The sleeper

Jason (not his own name, mercifully) bought a load of weed stocks with the money in his TFSA. Made a bundle. So, I said when he called me to gloat three weeks ago, sell. The point of investing is to make money. You did. Tax-free. Dump it.

He didn’t, of course. Human nature clicked in. After all, since he’d just made out like a bandit he wanted to do it again. More. He was a freaking stock genius.

Since then it’s been all downhill, as I told him it would be. Bubbles always burst, and the weed stocks were highly speculative. Canopy Growth has lost over 30% of its value, for example, and Aurora is down 40% while Jason’s small-cap puppies have been scorched. His six-figure TFSA has lost half its value. Yes, there are some lessons…

Buying individual stocks massively increases volatility and risk (and sometimes the return), compared to index ETFs. So it’s called ‘gambling’ instead of ‘investing.’ Second, when you make money, take it. Isn’t that the point, especially when the gains are free of tax? Finally, Jason had an opportunity to move a huge whack of money out of his TFSA while retaining the ability to replace it in the future. In effect he created years and years’ worth of new contribution space, but let it dissipate as his sheltered investments fizzled.

That’s a huge advantage of a TFSA over an RRSP. When you make a retirement plan withdrawal, that money’s gone forever. You cannot put it back into the account. Not so with a TFSA. In this case Jason could have removed fifty grand in profit from his plan and left that space open for new money in the future. Not only would be have scored by crystallizing his gain, but created an equal future opportunity. This element of flexibility is one reason everybody should have a TFSA, fully fund it and load it up with growthy stuff.

The second big advantage comes when you turn paleo and start collecting government pogey. A $500,000 TFSA (more on that in a minute) can generate $3,000 a month which is not counted as income, allowing the full CPP and OAS without tax on cash flow of about $54,000. Add in $37,000 in dividends which can be earned sans tax (if you have a low income), and this amounts to a retirement stipend of $91,000 – no tax.

All totally legit. Within the rules.

So how do you get half a mill in your TFSA?

Simple. If you’re 35 (for example) and have saved diddly, start with $100 this week then add a hundred weekly until 65. Invest in a nice B&D portfolio averaging 7% a year over the next three decades (to be consistent with the last 30 years), and on your 65th birthday you’ll have $532,000 in the account, $376,000 of which was tax-free growth. Keep it invested, skim off the monthly gain and tell the CRA to go and harass the poor people who have pensions.

Of course, if you invest this way from 20 until 65, your sleeper TFSA will contain $1.67 million, paying close to $10,000 a month. With CPP, OAS and dividend income added, that would create an income of over $170,000. Yeah, still no tax.

Now imagine a couple doing this, both filling their tax-free accounts over the course of decades. You can easily see why the very first dollars you have should go into your TFSA. Unlike a million-dollar RRSP, the income flowing out is not forced upon you, not added to your taxable income, does not push you into a higher tax bracket and the withdrawals can be replaced. Of course, you get a temporary tax break for making RRSP contributions, but that’s like sex. You’ll pay later.

By the way, looks like the TFSA limit will be increased in a couple of months.

You will recall when T2 gained power one of his first acts was to gut the TFSA limit, scaling it back by half in a politically-motivated, highly questionable move. The justification was that Canadians were not using the space, so it benefited only the wealthy. That was specious, of course, since we don’t use 90% of our RRSP room, and the richer people are the bigger the tax break they score for contributing. But, alas, logic isn’t a strong point in politics these days.

Anyway, the contribution is now CPI-adjusted and given the fact inflation has returned, that $5,500 limit we’ve had for a couple of years will be migrating higher, to six grand. Good news. But only if you use it – faithfully, religiously, consistently. Plus, don’t forget what I told you a few days ago about the ‘successor holder’. Oh yeah, and don’t be a Jason. Bulls make money. Bears make money. Pigs get slaughtered.

_______________________________

Note: Always bear in mind returns fluctuate. There’s no guarantee, but the longer a person stays invested the better the odds of a positive outcome. Over the past eight years our 60/40 portfolio (equity ETFs, preferred shares, a variety of bonds and REITs) had a total return of 7% (before fees, which may be tax-deductible). This year it will likely be less. Over the past 20 years the TSX gained an average of 7% annually. The S&P 500 averaged 6.7%. Below is a chart (US) showing how a balanced portfolio has performed relative at an all-stock one. What is not shown here is the lower level of risk and volatility that the balanced investor experienced. – Garth

133 comments ↓

#1 Vancouverless on 10.28.18 at 2:42 pm

“Bulls make money. Bears make money. Pigs get slaughtered.”

For some reason I haven’t heard this one before.

#2 jonah on 10.28.18 at 2:57 pm

By the time, I noticed weed stocks, it was too risky to invest. I have mostly telecommunication stocks with good dividend payout which for example Telus is down over 4 bucks.

I have been contemplating bombardier since it is not sitting around 3:10 compared to over 4:00 couple of months ago. I know you should not put all your eggs in one basket, would putting in 30K to 40K in bombardier be risky which is less than 6% of cash in hand waiting to be invested :).

#3 Robin Lerner on 10.28.18 at 2:57 pm

Second!

#4 For those about to flop... on 10.28.18 at 2:59 pm

“Of course, you get a temporary tax break for making RRSP contributions, but that’s like sex. You’ll pay later.”

Can I finish my grapes first…

M44BC

#5 Frank The Tank on 10.28.18 at 3:14 pm

My wife and I have good DB pensions and money in TFSA that we regularly contribute to. Do we really need RRSPs? I’d rather just live a little more now rather than obsess over filling that up on top of the TFSAs.

#6 Lost...but not leased on 10.28.18 at 3:28 pm

Lawyer friend of ours worked for the regulatory bodies that monitored Stock Market….

Said THE worst scenario was someone getting lucky on their first market play and feeling they are either smart and/or the luck won’t run out.

Re WEED STOCKS….all I am observing is various groups
looking at the potential impact and drafting rules/regulations, bylaws etc effectively saying NO….with consequences of fines, DUI charges…..employment termination…etc. etc.

As per usual….only the Lawyers will ultimately benefit.

#7 Shawn Allen on 10.28.18 at 3:33 pm

TFSA withdrawals?

“That’s a huge advantage of a TFSA over an RRSP. When you make a retirement plan withdrawal, that money’s gone forever. You cannot put it back into the account. Not so with a TFSA.”

Agreed should of sold the Weed. And no argument on all that TFSA growth math.

TFSA withdrawals though of course can be dangerous to the plan accumulate that $500k or $1.67 million TFSA.

The reason to withdraw cash from a TFSA would usually be to spend it. The person withdrawing TFSA money to spend, even on a house may never have the spare cash to put it back into the plan later. And, of course while the cash is not invested it is not earning the 7%.

The accessibility of TFSA money can be an advantage to some people but for many people it will be a serious disadvantage as they will succumb to temptation to spend it and in many cases they will never have the cash to catch up on old withdrawals plus the new $5500 or soon to be $6000 per year.

Withdrawing cash from an RRSP before retirement can also ruin the plan to accumulate retirement wealth. The tax payable (unless you had little income that year) is high and as stated the RRSP “room” is lost forevr.

However those very penalties lead I think the vast majority of people to treat RRSP funds as untouchable until retirement. Therefore in I think more cases RRSP funds will be around to compound at that 7% while for many the TFSA funds slip out the back door for that car purchase or vacation or whatever.

The TFSA is superior if the money stays in (and far superior in some cases) but the RRSP can be the winner if it stands a far better chance of hanging onto the money in the face of temptation.

#8 Trumpocalypse2018 on 10.28.18 at 3:34 pm

10 Days to the Beginning of the End.

Don’t rely just on me: The Washington Post agrees –

“This is a time of the politics of the apocalypse…”

https://www.washingtonpost.com/politics/bomb-scares-and-the-politics-of-the-apocalypse/2018/10/24/e4c8d17a-d7b7-11e8-a10f-b51546b10756_story.html?noredirect=on&utm_term=.75c90e6e8d2d

The midterm results will lead to political catastrophe and widespread violence.

Interestingly, the Trump ideology has already infiltrated parts of the military, not discussed nearly enough.

So the first weapons of mass destruction to be used very soon will probably be directed at Americans, by other Americans. No surprise when you realize what has been going on there.

Then, a convenient global rival will be targeted in revenge as a distraction.

PREPARE

#9 Joe on 10.28.18 at 3:35 pm

Im having a brain fart…whats B&D again?

#10 Smartalox on 10.28.18 at 3:36 pm

I’ve got two votes for any federal political party that will negotiate a treaty with the USA so that dual-citizens’ TFSA can be accepted the equivalent of a Roth Investment Retirement Account, the way RRSPs and 401k is now.

#11 Paully on 10.28.18 at 3:51 pm

#9 Joe on 10.28.18 at 3:35 pm
Im having a brain fart…whats B&D again?

“Balanced and Diversified.”

#12 Proud Dreg on 10.28.18 at 3:57 pm

Meanwhile banks create money out of thin air at interest – regulated fraud. And tech companies keep buying back their multi billion dollar stock – manipulating their stock prices without improving the company one bit. Again regulated fraud.

#13 Barb on 10.28.18 at 4:00 pm

“…looks like the TFSA limit will be increased in a couple of months.”

——————————————————

A piddly increase of $500!
Any chance T2 will have it revert to the glory days-albeit short-of $10,000?

#14 Shawn Allen on 10.28.18 at 4:01 pm

RRSP versus TFSA?

A strong case has been made that the TFSA will lead to more after-tax wealth in retirement. And it will in many but not all circumstances.

Consider the following.

You have $6000 per year to invest and access to a line of credit and are in a 40% tax bracket.

You could put $6000 per year into TFSA and get it out in retirement tax free and no impact on old age claw back etc.

