Dr. Garth

Now that we’ve solved the nation’s woes and the week’s not yet over, there’s t to vex about your personal financial, emotional and marital ailments. After all, this is a full-service blog. Seven pathetic episodes a week. Never a snow day. Open 24/7. Just like a homeless shelter on Yonge or Robson, we take in the shivering, huddled, wretched masses, dispensing free advice and tummy rubs. Consensual, of course.

Whazzup, Arlo?

Have read your blog for years and appreciate your willingness to provide free financial education for Canadians that are able to see past the “advice” given so freely by the real estate cartel in this country.

I have an aunt with an elderly mother who has late-stage dementia.  The mom has a TFSA with no beneficiaries assigned, but my aunt holds enduring power of attorney and takes care of all matters including financials.  She has been able to transfer money into this TFSA in the past and now is wanting to draw from the TFSA in order to buy a wheelchair.  The financial advisor at the bank is giving her trouble with this and is suggesting that she can only withdraw from the TFSA for particular items that he deems appropriate.

Does my aunt, with PoA, have complete control over the TFSA?  I understand that she is legally bound to act in her mother’s best interests but it seems like the bank is trying intimidation tactics to ensure the account and its portfolio remains status quo.

Dude, that banker is Grade A snot. Of course he has no right whatsoever to intervene between a PoA holder and the person who granted that power, so long as the document is valid, complete, precise and has not expired. The TFSA funds belong to your aunt’s mother, not the bank. By signing over management of her affairs, mom is trusting that her daughter will make good decisions. In fact your aunt, as you correctly point out, has a legal obligation to do just that.

Read this for background. Tell your aunt to have her lawyer send a withering letter to the banker. Or just move the TFSA. Or let us know who this guy is. Maybe he needs a wheelchair.

Now to Sarah. Not a lot of money here, but she’s trying to hang on to more of it.

Thanks for the realistic, if occasionally apocalyptic, financial views each day. My partner makes half of what I make and we’re trying to figure out where to best put the monies.

I’m 40, he’s 47. We rent. I have $19K in RRSP, $3K in TFSA and smaller amounts in non-registered joint and joint savings with a robo-advisor. About $15K of my $70K income is self-employment. My tax bill last year was 3x than the year before and I’m trying to avoid that situation again this year.

Should he open a spousal RRSP that I contribute to or should I keep stuffing my own RRSP for now? Does it matter? If he invests his full income while I pay for our life, how should we distribute that? We will likely both be going back to school in the next 2-5 years so I’m trying to figure out the best course of action. Ok to publish. Thanks.

First, Sarah, you guys are hurtling towards the half-century mark with grand total of $25,000? Not good. And you’re thinking of going back to school? What for? What’s the plan? If it’s to become a tenured academic with a DB pension and a tweed coat I can understand the logic. Otherwise, pfft.

As for a tax-saving strategy a spousal RSP makes little sense if you’re going to be an unemployed student in a few years. You can take the money out then to pay tuition for no tax after securing a deduction for contributing now. And is your ‘partner’ a committed person you have a stable common-law spousal relationship with? Otherwise your contributions into his plan might be in jeopardy.  Personally I think he should marry you. Get back to us on that.

Okay, time for a question from a mouldie in Victoria (where else?):

“Thank you for the steady hand and bottomless cup of humour,” says Brian. “I’ve enjoyed your blog for a long time. I’ve recommended it to many friends, some who don’t invite me over any more.”

The thing is, I’ve long been an equities guy. I feed my registered accounts and TFSA’s with money from the unregistered, just as you suggest. Everything is topped right up and the blue chip dividend stocks keep rolling along. I only recently bought my first ETF – US one. Still a touch unsure of it, but keeping it fed.

I’m approaching 60 and have some incredibly strong performers in the registered accounts. Up over 250% over the years. Lots of unrealized gains, in other words. Does one, at this fine age, reap those gains and roll the stocks into ETF over time, or simply sit back and know that I’ve set myself up with a nice tidy sum for retirement should I ever get bored with my day job of reading your blog?

Besides the need for new friends, it’s time to start unwinding some of those equity positions. Sure, stocks have gone ballistic over the past year and the gains have been sweet, but let’s not forget markets are at all-time highs and owning individual companies  can result in heart failure just as easily as joy.

There’s a reason smart people diversify and own ETFs instead. One exchange-traded fund can give you exposure to the 500 biggest US companies, for example, so if Tesla or Netflix or Amazon blows up, you’re still okay. Sixty isn’t that old (I remember it fondly), but your recovery time is narrowing if a disaster happened. Do it.

Finally, capital gains taxes are the best deal in town. Half the profits come tax-free and the other half is taxed at your marginal rate. For most people this typically results in 15% tax, while you keep 85% of the profit. Don’t be a greedy old snort. They already hate us enough.

Lastly, let’s dissect young Ben.

Long time listener, first time caller. Thanks for the blog, it’s been a real eye opener for this (borderline) millennial. I’ve seen you mention a few times over the blog posts that if someone has some excess cash that adding additional payments to an existing mortgage isn’t the way to go, as the loan is basically free with current rates.

My wife and I are up for a renewal, we’re 10 years into a 25 year mortgage, that realistically will be done in about 17 years total. Before finding your blog I doubled up on a number of payments to help get that number down. As we come up for renewal my plan was to slightly increase our payments as I make significantly more than 5 years ago. This combined with a slight rate decline would decrease our time left on the mortgage from 9 to just under 7 years. Surely this 2 years of no payments would more than compensate for any interest I would have gained on investing the $50 bi-weekly. I feel like I’m missing something, or possibly just misinterpreting your advice.  Thanks for any thoughts you might have and for all the work you put into the blog.

Here’s the logic: mortgage money is still available for 3% or less. The inflation rate is 2.2%. That’s damn near free money, especially if your house is growing a little in value. Last year a boring balanced portfolio of financial assets earned 15%. The average over the last nine years is 7.2%. If the goal in your household is to build net worth, then why would you pay down an incredibly cheap house loan instead of diversifying into liquid assets paying far more?

The best bet is to stuff your TFSAs as well as a joint non-reg account with growthy, diversified assets and take out a cheapo five-year mortgage. Then when the loan renews use some investment gains to chunk down the principal. Overall your net worth will be higher than if you applied your cash flow only to debt retirement.

