|
My financial planner/advisor isn't from a bank so there are options.
|
#
?
Jul 14, 2018 08:49
|
|
|
|
| # ? May 30, 2024 10:07 |
|
|
the first thing i'd do is hire a proper tax accountant from a proper firm (i'd recommend you leave your backwoods town to find this individual) to go over your income and tax returns that your current idiot accountant prepared. sounds like you probably committed some light tax evasion. once you have your past tax returns sorted out and you are prepared for future tax returns max out your RRSP and TFSA accounts (you can min/max here, but i'd just buy low MER ETFs via qtrade/questrade). other income you can also buy ETFs in a regular (non RRSP/TFSA) accounts or just buy boats or whatever
|
|
#
?
Jul 14, 2018 16:38
|
|
|
RRSP and TFSA have the same benefit if you're in the same tax bracket. TFSAs have much more flexibility and are simpler because withdrawals are not counted as income. RRSP withdrawals count as income, and so have the chance to come out ahead if you end up being in a lower tax bracket when you cash out, but at the cost of potentially coming out behind if tax rates go up. There's no real way to know what tax policy will be like in 20+ years, but I'm okay with assuming it'll be something similar to what we have now (adjusted for inflation), because if there's really some huge shock to capital systems then there's nothing that can be done to prepare for it anyways. Standard bro-knowledge fill both if you can, but prioritize TFSA under 50k and RRSP above (assuming no consumer debt and emergency fund in place, if you roll that way). You won't have a lot of TFSA room due to your age, or a lot of RRSP room since you kept income artificially low. There's probably no reason why you shouldn't max out both asap and then throw money into unregistered accounts. If that kinda money is representative of what you'll be making indefinitely, then seek professional advice - you'll be rich so our chump change advice will amount to a rounding error on a rounding error after a decade or two. If you won't be able to sustain those kind of earnings then getting into the market asap for that sweet long term appreciation is likely to be best without the benefit of hindsight or insider trading. It also opens up the possibility to harvest capital gains/losses in a way that's most favorable to you. IMO.
|
|
#
?
Jul 14, 2018 16:40
|
|
|
Methanar posted:my idiot parents bitch about how RRSPs double tax you Sounds like you have this covered but: you’re not double-taxed on RRSPs. I had no idea this was a thing people thought! Always learning new things in this thread. Also, Methanar, it might be less confusing to just pick one thread to ask for advice. Doesn’t matter which one.
|
|
#
?
Jul 14, 2018 17:34
|
|
|
pokeyman posted:Sounds like you have this covered but: you’re not double-taxed on RRSPs. In a way you are if you spend your refund instead of reinvesting it, but no way people are that stupid right? 
|
|
#
?
Jul 14, 2018 18:58
|
|
|
What would be the reason for having a relatively high proportion of ETFs holding Canadian equity? For example the Canadian Couch Potato model portfolios always have a 2:1 ratio of international to Canadian equity. Is it because of the MER? Canadian equity performing well?  ? It just strikes me as odd when you consider the size and strength of Canada's economy relative to the whole world.Also, if I'm following the passive ETF strategy with a 30+ year horizon in mind and I'm not concerned about short term fluctuations, how stupid is it to forgo the bond ETF entirely and go full equity? For context, I've been doing 55% XAW, 30% VCN, and 15% ZAG for a year and I've been thinking about slowly moving towards something like 75% XAW, 20% VCN, 5% ZAG as I feel it might make sense given my risk tolerance/investment horizon. I know the CCP portfolios aren't gospel, but the people putting them together are probably smarter than me and this would be beyond their "aggressive" suggestion so I'm second guessing myself.
|
|
#
?
Jul 19, 2018 03:52
|
|
|
Shofixti posted:What would be the reason for having a relatively high proportion of ETFs holding Canadian equity? For example the Canadian Couch Potato model portfolios always have a 2:1 ratio of international to Canadian equity. Is it because of the MER? Canadian equity performing well? The CCP guy wrote about this: https://www.moneysense.ca/columns/bias-towards-canadian-stocks/ Shofixti posted:Also, if I'm following the passive ETF strategy with a 30+ year horizon in mind and I'm not concerned about short term fluctuations, how stupid is it to forgo the bond ETF entirely and go full equity? He also talked about this in an AMA: quote:princessdianasauce: I haven’t been investing long enough to have endured the 2008 financial crisis or any extended bear market. However, I have been very disciplined during the market volatility in the last 3 months, and for the entirety of my DIY experience. Do you think that is sufficient evidence to increase my risk tolerance? I am 28 years old, currently using 75% equity, 25% fixed income, but I am considering 85% to 90% equities.
|
|
#
?