Or put $10,000 into RRSP using your own $10,000 and borrowing $4000 to be paid back shortly with your tax refund and with minimal interest cost. (Contribute in February and get a refund in a couple weeks)

The RRSP has a head start but faces higher tax in retirement. No matter what your return the RRSP alternative is always 10/6 or 67% larger than the TFSA! (That math can be surprising!)

So, in retirement will say $1.67 million fully taxable money net you less than $1 million in tax free TFSA?

The two will be precisely equal if your total tax hit including old age clawback remains at 40% marginal rate.

RRSP will win if your total marginal tax rate impact in retirement falls below what it was when you contributed. TFSA wins if total tax impact marginal rate rises which it could do for some people given old age clawback and a high income in retirement.

But hey, both are GREAT so ideally max them both out for 30 years if you can.

#15 espressobob on 10.28.18 at 4:25 pm

One thing I learned years ago about speculation plays is how mentally painful it gets when your wager goes sour. Stuck to the major indices ever since.

Would like more downside in the near term just the same. Still enjoy a good bargain.

#16 R Appleton on 10.28.18 at 4:41 pm

Thanks for the clear and concise explanation
of the TFSA. Love the blog.

#17 Canopy Growth on 10.28.18 at 4:47 pm

absolute King. From RESP to Univesity of Waterloo- eldest education has been paid for. If i put it in a `balanced etf or fund`– yikes

with great risk comes reward. But it wasnt that risky tho, writing was all the wall. Legalization WAS going to happen

#18 Surf city on 10.28.18 at 4:47 pm

Good stuff. Surf the waves of life. Can’t go wrong.

#19 SunShowers on 10.28.18 at 4:48 pm

You will recall when T2 gained power one of his first acts was to gut the TFSA limit, scaling it back by half in a politically-motivated, highly questionable move. The justification was that Canadians were not using the space, so it benefited only the wealthy. That was specious, of course, since we don’t use 90% of our RRSP room.

——————————————————-

Great argument for slashing RRSP contribution limits too. It’s time for financial instruments that benefit ALL Canadians, or at least the vast majority of them. Not just tools that help the already well off squeeze every last bit of tax efficiency out of their money.

The TFSA is universally available to everyone. If you do not use it there is only one person to blame. – Garth

#20 Lost...but not leased on 10.28.18 at 4:52 pm

TFSA prognostications are based on their continuity.

My guess is they will eventually be terminated as our socialist gov’ts inevitably and incrementally morph to communism.

Never. – Garth

#21 Shawn Allen on 10.28.18 at 4:55 pm

RRSP versus TFSA more realistic

I said above:

Or put $10,000 into RRSP using your own $10,000 and borrowing $4000 to be paid back shortly with your tax refund and with minimal interest cost. (Contribute in February and get a refund in a couple weeks)

*****************
Whoops I meant of course using your own $6000…

But also the scenario of borrowing the $4000 to make a $10,000 contribution may be unlikely.

Another way… more likely to be used:

Invest $6000 in either a TFSA or RRSP and you are in a 40% marginal tax bracket.

If invested in TFSA, no tax refund so $6000 invested but never taxable and no all-in impact on old age clawback etc.

In RRSP you get a 40% refund so $2400, so now put that into TFSA.

No matter what return you get over decades the RRSP-plus-refund-into-TFSA has 40% more money but 6000/8400 or 71.4% of the retirement wealth will be fully taxable and 28.6% is in TFSA and not taxable.

If you face 40% tax on the 71.4% that is in RRSP that amounts to (you guessed it) 28.6% of your retirement fund going to taxes, but you can use the TFSA to precisely cover the tax bill in this case.

If your marginal tax rate in retirement all-in is greater than 40% (or whatever your marginal tax rate at contribution was) the TFSA is insufficient to cover the taxes and you should have gone the TFSA route with your $6000. But if your all-in marginal tax rate and impact in retirement is under whatever your rate was at contribution, the RRSP plus refund into TFSA route wins.

#22 Sydneysider on 10.28.18 at 4:57 pm

An interesting example that shows what is happening to prices of older, formerly high-end, houses in Burnaby (1980; 5BR + 4 bath).

https://www.zolo.ca/burnaby-real-estate/1230-phillips-avenue

Jul 11: $1.89M
Aug 7: $1.78M
Sep 6: $1.58M
Oct 26: $1.48M

Assessment: $1.587M (of which $1.317M for land)

#23 Hans on 10.28.18 at 4:59 pm

In my opinion this post should be added to the blog’s Hall of Fame. Thank you for everything you do Garth!

On a related note, I worry about potential changes to taxation in the future given the trajectory of debt and debt servicing costs. Government has a long standing history of screwing over people who use tax rules to shelter their income and assets. The fiasco with Income Trusts demonstrated that you cannot trust what the government says it will or will not do. Any long term plans have this governmental idiocy risk (not sure what the proper terminology is though). What’s stopping a government in the future from putting an end to the “tax leakage” from TFSAs? RSP’s being a tax deferral plan also raises a similar thought, who’s willing to wager that tax rates will be higher than they currently are? RSP’s are a bet that future tax rates will be the same, and that (as you note) your income will be lower. Judging from friends and family that have retired in recent years – this isn’t necessarily true. Thank goodness for firms like yours who can offer some guidance on how to navigate changes as they arise.

#24 Shawn Allen on 10.28.18 at 5:13 pm

Banks are perpetual money machines?

#12 Proud Dreg on 10.28.18 at 3:57 pm said:

Meanwhile banks create money out of thin air at interest – regulated fraud. And tech companies keep buying back their multi billion dollar stock – manipulating their stock prices without improving the company one bit. Again regulated fraud.

*****************************
There is some truth to what you say but when the full story is understood, what you say is misleading. You have been misled by those who told you this, and they are numerous.

Imagine though if banks were sort of perpetual money machines lending unlimited money created from thin air and charging interest! And if further they could continually drive up their share prices by buying back shares (perhaps using more of the created from thin air money).

If you believe this you are surely 100% investing every dollar you can spare into bank shares?

The reality is the created money loaned out always belongs to a depositor and not the bank and usually the bank pays interest on the deposit and always the bank is at risk the deposit will be moved to another bank and also there are limits on the process, loans can be not more than roughly ten times the equity capital of the bank due to minimum equity capital rules (not to be confused with minimum cash reserve rules which don’t exist in Canada).

The reality is also that a corporation will see its share price fall eventually if it continues to use dollars to buy back its own shares at inflated prices. Buybacks can truly add to per share value when the shares are purchased for less than their intrinsic value. Buybacks ultimately subtract from share value when purchased for more than intrinsic value. But yes, buybacks at inflated prices could temporarily manipulate share prices higher. But the math eventually catches up.

#25 Shawn Allen on 10.28.18 at 5:28 pm

RRSP Myth Number One:

Hans at 23 repeated the incorrect myth that:

RSP’s are a bet that future tax rates will be the same, and that (as you note) your income will be lower.

*********************************
That is not true, do the math and see that an RRSP can give the exact same after tax return as a TFSA if the marginal tax rate is the same in retirement.

Since TFSA grows tax free, and the RRSP ties it at the same tax rate, that means your net share of the RRSP (after refund) has grown tax free! If your tax rate in retirement is higher due to higher income (nice problem to have) then your share of the RRSP does attract some net tax. If your marginal tax rate in retirement is lower than at contribution then you faced negative tax. i.e The government funds say 40% of “your” RRSP via the refund and then only takes back say 30%. What a great partner the tax man is in that case!

The people who complain about 40% tax on RRSP withdrawal have conveniently totally forgotten (or more likely failed to understand) that the refunds at the outset effectively funded 40% or whatever of that RRSP. It’s like they had a partner (The tax man) that contributed 40% to the fund and now they grouse if their “partner” takes back ANY of so-called “their” RRSP. In many cases he takes back less than 40% and your net cost of your RSP has grown at a negative tax rate! That is the math.

Anyhow, I am sorry but the Math probably can’t compete with what you and many others want to believe here.

As Trump has shown, emotions and feelings are far more powerful than mere facts.

#26 Herb on 10.28.18 at 5:32 pm

Never say never. Remember income trusts gutted by that socialist Harper?

Will never happen with an existing tax shelter. – Garth

#27 georgist on 10.28.18 at 5:35 pm

Can I take this opportunity to verify my understanding of TSFA withdrawals, please Garth.

I get that if you take out $10k your contribution room goes up 10k, but is there any upper bound on this vs your total original contribution room.

A simple example.

Say I am eligible for TSFA, I hit 18 or 21 or whatever age it starts, I qualify for $5,500 contribution room.

I put 5.5k in, I invest the lot into a company that performs amazingly. The shares hit 20k in less than a year.

I withdraw the whole 20k.

Next year comes, I get another 5.5k, total contribution room is?

=> 5.5 + 20 ?

Is this correct, even though had I not invested my total contribution room would only be 5.5 + 5.5 ?

I believe so but wanted to confirm.

Confirmed. – Garth

#28 Albertaguy in AB on 10.28.18 at 5:41 pm

Interesting idea of capturing TFSA contribution room. Lets say “Jason” sold his weed stocks and withdrew all. Lets also say this was worth 150,000 in Oct 2018. His new TFSA limit on Jan 2019 is then 156k? Lets say he reivests 156k Jan 2019 and those investments drop to 100k by end of 2019 and again he sells and withdraws all . What is his tfsa limit in 2020? 106k? or 162k?

#29 Justine Doleman on 10.28.18 at 5:43 pm

Very excited to see TFSAs going up. When will the official announcement take place? I hope they make it soon!

#30 TurnerNation on 10.28.18 at 5:47 pm

Attention small business owners in Kanada you must find a method of insuring again GenderCrimes which could end up bankrupting your business.
Also consider replacing people with robots.

I was in an independent coffee chain and overheard an employee describing an irrate customer which also accused him of assuming gender – when calling that person ‘bud’ (as in Buddy).

