Getting lit

Besides being CPR Awareness Month, Crohn’s and Colitis Awareness Month, Diabetes Awareness Month, Huntington’s Awareness Month, Osteoporosis Month and, of course, the month in which we remember all the people who sacrificed so we could worry about being sick, it’s also Financial Literacy Month.

Today we will ignore your guts, organs, bones and blood and focus on money. The rest is up to you.

In general, Canadians are financial illiterates. We owe $2.3 trillion in personal debt, have the bulk of our net worth in a single asset class, happily take on 20x leverage and have steadily eschewed tax shelters and retirement saving even as pensions erode. In fact 70% of us won’t have a stable income stream when we stop work. The majority own expensive real estate, but half live paycheque-to-paycheque. Government Covid largesse and lockdowns caused a huge spike in savings, but apart from that we’ve been putting away less every years for the past three decades. Over 80% of all the TFSA money is in brain-dead interest-bearing stuff, and only a minority have wills or POAs.

Canadians need help. Not you, of course. Blog dogs are among The Chosen. But maybe you can pass on a few of the following points, presented in no particular order.

Tax shelters – use every last penny pf space you are given. More than ever you’ll need to hide assets and the money they throw off from capricious taxation. Chrystia is coming. Take cover. Remember that 18% of earned income (up to $26,000 a year) can go into a RSP, reducing taxable income and yielding taxless growth. When you hit 71, convert to a RRIF and hold the same assets in it (a nice mix of ETFs). The exception is for those with DB pensions. Because a fat RRIF could push you into a higher tax bracket, be careful. Besides, we hate you.

TFSAs are a no-brainer, as are RESPs (a 20% grant every year) and the ridiculous new FHSA for kiddos under 40. All  also pose great vehicles for income-splitting between family members (that you trust).

Diversification – seriously, we all need to understand this. And it doesn’t mean what realtors think, which is purchasing two condos instead of one. Being diversified means owning ETFs holding dozens or hundreds of companies, instead of trying to score by buying a few individual stocks. Just one loser could wipe out all gains. You are not smarter than Mr. Market. Diversification also means not having only growth-oriented assets, but also safe ones. It means not having all your money in Canadian securities, or maple currency. And don’t stick all net worth into a house. Of course, steer clear of boats. And cats.

Be patient – speculation, flipping, day trading and woke investing are, for most people, disasters. While social media is rife with stories of people reaping fortunes by investing in crypto, diddling with NFTs or becoming TikTok billionaires by shaking booty and punking strangers, this is not real life. Don’t take investing advice from anyone on Reddit. Understand that Bitcoin and its derivatives are backed by faery dust and unicorn flatulence.

Learn balance – a 60/40 portfolio is complex. Sticking everything in one ‘balanced’ ETF is a bad idea, as you’ll end up with too much bond exposure. Remember that interest rates are going up, so bonds are going down. Get some floating rate debt, and a mess of preferreds. The rate reset kind inflate along with the cost of money, while paying a dividend and providing a tax credit. Fixed income helps shield against equity declines, but this does not mean you have to suffer capital losses. Typically a 60/40 portfolio will have 12-16 positions. You can’t replicate that with one asset.

Avoid tax. Not evade it – that’s illegal. Avoidance is absolutely essential now that we are moving towards a top marginal rate of 60% and the pressure builds for a wealth tax. Pandering politicians continuously shift the burden of society upon the shoulders of fewer people. One percenters earn 9% of the income in Canada and pay 23% of the taxes. Four in ten families pay net nothing. Fairness left the nation long ago.

Shun a one-asset strategy – too laden with risk. Yes, real estate has been an out-performer during Covid and the years of dirt-cheap loans. But we’re at peak house as property values have spun above the ability of people to afford them. Those with windfall gains would be wise to sell. New buyers need to expect flatlining prices and higher mortgage renewals. Remember the Rule of 90. Residential real estate should not constitute a portion of your net work greater than 90 minus your age. Do not expect a rerun of the pandemic years. Unless we get a new virus.

Understand risk. This takes years. And experience. Risk does not normally come from losing money but failing to have enough of it. Life is really, really long. Trying to avoid risk with interest-bearing assets like GICs or high-yield savings accounts is, for most, a losing strategy. Saving money can be as foolhardy as gambling it. Take the middle path.

Have a partner? Integrate your finances. It’s about trust as much as money. Together you are a family and an economic unit. You cannot share a house, a bed, a life and children and think that your money is private. This leads to secrecy, distance and suspicion. Besides, couples who integrate pay less tax by harnessing income discrepancies, having spousal retirement plans, family income-splitting and low-cost investment loans. Share everything. Starve the man. Divorce never.

Finally, reach out. Most of us are too busy with life, job, kids, dog to properly manage finances or become literate about them. Find a mentor, coach or advisor. Or read a pathetic blog with a comment section full of people who know everything. Ignore them.

About the picture: “Here’s a pooch,” writes Jay. “He’s Angus. Allegedly a mini Golden Doodle, in fact a 45 pound Golden Wookie. (He makes the Wookie noises like a champ.) He likes to have a wee drink on his walk. Love your blog. Honest is a good look. Things are weird out there.”

135 comments ↓

#1 604Sam on 11.08.21 at 2:19 pm

That doggo need a haircut badly. Still a good boy though!

#2 TurnerNation on 11.08.21 at 2:23 pm

A goal is everyone dependent upon expensive State energy. Global communism.
Comrade your SMART Thermostat has raised an alert, you are living with too much warmth. Do not be so selfish
Is using Nat Gas to heat your home in -20c an addiction? No more news – only Manufacturing of Consent.

https://www.cbc.ca/news/business/natural-gas-weaning-column-don-pittis-1.6233011
“Despite recent price hikes, heating with gas is still so cheap it’s going to be hard to kick the habit
Architects and planners say market forces alone won’t end our natural gas addiction”

——

But this is no surprise. What I posted back in 2019.
THIS is why March 2020 was no surprise to me. It’s been a long time coming guys.

#39 TurnerNation on 03.03.19 at 9:21 pm
This carbon tax bill is Shawn A’s doing. A tax on the poor, single mothers and immigrants. What a guy.
I Really wasn’t joking when I posted that Kanadians will huddle around candles in this energy rich country.
Our elite rulers specialize in rationing things. ( Wait till they get to our foodstuffs.)

——
——
It appears that the Mink are the test case. Next, cattle, house pets? Control over our feeding. Yep CV can do that too.

.B.C. to permanently close all mink farms over COVID-19 transmission risk (cbc.ca)

.Iowa study: 82.5% of deer tested positive for COVID-19x (fox5ny.com)

#3 Immigrant man on 11.08.21 at 2:25 pm

What is better: a) plow as much as you can into RRSP or b) plow as much money into spousal RRSP (trusted, earns less) or c) put after-tax money in TFSA?
Assuming it’s another 20 years to retirement and that money is not immediately needed.

#4 Felix on 11.08.21 at 2:27 pm

“Of course, steer clear of boats. And cats.”

Stop your dogawful anti-feline RACISM!!!!

#5 vanreal on 11.08.21 at 2:28 pm

Don’t let your dog drink from a fountain meant for humans. That is disgusting!

#6 ogdoad on 11.08.21 at 2:34 pm

Trust me, I do NOT know everything….except how gullible we are.

Og

#7 crowdedelevatorfartz on 11.08.21 at 2:39 pm

Another day another anti vaxx story from BC

https://theprovince.com/news/local-news/thirty-40-and-50-year-olds-shouldnt-be-dying-at-this-level-a-day-in-a-victoria-icu

#8 Dolce Vita on 11.08.21 at 2:42 pm

“Blog dogs are among The Chosen.”

…and, on second thought:

“Ignore them”.

It’s good to cover all bases like in today’s Blog, nicely written.

I did not say chosen for what. – Garth

#9 Polozified on 11.08.21 at 2:44 pm

I can’t buy this blog post as an NFT, therefore I won’t listen

#10 Ryan on 11.08.21 at 2:49 pm

Garth, can you elaborate on why you advise avoiding asset-allocation ETFs? I’m not aware of any risk of excess bond exposure beyond what the fund advertises, since they rebalance to maintain that exposure (within a range). Thanks!

I said it. 40% bonds is 50% too much. Most ‘balanced’ ETFs fail the test. – Garth

#11 Opportunist on 11.08.21 at 2:52 pm

So here is a question: Two 30 somethings, already own a home. Put 80K into one of these FHSA things. Claim the 80K deduction and get a big fat refund.

Wait until they turn 40, then the FHSA gets converted to an RRSP.

They never had any intention of using the funds to buy a house.

They already own a house.

Legal?

#12 BM on 11.08.21 at 2:54 pm

“Remember the Rule of 90”

Do we calculate housing value as the total value including appreciation, the equity we’ve put in, or the total equity with appreciation?

#13 SunShowers on 11.08.21 at 2:54 pm

“Avoid tax. Not evade it”

What do you feel the distinction here is, Garth? The simplistic (and wrong) answer is “one is legal, one is illegal”, but I’m interested in the ‘why’ here, not the ‘what.’

Laws are made to reinforce an adherence to a certain ethical code. What ethical precepts do you think separate the legal ways to avoid tax from the illegal ones?

#14 Dolce Vita on 11.08.21 at 3:03 pm

I did not say chosen for what. – Garth

Darn. You read it.

I know Garth. Couldn’t resist joining the mutually exclusive.

