no toilet to fix.

See? This proves you can elect people with a tax fetish and still have fun. I should lighten up.

191 comments ↓

#1 Broke Dick on 12.29.15 at 4:53 pm

Where’s Tylenol?
Missing at sea?
Banned?

In therapy. Too much blog. — Garth

#2 Doug t on 12.29.15 at 4:57 pm

I told my wife to retire – we can’t afford for her to work

#3 dontcallmeshirley on 12.29.15 at 5:02 pm

Don’t belittle options Garth. Lots of pros use these for hedging and portfolio construction.

ETF shares can be accumulated cheaper via options than buying direct.

The blog ain’t for ‘pros’. Just us common folk. — Garth

#4 JR on 12.29.15 at 5:02 pm

http://www.news1130.com/2015/12/29/flight-agreements-could-be-a-boost-for-yvr-province/
BC Booster!

#5 MSS on 12.29.15 at 5:07 pm

Anyone with US citizenship will probably have to pay large accounting fees to have a TFSA (or RESP) which is why my husband doesn’t have one.

Accounting fees for what? If you file with the IRS the situation is simple and clear. — Garth

#6 Broke Dick on 12.29.15 at 5:09 pm

Third, marriage. Conjugal financing alone make it worth the effort. -GT

you just lost Freedom First

#7 For those about to flop... on 12.29.15 at 5:12 pm

I gifted my wife 15k this year to get her TFSA up and running.
One day she will gift it back if needed but she can keep the distributions and all the gains.

It just makes sense ,little seeds can turn into big trees…

#8 Panhead on 12.29.15 at 5:13 pm

#2 Doug t on 12.29.15 at 4:57 pm
I told my wife to retire – we can’t afford for her to work

I told my wife the same thing but she just won’t listen either. Maybe it’s a female thing …

#9 paul a on 12.29.15 at 5:17 pm

heres a tip for would be investors, if you are looking at US based blue chip stocks ie GE CATERPILLAR etc , did you know that you can purchase shares directly from these companies personally ,without inuring any fees ,i have not paid a cent in handling fees brokerage fees etc, the issuing corporations pay the postage to send your shares via the us postal system and you actually have a paper share certificate. i admit i am a cheap bugger but figure that a penny saved is a penny earned – cut out the middle man to your benefit- a lil bit of research will show you the way.

#10 Craig on 12.29.15 at 5:17 pm

Sorry to be off topic today folks but to steal a phrase from Art Cashin , I’m going to “marinate a few ice cubes” while I listen to one of the greatest ballads ever. RIP Lemmy !

https://www.youtube.com/watch?v=gFo0-Zb_p_8

#11 Mark on 12.29.15 at 5:23 pm

“#209 Alvina Knows on 12.29.15 at 12:08 pm ”

Get treatment for your mental or psychological illness immediately. That’s all I gotta say in response to your shameful post. (which, BTW, depicts neither myself, nor Harper, and appears to be heavily photoshopped).

Buying options, futures, gold or even individual stocks (especially the ‘juniors’ that a friend of your BIL’s cousin is hyping) constitutes gambling.

I agree, but its far less ‘gambling’ to be buying into the gold sector at prices which are at generational lows, than it was buying the sector after it had run up.

The economy, over the long run, depends upon at least a relatively small group of investors taking outlandish risks with their capital. Yes, its true, most of the time investors end up failing in their small businesses, but I highly doubt the economy would function very well if literally everyone just sat on the couch and bought neat portfolios of index funds. Actually, the more that people adopt a ‘boring money’ strategy, the greater the potential returns that are left off the table. IOW, indexing is great until it isn’t.

#12 Leo Trollstoy on 12.29.15 at 5:25 pm

#107 pwn3d on 12.28.15 at 9:54 pm
Garth, please give us all a Christmas gift and ban this liberal racist ageist idiot.

#194 squidly77 on 12.29.15 at 10:42 am
I do find your comments at times to be racist, you are a very offensive blogger that most would just wish would go away

For the above posters, I want to assure you that your 6th sense is correct. Mark was temporarily banned from RFD for being condescending and racist. It’s unfortunate because due to this ban, he has migrated over here in order to continue polluting interesting discussions. Thankfully Garth moderates discussions better than RFD.

Your post reeks of hubris and certainly doesn’t help your reputation on this forum.
http://forums.redflagdeals.com/credit-card-fraud-experiences-1401849/#post17692307

http://forums.redflagdeals.com/isnt-n-word-racist-against-non-blacks-1064978/3/#post13227577

In addition to investing awareness, Mark seems to lack social awareness and was eventually banned for passing off information that was either misleading or completely wrong (as he has done here). Most of the topics are the same. E.g. deflation, USD/CAD, Vancouver/Toronto RE prices, IT/engineering jobs, etc. I expect him to lay low for awhile.

#13 mitzerboy aka queencity kid on 12.29.15 at 5:34 pm

thanks again for the words of money wisdom garth

#14 SunShowers on 12.29.15 at 5:42 pm

“But if you earned that extra $12,000 in the form of capital gains on investments (like a portfolio of ETFs, for example) the total tax payable would be just $2,600 – because half a cap gain is tax-free and the other half is subject to your marginal rate. It’s a massive difference. All for making the same money in a different way. And no toilet to fix.”

$12,000 in capital gains would require principal invested assets of over $170,000 (assuming 7% growth). Not many people have $170,000 cash sitting around with which to purchase investment assets. All they have is the ability to indebt themselves, and there’s only one asset that can be purchased (at least 95% of it) with debt.

I’m not saying doing that is a good idea (it’s not), but my point is that while you certainly know your stuff, sometimes (like when you casually assume people have six figures worth of liquid assets to invest) you come off as disconnected from the plight of Canadians, and very “let-them-eat-cakeish”.

Actually lots of people have accumulated $12,000 in capital gains, are ignorant of tax treatment and would be wise to harvest it. Besides, this blog is not for everyone. Thought I made that clear. — Garth

#15 Leo Trollstoy on 12.29.15 at 5:45 pm

A lot of jam packed info in today’s post. Like a megadose of mega nutrients. I hope the younger readers pay attention. I would bookmark Garth’s post today and repeatedly re-read it. Seriously.

#16 IHCTD9 on 12.29.15 at 5:46 pm

In addition to the money sense Garth posted today, there are also things you can do to reduce your expenses, and your exposure to taxation as well.

Everyone’s different in their abilities here, but everyone should be making 2016 the year to limit their exposure to taxation. T2 really has no choice but to put the revenue tool pedal to the metal for probably his entire tenure – don’t feed them any more than the bare minimum!

#17 Red Deer Rob on 12.29.15 at 5:51 pm

Relevant:

http://www.greaterfool.ca/2014/05/15/the-millennial-portfolio/

#18 Canadian on 12.29.15 at 5:55 pm

Good post. Spousal planning has been a Godsend. What are your thoughts on having more than 1 RRSP with different timelines on each? Is it a waste of time trying to work around the RRIF coversion and withdrawal guidelines?

Say for example I have 2 RRSPs to utilize depending on what age I retire?

#14 SunShowers on 12.29.15 at 5:42 pm

Hasn’t it sunk in yet that not everyone is as poor and bitter as you are? I would have thought you would have changed your user ID after you so thoroughly made a fool of yourself in the comment section during the election.

#19 For those about to flop... on 12.29.15 at 5:55 pm

If you’re still dicking around with high-fee mutual funds or a bank-brokerage portfolio of 28 stocks, you have nobody else to blame. Not even [email protected] or the advisor with the nice Porsche. -Garth

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

I know this comment is going to get my knuckles rapped with a meat mallet but I will put it out there regardless.
I am an investment hack so when I looked into starting my TFSA ,I looked into ETFs but thought they were not for me.
2015 was not a good year for most but the bank I have my mutual funds with have 24 options to invest in.
19 of these made gains .Of the 5 losers the losses ranged from 1to 5%.
The winners included us eqy up 20%, Europe eq up 18% and even though China had a collapse mid year it still rose 15% in the last year.
The irony is they don’t have separate funds for precious metals and reits so I couldn’t get into trouble if I tried.
For the record I made sure my wife had some reits in her account with a different company to make our pie a little fuller.
4 out my 6 funds ended up positive with dividends as gravy but I still found time to paper lose some money in India.
One day I might take the training wheels off but for now this suits me best even with the stupid mers.
At the moment ETFs still stand for Easy To F -up around here.
At this moment and to perhaps soften up Garth’s meat mallet I would like to thank him for his guidance this year on the blog.
As we say back home in Oz…easy tiger!

#20 Dont Believe The Hype on 12.29.15 at 5:58 pm

Problems in Calgary starting to hurt it seems, as a record number of people send high-end personal items to consignment stores:

https://ca.news.yahoo.com/calgary-consignment-stores-deluged-high-123000887.html?nhp=1

#21 JR on 12.29.15 at 6:00 pm

More good news for BC!
http://globalnews.ca/news/2422776/a-look-at-taxes-and-fees-going-up-and-changing-in-b-c-in-2016/

#22 Millenial on 12.29.15 at 6:06 pm

“The TFSA is gold…”

Funny you bash gold, then that one slip.

Anyway, happy new year Garth.

#23 Doug t on 12.29.15 at 6:13 pm

Bigger dog wow

#24 JakeR on 12.29.15 at 6:16 pm

“Every day but Sunday (which is for riding) you can come here for free opinion and guidance on investing, real estate, macroeconomics, tax avoidance and hot marital advice”

Well I’m hoping for some of this.

Two years ago I got a good job, and since I live in a cheap apartment with a roommate, I’m “saving” a big chunk of it. Unfortunately, for maybe eight years after graduating I made hardly any money, so I’m “behind the curve”, so to speak. I don’t plan on buying a house, car, or anything else expensive like that. I also can’t do self-directed investing, where I work I might hear hot stock tips, so that’s a no-no. There’s some “safe” government debt I could have bought into, mentioned on this blog before.

I have an emergency fund and some liquid TFSA investments, but am starting to put TFSA money into a credit union investment. It’s a market-linked GIC. I’m sure I can hear some hissing. It’s Meridian’s Global 5, which unlike every other similar GIC I’ve read about does not have a cap. I don’t just get a percentage of gains, but the whole thing. I don’t get a maximum of x%, but the whole thing. And “the whole thing” is the gain or loss of five markets (US, Canada, Japan, EU and UK), so it’s pretty diversified.

There’s downsides, of course. It’s a GIC , and the minimum is 0% instead of the usual 0.6% or something. In fact, it’s so good I almost wonder why I don’t invest in nothing else. But it’s a GIC, and while it’s a very diversified fund, it’s just one fund. I need a reality check.

#25 MSS on 12.29.15 at 6:18 pm

TFSA’s and RESP’ are considered “trust accounts” by the IRS. There is no such thing as a tax free savings account in the USA. The extra fee an accountant charges to do a tax return for such an account is around $1500.

Bizarre. Get a new accountant. — Garth

#26 Ray Skunk on 12.29.15 at 6:19 pm

As someone getting married next year, you have my attention.

Living in Ontario, a bespectacled woman is going to get her mitts on half my money eventually.
May as well make it the good looking one I’m sleeping with.

Freedom First: come at me, bro.

#27 Pessimization Expert on 12.29.15 at 6:20 pm

Insisting on 7% returns is not very convincing given what we’ve been seeing, plus demographics. Maybe you can give what happens on a 7% return but also what happens if it’s 4%, which looks more realistic to us small investors.

It’s the long-term average. — Garth

#28 Love my Kia on 12.29.15 at 6:31 pm

I max out on my TFSA every year, that’s why I’m more than happy to drive a KIA. Love it too.

Going into January and the new years’ resolutions and the whole bit, this is a well timed read.

#29 SeeB on 12.29.15 at 6:31 pm

Thank you for the encouragement today, Garth. I was hoping there might be some extra recommended reading for choosing ETFs to hold in my TFSA?

#30 EmpCod on 12.29.15 at 6:32 pm

Investment income from a joint account must still be reported proportionately to each spouse’s individual contribution… No free lunch there. Unless gaming the CRA is your thing.

The theory is not matrimonial reality. The proceeds of a home sale, for example, are joint, regardless of the name on title. Investment gains can be split equally. — Garth

#31 Alvina Knows on 12.29.15 at 6:39 pm

#12 Leo Trollstoy on 12.29.15 at 5:25 pm

His multiple temporary bans and use of two or more usernames (Mark77 & Pitz) was certainly a factor in his ultimate removal.

Mark77 and Pitz had a love of the Oldsmobile Cutlass and Jags. He was a frequent poster in the Automobile section before he became a real estate guru.

If Mark77/Pitz ever dreamt of owning a home, this quiet property in Moose Jaw – https://goo.gl/maps/wWVvXtjb2xC2 – would be it!

