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Oxyclean posted:Is it unusual to owe tax due to bank interest? I just punched in my taxes with GenuTax and it says I'm owing by a few hundred bucks which feels sorta of surprising. (Granted, I am an idiot who barely understands taxes)  yeah you pay bank interest. if you have substantial savings in a bank account, you should consider buying stocks or something. You don't pay tax on unrealized profits from capital gains; so you can just hold until retirement or until you're ready to spend monies. You could also contribute to a tfsa or whatever, or do a variety of other things that will meet your needs for flexibility but not pay you out 12 times a year. If your bank interest is lets say 1000 dollars, you get taxed on that at your marginal tax rate. Lets say your marginal rate (the bracket you're at for this next set of income) is 30%. You owe the CRA 300 dollars, 30% of 1000.
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Mar 7, 2024 17:54
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You always owe tax on unregistered bank account interest. The provider isn't required to send you a slip below some threshold, in which case you're supposed to write it in. Doesn't surprise me that you hit that threshold last year, rates were higher than they had been in awhile, especially with promos.
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Mar 7, 2024 18:17
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Unless you have a reason to think your T5 is actually wrong, it's not something to worry about. You're probably paying more than before because you earned more than before, from the promotion. If you're sincerely worried I'd just check your year of transactions, add up the interest deposits, and make sure that matches the t5.
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Mar 7, 2024 18:17
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Like ^^ says, If its not sheltered, yes. A bank will issue you a T5 for a standard savings or checking (lol) and you need to claim that as part of your taxable income. If you have the room, keeping it in your TFSA in a GIC or ~something~ is probably better idea for tax implications. Anything else is basically a differed tax, which probably makes sense if you start withdrawing when you make less income (IE: retired). Or if you need it and take a gains hit (or loss) from a non-registered investment account.
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Mar 7, 2024 18:18
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That all makes sense. Just got really caught off guard since I sort of got my poo poo together last year and filed a bunch of back taxes, in most years I got something back, so to go from getting a bit back to paying like 400$ came as a bit of a shock, but the bank interest looks about right. I think it was just a bit of a side effect of shuffling a lot from chequing to savings, but the online portal only lets me look back 13 months so it's a bit hard to confirm exactly why one of the promotional payouts was particular big, but I somehow doubt they erroneously gave me too much interest and didn't notice for a year.
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Mar 7, 2024 18:50
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Yeah nothing you're saying sounds odd. A few years back I had the experience you're having. Increases in income and benefits and decreases in deductions carried over the years (like the old education deductions) meant I started owing after years and years of refunds. Congrats on being caught up! Its nice to get that load off your mind.
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Mar 7, 2024 19:34
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I've decided to liquidate all my stocks in my TFSA and invest everything into the S&P 500. Prior to this, I've been buying blue chip dividend stocks and 'dripping' all my dividends/distributions. It really does not make sense for me considering my time horizon for retirement is at least 25 years and I don't need fixed income at his point. I'm also not confident in our economy since we seemingly do not build poo poo or innovate in this country anymore. My portfolio consisted of Canadian oligopolies with little growth potential: big banks, big telco, REITS (yuck), utilities. I was also bag holding a bunch of garbage such as AQN.TO. Time to ride the US market since I'm lazy and I'm not Warren Buffet.
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Mar 13, 2024 13:12
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Scrum posted:I've decided to liquidate all my stocks in my TFSA and invest everything into the S&P 500. Prior to this, I've been buying blue chip dividend stocks and 'dripping' all my dividends/distributions. It really does not make sense for me considering my time horizon for retirement is at least 25 years and I don't need fixed income at his point. I'm also not confident in our economy since we seemingly do not build poo poo or innovate in this country anymore. My portfolio consisted of Canadian oligopolies with little growth potential: big banks, big telco, REITS (yuck), utilities. I was also bag holding a bunch of garbage such as AQN.TO. Did something similar more than a year ago, but I srill kept some money in a total Canadian market. The big part I split in two funds, VUN (US market) and VIU (international market except North America). It was really, really worth it.
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Mar 14, 2024 02:19
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I completely divested from Canadian stocks awhile ago and it was 100% worth it.