Jul 19, 2018 04:45
|
|
|
Unless you’re buying total global market then you’re picking winners which is not passive investing.
|
|
#
?
Jul 19, 2018 04:53
|
|
|
Couch Potato guy's portfolio is way over on Canada, IMO. Considering probably your job and your house is also located here, having a third of your equity portfolio also be concentrated in our economically tiny nation also seems way unbalanced. I think the Vanguard portfolio ETFs are also over-weighted on Canada, so I balance them out with an all-world-equity-ex-canada ETF. Keeping 2 ETFs balanced is pretty easy.
|
|
#
?
Jul 19, 2018 15:58
|
|
|
Square Peg posted:Couch Potato guy's portfolio is way over on Canada, IMO. Considering probably your job and your house is also located here, having a third of your equity portfolio also be concentrated in our economically tiny nation also seems way unbalanced. Yeah I am just VXC, VAB.
|
|
#
?
Jul 19, 2018 16:21
|
|
|
Kal Torak posted:The CCP guy wrote about this: Thanks! These are both very useful answers. cowofwar posted:Unless you're buying total global market then you're picking winners which is not passive investing. Fair enough, still wrapping my head around the nomenclature.
|
|
#
?
Jul 19, 2018 22:42
|
|
|
What exactly is a TFSA and how do I buy one. Is it literally just a savings account I ask CIBC to give me, or is it something else. Where can I read more about them. All of the ETFs that I currently own are things I picked out of the historically successful list here. https://www.blackrock.com/ca/indivi...rview&view=list What is the difference between doing that and buying the two things that are listed in the OP. Is it literally the same process as buying, I just go through my bank's ETF buyer page, enter the trading code and thats it? Is there any major functional difference? Do I treat them the same way and pick things that have historically trended well over the last N years and be diverse in the industries the ETFs relate to? https://www.td.com/ca/en/personal-banking/products/saving-investing/mutual-funds/td-eseries-funds/ https://www.vanguardcanada.ca/individual/articles/education-commentary/investing/learn-about-factor-investing.htm Also what is a mutual fund.
|
|
#
?
Jul 21, 2018 21:44
|
|
|
Methanar posted:What exactly is a TFSA and how do I buy one. Is it literally just a savings account I ask CIBC to give me, or is it something else. Where can I read more about them. A TFSA is a registered tax basket in which you put other products. After tax money up to the yearly limit goes in and then any gains are not taxed. A TFSA account can hold cash, funds, equities or whatever. You just ask your broker to open a TFSA and then do whatever inside of it, banks offer TFSA savings accounts, investment brokers offer TFSA equity accounts. Capital gains in a TFSA are sweet because it effectively raises your TFSA cap, however TFSA capital losses are brutal for the opposite reason. Funds are managed baskets of equities and bonds and whatever other instruments. They can be passively or actively managed. They can be bought in to or sold out of like mutual funds or shares can be purchased and traded on the exchanges like ETFs.
|
|
#
?
Jul 21, 2018 22:10
|
|
|
You guys read that article in the gloat and bail about the CRA randomly auditing TFSA accounts? 
|
|
#
?
Jul 22, 2018 02:25
|
|
|
I still don't really get TFSAs. https://www.cibc.com/en/interest-rates/tfsa-rates.html CIBC's TFSA interest rates are 2.5%. Inflation is 2.2%. So I'm not even really making money with these. At best I'm holding money and maintaining parity with inflation. I have a business and all of the money I draw out of the corporation to my personal bank account is subject to personal income tax. Why would I pull 55k personally and put them into a TFSA and get taxed at the 55k income tax bracket when I could instead pay myself 50k and just hold that extra 5k in my corporate bank account in ETFs indefinitely. Then only draw 30k or whatever out of my corporate bank account later in life when my house is paid off and I'm retired and pay the 30k personal income tax bracket
|
|
#
?