#32 JB on 12.29.15 at 6:39 pm

My millennial son wishes he was born back in the ’50s like his old man.
Not because of the spectacular real estate returns in Vancouver, cheap education at UBC (tuition $1200 a year) or better job opportunities…No.
What he wishes for is not the ‘easy’ money.
What he’s jealous of is the music, the bands, the shows: the Clash at the Commodore, the Talking Heads, Blondie, Magazine, Devo, OMD, the B-52’s, The Psychedlic Furs, Human League, Madness, Lloyd Cole, Joe Jackson, The Proclaimers Lene Lovich, Echo and the Bunnymen, Ian Dury, the English Beat or Tears for Fears. Going to the Town Pump, the Railway Club or Club Soda to see the local acts like Spirit of the West, the Odds, the Payolas, 54-40, Art Bergmann, DOA or the Pointed Sticks. Visiting Expo ’86 and seeing the Cure, the Eurythmics, Harry Belafonte or Suzanne Vega.
Money is money,…..meh.
What makes life worth living is what you spend some of it on. Hopefully its something that feeds the soul and the memories last a lifetime.

#33 BlackDog on 12.29.15 at 6:40 pm

Re: #5 “Anyone with US citizenship will probably have to pay large accounting fees to have a TFSA (or RESP) which is why my husband doesn’t have one.

Accounting fees for what? If you file with the IRS the situation is simple and clear. — Garth”

There is nothing simple, nor clear about the USA’s attack on one million Canadian citizens deemed ‘US persons’ by USA. Apparently a Canadian is a Canadian but not if owned by the USA. Rather such special Canadians are US taxpayers on their Canadian income (including investment income and gov’t grants on TFSAs, RESPs, RDSPs), and most are criminals for not being aware they are required to report annually, the details of their so-called ‘foreign’ (aka Canadian) financial accounts to the American Financial Crimes Enforcement Network (FinCen). The penalties for non-compliance are devastating, and our Canadian banks are in the process of ratting on fellow Canadians because the CONS made it legal to do so in their last omnibus budget bill.

This is big shit, but no one is talking about it!
Our media and government has done a good job of keeping it all hush hush for some time now, but we will be hearing more this year about a lawsuit filed in 2014, originally against the Cons, which T2 has now inherited.

The outcome will change forevermore the meaning of our Charter of Rights and Freedoms. Stay tuned. As a Canadian for as long as I have memory, yet tainted with ‘Usness’, I am scared.

#34 When will they raise rates? on 12.29.15 at 6:48 pm

#17 Red Deer Rob on 12.29.15 at 5:51 pm

Relevant:

http://www.greaterfool.ca/2014/05/15/the-millennial-portfolio/
——————————–
40% Canadian…

Is that still Garth’s recommended allocation?

I said 15% maple growth assets. Still about right. — Garth

#35 Gray man on 12.29.15 at 6:49 pm

http://thewealthwatchman.com/will-the-new-swiss-referendum-reign-in-the-banking-beast-or-create-a-new-monster/

There will be a test tomorrow to see who reads the article.

#36 Kreditanstalt on 12.29.15 at 6:54 pm

“Investing, on the other hand, is making money slowly, predictably, tax-efficiently and with substantially less risk. Success is within everyone’s grasp.”

Haha. Good one. In our new world of disinflation, if not outright DEflation, yield is going to outright disappear. “Investing” will too.

Look at the demise of the hedge funds: forced to speculate. Companies devour one another and play financial games, buying back shares, instead of expanding capacity. Stocks are held for as little as milliseconds. Bonds and stocks of cashflow-less entities and governments are bid to the moon.

You and I will progressively have to do that too. “Investing” is dying, yield (ESPECIALLY “safe” yield) is shriveling and risk is soaring.

You don’t do much reading, do you?

Don’t invest much, do you? BTW, you are my guest here. Act like one. — Garth

#37 David Lee on 12.29.15 at 6:59 pm

Unless T2 speaks up, I think it’s time to leave YVR.

Find some other slaves to support this laudromat of a city. The only winning move is not to play.

http://www.scmp.com/comment/blogs/article/1896423/equity-affordability-justin-trudeaus-vacuous-response-vancouvers

#38 mark on 12.29.15 at 6:59 pm

“But if you earned that extra $12,000 in the form of capital gains on investments (like a portfolio of ETFs, for example) the total tax payable would be just $2,600 – because half a cap gain is tax-free and the other half is subject to your marginal rate. It’s a massive difference. All for making the same money in a different way. And no toilet to fix”

In Garths above example and too the point of tax-shifting with a RRSP, wrap your head around the fact you can tax shift all of the money your going to pay(in taxes) in a non-registered account and make a RRSP tax-shift contribution in the same year to cover your capitol gains tax or better yet your dividend tax credit from income earned in a non-registered account and pay Zero tax, (at least till later upon rrsp withdraw!)
Its another way for those who don’t care for the straight rrsp option.

#39 Brian on 12.29.15 at 7:01 pm

US fed may slowly raise rates over the next 1-2 years. Canada is becoming a 2nd world economy and will resist rate increase as long as possible. Say another 1-2 years. RE prices are sticky so any declines in prices will take years as well. So maybe in a decade 604 will see a RE decline?

#40 Mark on 12.29.15 at 7:08 pm

“In addition to investing awareness, Mark seems to lack social awareness and was eventually banned for passing off information that was either misleading or completely wrong (as he has done here). “

Not at all true. I have never misled anyone here, or anywhere else. Don’t need to — the facts, of falling RE prices across Canada, speak for themselves. Step back from the keyboard and actually look at what you’re typing before you type it. You, OTOH, are a complete troll, and you are impressing nobody by behaving in a belligerent manner towards a well respected contributor to these blog comments.

To your claim that I don’t know about investments, you simply do not know what you are talking about. I derive more than the average all-in paid compensation of a Canadian in annual returns from my investments alone.

As for RFD, a few demonstrably dishonest Realtor types pestered the moderators constantly, and drove a lot of very good and informative posters away from the forum. Including one guy, PF4, who actually generated data that made it very clear that the sales mix had shifted dramatically (no wonder the Realtors/mortgage brokers were so eager to get him banned!). Really unfortunate, but the fact that a few Realtors and mortgage brokers had a lot of time and/or reason to hang out on a couponing website and spread lies about the state of the RE marketplace is proof, in and of itself of the poor state of their businesses.

And to call me racist, not a shred of proof to your baseless allegation. In fact, I am one of the most vociferous defenders in the comments section of the fact that it is Canadians speculating with large amounts of CMHC-enabled leverage, not “Chinese”, that have driven GTA/GVR RE pricing to the extremities reached ~2.5 years ago.

#41 BG on 12.29.15 at 7:16 pm

I’m trying to apply your RRSP advice this year Garth.
Been working as an incorporated consultant for little more than a year.
I chose to pay myself fully in salary as the dividend is too dangerous for my taste (In my situation, I can see reasons why CRA would call me a personal service business).
I don’t want to raise any flag at CRA ever, and I’m willing to take the hit financially for that.

Long story short 2015’s been a good year and I could pay myself anywhere between 100k and 140k.
I have 40k RRSP room (immigrant – never used any RRSP room – TFSA is maxed).

So I will pay myself 123k and contribute 40k to the RRSP to bring the taxable income to 83k.
Because I don’t foresee myself making more than 83k on an average year, and in Quebec 83k is the limit between the tax brackets of 38.37% and 42.37%.

I plan to get it out on a year when I have 0 other income so it should be in the lowest tax bracket and I will have saved around 5k + any investment earnings.

I hope I’m doing this right.
I still don’t understand why the Libs went after the TFSA rather than the RRSP.

#42 Chaddywack on 12.29.15 at 7:16 pm

Except Garth most people I know in Vancouver don’t declare a penny of their rental income so their effective tax rate on that income is zero.

Best line I heard: “It’s an illegal suite so I don’t have to declare the rental income”

*facepalm*

#43 Bobs ur uncle on 12.29.15 at 7:19 pm

#19 For those about to flop… on 12.29.15 at 5:55 pm

Flop – as someone who felt similar to you a few years ago, I’d say don’t let ETFs intimidate you. Take a restively small amount – 500? 100? And buy a broad-based index ETF. I bought VUN at the start of the year and am quite happy I did. Whether that’s the right choice for 2016 or for you is debatable, but if you did a little research on a decent low-cost plain vanilla fund, and bought that small amount and considered it an ETF education fee, then it’d be worth the $$ just to get comfortable with the act of buying one. The cost difference va mutual funds makes it totally worth your while.

#44 Retired Boomer WI on 12.29.15 at 7:19 pm

Great, meat-packed post tonight! Wonder how many of the readers will avail themselves to the “FREER” money awaiting them? 93% seems the available audience, right?

I am all over screwing uncle sam, or his counterpart the CRA out of money legally! Thanks for the post!

Strange thing, you have to have some ‘extra’ to save first, right? How many use RRSP and TFSA in your country? We are just as lazy and illiterate here. Look at the stats!

While my wife and I were out for cocktails, and dinner tonight, she said, “Thank you for planning our retirement so well.”

2016 begins our 5th year in retirement. Today, we have more than we started with 5 years ago – AFTER taking an average of $22,000 a year to help our retirement desires.

All built on the American version of TFSA and RRSP, and together, we earned over $100,000 only 1 year of work -our last!

Think it can’t be done today? HA! Think, Again young 1.

#45 Mark on 12.29.15 at 7:20 pm

“His multiple temporary bans and use of two or more usernames (Mark77 & Pitz) was certainly a factor in his ultimate removal.”

Not true. And Garth should ban you for your complete trolling here. Your comments are completely untruthful, off-topic, and you need help for your psychological illness.

#46 When will they raise rates? on 12.29.15 at 7:27 pm

#40 Mark on 12.29.15 at 7:08 pm

Not at all true. I have never misled anyone here, or anywhere else. Don’t need to — the facts, of falling RE prices across Canada, speak for themselves.

….”salesmix”
—————

Hi Mark, I’m very interested in seeing this data that you often refer to.

Do you have a link?

Thanks!

#47 PillboyKirk on 12.29.15 at 7:28 pm

Today’s post mirrors an exact conversation I had with my friend. The topic was purchasing an investment condo in downtown steel town where there’s a guaranteed opportunity to make money because of gentrification and the new LRT that’s to be completed in 2020. I gently reminded him that it’s not how much you make but how much you end up keeping at the end of the day. Explained the tax code briefly, along with TFSAs, and suggested he look at couch potato investment but to be very careful of commission based advisors when moving forward.

He got me my sweet current gig and I owe him for it. Now if he doesn’t heed caution, whatever happens is on him.

#48 For those about to flop... on 12.29.15 at 7:35 pm

Mark said:

Not at all true. I have never misled anyone here, or anywhere else. Don’t need to — the facts, of falling RE prices across Canada, speak for themselves. Step back from the keyboard and actually look at what you’re typing before you type it. You, OTOH, are a complete troll, and you are impressing nobody by behaving in a belligerent manner towards a well respected contributor to these blog comments.

/////////////////////////////
Mark , I don’t know what drugs you are on but can you send me some as I think they are more powerful than the Tramadol i am on and I am still feeling post surgical pain.
Or is it just the mushrooms ,some off them are poisonous don’t you know…can cause grand delusion.

#49 Nodebt on 12.29.15 at 7:38 pm

#26 Ray Skunk
Please post pic of future wife! Thanks

#50 pwn3d on 12.29.15 at 7:40 pm

#12 Leo Trollstoy on 12.29.15 at 5:25 pm

In addition to investing awareness, Mark seems to lack social awareness and was eventually banned for passing off information that was either misleading or completely wrong (as he has done here). Most of the topics are the same. E.g. deflation, USD/CAD, Vancouver/Toronto RE prices, IT/engineering jobs, etc. I expect him to lay low for awhile.
————–
Like an idiot savant, whose one true gift is to get everything wrong. A real life Costanza.

I find it especially amusing when he talks IT, about lack of IT jobs when the lack is in good employees not jobs. Or when he said the dropping CAD wasn’t affecting prices for IT equipment a few days after Cisco increased their list price 12%. I don’t even think he knows he’s a troll.

#51 Not 1st on 12.29.15 at 7:42 pm

Garth T2 will be back for the rest of those tfsa balances some day. No politician can resist all that untaxed money sitting there. Probably be tapped for some bogus boomer bribe in about 5 yrs time.

#52 Rook on 12.29.15 at 7:44 pm

I need advice for Victoria.
First time homebuyer here in this city. Do I wait or should I consider buying now? I follow rule of 90 and can pretty well afford an increase to 5 or 6% in 5 years.
Thanks.

#53 Not 1st on 12.29.15 at 7:47 pm

And Garth what about the “mincome” that T2 and others are talking about implementing. We will all get 1000 per month free cash forever.

#54 Guillaume on 12.29.15 at 7:50 pm

Question about the strategy of using the RRSP as a tax-shifting tool. When you make taxable RRSP withdrawals, do you “gain back” the contribution room for use in upcoming years with higher earnings?