#15 Bullshift on 11.08.21 at 3:10 pm

YUP! It’s all about making you borrow borrow and borrow. Liquidity markets can NEVER freeze! Keep the credit flowing flowing flowing! Let them borrow borrow borrow!

>>
To paraphrase market commentator and strategist Peter Schiff’s oft-stated thesis, central bankers would rather keep rates low indefinitely than raise short term rates — or even taper longer-term bond purchasing — if those actions were to risk ruining the economy. Being even a little more hawkish could cause a collapse. This approach is something I have come to call a “bullshift.” I have a book about this topic due out soon. It explores how the financial advice industry is immersed in optimism bias.

People in the financial services business are notorious for shifting people’s collective attention toward a bullish mindset because that mindset is good for business. Politicians are equally culpable for nearly identical self-serving reasons. The bullshift narrative rules the day, even if the facts do not support that perspective. The truth is too much for both investors and voters to bear, so the bullshift continues. Like the scene in A Few Good Men, it appears that investors and voters “can’t handle the truth.”

https://nationalpost.com/investing/the-timing-of-the-next-global-depression-is-getting-closer-than-you-think/wcm/c32cb0e3-1193-4b75-9793-88a3ed05d59f

Gaze upon a 50-year chart of the S&P 500. People who invest and stay invested do well. Those who time things flail. Sounds like you’re a timer. – Garth

#16 Andrewski on 11.08.21 at 3:14 pm

Why do some of you who take the time to read Garth’s blog ask for free financial advice?!
Either do your own research or invest your money through Garth.

#17 A Dollar is a Dollar is a Dollar on 11.08.21 at 3:18 pm

You forgot one piece of advice, Garth.

Avoid offshore tax havens!

The pitchforks will be coming out soon for people who pull this sort of “legal” yet completely immoral scam. Given the environmental footprint of the .1% and the tax avoidance and money laundering created by the Caymans and Panama Papers etc…, no one pulling these stunts should expect any sort of privacy or security in these matters.

People wanting to do this should be forced to leave the country, and their financial helpers should be put in prison.

There is nothing immoral or illegal about investing outside of Canada. Just report it, as required. – Garth

#18 ImGonnaBeSick on 11.08.21 at 3:21 pm

#13 SunShowers on 11.08.21 at 2:54 pm

Because we are over taxed as it is. There is never a point in paying more than one is required.

But if you are so inclined, please just send your entire paycheques directly to Receiver General…

#19 OK, Doomer? on 11.08.21 at 3:27 pm

I’ve decided on a new retirement strategy. My wife and I will cross the U.S. border illegally and then claim that ICE separated us from our kids.

That’s good for $900K USD.

I like it.

#20 Bullshift on 11.08.21 at 3:29 pm

Gaze upon a 50-year chart of the S&P 500. People who invest and stay invested do well. Those who time things flail. Sounds like you’re a timer. – Garth

100% Garth.

Returns represent past performance, are not a guarantee of future performance, and are not indicative of any specific investment.

Past returns tend to be more of an indicator of the future than authors. (Or bloggers.) – Garth

#21 Sam j on 11.08.21 at 3:30 pm

Hi Garth, do you think Ontario is going into recession anytime soon?

#22 Prince Polo on 11.08.21 at 3:32 pm

#10 Ryan on 11.08.21 at 2:49 pm
Garth, can you elaborate on why you advise avoiding asset-allocation ETFs? I’m not aware of any risk of excess bond exposure beyond what the fund advertises, since they rebalance to maintain that exposure (within a range). Thanks!

I said it. 40% bonds is 50% too much. Most ‘balanced’ ETFs fail the test. – Garth

For the inner cheapskate, there’s always:
80% balanced ETF +
20% preferred ETF

OR

20X leverage on a God-forsaken slanty-semi +
80% cat-food diet in old-age

#23 Yukon Elvis on 11.08.21 at 3:33 pm

Chrystia is coming. Take cover.
+++++++++++++++++++

Of course she is coming. She was elected. The LibDip coalition and free stuff crowd got 65ish percent of the popular vote and they did it by promising to tax the bejesus out of those dirty rotten stinkin’ businesses and corporations and banks and high income earners and redistribute their wealth to the voters. And the people said hell yes! and sent the coalition back to parliament with an increase of 5 seats while the Cons lost 2 seats. Seems like a pretty clear mandate to me. Democracy in action.

#24 Dave on 11.08.21 at 3:37 pm

‘This year is shaping up to be the worst year ever for bonds…”
https://www.theglobeandmail.com/investing/markets/inside-the-market/article-this-year-is-shaping-up-as-the-worst-ever-for-bond-etfs-but-there-are/

#25 Sail Away on 11.08.21 at 3:42 pm

#13 SunShowers on 11.08.21 at 2:54 pm
“Avoid tax. Not evade it”

What do you feel the distinction here is, Garth? The simplistic (and wrong) answer is “one is legal, one is illegal”, but I’m interested in the ‘why’ here, not the ‘what.’

Laws are made to reinforce an adherence to a certain ethical code. What ethical precepts do you think separate the legal ways to avoid tax from the illegal ones?

———

First, never conflate legal with ethical. While the two sometimes coincide, it is quite possible to fully adhere to the law while behaving unethically. And vice versa.

Mutual benefit is the concept driving tax incentives here, not ethics.

Addressing the distinction between tax avoidance and tax evasion from a conceptual perspective:

When a person actively prepares by saving for their future financial stability in retirement, they are helping eliminate a future social assistance burden to the gov’t. They are rewarded for this action with tax benefits. When these savings are invested, it further benefits the country’s productivity.

Similarly, owning and running a business that provides jobs and helps the country’s economy is of mutual benefit to both the owner and the government. There are tax incentives available for this.

Simplistically, when a person or organization actively works to benefit themselves while also benefitting the country, there are often governmental incentives to encourage this.

Importantly, these recognized tax-avoidance incentives are always equally accessible to all citizens.

Tax evasion is avoiding tax in a way that is not officially recognized, usually as a purely personal benefit with no correlated benefit to the country as a whole, and in a way not accessible to all citizens equally. And yes, illegal as well.

#26 James on 11.08.21 at 3:45 pm

#20 Bullshift on 11.08.21 at 3:29 pm

Gaze upon a 50-year chart of the S&P 500. People who invest and stay invested do well. Those who time things flail. Sounds like you’re a timer. – Garth

100% Garth.

Returns represent past performance, are not a guarantee of future performance, and are not indicative of any specific investment.

Past returns tend to be more of an indicator of the future than authors. (Or bloggers.) – Garth
___________________________________________
Correct on all accounts. If you can not wait out for the long term payback then I suggest you stuff your mattress with your hard earned cash and check on the returned every night before you go to bed.
Sleep tight now!

#27 Dolce Vita on 11.08.21 at 3:49 pm

Forgot yesterday on Europe travel, if unaware, you are going to need to fill out a Passenger Locator Form BEFORE travel, even for some Regions within a country. Ryanair does a good of steering you to the forms for UK and Europe:

https://www.ryanair.com/ie/en/plan-trip/travel-documentation
https://www.gov.uk/provide-journey-contact-details-before-travel-uk

So you know what each EU country is doing about Covid, as in no surprises when you get there, go here (under “Measures in place” select a destination from the drop down list):

https://reopen.europa.eu/en

And ya, 4th, 5th Wave Europa…I’ve lost count. Canada * in there for reference:

https://i.imgur.com/4trAgmo.png

You’re me in NE Italia and these are your nearby neighbors:

Austria, Slovenia, Switzerland, France – well, 1 out of 4 OK. Something to be happy about.

———

UK all excited their cases are coming down:

https://i.imgur.com/jgAoMCX.png

3rd hump in a row down. Winter coming.

* Don’t get cocky Canada like you have in the past. Recall:

Winter coming for you too.

https://i.imgur.com/999F4bh.png

And a lot of those EU countries pretty highly vaxd as well.

What do I think?

Vaxes on the wane. Something else more virulent afoot like Delta +. Or who knows what else?

The people are always last to be told. You know, ego, national pride, Gov’s that won’t admit they f’d up.

Welcome to Planet Earth. Have a nice day.

#28 Lisa on 11.08.21 at 3:49 pm

My spouse and I love our brain dead GICs and provincial strip bonds, 50% spit even which we have all in our TFSAs. We are accumulating every year $8,700 a year tax free on $170,000. We already have some risk with our business and counteracted with safer stuff. It is okay for us. Each to their own.

#29 James on 11.08.21 at 3:53 pm

#23 Yukon Elvis on 11.08.21 at 3:33 pm

Chrystia is coming. Take cover.
+++++++++++++++++++

Of course she is coming. She was elected. The LibDip coalition and free stuff crowd got 65ish percent of the popular vote and they did it by promising to tax the bejesus out of those dirty rotten stinkin’ businesses and corporations and banks and high income earners and redistribute their wealth to the voters. And the people said hell yes! and sent the coalition back to parliament with an increase of 5 seats while the Cons lost 2 seats. Seems like a pretty clear mandate to me. Democracy in action.
_____________________________________________
Of course she is coming for you. Other than perhaps working on her parents farm as a child she has never worked in the real world and has no comprehension of what life for the regular folk is like. She is a tried and true upper politburo socialist spewing T2s destiny of destruction for this country.

#30 Sail Away on 11.08.21 at 3:59 pm

#17 A Dollar is a Dollar is a Dollar on 11.08.21 at 3:18 pm

You forgot one piece of advice, Garth.

