Search found 514 matches

by couponstrip
06 Jul 2013 10:11
Forum: Taxing Situations
Topic: Property damage deduction?
Replies: 2
Views: 592

Property damage deduction?

Can property damage from a flood be deducted from taxable income? I see that IRS allows this, but I can't find any evidence that CRA does.
by couponstrip
04 Jul 2013 17:46
Forum: Retirement, Pensions and Peace of Mind
Topic: Sustainable Withdrawal Rates
Replies: 609
Views: 101026

Re: Sustainable Withdrawal Rates

SQRT wrote:I have read studies that suggest an income approach to withdrawals is suboptimal. These studies are probably correct but I feel better just spending my divs. This way I don't have to decide when and which stocks to liquidate.
That's the most candid and perhaps the best rationale I have ever seen for a dividend/dividend growth strategy. For similiar reasons, people live frugal lives and die with millions in the bank. The money was never going to be spent. It's very presence brings those individuals pleasure, peace, and comfort. And that's worth something.
by couponstrip
04 Jul 2013 17:41
Forum: Retirement, Pensions and Peace of Mind
Topic: A Difference of Opinion on Dividends
Replies: 13
Views: 1413

Re: A Difference of Opinion on Dividends

That's the first part of the process but if the investor is NOT faced with frequent reallocation of funds, what is it exactly an investor does? To clarify, George's point about academics being useless in a general sense is not what I meant. I'm claiming that we practitioners have to be very, and I mean very, careful about what we accept as readily applicable truths in this area. And not unique to economics or finance. Any discipline's literature is littered with poorly designed and executed studies with inadvertant assumptions and worse, neglected facts/data that would completely change the results of the experiment if properly considered. In medicine, only a small percentage of the published literature is ever actionable for these reasons...
by couponstrip
13 Jun 2013 17:27
Forum: Retirement, Pensions and Peace of Mind
Topic: Well One Gets Old
Replies: 79
Views: 6233

Re: Well One Gets Old

Good point. Some of my elderly patients wish they could afford something better for themselves...one of the luxury homes. This wish needs some context to make it insightful. Are these elderly patients saying: "I wish I had worked 10 more years so I could afford a luxury retirement home" or perhaps "I wish I had not spent all that money travelling and seeing the world in my sixties so I could afford a luxury retirement home"? If folks who've "been there, done that" are saying they should have forgone earlier pleasures for later comfort I might sit up and take notice. OTOH, pretty much everyone just wishes for free luxury, but realistically, what would these folks have given up for it? I mean, heck, I wish I had...
by couponstrip
13 Jun 2013 16:51
Forum: Financial Planning and Building Portfolios
Topic: Risk aversion
Replies: 71
Views: 3055

Re: Risk aversion

I think it makes a big difference if your portfolio was 2 million and you lost 25%, than if your portfolio was $50,000 and you lost 25%. There would be a much greater sick feeling if the dollar loss was half a million as in the first case, than $12,500 in the second. Would the same person pick 25% in both cases? Not likely. ltr I think the opposite would be the case, depending on the age of course. Assuming the same age (middle aged or close to retirement), the 50k savings has far more value to that individual than the 2 million to the other. The marginal utility is much higher to the 50k individual and losing 12.5k could be devastating. Losing 500k isn't going to be fun either, but 1.5million still buys a lot of things. :wink: Jim Otar ma...
by couponstrip
25 May 2013 14:27
Forum: Financial Planning and Building Portfolios
Topic: What % of your portfolio is CDN equities?
Replies: 18
Views: 1366

Re: What % of your portfolio is CDN equities?

adrian2 wrote:
couponstrip wrote:In fact, going back 3-4 years ago, no one was going to touch US equity with a 10 foot pole, including some regulars here reducing their US weighting after the banking crisis.
"No one" is a hyperbole, you know that! :P
Guilty as charged. :wink: I know you were still buying including USA. In fact, I recall one of your posts in early 2009....(paraphrasing) "The market is driven by fear and greed. Now is the time to be greedy."

So my mistake. At least one person was buying US equity*. :)

*I'm sure there were others...
by couponstrip
24 May 2013 15:35
Forum: Financial Planning and Building Portfolios
Topic: What % of your portfolio is CDN equities?
Replies: 18
Views: 1366

Re: What % of your portfolio is CDN equities?