#55 BlackDog on 12.29.15 at 7:50 pm

Stomping feet! So angry! Don’t get how GT can be so in your face anti-racist, yet completely unaware of the torment that so many Canadians, many facing looming retirement, are now facing as they realize they are owned by the USA. We are not talking about American tax evaders here. We are talking about Canadians with tenuous US ties, no US income, just a freaking US birth place, some with no US ancestry at all…we are no CRIMINALS! Seriously BlogDogs do you not get how Canada’s rolling over for USA’s FATCA negatively effects you too?….well, maybe not you right now, but your kids eventually…Garth do you have kids?

#56 Godth on 12.29.15 at 7:51 pm

Vanishing Point
http://www.newyorker.com/books/page-turner/vanishing-point

#57 earthboundmisfit on 12.29.15 at 7:52 pm

@32JB
Dude …. please. Pink Floyd Montreal Forum Dec ’73.

#58 kommykim on 12.29.15 at 7:55 pm

RE:

#19 For those about to flop… on 12.29.15 at 5:55 pm
I know this comment is going to get my knuckles rapped with a meat mallet but I will put it out there regardless.

I don’t think Garth is against low fee index mutual funds, but rather the higher fee ones ( 2% or more) that really give you little in return for the fee. Much better to pay 1% for professional hand holding instead if you are not going DIY with a discount broker.

#59 Paul on 12.29.15 at 8:00 pm

A guy goes into a bar in Louisiana where there is a robot bartender.  The robot says, “What will you have?
The guy replies, “Whiskey.”
The robot brings back his drink and asks, “What’s your IQ?”
The guy say, “168.”
The robot continues to talk about physics, space exploration, and medical technology.
 
After the guy leaves and the more he thinks about it, he the more curious he gets, so he decides to go back.
The robot asks, “What’s your drink?”
The guy answers, “Whiskey.”
The robot returns with his drink and asks, “What’s your IQ?”
The man replies, “100.”
The robot talks about Nascar, Budweiser, the Lions, and LSU.
 
The man finishes his drink, leaves, but is so interested in his “experiment” that he decides to try again.
He enters the bar and, as usual, the robot asks him what he want to drink.
The man replies, “Whiskey.”
The robot brings the drink and asks, “What’s your IQ?”
The man answers, “50.”
 
The robot leans in real close and asks,
“So . . . are . . . you people . . . still happy . . . with Trudeau?”

#60 Cdn Mom on 12.29.15 at 8:08 pm

An important point regarding RESPs started late:

“Back contributions” can be made, collecting the full grant for the “back year”, in addition to the current year.

For example, if you have never contributed, you can contribute $5,000, and receive the full $500 grant for the year you contribute, and $500 grant for a previous year you had not contributed.

There are some rules, such as there must be a contribution by the end of the year the child turns 15, IIRC, and it ends when the grant eligibility period ends. I believe that is 18.

I have done this for one child, contributing $5,000 per year from 15-17, and received $3,000 in grant money. Prior to age 15, we could not afford RESP contributions.

#61 Smoking Man on 12.29.15 at 8:21 pm

Reading the rum diarys.

Glued to it, see you dogs in a few.

#62 BlackDog on 12.29.15 at 8:23 pm

It is all about the money. Pretend all you want, that you have morals, but it is still all about the money.

#63 Smartalox on 12.29.15 at 8:25 pm

Well, my TFSA contribution room was reduced, but I have over $100k in unused RRSP contribution room.

I had hoped to avoid future taxes (payable to some future government) by making larger TFSA contributions, but instead I guess that I’ll use what would have been TFSA contributions to reduce my tax payable to THIS government (and probably a couple more after it), until all that forwarded contribution room is used up.

Then maybe I’ll take a few years off, and withdraw some of my increased RRSP investments as income.

#64 Nuke on 12.29.15 at 8:38 pm

The RDSP is the most overlooked planning tool in the country. While it is for people who have disabilities, it is 90,000 of government money that you can invest any way you want. 20k in bonds ( simply by opened my the account) and 70k in grants that are up $3 government $ for each $1 you contribute. The Feds are so perplexed that so few have taken advantage of the program they mailed 320,000 letters to those whole qualify telling them to pick up their cash!! Sure there are some restrictions but you can also drop 200k into the plan and still keep all your disability benefits. This program came directly from Jim Flaherty and is a lasting legacy.

#65 cramar on 12.29.15 at 8:38 pm

#5 MSS on 12.29.15 at 5:07 pm
Anyone with US citizenship will probably have to pay large accounting fees to have a TFSA (or RESP) which is why my husband doesn’t have one.

Accounting fees for what? If you file with the IRS the situation is simple and clear. — Garth

————————-

I told my son who is living and working in the U.S. about the TFSA. He wasn’t aware of it and checked into it at Revenue Canada’s website. He found this:

“A person determined to be a non-resident of Canada for income tax purposes can hold a valid SIN and be allowed to open a TFSA; however, any contributions made while a non-resident will be subject to a 1% tax for each month the contribution stays in the account.”

They have made it worthless for a Canadian citizen outside of Canada.

#66 Big things | Realties.ca on 12.29.15 at 8:40 pm

[…] Source: http://www.greaterfool.ca/2015/12/29/big-things/ […]

#67 Freedom First on 12.29.15 at 8:44 pm

#26 Ray Skunk

Ray, I don’t know enough about you or your fiance to justify whether you should or should not willingly put the noose of matrimony around your neck.

#68 Fine Wild Roasted Gonads on 12.29.15 at 8:48 pm

Hey Garth, you getting a new harley this year?… low loonie is putting pressure on the sticker price

http://www.calgaryherald.com/cars/motorcycle+industry+canada+shifts+gears+copes+with+loonie/11619620/story.html

#69 megadose on 12.29.15 at 8:49 pm

15 Leo Trollstoy

A lot of jam packed info in today’s post. Like a megadose of mega nutrients.

Which part was new for you?

#70 Fiendish Thingy on 12.29.15 at 9:01 pm

Anyone with US citizenship will probably have to pay large accounting fees to have a TFSA (or RESP) which is why my husband doesn’t have one.

Accounting fees for what? If you file with the IRS the situation is simple and clear. — Garth

Garth, have you ever completed the IRS paperwork for a foreign income trust (which is what the IRS considers a TFSA to be)? Even the IRS estimates the time to complete the forms at over 40 hours! The forms are so complicated, Turbotax won’t touch them!

And after all that hassle, you have to declare the gains as income and pay tax on it! Tax accountants charge $300 per person to complete the IRS forms for the TFSA.

Until I become a Canadian citizen (and if I renounce my US citizenship) I’m not going anywhere near a TFSA.

#71 Steve-0 on 12.29.15 at 9:02 pm

Hi Garth,

Any idea on what percentage of Canadians max out their RRSP’s? I tried google, but he failed me.

I think i’m doing pretty good, but still away from maxing out my contribution room, knowing what percent of people max out would be a good gauge on how you stand.

#72 S.Bby on 12.29.15 at 9:05 pm

#32 JB
Absolutely correct. Vancouver in the 80’s was fantastic. Not just the city but the culture and the environment in general. Too bad we’ve lost all that and sold our souls for a few bucks… nothing here and now can touch that time.

#73 wade on 12.29.15 at 9:20 pm

Hey….so I thought t2 dropped the next tfsa contrabution back down to 5500 a year …what’s the max as of Jan 2016….ya I could verify/google that shit but I’m lazy

#74 Darren on 12.29.15 at 9:24 pm

Garth says; “….93% of all TFSAs have not been maxed.”

Hey, I’m a 7%’er! No wonder T2 cut my contribution limit.

#75 TRT on 12.29.15 at 9:33 pm

Unlikely that many landlords declare rental income on taxes. At least not here in YVR.

#76 Leo Trollstoy on 12.29.15 at 9:38 pm

His multiple temporary bans and use of two or more usernames (Mark77 & Pitz) was certainly a factor in his ultimate removal.

Mark77 and Pitz had a love of the Oldsmobile Cutlass and Jags. He was a frequent poster in the Automobile section before he became a real estate guru.

I wasn’t aware of how deep his delusions run. Apparently it’s even deeper than I assumed. Garth is good at identifying posters that use multiple usernames here so I don’t think that will be an issue. It’s fortunate that Mark is no longer allowed to mislead new investors on RFD about gold, the CAD/USD, and real estate. At least new readers will be spared and some honest discussion can continue. Accurate information and advice is already difficult to find without fraudulent posters giving advice that they’re neither qualified or certified to give.

#77 IHCTD9 on 12.29.15 at 9:42 pm

#26 Ray Skunk on 12.29.15 at 6:19 pm
As someone getting married next year, you have my attention.

Living in Ontario, a bespectacled woman is going to get her mitts on half my money eventually.
May as well make it the good looking one I’m sleeping with.

Freedom First: come at me, bro.
————

Hopefully she has earning potential, even better if public sector. Life is tough in Ontario without two good incomes, and looks to be getting tougher.

#78 Leo Trollstoy on 12.29.15 at 9:43 pm

Which part was new for you?

Everything that didn’t involve being a landlord. And for all you US citizens, don’t forget that rent is due this week. Happy new year.

#79 Poco Loco on 12.29.15 at 9:45 pm

Easy-to-understand and actionable advice for US (dual) citizens residing in Canada is hard to come by, when it comes to TFSA.

From my inspection of the web, I think most advisors/accountants advise against TFSAs for these people because of the tax reporting/liability exposure.

Tax reporting to the CRA is fairly straight-forward, but even going through a step-by-step US tax accounting software to report to the IRS can be a frustrating and bewildering experience for even minimal income reporting (i.e. wife was unemployed for a tax year), and paying for the services of a Canada/US tax accountant seems like overkill. It’s enough for some dual citizens to renounce their US citizenship.

#80 Smoking Man on 12.29.15 at 9:46 pm

DELETED

#81 IHCTD9 on 12.29.15 at 9:56 pm

#28 Love my Kia on 12.29.15 at 6:31 pm
I max out on my TFSA every year, that’s why I’m more than happy to drive a KIA. Love it too.

Going into January and the new years’ resolutions and the whole bit, this is a well timed read.

——–

KIA’s are rolling crap buckets, it’ll rust out underneath before 8 years pass.

May I suggest an older SAAB 9-3? They don’t rust, and run forever. Plus, if you get a 1999, you have the bonafide 200 hp SAAB B204R “H” block under the hood which is bulletproof, and can run up to 500 whp on stock internals if so desired.

Pick one up for $1500.00, throw $2500.00 worth of mods on it. Enjoy eating Z06’s and Vipers on the way to work, and fighting off hoards of women everytime you get behind the wheel.

Just a friendly suggestion.

#82 Shirley Valentine on 12.29.15 at 9:59 pm

#61 Smoking Man on 12.29.15 at 8:21 pm

Reading the rum diarys.

Glued to it, see you dogs in a few.
…………..

“the novel encompasses a tangled love-story involving jealousy, treachery and violent alcoholic lust”

Oh Smokey man……… I’m flushed…………. can’t wait for your studly beast of a romance novel…… it is nearly finished.. yes?

#83 OXI in GREECE on 12.29.15 at 10:02 pm

Great advice for the 1% of whom most are Govt Workers who continually get raises, have benefits which means NO dental, eye or drug costs and an awesome pension that the working poor pay 50% into…. And guess what !! Yer taxes will keep going up and up and up and up to pay for these 1% of Govt Workers. Welcome to Canada !!

In other words…..most of the population of “actual working people” to quote the late Jack Layton, are not able to use any of this advice. But it is darn good advice.

You’re sad. — Garth

#84 young & foolish on 12.29.15 at 10:03 pm

Great post ….. it’s why we come here (along with the dog pics!) …..

#85 vic guy on 12.29.15 at 10:05 pm

A bedroom in Vic is $650 per/mo minimum.
Tax? Lol.
Slumlords get the best exemption it seems.

#86 When will they raise rates? on 12.29.15 at 10:06 pm

#53 Not 1st on 12.29.15 at 7:47 pm

And Garth what about the “mincome” that T2 and others are talking about implementing. We will all get 1000 per month free cash forever.
——————————
Let’s see…

~ 30,000,000 adults in Canada X $1,000 X 12 Months =

$360,000,000,000/Year

Sounds legit!

#87 Cdn Mom on 12.29.15 at 10:20 pm

I don’t understand how YVR landlords could get away with not claiming rental income.

As an Ontario landlord, I claim ALL rental income. If I didn’t I would be caught. There is an Ontario income tax credit for amounts paid for rent or property tax. The landlord name and rental property address is required on the income tax schedule, or the name of the municipality the property tax is paid to. CRA processes these returns, so CRA would have the name of every landlord in Ontario that has tenants seeking the tax credit.