Avoid offshore tax havens!

——-

My offshore operations pay quite a bit of tax to Canada, as mandated by law.

The main benefit is that Canada does not control their function, or access to the funds.

Real danger comes from a panicked government freezing and confiscating assets, as my Venezuelan family has experienced. Diversify.

#31 Pylot Project on 11.08.21 at 4:02 pm

I thought I understood what I was doing but now I’m a bit lost, after reading the section Learn Balance.

I’ve been doing a 60 RRSP/40 TFSA split of what I can invest each month. Both RRSP and TFSA are Balanced Growth ETFs. I have a lot of contribution space. It seems from what I just read in that Lean Balance paragraph is that I’m too exposed. I guess I need to hire somebody.

===

#5 vanreal

Our human mouths are way more disguating than a dog’s. They constantly salivate so alway clean-er.

#32 Dolce Vita on 11.08.21 at 4:03 pm

There is nothing immoral or illegal about investing outside of Canada. Just report it, as required. – Garth

——

There is a Foreign Withholding Tax Garth, at source save RRSPs. CRA will know.

No gross-up nor a dividend tax credit unlike Cdn eligible.

Foreign dividends are usually subjected to foreign tax, which is deducted BEFORE each dividend is paid to the investor * Generally between 15% and 25%.

U.S. dividends earned in RRSPs, RRIFs and locked-in accounts are subject to a 0% foreign withholding tax, W-8BEN form.

——————–

* First time it happened to me I thought WebBroker had seriously screwed me on the Exchange Rate…then, oh, OK…darn you CRA. Still, lessens the tax burden at the end of the year if you pay as you go along. I’m good with that.

This guy explains it as good as anyone w/tax examples:

https://www.advisor.ca/tax/tax-news/foreign-withholding-tax-is-the-credit-always-worth-it/

#33 Bullshift on 11.08.21 at 4:07 pm

Past returns tend to be more of an indicator of the future than authors. (Or bloggers.) – Garth

No doubt! You have to go with the odds not the bloggers.

The only issue is that the game is so rigged it is now a risk to itself.

#34 SunShowers on 11.08.21 at 4:25 pm

#25 Sail Away
“First, never conflate legal with ethical.”
Yes, that is precisely the distinction I was trying to make, thank you.

“Tax evasion is avoiding tax in a way that is not officially recognized”
However, you unfortunately do exactly that right here.

#35 Doug t on 11.08.21 at 4:26 pm

The look on most Canadians faces when asked about their financial planning

http://trailerparkboys.wikia.com/wiki/File:Bubbles.jpg

#36 Bullshift on 11.08.21 at 4:27 pm

By the way you guys…this was out of the article about the fact that central banks are not doing what they need to do around rates.

It continues on after the two paragraphs I posted above…

>>>
Regarding the likelihood of continued dovishness, all anyone needs is a good story. Nobel laureate Daniel Kahneman has quipped that “no one ever made a decision about a number. They need a story.” Central bankers have a story. They insist they are carefully watching and are prepared to act while simultaneously doing absolutely nothing substantive. By noting there are supply chain bottlenecks and other challenges to overcome, the transitory inflation story remains plausible, too — for now.

Here’s a thought exercise: ask yourself what will happen when central banks deleverage? They tried this in the fourth quarter of 2018 and we had to endure a taper tantrum when markets violently reacted to the removal of stimulus. Even as rates began to normalize very slowly thereafter, we had three rate cuts in late 2019 to avert what seemed to be an oncoming recession considering a yield curve inversion earlier that year. Before any of us had ever heard the word COVID-19, the Fed cut rates three times even though unemployment was at a 30-year low and neither inflation nor deflation seemed likely.

Every time I go through the exercise, I conclude that we will be in for a world of hurt, both in the capital markets and the real economy (jobs, profits, etc.), as soon as government deleveraging begins. As a result, I agree with Schiff and have come to conclude that there will be no meaningful tapering or normalization of any kind until we are faced with the cruel no-win economic ultimatum to do something about inflation that is conspicuously non-transitory.

The current narrative dictates that bankers will keep doing nothing until they see significant evidence of economic improvement … or until inflation becomes so obviously intractable and non-transitory that a rate hike becomes the only way to prevent being called liars.

Promising a rate hike is all fine and good for now, and the moral suasion it harnesses is a credible public policy lever. This will hold until the day people cease to believe that central banks will follow through and actually do what they insist they are prepared to do. That’s when the next global depression begins.

https://nationalpost.com/investing/the-timing-of-the-next-global-depression-is-getting-closer-than-you-think/wcm/c32cb0e3-1193-4b75-9793-88a3ed05d59f

#37 Ponzius Pilatus on 11.08.21 at 4:27 pm

#8 Dolce Vita on 11.08.21 at 2:42 pm
“Blog dogs are among The Chosen.”

…and, on second thought:

“Ignore them”.

It’s good to cover all bases like in today’s Blog, nicely written.

I did not say chosen for what. – Garth
—————–
haha,
Another example how words are interpreted depending on the person reading them.
No Dolce, wearing a cross does not guarantee you a place in heaven.
I read somewhere, only 44k are chosen.
That’s an elite crowd.
Gotta pray harder.
Ora et Labora.

#38 Sail Away on 11.08.21 at 4:29 pm

Anybody see the prosecution literally facepalm during today’s Kyle trial? Oh my.

#39 Faron on 11.08.21 at 4:33 pm

The words of one CEO “geunius” in reply to a senior senator:

Elon Musk Replying to @RonWyden

Why does ur pp look like u just came?

Regulation is broken, it’s a free-for-all now.

#40 STeve french on 11.08.21 at 4:39 pm

People in Canada really need to get over their dogs… dogs are not people !

#41 Chameleon on 11.08.21 at 4:52 pm

#5 vanreal

Don’t let your dog drink from a fountain meant for humans. That is disgusting!

——

Hey, come on. My dog is clean. Come closer and he’ll slobber all over you to show you how clean.

My dog is also very friendly, which is why I don’t need to have it on a leash, even though the sign says so.

Also, I feed my dog an all natural food, which is why I don’t have to scoop the dog’s poop.

#42 Bullshift on 11.08.21 at 5:02 pm

They article is about interest rates…

>
There’s a real conundrum shaping up for central bankers around the world and the politicians they report to. Damned if they do; damned if they don’t. Raise rates, that is.

I suspect the real reason politicians purport to not think about monetary policy is that the subject is altogether too painful and the choices on offer are simply competing variations of how one might commit political suicide. Raise rates to stave off inflation? Die by drowning. Keep rates at generational lows for the foreseeable future? Die by fire.

https://nationalpost.com/investing/the-timing-of-the-next-global-depression-is-getting-closer-than-you-think/wcm/c32cb0e3-1193-4b75-9793-88a3ed05d59f

#43 R on 11.08.21 at 5:11 pm

If you have TFSAs , check on the status of how the funds will be handled should you pass away. You can set up a designation of “Successor Holder” as oppose to a benificary. With a Successor Holder status, your spouse can recieve the total TFSA amount ,it merges into the spouses TFSA. A benificary status requires the TFSA to be dissolved, and the funds made avalible . If your spouse has no contribution room left, the funds could not be used to expand the servivors TFSA. We had to set up a meeting at TD ,and specifically request this designation change.

https://www.planeasy.ca/tfsa-beneficiary-vs-successor-holder-the-difference-is-huge/#:~:text=The%20best%20way%20to%20describe,holder%20would%20get%20the%20account.&text=A%20successor%20holder%20on%20the,all%20that%20tax%2Dfree%20room.

We have covered this often. – Garth

#44 macduff on 11.08.21 at 5:12 pm

Garth, Chrystia wants to know if you are fluent in French, otherwise learning it will be part of your performance review.

#45 AM in MN on 11.08.21 at 5:16 pm

A couple of comments of mine on your list, as I’ve mentioned before.

The biggest issue is stay married. One life, one wife. Very few long term married couples are in true poverty… for a number of reasons.

On the bitcoin front, I would argue about its derivatives, as you mention. And so says the SEC. One is “property”, the others are basically securities.

Understand what backs up the “property” (largest computer network in the world) and you will understand it’s value.

Those who simply buy and hold have done very well, and will continue to do so as its adoption spreads and its use case as a reserve asset grows, forcing global banks and settlement companies to need a reserve position.

#46 crowdedelevatorfartz on 11.08.21 at 5:18 pm

@#44 macduff

“Garth, Chrystia wants to know if you are fluent in French, otherwise learning it will be part of your performance review.”

+++

I believe Air Canada may require a new bi-lingual president in the next few weeks.

#47 Penny Henny on 11.08.21 at 5:20 pm

Two things wrong with today’s photo.
1. As much as I love dogs a public fountain is not for their use. Bring a container fill it with water from the fountain and let your dog drink from that.
2. Grown men should not wear footwear that exposes their toes unless they are on a beach.

#48 Sail Away on 11.08.21 at 5:28 pm

#34 SunShowers on 11.08.21 at 4:25 pm
#25 Sail Away

“Tax evasion is avoiding tax in a way that is not officially recognized”

However, you unfortunately do exactly that right here.

——–

???

Please explain

#49 jimmy zhao on 11.08.21 at 5:30 pm

When you see Chrystia’s budget and how much taxes you will have to pay, you will wish you had some Bitcoin to hide your wealth from the Government’s rapacious claws.