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Mar 14, 2024 02:25
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Scrum posted:I've decided to liquidate all my stocks in my TFSA and invest everything into the S&P 500. Prior to this, I've been buying blue chip dividend stocks and 'dripping' all my dividends/distributions. It really does not make sense for me considering my time horizon for retirement is at least 25 years and I don't need fixed income at his point. I'm also not confident in our economy since we seemingly do not build poo poo or innovate in this country anymore. My portfolio consisted of Canadian oligopolies with little growth potential: big banks, big telco, REITS (yuck), utilities. I was also bag holding a bunch of garbage such as AQN.TO. Investing in fixed income as part of your overall portfolio isn't entirely the same as using your investments for a fixed income (such as after you retire) it's more about diversification of the portfolio in the setting of fluctuations in inflation, interest rates, etc. It's worth talking to a financial planner to figure out where the best allocation lies for you. I'm not retiring for a long time, will have a good pension, and I still have some bond exposure, for example.
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Mar 14, 2024 03:06
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How is wealthsimple for passive ETF investing and/or chequing? I'm sick of banks using sms for "2step" authentication and wealthsimple seems to use TOTP.
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Mar 14, 2024 04:16
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Mantle posted:How is wealthsimple for passive ETF investing and/or chequing? If you're just planning on dumping all your money into a few CAD ETFs then it's good, and yes it authenticates with authenticator so for security it's good. Anything more than that and the interface is probably just too simplistic.
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Mar 14, 2024 05:31
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qhat posted:If you're just planning on dumping all your money into a few CAD ETFs then it's good, and yes it authenticates with authenticator so for security it's good. Anything more than that and the interface is probably just too simplistic. I should mention that I'm already using Questrade and passive investing. The reason I'm considering moving over is to get synergies with their other services like chequing and tax preparation. It's really driven by being pissed off at (all?) banks requiring SMS and phone service. I couldn't find info about their commission pricing on their website and their mobile app crashes when I try to use it. Are all ETF buys free or only certain ones on a list?
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Mar 14, 2024 06:44
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My understanding is that wealthsimple cash is good, but they don't offer credit cards, which is kind of a dealbreaker for me since I like to have everything in one place. Also I do actually need a USD account that I can wire money into from a brokerage (as opposed to from a bank) to forward onto another brokerage, no idea if wealthsimple trade supports that but it's one thing I've found the normal banks to be much better at than brokerages.
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Mar 14, 2024 07:01
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Mantle posted:I couldn't find info about their commission pricing on their website and their mobile app crashes when I try to use it. Are all ETF buys free or only certain ones on a list? The magic words you want to search for are "fee schedule": https://www.wealthsimple.com/en-ca/legal/fees/trade quote:Commission for listed US & Canadian securities : $0
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Mar 14, 2024 07:43
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I'll get my first EI payment next week  Because of severence/vacation pay, the first like 8 weeks all went into the void, and then there was a 1 week waiting period. =/ Seems like on the bright side, there's some number of weeks where even though I did accept a job offer starting in April, I still get EI during at least some part of my new job? I guess to make sure things go fine so I don't have to reapply if I start a job and end up having to leave for reasons like a month in? I tried to ask but it wasn't super clear to me but when exactly assuming of course I'm not a dingbat and I'm reporting the fact I started work starting that period and what my approximate income is, how long do I still get to keep getting EI benefits? Or does it likely not better because it might just be 0 if I'm making like 60$/hour? =/
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Mar 14, 2024 14:58
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VelociBacon posted:Investing in fixed income as part of your overall portfolio isn't entirely the same as using your investments for a fixed income (such as after you retire) it's more about diversification of the portfolio in the setting of fluctuations in inflation, interest rates, etc. It's worth talking to a financial planner to figure out where the best allocation lies for you. I'm not retiring for a long time, will have a good pension, and I still have some bond exposure, for example. You have a good point. I guess my concern isn't necessarily about fixed income investments because I'm far off from retirement, or dividend stocks in particular, it's my pessimistic outlook on the Canadian economy in general. I agree that they're a valid component of a well diversified portfolio. I just want out of the Canadian economy at this point.