This has come up a couple of times now in recent weeks. Interestingly, the reverse situation (Should I have more CAD equity?) was a popular discussion 2 years ago, coincidentally, (or perhaps not) after negative real returns from US equity for the preceding DECADE, and CAD equity returning double digits for a couple of years. In fact, going back 3-4 years ago, no one was going to touch US equity with a 10 foot pole, including some regulars here reducing their US weighting after the banking crisis. So now we have a 25% two year return (since May 2011) from US equity, and -7% from CAD equity. What's my point? I wouldn't play this game. You're as likely to find yourself chasing your own tail as you are seeing any significant improvement in you...
by couponstrip
18 May 2013 11:53
Forum: Retirement, Pensions and Peace of Mind
Topic: Well One Gets Old
Replies: 79
Views: 6233

Re: Well One Gets Old

See this FPA Journal article. Nice article. Exactly what I was trying to say. Dream life with perfect health vs reality. but I'm also mindful of the cost of having to live in a retirement home. I know two such people, both with major disabilities. Their retirement home bills run $70,000-$80,000/year. Now, that's not as high as it might seem at first glance because it covers virtually all living expenses and part is tax-creditable. But it's still likely 50% more than typical spending in the early years of retirement. Good point. Some of my elderly patients wish they could afford something better for themselves...one of the luxury homes. I wanted to add that being realistic about health doesn't have to be depressing approaching our mid 70's....
by couponstrip
17 May 2013 14:14
Forum: Retirement, Pensions and Peace of Mind
Topic: Well One Gets Old
Replies: 79
Views: 6233

Re: Well One Gets Old

Life expectancy is one thing, living many years with dementia (Keith, don't forget to leave yourself a note as to the whereabouts of your money!) or with some other debilitating ailment is another. Two of my aunts are in their 80s and the health issues and pain they have gone through is very daunting. Hopefully, my mother will continue to age in a healthier pattern. Old age is definitely not for the faint of heart. :wink: This is why financial planning that projects spending at the same rate to 95 or 100 doesn't make a lot of sense. Sure we're living longer. But I would argue that we're not necessarily living better. My work has me cross paths with many retired folks in their late 60's, 70's and some in their 80's dealing with chronic pain...
by couponstrip
13 May 2013 14:19
Forum: Retirement, Pensions and Peace of Mind
Topic: Sustainable Withdrawal Rates
Replies: 609
Views: 101026

Re: Sustainable Withdrawal Rates

The SWR studies were not always on same basis, but I thought as a rough guideline, it meant we could safely withdraw 4% of our total portfolio value. Safely meaning that there would be a high probability of us not exhausting our savings. We too have RRIFs as lions share of savings. The RRIF withdrawal is not really a withdrawal - it is just a movement of funds from a registered account to an unregistered account. We don't have to spend that money, but we do have to pay tax on it. Let's say RRIFs amount to $1million and unregistered $500k. At say 76, we have to withdraw move 8% or $80k. If our RRIF withdrawal is taxed at 30%, $24k or 1.6% of total portfolio will have to be allocated to RRIF taxes. That would leave a 2.4% SWR (including taxe...
by couponstrip
08 May 2013 14:31
Forum: Property: Owning, Renting, Managing, Investing and Mortgaging
Topic: Is it cheaper to rent then to own.
Replies: 55
Views: 6455

Re: Is it cheaper to rent then to own.

Land is certainly part of it. Even where you can find cheap housing in the US, if you just look in a slightly better nearby location, you get prices that resemble some of those we see in Canada, and for good reason. Treed, well kept neighbourhood, closer to amenities/schools, safety, low vacancy, in a larger center etc.

I can probably find some $135k houses in Canada too if I look in Gravelbourg, SK, or The Pas, MB.

I agree that the materials to make a house don't cost much. When we had our house built for us, the materials were a mere 20% of the bill. It was the talented tradespeople's time that cost the other 80%. And unfortunately for us, in Alberta, their time is priced as more valuable than most other places in North America.
by couponstrip
03 May 2013 18:07
Forum: Financial Planning and Building Portfolios
Topic: How am I doing?
Replies: 290
Views: 453476

Re: How am I doing?

Landbanking is a difficult investment vehicle. The small investor is at the mercy of businessmen who know more than they do. There is no easy way to resolve the information asymmetry. The whole thing is so opaque, and the sale of rural land is so illiquid, that there is no real way for this group of investors to protect themselves. Not that they will. They will just take the return of their 2006 dollars in full without interest. Try to run a valuation analysis on the land? Good luck. No piece of land is the same. A piece of land 1km away will have markedly different value. Compounding this is that ag land sales are often not common enough/concentrated enough to create a sense of value. Further, estimated value often lags real value in a red...
by couponstrip
03 May 2013 17:34
Forum: Financial Planning and Building Portfolios
Topic: How am I doing?
Replies: 290
Views: 453476

Re: How am I doing?