Real men invest.

76 comments ↓

#1 NotLegalAdvice on 01.23.20 at 3:16 pm

The financial advisor at the bank is giving her trouble with this and is suggesting that she can only withdraw from the TFSA for particular items that he deems appropriate.

In my not-so-legal opinion, this depends on how the POA was drafted. DOES the POA give complete control over the property of your aunt’s mother?

Speak to the lawyer that drafted the POA if possible, they may be able to explain this further.

#2 Mr Fundamental on 01.23.20 at 3:17 pm

I like it! A wise man once said, “Invest when you have the money, and only sell it when you need it.”

Cheers!

#3 Linda on 01.23.20 at 3:36 pm

‘Sarah’ is only 40, so she still has time to build. Kind of sounds like her current partner has not yet started. Given the partner age of 47, not good. ‘What’s the plan?’ indeed. As for going back to school, I’d be doing a cost benefit analysis first to determine whether this is time & money well spent because time – particularly in the partners case – is not something they can afford to waste.

As for the bank advisor, what the heck is it with these people? I too have noticed bank employees acting as if they have a legal right to interfere in various matters that they do not in fact possess. If I were the aunt I would move all funds immediately because to me the bank employee’s assumption of oversight on her POA is a big red warning sign. I’d be doing an immediate audit to make sure there was no hanky-panky going on with the accounts, for sure.

#4 Dog Thoughts on 01.23.20 at 3:41 pm

Today was accomplishment. Big jumps. Zooms.
Carried a stick. Borked at evil. Big leaps. (different than jump). Ate a bug. Spit out bug.

Loved every minute.

#5 Sail away on 01.23.20 at 3:45 pm

Never again will I try financial finagling with a POA. The banks will block you at every turn, and it doesn’t matter which bank.

If I’m handling someone else’s finances, it’s through a joint account… meaning the TFSA holdings must be moved to non-reg.

Arlo’s aunt should open a non-reg in her (the aunt’s) name only since the mother has dementia, and go through the legal process to transfer the TFSA. Good luck. Guaranteed headache.

#6 Calgary Cowboy on 01.23.20 at 4:02 pm

Great friggin post today Garth. Hilarious and helpful throughout. Keep up the amazing work!

#7 Westcdn on 01.23.20 at 4:20 pm

I do maintenance on my home and vehicles if I have the right tools. Most times I do a better job than pro’s but it takes me 3 times as long and costs me frustration getting the right parts/materials, never mind the cleanup. I get irritated needing to buy expensive specialized tools that I will only use a few times in my life – like a wheel bearings popper.

The first time I did my own oil change; I drained the transmission fluid and added oil. The dipstick didn’t help as the oil level was too high and clear – I had no mark to see and I had zero experience. I knew something was wrong so I started the car. It sounded like the wringer washer I grew up with – the kind that sucks in your hand to crush fingers while you try to trigger the emergency release. Yeah, we had laundry tubs and a clothesline.

I pushed my car to the nearest garage and endured the ribbing and the bill. Nothing is readily available to change on my current car except for the brake pads and tires. I need ramps or jacks to get under my car to even do an oil change and then I have to remove an engine cover and assemble the filter. I got a quote to change my spark plugs of $900. I watched Youtube to understand why – small wonder after seeing what you have to do. I have nearly 100,000 km on my original 4 wheel disk pads. I don’t ride them nor brake hard much. Even though replacing them should be an easy job with the resources I have, I expect a reasonable bill from a pro and I have someone responsible for shoddy work. If not, I will prep with Youtube to decide on DIY.

I did some homework regarding corporate bankruptcies and put options – nothing to fear. Calls on the other hand end up where they should be. It is the opposite with a takeover. I see Cdn interest rates are falling, hmmm…

#8 LMFAO on 01.23.20 at 4:25 pm

‘Now that we’ve solved the nation’s woes and the week’s not yet over,’

hahahahaha.

#9 SS in MTL on 01.23.20 at 4:26 pm

One thought I had about Ben’s situation, and is something I would consider if I ever am a homeowner (no rush, 90s baby).

Let’s say you have maxed out your RRSP and TFSA. Next let’s say you have another 20k a year to invest and want to replicate the return of a 60-40 portfolio. Why not invest 12k in an all equity portfolio and put an additional 8k down on your mortgage?

The implicit annual return on your extra 20k would be 12k*stock market return + 8K*mortgage rate (that is now tax free vs if you had collected interest on bonds in an unregistered account).

Similar return/risk profile at the margin (I know a bond portfolio has longer duration but you have most of it in your RRSP anyway), debt reduction for those who see it as an objective. Minimal opportunity cost.

#10 Andrewski on 01.23.20 at 4:40 pm

Bank processes move at a snails pace. My Dad (2nd to die) passed in May of last year. He had a super tight, up to date will & I was the dully listed POA on both care & finances, as well as joint account holder on all bank accounts and non-registered investments.
One particular bank is still figuring out what needs to be done with small (< $1K) in-trust investments that my folks put in to place for their grandchildren. Amazingly, I’m advising them on what to do & they still can’t get it done, due to their incompetence. Oy vey.

#11 IHCTD9 on 01.23.20 at 4:41 pm

Ben should pay that mortgage weekly if he’s not already, and then take Mr. T’s advice. Not only because mortgages are almost free, but because if he’s not expecting to be rich, it’s best to pound the $ into investments when you’re a young pup.

I like the idea of getting started soon enough to get near 40 years of regular investments in before 65. It’s that 4th decade that will hit a home run, anything less requires a much bigger commitment. A 40 year time horizon means you can make much easier monthly deposits and still arrive at 65 in good shape.

Again, assuming Ben is just a regular working/earning dude like me.

#12 Power of Attorney on 01.23.20 at 4:43 pm

While you are correct Garth! Reality is far from what you understand at the banks. Maybe the banks have been burned by POA not sure, here is my story I encourage others to write as I am sure there are many similar stories.
Royal Bank is the worst.
Two sole beneficiaries, power of attorney for everything under the sun and a will saying we are the only two.
Go into the bank, yes I want to move this money, it was about $300,000. Yes I will admit I wanted to avoid inheritance tax. So the bank said no. WTF. Went to my lawyer who drafted the POA and the wills, wrote a stern letter to the bank. And guess what RBC said nope to the lawyer. Took it up to the ombudsman At the bank got the run around for months. In the end my mother died I had to pay taxes and lawyers fees. Forget POA make all your accounts joint, then the banks can go to you know where and cannot say a peep.