The next logical step is a human rights complaint with fines and or a gender discrimination lawsuit.
Six figures in lawyer fees with tearful testimony and earnest witness in line.

And anyone stopping at the US owned Sht Bucks and Grim Hortons your actions are traitorous.
Welcome to hell
Welcome to Kommunist Kanada.

#31 Stone on 10.28.18 at 5:50 pm

So how do you get half a mill in your TFSA?

Simple. If you’re 35 (for example) and have saved diddly, start with $100 this week then add a hundred weekly until 65. Invest in a nice B&D portfolio averaging 7% a year over the next three decades (to be consistent with the last 30 years), and on your 65th birthday you’ll have $532,000 in the account, $376,000 of which was tax-free growth. Keep it invested, skim off the monthly gain and tell the CRA to go and harass the poor people who have pensions.

Of course, if you invest this way from 20 until 65, your sleeper TFSA will contain $1.67 million, paying close to $10,000 a month. With CPP, OAS and dividend income added, that would create an income of over $170,000. Yeah, still no tax.

———

Quite accurate however missing one piece. $1 today will not be $1 tomorrow. Unfortunately, inflation eats away at what that $1 is worth over time.

As such, $532,000 in 30 years from now considering a 3% inflation rate would provide you an investment of $219,000 in today’s dollars.

$1,670,000 in 45 years considering a 3% inflation rate will turn this into the equivalent of about $442,000 in today’s dollars and provide about $2,500 to $2,600 per month income on a 7% return.

Nothing to spit on of course considering only investing $5,200 annually. It’s just something that should be considered. You can’t buy gum for a penny anymore. The same is true for everything else.

Regardless, stuffing your TFSA and RRSP is important as well as building a non-registered account as well with anything that doesn’t fit into the TFSA and RRSP.

You can’t do anything about inflation. You can do something about growing money. Focus on what matters. – Garth

#32 Stone on 10.28.18 at 5:52 pm

#28 Albertaguy in AB on 10.28.18 at 5:41 pm
Interesting idea of capturing TFSA contribution room. Lets say “Jason” sold his weed stocks and withdrew all. Lets also say this was worth 150,000 in Oct 2018. His new TFSA limit on Jan 2019 is then 156k? Lets say he reivests 156k Jan 2019 and those investments drop to 100k by end of 2019 and again he sells and withdraws all . What is his tfsa limit in 2020? 106k? or 162k?

———

$106k.

#33 baloney Sandwitch on 10.28.18 at 5:55 pm

Never really understood the mania for pot stocks. Its “weed” for god sake which anyone can grow in a greenhouse. At best the cannabis companies are farm operations. No way are they worth more than a P/E of 12 or P/B of 2 in the longer term. Yes, they are going down big time – but hard to short – given the bear traps along the way.

#34 georgist on 10.28.18 at 6:01 pm

Shawn Allen, have a read of this from the Bank of England and a guy who writes for the IMF. Former BoE governor Merv King also stated this, as has the Bank of Australia (https://www.rba.gov.au/speeches/2018/sp-ag-2018-09-19.html):

https://bankunderground.co.uk/2015/06/30/banks-are-not-intermediaries-of-loanable-funds-and-why-this-matters/

> And if further they could continually drive up their share prices by buying back shares

They are explicitly prevented from doing this. Just this week Barclays were in the dock for this when they lent money out to Qatar who then used the money to buy back the shares. Why does this rule exist? Because banks create money and they could use this to drive their own stock price.

> loans can be not more than roughly ten times the equity capital of the bank due to minimum equity capital rules

This paper explicitly addresses this limit, it’s not a limit:

>> By contrast, and contrary to the deposit multiplier view of banking, the availability of central bank reserves does not constitute a limit to lending and deposit creation. This, again, has been repeatedly stated in publications of the world’s leading central banks.

When several banks all start making loans each issuer also has loans *deposited* into their customer accounts which are not distinguishable from govt money, as it is given the status of legal tender. Were this not the case then “bank money” would trade at par to “govt money”. This allows all banks to lend simultaneously without limit, other than willing borrowers.

Finally on the share buy-back schemes. You need to separate out incentives.

Long term: share buy-backs could be harmful for *the company*.

Short term: share buy-backs hit bonus targets for *the board*.

We saw this with banks pre 2008. It was hugely profitable for *employees* to hide risk at the large banks. Many of them imploded. Bonuses are paid annually. They had years of making a fortune, then they left, with no real consequence.

#35 When Will They Raise Rates? on 10.28.18 at 6:09 pm

Will never happen with an existing tax shelter. – Garth

Are you 100% sure about that?

#36 crowdedelevatorfartz on 10.28.18 at 6:17 pm

@#20 Lost…your mind
“My guess is they will eventually be terminated as our socialist gov’ts inevitably and incrementally morph to communism.’
++++

What is your paranoid delusional infatuation with Communism?
Yesterday it was “FDR(President Roosevelt) was a Communist?
Today , even weirder.
Do you actually read what you type?
Twitchy fingers…. the delirium tremens kicking in before Happy Hour again?

#37 AK on 10.28.18 at 6:17 pm

Jair Bolsonaro: Far-right candidate ‘to win Brazil poll’

#38 Shawn Allen on 10.28.18 at 6:29 pm

#34 georgist on 10.28.18 at 6:01 pm

“the availability of central bank reserves does not constitute a limit to lending and deposit creation.”

I said that minimum equity capital ratios create a limit (to lending and deposit creation). I did not mention central bank reserves.

Like I said, the created money (deposits) always belongs to a bank customer. If a loan and deposit are simultaneously created and the borrower spends the deposit on a vacation then the vacation company now owns the deposit. If the borrower then defaults on the loan, the bank is out of luck as there is no security on the loan but the bank still owes the deposit back to the vacation company. Here you can see that banking can be quite risky.

With your views on banking and money creation do you think a strategy of investing 100% in bank shares is a good idea? If not, why not?

Banks would be a perpetual money machines if they could create money for their own account. They cannot, the created money belongs to depositors always.They can however loan out the depositors money, taking the very real risk that the loan will not be repaid to the bank but the depositor is still owed the deposit by the bank.

It would be folly to borrow money and use it to buy bank shares if they were selling for more than intrinsic value and so there is little need of a law to prevent that. The borrower would end up with bank shares that he paid more for than they are worth and he still owes the loan. Yeah, it might work in the short term but is risky. How many shares would you need to buy to artificially push up the price of Royal bank?

#39 Lost...but not leased on 10.28.18 at 6:31 pm

Huh?

If banks were lending $$$ at historically low interest rates, they are couldn’t be relying on private deposits. People were more predisposed to invest elsewhere.

Where the hell did the banksters get the $$$’s to lend for mortgages till the market was cooled ?

#40 SunShowers on 10.28.18 at 6:32 pm

“The TFSA is universally available to everyone. If you do not use it there is only one person to blame. – Garth”

Lamborghinis are also “universally available to everyone” in the exact same sense that nothing is PREVENTING anybody from taking advantage of one except their own lack of funds.

For all your good intentions, lots of your advice comes off as very out of touch. There’s a reason the vast majority of Canadians don’t have any money to invest in RRSPs and TFSAs, and it’s not real estate.

Life is about choices. Do not criticize me for showing you a path out of your victimhood. – Garth

#41 Proud Dreg on 10.28.18 at 6:38 pm

AK on 10.28.18 at 6:17 pm
Jair Bolsonaro: Far-right candidate ‘to win Brazil poll’

Funny how the “Far-Left” never seem to use the word “Far” in their description.

#42 Hans on 10.28.18 at 6:40 pm

Re: Shawn Allen #25

“Anyhow, I am sorry but the Math probably can’t compete with what you and many others want to believe here.”

No need for the shot. Your opinion is valued as much as any other anonymous poster. You can make your point minus the vitriol and it will still be read.

Re: Your response – I don’t see how that changes what I posted.

If you contribute now, marginal tax rates are set 2018, using 2018 currency, inflation rates, etc. Will those tax rates be the same in 10/15/20 years when you want to withdrawl? I said nothing of returns. The point I’m trying to make is that in time, I suspect marginal tax rates will have to go up to pay for the accumulated debt and related interest payments, and there is the potential for the “brackets” to change to our detriment.

So you contribute $50K into your RSP in 2018, and withdrawal $50K in 2028. Inflation has eaten your buying power so you will need to withdrawl more than the $50K to get the equivalent buying power, the taxes to be paid on the withdrawal will almost certainly be different and I suspect higher, so you end up further behind. Are incomes gaining with the cost of living? Are tax inclusion rates (I don’t know the proper term for this) being increased to reflect inflation? If not, then you are gravitating towards higher marginal tax rates due to inflationary pressures. It isn’t something that keeps me up at night, but it seems like it might be a bit of a fools game. Maybe weed stock returns (the upside, not the downside hahah) are what’s needed to get ahead?

#43 For those about to flop... on 10.28.18 at 6:43 pm

Boss,since you asked me to come up with a gimmick to keep everyone cool while the waters are a little choppy, this is what my expert recommendation is.

We need to freshen things up, the team has done a good job to get us this far but we need to tweak a few things.

Doug and Ryan are already confused for each other every Saturday so we need to make the name switch permanent.

Would I invest with Ryan Lewenza and Doug Rowat…no way!

However…I would go all in with Doug Lewenza and Ryan Rowat…

M44BC

#44 georgist on 10.28.18 at 6:49 pm

Shawn, you haven’t read that paper.

> If a loan and deposit are simultaneously created and the borrower spends the deposit on a vacation then the vacation company now owns the deposit. If the borrower then defaults on the loan, the bank is out of luck

My issue here is: it is tenable, in the short term. The vast majority of bank lending is against property. When we enter an upturn banks simultaneously begin to lend, and this is only restricted (as per the article) by finding enough willing borrowers.