Jul 28, 2018 03:10
|
|
|
You can use a TFSA to hold almost any investment instrument you want. They have a terrible and confusing name - Tax Sheltered Investment Account would be a more appropriate name.
|
|
#
?
Jul 28, 2018 03:22
|
|
|
Methanar posted:I still don't really get TFSAs. It’s a basket that holds whatever you want and is registered for tax reasons. -registered —TFSA —-Savings account ——cash —-Investment account ——equities ——bonds —RRSP —-Savings account —-Investment account —RESP —-Savings account -—Investment account -unregistered —Savings account —Investment account —chequing account
|
|
#
?
Jul 28, 2018 03:46
|
|
|
Methanar posted:I still don't really get TFSAs. It’s confusing, but it’s worth understanding so don’t give up! quote:I have a business and all of the money I draw out of the corporation to my personal bank account is subject to personal income tax. Why would I pull 55k personally and put them into a TFSA and get taxed at the 55k income tax bracket when I could instead pay myself 50k and just hold that extra 5k in my corporate bank account in ETFs indefinitely. Then only draw 30k or whatever out of my corporate bank account later in life when my house is paid off and I'm retired and pay the 30k personal income tax bracket Because you can hold those same ETFs in a TFSA and pay no taxes ever on the gains. As in, you can open a TFSA at a brokerage. (I’m just restating what two other posters have told you, but you never know which restatement will click.)
|
|
#
?
Jul 28, 2018 05:03
|
|
|
Methanar posted:I have a business and all of the money I draw out of the corporation to my personal bank account is subject to personal income tax. Why would I pull 55k personally and put them into a TFSA and get taxed at the 55k income tax bracket when I could instead pay myself 50k and just hold that extra 5k in my corporate bank account in ETFs indefinitely. Then only draw 30k or whatever out of my corporate bank account later in life when my house is paid off and I'm retired and pay the 30k personal income tax bracket http://www.advisor.ca/tax/tax-news/investment-solutions-for-business-owners-109941 Super simplified comparison assuming you're paying yourself in dividends. The rates are coming from a spreadsheet I made to calculate dividend tax stuff. Could be wrong. A) Pull and additional $6,150 out this year on top of the first $50,000, pay 18.7% marginal personal income tax rate = $5000 left. $5000 earns 8% in an ETF in your TFSA for 30 years. Now $50,000. Withdraw from TFSA tax free: $50,000 in your chequing account. B) Leave $6,150 in your corporation. $6,150 earns 8% in the same ETF in the corporation for 30 years. Now $61,500. Sell ETFs. Corporation pays 25% tax, $46,125 remains. Withdrawing $30,000 per year, you're paying a 9.2% effective income tax rate. That $46k is reduced to $41,882 in your chequing account. Note that if you had no other income, after accounting for the personal exemption, you'd actually only pay an effective tax rate of 1.2% on a $30,000 dividend, but you'd still come out behind. Use your tax shelters! It's worth consulting a tax planner, you probably want to pay yourself a salary (but only just enough!) to open up some RRSP room so you can use that as well. Kreez fucked around with this message at 20:23 on Jul 28, 2018 |
|
#
?
Jul 28, 2018 05:18
|
|
|
TFSA is a horrible name the big financial institutions haven't helped by literally trying to make people think it's a generic savings account. They should have just got rid of the word savings altogether. If it was something like "Tax Free Investment Account" or something like that, it would at least make people investigate what it is. Instead people hear the word "savings" and think they know what it is, and they likely do not.
|
|
#
?
Jul 28, 2018 19:57
|
|
|
Oddly people don’t have the same belief about the RRSP or RESP. I guess they’ve had longer to be established in their meaning, but I wonder what people thought when they were introduced.
|
|
#
?
Jul 28, 2018 20:27
|
|
|
I think it was more of a strategic decision by the Conservatives to have it disproportionately advantage their base by it being underutilized by the rest of Canada.
|
|
#
?
Jul 28, 2018 20:52
|
|
|
Mantle posted:I think it was more of a strategic decision by the Conservatives to have it disproportionately advantage their base by it being underutilized by the rest of Canada. Which is weird because the lower your income, the better the TFSA is for you vs an RRSP. I mean, assuming you can save any cash at all, which is obviously difficult if you're low income. And of course if you're rich you're maxing them both out anyway.
|
|
#
?