#13 Sail away on 01.23.20 at 4:59 pm

#12 Power of Attorney on 01.23.20 at 4:43 pm

Royal Bank is the worst.

Two sole beneficiaries, power of attorney for everything under the sun and a will saying we are the only two.
Go into the bank, yes I want to move this money, it was about $300,000. Yes I will admit I wanted to avoid inheritance tax. So the bank said no. WTF. Went to my lawyer who drafted the POA and the wills, wrote a stern letter to the bank. And guess what RBC said nope to the lawyer. Took it up to the ombudsman At the bank got the run around for months. In the end my mother died I had to pay taxes and lawyers fees. Forget POA make all your accounts joint, then the banks can go to you know where and cannot say a peep.

————————————-

Almost exactly my experience the first time over 1.5 years. Both Royal and TD. Blueshore Credit Union, on the other hand, was very accommodating.

Finally gave up and made everything joint/emptied TFSA. Second time, just started with joint accounts and no problems.

#14 POA Lawyer on 01.23.20 at 5:10 pm

Lots of confusion here re POAs.

A POA can’t be used to thwart testamentary intent. So if the TFSA has appointed beneficiaries that are different from the estate, there can be issues here and the bank is right to deny access if there are other funds. Also, if there are non-reg funds, the TFSA should be used last for tax efficiency – the POA has a fiduciary duty to be tax efficient.

You also can’t use a POA to transfer assets into your (or the estate beneficiaries) names to avoid probate tax. This is POA fraud. The bank was correct to deny this transfer. Your lawyer should have advised you of this rather than writing a letter.

#15 Sail away on 01.23.20 at 5:13 pm

#11 IHCTD9 on 01.23.20 at 4:41 pm

I like the idea of getting started soon enough to get near 40 years of regular investments in before 65. It’s that 4th decade that will hit a home run, anything less requires a much bigger commitment.

A 40 year time horizon means you can make much easier monthly deposits and still arrive at 65 in good shape.

—————————————

I still use a 40+ year timeline in projections. Why not? I never intend to stop managing my finances, so essentially investments represent a paying job forever.

I find this gives me a much different perspective since I’ll never retire, but will increase financial management while reducing company work over time. Maybe write a blog…

Carve out a chunk for safe retirement, but the rest keeps on working…

Try it. My calcs have a lot of zeros at age 90.

#16 TIM on 01.23.20 at 5:22 pm

The average over the last nine years is 7.2%

………….

huh?

THE INDEX 60/40 hasnt averaged that, adn we KNOW active investing (such as a ‘tactical balanced ‘ manager) DOES not beat the index

please post accurate information

Just did. – Garth

#17 Attrition on 01.23.20 at 5:22 pm

#12 Power of Attorney on 01.23.20 at 4:43 pm

While you are correct Garth! Reality is far from what you understand at the banks. Maybe the banks have been burned by POA not sure, here is my story I encourage others to write as I am sure there are many similar stories.
Royal Bank is the worst.

True words. Teller at RBC just told me and pops to our face that they’d never accept a PoA not signed by a lawyer or notary.

I pointed out the in BC, when no real estate is involved, only two witness sigs are required on a standard government PoA agreement you can download from the gov site.

“We’d never accept that…” she repeated.

Brutal.

#18 Timmy on 01.23.20 at 5:23 pm

Keep the dividend paying stocks. If they are conservative, blue chip and you have 20-25, diversified across main sectors of economy you’ll do fine. Whatever you do, don’t buy a lot of bonds at this time!

#19 CEW9 on 01.23.20 at 5:25 pm

#9 SS in MTL on 01.23.20 at 4:26 pm
Let’s say you have maxed out your RRSP and TFSA. Next let’s say you have another 20k a year to invest and want to replicate the return of a 60-40 portfolio. Why not invest 12k in an all equity portfolio and put an additional 8k down on your mortgage?

When the market flips, you can rebalance from your 40% safe stuff, and make up losses on the rebound. You can’t rebalance from a mortgage.

#20 Mattl on 01.23.20 at 5:33 pm

Hold on, so Sara rents and only has 22k in savings?

#21 Diversified in Oakville on 01.23.20 at 5:35 pm

Great advise on the mortgage issue. I have a 250K mortgage at 2.99% and my balanced portfolio made 18% last year.
Simple math; 15% of 250K = $37,500 in my pocket by not paying off my mortgage.
Any way you slice it, pay minimal on your mortgage and invest in Balanced and Diversified ETF’s.
Garth,
Your advise is always great!

#22 Bytor the Snow Dog on 01.23.20 at 5:44 pm

Dear Sarah,

Dump the anchor.

Signed, Bytor.

#23 will on 01.23.20 at 6:09 pm

Bad dog!

https://sputniknews.com/videoclub/202001151078042657-absolutely-cute-guilty-dog/

#24 IHCTD9 on 01.23.20 at 6:12 pm

#15 Sail away on 01.23.20 at 5:13 pm

I still use a 40+ year timeline in projections. Why not? I never intend to stop managing my finances, so essentially investments represent a paying job forever.

I find this gives me a much different perspective since I’ll never retire, but will increase financial management while reducing company work over time. Maybe write a blog…

Carve out a chunk for safe retirement, but the rest keeps on working…

Try it. My calcs have a lot of zeros at age 90.
—-

Ha! I have done that, lots of time spent on the compound interest calculator. The 40 year thing is mainly about getting set with the minimum, but if conditions are such that a dude/ette can keep going, I too say keep going!

Ms. IH has many family members who crossed 90, and I think she will have a great chance of doing the same. I expect our retirement lifestyle will not be too expensive, and we’ll both get above average CPP, + OAS, plus her pension, so it’s entirely possible that we won’t need much if any proceeds from the portfolio. We might still be able to fund it even.

