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moneysense.ca, 2/02/07
This and That
- The financial services industry has a vested interest in telling us to save more. Now, some economists are telling Americans that they may be saving too much.
- Rob Carrick, writing in The Globe and Mail, offers this advice for 25-year olds: live it up! RRSPs can wait!
- If you are an investor in Loblaws (TSX: L), you may have more than a passing interest in whether Galen Weston Jr. will be able to correct the missteps made by the grocery chain in the past few years.
- If you are shopping for life insurance, here are five blunders to avoid, courtesy of BusinessWeek.com.
- A recent post on The Wealthy Boomer blog reveals one more disadvantage of mutual funds: you might think that you are holding a Canadian equity fund but close to half the fund could be invested in US equities.
- Money manager Leith Wheeler outlines a few reasons why Canadians should be invested in U.S. equities.
- How do you say “bubble” in Chinese? Investors in the world’s hottest economy are going gaga over the stock market.
- Globe and Mail columnist Eric Reguly thinks that income trust investors have an impossible task in getting the Finance Minister to change his mind on taxation.
- This weekly round up is made possible by a nifty little widget called Google Notebook.
moneysense.ca, 2/02/07
Despite having had over $20K of my net worth lopped off with the whole income trust fiasco, it’s time to move on. Although the opposition parties are salivating over “the lie” the Conservatives made as a campaign promise – the reality is that none of the opposition parties have stood up and said that they would reinstate the income trust structure. So, it is all just pure political maneuvering by the opposition to emphasize that the Conservatives lied, but they don’t have the political will to go against the tax ruling.
Although I haven’t really sold very many of my holdings, all of my NEW money is being invested the NYSE and NASDAQ markets. There is no longer any incentive in investing in this country when our rules are changing faster than some third world banana republic.
Oh and I just heard on 640 news tonight that the Conservatives have reneged on their plan to implement income splitting between married couples. As if we needed any more reasons to hate the idiots running our government. They can’t even deliver on a promise that they JUST delivered.
Actually they never delivered that promise – their only promise was income splitting for retired people over 65 which I believe they are still planning to do – I think it was the media that took that idea and somehow made it seem like income splitting for everyone would be just around the corner.
But you’re right about the Conservatives lying about the trust issue. Of all the things to lie about that was probably one of the dumbest things in my opinion.
Ok I’ve had a good night’s sleep now
My thoughts on income splitting are as follows: on a personal level I love it since it would greatly benefit me & my family. On a theoretical level however I don’t agree with it. I think it makes more sense to have a general tax cut that would benefit more people rather than one where only certain families benefit. While you could argue that it’s not fair that a family where one earner makes 100k pays more tax than a family where both spouses make 50k each…in my opinion that’s the way it goes. The question I would ask is why isn’t the other spouse working? Even if he/she made 10k a year then that would put that family past the 2 times 50k family in terms of net income. Other problems are what about the single person who makes 100k? They already live more expensively than 2 people so I don’t see why they should get left out. And the last reason I don’t like it (in theory) is because it provides a disincentive to work (however small) which I’m not too keen on either.
Having said all that – if the income splitting ever happens then we will be celebrating big time!!
excellent list!
I like your Notebook tip … how do you copy your notes to your post form without getting the arrows and other pieces you don’t want from the Notebook?
I just keep track of interesting posts / columns over the week. I read them again and create this post every Thurs. Sort of “highlights from the world of finances”…
So let me get this straight, splitting your income from a RRIF when you are over the age of 65 is allowed? (basically making spousal RRSPs almost useless, unless you planned on using your spousal RRSP before 65). Has this got the “ascent”, or senate approval or whatever yet?
Income splitting in general: still not allowed?
Dave: Spousal RRSPs are still useful if you want to retire before 65 (because you can’t split income). Income splitting in general is not allowed.
Hey Mike. Have you ever pondered the US model? They give you the option of filing single, married filing separately or married filing jointly. The basic exemptions and such are different for all 3 cases. If you file jointly, then you can take advantage of the income splitting thing in the family. You can also file separately if you both work. Still, the single person continues to get screwed even in the US model, of course.
Although US personal tax rates are much lower, I’ve always found their tax forms more confusing than the Canadian ones. I kind of like the flat tax of whatever percentage for everybody which is gaining popularity in countries all over Europe. Much simpler! Why can’t our government make it so simple, as opposed to our crazy system of deductions and credits.
I’m not familiar with US taxes but I thought that maaried people had to pay more tax? Yah the flat tax is definitely simpler but once you start adding an exception here and a credit there and a surcharge on top…you end with what we have now.
My comments seem to be getting caught in a spam filter.
Rob Carrick’s [Bad] Advice to Young People: RRSPs? Nah….
Rob Carrick’s receent article is a beauty. His headline is “Under 25? Live it up! Financial advisers can wait.” The article gives very confusing advice, and is by no means “financial and investing wisdom” as he claims. It&…
Actually, I somewhat agree with Rob Carrick’s Opinion piece. Keep in mind that he says to ensure that you continue to pay down debts at your fastest possible rate and not to incur any new debt. It’s like the old expression goes, youth is squandered on the young. After all, if you actually make it to 70, you may not be able to enjoy things like playing sports or backpacking around the world.
Phil,
The only thing he says about debt is:
“All the financial advice that 18- to 24-year-olds need can be summed up in two words — avoid debt. Work on paying down any student loans, and don’t borrow more than you can easily pay back based on your income. Most importantly, don’t acquire the nasty habit of buying things you can’t really afford using a credit card.”
First of all, not all 18-24 year olds have debt. If you didn’t go to university you certainly might not. If you had a full-ride scholarship or had some help from bursaries and held a part-time job you also might not have any debt. Or if you went to school part-time, opted for college instead of the big univerities, are in a co-op work experience program, live at home instead of university residence, have parents who will split tuition with you, or any other number of things, you might not have debt.
Saying that ALL the advice that 18-24 year-olds need can be summed up as “avoid debt” says to me that those 18-24 year-old who have no debt can basically not worry about financial planning until they are 24. My wife has a large line of credit that we are paying off, but we are not in a rush. We pay the interest on it, and pay off some of the principal when we have some extra cash laying around. We also max out our RRSPs then apply the large tax refund in April to the line of credit. To us, RRSPs come first, then the line of credit. Opposite to Rob Carrick’s advice. If you see anything wrong with my strategy let me know.
Our line of credit is at prime. Government loans actually have 0% interest until you graduate. Your better off putting money into some low-risk investment than paying off a 0% loan. Then when the loan starts charging interest, cash in the investment and apply it to the loan. Saying that all 18-24 year-olds should concentrate only on paying off debt is BAD advice.