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This and That

December 14th, 2007 · 18 Comments

  1. Time is running out if you want to take advantage of some tax breaks for the 2007 tax year. You can also add RESP contributions to the list.
  2. Just in time for the holiday season: “Eight tips for the office party”.
  3. While his approach to investing might be boring, the same epithet doesn’t apply to William Bernstein, author of The Four Pillars of Investing, recently quoted in The Globe and Mail.
  4. Jonathan Chevreau writes about yet another study that shows how chasing performance negatively affects investment returns.
  5. A hot fund could easily turn cold, so beware of investing based on past performance. Rob Carrick relates the story of formerly high-flying Mackenzie Ivy Canadian Fund.
  6. Ellen Roseman writes about an investor who sold equities anticipating a market decline and parked the proceeds in commercial notes when his adviser suggested that the notes have an “AAA rating, better than many government bonds”.

Blog Roundup

  1. Canadian Dream pointed out the dangers of comparing net worth in response to a post by Million Dollar Journey. I’m curious if readers really care to know a blogger’s net worth.
  2. Steady Hand’s Tom Bradley notes that “I don’t want any of my money in the U.S.” is a common refrain these days.
  3. Many readers had pointed out the TD Mutual funds does not handle grants other than the basic CESG. Larry MacDonald suggests checking out if your RESP provider can handle all the grants you are eligible for.
  4. Canadian Financial DIY suggests how to construct a portfolio from scratch.

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Tags: Miscellaneous

18 responses so far ↓

  • 1 MillionDollarJourney // Dec 14, 2007 at 8:39 am

    CC, i’m curious also. I’ve always got the impression that readers enjoy the net worth postings as I always appreciate them when other bloggers post theirs. BTW, thanks for the mention!

  • 2 Steve Heath // Dec 14, 2007 at 10:18 am

    Personally, I generally pay no attention at all to “net worth” type posts, for exactly the reasons mentioned, plus… how does my knowing your net worth teach me anything?

    The personal numbers provided that I do find interesting are ones that I can apply to my own finances… for example, when CC provided all the information on the sleepy portfolio, seeing the performance not only helped me decide how I wanted to set up my portfolio, but also gives me a performance benchmark I can share with him.

    If a net worth is mentioned in context of a post (ie, this investment doubled my net worth) I just take it as anecdotal.

  • 3 Canadian Capitalist // Dec 14, 2007 at 11:00 am

    Steve: Thanks for your input. I don’t pay much attention to net worth posts either because a) it’s none of my business and b) without context, it is meaningless.

    That said, I think tracking net worth once a year using a consistent method is very useful to keep track of financial progress.

  • 4 FourPillars // Dec 14, 2007 at 11:07 am

    I don’t place much meaning in net worth because my house equity is half of it.

    The number I’m interested in is total investments minus debts because that’s the money that I can live off of.

  • 5 thickenmywallet // Dec 14, 2007 at 11:22 am

    What shocks me about the Ellen Roseman story is that the advisor seems to have done this without instruction from the client. Its one thing to fall on your own sword. Another when your advisor does it for you (if indeed, they acted without instructions).

  • 6 Phil S // Dec 14, 2007 at 11:33 am

    Moneysense magazine recently (November 2007) had an issue that covered the wealth of Canadians. It gave statistics for both income and net worth. Since it was an aggregate of all Canadians from the likes of Galen Weston Jr to the kid collecting shopping carts at the Weston’s Loblaws chains, I’m not sure how useful it is.

    But the one interesting statistic is the net worth cross-referenced with income. There you can compare how well that you’re accumulating wealth against other people in the same income bracket. I’m happy to know that I’m ahead of the curve, but in reality I certainly don’t FEEL very wealthy and I’m thinking that perhaps other Canadians just aren’t saving enough!

    The most worrying statistic to me in this issue is that even in the age bracket near retirement (55 to 64), only 69% of Canadians have RRSPs! And the average value of those 69% who have RRSPs is only a measly $124,500!!! That’s not enough to live on! What are these Canadians thinking?!! The reason why I find that worrying is because that means those of us who ARE responsible with our money will get taxed to death to cover the welfare of those who just whooped it up and spent like drunken sailors all their life! Gaak!!!