That’ll be a tactical decision made when we get there, as who knows what life may bring. The first 40 are definitely strategic though!

#25 Tater on 01.23.20 at 6:33 pm

#9 SS in MTL on 01.23.20 at 4:26 pm
One thought I had about Ben’s situation, and is something I would consider if I ever am a homeowner (no rush, 90s baby).

Let’s say you have maxed out your RRSP and TFSA. Next let’s say you have another 20k a year to invest and want to replicate the return of a 60-40 portfolio. Why not invest 12k in an all equity portfolio and put an additional 8k down on your mortgage?

The implicit annual return on your extra 20k would be 12k*stock market return + 8K*mortgage rate (that is now tax free vs if you had collected interest on bonds in an unregistered account).

Similar return/risk profile at the margin (I know a bond portfolio has longer duration but you have most of it in your RRSP anyway), debt reduction for those who see it as an objective. Minimal opportunity cost.

——————————-

One of the jobs of the 40% safe stuff is to give you something that will hold its value when equities plop. Then you rebalance and get to buy stocks cheaper. That’s harder to do if you put the money into a house.

And sure, you could use a credit line, but that presupposes you have enough equity in your home and that the banks will be in a lending mood.

#26 Blackdog on 01.23.20 at 6:35 pm

@ #14 POA Lawyer:

“A POA can’t be used to thwart testamentary intent.”

Thank you for that.

#27 RE_Investor on 01.23.20 at 6:35 pm

#7 Westcdn on 01.23.20 at 4:20 pm

The first time I did my own oil change; I drained the transmission fluid and added oil. The dipstick didn’t help as the oil level was too high and clear – I had no mark to see and I had zero experience. I knew something was wrong so I started the car. It sounded like the wringer washer I grew up with…

That’s hilarious! Actually the first thing that you should have noticed was that the oil you were putting in was amber in colour and the oil you drained was red in colour. Anyways, It’s good to see you doing your own work. I’m like you as well, mainly because I hate paying money for service, paying fees, or paying interest…lol I’ll do everything I can myself to save a buck.

#28 kommykim on 01.23.20 at 6:38 pm

I gave up on POAs with my parents as far as the bank was concerned. Except for a registered account, it is far easier just to make it a joint account and deal with it that way.

#29 bellend on 01.23.20 at 6:42 pm

#bankerneedsawheelchair ..no doubt of that…and dear lady needs to take a friend to the banking appointments[with notebook]

#30 Nonplused on 01.23.20 at 6:56 pm

#17 Attrition

Banks want a POA signed by a lawyer because there are lots of sneaky people out there who can’t wait for mom to croak before they appropriate her funds. Having a lawyer prepare a POA is not that expensive so if there is any money in the TFSA or whatever else the aunt is meant to handle this should have been done years ago while grandma was still capable of signing it. (If she has dementia, she may not be considered capable of signing it now. This is why anyone with 2 cents to rub together should have a will, POA, the medical thing, and keep them updated as life circumstances change. Sure it costs a lot but it is necessary. Also it’s best to appoint a lawyer or trustee to handle POA and executor if you can. That also costs money but it makes Christmas go better down the road.)

So while you are probably correct that legally only 2 witnesses are required (and it is best if they do not have a relationship with the person involved other than professional), I’m pretty sure the bank’s terms of service have some more clear language about what they will accept and what they won’t. Lots of people try and defraud their parents. Just watch “A Current Affair” for a while. It’s almost rampant. One dude sold his mother’s house out from under her and kept all the money leaving her homeless. You’d wonder how someone could do this to their own mother, but it happens.

#31 Coastal Zapper on 01.23.20 at 6:59 pm

Really enjoyed yesterdays post as you answered the question many have asked

“what would you do/recommend the government do Garth”

I really appreciate you taking time out from chiselling those abs to enlighten us

#32 Sail away on 01.23.20 at 7:00 pm

#14 POA Lawyer on 01.23.20 at 5:10 pm

Lots of confusion here re POAs.

A POA can’t be used to thwart testamentary intent. So if the TFSA has appointed beneficiaries that are different from the estate, there can be issues here and the bank is right to deny access if there are other funds. Also, if there are non-reg funds, the TFSA should be used last for tax efficiency – the POA has a fiduciary duty to be tax efficient.

You also can’t use a POA to transfer assets into your (or the estate beneficiaries) names to avoid probate tax. This is POA fraud. The bank was correct to deny this transfer. Your lawyer should have advised you of this rather than writing a letter.

———————————-

No confusion whatsoever on my end. The issue with the TFSA was that it was fully invested in GICs that automatically rolled over to new GICs at maturity and high-MER, even DSC!, mutual funds.

I naturally wanted to get rid of all that crap and buy index ETFs/fixed income. Nope. Not allowed.

So I told the bank not to roll the GICs into new ones, and cash them out. Nope. They insisted this had to come from the account owner. By the time the owner made it in, new GICs had rolled over.

So I couldn’t do anything with the account that was horribly allocated, with an account owner who was slipping mentally. The writing for the future was on the wall.

So the account owner transferred everything over to a joint non-reg account and all was good. The second time I was in this situation, the TFSA holdings were immediately transferred, again by the owner.

Going on bended knee to a bank to beg for access to my family’s assets, that I need to allocate, doesn’t sit well.

My recommendation would be to have the TFSA owner go and thwart the bank.

#33 OK, Doomer on 01.23.20 at 7:07 pm

Going off topic, but at my age I’ve earned the right. I’m in favor of Senate calling witnesses. I want those SOB’s Schiff, Nadler, Comey and the two Bidens under oath and facing the same perils and legal abuse that they’ve inflicted on all of their enemies.

I’m certain that much of the public feels the same way. The Democrats are asking for witnesses and touting public support, but they fail to understand that a lot of people who want witnesses want to see the Deep State Democrats put through the wringer, not Trump.

#34 Nonplused on 01.23.20 at 7:23 pm

#12 Power of Attorney

Sounds like what you were trying to do is illegal on at least 2 counts, so it is no wonder the bank told you and your lawyer (where did you find him/her?) to pound sand.

POA has a fiduciary duty to use the funds solely for the benefit of the owner of those funds. Much say as a trustee for a minor. It does not give the POA the right to transfer funds to another party whether that party be a beneficiary or not, save as the beneficiary is using the funds for the benefit of the owner of them. You could have landed in jail if the bank hadn’t stopped you.

