Comments on: Guest Post: Retired at 34 – Almost Three Years Ago… http://www.canadiancapitalist.com/guest-post-retired-at-34-almost-three-years-ago/ Helping you invest and prosper Sun, 12 Feb 2012 00:54:40 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: Traciatim http://www.canadiancapitalist.com/guest-post-retired-at-34-almost-three-years-ago/#comment-196376 Traciatim Fri, 24 Jul 2009 22:36:38 +0000 http://www.canadiancapitalist.com/2007/02/11/guest-post-retired-at-34-almost-three-years-ago#comment-196376 Whoops, I did the calculation on 40k a year and claimed they both took home 50 at the start . . . but the math still applies. Whoops, I did the calculation on 40k a year and claimed they both took home 50 at the start . . . but the math still applies.

]]> By: Traciatim http://www.canadiancapitalist.com/guest-post-retired-at-34-almost-three-years-ago/#comment-196375 Traciatim Fri, 24 Jul 2009 22:34:45 +0000 http://www.canadiancapitalist.com/2007/02/11/guest-post-retired-at-34-almost-three-years-ago#comment-196375 What's Fair, instead of whining why not offer a better solution? Maybe reducing the CCTB but giving it to everyone would be better? The CCTB is based on income. Mr. Foster, probably gets less than others because his income includes dividends. Lets say for instance two families making 50K per year, one works and the other makes 50K in dividends by investing in companies that pays for the other ones job. The one working gets 237 a month (2844, common law, ontario, one spouse 40K income). Mr. Foster if he made only dividends would get 166 a month (1992 a year). Of course their taxes are different too . . . one gets a discount for investing in companies that makes jobs for others, and one pays what most people pay . . . and whines about how unfair life is while he wastes money on a big screen TV. What’s Fair, instead of whining why not offer a better solution? Maybe reducing the CCTB but giving it to everyone would be better?

The CCTB is based on income. Mr. Foster, probably gets less than others because his income includes dividends. Lets say for instance two families making 50K per year, one works and the other makes 50K in dividends by investing in companies that pays for the other ones job. The one working gets 237 a month (2844, common law, ontario, one spouse 40K income). Mr. Foster if he made only dividends would get 166 a month (1992 a year).

Of course their taxes are different too . . . one gets a discount for investing in companies that makes jobs for others, and one pays what most people pay . . . and whines about how unfair life is while he wastes money on a big screen TV.

]]> By: what'sfair http://www.canadiancapitalist.com/guest-post-retired-at-34-almost-three-years-ago/#comment-196361 what'sfair Fri, 24 Jul 2009 16:03:50 +0000 http://www.canadiancapitalist.com/2007/02/11/guest-post-retired-at-34-almost-three-years-ago#comment-196361 After briefly seeing Mr. Foster on a TV program about a week ago (July 2009) doing an interview, I immediately took an interest and started looking up info. about him and what he was saying. I started reading some of the numerous info. available from him, and in these articles, Globe & Mail, etc. Mr. Foster has highlighted that it is not worth it to work hard in this country because we are taxed to death. Only low income people (even the RICH ones) benefit from all the tax benefits. I can't believe that someone who has liquid assets of over $400k is allowed to collect Child Tax Benefit. Some of us have to work hard to get to just a comfortable level in their life even with illnesses. Yet, never collect anything for free from the Government...no EI, nor nothing else. The more you work in Canada, the less rewards you get from the Government...basically, I don't have any liquid assets, but a big mortgage because I have to live close to my job, but I am subsidizing Mr. Foster's lifestyle. While I found all the arguments about RRSP vs. paying off your Mortgage very interesting (have me thinking), I do think it is unfair that Mr. Foster is allowed to collect CTB. After briefly seeing Mr. Foster on a TV program about a week ago (July 2009) doing an interview, I immediately took an interest and started looking up info. about him and what he was saying. I started reading some of the numerous info. available from him, and in these articles, Globe & Mail, etc.

Mr. Foster has highlighted that it is not worth it to work hard in this country because we are taxed to death. Only low income people (even the RICH ones) benefit from all the tax benefits. I can’t believe that someone who has liquid assets of over $400k is allowed to collect Child Tax Benefit.

Some of us have to work hard to get to just a comfortable level in their life even with illnesses. Yet, never collect anything for free from the Government…no EI, nor nothing else.

