Comments on: This and That http://www.canadiancapitalist.com/this-and-that-18/ Helping you invest and prosper Sat, 11 Feb 2012 12:40:17 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: Canadian Capitalist http://www.canadiancapitalist.com/this-and-that-18/#comment-6811 Canadian Capitalist Thu, 31 Aug 2006 02:05:04 +0000 http://www.canadiancapitalist.com/2006/08/30/this-and-that-18#comment-6811 Phil, Al: That's an excellent point. Some credit cards provide rental insurance or flight cancellation insurance. Depending on your usage these benefits may be more valuable than rewards. One idea would be to have a no-fee card that provides the benefit you are looking for as the backup card and use the reward card for other purposes. Phil, Al: That’s an excellent point. Some credit cards provide rental insurance or flight cancellation insurance. Depending on your usage these benefits may be more valuable than rewards. One idea would be to have a no-fee card that provides the benefit you are looking for as the backup card and use the reward card for other purposes.

]]> By: Al R http://www.canadiancapitalist.com/this-and-that-18/#comment-6802 Al R Wed, 30 Aug 2006 19:11:52 +0000 http://www.canadiancapitalist.com/2006/08/30/this-and-that-18#comment-6802 Phil S - I agree, but it would be really difficult to factor all the extras into the equation. There's dozens of rewards programs out there because different things appeal to different people. I've got the BMO Gold Mosaik card which pays off big for me because it's easy to save up for flights, and it essentially gives you free banking at BMO. If you never rent cars or stay in hotel rooms, the RBC card looks weak. That's why these exercises are kind of pointless... Phil S – I agree, but it would be really difficult to factor all the extras into the equation. There’s dozens of rewards programs out there because different things appeal to different people. I’ve got the BMO Gold Mosaik card which pays off big for me because it’s easy to save up for flights, and it essentially gives you free banking at BMO. If you never rent cars or stay in hotel rooms, the RBC card looks weak. That’s why these exercises are kind of pointless…

]]> By: Phil S http://www.canadiancapitalist.com/this-and-that-18/#comment-6788 Phil S Wed, 30 Aug 2006 16:45:08 +0000 http://www.canadiancapitalist.com/2006/08/30/this-and-that-18#comment-6788 The webpage with the credit card comparisons doesn't take into account some of the "other" benefits of the cards. For example, I have the RBC Platinum Avion card and if I rent a car, I can waive the basic insurance, or if I book a hotel room on it, I get automatic Hotel Burglary insurance, yada yada yada. In comparison, I have the BMO Gold Mosaik Westjet card which has diddly squat for extra features, other than some small Westjet benefits. Since I enjoy travelling as a pastime, my RBC annual fee (to me) pays for itself in spades every year, whereas my Gold Mosaik Westjet card is more like a money pit. The webpage with the credit card comparisons doesn’t take into account some of the “other” benefits of the cards. For example, I have the RBC Platinum Avion card and if I rent a car, I can waive the basic insurance, or if I book a hotel room on it, I get automatic Hotel Burglary insurance, yada yada yada. In comparison, I have the BMO Gold Mosaik Westjet card which has diddly squat for extra features, other than some small Westjet benefits. Since I enjoy travelling as a pastime, my RBC annual fee (to me) pays for itself in spades every year, whereas my Gold Mosaik Westjet card is more like a money pit.

]]> By: Canadian Capitalist http://www.canadiancapitalist.com/this-and-that-18/#comment-6781 Canadian Capitalist Wed, 30 Aug 2006 14:06:50 +0000 http://www.canadiancapitalist.com/2006/08/30/this-and-that-18#comment-6781 As you mentioned, I figured that an average tax rate of 25% on an individual income of $60K sounds about right. What really impressed me that they have managed to accumulate a net worth of more than 5 times their annual income. Wow! As you mentioned, I figured that an average tax rate of 25% on an individual income of $60K sounds about right. What really impressed me that they have managed to accumulate a net worth of more than 5 times their annual income. Wow!

]]> By: 0xcc http://www.canadiancapitalist.com/this-and-that-18/#comment-6778 0xcc Wed, 30 Aug 2006 12:39:24 +0000 http://www.canadiancapitalist.com/2006/08/30/this-and-that-18#comment-6778 Oh and one more thing, that rental mortgage interest is also tax-deductable so there is an extra $1490 a month that they can use to reduce their taxes. Oh and one more thing, that rental mortgage interest is also tax-deductable so there is an extra $1490 a month that they can use to reduce their taxes.

]]> By: 0xcc http://www.canadiancapitalist.com/this-and-that-18/#comment-6777 0xcc Wed, 30 Aug 2006 12:36:33 +0000 http://www.canadiancapitalist.com/2006/08/30/this-and-that-18#comment-6777 Doing a little bit of math, I come up with a yearly figure of $83100 (the article says they have yearly mortgage payments of $33240 and that is 40% of their take-home income). At the bottom of the article they mention the $7483 that you quote is about $550 more than the $6925 that is calculated using their mortgage payment of 2770 making up 40% of their income. If you note in the summary at the bottom there is a $300 RRSP contribution which would help to increase their after-tax income, also charitable donations of $30 would increase their after-tax income. They also don't split out their incomes so if they were both making just under $60k the 25% average tax rate would be in the right ballpark... The marginal tax rate (amount of tax paid on each additional dollar of income) is higher than 25% but the average tax rate (total tax paid divided by total income) at around 25% seems about right to me. Doing a little bit of math, I come up with a yearly figure of $83100 (the article says they have yearly mortgage payments of $33240 and that is 40% of their take-home income). At the bottom of the article they mention the $7483 that you quote is about $550 more than the $6925 that is calculated using their mortgage payment of 2770 making up 40% of their income. If you note in the summary at the bottom there is a $300 RRSP contribution which would help to increase their after-tax income, also charitable donations of $30 would increase their after-tax income. They also don’t split out their incomes so if they were both making just under $60k the 25% average tax rate would be in the right ballpark… The marginal tax rate (amount of tax paid on each additional dollar of income) is higher than 25% but the average tax rate (total tax paid divided by total income) at around 25% seems about right to me.

]]> By: awardtour http://www.canadiancapitalist.com/this-and-that-18/#comment-6746 awardtour Wed, 30 Aug 2006 07:06:32 +0000 http://www.canadiancapitalist.com/2006/08/30/this-and-that-18#comment-6746 It goes to show how insane the vancouver housing market is when a young couple with that much savings still have to take on a massive mortgage. I was also confused by the fact that their net monthly income was $7483 (or almost $90K annually) on a gross income of $119K. I thought the income tax rate in that bracket would be much higher than 25%? Is the tax rate on rental income really low? It goes to show how insane the vancouver housing market is when a young couple with that much savings still have to take on a massive mortgage.

I was also confused by the fact that their net monthly income was $7483 (or almost $90K annually) on a gross income of $119K. I thought the income tax rate in that bracket would be much higher than 25%? Is the tax rate on rental income really low?

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