Why not buy bank shares? Calling the bottom and top of a cycle is very hard. Clearly banks cannot print forever, but they can print for the duration of the cycle before it catches up with us all. In addition the wealth appropriated by over-issuance of fiat vs productivity gains may well be dispensed as bonuses rather than to shareholders via profits/dividends. It’s simplistic to say “why not buy banks”.

> I said that minimum equity capital ratios create a limit

This is also debunked in the linked paper.

I’m not that interested in the buy-back part TBH, I’d sooner discuss money creation, but companies have been doing this to achieve bonus targets rather than long term R&D.

#45 JTEpic on 10.28.18 at 6:50 pm

I dumped all of the proceeds of primary residence sale into a B&D portfollo and just watched nearly 40k vaporize in two weeks. My market entry timing stunk since I only got in late second quarter of 2018 missing all of gains years first half.

I might have been better to DCA my way in based on the obvious run up.

Licking my wounds this weekend but have 20yrs to wait, so this will only be a great story to tell when I’m enjoying the fruits of a well executed plan.

Immaterial to the outcome. – Garth

#46 arfmoocat on 10.28.18 at 7:00 pm

Overeating can also cause sleepiness. Post-meal, the body streams more blood to the digestive system to better digest foods in massive amounts. This causes a temporary blood and nutrients shortage in the brain

#47 Terry on 10.28.18 at 7:09 pm

“Whatever happens in that election, populism will inevitably falter.”

And now Brazil votes for a far right government! Looks to me like Populism is winning in country after after country Garth. This time no matter how often you repeat the propaganda to get a following the real world is rejecting Globalism & Liberalism. Harper is right once again in saying that the future is Populism!

Celebrating the win of a man who said he’d rather have a dead son than a gay one is sick. Go away. – Garth

#48 georgist on 10.28.18 at 7:23 pm

Shawn – to add, in any case you are in the minority in acknowledging banks create money. We are discussing how much they can create, it’s a heck of a lot *more* than productivity growth could ever be.

When issuance is > productivity growth they are essentially enacting a land grab on existing wealth.

IMHO money expansion should be under democratic control (bring back the green back!!) and banks should be intermediaries. The tail is wagging the dog, which is why we’ve seen the West fall so far from grace since the mid 1970s.

I’m not holding my breath for Trudeau to comprehend any of this, nor to act!

#49 Lifexprt on 10.28.18 at 7:25 pm

Ah i am in the same boat as Jason, up a few hundred percent, down 20 or so in the past month. Key is to take profits along the way and use some fairly basis technical analysis to attempt market tuning. Works sometimes.

Scotia just issued a report on aphria, gave it a $25 target, its trading at $15 today, why not take a gamble here and there.

On a side note what worked for me was buying sector leaders, today i would rebalance into US and International plays as that is where growth will come from, Canadian market is saturated and too late to enter

#50 Mountain guy on 10.28.18 at 7:27 pm

Thank you Garth for promptly rebutting the celebration (terry #47) of election of the extremist, violence condoning, new president of Brasil, the 4th largest democracy. Many people now have good reason to fear for their lives under his rule. This is a lesson in how quickly a country can descend toward a totalitarian state.

#51 FOUR FINGERS WATSON on 10.28.18 at 7:30 pm

#9 Joe on 10.28.18 at 3:35 pm
Im having a brain fart…whats B&D again?
…………………………….

Bondage and Discipline.

#52 baloney Sandwitch on 10.28.18 at 7:34 pm

mmm. I am sure there are speculators using TFSA as a perpetually filling piggy bank. Buy a hot stock (bitcoin, cannabis, block chain, tulips) – ride it up to 1000% – sell before the public – withdraw your loot – top it up again – rinse and repeat. This is why you are seeing million dollar TFSA’s which getting the finance guys seeing red.

#53 georgist on 10.28.18 at 7:39 pm

> This is why you are seeing million dollar TFSA’s which getting the finance guys seeing red.

Can you expand upon this please, perhaps with a link?

What is the problem here? if you have say 100k in a TFSA and you move it into a risky stock, win big, then move it out into bonds / GIC (still in the TFSA wrapper, no need to actually remove it from the wrapper as far as I can tell).

In this case what is the problem, or who thinks there is a problem? Are some arguing it should be a taxable, speculative gain?

#54 SwanPardis on 10.28.18 at 7:40 pm

@No.10
“I’ve got two votes for any federal political party that will negotiate a treaty with the USA so that dual-citizens’ TFSA can be accepted the equivalent of a Roth Investment Retirement Account, the way RRSPs and 401k is now.”

The Great Omniscient disagrees with this, but a majority of crossborder accountants advise US./Canada dual citizens to open TFSAs with no hesitation on the assumption that had that option preceded the Treaty, it would have been explicitly addressed therein. Clear law would of course be a relief, but I would not wait for one if you’re inclined to take advantage of a TFSA and it makes financial sense to your situation.
.

#55 FOUR FINGERS WATSON on 10.28.18 at 7:45 pm

Life is about choices. Do not criticize me for showing you a path out of your victimhood. – Garth
……………………………

Well said…..The Libtards and the US Dem platforms play the race and gender cards to imply that we are victims and that only they can save us from our horrible fate. Everyone else is racist, sexist, and fascist.

#56 Leslie Holten on 10.28.18 at 7:48 pm

Garth, What would it take for the Bank of Canada to start adding to their physical gold holdings again?

Why would it? – Garth

#57 crowdedelevatorfartz on 10.28.18 at 7:50 pm

@#40 sunshowers
“There’s a reason the vast majority of Canadians don’t have any money to invest in RRSPs and TFSAs, ”
+++++

The average person has the self discipline of cigar smoking albino chimp in a circus sideshow staring at a humidor full of Havanas.

Wants vs Needs.
Do you want that $50 cigar. Absolutely!
Do you want a new car? Sure!
Do you need a new car? no…..

How much do you spend on coffee per day?
Lunch per day?
Dining out per month?
Pretty easy to save $200 per month if you start looking at your expenses.
Wants vs Needs….its up to you.
Your choice.
Live with it.

#58 crowdedelevatorfartz on 10.28.18 at 7:54 pm

@#51 4 fingers
“Bondage and Discipline.”
+++++
ahahahaha
Good one.

Re :Sunshine
Financial Bondage or Personal Discipline

Your choice

#59 Capt. Obvious on 10.28.18 at 7:56 pm

Something to keep in mind is that returns fluctuate year to year. This is not a smooth ride. Sometimes there are periods of time where stocks go nowhere (accounting for inflation) for several years. You wouldn’t get higher returns from stocks if you faced no risks. I think we are pretty influenced by the past 30 years, which have been particularly amazing for equity returns. It would not shock me one bit if we have to endure a dead period in the next 30. The key is not abandoning the plan, even if in the short term you are just treading water. Easy to say, hard to do.
A good factoid to remember (this is for the S&P 500, but I’d imagine similar for other developed markets) is only 5% of trading days make new highs, the other 95% spent in a state of drawdown below the peak. Patience grasshoppers.

#60 Linda on 10.28.18 at 8:02 pm

Another benefit of TFSA’s is that the annual contribution limits apply regardless of income source. So pensioners can take advantage of that tax free status too.

Puppy photo of the day = smile.

#61 baloney Sandwitch on 10.28.18 at 8:05 pm

Just googled – million dollar TFSA and this article from 2015 popped up. https://business.financialpost.com/personal-finance/tfsa/this-bay-st-trader-managed-to-amass-1-25-million-in-his-tfsa-now-the-taxman-wants-to-know-how

It 2018 now – probably looking at $3 million TFSA’s by now.

TFSAs cannot used for professional trading purposes. – Garth

#62 Ponnaps on 10.28.18 at 8:08 pm

Hi Garth,
A quick question to you hoping this gets your attention.

The wife’s going on maternity leave for a year. Can she legally withdraw from her self directed RRSP (its not a spousal) to take advantage of the lower tax bracket she’ll be in? Are there any restrictions on these withdrawals? for eg whether contributions made in the current year cant be withdrawn..etc?

Appreciate it!

She can withdraw what she wants. But the money taken will be added to her total income for that year. She can contribute up to March 1, 2019 for the 2018 taxation year and take that money in 2019, still receiving the deduction. – Garth

#63 rc99ar on 10.28.18 at 8:17 pm

Were those TSX returns TR or before dividends? Seemed a bit low but the start date might be the difference.

#64 georgist on 10.28.18 at 8:34 pm

baloney – thanks. I’m an index buy and hold guy, so not sailing anywhere near this classification, but I was curious. It’s an interesting problem.

#65 slick on 10.28.18 at 8:35 pm

Excellent post today Garth.
a couple of additions if I may;
1] the TFSA allows contribution room to be carried forward.
Yes, many people cannot afford to contribute today, but many of them will have an opportunity to fill that contribution room later in life, eg: after the kids are thru school, after he mortgage is paid, after the parents dies and leave an inheritance, etc.
2] The TFSA can be contributed to for the rest of your life. While my mother was in her late 70’s she was still contributing from RIF payments, and unregistered investments. Good thing too, cause when she died we needed that money to pay the taxes on the RIF collapse.

#66 slick on 10.28.18 at 8:39 pm

pressed send to quick.
3] the self employed, or those that earn from dividends in their own company, don’t have ‘earned income’ like regular paycheck people. Therefore not nearly as much RSP room. The TFSA has no such discrimination

#67 Ponnaps on 10.28.18 at 8:42 pm

Thank you so much Garth.

I understand the contribution room is lost forever plus the opportunity loss of compounded income.

All things considered, is this still something one should be taking advantage of? I haven’t seen you write much about it making me wonder if its even a sound financial strategy.

#68 Fish on 10.28.18 at 8:46 pm

Release dates for major economic indicators, by month, 2018

https://www.statcan.gc.ca/release-diffusion/2018month-mois-eng.htm

#69 TurnerNation on 10.28.18 at 8:52 pm

Blogmaster General’s warning: Reading of this commenting section may result in
– Dizzyness, headaches
– Backpain
– Limp Members
– And being shown ads like this one all over other web sites:

https://canada.equityempire.ca/why-invest/
“Typical investment returns on private mortgage investments with us range from 9-15%”
…………..