The more you work in Canada, the less rewards you get from the Government…basically, I don’t have any liquid assets, but a big mortgage because I have to live close to my job, but I am subsidizing Mr. Foster’s lifestyle.

While I found all the arguments about RRSP vs. paying off your Mortgage very interesting (have me thinking), I do think it is unfair that Mr. Foster is allowed to collect CTB.

]]> By: Kevin Malone http://www.canadiancapitalist.com/guest-post-retired-at-34-almost-three-years-ago/#comment-58253 Kevin Malone Thu, 26 Jul 2007 16:58:05 +0000 http://www.canadiancapitalist.com/2007/02/11/guest-post-retired-at-34-almost-three-years-ago#comment-58253 Bryce // Feb 20, 2007 at 2:43 pm I agree about the apples and oranges comparison. The RRSP v. Mortage v. Non-rrsp debate is a debate about what to do with money that you HAVE. AAAAAgggghhhh (notstupidanymore) you are talking about a method to go into debt further with the oportunity (a pretty good one it sounds like) of getting rid of ALL your debt earlier. It is still taking on more debt even though you are using it to eventually reduce other debt. It is not magic but it really sounds like a good strategy that I am thinking of exploring. If you are really adverse to risk then maybe this is not the right thing for you. It isn’t a one size fits all and be glad for it. If everyone wanted to do it then those good dividend stocks would be even harder to find. === LOL, I feel ARGGGHS pain, like me I don't think he/she fully understands how he arrived at his own success. He only know that it works, or that's at least his/her main motivation for trying to discuss it. Bryece, you don't increase your debt load with SM, that simply is not true. If you do SM starting with a $750k mortgage on a $1mill home, at the end of it all you will have a $1mill home and $750k worth of investments purchased with borrowed money. At no time will you have more than the $750k debt you started with! I've read Derek's book by the way and liked it very much and actually plan to incorporate some of his strategies once my mortgage is totally gone. CC, this is a great website, I can't believe all these great topics and discussions! Kevin Bryce // Feb 20, 2007 at 2:43 pm I agree about the apples and oranges comparison. The RRSP v. Mortage v. Non-rrsp debate is a debate about what to do with money that you HAVE. AAAAAgggghhhh (notstupidanymore) you are talking about a method to go into debt further with the oportunity (a pretty good one it sounds like) of getting rid of ALL your debt earlier. It is still taking on more debt even though you are using it to eventually reduce other debt. It is not magic but it really sounds like a good strategy that I am thinking of exploring. If you are really adverse to risk then maybe this is not the right thing for you. It isn’t a one size fits all and be glad for it. If everyone wanted to do it then those good dividend stocks would be even harder to find.

===

LOL, I feel ARGGGHS pain, like me I don’t think he/she fully understands how he arrived at his own success. He only know that it works, or that’s at least his/her main motivation for trying to discuss it.

Bryece, you don’t increase your debt load with SM, that simply is not true.

If you do SM starting with a $750k mortgage on a $1mill home, at the end of it all you will have a $1mill home and $750k worth of investments purchased with borrowed money.

At no time will you have more than the $750k debt you started with!

I’ve read Derek’s book by the way and liked it very much and actually plan to incorporate some of his strategies once my mortgage is totally gone.

CC, this is a great website, I can’t believe all these great topics and discussions!

