In this video clip, Dan Gardner talks about his book Future Babble: Why Expert Predictions Fail and Why We Believe Them Anyway.

  1. It is unbelievable the length some people will go to save taxes. Jon Chevreau highlighted an author who says that you can save a ton of taxes by cutting residential ties to Canada. It sounds great until you add up all the extra expense of living abroad — the flight tickets to visit family and friends, paying up for private health insurance etc. To all those who have taken their money and run, I say, “Thank you!”. It’s great that you pay 25% taxes and don’t take advantage of our social programs and leave more for the rest of us.
  2. The Blunt Bean Counter, quite correctly points out that severing residential ties is a lifestyle and not income tax decision.
  3. Kevin Press cites an example to illustrate the usefulness (or lack thereof) of expert market predictions.
  4. This being RRSP season and all, Canadians are probably wondering if they are saving enough for retirement. Globe & Mail columnist Rob Carrick rounds up some nifty retirement calculators to help answer that question.
  5. Jim Yih has been writing about personal finance for more than a decade now. He has recently launched a new blog called Retire Happy to keep informing Canadians on their finances. Drop by and say hello. To give you a flavour of his writing, a recent post offered tips on how to review your RRSP portfolio.
  6. I cringe every time I hear dividend investors boasting about their yield on cost. Canadian Couch Potato explains why the belief that a dividend growth strategy will eventually beat the market on yield alone is flawed.
  7. RRSP or TFSA for your retirement funds? Money Smarts Blog offers some thumb rules.
  8. Million Dollar Journey featured a guest post on living without the idiot box.
  9. Michael James suspects that the main benefits of dividend investing are emotional.
  10. I don’t collect Air Miles or Aeroplan points anymore but it is undeniable that loyalty programs are incredibly popular with Canadians. Canadian Financial Stuff points out that you can collect points faster by double dipping.
  11. Boomer and Echo point out the ten ways in which women can obtain financial empowerment.

Just a quick reminder that you can read my posts in your favourite reader or delivered by e-mail. Have a great weekend everyone!

This article has 13 comments

  1. C’mon
    If you’re in the 45% tax bracket and have a $1million dollar RRSP, yes you pay for living abroad, but you’ve also saved 20% on your contribution which is a coll $200,000! MUCH MORE if you have more in that RRSP.

    Getting the hell out of Canada is, currently, a viable way to beat the tax man.

  2. Thanks very much for the mention!

    I think that sometimes the ‘expert predictions’ gets taken a bit out of context after it comes out in sound bites in the media. Like the Capital Economics report, they were saying that with increasing inflation, resuming interest rate hikes this year could potentially trigger a housing correction of up to 25% over the next few years. There’s a lot of information in that report and a lot of things that would have to happen to trigger that worst case scenario. But when it comes out in the news, it’s “housing market to crash by 25%”.

  3. Thanks for the mention! I use points a lot, but only in instances where I was going to make the purchase anyhow.

    Have a great weekend.

  4. I don’t think I’ll ever have enough money in my RRSP to make leaving the country worthwhile.

    Mike

  5. You’ve pointed out a lot of bloggers and journalists who are poo-poo-ing the RRSP structure. But let’s face it, we live in a jurisdiction with high income taxes and the government is giving you a perfectly legal method of reducing your taxable income and raising your net worth with the RRSP structure. It is their method of encouraging our retirement savings without having to jack up CPP premiums so high that it becomes a job killer and forces companies to relocate outside of Canada. As for the government coffers, the RRSP in the persepective of the government is really tax deferral, not tax reduction. You pay your taxes later when you’re retired, not today when you’re working and should be saving money for your retirement.

    There are other methods of reducing our income taxes to save for retirement but they tend to be either shady (such as the use of the “in-kind” charitable donations, or offshoring your savings) or complicated (such as becoming a non-resident as mentioned elsewhere here, or using permanent life insurance policies). Say what you will about RRSPs, but they’re totally above board and legal and I will continue to maximize my RRSP contributions until I’m retired.

  6. the blunt bean counter

    Hey CC, thanks for the mention.

    Sustainable PF, the problem I am having with all these recent articles and the resulting controversy is perception vs. reality. I am a tax accountant and I see this issue every day and have seen it for 20 years, including when the tax rates were far higher than today. Why are my clients not leaving? Most have cash and stock worth multiples of your $1million cash example and yet very few even consider the option? It is because of the reality of family, medical and lifestyle. In addition, most people are married and even where one spouse is vehemently anti-tax and wants to “get the hell out of Canada”, it is very unusual to find both spouses who are willing to leave Canada for monetary reasons. Again the reality of real life, but no one wants to seem to reflect reality, but they wants to be esoteric or reflect the far and few between who do leave.

    Yes, some make the run, but how many return and how many are happier in there balmy in new climate with no friends and family.

    Also, the article simplifies leaving Canada. There is a deemed disposition of most capital property upon leaving Canada with certain exceptions which further complicates the matter.

  7. I absolutely love my Air Miles points! As evidenced by the fact that I’m a gold status collector. I think it’s a great loyalty program. All it really is, is that it makes consumers such as myself choose a vendor that is part of the program and it occasionally rewards you with either merchandise or travel.

  8. @Sustainable PF: $200K doesn’t go far if you account for loss of OAS, add health insurance premiums, taxes in the new jurisdiction, visits to Canada, capital gains on disposition when leaving Canada etc.

    @Echo: Yes, that’s true that nuances in forecasts are often missed in media sound bites. Also, outrageous predictions get more airtime (Oil going to $150! Dow going to 3000! Gold will hit $3000) than more nuanced forecasts.

    @Big Cajun: I gave up on points simply because it’s too much of a hassle to carry around loyalty cards, remember to flash them at the checkout and keep track of when they expire etc.

    @Money Smarts: I don’t think I will either.

    @Phil S: Well put. Deferring taxes is a good thing for most middle- to high- income earners.

    @The Blunt Bean Counter: Agreed. I seriously doubt that severing residential ties for middle class Canadians would work out financially. If we just look at giving up OAS, the pool of Canadians who can even think about taking their money and running will be rather small.

  9. Pingback: This and That: Expert predictions, take your money and run and more… | MoneySense

  10. Actually $200K would be a very serious chunk of money in a (relatively developed) Third World country. That’s 20 times what the average resident of my home country makes in one year.

  11. Thanks so much for the link. Dan’s book is terrific. A bit slow at the start, but worth sticking with.

  12. Thanks for the mention. I agree with your take on saving taxes by living abroad. If I already wanted to live abroad, then saving on taxes would be a nice benefit.

  13. Hello, loving your ‘this and that’ posts latelly
    Could you give us a comment about: Assessing the risks of an ETF ‘blow up’, published this week in the globe and mail
    http://www.theglobeandmail.com/globe-investor/investor-education/investor-clinic/assessing-the-risks-of-an-etf-blow-up/article1890849/
    Thanks