The reason given, avoiding “inheritance tax”, is also probably illegal. A quick typing of “does Canada have an inheritance tax” in Google leads to this link at that top:

https://turbotax.intuit.ca/tips/canada-inheritance-tax-laws-information-463

To sum: Canada does not have an inheritance tax, so I don’t know what you were trying to avoid. But tax avoidance is illegal (unless “avoidance” means only paying the minimum you have to, which everyone should strive to do). I’m no mind reader, but since your excuse was to avoid a tax that doesn’t exist I’m going to suggest your motives were not pure and taxes were not a factor.

Canada does treat death as the sale of the estate. That means any unpaid capital gains taxes are due. That is the largest impact of the treatment. But those have to be paid when a “gift” of assets or a “gift” of money resulting from the sale of assets happens as well.

Royal Bank probably kept your arse out of jail.

Remember folks, whatever sneaky little plan you have probably won’t work. It’s like cheating on your spouse; lots of fun until she lawyers up. Then it turns out to be way more trouble than it was worth.

#35 WIN not lose on 01.23.20 at 7:58 pm

A wonderful picture of a Newfie.
We had two superb animals who loved and protected us.
We always kept a towel handy to wipe away the saliva.
LOved jumping on our trampoline
They have the heart of a champion.
They would give their life for us.
I miss them so.

#36 Mike Rowe Impersonator on 01.23.20 at 8:20 pm

Why on earth would Sarah want to go back to school at 40 when she is already making $70,000/year? Even if she takes a 2 year diploma that’s $140,000 of income that she has to earn back before she breaks even. If she takes a 4 year degree that’s $280,000. What kind of job does she think she’ll have after the degree that pays that much more? If we assume she graduates at 44 and works until she is 65 she will have to earn an extra $!3,333/year to break even. The proper time to go to school is when you are young and don’t make much. Even then it doesn’t always pay.

#37 Director on 01.23.20 at 8:27 pm

#33 OK, Doomer

Relax, it’s all reality TV, sort of like “The Truman Show”. They need something to put on CNNMNBCABC. Without the ad revenue, a major source of campaign financing would dry up.

Trump=Truman. That’s all you need to know.

#38 meslippery on 01.23.20 at 8:48 pm

#7 Westcdn
I got a quote to change my spark plugs of $900.
——
Thats whats wrong with this world.
40 years ago I was a pimple faced high school kid changing spark plugs my self in high school shop class in15 mins. $2.50 each plug.Now a house is over a million and spark plugs are $900.00 + 13% for tax.

#39 Ustabe on 01.23.20 at 9:18 pm

@ #33 OK, Doomer on 01.23.20 at 7:07 pm

You know what would be even better? Lets prove exactly how dumb those Democrats are and have a real trial, all the witnesses, all the documents, all fully open to the press and show Americans and the world that the Democrats are just out to get the President and really don’t have anything to go on.

Even better, have President Trump testify under oath…that will show those nefarious Democrats!

#40 Steve Thompson on 01.23.20 at 9:31 pm

Having now dealt with the Great Canadian Banking Sector after the passing of both sets of parents I came to the conclusion that our money is their money until they decide to release it. Generally I found the front line staff to be a pretty hateful and incompetent bunch with rare shining examples of employees that actually cared about their clients.

#41 IHCTD9 on 01.23.20 at 9:56 pm

#22 Bytor the Snow Dog on 01.23.20 at 5:44 pm

Dear Sarah,

Dump the anchor.

Signed, Bytor.
——-

Might happen. There is already enough stats taken since Women became educated to show a trend with Wives who make much more than their husbands eventually dumping them.

Income levels change, but the DNA can’t keep up.

#42 Spectacle on 01.23.20 at 10:00 pm

#37 meslippery on 01.23.20 at 8:48 pm
#7 Westcdn
I got a quote to change my spark plugs of $900.
——
Thats whats wrong with this world.
40 years ago I was a…….high school kid changing spark plugs my self……..in15 mins. $2.50 each plug.Now a house is over a million and spark plugs are $900.00 + 13% for tax.

————- yup, pretty much ———

Now enter the Ford diesel injectors. Process starts with, ” Best to remove the front Cab of the Truck” ……$5000 to do this process?
Not a good investment I think. Kind of like current real estate!

#43 Sail Away on 01.23.20 at 10:01 pm

#39 Ustabe on 01.23.20 at 9:18 pm
@ #33 OK, Doomer on 01.23.20 at 7:07 pm

You know what would be even better? Lets prove exactly how dumb those Democrats are and have a real trial, all the witnesses, all the documents, all fully open to the press and show Americans and the world that the Democrats are just out to get the President and really don’t have anything to go on.

Even better, have President Trump testify under oath…that will show those nefarious Democrats!

——————————

Even more better: let’s leave it all up to the Americans because the Trump drama is happening in another country.

It may come as a surprise, but they don’t actually care what we think.

Concentrate on Harry, Meghan and Trudeau memes

#44 Power of Attorney on 01.23.20 at 10:15 pm

Sorry I meant to say probate fees.
POA should allow you to move money anywhere.
I should be able to go into any bank with power of Attorney and move money.
In fact my lawyer said are you aware that giving someone POA gives them full access to your money.

But in the case my mother she had a week to live and I think a avoiding probate fees is a Canadians right. Truthfully this should have all been done in advance.
My point is don’t assume POA gives you lots of rights it does not. Joint bank account is king and no probate fees.
Tax avoidance is not a crime.
Or you can be like BMO and handcuff it’s clients for suspected fraud.

#45 IHCTD9 on 01.23.20 at 10:20 pm

#7 Westcdn on 01.23.20 at 4:20 pm

…I get irritated needing to buy expensive specialized tools that I will only use a few times in my life – like a wheel bearings popper.
——- –

Yeah, that’s the nature of the beast when it comes to doing your own work. At least the tools are dirt cheap these days. I’ve got quite the pile of “used once” tools.