Jul 29, 2018 02:27
|
|
|
Are there any good GICs? Are market linked GICs just a scam for commision for the brokers? Any good low-cost mutual funds from the big banks? Wife wants to invest some cash but doesnt want any risk for the next few years.
|
|
#
?
Aug 2, 2018 02:59
|
|
|
zapplez posted:Are there any good GICs? Are market linked GICs just a scam for commision for the brokers? There are a few HISA out there paying >2%: https://www.highinterestsavings.ca/chart/
|
|
#
?
Aug 2, 2018 03:14
|
|
|
Kal Torak posted:There are a few HISA out there paying >2%: Same site has a table of GICs too, in case anyone's curious and missed the link in the top nav.
|
|
#
?
Aug 2, 2018 03:28
|
|
|
zapplez posted:Are there any good GICs? Are market linked GICs just a scam for commision for the brokers? If she literally has zero risk tolerance just use fixed income stuff like this or something similar.
|
|
#
?
Aug 2, 2018 03:28
|
|
|
VelociBacon posted:If she literally has zero risk tolerance just use fixed income stuff like this or something similar. Bond indexes still have some short-term risk, especially as interest rates rise, so shorter-term bond index funds like VSC have less short-term risk.
|
|
#
?
Aug 3, 2018 15:43
|
|
|
Thank you for the tips everyone!
|
|
#
?
Aug 4, 2018 19:21
|
|
|
PSA: when you open a Spousal RRSP, the lower income spouse is the one who needs to open the account (the “annuitant”). The higher-income contributor is not the account opener. Learned this one the hard way.
|
|
#
?
Aug 7, 2018 22:51
|
|
|
Lexicon posted:PSA: when you open a Spousal RRSP, the lower income spouse is the one who needs to open the account (the “annuitant”). The higher-income contributor is not the account opener. This was really hard for me to figure out as well. Questrade was not helpful at all because all I could get on the phone was some front line phone jockey that didn't know anything about tax planning.
|
|
#
?
Aug 8, 2018 02:43
|
|
|
Does it really matter what bank I use? They're all 99% identical in their offerings and rates right? Or should I use a credit union.
|
|
#
?
Aug 8, 2018 02:51
|
|
|
Methanar posted:Does it really matter what bank I use? They're all 99% identical in their offerings and rates right? Use a credit union. Here's $200 if you're in BC. http://forums.redflagdeals.com/coast-capital-savings-bc-only-free-no-fee-chequing-account-200-welcome-bonus-2213102/
|
|
#
?
Aug 8, 2018 02:53
|
|
|
Alberta  What do credit unions even do that are different from a bank. And are GICs ever worth it?
|
|
#
?
Aug 8, 2018 03:01
|
|
|
Methanar posted:What do credit unions even do that are different from a bank. Nothing, they do the same things they’re just sometimes less assholish. quote:And are GICs ever worth it? Yes, they’re risk-free and can pay out more than a high-interest savings account, so they’re useful for stashing money for 1-5 years.
|
|
#
?
Aug 8, 2018 03:16
|
|
|
CUs can apparently write mortgages without the additional 2% stress test, if that’s relevant to you.
|
|
#
?
Aug 8, 2018 03:45
|
|
|
Lexicon posted:PSA: when you open a Spousal RRSP, the lower income spouse is the one who needs to open the account (the “annuitant”). The higher-income contributor is not the account opener. I'm curious from a hypothetical perspective what happens if both spouses have literally identical incomes?
|
|
#
?
Aug 9, 2018 20:11
|
|
|
HookShot posted:I'm curious from a hypothetical perspective what happens if both spouses have literally identical incomes? It’s not a matter of law that the lower-income person open it, just a matter of tax planning.
|
|
#
?
Aug 9, 2018 20:18
|
|
|
HookShot posted:I'm curious from a hypothetical perspective what happens if both spouses have literally identical incomes? Nothing changes. Spouses with identical incomes during the time of contribution can still benefit if their incomes differ at the time of withdrawal.
|
|
#
?
Aug 9, 2018 20:31
|
|
|
|
| # ? May 30, 2024 10:07 |
|
|
I thought a Spousal RRSP was just a spouse's RRSP. Does it have to be a specific type of RRSP account?
|
|
#
?
Aug 9, 2018 23:19
|
|