Bitcoin gains are taxable. – Garth

#50 Sail Away on 11.08.21 at 5:32 pm

#34 SunShowers on 11.08.21 at 4:25 pm
#25 Sail Away

“First, never conflate legal with ethical.”

Yes, that is precisely the distinction I was trying to make, thank you.

——-

For one example, during WWII, the following diplomat illegally created hundreds of fake passports. Illegal? Yes. Ethical? Most would also say yes.

https://www.thefirstnews.com/article/diplomat-who-used-fake-passports-to-save-hundreds-of-jews-during-wwii-named-righteous-among-the-nations-5639

#51 mark on 11.08.21 at 5:35 pm

Not sure if this has been covered, as I have not seen the answer here, was wondering if your adult child has a tfsa with investments in it, can they open a FHSA, are they two different entities? Should one close a tfsa and open a FHSA if you can only choose one?

Unknown until details are released. – Garth

#52 Ponzius Pilatus on 11.08.21 at 5:37 pm

DG.
Regarding Netflix. Some people kinda look down it.
But, I think it’s time to break Hollywood’s and it’s Amerika first stranglehold on the movie industry.
I’m watching lots of great foreign movies and documentaries.
Have to say,  I like the Mexicon themed productions.
Like Narcos Mexico.
Am on the second season and it just gets better and better.
Great acting, directing and cinematography.
And the natural vistas of the Country and the Ladies. Oh,La,La.
————–
As for Quid Games:
It confronts us with the age old dilemma:
What decisions do we make when our life is on the line?
Simple answer: We do anything to save our sorry butts.
Except for JESUS -CHUY, of course.
In the words of our “Canadian Laureate Poet, Musician, Philosopher”
Leonard Cohen:
” If it all comes down to dust, 
I will kill you if I must,
I will help you, if I can”

DG.
Regarding Netflix. Some people kinda look down it.
But, I think it’s time to break Hollywood’s and it’s Amerika first stranglehold on the movie industry.
I’m watching lots of great foreign movies and documentaries.
Have to say,  I like the Mexicon themed productions.
Like Narcos Mexico.
Am on the second season and it just gets better and better.
Great acting, directing and cinematography.
And the natural vistas of the Country and the Ladies. Oh,La,La.
————–
As for Quid Games:
It confronts us with the age old dilemma:
What decisions do we make when our life is on the line?
Simple answer: We do anything to save our sorry butts.
Except for JESUS -CHUY, of course.
In the words of our “Canadian Laureate Poet, Musician, Philosopher”
Leonard Cohen:
” If it all comes down to dust, 
I will kill you if I must,
I will help you, if I can”
 

#53 Linda on 11.08.21 at 5:39 pm

Angus the golden ‘Wookie’ looks like a real keeper:)

About ‘golden’ DB pension plans. Some things to remember. First, the pension adjustment when it comes to RRSP’s. Any contributions made to that much envied DB plan is deducted from RRSP room. So those with DB plans tend to have less financially robust RRSP’s, if indeed they have them at all. Second, those with workplace pension plans, even DB plans, are vulnerable to those plans being diddled with. Whether that is in the form of government meddling in how a plan operates – hello there, employer pension plan ‘holidays’ – or whether the employer declares bankruptcy – hello there, Enron, Nortel, Air Canada, Sears etc. – the ‘guaranteed’ benefit all too frequently isn’t guaranteed after all. I’d add most DB plans pay on the years of service plus amount of contributions principle. Think of CPP. In order to receive ‘the maximum’ one must work at least 39 out of 47 years between age 18 & 65 AND contribute the maximum CPP contribution for most if not all of those years to boot. This is the main reason why most Canadians will never receive ‘maximum’ CPP. Workplace DB pension plans tend to use the same rules. This means while some retirees will ‘make out like bandits’ due to lengthy years of service/high contributions most will end up getting ‘average’ pension income. As per the plan I belong to, that average is $18,000 per year (before tax). So much for the lavish lifestyle of the average DB pensioner.

#54 cramar on 11.08.21 at 5:40 pm

#43 R on 11.08.21 at 5:11 pm

“If your spouse has no contribution room left, the funds could not be used to expand the servivors TFSA.”

——–

And THAT is THE problem!

#55 Wrk.dover on 11.08.21 at 5:42 pm

#46 crowdedelevatorfartz on 11.08.21 at 5:18 pm
I believe Air Canada may require a new bi-lingual president in the next few weeks.
__________________________
Scaramuchi spoke my two languages and only lasted 11 days.

#56 Shawn Allen on 11.08.21 at 5:43 pm

Jealous Much of Chystia Feeland

#29 James on 11.08.21 at 3:53 pm said

#23 Yukon Elvis on 11.08.21 at 3:33 pm

Chrystia is coming. Take cover.
+++++++++++++++++++

____________________________________________
Of course she is coming for you. Other than perhaps working on her parents farm as a child she has never worked in the real world and has no comprehension of what life for the regular folk is like. She is a tried and true upper politburo socialist spewing T2s destiny of destruction for this country.

******************************
That is a pathetic comment that speaks volumes about the person spewing it.

The work of an MP is very real. Can you imagine the letters and requests from constituents? Sure she has help but that part of the job alone is very hard and not one I would ever want or frankly could do. The demands of constituents would soon drive me crazy I am sure.

Then there is the job of being a cabinet Minister. Finance Minister no less. Oh yes, and deputy Prime Minister. To suggest that is not real world work is beyond juvenile.

Think about the pressure she was under a few years ago negotiating the changes to NAFTA with the likes of Trump and his minions. Remember how she was on television almost daily and how everyone was so hungry for news and progress? I doubt any of us commenting on this blog can even imagine the stress of that work.

There may be lots of legitimate reasons to criticize Chrystia Freeland and one could question her finance qualifications. But to suggest she is not working in the so-called real world is just contemptuous.

I am not sure what your idea of “regular folk” is. Your buddies or what? This is not 1812 and “real world” work certainly extends well beyond manual labour or whatever your concept of it is.

In my world being successful is not something to be spit upon like this.

#57 wallflower on 11.08.21 at 5:44 pm

wookie gorgeous

#58 I'mshort_corpdebt on 11.08.21 at 5:52 pm

“In fact 70% of us won’t have a stable income stream when we stop work. The majority own expensive real estate”

Basically housing debt rich, cash poor – [email protected]!§n’ brilliant and self-destructive. Ahh the pressures of being poor.

#59 Dogman01 on 11.08.21 at 5:54 pm

#36 Bullshift on 11.08.21 at 4:27 pm

Like all Ponzi schemes when people lose confidence it is game over, that is why it is called a con.

https://www.youtube.com/watch?v=YWyCCJ6B2WE

#60 HH on 11.08.21 at 5:57 pm

Hey!!! What do you mean “steer clear of cats”? I have a cat. He’s a bit bossy but, otherwise, a sweetheart. I love him.
Out here in BC every so often there’s a news report about the concern over seniors being financially ripped off by usually family members. Yammering about it solves nothing. In my opinion POAs and executors should be registered and audited.

#61 Brunett43 on 11.08.21 at 6:14 pm

I’m good with personal finances because I read your books when I left school. I’m in a really good place financially with ZERO debt. Thanks, Garth.

They should teach personal finance classes in school, and it should be a compulsory course.

#62 wallflower on 11.08.21 at 6:17 pm

#40 STeve french on 11.08.21 at 4:39 pm
People in Canada really need to get over their dogs… dogs are not people !

========
Dude, you are soooooooooooooooo confused.
Dogs are our MASTERS!

#63 Don Guillermo on 11.08.21 at 6:19 pm

#52 Ponzius Pilatus on 11.08.21 at 5:37 pm
As for Quid Games:
In the words of our “Canadian Laureate Poet, Musician, Philosopher”
Leonard Cohen:
” If it all comes down to dust,
I will kill you if I must,
I will help you, if I can”
*********************************
That sums up Squid Game perfectly. I’m a big Netflix fan as well. Some great foreign productions out there. The Koreans did an incredible job on this one.

#64 Faron on 11.08.21 at 6:22 pm

#38 Sail Away on 11.08.21 at 4:29 pm

You are an appalling human being.

I’ve watched a few of the videos of Rittenhouse’s killings including the clearest video of the second kill and the wounding of the third. People died trying to disarm an active shooter and you call it self-defence? The people who died were armed with, at worsst, a skateboard.

And he’ll probably walk. Not because he’s innocent — he killed. But becase the state has limited resources and Kyle is backed by the entire gun lobby at this point.

#65 Andrewski on 11.08.21 at 6:24 pm

Garth mentions the importance of a POA. Here’s a great (free) resource through Peoples Law School, happening tomorrow:

https://us02web.zoom.us/webinar/register/WN_-qMmtkzFRXyMBg5g5xYzbQ?utm_source=People%27s+Law+School+subscribers&utm_campaign=7e6e3494f6-EMAIL_CAMPAIGN_2020_12_11_10_49_COPY_01&utm_medium=email&utm_term=0_e68ada2b2c-7e6e3494f6-563888686&mc_cid=7e6e3494f6&mc_eid=4990f199e7

#66 Do we have all the facts on 11.08.21 at 6:28 pm

In January 2019 a survey completed by the insolvency firm MNP Ltd. indicated that 46% of Canadian households were $200 away from insolvency. Setting aside the accuracy of this estimate the blame focussed on recent increases in interest rates by the Bank of Canada to 1.75%.

