Search found 514 matches

by couponstrip
03 Feb 2017 11:56
Forum: Financial Planning and Building Portfolios
Topic: Reacting to the Trump markets
Replies: 22
Views: 1212

Re: Reacting to the Trump markets

After the US election one of my colleagues who likes to talk about his personal finances sold all US investments and put it in cash. Another sold all US investments and put the proceeds into VCN.

So far, neither of those were the correct course of action, though as the former tells us at work just about every day, it's still early. :)
by couponstrip
26 Jun 2016 21:40
Forum: Stocks, Bonds, ETFs, Funds, REITS and More
Topic: Vanguard Canada ETF changes
Replies: 83
Views: 15649

Re: Vanguard Canada ETF changes

For those wanting to simplify their portfolio from VEA + VWO to VXUS, or switch VEA to VPL/VGK due to Canada contamination, it looks like brexit may provide just such an opportunity without the CG tax concern. Check your ACB on VEA vs current market price. It may bring tears to your eyes, but some folks might even be in a position to book a capital loss. :o
by couponstrip
04 Apr 2016 11:40
Forum: Taxing Situations
Topic: Investment income in a CCPC
Replies: 1102
Views: 152214

Re: Investment income in a CCPC

Thank you both. Very helpful.
by couponstrip
03 Apr 2016 22:11
Forum: Taxing Situations
Topic: Investment income in a CCPC
Replies: 1102
Views: 152214

Re: Investment income in a CCPC

A simple question I should probably know:

When paying out an ineligible dividend from the corp, would the entire dividend be subject to ineligible dividend tax rates, or only the portion that was originally taxed at the small business rate (with SBD)?

I'm thinking of a situation where the corporation is decades old and has equity assets that were derived from 20% active business income and 80% capital gains...or something like that. Then, a security is sold for the purposes of paying a dividend. Does the 80% capital gain get taxed in the CCPC and then after that subject to ineligible dividend tax rates as well?
by couponstrip
19 Dec 2015 11:54
Forum: Financial Planning and Building Portfolios
Topic: Philosophy of dividend investing?
Replies: 385
Views: 23192

Re: Philosophy of dividend investing?

Yes, a CCPC will pay more tax on eligible div flowed through to the shareholders in 2016 than those same eligible dividends earned personally without a PC. However, if you have other sources of income to fund living expenses, the eligible dividends can be retained in the CCPC for now until the integration is repaired. At least I am assuming it will be fixed. There is some friction with this plan in the sense that the distributions in a CCPC are taxed higher than those earned personally until they are refunded via the RDTOH mechanism. The loss of compounding on tax paid, but not refunded is suboptimal which is why it was advisable to pay out all eligible dividends from the PC up until now. However, this 'loss of return compounding' would onl...
by couponstrip
17 Dec 2015 16:25
Forum: Financial Planning and Building Portfolios
Topic: Philosophy of dividend investing?
Replies: 385
Views: 23192

Re: Philosophy of dividend investing?

For those earning more than 200k from various sources in Alberta, the new tax changes drastically change the dividend vs CG landscape. There is still considerable eligible dividend advantage from 0-90k, but after 200k, there is substantial CG advantage.

HXT is suddenly looking more interesting.

Maybe we need a philosophy of capital gain investing thread. :)
by couponstrip
17 Nov 2015 02:15
Forum: Taxing Situations
Topic: Investment income in a CCPC
Replies: 1102
Views: 152214

Re: Investment income in a CCPC

Agreed. Also, I can't see them going after all the engineers, lawyers, doctors and accountants and reassessing previous years' income. That sounds like a logistical nightmare. Though possibly not pragmatic, it's not beyond their power. There is a CRA published case I can't find right now where CRA declared an IT professional working for a megacorp a PSB and reassessed several previous years returns taxing everything at the highly punitive rate and then stripping him of the CCPC status. Plus interest penalties. Plus fines. Plus fees. I think most likely they will target the ability to income split dividends/salary paid out of a CCPC and attribute all distributions back to the primary shareholder for any dividends paid out to spouse or kids. ...
by couponstrip
15 Nov 2015 22:13
Forum: Taxing Situations
Topic: Investment income in a CCPC
Replies: 1102
Views: 152214