#88 For those about to flop... on 12.29.15 at 10:20 pm

#43 Bobs ur uncle on 12.29.15 at 7:19 pm
#19 For those about to flop… on 12.29.15 at 5:55 pm

Flop – as someone who felt similar to you a few years ago, I’d say don’t let ETFs intimidate you. Take a restively small amount – 500? 100? And buy a broad-based index ETF. I bought VUN at the start of the year and am quite happy I did. Whether that’s the right choice for 2016 or for you is debatable, but if you did a little research on a decent low-cost plain vanilla fund, and bought that small amount and considered it an ETF education fee, then it’d be worth the $$ just to get comfortable with the act of buying one. The cost difference va mutual funds makes it totally worth your while.

———————————–
#58 kommykim on 12.29.15 at 7:55 pm
RE:
#19 For those about to flop… on 12.29.15 at 5:55 pm
I know this comment is going to get my knuckles rapped with a meat mallet but I will put it out there regardless.
I don’t think Garth is against low fee index mutual funds, but rather the higher fee ones ( 2% or more) that really give you little in return for the fee. Much better to pay 1% for professional hand holding instead if you are not going DIY with a discount broker.

///////////////////////////////////
You know what,there are some fine guys and gals on here.You guys have helped me in the past and I know you could have hoed the boots in but I think you realize I’m doing my best and am a genuine guy looking to fend for himself .
One thing I do differently than most people is I don’t see myself as paying the mer as a thankyou for making me money ,I view it more as a fee for not bankrupting me.
I know they yaks the money regardless but I look to see how much the funds are turned over and some of mine were turned over a lot as much as 70/80% so some putz I will never meet is looking after their own job and I benefit.
I don’t listen to the people at the bank ,I have made my mind up what I want to do before I get there.
I simply use them as a tool to get me results and the added safety off a worldwide brand doesn’t hurt either.
I’m not looking to hit a home run ,just gonna pick off a few singles..slow and steady just like Boomer WI.

#89 renounce your citizenship on 12.29.15 at 10:21 pm

#55 Black Dog (formerly white Kat)

The Lord helps those who help themselves. You should have renounced US citizenship right away instead of trying to get support on this blog. Now it’s a mighty expensive proposition.

Who can stand up to American might? What would you have the rest of us do? Sorry but it looks like you guys are going under the bus.

I’ve got a friend in the same position but he doesn’t whine, just changed his strategy and moved on. A shame because he’s sitting on a pile of cash that he’d love to dump into a TFSA but he’s got the same problem other posters here do (Uncle Sam’s hands firmly gripping his hips) . Best to get over this and move on to a different phase in life. Let us know how it goes.

#90 Dave on 12.29.15 at 10:23 pm

If you have rental income you should claim depreciation on the rental property to eliminate the tax that you owe. When you sell the rental property, the cost base is adjusted by the total amount that you have depreciated. In other words, you pay $0 in tax on the rental income each year until you actually sell the property….then you get hit with a big tax bill. This is beneficial because money is worth more today then it is next year or in 5 or 10 years…..inflation.

#91 The school of Garth on 12.29.15 at 10:25 pm

You are a wealth of knowledge. You offer housing, financial, taxation and even knowledge with vocabulary (unintentionally). I’m sure others have found other educational tools that may not be so obvious. Thank you Garth . I love the way you write.

#92 IHCTD9 on 12.29.15 at 10:26 pm

#51 Not 1st on 12.29.15 at 7:42 pm
Garth T2 will be back for the rest of those tfsa balances some day. No politician can resist all that untaxed money sitting there. Probably be tapped for some bogus boomer bribe in about 5 yrs time.
—————–

I figure this will happen by the time I exit the workforce as well. It will be further down the road than five years.

But, it will probably be a line in the sand where those who are existing are good, but from that line forward some unfortunate circumstance will apply. Of course if you do anything like start taxing the gains inside a TFSA, you may as well fold the whole program as all the money would quickly run elsewhere.

Either way, the boomers and gen X’ers will probably be good to go, where the Millennials on down get the shaft.

I am actually ahead of this even in thinking on the future of taxation in Canada, and have taken acute notice of Garth’s mention of a “Wealth” tax possibly being rolled around in Ottawa.

Seems crazy, but the path I’m on leads me down the same path as a criminal possessing some ill-gotten gains:

Get it out of the country, preferably somewhere you would like to retire.

Either that, or get it off the books altogether…

TFSAs will not be taxed as income. Period. — Garth

#93 BlackDog on 12.29.15 at 10:28 pm

@FiendishThingy#70, As if it is not complicated enough for the minority who knew to avoid the complications in the first place, but for the rest of the us, mostly clueless, US tainted, other wise average Canadians just trying to be responsible saving money in TFSA’s, RESPs, RDSPs, RRSPs and the horribly poisonous Canadian mutual funds which USA tells us now are Passive Foreign Investment Companies (each and every single one and every little movement that you make within) Sigh…i need another cookie and glass of wine. F- them. Both the Canadian government and the American one too. You all will see. You are next.

This endless rant of your is over. It is pointless and futile, and of interest to few. — Garth

#94 RayofLight on 12.29.15 at 10:30 pm

I am a “Boomer” and I grew up in Scarborough. Many younger contributors to this blog resent the ‘Boomers”, and the unfair economic advantages they had growing up compared to them. In part, they may be right about some of it. I also believe, however, their anger is also somewhat misplaced. Close to where I grew up, on Eglington Ave, I remember the manufacturing plants that lined this street. There was a General Motors Plant, and across from them was a General Electric Plant. Down from the GE Plant was a Link Belt Plant. At Eglington and Birchmont Rd was a SKF Bearing Plant. And this was a relatively small area of Scarborough, other manufacturing facilities were all in this area. During the 60s and 70, Ontario was manufacturing friendly, and they had the least expensive electric power in all of North America. Now where are we? Ontario is the fiscal laughing stock of North America. Manufacturing is openly distained, and power costs are the MOST expensive in North America. Yes Boomers had better opportunities, but direct some of your anger at the obscene arrogance of the government that forced their ideology at all expense. The greatest expense being that cost of opportunities lost by the younger generations.

http://business.financialpost.com/fp-comment/joe-oliver-ontarios-fiscal-train-wreck

#95 When will they raise rates? on 12.29.15 at 10:32 pm

Apparently, this is actually being considered:

http://www.torontosun.com/2015/12/28/lets-give-people-a-guaranteed-income

I am speechless.

#96 learningfromyou on 12.29.15 at 10:34 pm

I come every day to this blog, almost getting a heart attack looking every single time for posts like this one. It makes everyone grow.

Finally, thank Garth for today, please just do it more often.

#3 dontcallmeshirley

>ETF shares can be accumulated cheaper via options >than buying direct.

>The blog ain’t for ‘pros’. Just us common folk. — Garth

Where I can get this level 2 knowledge?
I’d love to learn.

#97 ulsterman on 12.29.15 at 10:37 pm

Keep up the good work Mark. I always enjoy reading your posts.

#98 MSS on 12.29.15 at 10:38 pm

re # 5 and # 25

http://www.ctf.ca/CTFWEB/EN/Newsletters/Canadian_Tax_Focus/2013/1/130102.aspx

Nothing new there. You have four choices: learn to file, get a fair accountant, ditch the TFSA, or renounce. Option five – coming here to moan – is getting tired. — Garth

#99 IHCTD9 on 12.29.15 at 10:41 pm

#63 Smartalox on 12.29.15 at 8:25 pm
Well, my TFSA contribution room was reduced, but I have over $100k in unused RRSP contribution room.

I had hoped to avoid future taxes (payable to some future government) by making larger TFSA contributions, but instead I guess that I’ll use what would have been TFSA contributions to reduce my tax payable to THIS government (and probably a couple more after it), until all that forwarded contribution room is used up.

———-

I am doing the same. I wonder how many more of us there are?

T2 obviously has no foresight whatsoever.

On top of all the other revenue issues he will face next year, this one could really hit him over the head.

Oh, well – I look forward to a really nice tax return next year, and I’ll put 5.5K of it into a TFSA, and plow the rest of it back into RRSP’s for another round in 2017.

#100 period on 12.29.15 at 10:45 pm

TFSAs will not be taxed as income. Period. — Garth

Who is period?

T2? The Queen? G_d? You?

#101 kommykim on 12.29.15 at 10:49 pm

RE:

#73 wade on 12.29.15 at 9:20 pm
Hey….so I thought t2 dropped the next tfsa contrabution back down to 5500 a year …what’s the max as of Jan 2016….ya I could verify/google that shit but I’m lazy

Read the official word on the TFSA here:
http://www.cra-arc.gc.ca/tfsa/
If you are mega lazy, here’s the quote from the site above to save you a mouse click:
“Note:
Under proposed legislation, starting January 1, 2016, the annual TFSA dollar limit for 2016 will decrease from $10,000 to $5,500 and will be subject to indexation.”

#102 guaranteed income on 12.29.15 at 11:00 pm

#95 When will they raise rates? on 12.29.15 at 10:32 pm

Apparently, this is actually being considered:

http://www.torontosun.com/2015/12/28/lets-give-people-a-guaranteed-income

I am speechless.

Let me say it then: perfect complementary government program to TFSA and RRSP.

#103 Suede on 12.29.15 at 11:04 pm

The RESP is a no brainer.

The libs are giving low income families 200 to 300 a month per kid. Just put that all into the RESP and get another free five hundy from the govt.

It’s Tru-deau…

#104 For those about to flop... on 12.29.15 at 11:06 pm

#94 RayofLight on 12.29.15 at 10:30 pm
I am a “Boomer” and I grew up in Scarborough. Many younger contributors to this blog resent the ‘Boomers”, and the unfair economic advantages they had growing up compared to them. In part, they may be right about some of it. I also believe, however, their anger is also somewhat misplaced. Close to where I grew up, on Eglington Ave, I remember the manufacturing plants that lined this street. There was a General Motors Plant, and across from them was a General Electric Plant. Down from the GE Plant was a Link Belt Plant. At Eglington and Birchmont Rd was a SKF Bearing Plant. And this was a relatively small area of Scarborough, other manufacturing facilities were all in this area. During the 60s and 70, Ontario was manufacturing friendly, and they had the least expensive electric power in all of North America. Now where are we? Ontario is the fiscal laughing stock of North America. Manufacturing is openly distained, and power costs are the MOST expensive in North America. Yes Boomers had better opportunities, but direct some of your anger at the obscene arrogance of the government that forced their ideology at all expense. The greatest expense being that cost of opportunities lost by the younger generations.

///////////////////////////////
I thought this was a good post,no mud slinging just telling it the way you remember.
I wish there was more posts like this one.
I grew up in Australia and so I like to learn what got Canada to where it is today.

#105 When will they raise rates? on 12.29.15 at 11:20 pm

This will be a central planner’s wet dream.

This, along with the elimination of cash, will give them the ability to fine tune consumption up or down by increasing or decreasing the monthly income and implementing negative interest rates.

A brave new world indeed.

Long gold and silver.

#106 conan on 12.29.15 at 11:31 pm

In some ways this has been a fantastic year for me so I will tell a story.
I was a newly hatched mutual fund salesperson and I was learning the ropes by doing sales calls on local business’s in my area.
One restaurant that I entered, the owner was more then pleased to talk to me. Probably, because he wanted to tell me, with much fanfare, that he did not need my advice because his son was a financial genius who had made millions in the stock market.

Me: How did he do that?

Prospect: He bought a gold share and it took off!!! Just like you need to son!!

Me: What did he buy?

Prospect: Bre-x

Me: ……. are you nuts? This is not a gold company located in Canada with some kind of regulation this is Busang Indonesia……. sell it all and get out of it.

I told him to tell his son what I said word for word and that I would return in a day or two with a properly thought out plan .

Two days later I delivered the plan but the owner told me that the son was not interested because he thought the stock would continue going higher.

Me: You do know the mineral expert jumped out of helicopter yesterday and killed himself? You need to sell it now…..

Prospect: My son does not want to pay the tax!!!!

Me: Argh!!!!!!!!!!!

No sale…….

I did meet this owner many years later and he had the moral fortitude to approach me and say….. “We should have listened to you…….stupidest thing we have ever done”.

Moral of the story is to diversify. People are not financial geniuses because they bought one stock that struck gold or started one business that got lucky.