This blog provides excellent advice for households that have surplus disposable income to invest. My concern however is that over 50% of all Canadian households are currently finding difficult to cover the basic costs of living as prices continue to escalate.

As I noted yesterday the average net worth of the bottom 40% of all Canadian households was less than $21,000 in 2019. This indicates that over 50% of all Canadian households had less than $10,000 in disposable income to invest in 2021. The vast majority of the close to $7 trillion currently invested in various securities in is held by the top 20% of Canadian households who have probably already maxed out their contribution maximums.

Inflation, or an increase in interest rates, will have a serious impact on households with limited income. In a economy where over 75% of GDP is generated internally the current situation presents a problem. Without a significant increase in disposable income across the board growth of Canadian GDP will definitely stall.

Our current Government is acting as if growth of the Canadian economy is tied to increased immigration. Expansion of our main source of export revenue has not been supported by government and is currently being threatened by the United States.

All governments are increasing their debt and this trend cannot be continued for much longer without serious consequences.

Neglecting that the fact that over 50% of Canadian households are facing potential insolvency in the coming years is no way to govern a country.

The good ship Lollypop appears to have sprung a leak and the projected consequences will affect us all.

#67 Don't Let the Dancing Octopus Fool You on 11.08.21 at 6:33 pm

What happened to all the oil?

https://mishtalk.com/economics/irony-of-the-day-energy-secretary-asks-opec-to-pump-more-oil

Remember this is the same crowd that shut down Keystone and is doing everything they can to defund the energy industry.

Bill Maher perhaps at his best. Must watch TV right here:

https://www.youtube.com/watch?v=RYSLyvbR_1w

“Someone must tell [Thunberg], you may be the conscience of your generation, but you don’t represent it. I really wish you did, Greta, but you don’t. But I can show you who does. [Puts up picture of Kylie Jenner sitting on a roll of money]”

“Cryptocurrency uses more energy than Netflix, Apple, Facebook, Microsoft and Google combined, and more than some entire nations, and yet young people could not love it more if it came with a side of avocado toast.”

“What would it take to convince Gen Z and Millennials to give up their phones? A pollster once asked, and 43 percent said it would take five million dollars to give up their phone. One in ten said they’d sacrifice a finger for it.”

Dark days are ahead. Literally. The only plan is to shut off the power. There is no other plan. And this is what’s causing the inflation. Not covid, not government spending (the money hasn’t been spent yet), and not supply chain disruptions (which are a symptom not a cause).

#68 espressobob on 11.08.21 at 6:35 pm

Investing is a really tough subject.

Trading in commodities, inverse, leveraged, or OTC pink is a path many regret.

Choices…

#69 Shirl Clarts on 11.08.21 at 6:37 pm

Make sure your spouse is the Successor Holder of your TFSA account, and not merely a Beneficiary. S/he will have new found adoration as you pass through the light.

#70 Nonplused on 11.08.21 at 6:40 pm

#13 SunShowers on 11.08.21 at 2:54 pm
“Avoid tax. Not evade it”

What do you feel the distinction here is, Garth? The simplistic (and wrong) answer is “one is legal, one is illegal”, but I’m interested in the ‘why’ here, not the ‘what.’

Laws are made to reinforce an adherence to a certain ethical code. What ethical precepts do you think separate the legal ways to avoid tax from the illegal ones?

—————————————-

“Avoiding taxes” means simply arranging your affairs so that you do not pay taxes you do not owe. For example, RRSP’s are tax “avoidance” because if you put money in your RRSP you get a perfectly legal government sanctioned and encouraged tax deduction.

“Evasion” generally refers to illegally not paying taxes you do owe. For example not claiming your tips on your T4.

#71 I'mshort_corpdebt on 11.08.21 at 6:45 pm

Pierre Poilièvre is correct in his predictions for the end of the century, as per NP:

“Federal Reserve Chairman Jerome Powell. Central bankers would rather keep rates low indefinitely than raise short term rates — or even taper longer-term bond purchasing — if those actions were to risk ruining the economy.”

#72 IHCTD9 on 11.08.21 at 6:55 pm

#13 SunShowers on 11.08.21 at 2:54 pm
“Avoid tax. Not evade it”

What do you feel the distinction here is, Garth? The simplistic (and wrong) answer is “one is legal, one is illegal”, but I’m interested in the ‘why’ here, not the ‘what.’

Laws are made to reinforce an adherence to a certain ethical code. What ethical precepts do you think separate the legal ways to avoid tax from the illegal ones?
—-

I reduce and modify my consumption habits to knock down my cost of living, and dodge a boatload of taxes at the same time. Effective tax avoidance, and no one is going to gripe about me buying a vehicle that gets better fuel economy or buy used items instead of new.

Dragging ethics into it shows you’re looking with too narrow a focus. Should firewood have a fuel tax? It doesn’t. Should EV’s pay highway taxes? They don’t. Who’s ethics? Good luck sorting all that out – guys like me would find loopholes all over the place.

Sure, some laws are ethically based. Tax laws aren’t about ethics, they’re about paying the bills (or not in Trudeau’s case).

#73 crowdedelevatorfartz on 11.08.21 at 7:00 pm

@#64 Faron
“You are an appalling human being.”

+++

I didn’t realize “Drama” was a required subject when acquiring your Climatology degree

As for Rittenhouse.
Don’t bring a skateboard to a gunfight.

#74 I'mshort_corpdebt on 11.08.21 at 7:02 pm

The Epic Everything Bubble; the question is will be witness an generational defining crisis?

What about your ETFs? How really liquid are they once everyone that actually own the stocks, run for the exits?

Way more liquid than houses. – Garth

#75 Sail Away on 11.08.21 at 7:05 pm

#64 Faron on 11.08.21 at 6:22 pm
#38 Sail Away on 11.08.21 at 4:29 pm

And he’ll probably walk. Not because he’s innocent — he killed. But becase the state has limited resources and Kyle is backed by the entire gun lobby at this point.

——-

You mean the gun lobby is mind-controlling the independent and democratic jury of Kyle’s peers?

And the state doesn’t have the resources to pay a DA to present the facts of the case?

Wow. I wonder if anyone else knows this? You should tell someone.

#76 espressobob on 11.08.21 at 7:06 pm

#67 Don’t let the Dancing Octopus Fool You,

Our entire civilization is built on fossil fuels. This will probably be our undoing over time. Masters of our own demise.

Enjoy the good times. All things are cyclical.

#77 habitt on 11.08.21 at 7:07 pm

53 Linda. The rules for RRSP contributions if one has a DB plan are the same for DCP, DPSP et al. Whatever plan one may have, it’s better than most do. AS for plans being stripped for the employers benefit perhaps others may want to comment. We should all work for the Feds. Huge $ no worries. Oh wait we’d all eventually be scre….

#78 crowdedelevatorfartz on 11.08.21 at 7:11 pm

@#64 faron.
” People died trying to disarm an active shooter and you call it self-defence? The people who died were armed with, at worsst, a skateboard.”

++++

Apparently you watched a different video than the rest of us.
Oh.
And did you hear todays testimony.
The “wounded” person was pointing a pistol at Rittenhouse when he was shot…..

https://www.reuters.com/world/us/survivor-shooting-by-us-teen-rittenhouse-testify-pivotal-moment-trial-2021-11-08/

Self…. Dee…. Fense…

I don’t know about you Faron.
But when someone has a semiautomatic rifle and they are running in a panic….. being chased by a mob…….
Thats the last place I’d want to be trying to “disarm” someone.

But you just keep taking the moral high ground….the air is so much cleaner up there.

#79 habitt on 11.08.21 at 7:14 pm

Linda my apologies. I forgot to mention I think your posts are great. Please keep them coming. You’re a breath of fresh air here. Thank You

#80 I'mshort_corpdebt on 11.08.21 at 7:16 pm

Way more liquid than houses. – Garth

But the houses too will be easy to pickup for nothing.
All this applies to the everything asset bubbles.

That is why I laugh at those that say cash is trash!

#81 Paul on 11.08.21 at 7:18 pm

#64 Faron on 11.08.21 at 6:22 pm
#38 Sail Away on 11.08.21 at 4:29 pm

You are an appalling human being.

I’ve watched a few of the videos of Rittenhouse’s killings including the clearest video of the second kill and the wounding of the third. People died trying to disarm an active shooter and you call it self-defence? The people who died were armed with, at worsst, a skateboard.

And he’ll probably walk. Not because he’s innocent — he killed. But becase the state has limited resources and Kyle is backed by the entire gun lobby at this point.
————————————————————————————————

What?
Kyle is backed by the entire gun lobby at this point ?The prosecution is back by the United States Of America.
If you watched today the crowd ran him down one with a gun, the guy with the skateboard would have killed him.
I guess he should have just stayed on the road where he was knocked down to and hoped for the best!

This thread is over. – Garth

#82 lard buster on 11.08.21 at 7:29 pm

Gaze upon a 50-year chart of the S&P 500. People who invest and stay invested do well. Those who time things flail. Sounds like you’re a timer. – Garth

most people will be dead in 50 years so who cares?

A new blog low. – Garth

#83 Brian on 11.08.21 at 7:39 pm

Is Rittenhouse actually getting criticized on a financial forum? I guess the loony left is everywhere.
After evidence that came out today this kid should be recognized as the hero that he is, but unfortunately he will have to defend himself for the rest of his life from all the wokesters.
Hopefully now that the truth is out, and not CNN slants; he can be successful in launching civil suits.