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Mar 14, 2024 15:41
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Scrum posted:You have a good point. I guess my concern isn't necessarily about fixed income investments because I'm far off from retirement, or dividend stocks in particular, it's my pessimistic outlook on the Canadian economy in general. I agree that they're a valid component of a well diversified portfolio. I just want out of the Canadian economy at this point. Yeah sure, it seems weird to me that anyone would have the assumption that Canadian stocks are better investment vehicles in the first place, it's like saying I only invest in tickers that start with the letters A-R or something like that. I don't mean it in a snarky way and hope it doesn't sound like I'm being lovely. I'm sure the Canadian economy broadly tracks with the US economy regardless, and you can get US index exposure via TSX traded ETFs (Vanguard, BlackRock, others) so I think that's pretty much the way to go for most people. Honestly I've been looking at VTI as an option for a passive portfolio, it's really outperformed XGRO for a good while now. e: ah I guess VTI is all equity so that's not really a good comparison... VelociBacon fucked around with this message at 06:27 on Mar 15, 2024 |
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Mar 15, 2024 06:17
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Why not just use XAW to exclude Canada and diversify outside of the US? It's also CAD denominated to boot.
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Mar 15, 2024 06:25
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Mantle posted:Why not just use XAW to exclude Canada and diversify outside of the US? It's also CAD denominated to boot. Oh yeah I was assuming VTI was TSX traded also. Yeah.
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Mar 15, 2024 06:30
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Scrum posted:You have a good point. I guess my concern isn't necessarily about fixed income investments because I'm far off from retirement, or dividend stocks in particular, it's my pessimistic outlook on the Canadian economy in general. I agree that they're a valid component of a well diversified portfolio. I just want out of the Canadian economy at this point. Stock returns have little to do with economic outlook. Everyone's looking at the same forecasts you are and have already priced it in. VelociBacon posted:Yeah sure, it seems weird to me that anyone would have the assumption that Canadian stocks are better investment vehicles in the first place, it's like saying I only invest in tickers that start with the letters A-R or something like that. I don't mean it in a snarky way and hope it doesn't sound like I'm being lovely. There's arguments in favour of home country bias, it's not as arbitrary as slicing off part of the alphabet. Ben Felix had a good video recently that talks about this and links to papers for further reading if you're interested: https://youtu.be/jN8mIHve1Ds
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Mar 15, 2024 08:44
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Here's a discussion on some reasons you may want to hold Canadian equities (or not). Predicting performance (or lack) of shouldn't be one of the considerations. https://canadiancouchpotato.com/2012/05/22/ask-the-spud-does-home-bias-ever-make-sense/
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Mar 15, 2024 08:59
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pokeyman posted:Stock returns have little to do with economic outlook. Everyone's looking at the same forecasts you are and have already priced it in. Good video. But yes some home bias makes sense since it’s the one country on the planet that there is virtually no risk of being penalized, or worse shut out of entirely, because you’re foreign.
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Mar 15, 2024 16:52
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qhat posted:Good video. But yes some home bias makes sense since it’s the one country on the planet that there is virtually no risk of being penalized, or worse shut out of entirely, because you’re foreign. I'm not following why this matters. If I'm fully invested in foreign denominated holdings, in foreign domiciled entities, what would I be shut out from if my broker is Canadian domiciled?
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Mar 15, 2024 17:20
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In the last few weeks my mom was given a forced retirement package and now my parents are having to make all their retirement decisions a few years earlier than expected and quickly. Was wondering if anyone had some decent reading material for retirement specific stuff. Like converting RRSP to RRIF and how to manage the RRIF, rules pertaining to withdrawals, what kind of holdings to keep in the RRIF. I want to try and help them out, my mom has a decent pension but their RRSPs have been in terrible Scotia bank mutual funds managed by somone at the bank, and now they're talking to a financial advisor/portfolio manager type guy who just says his fees will be less than Scotia bank. I'm hoping to convince them they can manage this on their own with a little reading and help from me.
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Mar 15, 2024 21:56
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If the USA freezes the assets of Canadians we have bigger problems than retirement.
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Mar 16, 2024 00:52
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pokeyman posted:
I really didn't follow at all the point here about "hedging costs of local consumption." But yea seems like the justifications are mostly: * Dividends are preferentially taxed (no 15% tax on withholding from the USA Gov) * mildly lower fees on ETFs * FOMO insurance in case we get a new Nortel. * historical study says so I'm not normally one to doubt the experts but my gut tells me that it doesn't add up and I should just put 100% of my money into the USA funds anyway lol. I think the strongest point is around dividends and taxes, but dividends suck anyway. It could make sense to more significantly weight Canada if you're more retirement age and pivoting more into dividends.