Kevin

]]> By: John Stringfellow http://www.canadiancapitalist.com/guest-post-retired-at-34-almost-three-years-ago/#comment-27398 John Stringfellow Sat, 07 Apr 2007 19:03:54 +0000 http://www.canadiancapitalist.com/2007/02/11/guest-post-retired-at-34-almost-three-years-ago#comment-27398 Ok Derek, where did the money come from, lets put this in its right perspective, you say that you started to save in 1992, at a rate of $200 per month, that’s $2400.00 per year and you retired in 2004, that gives us a total of 12 years @ $2400.00 per year = $28,800.00. Your chapter 20 on Example Portfolio reveals this. To have an income of $18,845.00 per year one would have to own all the company’s that you mentioned in that chapter. To own that amount of share’s and the cost of them share’s comes to $325,500.00, at a rate of $2400.00 per year it would take 136 years to get there. Even just to own one company, lets say Riocan the total cost is $40,000.00 at a rate of $2400.00 per year it would take 17 year to get there. You might have retired at the age of 34, but not with $2400.00 per year investments. Am I missing something or is this another one of them books that is all smoke and mirrors. John Ok Derek, where did the money come from, lets put this in its right perspective, you say that you started to save in 1992, at a rate of $200 per month, that’s $2400.00 per year and you retired in 2004, that gives us a total of 12 years @ $2400.00 per year = $28,800.00.
Your chapter 20 on Example Portfolio reveals this.
To have an income of $18,845.00 per year one would have to own all the company’s that you mentioned in that chapter. To own that amount of share’s and the cost of them share’s comes to $325,500.00, at a rate of $2400.00 per year it would take 136 years to get there.
Even just to own one company, lets say Riocan the total cost is $40,000.00 at a rate of $2400.00 per year it would take 17 year to get there.
You might have retired at the age of 34, but not with $2400.00 per year investments.
Am I missing something or is this another one of them books that is all smoke and mirrors.

John

]]> By: Derek http://www.canadiancapitalist.com/guest-post-retired-at-34-almost-three-years-ago/#comment-21447 Derek Thu, 22 Feb 2007 18:10:44 +0000 http://www.canadiancapitalist.com/2007/02/11/guest-post-retired-at-34-almost-three-years-ago#comment-21447 Hey Guys, Just logged on and noticed my newest addition - Consumer's Waterheater - hiked their payout 4.9%, so far so good..... Just picked this up after the Oct 31. trust announcement. I'm in Florida right now and decided to see what's up. We're staying at a neat loft-type condo with two bathrooms and loads of amenities for the kids for....get this.....$150 for the week. If you have a bit of time to check the net, there are some good deals to be had if you're flexible on your arrival and departure times. Hope winter ends by March 1, when we get back, but I won't hold my breath! Cheers, Derek Foster (author STOP WORKING: Here's How You Can!) Hey Guys,

Just logged on and noticed my newest addition – Consumer’s Waterheater – hiked their payout 4.9%, so far so good….. Just picked this up after the Oct 31. trust announcement.

I’m in Florida right now and decided to see what’s up. We’re staying at a neat loft-type condo with two bathrooms and loads of amenities for the kids for….get this…..$150 for the week. If you have a bit of time to check the net, there are some good deals to be had if you’re flexible on your arrival and departure times.

Hope winter ends by March 1, when we get back, but I won’t hold my breath!

Cheers,
Derek Foster (author STOP WORKING: Here’s How You Can!)

]]> By: silverm http://www.canadiancapitalist.com/guest-post-retired-at-34-almost-three-years-ago/#comment-21236 silverm Tue, 20 Feb 2007 21:47:12 +0000 http://www.canadiancapitalist.com/2007/02/11/guest-post-retired-at-34-almost-three-years-ago#comment-21236 Excellent. I see we're making progress. Let's start at the point where you've just moved all your equity into your home, and you're ready to borrow from your home line of credit. Please show a very *clear* numeric example of how you can get ahead with non-RRSP vs RRSP. Don't forget to outline your assumptions at the beginning. e.g. Tax = 40%. Investments = Income trusts & US Dividend paying stocks. Canadian dividend paying stocks can stay outside RRSP. No problem. Excellent. I see we’re making progress. Let’s start at the point where you’ve just moved all your equity into your home, and you’re ready to borrow from your home line of credit.

Please show a very *clear* numeric example of how you can get ahead with non-RRSP vs RRSP. Don’t forget to outline your assumptions at the beginning.
e.g. Tax = 40%. Investments = Income trusts & US Dividend paying stocks. Canadian dividend paying stocks can stay outside RRSP. No problem.

]]> By: Bryce http://www.canadiancapitalist.com/guest-post-retired-at-34-almost-three-years-ago/#comment-21231 Bryce Tue, 20 Feb 2007 18:44:17 +0000 http://www.canadiancapitalist.com/2007/02/11/guest-post-retired-at-34-almost-three-years-ago#comment-21231 Sorry my spelling was terrible. I'll proof my posts better in the future. Sorry my spelling was terrible. I’ll proof my posts better in the future.