#84 TurnerNation on 11.08.21 at 7:42 pm

#27 Dolce Vita – Science is different here in Canada.
Why for 2 years running we have erradicated the Flu.

https://www.canada.ca/en/public-health/services/diseases/flu-influenza/influenza-surveillance/weekly-influenza-reports.html
In week 43, influenza activity across Canada was exceptionally low with almost all regions reporting no influenza activity.

——

Almost back to normal guys! We are like So close.
A Legend under attack for ThoughCrimes.

.N. Ireland official suing Van Morrison over COVID criticism (apnews.com)

.German health chiefs call for stricter curbs (dw.com)

.Near-Daily Covid Tests, Sleeping in Classrooms: Life in Covid-Zero China (nytimes.com)


….
Life in Canada. An Ode to My Mask.

I love My Mask. I will be wearing My Mask until 2025. (As the global bankers have indicated this will run.)
I keep My Mask crumpled up in my jeans or coat pocket.
Masks Save Lives. Using my spreadsheet model with both linear and stochastic regression I conservatively estimate that My Mask has saved 3.8 lived to-date. More to come.

#85 Faron on 11.08.21 at 7:43 pm

#78 crowdedelevatorfartz on 11.08.21 at 7:11 pm

@#64 faron.

when someone has a semiautomatic rifle and they are running in a panic

And why, exactly, was he running in a panic?

Oh yeah, because he shot someone who threw a plastic bag at him.

He was being chased BECAUSE HE HAD AN ASSAULT RIFLE AND WAS ACTING CAGEY.

I actually think Rittenhouse should get a minimal sentence. He was a cowardly clown in way over his head and it went badly. Not worth destroying a life over. But, he killed fellow humans. If he wasn’t there that night or didn’t bring the gun, two people would still be alive, the third would have two working arms.

#86 Faron on 11.08.21 at 7:48 pm

#75 Sail Away on 11.08.21 at 7:05 pm

#64 Faron on 11.08.21 at 6:22 pm
#38 Sail Away on 11.08.21 at 4:29 pm

I wonder if anyone else knows this

What, that people who can afford (because the NRA and a bunch of righty goons funded him) massive legal teams are far far far moor likely to get favourable results in court? Widely documented.

“mind-controlling”

Yes, that is an apt description of the legal profession. Although, most call it persuasion. But, really, same same.

But don’t let me interrupt you from your discussion about law and ethics.

#87 crowdedelevatorfartz on 11.08.21 at 7:53 pm

Garth
A coupla tax questions.
When converting the entire RRSP holdings to a RRIF are you getting tax hammered all at that time or are you taxed when you take the compulsory annual withdrawals ….that increase as you age?

Is it advantageous to wait until age 71 to swap it all over from an RRSP to a RRIF of should you start moving some at 65 and be finished moving it all at 71?

If money in the RRIF continues to grow due to a balanced and diversified portfolio is that taxed?
and again when you withdraw?

Or
Perhaps a Saturday tax lesson from the suspender snapping hotshots at Turner Investments of the does and don’ts for converting RRSP’s to RRIF’s?

For all us Silver Tsunami greedy Boomer Bastards getting ready to drink thee retirement gravy and want to avoid Chrystia’s grasping tax claws.

1. Converting is not a taxable event. 2. No reason to convert unless you want some income with a lower withholding tax. 3. All RRIF growth is untaxed until income is taken. – Garth

#88 crowdedelevatorfartz on 11.08.21 at 7:59 pm

DELETED. Thread over.

#89 crowdedelevatorfartz on 11.08.21 at 8:06 pm

@#82 Lard buster
“most people will be dead in 50 years so who cares?”

++++

And if YOU’RE not?

40 years ago in my late teens I didnt have a dime saved or could care less….
65?
Pffft.

“I’ll never see 65!”

Well when I hit 30 and had zero saved…. I realized, Maybe I will see 65.
3o some odd years later……
Took some discipline and scrimping but I’m in a financial happy place now.
4 more years tops.
And I’m done with lots to keep me living comfy.

|I’ll stick with my plan ‘ cause…. I aint dead yet.

#90 Quintilian on 11.08.21 at 8:09 pm

“In general, Canadians are financial illiterates. We owe $2.3 trillion in personal debt, have the bulk of our net worth in a single asset class,”

And yet on an earlier thread a RE pumper, was exalting the prudence and acumen or homeowners; citing the fact that 40% of mortgages are paid off.

Which actually means that the debt load is unevenly spread, and that recent buyers are indebted to levels beyond belief.

This cannot end well.

Tick Tock, Tick Tock

#91 Elon Fanboy on 11.08.21 at 8:30 pm

#38 Sailaway….” Anybody see the prosecution literally facepalm during today’s Kyle trial? Oh my”

Classic moment. Prosecution witness basically said Rittenhouse acted in self defence. Trial was right over then.

What I want to know is why isn’t Grosskreutz (prosecution witness), not on trial for attempted murder given he admits (and there is also video evidence) of him drawing his weapon first on Rittenhouse?

#92 Philco on 11.08.21 at 8:31 pm

#2 TurnerNation on 11.08.21 at 2:23 pm
A goal is everyone dependent upon expensive State energy. Global communism.
Comrade your SMART Thermostat has raised an alert, you are living with too much warmth. Do not be so selfish
Is using Nat Gas to heat your home in -20c an addiction? No more news – only Manufacturing of Consent.
————————————-
You got it right TN…..fear and leverage….
Nearly everything is a lie these days….Doesn’t take to many brain cells to figure out. Socks is at the top of it, turning Canada into his own piggy bank and the majority will be restricted and poorer for it.
https://www.youtube.com/watch?v=5U2UoR-oB1M

#93 Unpinned on 11.08.21 at 8:48 pm

Today was “booster day or third covid jab” at the Western Fair Agriplex in London, On. Never have I seen such an “efficient and fast and professional medical service” done so fast I was in and out of there before I could think of anything but “my word, this is so incredible and easy and done by “nice smiley nurses” full of good cheer. I had to ask myself: Is this Ontario? Anyone wanting to get their covid jab in London can be confident of getting the best care anywhere. OHIP rocks when it comes to the vax.

#94 Michael in-north-york on 11.08.21 at 8:48 pm

#3 Immigrant man on 11.08.21 at 2:25 pm

What is better: a) plow as much as you can into RRSP or b) plow as much money into spousal RRSP (trusted, earns less) or c) put after-tax money in TFSA?
Assuming it’s another 20 years to retirement and that money is not immediately needed.
===

Personal vs spousal RRSP: it is best if your total and your spouse’s total are about same size. That gives more flexibility when buying a house, or in a bad year when both spouses have no income.

RRSP vs TFSA: depends on your situation. I expect to be in a lower tax bracket when I retire, therefore I prefer RRSP. I get more in tax refunds than I will have to pay on my future RRSP withdrawals.

But if you expect to be in the same tax bracket when you retire, then TFSA should be better because you will not get hit by any future tax rate hikes.

#95 Wrk.dover on 11.08.21 at 8:49 pm

#89 crowdedelevatorfartz on 11.08.21 at 8:06 pm
4 more years tops.
And I’m done with lots to keep me living comfy.
_________________________

Your are over doing it. Call in ‘over and out, I’m done’, tomorrow.

Really though, listen to yourself, a few months ago you stated to all of us here, one more year….

I had a friend that pulled every hour of overtime he could at GM St Catherine’s in order to go full FIRE after ten years of it. One week to go he took the weekend off, dove off a boat, broke his neck and was a Quad for two decades, then lights out. He was a wealthy quad though.
Still had GM benefits.

#96 Solo Artist on 11.08.21 at 8:53 pm

When Garth says dont buy an all in one ETF, does that include the all-world equity offerings like VXC and XAW? I switched over to these a few years ago and drip the maxed out tfsa with both only. Seems to be be working ok.. volumes are a bit low but not the underlying funds. MER decent all things considering.

#97 Faron on 11.08.21 at 9:46 pm

#91 Elon Fanboy on 11.08.21 at 8:30 pm

Leave it pup.

#98 Sail Away on 11.08.21 at 10:20 pm

#86 Faron on 11.08.21 at 7:48 pm

But don’t let me interrupt you from your discussion about law and ethics.

——–

Thanks, yes, I am a bit of a stickler that way. And you?

Keeping up with US taxes, I assume?

#99 Indigirl on 11.08.21 at 11:06 pm

On the issue of divorce – it does happen. It only takes one person in the marriage to make it happen. We don’t always have a say in it. Plus the spouse that is leaving has been planning… So be prepared, just in case. Have your own stash of money that you can easily access in case you need it in the immediate future.

#100 Zen on 11.08.21 at 11:47 pm

Agree mostly, except the balancing with no pay bonds. But people are stupid and crazy all at the same time. There’s no hope. Humanity will survive when a majority finally capitulate and jump off a cliff.

It was very apparent at the recent COP event where the Green Goons went absolutely ballistic with the complete surety that we’re all going to die if we do trip control the planet. What a laugh. When in fact that a majority are not hypnotized by Al Gores steely blues or Gretas weird eye eyebrows, and that a vocal minority are part of a psycho cult, the truth is out there, hiding apparently, or like me, on a beach not listening to the howling mob.

https://phys.org/news/2021-11-glacial-million-years-clues-bed.html

This along with the Maunder science, miles thick ash left behind in Antarctica, tectonics, etc etc etc…proves that climate changes and has for billions of years. Can a taxation regime to build flush toilets in Africa change the planet, of course not. Look, we have pollution, that can be cleaned up, but the idea that we’re going to “control the planet”…c’mon…that’s just stupid.