I agree with those who are suspicious of S&D's motivation. This company intends to make money, and there is no limit to the amount it intends to make. One consideration I haven't seen proposed is that the land is, in fact, now worth more than the principle amount invested by all the shareholders. After all, Alberta, Edmonton, and especially the Leduc area have been booming for over a decade with only a small blip during the 2008-2009 crash. Property values across the province have more than doubled since 2004-2005. Inflation alone would already put the original purchase value of 2.5million in 2004 at 4-5 million+ in 2013 dollars. Not a stretch to think it may be worth more than 8 million. Perhaps much more. None of the investors will ev...
by couponstrip
12 Mar 2013 17:58
Forum: Community Centre
Topic: Hardwood or Laminate
Replies: 9
Views: 182

Re: Hardwood or Laminate

We have had both. Both are great products. Both will scratch. Hardwood will get grooves with blunt trauma, laminate not so much. Hardwood has a natural wood sound and feel, laminate a little more of a "plastic-type" feel. Hardwood can be refinished. I'm unsure about laminate since it is essentially a sticker over top of the flooring, or at least that's what ours was.

Overall, I doubt you will care much about the scratches and grooves within a few months of install. At least we didn't. They simply add character and give the house that desirable "lived in" feel. :)
by couponstrip
04 Mar 2013 14:03
Forum: Taxing Situations
Topic: Income Splitting
Replies: 65
Views: 8140

Re: Income Splitting

Thanks for the information. Reviewing my records, it looks like I haven't paid EI in past years, but the accountant has me paying it this year. Obviously an error either the accountant or myself should have caught. Maybe it is time to start doing this myself. :) Regarding the income splitting, I have run a few more scenerios through the calculator which revealed the answer. As our dividend income from CAD and nonCAD sources (other income) has increased (due to increased savings), the amount of self-employment income that can be split to a tax advantage has decreased. So income splitting is still happening to similiar value as previous years, it's just that the income being split is now from different sources. There is now diminishing tax ad...
by couponstrip
03 Mar 2013 23:12
Forum: Taxing Situations
Topic: Income Splitting
Replies: 65
Views: 8140

Re: Income Splitting

The lower income spouse (me) doesn't work for a CCPC. I just do the finance work for my spouse and some billing work. My spouse does not have a CCPC.

All my income is retained in my CCPC which is why I have no personal income apart from investment dividends.

Agreed about CPP. Not dead weight, and not a "cost" per se.
by couponstrip
03 Mar 2013 18:41
Forum: Taxing Situations
Topic: Income Splitting
Replies: 65
Views: 8140

Re: Income Splitting

I was just running some numbers on this calculator and I was suprised by the meagre benefit income splitting provides in our circumstance. I always assumed it was a brilliant tax maneuvre based on my accountant's excitement about it, but now I'm wondering if it is worth the effort considering it costs us CPP and EI payments that we otherwise wouldn't pay. The higher earning spouse's income is self-employment income. The lower income spouse does the books and financial work for the self-employed spouse for which they are paid. The higher earning spouse remains above the top marginal rate after splitting in our case. I tried various amounts ranging up to 100k. Are there other benefits of income splitting? RRSP room obviously. Anything else?
by couponstrip
28 Feb 2013 13:29
Forum: Taxing Situations
Topic: Investment income in a CCPC
Replies: 1102
Views: 152161

Re: Investment income in a CCPC

We don't do any bookkeeping. So the price includes bookkeeping. We just hand over the "shoebox".

Before we changed from the higher priced accountant, we looked around and got word-of-mouth referrals and asked for quotes. Most of them were higher than the $3500 range we get at our current accountant.

I'm not sure if the amount of retained earnings in the CCPC affects the price? When I asked for quotes, most accountants asked for the estimated yearly active income and expected retained earnings.
by couponstrip
27 Feb 2013 19:52
Forum: Taxing Situations
Topic: Investment income in a CCPC
Replies: 1102
Views: 152161

Re: Investment income in a CCPC

Last year we paid:

$3800 for CCPC return.
$400 for filing of various T slips in Feb
$300 for legal.

Our previous accountant at a larger "name-brand" firm charged $6400 just for the CCPC return.