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Mar 16, 2024 01:10
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In the accumulation phase I don't see any reason to hold Canadian equities. In the drawdown phase I can see how favorable tax treatment and lower currency risk could be attractive.
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Mar 16, 2024 01:14
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Being shut out is the worst case scenario, that's like literally owning Russian stocks right before they invade Ukraine. Having taxes withheld is the more likely case, especially if you own funds that own foreign domiciled funds because taxes are often reciprocated for countries that withhold from foreign investors. This is true for all US stock dividends, and more so if you are Canadian and own an ex-NA ETF that has US ex-NA ETFs as the underlying securities, you're getting 30% withheld for no reason. Luckily Canada lets you claim it back but it doesn't have to be that way, which is the point, it's an added risk that isn't actually compensated. Does that mean your portfolio should own 30% VCN? IMO no that is an insane number for such a small market and it's the point where I think Ben Felix moves into parody. I also really don't like it when it's justified because "it's backed up by like 100 years of historical data" because that includes data from when the world was a very different place, specifically when globalization was taking hold. But, it doesn't mean you shouldn't have any home country bias, the amount you have however is a matter of preference and if you prefer diversity then go nuts, but just understand the added risk on investing in international stocks which isn't compensated.
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Mar 16, 2024 01:54
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quote:U.S. interest and dividend income earned in a Canadian registered account lol whoops uhhh it probably would have been better for me to move my S&P500 ETF RRSP holdings to a USD account back in 2022 when the dollar was at like .82 instead of .74...
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Mar 16, 2024 04:30
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Femtosecond posted:I really didn't follow at all the point here about "hedging costs of local consumption." I think the hedging local consumption bit is because home country stocks are valued in home country currency, which is what your expenses are in. May mean you're less screwed by untimely currency fluctuations. What is your gut basing 100% USA on if not historical data? And "dividends suck", what? Aiming just for dividends doesn't usually make much sense because you're needlessly concentrating your investment. If you're not doing that then what do you care whether your return comes in dividends or buybacks or appreciation? And why no ex-Canada ex-USA? That's like half of the global stock market you're leaving out because vibes. I mean, do what you want, but it's a free lunch you're passing up. Mantle posted:In the accumulation phase I don't see any reason to hold Canadian equities. In the drawdown phase I can see how favorable tax treatment and lower currency risk could be attractive. I can see the argument for going entirely ex-Canada stocks if you live and work here. Kind of the other side of the home bias hedging argument: you're already well exposed to the Canadian economy, so leave it out of your portfolio. Also if you have savings in an unregistered account, tax treatment helps there.
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Mar 16, 2024 04:50
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I’ve been US only for 5 years, my money still exists
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Mar 16, 2024 15:29
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I’d just say investing solely in the S&P 500 is an active bet that the US market continues to boom as it has in the past set of years. This is a deviation from passive investment “guidelines” fwiw, although only a concern if you care about that kind of thing.
tragic_ethos fucked around with this message at 20:49 on Mar 16, 2024 |
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Mar 16, 2024 19:42
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500 big US companies, as chosen by committee. But yeah agreed on the above, if you can cheaply hold for a couple decades then you'll do great. My worry is that without any rhyme or reason behind that choice, people might go chasing performance or avoiding gloom or making any number of possible mistakes.