Re: balance. I can accept that aging can affect your asset mix, and should. Investment cycles can be brutal on retired people. But, you just posted about “being in the market on the best days”…so …? In or out, no middle ground. I’m older but I still want growth value because I have good health and longevity prospects.

#101 Don't Let the Dancing Octopus Fool You on 11.09.21 at 12:17 am

Why isn’t this man considered a green hero?

https://www.zerohedge.com/commodities/no-extra-gas-booked-european-gas-prices-surge-after-putin-punks-freezing-continent

And of course “Line 5”. If you live in the Midwest, Ontario, or Quebec and you need propane, you better get it now or it will be a long cold winter:

https://www.zerohedge.com/energy/biden-targets-another-us-pipeline-shutdown-after-begging-saudis-more-oil

#102 Bileth on 11.09.21 at 2:34 am

What about those of us with a DBPP? Should we retire early and draw down from RRSP?

#103 Jane Finch on 11.09.21 at 3:17 am

Saudi economy grows at the fastest pace in two decades. Canada buying more Saudi oil than ever. Marc Carney says Canadians need to shut down the energy patch so that Saudi, Venezuela, Nigeria etc can grow on the cash transfer. Canada apparently has grown enough. We’re now being told to “live with less'”. Is it punishment? It seems so. Costs to Canadians are 40-50% +++ for heating oil, propane, nat gas. Punitive. This is sustainable development, not climate related.

#104 Short_TESLA on 11.09.21 at 4:56 am

@Garth

“Understand that Bitcoin and its derivatives are backed by faery dust and unicorn flatulence.”

Gath, Bitcoin IS VALUABLE because value, time, energy in a monetary, highly divisible unit, secured on a permanent, indestructible and incorruptible ledger.

If the universe had a currency, it would be time and energy.

I urge you to actually read some literature on Bitcoin because your opinion here is looking pretty antiquated and unsophisticated, and increasingly irrelevant.

#105 Miss Boomer on 11.09.21 at 6:48 am

This week in history Canadians were fighting and dying for our flag…our way of life…. Remember….remind Trudeau…..our flag is not his toilet paper.

Mine – replacing the one stolen and destroyed by Cancel Canada Day thugs – goes up this morning. – Garth

#106 Steven Rowlandson on 11.09.21 at 7:04 am

Given the tendency of too many to disrespect truth and truth tellers in this country any attempt at teaching or truth telling will fall on deaf ears or be like casting pearls before swine. Most prefer to dabble in real estate profiteering, be entertained and hypnotized by the media and have unshakeable faith in bankrupt government. Money is too serious a subject for them.
Nothing has changed since Jesus preached to the masses who followed him around the country side. All they wanted was a bite to eat and to be entertained. The Romans called it bread and circuses.

#107 chalkie on 11.09.21 at 7:12 am

Invest like Buffett, slow and steady is the course, Discipline like a soldier and stay focused with some good private REIT, you will do just fine.
If you buy homes and except bank GIC’s & Bonds rates at these insane prices, the cliff is just ahead & there is no one at the bottom, to stand you back on your own two feet, only poor stupid me.

#108 Immigrant man on 11.09.21 at 7:16 am

#94 Michael in-north-york on 11.08.21 at 8:48 pm
Thank you! I do not expect to be in the same tax bracket as now, most most likely lower.

“That gives more flexibility when buying a house,”
I am ashamed to admit my financial illiteracy – we did not use RRSPs when buying our first home. D’oh! When we bought our first house we put down 50k in cash we had saved up for the downpayment. The second house was bough while still in possession of the first house. Downpayment was obtained by converting our bank mutual funds to cash. Only recently have we started putting some money into RRSPs.

From what I have read the First Time Home Buyers Plan actually can be used a second time, as long as there is a 4 year break from homeownership. However, I am yet to find a scenario described like my own where the RRSP have never been used to buy a house for the 1st and 2nd time. I will probably now be evicted from this blog for this rookie mistake…

#109 NoName on 11.09.21 at 8:02 am

@forign man

I do vagli remember that you can use rrsp twice for purchase, but there are are/were some condition attached and hbp rules is involved again.

#110 crowdedelevatorfartz on 11.09.21 at 8:08 am

@#95 Wrk.dvr
“Really though, listen to yourself, a few months ago you stated to all of us here, one more year….”

+++

Nope. Never planned for a retirement at 61.
65 is the goal. And I’m a co-owner.
Quitting isnt an option unless I’m bought out or the company sells.
Another 4 years of juicy salary, bonuses, profit sharing and dividends…. :)
Slow and steady wins the race.

#111 Dharma Bum on 11.09.21 at 8:15 am

“Take the middle path.” – Garth
———————————————————————————————–

Now THAT’s whuttimtalkinabout!

https://www.thedharmatemple.com/how-to-walk-the-middle-path-of-the-buddha/

Ommmmmmmmmmmmmmmmmmmmmmmmmmmmmm

#112 the Jaguar on 11.09.21 at 8:38 am

Meanwhile, back at the Ranch…….(pretty sure this “study” will last long enough to get through the winter months. Maybe unpack your thermal underwear just in case…

“The White House said it’s waiting on a study by the U.S. Army Corps of Engineers before deciding on the controversial pipeline that carries Canadian oil across the Great Lakes into Michigan. The idea that the Biden administration is considering shutting Enbridge Inc.’s Line 5 is “inaccurate,” White House Spokeswoman Karine Jean-pierre told reporters Monday. Speculation that President Joe Biden was considering killing Line 5 prompted angry reactions among Republicans as the country grapples with surging prices for everything from propane to gasoline. Line 5 supplies crude and propane to Michigan homes, as well as refineries in the U.S. Midwest and Ontario. Michigan Governor Gretchen Whitmer and Enbridge have been in a legal tussle for the past year over the fate of the pipeline.”

#113 crowdedelevatorfartz on 11.09.21 at 8:46 am

Apparently the Canadian educational system is doing a “bang-up” job teaching the kids about bullying and harrassment.

https://nationalpost.com/news/local-news/violence/wcm/ec47dd47-3f92-4267-a28a-9b97fe7ed056

Time for more “Pro-D days” to gather up more pink T-shirts to hand out….

#114 the Jaguar on 11.09.21 at 9:21 am

@#163 Don Guillermo on 11.08.21 at 2:34 pm
“As Jag likes to quote “Poor Mexico, so far from God, so close to the US.”++

This quote is attributed to Porfirio Diaz, a Mexican Dictator. He was overthrown by Francisco Madero, arguably the finest Mexican President ever, who was assassinated during the Ten Tragic Days. US Ambassador H.L. Wilson had a hand in the coup that overthrew his presidency. Not the first or last time a ‘coup’ would be orchestrated on foreign soil.

Mazatlan forecast – 24 Celsius, precip. 2%, hum. 86%, wind 8 k./hr. /con fria Modelo Especial .
Muy contento. Salud.

#115 crowdedelevatorfartz on 11.09.21 at 9:43 am

70% of patients in intensive care units in BC are unvaccinated.

Hand them an invoice of ICU care IF they wake up.

17 covid deaths in the last 48 hrs.

#116 Paterfamilias on 11.09.21 at 9:51 am

# 105. Miss Boomer. The Prime Minister is not listening to the likes of us; and, if he were, he would not know what we were saying.

#117 Do we have all the facts on 11.09.21 at 10:00 am

# 104 Short-Tesla

An ETF that tracks the value of derivatives based on the future value of crypto currencies seems counterintuitive to the underlying reason why crypto currencies have any value at all.

Introduction of the Proshares Bitcoin Strategy ETF allows an ‘unlimited’ number of investors to gamble on the future value of a gamble. Does this appear logical.

I may be naive but derivatives tied nothing but investor confidence seem ripe for manipulation. One little shake of the confidence tree or an announcement that a crypto currency is gaining public acceptance can influence the value of a derivative. Pump and Dump appears to have
a new face.

No underlying metrics, assets, or annual reports, to evaluate. Just wet your finger and figure out how the next media release will influence the value of a specific derivative.

Attaching ETF to an investment opportunity does not assure that an investor will realize a positive rate of return. Extreme caution is advised.

#118 Frederick Onzberger on 11.09.21 at 10:02 am

Air Canada ‘ ordered’ to learn to speak French for appearances sake? Why not Mandarin or Swahili or Punjabi or Urdu, or any of the other languages keeping Justin in power? Why not demand that all Crown Corp officers obey certain religious observances like wearing a turban or special ‘ceremonial’ shoes. Shouldn’t our civil servants be either gay or trans ?

What about all the other “really important things’ that have committed us to admit our tragic sins of being Canadians? The Liberals are on to something, our flag should represent a thousand pieces that can never form a picture.

Canadians were fighting and dying today in history. They battled the Nazis to liberate Holland. I know the Dutch celebrate Canada. Why don’t Canadians?

https://torontosun.com/news/national/make-your-ceo-learn-french-freeland-tells-air-canada-board

#119 Faron on 11.09.21 at 10:55 am

#98 Sail Away on 11.08.21 at 10:20 pm

#86 Faron on 11.08.21 at 7:48 pm

Thanks, yes, I am a bit of a stickler that way

Stickler about discussing? Yes. Comprehending? No.