#107 IHCTD9 on 12.29.15 at 11:31 pm

#94 RayofLight on 12.29.15 at 10:30 pm
I am a “Boomer” and I grew up in Scarborough. Many younger contributors to this blog resent the ‘Boomers”, and the unfair economic advantages they had growing up compared to them. In part, they may be right about some of it. I also believe, however, their anger is also somewhat misplaced. Close to where I grew up, on Eglington Ave, I remember the manufacturing plants that lined this street. There was a General Motors Plant, and across from them was a General Electric Plant. Down from the GE Plant was a Link Belt Plant. At Eglington and Birchmont Rd was a SKF Bearing Plant. And this was a relatively small area of Scarborough, other manufacturing facilities were all in this area. During the 60s and 70, Ontario was manufacturing friendly, and they had the least expensive electric power in all of North America. Now where are we? Ontario is the fiscal laughing stock of North America. Manufacturing is openly distained, and power costs are the MOST expensive in North America. Yes Boomers had better opportunities, but direct some of your anger at the obscene arrogance of the government that forced their ideology at all expense. The greatest expense being that cost of opportunities lost by the younger generations.

http://business.financialpost.com/fp-comment/joe-oliver-ontarios-fiscal-train-wreck

————–

You’ve nearly hit the nail on the head, a direct hit IMHO would be blame government more than “some”, more like 80%, Unions 19%, and leave 1% for whatever else may have been involved. The trouble really got underway when Dalton showed up.

Boomers did not have an “unfair economic advantage”, rather; Millennials have an unfair one.

Gen X’ers like me are just old enough to have tasted the better end of things, and just get established enough to escape the financial roadblocks the Milens are faced with today. We’ve watched the decline with our own eyes, pretty much in disbelief.

Government and Unions put these roadblocks in place, and are now bringing in the concrete and reinforcing steel.

Problem (for them) is, everyone from the disoriented Millennials to the hard working new Canadians seem to lean left, and vote for more taxes, more fees, more government, more debt, more deficit, less ability to save, and nice hair. Combine this with a preferential ballot, and we may never see a Government that cares about the financial future of regular Canadians at the helm again for a long, long time.

Do the math starting from where we are right now in Ontario, and it’s easy to see that folks just entering the work force had better be qualified for a public job, or good at digesting the foliage on their front lawn. Other opportunities will be there, but are, and will continue to; shrink under the current conditions.

#108 cmj on 12.29.15 at 11:49 pm

Garth,
I reviewed the Millennial Portfolio May 15/14 and noticed that the equity ETFs for Canada, US and Europe are large cap. Are you in favor of the full index for US, Canada and Euopre with large, mid and small caps? thanks

Sure. That was for virgins, with small amounts to invest. — Garth

#109 Old Man Too on 12.29.15 at 11:59 pm

#14 SunShowers
Use your equity. Get a LOC on your house. Invest $100k.
Wait 10 years. Withdraw 10k 3 times. Sell. Presto: $65k capital gain. Not smart enough to have a capital loss, but will have to pay about $12k tax on half the gain. You don’t have to earn it all in one year, and you don’t pay tax until you sell, unlike a GIC.

#110 Mark on 12.30.15 at 12:01 am

“It’s fortunate that Mark is no longer allowed to mislead new investors on RFD about gold,

I’ve never misled anyone, nevermind ‘new investors’ about gold, CAD/USD, or real estate. You really need to lay off the delusional crap because its getting old.

BTW, I’m still on RFD with their blessing. I don’t post much, but I’m still there and have received awesome feedback for the few posts I have made.

the CAD/USD, and real estate. At least new readers will be spared and some honest discussion can continue. Accurate information and advice is already difficult to find without fraudulent posters giving advice that they’re neither qualified or certified to give.”

There was nothing inaccurate then, or now, in my statements. What is inaccurate is your characterization and bizarre claims. You are the one, an admitted troll, who needs to get help. Please do get it, for your own sake. And stop misleading people about the state of the IT job market, the state of the Canadian RE market, and whatever else you troll on and on about. Most people with half an iota of brain can see right through most of your nonsense and recognize you for the troll you are. Lots of people are sick of seeing your verbal diarrhea being spewed everywhere, including your disgusting Christmas Eve “performance” for which you still have yet to apologize.

“Or when he said the dropping CAD wasn’t affecting prices for IT equipment a few days after Cisco increased their list price 12%. “

I don’t recall saying anything of the sort when it came to enterprise equipment (I was mostly commenting on the retail/consumer stuff), but the fact that the CAD/USD pair has dropped, what, 30% this year, and those ‘list’ prices have only changed 12% (according to you) indicates that pricing power is quite minimal. Additionally, anyone who has ever dealt with Cisco or Dell for that matter knows that nobody ever pays list.

So please join your brother Troll in therapy. The need to resort to unfounded ad hominem is usually a pretty good sign of being on the losing end of an argument. Which is pretty pathetic coming from someone who is grown up.

#111 Mark on 12.30.15 at 12:12 am

“Hi Mark, I’m very interested in seeing this data that you often refer to.
Do you have a link?

Most of the datasets I work with are proprietary and I’m not really into publishing (license issues aside), but this article written by the well-respected Ben Tal lays out the case for a dramatically shifted sales mix.

http://research.cibcwm.com/economic_public/download/if_2014-0908.pdf

Quite telling though is just how much the RE sell-side types (Realtors, mortgage brokers, etc.) freak out when you mention ‘sales mix’. Its almost like yelling “Beetlejuice” to them if you’ve ever seen the childrens movie, as they basically want you to accept their spoon-fed headline numbers without any critical thought whatsoever. As Ross Kay has pointed out in the audio interviews he’s given on Howestreet.com, the RE sell-side has a serious credibility problem with the narrative they’re pushing now that RE has been in decline for the past 2-2.5 years past the CMHC subprime peak. Garth, likewise, has a relatively easy time poking holes in the sell-side generated numbers as well.

The other thing that people should be asking is why the RE sell side is so eager to keep data secret. If housing markets were actually appreciating, and if the shift in the sales mix could be disproven, they should be more than glad to share deep and rich datasets with the public. Rather than forcing people like me to obtain them in sometimes rather clandestine ways.

#112 Old Man Too on 12.30.15 at 12:17 am

#83 OXI in Greece
You are sadly mis-informed if you think most gov’t workers come close to being 1%ers. My better half worked 32 years for the gov’t, is too young to be retired and will get a reduced pension due to part time work when looking after the diaper squad. Several years with no raises and 2 with roll backs. More like a 40 %er. Unless you were referring to Greek gov’t workers.

#113 diharv on 12.30.15 at 12:23 am

As a former US citizen I find comments/rants by the likes of MSS and Blackdog/Whitekat embarrassing . Ranting and whining to other Cdn citizens with no US ties will not change anything . Opening their eyes to your plight will change nothing . I just shed the USC and filed the last papers and exited the system . Problems are now solved and gone and I can invest like everyone else. I complied at great expense even though I feel that all the US so called threats are all bark and have no teeth . As GT has pointed out you have options to either free yourself or comply but quit preaching ! Nobody cares !

#114 Turtle on 12.30.15 at 12:39 am

#97 ulsterman

Keep up the good work Mark. I always enjoy reading your posts.

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

I stopped reading his posts (Scroll, baby, scroll!) long time ago. There is not enough time in a day to sort out everything he blurbs on every subject and every question that people bring in here. Almost everything is wrong or questionable at best. The guy is no gentleman… same as Victoria Update…

Scroll, baby, scroll!

#115 Not 1st on 12.30.15 at 12:44 am

Garth look what Norway did

http://www.thelocal.no/20151215/norway-oil-fund-to-make-green-investments

#116 Joe Schmoe on 12.30.15 at 12:55 am

At what point do we just pay for a room so Leo and Mark can ‘work it out’?

#117 willworkforpickles on 12.30.15 at 12:58 am

…Maybe its that 93 percent of canadians are concerned with the futility of locking their money in anywhere long term as this land may no longer be a functioning nation 15 or even 10 years from now…

#118 Mark on 12.30.15 at 1:07 am

“Moral of the story is to diversify. People are not financial geniuses because they bought one stock that struck gold or started one business that got lucky.”

Very well put. Thank you for your contribution. Actually you are sort of lucky that the guy was arrogant to the point that he made it clear to you up-front that your advice was not, at least at the time, welcome. Many an advisor have, over the years, invested considerably in meeting clients’ needs with balanced portfolios, only to have those clients, on a whim, pull their funds and chase whatever their brother-in-law did well on (but for which the gains largely were in the rear view mirror). Real estate being a great example of an asset class that is, like the gold stocks, full of vociferous people with excess optimism.

The particular danger that arises in real estate is that for the non-wealthy, it requires a very significant devotion of assets, diversification is difficult, and the leverage involved is usually very high. At least with stocks its usually not possible to lose more than one invested, even when buying on margin. While negative equity in housing is very plausible for a large swath of contemporary homeowners with most buyers over the past few years of decline having minimal to no equity at this point.

#119 betamax on 12.30.15 at 1:24 am

#40 Mark: “the facts, of falling RE prices across Canada, speak for themselves.”

Prices rose in Van throughout 2015, and that’s a fact.

I believe the bubble is going to burst at some point, but it’s still inflating in the GVRD.

#120 Protea on 12.30.15 at 2:11 am

# 72 you are spot on Vancouver in the 80’s was the best place on earth to live in. It has been destroyed in so many ways the atmosphere, greed, traffic nightmare.

I have lived on the North Shore for 40 years have put Garths advice into action sold my property to relocate off the North Shore to rent and avoid the two bridges. With only 2 major arteries to get off the N.Shore the quality of life here with its increasing density has been diminished. I met with the Mayor Mussato N.Van city several months ago and talked about the horrible traffic. With a straight face he tells me that the traffic is no worse then what it was 10 years ago! What!!!

#121 liquidincalgary on 12.30.15 at 2:15 am

Mark on 12.29.15 at 7:20 pm

“His multiple temporary bans and use of two or more usernames (Mark77 & Pitz) was certainly a factor in his ultimate removal.”

Not true. And Garth should ban you for your complete trolling here. Your comments are completely untruthful, off-topic, and you need help for your psychological illness.

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

he’s baiting you and it’s working.

careful…he is just another SM persona…

#122 Vampire Studies GMST 454 on 12.30.15 at 2:22 am

95 When – forms of this have been kicked about for decades. The intended effect is to reduce poverty and simplify the welfare system and associated admin costs by abolishing welfare, EI, public pensions etc.

There are variations on the theme, one being a “guaranteed minimum income” which results in a negative income tax to low wage earners. Another is the “basic income” which writes everybody a monthly
cheque. I would imagine this amount would vary
depending on age and work availability.

I believe the latter to provide less “leaking” in the
system as it is quite simple. If $X isnt enough, you go earn the extra you need. Be prepared for a income tax
rates starting at 50% though.

#123 liquidincalgary on 12.30.15 at 2:27 am

Leo Trollstoy on 12.29.15 at 9:38 pm

At least new readers will be spared and some honest discussion can continue. Accurate information and advice is already difficult to find without fraudulent posters giving advice that they’re neither qualified or certified to give.

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

and what certifies you, SM?

besides the psychiatrist that committed you?

#124 Ethan (Aflunenza Kid) Couch on 12.30.15 at 3:32 am

Wow I am I ever glad I found this blog. I was going to run to Canada but then decided to go to Mexico after reading here how bad things are in Canada. God housing costs are ridiculous, even for a rich kid like me. Food prices are nuts too not to mention that that Trudeau guy wants to tax the shit out of people like me. Anyway let me leave you with this before the U.S. Marshalls pick me up.

I ran from the law with my mom
To Puerto Vallarta to hide in the sun
It’s a great place to play beer pong
At least ’till the federalies come
My parents are rich and you’re dumb
How dare you call me pond scum
A few people got killed you wail
That sure doesn’t mean I should go to jail
I’ll get a few more days probation, you’ll see
The laws not the same for rich folks like me
I’ll live my life so happy
Marry a gorgeous girl, you’ll see
Eventually I’ll kill her to be free
Then the cops will re-arrest me
I’ll sentenced to life or cause it’s Texas
It might be the death penalty maybe
Probably the only way people will be safe from me

#125 Smoking Man's Old Man on 12.30.15 at 3:37 am

Hmm that little earthquake I just felt here in Vancouver should slow the real estate frenzy a tad…

#126 Koshy Alex on 12.30.15 at 4:15 am

http://www.independent.co.uk/news/business/news/swiss-referendum-to-decide-whether-its-banks-can-create-money-a6789061.html

#127 BC_Doc on 12.30.15 at 4:35 am

“#98 MSS on 12.29.15 at 10:38 pm
re # 5 and # 25

http://www.ctf.ca/CTFWEB/EN/Newsletters/Canadian_Tax_Focus/2013/1/130102.aspx

Nothing new there. You have four choices: learn to file, get a fair accountant, ditch the TFSA, or renounce. Option five – coming here to moan – is getting tired. — Garth”

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

There’s one more option, Garth– sue. There are one million people in Canada whom the IRS considers to be “American persons.” Many good Canadians are pretty upset that the Harper government rolled over for the US government and enacted the FATCA IGA. Two big issues that come to mind are sovereignty and equality (“A Canadian is a Canadian is a Canadian.”). By enacting the FATCA IGA, Harper failed to defend Canadian sovereignty and created a sub-class of “less equal” Canadian citizens. If China, North Korea, or Iran were making similar demands, would a similar agreement be passed? Anyways, a lawsuit is progressing through the courts argued by top notch constitutional lawyer Joseph Arvay:

http://www.adcs-adsc.ca/

#128 Great Canadian Bubble Co. on 12.30.15 at 5:29 am

You know we are near the top when strippers start getting in on the real estate action:

http://forums.redflagdeals.com/where-invest-money-housing-market-1891925/

#129 Dave in Kincardine on 12.30.15 at 6:00 am

Garth, Bravo, well written,

You are the best of the best of the best SIR!