Re: Investment income in a CCPC

I've been soliciting a number of opinions regarding my risk with the CCPC structure which I use as a professional (MD) as an investment vehicle to minimize tax like thousands of others in Canada do. On Friday, I met with an accountant and lawyer from a firm that believes it is likely that the rules will be changed to more strictly allow the SBD for only those Canadians running true small businesses as defined by number of employees or specific sectors (excluding professionals) much as Quebec did in their 2015 budget. In addition, they believe there is smaller, but real risk that the liberals are going to be more aggressive with the definition of a personal services business which could very well be applied to professionals like me (and them...
by couponstrip
12 Nov 2015 11:30
Forum: Taxing Situations
Topic: Investment income in a CCPC
Replies: 1102
Views: 152214

Re: Investment income in a CCPC

Food for thoughts before October 19th. Is Trudeau challenging small business tax benefits? http://achenhenderson.ca/is-trudeau-challenging-small-business-tax-benefits/ Post election now...this is a big issue. I'm curious how it is going to play out. There were 4 main pillars of the liberal financial platform, and one of them was eliminating tax advantage to wealthy Canadians using CCPC as a tax deferral for investment income. That's basically what this entire thread is predicated on. There are some measures that could be taken that would be highly punitive for existing CCPC assets...for example expanding the definition of and enforcing the rules for a personal services business. For any Alberta CCPC's out there, the small business PC is at...
by couponstrip
25 Aug 2015 10:26
Forum: Stocks, Bonds, ETFs, Funds, REITS and More
Topic: What did you Buy? What might you buy? (2015)
Replies: 596
Views: 61472

Re: What did you Buy? What might you buy? (2015)

Ended up with 15,000 CPG at about 13.05 ACB over Friday/Monday. Missed all the 11''s and it was over 12.50 buy the time I got a chance to put an order in yesterday. Also got smaller positions SGY and RMP (a riskier name) to complete the oil bet.

Also took the opportunity to complete the passive purchases for the year...VTI, VEA, and VWO. History tells us that this volatility is just the beginning of additional gyrations, but I'm hoping the market settles in weeks rather than months.

Now, how long can I hold my breath?
by couponstrip
21 Aug 2015 15:48
Forum: Stocks, Bonds, ETFs, Funds, REITS and More
Topic: What did you Buy? What might you buy? (2015)
Replies: 596
Views: 61472

Re: What did you Buy? What might you buy? (2015)

Went off the passive grid a bit and bought 5000 cpg at 13.40. Trying to catch a falling knife. This might hurt.

Ready for another tranche, maybe bte if lower next week.
by couponstrip
23 Apr 2015 20:48
Forum: Stocks, Bonds, ETFs, Funds, REITS and More
Topic: Interactive brokers - anyone have any experience with them?
Replies: 6
Views: 1355

Re: Interactive brokers - anyone have any experience with them?

Also depends on the types of equity you are investing in. The commissions can be low if you're buying stocks priced in the double digits, but can be very high vs other brokers if you are buying penny stocks or even a large number of shares of sub-ten dollar stocks.
by couponstrip
21 Feb 2015 11:02
Forum: Financial Planning and Building Portfolios
Topic: Lifetime cashflow spreadsheet... comments?
Replies: 56
Views: 7129

Re: Lifetime cashflow spreadsheet... comments?

I still manage to make the occasional error on my DIY spreadsheets, but it is usually easy to discover by cross checking data.

Trying to understand a spreadsheet written by someone else is almost like trying to learn a new language. A colleague who was in the early stages of learning DIY personal finance sent me one a few years ago which examined the problem of incorporating at his career stage. He wanted to know if he had "done it right". I tried to look at it for over an hour but I was no further ahead. So then I started from scratch with my own which only took an hour and I was certain of the quality of the work and the result.
by couponstrip
20 Feb 2015 11:19
Forum: Financial Planning and Building Portfolios
Topic: Lifetime cashflow spreadsheet... comments?
Replies: 56
Views: 7129

Re: Lifetime cashflow spreadsheet... comments?