#120 David on 11.09.21 at 10:58 am

Is the first time home buyer savings plan account going to be available in 2022?

It will be my own $40,000 that I put towards it and I hope there will be a system that stops parents giving their kids the $40,000 to use the account. But I can’t figure out how you wouldn’t stop parents from doing so… :(

#121 Philco on 11.09.21 at 11:17 am

#105 Miss Boomer on 11.09.21 at 6:48 am
This week in history Canadians were fighting and dying for our flag…our way of life…. Remember….remind Trudeau…..our flag is not his toilet paper.

Mine – replacing the one stolen and destroyed by Cancel Canada Day thugs – goes up this morning. – Garth
———-
If our brave soldiers didnt fight…..maybe the folk that stole your flag wouldnt be around kicking it in a free country.
Peeps are so messed up these days they cant or wont think for themselves. We have a leader that is just causing more divide. Likely on purpose.

#122 IHCTD9 on 11.09.21 at 11:38 am

#102 Bileth on 11.09.21 at 2:34 am
What about those of us with a DBPP? Should we retire early and draw down from RRSP?
____

It’s tough. Pull out a calculator and do the math for several scenarios and the result is always the same – draining a decent sized RRSP efficiently takes a loong time, even for a couple, and you’ll pay between 20-25% anyway.

Then a bunch of those withdrawn funds either land in a taxable account or just get spent. Anyone who doesn’t have decent TFSA’s to help out on the income front during those years might be forced live a potentially meager life to accomplish the goal.

IMHO, there is more benefit to an early semi-retirement working part time and bleeding the RRSP’s what you can for a decade+, than there is in living like a hermit full-time to max out 10K additional taxes per year. So do it for that reason, enjoy 4-5 day weekends every week, drain your RRSP’s what you can and keep filling your TFSA’s. When 71 comes, you’ll have done as best as you reasonably could, and have been essentially retired for 16 years already.

Give it a lot of thought, and do the real math every time you think you just had a great/new idea.

#123 Don Guillermo on 11.09.21 at 11:58 am

#114 the Jaguar on 11.09.21 at 9:21 am
@#163 Don Guillermo on 11.08.21 at 2:34 pm
“As Jag likes to quote “Poor Mexico, so far from God, so close to the US.”++

This quote is attributed to Porfirio Diaz, a Mexican Dictator. He was overthrown by Francisco Madero, arguably the finest Mexican President ever, who was assassinated during the Ten Tragic Days. US Ambassador H.L. Wilson had a hand in the coup that overthrew his presidency. Not the first or last time a ‘coup’ would be orchestrated on foreign soil.

Mazatlan forecast – 24 Celsius, precip. 2%, hum. 86%, wind 8 k./hr. /con fria Modelo Especial .
Muy contento. Salud.
***************************************
Thanks for the background on that.

Yes, looking like a fine day. There’s actually some light cloud around this morning. Haven’t seen many clouds since we arrived 2 days after Pamela. No cervezas today as we are heading to a Spanish wine tasting event late this afternoon. Gotta stay fresh :-)

#124 Shawn Allen on 11.09.21 at 12:03 pm

RRSP Tax?

It would not be such a bad scenario to have say $2 million in your RRSP at age 71 and with other income face taxes of say 50% (with claw back) for many years and also about 50% on death of last spouse (you would be well past the claw back range).

The deal was, tax refund up front, enjoy tax free growth and pay taxes on withdrawal. Surely people are okay with this deal? I mean they were okay entering the deal so have to be okay honoring the deal?

Basically, facing a 50% tax rate in Canada means you are doing pretty well. Congratulations.

#125 Fortune500 on 11.09.21 at 12:03 pm

Serious question Garth, I have 56% of my wealth in my home and only 44% in investments. I am 41. But the house is paid off. Does this mean you recommend pulling equity out of my house so I get closer to those 90 minus age numbers?

#126 Linda on 11.09.21 at 12:39 pm

#77 ‘habitt’ – you are of course correct that the pension adjustment applies to any type of pension plan, be it DB, DC or some hybrid. I’m not sure whether CPP is part of that adjustment or not. I’m guessing yes – CPP is a DB pension plan after all – but will have to research to see if it is included in the calculation. All I know for sure is that my RRSP contribution room has never been very much due to the pension adjustment. Speaking of RRSP’s, those whose employers will match the annual RRSP contribution (usually to a specific limit) probably have the best retirement plan going. First, their RRSP contribution room is as high as possible due to not having a workplace pension adjustment other than possibly their CPP contributions. If their employer matches their annual contribution, even if it is capped to a specific sum, that means the employee has assistance in making their contribution – both lowering the taxes they pay as well as potentially increasing their chances of a tax refund which can then be invested in turn. Win-win! In addition to all that, those with RRSP’s have full control over those funds. If their employer goes belly up their retirement savings are still theirs. In a world where even those ‘too big to fail’ fall, that kind of security is invaluable to say the least.

The one asset strategy of owning a home is still better than nothing at all. Thing is with these crazy RE prices I can’t see how buying now is anything but financial suicide for average Canadians. Lord help the lemmings!

#127 Mattl on 11.09.21 at 1:01 pm

#125 Fortune500 on 11.09.21 at 12:03 pm
Serious question Garth, I have 56% of my wealth in my home and only 44% in investments. I am 41. But the house is paid off. Does this mean you recommend pulling equity out of my house so I get closer to those 90 minus age numbers?

—————————————————————

Similar boat, and when markets went in the tank Spring 2020 we did just that. Those investments have yielded over 40% and our borrowing rate is 1.74%

Funny enough, the house went up in value significantly so we are still off on the rule of 90. But we expect house prices to soften, and will get in balance with the rule as our contributions to investments outpace equity value in the home.

Long way of saying I wouldn’t worry about it.

#128 IHCTD9 on 11.09.21 at 1:21 pm

#124 Shawn Allen on 11.09.21 at 12:03 pm
RRSP Tax?

It would not be such a bad scenario to have say $2 million in your RRSP at age 71 and with other income face taxes of say 50% (with claw back) for many years and also about 50% on death of last spouse (you would be well past the claw back range).

The deal was, tax refund up front, enjoy tax free growth and pay taxes on withdrawal. Surely people are okay with this deal? I mean they were okay entering the deal so have to be okay honoring the deal?
____

Everything was fine until the TFSA came along :)

#129 Shawn Allen on 11.09.21 at 1:32 pm

Paid off house at 41 plus investment portfolio

#125 Fortune500 on 11.09.21 at 12:03 pm

Serious question Garth, I have 56% of my wealth in my home and only 44% in investments. I am 41. But the house is paid off. Does this mean you recommend pulling equity out of my house so I get closer to those 90 minus age numbers?

*************************************
You are doing exceptionally well. Carry on. Add this info to your dating profile if applicable.

#130 Immigrant man on 11.09.21 at 1:45 pm

#126 Linda on 11.09.21 at 12:39 pm
Speaking of RRSP’s, those whose employers will match the annual RRSP contribution
——–
Yep, that’s what me and the wife have. Would be great if Garth could do a post one day on how to maximize the value of those investments if they are managed by something big like Sunlife/Manulife.

#131 Ohio Rocks....lmao on 11.09.21 at 1:53 pm

Today was “booster day or third covid jab” at the Western Fair Agriplex in London, On. Never have I seen such an “efficient and fast and professional medical service” done so fast I was in and out of there before I could think of anything but “my word, this is so incredible and easy and done by “nice smiley nurses” full of good cheer. I had to ask myself: Is this Ontario? Anyone wanting to get their covid jab in London can be confident of getting the best care anywhere. OHIP rocks when it comes to the vax.

LMAO….people in Canada need a BRAIN first

#132 Millennial 1%er on 11.09.21 at 2:24 pm

I really hate our shitty government.

This year, I’m paying 45% in taxes. In two years, I’m going to Seattle Washington. I’ll make more, get taxed less, and I won’t have to deal with an irresponsible liberal populist government.

Every dollar I give to the government is a dollar wasted.

#133 Wrk.dover on 11.09.21 at 2:31 pm

#122 IHCTD9 on 11.09.21 at 11:38 am

Seven day weekends help draw down an RRSP even better. Those things are an albatross beyond midlife with a DBP in the marriage if not put to use, even if only to stuff TSFA’s because uni funding is flat lining the float.

#134 the Awakened One on 11.09.21 at 6:16 pm

Thank you, Garth!
I appreciate you’ve been harping on tirelessly on these tips over the years for us all.

These concepts are the true Pearls of financial literacy & investment, sadly no one taught us this in school. I actually print some of these articles out and save them for easy read / reference. Believe it or not: my wife now is a daily blog dog as well: took me almost 2 years to recruit her!

Perhaps you can consider creating links for of all these informative writings in some easily-searchable Glossary Index?

It would be super helpful for newbies to search and absorb, and even long-time readers to go back & reference an interesting blog easily; instead of shifting through and getting lost in 12+ years of archived works. Just an idea, as it will serve as a massive, keywords-searchable encyclopedia for investment, learning common sense, and financial literacy.

#135 Fortune500 on 11.10.21 at 7:40 am

#129 Shawn Allen, thanks for that, but happily married with kids. As many others have pointed out, a spouse on the same page financially is half the battle.