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Mar 16, 2024 20:14
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pokeyman posted:What is your gut basing 100% USA on if not historical data? And "dividends suck", what? Aiming just for dividends doesn't usually make much sense because you're needlessly concentrating your investment. If you're not doing that then what do you care whether your return comes in dividends or buybacks or appreciation? Oh yea I was just knee jerk dismissing the historical data cited in the video because it seemed overly broad in scope to me, but yea like if there is like a real series of studies that point to the same thing, and especially if we're looking at narrower timelines well then I'm listening. I'm not like gonna deny the science if it's there, but there's just so many people trying to sell you on something in this space that I'm knee jerk skeptical to anything. What I was getting at by "dividends suck" is what you said there like the stereotypical dividend hog investor that has a specifically dividend oriented portfolio, and these portfolios seem to often do much more poorly than others. So yeah don't do that (unless you're retiring). But yea as the video says, if you're investing in like the S&P500 there's a lot of dividend companies in there (eg. Apple) and you are going to get dinged on withholding tax if you don't have the right ETF in the right instrument (as I posted above with my own example... whoops) and that will be some sort of drain on return. Now this is hypothetically where having more beneficially taxed Canadian dividend stocks could help in reducing that drain on return. I think it would be interesting to actually look at a real numbers concrete example of this because every time I see someone mention this it's more handwavey hypothetical than I'd like. (Now that I've established that whoops I am paying taxes I didn't think I was paying on my S&P500 ETF i'm going to have a look at see how much it actually is.) ex-Canada ex-USA actually does make sense and something I do have. Remarkable thing in that video was the part that said how the 16 Danish companies out performed everyone lol. But yea it makes sense to weight it. The one point from the video above about concerns around getting money out, it's not really a problem if you limit what you look at to our allies in Europe in particular. Makes me wonder if people who invested ex-Canada ex-USA got dinged at all by Russia problems. Is Russia part of the emerging market ETFs or the European market ETFs?
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Mar 16, 2024 21:02
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Is there an ETF for like "these companies don't do dividends just stock buybacks" as that would be the thing you'd want for a TFSA, setting aside the whole fact that you will narrowed your portfolio in a weird way by doing this and could be sub optimal for that reason. Casual google reveals nothing. Edit There's this but i dunno if it excludes dividend stocks https://www.invesco.com/us/financial-products/etfs/product-detail?audienceType=Investor&ticker=PKW Lol Apple is one of the biggest buy backers and does dividends too. Femtosecond fucked around with this message at 21:21 on Mar 16, 2024 |
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Mar 16, 2024 21:17
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Femtosecond posted:Is there an ETF for like "these companies don't do dividends just stock buybacks" as that would be the thing you'd want for a TFSA, setting aside the whole fact that you will narrowed your portfolio in a weird way by doing this and could be sub optimal for that reason. Eh, I'm still generally of the mind that worrying about dividend withholding for US stuff is pretty marginal in terms of total gains. The current average yield of S&P 500 tickers is 1.84% per Google, it sucks to be sub-optimal obviously, but likely not worth much mental expense if we're talking a 0.2 to 0.3% loss each year (ie. taking a 30% withholding hit on US dividends rather than 15%).
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Mar 16, 2024 21:35
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Skepticism is definitely good when it comes to personal finances. I think this is the most comprehensive explanation of foreign withholding taxes I've seen, in case it helps at all https://canadianportfoliomanagerblog.com/part-i-foreign-withholding-taxes-for-equity-etfs/ It's one of many topics where I try to reframe it as "what am I willing to pay to not make my situation more complicated?" and so far I've been willing to pay for the simplicity of not exchanging US$, having someone else deal with rebalancing, etc. Someday it'll probably be worth it to me to complicate. This is one of the papers cited in that video https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4590406 the tables in the appendix show e.g. the results of their simulations of varying levels of home country bias. And there's one showing how allocating various portions of a portfolio to bonds at retirement affects simulated results, if anyone's curious about that.
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Mar 16, 2024 21:38
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Femtosecond posted:Makes me wonder if people who invested ex-Canada ex-USA got dinged at all by Russia problems. Is Russia part of the emerging market ETFs or the European market ETFs? Edit: and it's not even present in VIU. Technomancer fucked around with this message at 21:53 on Mar 16, 2024 |
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Mar 16, 2024 21:50
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tragic_ethos posted:Eh, I'm still generally of the mind that worrying about dividend withholding for US stuff is pretty marginal in terms of total gains. The current average yield of S&P 500 tickers is 1.84% per Google, it sucks to be sub-optimal obviously, but likely not worth much mental expense if we're talking a 0.2 to 0.3% loss each year (ie. taking a 30% withholding hit on US dividends rather than 15%). That's always been my opinion too. The thought just popped into my head as I was typing the last post though. It would be interesting to see what it would look like as a thought experiment. I do expect it would be such a bespoke and particular group of companies that that aspect would dominate the trend on returns.
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Mar 16, 2024 21:50
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