Dave.

#130 InvertedYieldCurve on 12.30.15 at 6:47 am

Yup…everything is fine. The Fed has your back…until they don’t.

http://www.cnbc.com/2015/12/29/the-bond-market-is-sending-off-a-troubling-signal.html

#131 dontcallmeshirley on 12.30.15 at 7:50 am

#96 learningfromyou

re: level 2 knowledge

Get margin and option buy / sell added to your trading account.

Most US etfs can be picked up by selling out-of-the-money put options, or near-the-money call options.

Cdn etfs don’t have options, but the etf components do.

#132 Christopher Mewhort, EA on 12.30.15 at 7:53 am

TFSA’s and RESP’ are considered “trust accounts” by the IRS. There is no such thing as a tax free savings account in the USA. The extra fee an accountant charges to do a tax return for such an account is around $1500.

Bizarre. Get a new accountant. — Garth
—————————————–
Beyond bizarre. My fee (so far) is $100. Maybe I should raise my rates.

#133 crowdedelevatorfartz on 12.30.15 at 8:20 am

Not a bad “shaker” in the Vancouver lowermainland last night. 4.5
Woke me up out of a sound sleep.
Cant imagine what a 7.5 would do to the real estate market but the contruction industry would be booming.

#134 Mark on 12.30.15 at 8:33 am

“Prices rose in Van throughout 2015, and that’s a fact. “

We’ll have to agree to disagree then. Vancouver is basically the poster child for a dramatic shift in the sales mix with most transactional activity having shifted to the very high end. At what, a million bucks for a SFH, its not the entry-level that’s transacting there, that’s for sure. Its almost entirely move-up buyers.

Cdn etfs don’t have options, but the etf components do.

XIU has listed options, and there’s even a TSE60 futures contract available on the M-X for it.

(just a statement of fact, not an endorsement of any security or any trading strategy)

You know we are near the top when strippers start getting in on the real estate action

No disrespect to those who disrobe for money, but usually the Johnny-come-latelys (or in this case, Jill-make-you-come-latelys) get involved after a bubble has popped. Believing that a mere 5-10% discount from the peak (ie: what we have today) is a good deal. Not realizing that such will eventually turn into a 60-80% discount.

#135 Bytor the Snow Dog on 12.30.15 at 9:16 am

That girl can’t take any of your investment advice as she is obviously poor! She can’t even afford nice pants!

#136 young & foolish on 12.30.15 at 9:21 am

” … That means if you then clear $12,000 renting out a condo, every dollar will be subject to that higher tax – and you lose more than five grand …. ”

OK fair enough, tax policy favours capital gains over income … but what about the notion that accommodating monetary policy has created over investment in many industries and in many markets over the last few years? Sure, RE values could wither, but how about “growth” products such as equities (here and abroad)? Would capital be any safer there?

#137 UnitedWeStand on 12.30.15 at 10:06 am

@#89RenounceYourCitizenship

re: “The Lord helps those who help themselves. You should have renounced US citizenship right away instead of trying to get support on this blog. Now it’s a mighty expensive proposition.

Who can stand up to American might? What would you have the rest of us do? Sorry but it looks like you guys are going under the bus.

I’ve got a friend in the same position but he doesn’t whine, just changed his strategy and moved on. A shame because he’s sitting on a pile of cash that he’d love to dump into a TFSA but he’s got the same problem other posters here do (Uncle Sam’s hands firmly gripping his hips) . Best to get over this and move on to a different phase in life. Let us know how it goes.”

Thanks so much for supporting your fellow Canadians owned by the USA. People like me, born to Canadian parents living temporarily in the USA but who returned to Canada as young children really appreciate your concern that our rights as Canadians are being violated by a Canadian government which is in the process of turning us over to American authorities under threat of economic sanctions for not doing so. Bet you are glad you are not one of us eh?

The vast majority of Canadians who are also technically considered US citizens had no clue (still have no clue) they were US taxpayers on their Canadian income, nor did most know they are required to report to the Financial Crimes Enforcement Network annually. It is a bit counter-intuitive to think that one who has nothing to do with USA, would actually be a US tax payer and would have to report back to the plantation on one’s financial assets every year. Who’d have thunk it? Anyway, by the time many figured it out (many are still in the dark) they were totally enmeshed in financial lives as Canadians making it very complicated and expensive to back-track.

Just renounce you say? Geeze…I wish I could go back in time 30 years or so, before I had started working and saving, cause knowing what I know now, I sure would renounce US citizenship!! Strange I never thought of that…what with everyone telling me how lucky I was to be dual and all. No one every said, “hey you should renounce that US citizenship curse cause did you know you are a US taxpayer?”

One cannot JUST RENOUNCE as so many like yourself continue to suggest as the process involves catching up on past tax filing and Foreign Bank Account reporting of our local accounts) to USA’s FINCEN which can be a complicated, expensive nightmare with risk of life altering penalties (never mind accounting fees, renunciation fee, possible taxes) for those of us who have been saving and investing for decades as the Canadians we are.

So there is no easy way out for many of us unless ‘easy’ means giving up a big chunk of your life savings to a foreign government. Will you take care of us in our old age when USA finally gets around to clearing out our Canadian bank accounts for being disobedient US slaves?

Anyway, thanks for letting me know that as a fellow Canadian you think it is cool to throw me and others like me under the bus in your misguided opinion that this is required to save your non-US owned (so far) a$$.

Karma is a bitch, perhaps you will be next. Meanwhile I support the FATCA IGA Charter Challenge against the new T2 government which will hit the Supreme Court sometime 2016. The people funding it, whom I know personally, are still raising money (I believe they need another 75K or so and have raised over 1/2 a mill so far from average Joe’s). Perhaps you would consider donating to help protect the Charter of Rights and Freedoms of ALL CANADIANS, not just you.

Remember that poem by Niemoller:

First they came for the Socialists, and I did not speak out—
Because I was not a Socialist.

Then they came for the Trade Unionists, and I did not speak out—
Because I was not a Trade Unionist.

Then they came for the Jews, and I did not speak out—
Because I was not a Jew.

Then they came for me—and there was no one left to speak for me.

#138 BlackDog on 12.30.15 at 10:10 am

@BC_DOC #127

Don’t waste your breath. I’ve explained the FATCA situation here many times, as Garth has already mentioned, and he could care less. As far as he and many of his followers are concerned, Canadians like us should be thrown under the bus so that Canadian investors can continue to invest in the USA without threat of 30% withholding for not complying with FATCA. It really is a matter of fellow Canadians throwing other Canadians under the bus. Sad.

#139 joblo on 12.30.15 at 10:44 am

#117 willworkforpickles:
“Maybe its that 93 percent of canadians are concerned with the futility of locking their money in anywhere long term as this land may no longer be a functioning nation 15 or even 10 years from now…”

Well it, Canada was a nice idea for 148 years. All things come to an end!

#140 dontcallmeshirley on 12.30.15 at 11:00 am

#134 Mark

“XIU has listed options, and there’s even a TSE60 futures contract available on the M-X for it.”

You are correct, some cdn etfs do have options. Anyone interested in accumulating XIU would be well served to sell the PUT one strike down from market price.

Why buy at the market price? That’s for tourists.

#141 joblo on 12.30.15 at 11:03 am

https://youtu.be/4pBo-GL9SRg

#142 Balmuto on 12.30.15 at 11:17 am

#110 Mark

“You really need to lay off the delusional crap because its getting old.”

Physician, heal thyself!

#143 For those about to flop... on 12.30.15 at 11:22 am

#133 crowdedelevatorfartz on 12.30.15 at 8:20 am
Not a bad “shaker” in the Vancouver lowermainland last night. 4.5
Woke me up out of a sound sleep.
Cant imagine what a 7.5 would do to the real estate market but the contruction industry would be booming.

/////////////////////////////////////
Yeah my house shook for about 10 seconds ,however I just checked my portfolio online and it was rock solid!

#144 Smoking Man on 12.30.15 at 11:34 am

#82 Shirley Valentine on 12.29.15 at 9:59 pm
#61 Smoking Man on 12.29.15 at 8:21 pm

Reading the rum diarys.

Glued to it, see you dogs in a few.
…………..

“the novel encompasses a tangled love-story involving jealousy, treachery and violent alcoholic lust”

Oh Smokey man……… I’m flushed…………. can’t wait for your studly beast of a romance novel…… it is nearly finished.. yes?
……………..

Not finished yet, Been drinking way too much lately, writing quality in the shitter.

Need to quit drinking for a bit, rebuild some brain, then hit it hard.

Then drink again…..

Reading Rum Diaries has got me in the writing mood again.

#145 John Prine on 12.30.15 at 11:48 am

#83 OXI in GREECE on 12.29.15 at 10:02 pm
Great advice for the 1% of whom most are Govt Workers who continually get raises, have benefits which means NO dental, eye or drug costs and an awesome pension that the working poor pay 50% into…. And guess what !! Yer taxes will keep going up and up and up and up to pay for these 1% of Govt Workers. Welcome to Canada !!
____________________________________________

Worked for provincial government(10 years), regional districts (4 years) and a city (22 years) in a Tech position. My wife and I get dental (75% after deductible), medical (BC you pay) and extended health (80% after deductible) for which I pay $225 per month and after a $150 income tax withhold the clear cheque is $376 and limited to less than 1% maximum inflation allowance. Anybody that thinks government workers are in the 1% doesn’t pay much attention…

#146 Robert on 12.30.15 at 11:48 am

Garth,
Financial Advisor at my bank tells me to take RRSP loan (approx 5-7 years repayment) and use it to open RRSP with one of bank-run portfolios (or perhaps invest in TFSA ETFs). I wonder if it is wise to do it.
In theory, long term growth of the portfolio should outrun interest paid on the loan, but I’m not entirely convinced to take on additional debt to start RRSP.
What do you think Garth? Should I stay away from RRSP loans?

What rate offered? Interest on investment loans for registered accounts is non-deductible. — Garth

#147 BG on 12.30.15 at 11:53 am

#137 BlackDog on 12.30.15 at 10:10 am
@BC_DOC #127

Don’t waste your breath. I’ve explained the FATCA situation here many times, as Garth has already mentioned, and he could care less. As far as he and many of his followers are concerned, Canadians like us should be thrown under the bus
————————————————————–

Nobody here can do anything about your problem.
I don’t know what kind of reaction you’re looking for really.

Other posters here have explained how they solved this situation for themselves.

Personally, I wish I had American citizenship. I would move there and make 1.5 to 2 times the money I make here.

#148 For those about to flop... on 12.30.15 at 12:02 pm

Finally a use for cats?

http://www.thesun.co.uk/sol/homepage/features/6828134/Man-sparks-outrage-after-using-a-CAT-to-polish-his-shoes.html

#149 pinstripe on 12.30.15 at 12:15 pm

The coffee shop this morning brought much news about the millennials at the construction jobs. Many millennials on the job will look at something and then claim they know it all and want a promotion. they do move up the ladder fast and then put their expertise to work. One shift will do something and the next shift will have to redo it. The rework is ongoing continuously. the senior trades don’t worry because double bubble is ok for them, especially when oil sits at 35 bucks a barrel. the person squealing on the rework is tweeted as a bully. No one in top management seems to care about the rework. Everyone does not worry but moves along with the flow.

#150 Bram on 12.30.15 at 12:42 pm

#111 Mark on 12.30.15 at 12:12 am

The other thing that people should be asking is why the RE sell side is so eager to keep data secret. If housing markets were actually appreciating, and if the shift in the sales mix could be disproven, they should be more than glad to share deep and rich datasets with the public.

And what do you know, Mark, they do EXACTLY that.
Here’s what REBGV puts out every month:
The exact make up of all the sales.

http://maggie-chandler.myrealpagewebsite.com/_media/Documents/2015%20graphs/VW112015.pdf?inline=false

Note that their histogram buckets have not been updated for years, it seems: A big chunk of the sales falls off their chart at $3M+

Bram

#151 Rational Optimist on 12.30.15 at 12:56 pm

95 When will they raise rates? on 12.29.15 at 10:32 pm

It’s a great idea. There would be a net savings if we scrapped many of our existing social programs, and you would not have this perverse situation that a lot of people are in wherein getting a job would actually decrease their standard of living as they would lose entitlements to housing and other benefits.