I’ve even been reduced to making my own tools. My small dozer had mangled the splines inside the drive sprocket at some point in its life, and some wingnut decided to pound the thing back on the final drive output shaft with a sledgehammer and weld it up. I had to build a puller to accept a 20 ton bottle jack to pull it off (break the weld). The puller weighs 40 lbs and has 20” long arms made from 1” thick ASTM A514 plate. When the weld let go it was like a bomb went off. I had it Bessie clamped onto an acorn table and I felt the shock come through the bottom of my work boots. The puller now sits in my shop as a testament to my badassery. I did get to use the bottle jack a couple more times.

#46 Dumb Wealth on 01.23.20 at 10:52 pm

Better think hard before quitting a full time job in middle age and blowing a wad of cash on school. Unless you have a crystal clear ROI it’s not worth it. If you’re just going for the knowledge stick to YouTube.

If you insist on going to school, then go part time. It sucks but it will help pay the bills. And the extra experience will keep you relevant. Plus, who knows what kind of economy you will graduate into.

I remember in 2002 seeing newly minted MBAs apply for call centre jobs. If that doesn’t open your eyes than nothing will.

Is it worth getting an MBA?
https://dumbwealth.com/is-it-worth-getting-an-mba/

#47 Jimers on 01.24.20 at 12:27 am

#33 OK, Doomer -So true.

But why would Trump cede any ground to The Swamp in this process when he as top law enforcement official can launch a full investigation into the Bidens any time he wants, as along as he has probable cause (ie. Joe Biden’s CFR confession on tape)?

#48 Captain Cruise on 01.24.20 at 12:38 am

Well thanks, sort of. The passive dumb money flowing into ETF index funds force managers to buy the good with the bad. The best dividend players are shooting the lights out. Being a stock picker these days is a zero risk scenario, fish in a barrel you’d say.

#49 CAP on 01.24.20 at 12:51 am

DELETED

#50 SoggyShorts on 01.24.20 at 12:57 am

#16 TIM on 01.23.20 at 5:22 pm
The average over the last nine years is 7.2%
………….

huh?

THE INDEX 60/40 hasnt averaged that
*******************************
Sure it has. Perhaps you aren’t counting dividends?

#51 SoggyShorts on 01.24.20 at 1:02 am

#36 Mike Rowe Impersonator on 01.23.20 at 8:20 pm
Why on earth would Sarah want to go back to school at 40 when she is already making $70,000/year?
*****************************
Exactly, makes no sense. Assuming she goes from 70K to a nice 100k job, but takes 4 years to graduate she’ll be in her late 50s before that plan turns a profit.

The other question is what is hubby doing at 47 making minimum wage?

#52 Robert Ash on 01.24.20 at 1:36 am

I would be curious to get some feed back that if the world is awash in cash, why are Central Bankers still Easing, and injecting liquidity into the system. Is it destined for Industrial activity and just sliding into the Capital Markets? If interest rates are so low, is this a Currency Relative strategy, to augment Exports… Any feed back would be appreciated, and I know very little, and admit I am on the Learning curve…. Out right guesses are OK as well… Cheers.

#53 Not So New guy on 01.24.20 at 2:19 am

Your list yesterday was great. I’ll add my .02 here:

1. The problem in Canada is credit. We have brought decades of spending forward which has boosted prices as all good auction economies do. Those higher prices on payments need to be paid back with less income in the future (assuming you are not in a small minority who’s income keeps up with inflation)

So you have 100K today which you supposedly can’t live on. You borrow 50K for toys. You need to live on a lot less than 100K in the future to pay for those toys unless they generate income.

What has created our credit problem is politicians and bankers willfully walking into this mess. They have been on a downward lending slope for decades. This isn’t rocket science. The problem we’ve had in the past was the fix was sharp enough to pop the bubble (spiking interest rates, which many would argue was a planned theft from borrowers). If we walked in, we need to walk back out.

The government needs to mandate that the central bank raises interest rates by a quarter-point every six months, come hell or high water until things stabilize. That would mean the price of housing in the entire country goes back below five times income and the savings rate (and earnings on those savings i.e. above inflation) is high enough to compete with the only investment we have right now in most people’s eyes which is housing.

2. Every child born in Canada today should have $5000 deposited into their CPP account
on their behalf. This will grow uninterrupted for 65 years until they are ready to retire. When they hit the job market then they add to it as usual. This will put the power of compound growth in their favor and lower the burdens on the plan in the long term

#54 Johnnypeedoff on 01.24.20 at 3:19 am

China takes bold action In closing several cities and linking transportation systems to contain killer viral outbreak. I’m not usually a big fan of totalitarian regimes but in this case I applaud China for attempting to isolate a deadly disease. Wuhan Virus is killing people at an exponential rate cases reported multiplying, and has spread to 32 of 34 provinces, and several countries internationally. Those who don’t think of this disease as noteworthy need only harken back to another pandemic that slipped “official” notice , until it had killed twenty million people, Spanish Flu. Asia is on Red Alert and Canada should be too. All passengers who have arrived within the 14 day incubation period should be rounded up and locked down.

Canadian health officials site quarantine as “bad for business”. OK?

#55 NoName on 01.24.20 at 5:58 am

#42 Spectacle on 01.23.20 at 10:00 pm

Removing cab on 3/4 ton or bigger trucks to do service trucks is more common than you think.

In many cases Its choice cab off or engine out… To remove cab on ford doesn’t take that much, putting it back it’s a bit longer but not to difficult. It’s much easier to do cab off/on, on ford that gm.

#56 Felix on 01.24.20 at 7:08 am

Ugh. That photo of a canine literally dripping with toxic contaminants says everything about that species and why you should avoid it.

#57 Sail Away on 01.24.20 at 8:05 am

I see Neil Young just became an American.

MF, yesterday you suggested making dual citizenship illegal; are you willing to give up Neil?

#58 crowdedelevatorfartz on 01.24.20 at 8:42 am

#@54 Johnnyrustybedsprings
“I applaud China for attempting to isolate a deadly disease. Wuhan Virus is killing people at an exponential rate cases reported multiplying…”
+++++

Wuhan. A city of 11 MILLION people…..where
hundreds have contracted a flu virus not a “deadly disease”.
32 have died.
That city probably has more pedestrians killed in cross walks every day.
We dont know if they were old, sick, whatever.
The Chinese govt is probably reacting to the WHO’s concerns about it spreading over the Chinese New Year.
Nothing like 1 BILLION mutating viruses to kick start a really lethal strain with jets ready to dely the next batch in a few hours….. all over the world.