I think to say spreadsheets are not that useful because of the quality of the assumptions is misplaced. The problem is not the spreadsheet, but the uncertainty of the future. Assumptions depend on how optimistic or pessimistic you are about the future*. Perhaps the most valuable information I have gained from spreadsheeting is the savings rate and nestegg required to cut back on workload at various ages. Yes there are assumptions, but without a spreadsheet it would be difficult to figure out how to better allocate life's energy. * We have a natural optimistic bias. Perhaps this is why there are many more short term investors/traders that bet long than short. Depressed people lose this optimistic bias. According to research, depressed people...
by couponstrip
01 Feb 2015 17:18
Forum: Retirement, Pensions and Peace of Mind
Topic: Variable Percentage Withdrawal (VPW) for Canadians
Replies: 791
Views: 109746

Re: Variable Percentage Withdrawal (VPW) for Canadians

Agreed. The simplest tools are always the most useful. The only fly in the ointment for me personally is that I would prefer to spend more in the younger years of retirement at the risk of having much less at age 78+. Mostly because I meet 78+ year olds every day who no longer wish to do things that cost a lot of money. And money has even more rapidly declining value thereafter. What's the use of being an 90 year old with a 100k (2015 dollars) draw down every year when the highlights of the day are walking the dog and having the grandkids over in the afternoon for a visit? At that age, there is still much pleasure, but it doesn't cost much. Of course there are elderly folks that buck this generalization, but they are the exception to the ru...
by couponstrip
30 Jan 2015 21:37
Forum: Retirement, Pensions and Peace of Mind
Topic: Variable Percentage Withdrawal (VPW) for Canadians
Replies: 791
Views: 109746

Re: Variable Percentage Withdrawal (VPW) for Canadians

What a great project. Longinvest, you have developed a valuable tool. I have read through your trials in bringing this to the forum for debate on bogleheads, and I must commend you for persistence in the face of much skepticism, and your sustained resistance to deviating from the simple question your work seeks to answer. Of course we can dream up all kinds of different financial disasters requiring layers of conservation and income floor, but that only serves to complicate the task at hand. These complexities are best addressed by the individual investor's financial plan tailored to their risk tolerance. As is often mentioned around here, when considering decades of time, it is probably more likely that something nonfinancial (war, health ...
by couponstrip
29 Dec 2014 16:33
Forum: Financial Planning and Building Portfolios
Topic: What should I sell?
Replies: 18
Views: 1481

Re: What should I sell?

adrian2 wrote:Another scenario in which this could be useful is if, after you start buying the new ETF's, a substantial equity hiccup happens. In that case, you could switch out of the new ETF's, bank the capital losses, and switch to another set of ETF's.
Another great idea. Thanks for this.

The most useful information to me from this thread had nothing to do with the original question. :)

Not that the other advice wasn't also useful. Thanks for all your thoughts and ideas.
by couponstrip
29 Dec 2014 14:27
Forum: Financial Planning and Building Portfolios
Topic: What should I sell?
Replies: 18
Views: 1481

Re: What should I sell?

Just did a little back of the envelope calculation. Using your existing VTI+VEA+VWO as a proxy for VT, your target allocation would be roughly VCE 30, and then: VTI - 40 VEA - 25 VWO - 5. Yes, VT wasn't available yet, nor VCE, but a dive in XIU a few years ago allowed a switch to VCE without tax consequences (good for tax, but kind of disappointing as I recall since we'd already been at it for more than 5 years with only dividends to show for it). Thanks for the ideas. Contributing to existing positions in substantial CG situations is less tax efficient than using similar products that generate a new ACB. Unless you value simplicity, using new products might be worth considering once the debt is paid off. That is a very useful tip. So I co...
by couponstrip
29 Dec 2014 09:26
Forum: Financial Planning and Building Portfolios
Topic: What should I sell?
Replies: 18
Views: 1481

Re: What should I sell?