The Sun is right that it’s unlikely to happen here in Canada, though: the savings would come from laying off thousands of public servants who work in administering social programs. Any program likely to “end” the poverty and other conditions they depend on, they’ll fight it tooth and nail.

Still, we can hope. It would be sensible.

#152 JacqueShellacque on 12.30.15 at 12:58 pm

Garth,

We know what you think of metal (that doesn’t have an engine). What about metal-based index ETFs? Some of these are selling at 10 or even 15 year lows.

You don’t buy things just because they are cheap. — Garth

#153 Smartalox on 12.30.15 at 1:05 pm

Re TFSAs and the USA:

The US equivalent to the TFSA is the Roth IRA. This type of account allows people to invest limited after-tax dollars, and shelter the gains from future tax.

Unfortunately, unlike the RRSP which is recognized under the can us tax treaty as equivalent to the US 401k, in terms of tax treatment, the TFSA and Roth IRA are still not recognized under the treaty, a consequence of the previous government’s singularly poor relationship with the US.

My wife is a dual citizen, and we flipped her TFSA into a non-registered account composed of a basket of US blue chip stocks. At tax time our financial planner sends us the IRS paperwork, we file her 1040, and any US tax deducted by the brokerage is remitted, mostly because Canadian taxes paid still outstrip what would be payable in US taxes.

I’m dammned glad that we don’t own a house together though; I’ve seen friends in a similar situation receive hefty tax bills from the IRS for the capital gains tax on the sales of their principal residences (not taxed for Canadians) that had dramatically increased in price during their ownership.

That surely was a rude awakwening!

As a Cdn citizen only, I also manage my son’s RESP, and a trust account in his name, to keep the FatCat’s paws of the kitty.

#154 JamesA on 12.30.15 at 1:10 pm

Are you having a good day? If so, don’t read this:

http://www.businessinsider.com/retirement-savings-guide-2015-3

It looks like I am on the road to starving to death. Ugh.

#155 MF on 12.30.15 at 1:18 pm

#139 dontcallmeshirley on 12.30.15 at 11:00 am

Thanks for the info.

Do you recommend any reads for options trading?

MF

#156 Smartalox on 12.30.15 at 1:20 pm

@Ray of Light #94:

Re the Golden Age of the Golden Mile in Scarborough:

Those factories you remember were hastily built for war production in the 40s, they were shoddily constructed, and though they remained profitable during the post-war infrastructure boom in the 60s and 70s, the companies that ran them never invested in modernization or efficiency, and remained dirty, dangerous places to work. Most storage areas had dirt floors!

To be fair, there wasn’t much in the way of government subsidy in those days, but when local and provincial governments began to hint that the buildings should be brought into compliance with building and workplace safety codes, those operations began moving elsewhere. In GM’s case, to new plants in Oshawa (where land was then cheaper).

A good read about those plants, and the working conditions therein, was called ‘Drunk on the Night Shift’ (if I recall correctly) written by a female reporter who took a night shift job at the GM plant before it closed. Published circa 1990, I believe.

#157 MF on 12.30.15 at 1:25 pm

#148 pinstripe on 12.30.15 at 12:15 pm

A buddy of mine is a contractor here in the GTA. He works almost exclusively on new homes and tear downs and says the exact same thing as you.

32 and refuses to buy any of these places because the workmanship is crap.

MF

#158 For those about to flop... on 12.30.15 at 1:35 pm

You know I was thinking over the weekend when the generational war took off for the umpteenth time that I wish there was an easier way to see where someone was coming from.
Some people were arguing but we’re very vague so you could not relate to them and then some posters kept reiterating there age and where they live.
And so after thinking about this I thought and easier way to do this would to simply put a code in the bottom corner of each post so you didn’t have to work it into the conversation each time.

The code would simply have gender ,age and province/ state for our American guests.

So my code would be at the moment M41BC.

This code will change as I age and if I can ever convince the wife to leave BC.
Also I guess the gender could change if I go all Bruce Jenner.

After all I don’t think that a 80 year old female and a 25 year male would agree on much accept that the Metrosexual Messiah(TM) has a great head of hair.

Anyway if it takes off great ,if not at least people will know where I am coming from and will only take 3 seconds.
Cheers.

M41BC

#159 JacqueShellacque on 12.30.15 at 1:36 pm

Re: the Boomer discussion above. As a Gen-Xer (born in ’74), child of Boomers (born in ’53), I can honestly say I don’t understand why the so-called “advantages” enjoyed by the Boomers are so hyped. Yes, they had easy jobs. Which were dull. Yes, they had cheap houses. Which meant they didn’t need to learn anything about managing their money. I’m not slamming Boomers, but most that I know today have nothing that I envy. They didn’t enjoy interesting careers, have little knowledge of the outside world, and their money sense is appalling. I wouldn’t trade places with my own parents for all the housing in Scarborough.

#160 DON on 12.30.15 at 1:36 pm

#142 For those about to flop… on 12.30.15 at 11:22 am

#133 crowdedelevatorfartz on 12.30.15 at 8:20 am
Not a bad “shaker” in the Vancouver lowermainland last night. 4.5
Woke me up out of a sound sleep.
Cant imagine what a 7.5 would do to the real estate market but the contruction industry would be booming.

/////////////////////////////////////
Yeah my house shook for about 10 seconds ,however I just checked my portfolio online and it was rock solid!
*********************************

I felt the knocking and rumbling…puts everything into perspective.

#161 jess on 12.30.15 at 1:38 pm

#35 Gray man on 12.29.15 at 6:49 pm
Perhaps you might like to review some historians

A Nation of Counterfeiters…
….” days when the federal government not only did not print paper money but likewise did not bother to regulate those regional banks that did. With more than 10,000 shades and varieties of cheaply printed currency on the market by the 1850s, counterfeiters had a field day.

A Nation of Counterfeiters – Harvard University Press
http://www.hup.harvard.edu/catalog.php?isbn=9780674032446
Prior to the Civil War, the United States did not have a single, national currency. Counterfeiters flourished amid this anarchy, putting vast quantities of bogus bills .
==============

In History Departments, It’s Up With Capitalism

By JENNIFER SCHUESSLERAPRIL 6, 2013
http://www.nytimes.com/2013/04/07/education/in-history-departments-its-up-with-capitalism.html?_r=0

#162 DON on 12.30.15 at 1:43 pm

#148 pinstripe on 12.30.15 at 12:15 pm

The coffee shop this morning brought much news about the millennials at the construction jobs. Many millennials on the job will look at something and then claim they know it all and want a promotion. they do move up the ladder fast and then put their expertise to work. One shift will do something and the next shift will have to redo it. The rework is ongoing continuously. the senior trades don’t worry because double bubble is ok for them, especially when oil sits at 35 bucks a barrel. the person squealing on the rework is tweeted as a bully. No one in top management seems to care about the rework. Everyone does not worry but moves along with the flow.
****************************
Yup…the millennials have all that theory but yet to understand the true value of experience combined with knowledge. Then again look at our current political class – very few have ability to lead and most if not all lack any vision. Things aren’t really that complicated – but then again stupid is as stupid does.

#163 cramar on 12.30.15 at 1:44 pm

#104 For those about to flop… on 12.29.15 at 11:06 pm

[snip]

I wish there was more posts like this one.
I grew up in Australia and so I like to learn what got Canada to where it is today.

————————–

You want to know when it all started? Feb. 20, 1959. Canada’s day of infamy!

That is when the Conservative Gov’t. of John Diefenbaker killed the Avro Arrow and in one act started the downward slide that continues to this day. This one act immediately killed almost 30,000 skilled manufacturing jobs! To add desecration to a dead hero, the gov’t. ordered all prototypes, tooling, plans destroyed! EVERYTHING! The fallout was devastating for Ontario and Canada!

AVRO Canada was the 3rd largest company in Canada employing over 50,000 and would go bust a few years later.

Many top aeronautical engineers were hired by NASA to work on the U.S. space program. It became the start of the “Brain Drain”.

This country would never recover industrially and was condemned to be a seller of resources instead of a nation that actually builds things.

See the overview:

https://en.wikipedia.org/wiki/Avro_Canada_CF-105_Arrow

Read the book (your public library should have it or better yet buy it):

Shutting Down the National Dream: A.V. Roe and the tragedy of the Avro Arrow by Greig Stewart – McGraw-Hill Ryerson, 1997.

I just turned 12, when I heard the shocking news on the radio. Even as a child I knew Canada’s greatest industrial achievement had been destroyed. It sucked the pride out of the nation. Even today it makes my blood boil to write of it.

#164 For those about to flop... on 12.30.15 at 1:47 pm

Is this to stop a future Joking Man?

http://www.dailystar.co.uk/news/latest-news/484248/UK-biggest-sperm-bank-probed-BANNING-dyslexic-donors

M41BC

#165 Herf on 12.30.15 at 1:48 pm

#79 Poco Loco

You might try picking up the latest (2016) copy of the following book when it becomes available to see if the author addresses TFSA’s. Or, perhaps try contacting the author who runs a cross-border financial planning firm based (I believe) in Phoenix, AZ. He is or was a Canuck.

If you click on the book cover photo at the following link, you can read the Table of Contents to get an idea of the book’s subject matter. The link below is for the 2009 edition which doesn’t appear to address the TFSA (probably because the TFSA was being introduced about the same time the book was published). I would expect the 2016 edition to be updated to address TFSA’s, given the nature of the author’s business and their need to keep on top of changes to tax laws, etc. on both sides of the border.

http://www.amazon.ca/Border-Guide-Living-Working-Investing/dp/1551808552/ref=sr_1_2?ie=UTF8&qid=1451500264&sr=8-2&keywords=the+border+guide

#166 Aggregator on 12.30.15 at 2:05 pm

Let's see if anyone can spot what's wrong with these sales figures.

Landcor vs REGBV Sales Data

March 2014   March 2015

Remember Landcor sales are actual property title transactions. There can't be any sales number greater then that.

#167 For those about to flop... on 12.30.15 at 2:21 pm

#162 cramar on 12.30.15 at 1:44 pm
#104 For those about to flop… on 12.29.15 at 11:06 pm

[snip]

I wish there was more posts like this one.
I grew up in Australia and so I like to learn what got Canada to where it is today.

————————–

You want to know when it all started? Feb. 20, 1959. Canada’s day of infamy!

That is when the Conservative Gov’t. of John Diefenbaker killed the Avro Arrow and in one act started the downward slide that continues to this day. This one act immediately killed almost 30,000 skilled manufacturing jobs! To add desecration to a dead hero, the gov’t. ordered all prototypes, tooling, plans destroyed! EVERYTHING! The fallout was devastating for Ontario and Canada!

AVRO Canada was the 3rd largest company in Canada employing over 50,000 and would go bust a few years later.

//////////////////////////////////////
Thanks Cramer ,sounds like a national disgrace all right.
I have hear people mention Avro on here before but never got around to researching it.
I like to find out about the good the bad and the ugly…
When one reader told me about old Ralpie chucking change at the homeless people that really shocked me.
No country is perfect …I have lived in 5 and they all have scandal after scandal that you never hear about on a global stage unless it’s really big or the media is bored.

M41BC.

#168 pwn3d on 12.30.15 at 2:30 pm

#111 Mark on 12.30.15 at 12:12 am
“Hi Mark, I’m very interested in seeing this data that you often refer to.
Do you have a link?

Most of the datasets I work with are proprietary and I’m not really into publishing

The other thing that people should be asking is why the RE sell side is so eager to keep data secret.
————————

Fcuk you really need to get help. Maybe call up your buddy Steve and see if he has some free time for charity work.

Anyways, back to ignore for me, if Garth allows it and people want to follow it’s their money…

#169 MissConstrued on 12.30.15 at 2:48 pm

The new year’s coming and so should our updated net worth calculations. Can we do another poll, oh wise one? Last year’s was fun. I am hoping more women have joined since then, but I will not hold my breath. Would love to see the new stats.

#170 pinstripe on 12.30.15 at 2:48 pm

#156 MF on 12.30.15 at 1:25 pm

A buddy of mine is a contractor here in the GTA. He works almost exclusively on new homes and tear downs and says the exact same thing as you.

32 and refuses to buy any of these places because the workmanship is crap.

MF

———————————————————–

I was taken aback by the stories heard this morning.

I thought it was bad when the boomers were taking everything for themselves, but with the millenniels all of Canada will be SCREWED for a long time. It appears that the millennials are bringing a new meaning to corruption and bribes.

As one old geezer mentioned, “i hope that oil drops to 10 dollars a barrel so that some sanity is brought back to this world”.

#171 SWL1976 on 12.30.15 at 2:52 pm

We didn’t even feel the earth quake last night, but I have some friends who did. I’m not to worried about any big shakers in my stick framed house, but whenever I venture to any underground parking or concrete structures I do sometimes think this would be bad timing should one hit.