Gonna be a real hoot as rising rates topple equity and force margin calls, imo.

#70 Marc Roger on 10.28.18 at 9:08 pm

Yay 6k.
Huzzah.

#71 young & foolish on 10.28.18 at 9:10 pm

” … Jason had an opportunity to move a huge whack of money out of his TFSA while retaining the ability to replace it in the future.”

Why would he take it out? To buy a house :)

#72 Spectacle ( driving a small part of the economy) on 10.28.18 at 9:16 pm

crowdedelevatorfartz on 10.28.18 at 7:50 pm
@#40 sunshowers
“There’s a reason the vast majority of Canadians don’t have any money to invest in RRSPs and TFSAs, ”
+++++

The average person has the self discipline of cigar smoking albino chimp in a circus sideshow staring at a humidor full of Havanas.

Wants vs Needs.
Do you want that $50 cigar. Absolutely!
Do you want a new car? Sure!
Do you need a new car? no…..

How much do you spend on coffee per day?
1) Lunch per day? Usually corporate pays, or $6 max 2x per week.
2) Dining out per month? $60 max usually take out for family.
3) cigar, Esplendidos, $95 each
4) coffee, gas station or Mcds, $1.50 3x week.
5). Yes, becoming frugal and El Cheappo, loving it, not robbing my 3year old or financial future.

Pretty easy to save $200 per month if you start looking at your expenses.

Note:: But I am questioning this running older vehicles, the expenses add up, who has/wants to work on them in the off hours! Plus a write-off paying someone else to get the ugly stuff done.

Anyone else….?

#73 Sammy on 10.28.18 at 9:26 pm

Huge assumption of future returns at 7%. Rising rates is a game changer , sadly . May have to drop that a full percentage . Bond bull market is kaput . May need 80/20 and a prayer

2018 will not return 7% . Not even close

As stated. – Garth

#74 Steven Rowlandson on 10.28.18 at 9:26 pm

“Bulls make money. Bears make money. Pigs get slaughtered.”

This is why if you are a buy and hold type you need to invest in something real that can’t go to zero.

#75 k on 10.28.18 at 9:27 pm

Re #40 Sunshowers. I have had difficult times in my life ….mid thirties…and divorce struck . Broken heart and all $$$ gone. Now in my early 60’s ….New (better) wife for past 30 years and we are financially comfortable …mainly due to working 3 jobs when I had to and my wife going to University to upgrade and working part time as well. What is your story and why do you feel like a victim ?

#76 Long-Time Lurker on 10.28.18 at 9:28 pm

#56 Smoking Man on 10.28.18 at 2:28 am
All you try and do is bring some comedy into a world that needs it badly. You get really evil ass holes who can’t take a joke.
Crazy un happy shit heads who because of there lack of creativity.
Want to destroy creative people.

I’m done here. And every other social media account. . You want to hear my old white man alien wisdom, there will be fee.

Good bye dogs. In done.

Hero Janes can take all the credit.

>Hey, Smokey. You can still post here (there). Create a new identity (s). Just change your character (s). There are so many wackos posting on here (there) no one will know it’s you. As long as you don’t “out” yourself, you can leave everyone guessing. I’ll still post something interesting that I see addressed to Smokey.

#43 For those about to flop… on 10.28.18 at 6:43 pm
Boss,since you asked me to come up with a gimmick to keep everyone cool while the waters are a little choppy, this is what my expert recommendation is….

>After two warnings to be civil, bounce ’em or shut down the comments for the post. Take it outside, goofs.

#77 k on 10.28.18 at 9:30 pm

Garth ….perfunctory sycophantic platitudes. Hell of a good post as usual !

#78 Spectacle on 10.28.18 at 9:32 pm

#13. Barb on 10.28.18 at 4:00 pm
“…looks like the TFSA limit will be increased in a couple of months.”

——————————————————

A piddly increase of $500!
Any chance T2 will have it revert to the glory days-albeit short-of $10,000?

$$$$$$$$$$$$$$ And in that Rises the opportunity $$$

Dear Mr Turner,

Please place your name into the running for Minister of Finance.

It will be the Tipping Point, the critical,axis that “working middle class lives matter”.

You will Win…..and shake up politics and get break up the Cabal.

Please Do It

#79 Shawn Allen on 10.28.18 at 9:41 pm

Apology to Hans

#42 Hans on 10.28.18 at 6:40 pm
Re: Shawn Allen #25

“Anyhow, I am sorry but the Math probably can’t compete with what you and many others want to believe here.”

No need for the shot. Your opinion is valued as much as any other anonymous poster. You can make your point minus the vitriol and it will still be read.

***************************************
I apologize for the shot. If you are someone willing to look at the math then congratulations.

I thought you were saying that an RRSP was a poor idea if marginal tax rate would not be lower in retirement.

The math shows, that on our contributions less the refund, it equals the TFSA (and is therefore tax free and wonderful) if the marginal tax rate is the same at contribution and withdrawal. And it beats the TFSA and therefore means tax less than zero on your net contributions and growth therein if the marginal tax rate is less in retirement. (Yes, the portion of the RRSP effectively funded by the refund grows to pay more than all the taxes in this case and it’s actually very common)

If the marginal tax rate is higher in retirement, the RRSP could still be good, but not as good as the TFSA unless the marginal tax gets too high where at some point the person would have been better off in a taxable account.

I agree that marginal tax rates could be higher in retirement. The government could certainly increase tax rates. But for most people their income will be lower in retirement with inflation-adjusted income at usually 70% or less of pre-retirement. And remember that tax brackets are adjusted upwards for inflation automatically in Canada.

The biggest benefit of the RRSP and this is HUGE is that it strongly encouraged people to invest for the tax savings. In reality that refund would be paid back later and the true benefit of the RRSp was the tax free compounding and not the refund at all. Nevertheless people invest in RRSP even if for the wrong reason.

No matter what the tax (as long as not 100% or more) a dollar in the RRSP will buy more in retirement than will a dollar that does not exist because nothing was saved for retirement.

I have said before, the only thing worse than having to pay a lot of income tax is not having to because you have no income. Of course, if you can get income without being taxed that is great. But having a big income and big taxes is not the worse outcome.

#80 young & foolish on 10.28.18 at 9:49 pm

I just love the TFSA …. thanks Garth!

#81 Shawn Allen on 10.28.18 at 9:50 pm

Georgist…

#48 georgist on 10.28.18 at 7:23 pm
Shawn – to add, in any case you are in the minority in acknowledging banks create money.

*******************************
Thank you, yes banks, together with their willing borrowers, create money. I view that as a good thing though.

Banks are an absolutely essential part of the economy and contribute greatly to the incredible standards of living that most of us enjoy today. But, yes, once in a while excessive lending causes problems for banks and the economy.

That is my view at least.

#82 For those about to flop... on 10.28.18 at 9:57 pm

#76 Long-Time Lurker on 10.28.18 at 9:28 pm

#43 For those about to flop… on 10.28.18 at 6:43 pm
Boss,since you asked me to come up with a gimmick to keep everyone cool while the waters are a little choppy, this is what my expert recommendation is….

>After two warnings to be civil, bounce ’em or shut down the comments for the post. Take it outside, goofs.

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

Hey Lurker,I must be slipping.

I was referring to the choppiness of the markets.

I thought everyone could tell that that post was satirical in nature and I wrote it because I was trying to afford host of this blog a little chuckle as things have been a bit tense around here lately.

I will make it up to you.

I will put more satay sauce on the next one…

M44BC

#83 Tony on 10.28.18 at 10:11 pm

Re: #33 baloney Sandwitch on 10.28.18 at 5:55 pm

They doubled the penalties for trafficking but the main reason for legalizing marijuana was to free up the court system backlog and save the taxpayers a lot of money by not sending people with drug crimes like simple possession to jail. Will they really enforce the trafficking penalties for marijuana? I think the same people who pull all those fake staged automobile accidents to defraud the insurance companies will be the same ones trafficking marijuana in the GTA.

#84 SaraJ on 10.28.18 at 10:36 pm

#52, #61 baloney Sandwitch It only counts if you sell. All those 35y something who invested and speculated over the past ten years never really experienced a bear market which will take away ~50% of their portfolio, if they didn’t sell any. If you managed to get on hot trend ( dotcom, CDN housing, bitcoin, weed …) and made money all good to you, but don’t get greedy and create a plan to sell and realize gains at some point, otherwise half or even more will vaporize in the next bear market

#85 William B Davis on 10.28.18 at 10:52 pm

Brazil elects a Trump.

A wack job Trump hater shoots up some some old white Jews. A patsy Trump supporter is caught sending fake bombs to Democrats.

Israel denounces George Soros.

Smoking Man Exits.

What the hell is going on?…

#86 pay your taxes on 10.28.18 at 11:11 pm

#73 Sammy
2018 will not return 7% . Not even close

2015 was a negative year too. Funny how those years never appear as a starting point, or even appear to factor into these “averages”. How much will markets have to rise in 2019 to make up for 2018 and maintain that magical 7% ?

I accept things as they are. Embellishment makes me suspicious.

This was a great blog entry though and the reason I keep coming back here. I’m getting to an age where I’ll start looking for income. Any opinions on XTR?

#87 ETF vs stock on 10.28.18 at 11:28 pm

Hello Garth, I just sold my rental house in Penticton, I have 510k to invest. You talk about etfs but my uncle tells me to invest it all in stocks, not junk stocks he says cn rail, td, Rbc, Mcdonalds etc… only great quality companys that will grow and pay dividends…. what’s the difference between stocks and etf?
Thanks
Arby

#88 Zack deRockies on 10.28.18 at 11:44 pm

#24 Shawn Allen on 10.28.18 at 5:13 pm

There is some truth to what you say but when the full story is understood, what you say is misleading. You have been misled by those who told you this, and they are numerous.”

