Comments on: Another RRSP Debate http://www.canadiancapitalist.com/another-rrsp-debate/ Helping you invest and prosper Sat, 11 Feb 2012 19:27:54 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: rajesh pachha http://www.canadiancapitalist.com/another-rrsp-debate/#comment-361537 rajesh pachha Wed, 29 Dec 2010 13:10:35 +0000 http://www.canadiancapitalist.com/?p=376#comment-361537 Please correct the last sentence that by receiving RRSP money with your pension should not be big burden as your annual income decreases when you retire. Please correct the last sentence that by receiving RRSP money with your pension should not be big burden as your annual income decreases when you retire.

]]> By: rajesh pachha http://www.canadiancapitalist.com/another-rrsp-debate/#comment-361534 rajesh pachha Wed, 29 Dec 2010 13:05:47 +0000 http://www.canadiancapitalist.com/?p=376#comment-361534 Just to go on debate the RRSP investments seems to be good for middle class people. First of all it saves from paying tax by decreasing your income to the amount invested. It brings down the tax bracket. The interest on RRSP investment could upto 3.30% which a good amount if you invest say$6000 the interest you earn will be $198. The total interest is added to your investement and it is not taxed unless you withdraw. At the age of retirement your income decreases as you will eligible for pention only. so the total gross income may less and if you receive RRSP money with your penstion it should be big tax burden as you are receiving monthly. Just to go on debate the RRSP investments seems to be good for middle class people. First of all it saves from paying tax by decreasing your income to the amount invested. It brings down the tax bracket.
The interest on RRSP investment could upto 3.30% which a good amount if you invest say$6000 the interest you earn will be $198.
The total interest is added to your investement and it is not taxed unless you withdraw.
At the age of retirement your income decreases as you will eligible for pention only. so the total gross income may less and if you receive RRSP money with your penstion it should be big tax burden as you are receiving monthly.

]]> By: Dale http://www.canadiancapitalist.com/another-rrsp-debate/#comment-186432 Dale Tue, 24 Mar 2009 05:03:45 +0000 http://www.canadiancapitalist.com/?p=376#comment-186432 As as Scotia bank customer I was given credit in the form of an RRSP line of credit a few years ago. Have never used it as I can't afford any more payments. Question: Should I use some of this credit, say, $10,000.00 to by a two year bridge mortgage from a mortgage broker, paying out at 12% to 14%, to top up my RRSP? In two years I will have been payed back the principal and interest, well above the line of credit interest I am paying. Pure leverage, with none of my own money. The interest will be free to me. As as Scotia bank customer I was given credit in the form of an RRSP line of credit a few years ago. Have never used it as I can’t afford any more payments.
Question: Should I use some of this credit, say, $10,000.00 to by a two year bridge mortgage from a mortgage broker, paying out at 12% to 14%, to top up my RRSP? In two years I will have been payed back the principal and interest, well above the line of credit interest I am paying. Pure leverage, with none of my own money. The interest will be free to me.

]]> By: ETFs Grow Leveraged Wings! (For Good Or Evil?) | Investorial http://www.canadiancapitalist.com/another-rrsp-debate/#comment-184453 ETFs Grow Leveraged Wings! (For Good Or Evil?) | Investorial Tue, 10 Mar 2009 02:40:52 +0000 http://www.canadiancapitalist.com/?p=376#comment-184453 [...] Or The Prospectus Dissappointedly, Marketwatch did not have the balls to warn about the magnified losses that can also come with leveraged investments. The closest they came to presenting the prudent point of view is: Still, investors shouldn’t [...] [...] Or The Prospectus Dissappointedly, Marketwatch did not have the balls to warn about the magnified losses that can also come with leveraged investments. The closest they came to presenting the prudent point of view is: Still, investors shouldn’t [...]