]]> By: Bryce http://www.canadiancapitalist.com/guest-post-retired-at-34-almost-three-years-ago/#comment-21230 Bryce Tue, 20 Feb 2007 18:43:32 +0000 http://www.canadiancapitalist.com/2007/02/11/guest-post-retired-at-34-almost-three-years-ago#comment-21230 I agree about the apples and oranges comparison. The RRSP v. Mortage v. Non-rrsp debate is a debate about what to do with money that you HAVE. AAAAAgggghhhh (notstupidanymore) you are talking about a method to go into debt further with the oportunity (a pretty good one it sounds like) of getting rid of ALL your debt earlier. It is still taking on more debt even though you are using it to eventually reduce other debt. It is not magic but it really sounds like a good strategy that I am thinking of exploring. If you are really adverse to risk then maybe this is not the right thing for you. It isn't a one size fits all and be glad for it. If everyone wanted to do it then those good dividend stocks would be even harder to find. I agree about the apples and oranges comparison. The RRSP v. Mortage v. Non-rrsp debate is a debate about what to do with money that you HAVE. AAAAAgggghhhh (notstupidanymore) you are talking about a method to go into debt further with the oportunity (a pretty good one it sounds like) of getting rid of ALL your debt earlier. It is still taking on more debt even though you are using it to eventually reduce other debt. It is not magic but it really sounds like a good strategy that I am thinking of exploring. If you are really adverse to risk then maybe this is not the right thing for you. It isn’t a one size fits all and be glad for it. If everyone wanted to do it then those good dividend stocks would be even harder to find.

]]> By: AAAAAgggghhhh http://www.canadiancapitalist.com/guest-post-retired-at-34-almost-three-years-ago/#comment-21226 AAAAAgggghhhh Tue, 20 Feb 2007 18:07:50 +0000 http://www.canadiancapitalist.com/2007/02/11/guest-post-retired-at-34-almost-three-years-ago#comment-21226 Sigh. Hopeless. You haven't paid any attention at all and keep recycling the same old financial industry crap that compares apples to organges - comparing the best use of an RRSP to the worst use of altneratives. Now get real! The non-RRSP is established with borrowed funds. The borrowed funds come from paying down your mortgage - more quickly than if you were instead putting the money into RRSPs. The money is borrowed from your home equity thus turning the bad debt mortgage into a good debt investment loan. The interest on the borrowed money is fully tax deductible. The non-RRSP investments are utilized to generate tax-friendly income (less than $10 per $100). This becomes your money - after tax - generated by borrowed money with tax deductible interest that came from the equity in your home that you paid off more quickly because you were not getting sucked into an RRSP which is best for your bank but not best for you. To get that wonderful sort of after tax income you can do it yourself with a Derek style strategy or you can use professionals who will operate your investments as a type of "open pension" where the income from those investments is returned to you for as little as $5 on a $100. But even without going that professional route, paying of your mortgage more quickly and borrowing with that equity to purchase non-RRSP and derive generous after-tax income is and will always be far superior to any RRSP strategy. But the banks don't want you to do that, and people are too stupid to break free of what they have been conditioned to believe. It's really very freaking sad. Sigh. Hopeless. You haven’t paid any attention at all and keep recycling the same old financial industry crap that compares apples to organges – comparing the best use of an RRSP to the worst use of altneratives.

Now get real!

The non-RRSP is established with borrowed funds. The borrowed funds come from paying down your mortgage – more quickly than if you were instead putting the money into RRSPs. The money is borrowed from your home equity thus turning the bad debt mortgage into a good debt investment loan.

The interest on the borrowed money is fully tax deductible. The non-RRSP investments are utilized to generate tax-friendly income (less than $10 per $100). This becomes your money – after tax – generated by borrowed money with tax deductible interest that came from the equity in your home that you paid off more quickly because you were not getting sucked into an RRSP which is best for your bank but not best for you.

To get that wonderful sort of after tax income you can do it yourself with a Derek style strategy or you can use professionals who will operate your investments as a type of “open pension” where the income from those investments is returned to you for as little as $5 on a $100. But even without going that professional route, paying of your mortgage more quickly and borrowing with that equity to purchase non-RRSP and derive generous after-tax income is and will always be far superior to any RRSP strategy.

But the banks don’t want you to do that, and people are too stupid to break free of what they have been conditioned to believe. It’s really very freaking sad.

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