This is sounding alot like a Rage Against the machine pre-song sppech. Beware copyright infringment on revolutionary ideas.

https://www.youtube.com/watch?v=8de2W3rtZsA

“They use force to make you do what the deciders have decided you must do.”

#89 PastThePeak on 10.29.18 at 12:11 am

#40 SunShowers on 10.28.18 at 6:32 pm
“The TFSA is universally available to everyone. If you do not use it there is only one person to blame. – Garth”

Lamborghinis are also “universally available to everyone” in the exact same sense that nothing is PREVENTING anybody from taking advantage of one except their own lack of funds.

For all your good intentions, lots of your advice comes off as very out of touch. There’s a reason the vast majority of Canadians don’t have any money to invest in RRSPs and TFSAs, and it’s not real estate.
++++++++++++++++++++++++

Snowflake, I think you are looking for the SJW blog, which is down the hall and to the left…

#90 len on 10.29.18 at 12:22 am

I would like to highlight a major privacy issue coming down as reported by Globe News on Friday. 1 in 5 Canadians will have their financial history scrutinized by Stats Canada. This government body will be asking financial institutions to release every single transaction. Here is a quote from the report:

“The personal banking and financial transactions being requested include bill payments, cash withdrawals from ATMs, credit card payments, electronic money transfers and even account balances of Canadians across the country.

James Tebrake, director general of macroeconomics at Statistics Canada, told Global News that beginning in January, the agency will ask nine banks for the financial transaction information from a representative sample of 500,000 randomly chosen Canadians or a 1 in 20 chance of being selected.”

Please note from the report that this information will be linked to Social insurance number, name, address and date of birth. Each new year, another 500,000 Canadians will be scrutinized.

The Federal Privacy Commissioner appears to be on board with this unbelievable intrusion of privacy but talks are still continuing.

If you find this dangerous and unprecedented, please contact the office of the commissioner at the federal level and also in your province.

Here is the link to the office: https://www.priv.gc.ca/en/contact-the-opc/contact-the-information-centre/

Here is a link to the original report by the Global News

https://globalnews.ca/news/4599953/exclusive-stats-canada-requesting-banking-information-of-500000-canadians-without-their-knowledge/

#91 Fortune 500 on 10.29.18 at 12:45 am

Garth, what would you recommend a mid-30s couple with significant savings do on return to Canada in regards to the TFSA or RRSP. Assuming you have high 6 figures in retirement savings already. Exactly how would you shelter or deploy this if you have been out of country for 15+ years?

#92 majik on 10.29.18 at 1:38 am

Interesting story:

“Stats Canada requesting banking information of 500,000 Canadians without their knowledge”

https://globalnews.ca/news/4599953/exclusive-stats-canada-requesting-banking-information-of-500000-canadians-without-their-knowledge/

Interesting that the banks are pushing back against this. I’ve never seen them act in their clients interests before! Could the data be used in formulating a B20 type regulation in the personal credit marketplace?

#93 Newguy on 10.29.18 at 2:06 am

It’s always hard to sell when your stock has gone up. The fear of seller’s remorse is strong. That leaves you open to holder’s remorse. I have trained myself to sell at least some at certain price points and you need to set them when you buy. Not when you are standing at the edge of the cliff. To sell at least some trains you to avoid both seller’s and holder’s remorse and makes you more comfortable with your own psychological trading limits.

#94 TS on 10.29.18 at 6:43 am

LOL,

Garth, why use 7% a year average? Find me an investment advisor who has averaged more than 4-5% since 2005?

7% after fees with no risk is impossible

Of course there is risk, but the numbers I quoted are reality. If you had been invested, that would have been the result. Asking for a guarantee suggests you are not cut out for it. Perhaps this is more your speed. – Garth

#95 dharma bum on 10.29.18 at 6:52 am

#23 Hans

On a related note, I worry about potential changes to taxation in the future given the trajectory of debt and debt servicing cost.
——————————————————————–

Quit worrying and keep saving and investing.

What’s the alternative?

The government will do what the government will do, notwithstanding the fact that you continue to do what you do.

If you don’t save and invest, you’ll end up with nothing.

If you continue to save and invest, and use the current legal tax loopholes, you’ll still be way ahead, regardless.

Paranoia about what the government will do in the future is counterproductive to your financial wellbeing.

#96 SunShowers on 10.29.18 at 7:27 am

Life is about choices. Do not criticize me for showing you a path out of your victimhood. – Garth

————————

“Why don’t poor people just CHOOSE to have more money?”

If you wish to give up and accept your circumstances, stop coming here. You are wasting my time. – Garth

#97 50 YEARS OF MAPLE LEAF INCOMPETENCE! on 10.29.18 at 8:06 am

Look south, Toronturds. Boston just grabbed another World Series, fourth time in 14 years.

This is called winning, GTA losers.

Oops, Sorry, let me spell that for you, I realize it’s a strange word, a foreign concept to you:

“W-I-N-N-I-N-G”

Now you can go, Toronturds – rush off and get another HELOC to buy more Make Believe tickets and “invest” in another condo because your prices only go up!

LOLOLOL!!!

(Seriously though….why does anyone continue to “live” in the GTA dumping ground….?)

#98 Jesse Livermore on 10.29.18 at 8:21 am

Didn’t anybody on here short weed stocks? Folks, the pros make money in collapsing stocks by shorting them….

#99 Wrk.dover on 10.29.18 at 8:21 am

#72 Spectacle ( driving a small part of the economy) on 10.28.18 at 9:16 pm

Note:: But I am questioning this running older vehicles, the expenses add up, who has/wants to work on them in the off hours! Plus a write-off paying someone else to get the ugly stuff done.

Anyone else….?

——————————————-

My wife’s bought new car still looks new inside and out but at 235,000 km and 17 years of age needed some consumables lately. Struts, tires, water pump, etc.

I ponied up the money, did the work. I have a known known. Could have junked it. Most would have.

The capital cost will have been $100/month in another couple of years. The maintenance cost is less than that, even in it’s declining years, and was negligible until recently.

Our summer drivers cost less than a cigarette or wine habit in total. Average time fleet owned 22 years, average age 34 years. Antique plates and insurance costs are a good joke.

It’s cheaper to keep her. (Indoors)

M65NS

#100 TurnerNation on 10.29.18 at 8:45 am

They were feeling left out of this precautionary exercise?
……
AMF proposes bail-in regime for Desjardins
The proposed regime is similar to the one that was adopted for the major Canadian banks

#101 Renter's Revenge! on 10.29.18 at 8:57 am

“Invest in a nice B&D portfolio”

Garth, you should call it the BDSM portfolio (balanced, diversified and sagely managed).

#102 Toronto Hater is a Moron on 10.29.18 at 9:25 am

#97 50 YEARS OF MAPLE LEAF INCOMPETENCE! on 10.29.18 at 8:06 am
“Look south, Toronturds. Boston just grabbed another World Series, fourth time in 14 years.
This is called winning, GTA losers.
Oops, Sorry, let me spell that for you, I realize it’s a strange word, a foreign concept to you:“W-I-N-N-I-N-G”Now you can go, Toronturds – rush off and get another HELOC to buy more Make Believe tickets and “invest” in another condo because your prices only go up!”LOLOLOL!!!(Seriously though….why does anyone continue to “live” in the GTA dumping ground….?)”

Good morning you moronic half wit. Let me remind you that the Jays have two World Series championships. What other city in Canada has that? Let me remind you that your hated Leafs are in first place as are the Raptors who are undefeated. Toronto FC won the MLS championship in 2017. This sounds like the insane Stan the Kook Brooks. Jealous of the huge capital gains free profits we make when we sell our homes? Go crawl back under your rock you pathetic loser and stop bashing Canada’s biggest city.

#103 AFD on 10.29.18 at 9:35 am

“Invest in a nice B&D portfolio”

Garth, you should call it the BDSM portfolio (balanced, diversified and sagely managed).

Don’t forget your “safe” word!

#104 Remembrancer on 10.29.18 at 9:45 am

#92 majik on 10.29.18 at 1:38 am
Interesting that the banks are pushing back against this. I’ve never seen them act in their clients interests before! Could the data be used in formulating a B20 type regulation in the personal credit marketplace?
————————————————————–
EVERYONE should be pushing back against this…

#105 Stan Brooks on 10.29.18 at 9:58 am

TFSAs cannot be used for professional trading purposes. – Garth

What exactly is professional trading purposes definition by law? How is it defined, by number of trades per day/month and where is the threshold?

Is there guaranteed profit in trading? I don’t think so.

What if you bought weed companies that increased 100 fold and sat on it, but then sold 1 week ago? Are you a trader?

If CRA is going to tax ‘professional trader gains’ as capital gains or income, are they going to introduce capital losses on TSFA for these who lose on their investment?

The whole think is a big idiocy, as the pot legislation, but this is what happens when you are run by lunatics.

They prosecute people not based on law, but based on rules introduced by bureaucrats and on subjective interpretations.

It is what CRA says it is. Use common sense. – Garth

#106 Tater on 10.29.18 at 10:15 am

#105 Stan Brooks on 10.29.18 at 9:58 am
TFSAs cannot be used for professional trading purposes. – Garth

What exactly is professional trading purposes definition by law? How is it defined, by number of trades per day/month and where is the threshold?

Is there guaranteed profit in trading? I don’t think so.

What if you bought weed companies that increased 100 fold and sat on it, but then sold 1 week ago? Are you a trader?

If CRA is going to tax ‘professional trader gains’ as capital gains or income, are they going to introduce capital losses on TSFA for these who lose on their investment?

The whole think is a big idiocy, as the pot legislation, but this is what happens when you are run by lunatics.