]]> By: DAvid http://www.canadiancapitalist.com/another-rrsp-debate/#comment-169627 DAvid Fri, 21 Nov 2008 20:35:22 +0000 http://www.canadiancapitalist.com/?p=376#comment-169627 Eric, Shareowner Magazine regularly published "Junior" portfolios containing stocks of companies kids would be familiar with. McDonalds, J&J, Hershey, P&G, ToysRUs, Coke, etc. might be considered candidates. DAvid Eric,
Shareowner Magazine regularly published “Junior” portfolios containing stocks of companies kids would be familiar with. McDonalds, J&J, Hershey, P&G, ToysRUs, Coke, etc. might be considered candidates.

DAvid

]]> By: Eric http://www.canadiancapitalist.com/another-rrsp-debate/#comment-169618 Eric Fri, 21 Nov 2008 18:17:40 +0000 http://www.canadiancapitalist.com/?p=376#comment-169618 Hello Derek and fellow bloggers, I've started initiating my 6yr old boy to the finance world. He has his own little bank at home in which he keeps currency from dozens of countries, he has his own savings account in which he follows and deposits funds. I want to investigate the possibility of investing directly in blue chip companies (DRIPs). What do you suggest for a 6 yr old? I want to incorporate a 'fun' factor, something to get him really excited about it .... more so than he already is. Looking forward to your insight, Regards, Eric Hello Derek and fellow bloggers,

I’ve started initiating my 6yr old boy to the finance world. He has his own little bank at home in which he keeps currency from dozens of countries, he has his own savings account in which he follows and deposits funds.

I want to investigate the possibility of investing directly in blue chip companies (DRIPs). What do you suggest for a 6 yr old? I want to incorporate a ‘fun’ factor, something to get him really excited about it …. more so than he already is.

Looking forward to your insight,

Regards,

Eric

]]> By: Kevin Malone http://www.canadiancapitalist.com/another-rrsp-debate/#comment-58260 Kevin Malone Thu, 26 Jul 2007 17:17:34 +0000 http://www.canadiancapitalist.com/?p=376#comment-58260 Derek said: The main point here was to offer alternatives to the RRSP (accelerated debt repayment and leveraged investing). There have been no arguments against mortgage prepayment, so wouldn’t a diversion of capital early on to accelerated mortgage repayment then borrowing to invest offer the same longer-term risk profile as simple gradual mortgage repayment coupled with constant RRSP investing in equities? In both cases, the borrower has the income to service the debt, with the only difference being that in the latter case the debt is tax-deductible. ==== Holy smokes, that's pretty similar to what I have been trying to say about the Smith Manoeuvre only your way sounds better lol. Every time an alternative to the traditional and to my mind illogical strategy of long mortgage + RRSP is proposed someone throws out "risk" or some other red herring when there really isn't any evidence being shown that people who do things like the Smith Manoeuvre actually experience negative outcomes. On the other hand there's people like me who've lived it and are in better situations than all sorts of smarter people (in terms of how effectively they can wax wise about investing) with higher incomes. I love the way Derek thinks and talks outside the box, but he's up against an industry that is like the McDonalds of fast food.....it must be about 99.9% of people that believe in taking out the longest term of mortgage possible and putting as much as possible into an RRSP is the path to financial enlightenment when it seems to me that this is just doing what is good for the bank and not so much for the investor. If it works so well, why are so many people in a panic about their future and working way past traditional retirement age (not by choice). Kevin Derek said: The main point here was to offer alternatives to the RRSP (accelerated debt repayment and leveraged investing). There have been no arguments against mortgage prepayment, so wouldn’t a diversion of capital early on to accelerated mortgage repayment then borrowing to invest offer the same longer-term risk profile as simple gradual mortgage repayment coupled with constant RRSP investing in equities? In both cases, the borrower has the income to service the debt, with the only difference being that in the latter case the debt is tax-deductible.

====

Holy smokes, that’s pretty similar to what I have been trying to say about the Smith Manoeuvre only your way sounds better lol.

Every time an alternative to the traditional and to my mind illogical strategy of long mortgage + RRSP is proposed someone throws out “risk” or some other red herring when there really isn’t any evidence being shown that people who do things like the Smith Manoeuvre actually experience negative outcomes. On the other hand there’s people like me who’ve lived it and are in better situations than all sorts of smarter people (in terms of how effectively they can wax wise about investing) with higher incomes.