Another option I considered last night after posting this would be to not sell anything, suspend contributions to our savings, and direct all savings to the debt for the next couple of years.

This assumes my spouse would be comfortable with that timeline for retiring the debt.
by couponstrip
29 Dec 2014 09:24
Forum: Financial Planning and Building Portfolios
Topic: What should I sell?
Replies: 18
Views: 1481

Re: What should I sell?

gsp_ wrote:Is there a valid reason for considering these funds in isolation of other assets?
A good point. These are all the funds we own. This is everything we own.

We have some registered assets and TFSA with the same funds (excluding VCE for tax purposes), but our registered accounts are small at <5% of our portfolio.
Flaccidsteele wrote:Personally I would only keep the US ETF. Perhaps the Developed Markets ETF is you really really feel that your statements look lonely with 1 ETF.
There would still be 4 ETF's in the portfolio regardless of what I sell, even if all the funds come from only one ETF.
by couponstrip
28 Dec 2014 22:55
Forum: Financial Planning and Building Portfolios
Topic: What should I sell?
Replies: 18
Views: 1481

Re: What should I sell?

It's called rebalancing, not some kind of market timing thing under the guise of "rebalancing".
:D

Perhaps I shouldn't let my personal bias on rebalancing (I don't do it) obscure the task at hand.

If I sell with the goal of allocating closer to 30:30:30:10, the majority of the funds will come from selling VTI. And the momentum investor's legion will cringe.

It feels like market timing, but I could be ok with it.
by couponstrip
28 Dec 2014 21:40
Forum: Financial Planning and Building Portfolios
Topic: What should I sell?
Replies: 18
Views: 1481

What should I sell?

We have used leverage as part of our investment plan for the last 9 years. For a number of personal reasons, we have decided to eliminate the debt, currently ~500k. We have the following ETF's and unrealized gains (in %): VTI - 93.6% VCE - 33.4% VEA - 17.6% VWO - 24.9% with original allocation and ongoing contribution of 30:30:30:10. Should I just do a couch potato sell proportionate share of each (150k 150k, 150k, 50k plus extra for CG tax), or should I consider tax liability, or should I do some kind of market timing thing under the guise of "rebalancing"? For example, VTI is currently much greater than 30% of the portfolio due to outsized returns. I'm interested to hear your thoughts. :) -edited for CG percentages, now calculat...
by couponstrip
03 Dec 2014 01:27
Forum: Financial Planning and Building Portfolios
Topic: Rebalancing
Replies: 119
Views: 10050

Re: Rebalancing

We let it ride. Nearly 8 years now, and have never rebalanced.
by couponstrip
28 Oct 2014 15:26
Forum: Financial Planning and Building Portfolios
Topic: William Bernstein
Replies: 101
Views: 26473

Re: William Bernstein

This idea originated from Wade Pfau. He called it a "rising equity glide path" in the distribution years.

It's fascinating work that raises interesting questions about traditional retirement financial advice.
by couponstrip
07 Oct 2014 17:54
Forum: Stocks, Bonds, ETFs, Funds, REITS and More
Topic: Vanguard Canada cutting fees
Replies: 35
Views: 3396

Re: Vanguard coming to Canada

Too bad I just picked XEC (Emerging iShares Canada) over VEE (Emerging Vanguard Canada) because VEE MER was too high... From the other thread . Effective MER's including withholding taxes, in an RRSP: VEE = 1.05% (this will get reduced a few bps, but not by much) XEM = 1.32% XEC = 1.0% VWO = 0.49% (any potential hit in exchanging to USD is incurred once, increased MER is paid each and every year) I just want to highlight this post. This is the kind of valuable information that gets lost in the pursuit of the lowest MER. If anyone hasn't looked at the above carefully, it is worth your while. There is much more than MER, and this information from adrian2 is more than most investors and even advisors understand about the various ETF options a...