They prosecute people not based on law, but based on rules introduced by bureaucrats and on subjective interpretations.

It is what CRA says it is. Use common sense. – Garth
—————————————————————
If sense were common, Stan might have some.

CRA looks at total return, number of trades, strategies employed and the occupation and qualifications of the holder of the account. Design quant trading strategies for a bank and are up huge? Yep, trading. Have a CFA and are a portfolio manager? Probably going to call it a business. Own a car wash and bought a bunch of calls on MJ stocks? Well, you’ll probably keep your money.

#107 Ubul on 10.29.18 at 10:21 am

#96 SunShowers

There are times in life, when your individual circumstances simply don’t allow you to put money aside to invest. I have been there.

At that point, the most important goal to focus on, is to improve your own circumstances, as that’s really the only thing you can control most effectively. You can chose to spend time feeling sorry for yourself and feeling a victim of circumstances, or you can chose to ignore that and focus only on improving your ability to make more money. Not allowing your mind to see yourself as a victim, no matter how justified that feeling might be, is very helpful. It saves you wasting good good energy, that could be used to turn around your circumstances.

When your personal circumstances change for the better and you will be able to set aside money to invest, you will find all the investment tools valuable. You will be grateful that they are there, and they didn’t get eliminated, just because at a certain time in your life you could not benefit from them.

Wishing you great success to reach that state as soon as possible.

#108 mike from mtl on 10.29.18 at 10:49 am

That’s a big assumption getting to seven figures contributing slowly without taking control. ‘Investing’ with pocket change, most likely to high fee sucky mutuals at one of the banks will not get you anywhere close to 7% anu.

Don’t bother with RSP unless you completely understand the tax implications of doing so. Again stuffing GICs or low preforming <2% MF like most I know actually have, only to be forced to withdraw as taxable income later is stupid. They their place however understand what full cost is.

As for TFSA, yes for now it is essentially tax free however, no one can predict what greedy future gobberment might change.

Besides Garth I don't think for most Canadians this is a concern as the vast majority of middle class retirement plan is "in the house".

#109 IHCTD9 on 10.29.18 at 10:53 am

#72 Spectacle ( driving a small part of the economy) on 10.28.18 at 9:16 pm

Note:: But I am questioning this running older vehicles, the expenses add up, who has/wants to work on them in the off hours! Plus a write-off paying someone else to get the ugly stuff done.

Anyone else….?
_____

Just got to pick the right oldies. My last beater went to the heap right around this time last year. 18 years old with 235K on it, looked near new inside and out (SAAB’s don’t rust). Lots was wrong with it, and I decided it was the time.

I paid 1300.00 for it with 137K on the clock, and drove it for 5 years.

Beater repair costs in that time:
2 tires 225.00/pr
1 serpentine belt 50.00
1 DIC unit (50.00 used)
2 shocks (180.00/pr online)
1 starter switch (20.00 used)
1 EVAP solenoid (120.00 online)
2 Green rollers for Window tracks (25.00?? can’t remember)
1 set of brakes 125.00

I did the work myself – most of it was tolerable. No one WANTS to fix old crusty cars, but you can save 10’s of thousands over buying new cars if you do it anyway.

#110 Stan Brooks is a Kook on 10.29.18 at 11:05 am

#106 Tater

“If sense were common, Stan might have some.”

Stanley doesn’t even have sanity, much less common sense…

#111 Stan Brooks is a Kook on 10.29.18 at 11:08 am

#105 Stan the Kook Brooks

“It is what CRA says it is. Use common sense. – Garth”

Garth, Garth…. This is Stan “madman” Brooks you are responding to. A momentary lapse in judgement I take it. Thinking Brooks the Kook is capable of using common sense…

#112 Stan Brooks on 10.29.18 at 12:11 pm

#106 Tater on 10.29.18 at 10:15 am

If sense were common, Stan might have some.

CRA looks at total return, number of trades, strategies employed and the occupation and qualifications of the holder of the account. Design quant trading strategies for a bank and are up huge? Yep, trading. Have a CFA and are a portfolio manager? Probably going to call it a business. Own a car wash and bought a bunch of calls on MJ stocks? Well, you’ll probably keep your money.

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

Common sense in taxes? Or taxes based on profession?

Wow!

Where are the boundaries? Where are the rules defined in black and white with numbers?

Strategies: How about: buy low, sell high?
Any other strategy you would like to share with us?
I don’t think trading options is allowed in your TSFA.
How can you be trader without trading options?

Cuckoo.. Cuckoo.. Cuckoo..

If none you have no legal defense against anything tax authorities would say or like to do with you.

What if you are ‘trader’ and lose money trading in your TFSA, are you getting back tax credits? It is a ‘Business’, remember?

So CFAs then who bought MJ stocks on the pennies are subject to ‘trading’ tax?

‘Common sense’ in Canada says: buy houses and get high on weed.

And I am posting these question so you can actually do some thinking and use those frozen brain cells.

As I said: They are coming for your money, including RRSP holdings, one way or another sooner or later.

Inventing arbitrary and subjective rules is the first step.

#113 Stan Brooks on 10.29.18 at 12:15 pm

#110 Stan Brooks is a Kook on 10.29.18 at 11:05 am

Go back to selling houses, realtor.

#114 Stan Brooks on 10.29.18 at 12:25 pm


#81 Shawn Allen on 10.28.18 at 9:50 pm
Georgist…

#48 georgist on 10.28.18 at 7:23 pm
Shawn – to add, in any case you are in the minority in acknowledging banks create money.

*******************************
Thank you, yes banks, together with their willing borrowers, create money. I view that as a good thing though.

Banks are an absolutely essential part of the economy and contribute greatly to the incredible standards of living that most of us enjoy today. But, yes, once in a while excessive lending causes problems for banks and the economy.

That is my view at least.

Absolutely. Hooking you on credit and beating the crap out of ya to pay it back is a great motivating factor for productivity and the true engine of the economy.

Look at all these payday loan shops growing like mushrooms everywhere in this rich, developed sophisticated country, they have great contribution to the GDP.

And because banks are so great, let’s offload any risk and transfer it to the thankful taxpayers/hello CHMC.

Sure. Pass the booze.

#115 SoggyShorts on 10.29.18 at 12:39 pm

#94 TS on 10.29.18 at 6:43 am
LOL,

Garth, why use 7% a year average? Find me an investment advisor who has averaged more than 4-5% since 2005?
********************
From 2005 to today the dow and the S&P are up more than double, about +125% in 13 years… sounds like more than 4-5% to me…… even with 2% inflation it’s still over 7% average

#116 Stan Brooks is a Kook on 10.29.18 at 12:39 pm

#113 Stan the Kook Brooks

“Go back to selling houses, realtor.”

Sorry Stanley but that is not my profession. Proof again of your paranoid behaviour that assumes everyone is a realtor lurking in the shadows… Why don’t you go back to your rubber room and straight jacket….

#117 Toryota Rocks! on 10.29.18 at 12:44 pm

#109 IHCTD9 on 10.29.18 at 10:53 am
#72 Spectacle ( driving a small part of the economy) on 10.28.18 at 9:16 pm

“Just got to pick the right oldies. My last beater went to the heap right around this time last year. 18 years old with 235K on it, looked near new inside and out (SAAB’s don’t rust). Lots was wrong with it, and I decided it was the time.”

If we are the topic of old beaters, I had a 1991 Toyota Camry that I ran to 350,000 kms and then donated it to the mechanic shop of the high school I was teaching in at the time. This was in 2003. It was still going but I finally decided to put it to a good final resting place and let students work on it in shop class.

#118 Renter's Revenge! on 10.29.18 at 12:55 pm

#103 AFD on 10.29.18 at 9:35 am
“Invest in a nice B&D portfolio”

Garth, you should call it the BDSM portfolio (balanced, diversified and sagely managed).

Don’t forget your “safe” word!

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

bondage… I mean bonds!

#119 jess on 10.29.18 at 1:04 pm

pathetic: and who owned it

Joe Beswick, head of housing at the New Economics Foundation thinktank, described the fact that housing benefit has become an international investment opportunity, offering guaranteed returns, as absurd.

“The offshoring of the private rented sector is just another layer of absurdity,” he said. “From a relatively stable housing system where the government provided homes for people that couldn’t access them through the market … we’ve now gone to an unregulated system where rents are much higher because UK property has become such an attractive asset to international investors.”

Beswick added: “A lot of those rents are finding their way into offshore accounts with, presumably, a higher level of tax avoided on taxpayers’ money.”

“Mill View tower, a 16-storey former council-owned high rise in Toxteth, attracted 13 prosecutions last year for Elite Property Management and Lettings Ltd, a local firm that was managing 13 of the flats. The flats had cost around £60,000 each in 2013 and were all rented to residents claiming housing benefit. The company was prosecuted for licensing offences.

The discovery of the building’s story – described as “shocking” by two local MPs – has prompted calls for some landlords to have their properties seized and housing benefit rental payments withheld.

When environmental health officers inspected the block in April 2016, 11 out of the 13 flats that were later the focus of the prosecutions were owned by overseas investors – based as far away as Russia, the United Arab Emirates, Singapore and Malaysia.”

#120 JB on 10.29.18 at 1:48 pm

#85 William B Davis on 10.28.18 at 10:52 pm

Brazil elects a Trump.

A wack job Trump hater shoots up some some old white Jews. A patsy Trump supporter is caught sending fake bombs to Democrats.

Israel denounces George Soros.

Smoking Man Exits.

What the hell is going on?…
………………………………………………….
What is happening to the world Smoky exits and his alter ego William B Davis appears. Come on now who are you kidding. Same mantra, same old same.
BTW Some old white Jews are Human beings, just like you and me! Your lack of civility astounds me.
PS The fake IED’s are not fake as to our knowledge, that is unless you work for the FBI and know something that we regular people do not know.
How the hell did this post pass the smell test?