#162 cramar – Good points about AVRO Canada. A sad story and state of affairs indeed. If this story does not illustrate that there is indeed a shadow government calling the shots going back decades then not much else will.

flop – Drunk Ralph chucking change at a homeless person was also quite the disgrace. Why he is still loved by the blue collars of that province is beyond me. They clearly don’t see the bigger picture and the mess he and his crew left behind.

I guess most people really only do see what they want to see

#172 Godth on 12.30.15 at 2:53 pm

#133 crowdedelevatorfartz on 12.30.15 at 8:20 am

I had just climbed into bed, not a bad shaker. My wife was awakened by me so we both lay there – quake! It wasn’t entirely unexpected though, my wife had told me there was a planetary alignment last week, so we went to check out solar activity. It was clear enough that something could happen somewhere – it’s not necessarily over yet! Planetary alignments + CME’s = earthquakes.
https://www.youtube.com/watch?v=VSbBkDAvlyg

#173 TCContrarian on 12.30.15 at 2:53 pm

“Big things can change in a wee amount of time. For example, yesterday I mentioned oil fell 3% on Monday. On Tuesday is gained 3%. Understanding you have no clue what comes next is why investing is different than gambling – a lesson most people never learn.” – GT

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

In my opinion, ALL investing is a form of gambling – just gotta know the odds.
For instance, it’s not a stretch to say that within 12 months oil will be considerably higher than it is today (say, $60-80/bbl).
Or that Canadian RE (at least in Vancouver/Toronto), is wayyy overvalued by any metric, and should be sold, not bought.

Yes, BIG things CAN (and do!) happen in a short time – like when oil dropped from $147 high in July 2008, to less than $35 only SIX months later!

“History doesn’t necessarily repeat; but it often rhymes!” – Mark Twain

#174 pinstripe on 12.30.15 at 3:04 pm

161 DON on 12.30.15 at 1:43 pm

Yup…the millennials have all that theory but yet to understand the true value of experience combined with knowledge. Then again look at our current political class – very few have ability to lead and most if not all lack any vision. Things aren’t really that complicated – but then again stupid is as stupid does.

—————————————————————-

the same exact same thing is happening here in Alberta after the prov and fed elecdtion.

latterly the WRP in Alberta did a lot of stirring the pot to get the farmers worked up on the Bill 6. many of the millennials in the WRP are worse than the brown and blue shirts from the 1930 era. Many of us old timers are well aware that they cannot deliver on anything they say or do, but yet the political parties accept that as a positive thing.

I must admit that harpo did an excellent job to pit one group against the other. he also forced many Canadians to lose ALL Trust and Confidence in politicians.

ALL of Canada, including the millennials, will be SCREWED for a long time.

#175 BlackDog on 12.30.15 at 3:10 pm

@BG, re: “Nobody here can do anything about your problem.
I don’t know what kind of reaction you’re looking for really. ”

I am not expecting anyone here to solve my problem. I already have my particular game plan worked out. My goal is to educate and inform fellow Canadians, and hopefully to garner some support for the 2016 Supreme Court Challenge which Canadians must pay for themselves, whilst our government uses taxpayer dollars for its defense.

#176 Bram on 12.30.15 at 3:15 pm

#165 Aggregator on 12.30.15 at 2:05 pm

Did you link the wrong images?
Both are REBGV figures, of different years.
No landcor figures.

#177 When will they raise rates? on 12.30.15 at 3:34 pm

#122 Vampire Studies GMST 454 on 12.30.15 at 2:22 am

95 When – forms of this have been kicked about for decades. The intended effect is to reduce poverty and simplify the welfare system and associated admin costs by abolishing welfare, EI, public pensions etc.

There are variations on the theme, one being a “guaranteed minimum income” which results in a negative income tax to low wage earners. Another is the “basic income” which writes everybody a monthly
cheque. I would imagine this amount would vary
depending on age and work availability.

I believe the latter to provide less “leaking” in the
system as it is quite simple. If $X isnt enough, you go earn the extra you need. Be prepared for a income tax
rates starting at 50% though.

———————————
They espouse the intended effects, but I see unintended consequences.

Income tax starting at 50% to support the program, huh? Can I opt out?

#178 Tony on 12.30.15 at 3:44 pm

Re: #24 JakeR on 12.29.15 at 6:16 pm

You can make 0 percent doing nothing. At the end of 2016 you’ll be thanking your lucky stars you made nothing unlike the people with real money in stocks who loss more than half their money.

#179 Plain Speak on 12.30.15 at 3:52 pm

BANNED

#180 Retired Boomer WI on 12.30.15 at 4:04 pm

#157 For Those About to Flop…

I think your ‘coding’ idea has real merit.

Yes, it is difficult enough to understand people from ME versus TN or AR, let alone understand their views on economics… through in Canada (and I have only traveled in ON and MB provinces), so fully don’e understand the Atlantic provinces, or the far prairies, and probably never can fully comprehend BC.

In the states, a great deal of taxation is lodged at the state levels, also insurance law, which indicates the very wide disparity in healthcare costs between states. It does vary by more than 150% across state lines same coverages, car insurances are similarly confusing.

Some states have NO state income taxes, others no sales taxes.

All this variety impacts how people invest, and their colloquial views on a great many things!

I have no idea ion Canada is such a patch-work nation as we are. Dog help us all!!

Might help us all ‘understand’ the other posters point more clearly.

#181 salonist on 12.30.15 at 4:06 pm

toystool
not deleted but banned on rfd….permanently

#182 Leo Trollstoy on 12.30.15 at 4:17 pm

More gems from Chris later. Stay tuned.

#183 For those about to flop... on 12.30.15 at 4:40 pm

#178 Retired Boomer WI on 12.30.15 at 4:04 pm
#157 For Those About to Flop…

I think your ‘coding’ idea has real merit.

Yes, it is difficult enough to understand people from ME versus TN or AR, let alone understand their views on economics… through in Canada (and I have only traveled in ON and MB provinces), so fully don’e understand the Atlantic provinces, or the far prairies, and probably never can fully comprehend BC.

In the states, a great deal of taxation is lodged at the state levels, also insurance law, which indicates the very wide disparity in healthcare costs between states. It does vary by more than 150% across state lines same coverages, car insurances are similarly confusing.

Some states have NO state income taxes, others no sales taxes.

All this variety impacts how people invest, and their colloquial views on a great many things!

I have no idea ion Canada is such a patch-work nation as we are. Dog help us all!!

Might help us all ‘understand’ the other posters point more clearly.

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

Thanks Boomer is your code M64WI ?

#184 For those about to flop... on 12.30.15 at 4:47 pm

Dammit ,I forgot to put MY code as well!

M41BC

#185 Aggregator on 12.30.15 at 4:59 pm

#174 Bram

Nope. Those are the numbers. You can check the reports yourself.

Landcor vs REBGV sales (as of Q2)

#186 Mark on 12.30.15 at 5:08 pm

“Anyone interested in accumulating XIU would be well served to sell the PUT one strike down from market price.”

I do understand the strategy, but the thing about options, being a zero-sum game, is that there are significant ‘tails’ that do appear.

For instance, that put option might get exercised when XIU drops a lot more than just a little below the strike. Or, alternatively, that put option never gets exercised at all and the price of XIU is a few dollars higher — growth having been missed out on (even if a premium was collected).

In a nutshell, you’ll be stuck with the underlying stock/ETF at a higher than necessary price if it collapses. Or you won’t have the stock/ETF when you really should have owned it going into a bull market (XIU does look pretty cheap at this point, btw).

Hence, it adds an additional layer of complexity, and statistically adds no return. I thus continue to concur with Garth that options really have little place in the portfolios of those who want to make money, and not “gamble”.

#187 For those about to flop... on 12.30.15 at 5:40 pm

#184 Mark on 12.30.15 at 5:08 pm
“Anyone interested in accumulating XIU would be well served to sell the PUT one strike down from market price.”

I do understand the strategy, but the thing about options, being a zero-sum game, is that there are significant ‘tails’ that do appear.

For instance, that put option might get exercised when XIU drops a lot more than just a little below the strike. Or, alternatively, that put option never gets exercised at all and the price of XIU is a few dollars higher — growth having been missed out on (even if a premium was collected).

In a nutshell, you’ll be stuck with the underlying stock/ETF at a higher than necessary price if it collapses. Or you won’t have the stock/ETF when you really should have owned it going into a bull market (XIU does look pretty cheap at this point, btw).

Hence, it adds an additional layer of complexity, and statistically adds no return. I thus continue to concur with Garth that options really have little place in the portfolios of those who want to make money, and not “gamble”.

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

Do ……you …….know……..how…….to ……..make …….a…….clear ………and ………..concise……..point?

M41BC.

#188 make money vs gamble on 12.30.15 at 5:58 pm

I thus continue to concur with Garth that options really have little place in the portfolios of those who want to make money, and not “gamble”.

Probably all the names of the pro investors, you know from the media, books, etc. have been using options one way or an other.

#189 JimH on 12.30.15 at 6:51 pm

#162 cramar on 12.30.15 at 1:44 pm
#166 For those about to flop… on 12.30.15 at 2:21 pm
#169 SWL1976 on 12.30.15 at 2:52 pm

Re: The CF 105 (Avro ‘Arrow’)

Wow! It’s a testament to the tremendous impact that the cancellation of this program had many in Canada that today, some 55 years after the fact, it still stirs strong emotions among Canadians of all political, social and economic leanings!

First, let me be clear; There is no doubt that the CF 105 in it’s final prototype configuration was a fine interceptor, with an estimated service ceiling of 60,000 feet ASL.

The cancellation of the project did, indeed, sound the death knell of Avro Canada, and the exodus of many highly skilled engineers and technicians from Canada.

Many today cannot understand why such a promising project was cancelled. Perhaps some context might help.

1. The Arrow was designed and developed as a long-range interceptor of Russian bombers attacking the North American continent. There is little doubt that with a proven top speed of mach 1.7, it could have fulfilled this role.

That said, the Russian launch of Sputnik and their manufacture of Thermonuclear weapons (hydrogen bombs) now made it clear that they had the capacity to deliver these weapons via intercontinental ballistic missiles. The Arrow offered no defense against this new threat, of course.

2. The Arrow’s first flight in it’s ‘final’ configuration took place in March 1958. In the case of virtually ALL military aircraft, the transition from ‘first flight’ stage to full production takes from 3 to 4 years, and is very expensive. So, in all probability, the first fully acceptable versions of the Arrow would not have been ready for delivery until into 1962.

This of course, begs the question of delivery where and to whom?

While the USAF had expressed mild interest, and had exchanged some notes of possible intent with the Liberal Government, it is extremely rare for branches of the US military to adopt aircraft from other countries. When they do, as in the case of the Hawker Siddeley Harrier, the aircraft is produced in the USA; in this case by McDonnell Douglas, who named it the AV-8B Harrier II.

Avro Canada did try to solicit orders from both the USA and Britain, but there were no takers.

3. There was deep disagreement within the Canadian Military establishment as to the necessity and feasibility of the program, as it was draining large sums from the army and the navy.

4. There is widespread mythology in Canada that the Arrow was somehow light-years ahead of the competition. While it was superior (in my opinion) to the F 102 Delta Dagger and the F 104 Starfighter, it is questionable whether it’s broad functionality would have approached that of the fabled F 4 Phantom. (We don’t have the blueprints for the Arrow, but it’s difficult to imagine its lighter airframe managing carrier take-offs and landings without extensive re-design.)

In any case, the F 101 Voodoo, the F 106 Delta Dart, the F 105 fighter/bomber (we affectionately referred to it as “the Thud” due to it’s ability to unload up to 18 750lb bombs per sortie), and other fighter/bombers like the A 6 Intruder and the development of the A 7 Corsair were already straining the budgets of the US military.

In other words, the Arrow had stiffer competition than many realize.

What truly is unfortunate is the sad fact that the design and manufacture of 5 aircraft (the 6th was 90%+ completed) so stressed Avro Canada that the cancellation of the project resulted in the company’s demise.

When all the eggs are in one basket, and when nobody really wants the eggs, there is always a huge increase in risk. On that we can all agree.

#190 mikesinlangley on 12.30.15 at 8:01 pm

Hi Garth, when you invented the TFSA what kind of parameters did you have in mind? There’s some stories on the net where people have been refused their tax free gains because their wins were too big, too irresistible not to tax. What say you…?

#191 Alvina Knows on 12.30.15 at 9:09 pm

#185 For those about to flop… on 12.30.15 at 5:40 pm

Do ……you …….know……..how…….to ……..make …….a…….clear ………and ………..concise……..point?

M41BC.

‘q’q’q’q’q’q’q’q’q’q’q’q’q’q’q’q’q’q’q’q’q’q’q’q’q’q’q’q’q’q’

When you are vying for the 2015 Greater Fool Sycophant Award, you must use every opportunity to praise the host and continually state your agreement with his ideals – on options, diversification, rule 90, etc.

Conciseness has no place in Mark’s plan.