So $5000 seems to be a good number.
by couponstrip
19 Feb 2013 15:55
Forum: Financial News, Policy and Economics
Topic: Reaching saturation on finance books
Replies: 58
Views: 5314

Re: Reaching saturation on finance books

Has anybody read Zweig's "your money and your brain"? Worthwhile intro into behavioral finance? Yes. It's pretty good, but slightly heavy reading. I wish he had stuck to the behavioural stuff and skipped all the brain anatomy/neurotransmitter discussion. The neurobiology doesn't add much to what he is saying. On the other hand, the behavioural experiments he cites are excellent and of good value. Perhaps it is my healthcare background, but I found the superficial, tangential use of neuroscience in an investing book tedious and irritating. What does it matter if the amygdala lights up on MRI when someone gets excited about money? Does that really tell us anything about the people and what decisions they are going to make with thei...
by couponstrip
09 Jan 2013 20:35
Forum: Financial Planning and Building Portfolios
Topic: So how did you do in 2012?
Replies: 114
Views: 5639

Re: So how did you do in 2012?

16.7% for us. However, before you get envious, our portfolio has been one of the lowest performers on this thread for the past 3-4 years running. I'm still catching up to the rest of you. :wink:

We have 100% equity, but we have less than 20% in Canada. For the first time in years the TSX was the laggard rather than the leader.
by couponstrip
19 Dec 2012 13:13
Forum: Property: Owning, Renting, Managing, Investing and Mortgaging
Topic: Buying or renting: Scenerio!
Replies: 27
Views: 3001

Re: Buying or renting: Scenerio!

My personal experience and observing that of others entering into parenthood is that mothers tend to be overly optimistic about how much work we are willing to do before the child arrives. It seems like there will be all kinds of time with the children and we will still be able to work full time. Then the children are born, and everything changes. The biological desire to be with those children is so strong, fulltime work falls to the side with little concern about the financial implications. Once a second child arrives, work often becomes the lowest priority for a busy mother. If I were you, I would use financial projections with your wife working two days a week, and another projection with her not working at all. PS Lots of generalizatio...
by couponstrip
06 Nov 2012 12:45
Forum: Stocks, Bonds, ETFs, Funds, REITS and More
Topic: ETF with Dividend Reinvested
Replies: 19
Views: 2322

Re: ETF with Dividend Reinvested

It's just a major PITA to have small amounts continuously added to the cost base. Any dividends+distributions are lumped in with new money to be invested (if one is accumulating) or used for living expenses (if one is in the classical "retiring" phase). I find it very unlikely to be at the exact cusp of needing exactly nil of the dividends received, and not having any additional monies to invest. In any case, IMHO it's an almost mythical belief in cost averaging using a DRIP (fractional shares and so on), even though it really does not make a practical difference considering the amounts involved. The internet seems to have a number of biases in personal finance. One of them is the DRIP. The fascination with DRIP products is myste...
by couponstrip
29 Oct 2012 15:47
Forum: Financial Planning and Building Portfolios
Topic: The Impacts of Generational Disenchantment
Replies: 180
Views: 10066

Re: The Impacts of Generational Disenchantment

...but one can also improve their odds with some foresight and willingness to make the effort. Absolutely. All of foresight, willingness, effort, and luck play a role. Sometimes for the most unfortunate, foresight, willingness, and effort are not enough. You cannot draw blood from a stone. Most of the oil execs I have met from the downtown Calgary crowd are more than willing to admit their good fortune. There were a sequence of fortuitous circumstances, chance meetings, opportunities that fell their way and allowed them to outearn the majority of the population after earning their business admin degree. I asked one VP at a recent Halloween function why he chose business for a degree. He said he was floundering around in arts and science no...
by couponstrip
29 Oct 2012 14:13
Forum: Financial Planning and Building Portfolios
Topic: The Impacts of Generational Disenchantment
Replies: 180
Views: 10066

Re: The Impacts of Generational Disenchantment

I think missing in this sometimes is these discussions is the role of luck. Everyone thinks they work hard. Everyone considers themselves self-starters. Most people think they are above average intelligence, if not the smartest person in the room. Yet not everyone gets a good opportunity, or a lasting opportunity. It's easy to look back at a successful career and a tidy sum in the bank account and attribute it to our hard work, vision, and other abilities. The reality is that luck plays a very big role. What is the economy like when you are looking for a job? What sort of jobs are in demand now? What jobs will be in demand 6-8 years hence? How might technology/regulation change the demand for your skills or the pay for your skills? How is y...