#121 baloney Sandwitch on 10.29.18 at 1:58 pm

SaraJ – the really astute speculators are the 0.01% with the 3 mill tfsa’s. They understand investor psychology, are contrarian and have exquisite sense of timing. The thing is you have to buy when you are shitting bricks and sell when everyone is partying (like last month).

#122 Shawn Allen on 10.29.18 at 2:08 pm

Stan Brooks praises Banks

“Hooking you on credit and beating the crap out of ya to pay it back is a great motivating factor for productivity and the true engine of the economy.”

*********************************
Absolutely agree, paying back debt is a motivator. Most of us beat the doors down of the banks to borrow at some point in our lives.

I would call banks the grease of the economy. Maybe an engine too but mostly the grease.

The economy would grind close to a halt without credit.

Various countries have various different industries and exports that drive their economy. But it’s probably safe to say that every single country today has banks lending to industry and individuals as a key part of their economy. And dare I say they lend “fiat” money on a fractional reserve basis since that is how banking works. If there are exceptions you can be sure they are horrible laces to live. North Korea?

#123 Jasmine on 10.29.18 at 2:26 pm

I am very lucky to have a defined benefit pension plan, so I have focused on Maxing out my TFSA and haven’t bothered adding anything to my RRSP over the past decade. But I will say that even without the pension I think the TFSA is a better because one thing we often forget is that projections for future growth of an RRSP assume that people are also investing their tax refund. The reality is that if someone makes a 10k contribution and gets a 4K refund most aren’t taking that money and also investing it, but rather paying debt taking a trip etc.

#124 Guy in Calgary on 10.29.18 at 2:58 pm

#40 SunShowers on 10.28.18 at 6:32 pm
“The TFSA is universally available to everyone. If you do not use it there is only one person to blame. – Garth”

Lamborghinis are also “universally available to everyone” in the exact same sense that nothing is PREVENTING anybody from taking advantage of one except their own lack of funds.

For all your good intentions, lots of your advice comes off as very out of touch. There’s a reason the vast majority of Canadians don’t have any money to invest in RRSPs and TFSAs, and it’s not real estate.
—————————————————————-

How does contributing $11k into 2 TFSA’s annually parallel purchasing a 6 figure lambo? One is a responsible way of investing for your future, the other is a ridiculous consumer purchase. Given you made such a ridiculous comparison, maybe take some time to educate yourself instead of calling those individuals that have taken steps to secure their futures “out of touch”.

If there is a lack of funds, make a change.

#125 JB on 10.29.18 at 3:19 pm

#124 Guy in Calgary on 10.29.18 at 2:58 pm

#40 SunShowers on 10.28.18 at 6:32 pm
“The TFSA is universally available to everyone. If you do not use it there is only one person to blame. – Garth”

Lamborghinis are also “universally available to everyone” in the exact same sense that nothing is PREVENTING anybody from taking advantage of one except their own lack of funds.

For all your good intentions, lots of your advice comes off as very out of touch. There’s a reason the vast majority of Canadians don’t have any money to invest in RRSPs and TFSAs, and it’s not real estate.
—————————————————————-

How does contributing $11k into 2 TFSA’s annually parallel purchasing a 6 figure lambo? One is a responsible way of investing for your future, the other is a ridiculous consumer purchase. Given you made such a ridiculous comparison, maybe take some time to educate yourself instead of calling those individuals that have taken steps to secure their futures “out of touch”.

If there is a lack of funds, make a change.
……………………………………………………………
People who purchase Lamborghini’s don’t do it for an investment, they do it because they can!
Any car save for a few is the worst investment you can make. There is the collector cars (Old guy hot rods and some others that buck the trend) but in general if its on wheels it has no value. I prefer the sound of the stock ticker to the rumble of an exotic car and because mostly I can’t afford a Lambo!

https://www.quora.com/Why-do-exotic-cars-Bentley-Lamborghini-etc-depreciate-so-dramatically-in-price

#126 Shawn Allen on 10.29.18 at 3:31 pm

RRSP Refunds Get spent?

Jasmine at 23 said: The reality is that if someone makes a 10k contribution and gets a 4K refund most aren’t taking that money and also investing it, but rather paying debt taking a trip etc.

*********************************
I am sure you are right in a good number of cases. If people treat the 4k refund as “free” money, because it does look like it is, they are sadly mistaken.

The proper way to think of the refund is okay, you made a $10 k contribution, then the government came along and gave you back $4k but your $10k is taxable and so in a sense the taxman just became a 40% partner in “your” RRSP.

If your RRSP does not grow at all and you take it out at 40% tax, the government gets their 4k back and you get $6k, your net cost back.

If the RRSP doubles and you take it out at 40% tax then the government gets 2 times $4k or $8k, as tax, you get 2 times $6k or $12k. And by the way your net $6k cost has doubled tax free in this example and thought of this way.

People have only so much to invest after expenses. Let’s say that number is $6k. The refund should allow them to invest the $10k in RRSP instead of $6k since with refund their net cost is their available $6k.

If instead they invest $6k and get $2400 refund and then go spend that on additional discretionary expenses then they have just spent a tax refund that was actually in substance the government buying into a 40% share of their RRP. Mathematically this is as dumb as taking money anyone asked you to invest as a partner and spending it. The partner still gets his agreed share of the RRSP.

It’s understandable that people do this however because the refund really does look like free money.

I do my best to help the education process. Hopefully at least a few readers may find my explanations help.

Of course the RRSP math gets more complicated when the total impact of a withdrawal is higher or lower than the tax rate at contribution time.

An RRSP is not a winning path in every case but I think more often than not it is. But as Jasmine alludes those who spend the refund as found money are in effect spending what amounts to a loan or what amounts to a partners money and it must be paid back later.

#127 Mattl on 10.29.18 at 3:43 pm

For the guy complaining about not having the income to save 400 a month….make more. Saving is only one piece of the picture. In most cities we are running full employment – it is challenging to find employees. Almost impossible to find trades people.

There is a ton of opportunity for people to get a trades ticket or do side jobs. Spend a summer learning to operate an excavator and you can work as many hours as you like at 30 bucks per.

I mean what does it really take to generate an extra 400 a month in this economy? Nothing other then willingness.

#128 Deplorable Dude on 10.29.18 at 4:07 pm

#120 JB…’PS The fake IED’s are not fake as to our knowledge, that is unless you work for the FBI and know something that we regular people do not know.’

Simple….because the FBI told us he would be subject to a max of 48 years in prison under their indictment. If those devices had in fact been active pipe bombs each one would have warranted a life sentence.

If the mailed IED devices were “functionally explosive” they would fall under the category “weapons of mass destruction” and the indictment would include 18 US Code 2332a. The absence of this charge infers the devices were not functionally explosive.

The FBI put out a very bizarre and carefully worded statement describing the devices as “energetic material that can become combustible when subjected to heat or friction”

I think that would apply to my toaster…..

#129 jess on 10.29.18 at 4:16 pm

remember indy mac , mers and david stern law florida, robo signing backdating

oh the irony!

…”the the toxicity of the foreclosure crisis and how it upended millions of lives. It’s also a lesson about how the failure to uphold the rule of law can reverberate in unforeseen directions, and how a combination of ignorance and partisan passions can make people believe their assailants are their saviors.”

Cesar Sayoc’s Home Was Foreclosed on by Steve Mnuchin’s Bank, Using Dodgy Paperwork
David Dayen

October 26 2018, 6:07 p.m.

#130 jess on 10.29.18 at 4:29 pm

https://www.documentcloud.org/documents/3250383-OneWest-Package-Memo.html

==========
#TrollTracker: Twitter Troll Farm Archives
Part One — Seven key take aways from a comprehensive archive of known Russian and Iranian troll operations

What sets this archive apart is Twitter’s consolidation and release of all accounts the platform maintains high confidence are associated with the Russian Internet Research Agency and separate Iranian accounts.

These are the seven most important points to know about the Russian and Iranian troll farm operations. Parts two, three, and four of this series take deep dives into each troll farm, their impact, and implications.”

https://medium.com/dfrlab/trolltracker-twitter-troll-farm-archives-8d5dd61c486b

#131 jess on 10.29.18 at 4:37 pm

American Financing Corp. ordered to pay up for firing mortgage fraud whistleblower
Four employees sued Colorado mortgage company after they were fired
October 26, 2018
Ben Lane

“Colorado-based American Financing Corp. was ordered to pay up after four of the mortgage company’s former employees claimed that the company fired them for trying to blow the whistle on widespread mortgage fraud taking place at the company.

Last year, the four former employees sued American Financing, claiming that they tried to warn their supervisors about fraudulent activities they’d uncovered at the company.

The lawsuit claimed that the company was using falsified documents and withholding unfavorable financial information on behalf of clients to originate mortgages that would not have been approved otherwise.”

https://www.housingwire.com/articles/47242-american-financing-corp-ordered-to-pay-up-for-firing-mortgage-fraud-whistleblower

October 29, 2018
Ben Lane
A Massachusetts man admitted in court last week that he took part in a nearly decade-long multifamily mortgage fraud conspiracy that defrauded financial institutions of millions of dollars. Court documents showed that Joseph Bates and other conspirators took part in a mortgage fraud scheme that stretched from 2006 through 2015, involved at least two dozen fraudulent loan transactions, and caused $4.3 million in losses to lenders.
Read More

#132 Shawn on 10.30.18 at 12:43 am

Despite all of the pain and despair there is a high probability that the S&P500 reaches 3753 over the next 18 months. I would think this would be a relatively contrarian outcome.

#133 Linda on 10.30.18 at 3:25 pm

The government giveth (TFSA) but the government also taketh away (TFSA contribution limits halved). IF you can put $ into your TFSA now, do so. Because future governments just might taketh away that golden opportunity. Also, time is money. The longer you give your TFSA to grow (tax free!!!), the better the result will be.