I love the way Derek thinks and talks outside the box, but he’s up against an industry that is like the McDonalds of fast food…..it must be about 99.9% of people that believe in taking out the longest term of mortgage possible and putting as much as possible into an RRSP is the path to financial enlightenment when it seems to me that this is just doing what is good for the bank and not so much for the investor. If it works so well, why are so many people in a panic about their future and working way past traditional retirement age (not by choice).

Kevin

]]> By: ETFs Grow Leveraged Wings! (For Good Or Evil?) » Investments + Editorials: Dissecting the good, the bad, and the ugly of investment / financial media! http://www.canadiancapitalist.com/another-rrsp-debate/#comment-3337 ETFs Grow Leveraged Wings! (For Good Or Evil?) » Investments + Editorials: Dissecting the good, the bad, and the ugly of investment / financial media! Wed, 31 May 2006 01:17:58 +0000 http://www.canadiancapitalist.com/?p=376#comment-3337 [...] Read The Fine Print… Or The Prospectus Dissappointedly, Marketwatch did not have the balls to warn about the magnified losses that can also come with leveraged investments. The closest they came to presenting the prudent point of view is: Still, investors shouldn’t expect these funds to deliver exactly double or the inverse of an index due to trading costs and other fees. And the turnover rate for the ETFs is expected to be greater than 100%, according to the prospectus. [...] [...] Read The Fine Print… Or The Prospectus Dissappointedly, Marketwatch did not have the balls to warn about the magnified losses that can also come with leveraged investments. The closest they came to presenting the prudent point of view is: Still, investors shouldn’t expect these funds to deliver exactly double or the inverse of an index due to trading costs and other fees. And the turnover rate for the ETFs is expected to be greater than 100%, according to the prospectus. [...]

]]> By: John http://www.canadiancapitalist.com/another-rrsp-debate/#comment-3240 John Mon, 29 May 2006 14:43:01 +0000 http://www.canadiancapitalist.com/?p=376#comment-3240 This is a very interesting discussion. I find it particularily interesting that many of the early comments criticizing Derek Foster's approach were looking for ways that this approach could fail. Personally, I would rather focus on ways in which the process could work. The proof is in the results in my opinion. And the reaction to this approach lies I suppose what your ultimate objective is. If you wish to accumulate a large nest egg inside of your RRSP a leverage approach is not going to work for you. If you wish to stop working for a regular paycheque then perhaps considering what Derek Foster has to say might be of interest since he has accomplished that. Leverage investing is definitely not for everyone, nor is being financially wealthy. There may be a connection between these two items or there may not be. I certainly think it is worth investigating. This is a very interesting discussion. I find it particularily interesting that many of the early comments criticizing Derek Foster’s approach were looking for ways that this approach could fail. Personally, I would rather focus on ways in which the process could work.

The proof is in the results in my opinion. And the reaction to this approach lies I suppose what your ultimate objective is. If you wish to accumulate a large nest egg inside of your RRSP a leverage approach is not going to work for you. If you wish to stop working for a regular paycheque then perhaps considering what Derek Foster has to say might be of interest since he has accomplished that.

Leverage investing is definitely not for everyone, nor is being financially wealthy. There may be a connection between these two items or there may not be. I certainly think it is worth investigating.

]]> By: Investing Intelligently http://www.canadiancapitalist.com/another-rrsp-debate/#comment-1177 Investing Intelligently Wed, 29 Mar 2006 06:42:48 +0000 http://www.canadiancapitalist.com/?p=376#comment-1177 <strong>Investing Inside an RRSP vs. Outside an RRSP...</strong> There were a couple of blog articles recently about investing inside an RRSP vs. investing outside an RRSP. Frugal Focus discusses a report by Phillips, Hagar & North called “The Retirement Savings Debate: Inside or outside the RRSP structur... Investing Inside an RRSP vs. Outside an RRSP…

There were a couple of blog articles recently about investing inside an RRSP vs. investing outside an RRSP. Frugal Focus discusses a report by Phillips, Hagar & North called “The Retirement Savings Debate: Inside or outside the RRSP structur…

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