Who needs nukes..

The Spanish flu epidemic of 1918 was far more impressive.

People were…Healthy in the morning. Symptoms at noon. Dead by midnight with the added bonus that the victims skin was blue from suffocating in their own mucus….

And I quote:
“However, a second, highly contagious wave of influenza appeared with a vengeance in the Fall of that same year. Victims died within hours or days of developing symptoms, their skin turning blue and their lungs filling with fluid that caused them to suffocate. In just one year, 1918, the average life expectancy in America plummeted by a dozen years….”

This gave rise to the term “feeling blue” when you were depressed.

Ahhhh the days before flu shots. A simpler time.

The media is jumping all over this because people are sick of hearing about “Impeachment” on the News.
The Main Stream Media….never letting the truth get in the way of a good story.

As I commented a week ago.
Give this flu time to mutate into something more serious… So far it’s just a neophyte .
This Fall flu season may be the kicker…..

https://www.history.com/topics/world-war-i/1918-flu-pandemic

#59 Malio on 01.24.20 at 8:52 am

“Give it to me straight doctor. I can take it!”

#60 n1tro on 01.24.20 at 8:52 am

#46 Dumb Wealth on 01.23.20 at 10:52 pm

I remember in 2002 seeing newly minted MBAs apply for call centre jobs. If that doesn’t open your eyes than nothing will.

Is it worth getting an MBA?
https://dumbwealth.com/is-it-worth-getting-an-mba/
————–
I took any reference of my MBA off the resume to start getting actual responses when I started out.

#61 Dharma Bum on 01.24.20 at 9:00 am

#40 Steve Thompson

Generally I found the front line staff to be a pretty hateful and incompetent bunch with rare shining examples of employees that actually cared about their clients.
——————————————————————–

Haha!

Exactly.

Idiots in training.

This is the breeding ground for politicians.

Apathy, smugness, contempt, and dishonesty.

#62 Sail Away on 01.24.20 at 9:09 am

#38 meslippery on 01.23.20 at 8:48 pm
#7 Westcdn

I got a quote to change my spark plugs of $900.

———————————

I hear you: my Tesla is a huge pain. Every 5 years I have to think about new tires and… oh, that’s it, actually.

A few Teslas now have a million miles. That’s lots of driving.

#63 Dharma Bum on 01.24.20 at 9:22 am

#46 Dumb Wealth on 01.23.20 at 10:52 pm

I remember in 2002 seeing newly minted MBAs apply for call centre jobs. If that doesn’t open your eyes than nothing will.
——————————————————————-

I got an MBA in 1983. Close to 40 years ago.

I felt like I squeaked into the last cohort of students for whom that degree carried any clout at all in the corporate world.

I graduated into a bad recession – WAY worse than it is today mils, check this out:

https://www.cbc.ca/archives/entry/unemployment-reaches-all-time-high-in-1982

Anyway, the MBA on a resume still meant something then.
You had to write the GMAT and score decently on it for any school to even consider your application. Somewhat similar to the LSAT for law school, or the MCAT for med school (though law and meds were harder to get into).

Fortunately, I was able to get a job with the MBA ticket.

Today, it’s a watered down degree. Not worth the time or money.

It was also cheap to get back then. Barely more than any run of the mill undergrad degree.

After all is said and done, the one thing I learned is that corporations are ruthlessly greedy and underlyingly evil.
I was a complicit pawn in their game. It was a job.

Now, although I no longer work for corporations, I criticize them while investing in them. The greedier and more vile, the better. Financially, that is.

Double standard?

I guess so.

Gotta eat.

#64 HH on 01.24.20 at 9:34 am

@ 46 Dumb Wealth

Wholeheartedly agree. In fact crystal clear ROI from all non-free education is a must at any age IMO. One must understand education/training is not panacea and not blindly worship it as some deity of prosperity that must unfailingly confer good jobs and income on believers.

It’s just another consumer good/service to be aggressively and ruthlessly marketed on a credulous population. So just like with all goods in a capitalist system, one must very thoroughly research and shop around before picking the rare right, good-value-for-the-money option out of myriad of crappy rip-off ones that form majority of the market.

Youngsters simply have time/strength to recover from big wasteful mistakes with education, while older folks dont. But better not make them in the first place.

And as for MBAs – absolutely not worth it.
Repeat after me: friends/relatives don’t let friends/relatives get MBAs.

Full disclosure: I am one of the suckers who fell for it and got one.
While I did eventually get what I wanted – higher income and career in finance sector – I now know I could have had that without one.

Though about a third of people I see around me seem to have them, its only a small consolation (I was not the only sucker…), as it would have been totally possible to follow same line of work after CFA or some coursework at fraction of the cost.

Ah well, the mistakes of one’s youth… Some blow money on booze, drugs and wild women. Others on useless degrees. Be careful with your choices.

#65 NoName on 01.24.20 at 9:38 am

#58 crowdedelevatorfartz on 01.24.20 at 8:42 am

Mrtlty rate “official” 3%, spreading rate 4.5 faster than SARA. Some things just don’t add up. 1000 beds hospice will not make any difference.

https://imgur.com/a/okj50uo

#66 Alpha Bravo on 01.24.20 at 10:33 am

One dude sold his mother’s house out from under her and kept all the money leaving her homeless. You’d wonder how someone could do this to their own mother, but it happens.

——————

How does this animal sleep at night?

#67 Sold Out on 01.24.20 at 10:36 am

#60 n1tro on 01.24.20 at 8:52 am
#46 Dumb Wealth on 01.23.20 at 10:52 pm

I remember in 2002 seeing newly minted MBAs apply for call centre jobs. If that doesn’t open your eyes than nothing will.

Is it worth getting an MBA?
https://dumbwealth.com/is-it-worth-getting-an-mba/
————–
I took any reference of my MBA off the resume to start getting actual responses when I started out.

xxxxxxxxxxxxxxxxxxxxxxxxxxxxx

At my former place of employment there was a well-worn path to management positions, beginning with crony promotion beyond competence level, followed by employer-sponsored MBA at local diploma mill (former COO was instructor/salesman), leading to inevitable firing for egregious ethical lapses. This includes the former COO/salesman.
Not an extensive study of the value of the degree, but definitely an indictment of a certain former military college, and current diploma mill.