  • 7 telly // Dec 14, 2007 at 3:08 pm

    Phil S.,

    I think that a lot of people in the 55 to 64 age group have pensions and that might be why many of them don’t have RRSPs. I know my dad (who is now retired) doesn’t have any registered savings at all. My parents currently live rather comfortably on his company pension and various rental income.

    For the younger crowd, RRSPs are almost a necessity with pension plans becoming much more rare.

  • 8 FourPillars // Dec 14, 2007 at 3:38 pm

    Good point Telly - my parents are in a similar situation.

    Those averages are pretty useless if you think about it.

    Mike

  • 9 boring investing — award tour // Dec 14, 2007 at 6:42 pm

    [...] Capitalist blog has a great news round-up post which pointed out some really interesting articles about personal investing and what not to [...]

  • 10 Canadian Capitalist // Dec 14, 2007 at 7:16 pm

    Thicken: I was very surprised that the adviser said “better than govt. bonds”. IMO, unlike the government, businesses don’t have taxation powers and can never be considered as safe as government bonds.

    Phil: Malcolm Hamilton’s report on senior finances shows that seniors have more after-tax income than working Canadians. Coupled with the fact that the big spending years are well behind, it looks like retired senior citizens don’t really need all that much to live on.

  • 11 Phil S // Dec 14, 2007 at 7:46 pm

    Good point telly. I guess I just wasn’t in the pension frame of mind. My father also retired with a pension, but he was a government employee so I figured he was more of an exception to the rule.

    To FourPillars. It is useless, but still it’s an interesting read. They have a table that shows the net worth of the wealthiest 20% of Canadians by age group and it shows:

    Under 35 = $89,700+ net worth
    35-44 = $309,200+ net worth
    45-54 = $516,300+ net worth
    55-64 = $965,000+ net worth

    If you beat this benchmark, then at least you know that you’re wealthier than 80% of Canadians in your age group. Don’t you find those statistics interesting? I certainly do…! So whenever I’m feeling like I’m just “slaving away for the man”, at least I can say that I’m getting further ahead than 80% of my peers… And suddenly things don’t seem so bad.

  • 12 FourPillars // Dec 14, 2007 at 8:46 pm

    Phil, I did find those stats quite interesting and compared myself to them as well.

    Mike

  • 13 CanadianInvestor // Dec 15, 2007 at 11:00 am

    Net worth would be more interesting and relevant if the sources of the wealth were revealed. For investing, I pay a lot more attention to the sayings of Warren Buffett than Bill Gates. For making money on software, it’s the reverse. It seems also to be true that the greater the net worth of a person, the greater the reluctance to reveal it.

  • 14 Traciatim // Dec 15, 2007 at 12:28 pm

    “It seems also to be true that the greater the net worth of a person, the greater the reluctance to reveal it.”

    I wonder if that has anything to do with the general populations resentment for other people’s success. Maybe the high net worth individuals fear they will be shunned or hated by others for their success because of envy.

    ‘Normal’ people look at skinny fit people with resentment even though it takes patience, hard work, and discipline to be fit. ‘Normal’ people look at wealthy people with resentment even though it takes patience, hard work, and discipline to become wealthy. ‘Normal’ people look at people who succeed at work with resentment even though it takes patience, hard work, and discipline to get their promotions.

    I think I know what the ‘norm’ is . . . lack of patience, hard work, and discipline. Maybe should wake up and stop being normal so that I too can succeed.

  • 15 moneygardener // Dec 15, 2007 at 6:31 pm

    I like seeing net worth for any blogger that is willing to share….

  • 16 thickenmywallet // Dec 15, 2007 at 6:47 pm

    Traciatrim: I would take a different take on Canadian Investors’ comments. The more net worth you have, the more you are subject to nuisance and predatory litigation especially if you live in the U.S. So why invite such litigation?

  • 17 Tall Poppy Syndrome // Dec 15, 2007 at 8:05 pm

    [...] about Tall Poppy Syndrome again rushed to front of mind. Especially when I was reading through comments that others had about this controversial post. Should I list my net worth? Why would I be doing it? [...]

  • 18 Todd // Jan 2, 2008 at 1:50 pm

    Does anybody know what happens to an RESP if I (the account holder) dies? Does the account ownership transfer to my son without any tax implications?

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