#68 IHCTD9 on 01.24.20 at 10:43 am

#46 Dumb Wealth on 01.23.20 at 10:52 pm

Is it worth getting an MBA?

https://dumbwealth.com/is-it-worth-getting-an-mba/
___

Nope.

Same with a Mechanical Engineering Degree. It looks like a Law degree is heading in the same direction.

These degrees will have you competing with a million other peeps for the same low paid crap jobs.

#69 Alpha Bravo on 01.24.20 at 10:58 am

#30 Nonplused

Just prior to my mother reposing to cancer (ten years ago), she honoured me to take care of my father and to handle their estate justly and fairly. Today as POA, (and as my father erodes to dementia), my reverence, love and respect for my mother, conducts my every move. I do have an older sibling and I govern my self as if I was not in charge of the estate, I have made every decision jointly with him. Every cent is and will be accounted for.

Not trying to pontificate here, forgive me. I simply can not comprehend how offspring can betray their parent(s)….

#70 Shawn Allen on 01.24.20 at 11:23 am

MBA Value?

I got mine from a run of the mill university in 1989. Did it over four years part-time. It was not easy to do two years full-time study in four years part-time. It definitely helped me in getting jobs.

By about 1990 executive MBAs were becoming popular. Do it two years part time and they claimed nothing was cut out. Must have been the new math. Generally the executive MBA tuition was vastly more expensive.

I realized that just about any university could offer an MBA and it was not standardized.

Basically they became a dime a dozen.

Also, since an MBA never required an undergraduate business degree it was always a “Masters” degree in name only. (Clever marketing!)

What matters with MBAs is what school. An MBA from a top-tier university, a real name brand is certainly worth something. A Harvard MBA will always be gold.

Accounting designations and CFA are also very plentiful. But there only ONE body sets the criteria. There are standardized exams. With the CFA and CPA (Formerly CMA, CA, CGA) there are national exams. Unlike the MBA there are no executive shortcuts.

If you can do an MBA part-time it costs you little except a lot of time but no lost wages and usually fairly low tuition (and employers often cover it). In that case why not?

#71 James on 01.24.20 at 12:15 pm

#43 Sail Away on 01.23.20 at 10:01 pm

#39 Ustabe on 01.23.20 at 9:18 pm
@ #33 OK, Doomer on 01.23.20 at 7:07 pm

You know what would be even better? Lets prove exactly how dumb those Democrats are and have a real trial, all the witnesses, all the documents, all fully open to the press and show Americans and the world that the Democrats are just out to get the President and really don’t have anything to go on.
Even better, have President Trump testify under oath…that will show those nefarious Democrats!

——————————
Even more better: let’s leave it all up to the Americans because the Trump drama is happening in another country.
It may come as a surprise, but they don’t actually care what we think.
Concentrate on Harry, Meghan and Trudeau memes
_________________________________________
Letting Trump testify would be a disaster to Republicans as he not only unashamedly lies unremittingly but he blindsides all of his cohorts that are in on his untruths by altering the lie. He cannot help himself and will not stay on script unless his narcissistic dialog is all about himself (DJ Trump). Putting Trump on stage would be akin to him being hoisted by one’s own petard.

#72 DON on 01.24.20 at 12:24 pm

#7 Westcdn
I got a quote to change my spark plugs of $900.
************************

Did they have to rethread the spark plug holes? Engines with aluminum heads (over time) can melt around the spark plug threads, so when you take one out it strips the threads. Had this happen on newer vehicle lately. Lucky I only had to do one hole. I let the garage do this, cost $150. Can do yourself but better to have the garage rethread the holes so nothing falls down into the cylinders.

#73 IHCTD9 on 01.24.20 at 12:36 pm

The national average salary for a MBA is $57,910 in Canada according to glassdoor.ca.

That’s pretty dismal. less than your typical 22 year old small town conventional machinist. I know a guy who plows snow, and does landscaping with a HS education making a good chunk more than that. Canadian Plumbers make 64K on average, can work anywhere, and get paid to go to school.

Better make sure that MBA degree is dirt cheap.

#74 If not too hard ... on 01.24.20 at 12:38 pm

#72 DON on 01.24.20 at 12:24 pm

#7 Westcdn
I got a quote to change my spark plugs of $900.
************************

Did they have to rethread the spark plug holes? Engines with aluminum heads (over time) can melt around the spark plug threads, so when you take one out it strips the threads. Had this happen on newer vehicle lately. Lucky I only had to do one hole. I let the garage do this, cost $150. Can do yourself but better to have the garage rethread the holes so nothing falls down into the cylinders.
————————————————————
to access, best to remove them when new and coat with antiseize compound … saves headaches later.

#75 IHCTD9 on 01.24.20 at 12:50 pm

#72 DON on 01.24.20 at 12:24 pm

Did they have to rethread the spark plug holes? Engines with aluminum heads (over time) can melt around the spark plug threads, so when you take one out it strips the threads. Had this happen on newer vehicle lately. Lucky I only had to do one hole. I let the garage do this, cost $150. Can do yourself but better to have the garage rethread the holes so nothing falls down into the cylinders.
__

Good call. They fix stripped threads like this with helicoils. To install one you need the helicoils themselves (sold 5-10/pkg), the right size drill and special helicoil tap, the installation tool, and something to cut the tang off after the install (ie. a tiny little chisel that won’t be found anywhere in your garage).

150.00 is dirt cheap, you would have spent more on just the components. Plus, it’s a tough job the first few times, and sure as sh!t you’d end up with that bloody tang going down the hole!

#76 world traveller on 01.24.20 at 2:09 pm

The key to low-cost car ownership is easy these days. Buy the car you need most of the time, people drive huge SUV’s and Pickups and never have them filled with goods or people. Also, stick to brands that have proven engines and transmissions. Toyota and other Japanese brands tend to use older tech but their reliability is high as it is proven tech. Other brands especially from the big three try new tech on their buyers which turn into beta testers.