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by newguy
13 Mar 2016 19:02
Forum: Financial News, Policy and Economics
Topic: Guaranteed annual income
Replies: 36
Views: 3014

Re: Guaranteed annual income

Ken wrote:If we scrapped CPP, EI, Welfare, OAS, GIS, and myriad provincial programs like Alberta's AISH what would happen?
I'd also scrap RRSP, TFSA, RESP, CTTB, UCCB, pension plans, minimum wage, every tax credit, every tax bracket.... well everything.

You'd need a real living wage like 15k per adult and 5-10k per kid. Then maybe a 50% flat tax on every thing else.

I think the future will have not as many jobs or maybe jobs that have to compete on price with the robots. We're headed this way no matter what politicians or voters think.

newguy
by newguy
13 Mar 2016 18:51
Forum: Retirement, Pensions and Peace of Mind
Topic: RRSP Contribution for 2015
Replies: 20
Views: 1547

Re: RRSP Contribution for 2015

InvestorNewb wrote:I modified Box 16 on my T4 income to $2,479.95 and that error is gone
Not really, they over deducted CPP and you should get back the difference. If this is one employer then the employer and tax software writers both have problems.

My guess is CRA will notice no matter what you enter and send you four bucks.

newguy
by newguy
11 Mar 2016 19:32
Forum: Taxing Situations
Topic: Capital Gains Inclusion
Replies: 47
Views: 5741

Re: Capital Gains Inclusion

AltaRed wrote:If there is a change in inclusion rate, I believe it would most likely be effective 'budget night' similar what happened on Feb 22, 1994 when they eliminated the $100k free cap gain exemption, but grandfathered at market values to that evening.
I didn't know that. I figured that would be way too complicated. Can I change my vote?

newguy
by newguy
11 Mar 2016 17:30
Forum: Taxing Situations
Topic: Capital Gains Inclusion
Replies: 47
Views: 5741

Re: Capital Gains Inclusion

ghariton wrote:The follow-up question is: If you think that the inclusion rate will increase, should you crystalize capital gains now?
I dunno, is it 2016 yet? I see no chance an increase isn't retroactive.

newguy
by newguy
07 Mar 2016 00:25
Forum: Stocks, Bonds, ETFs, Funds, REITS and More
Topic: Tax Efficiency For CCP Vanguard Portfolio
Replies: 7
Views: 652

Re: Tax Efficiency For CCP Vanguard Portfolio

serious7 wrote:Regarding the premium bonds, I did not know that the capital was supposed to decline
If you buy a bond for a $120 and sell it for $100 (face value at redemption) it's called a premium bond. By definition, premium bonds have a capital loss.

What happens is you still get the higher coupon payment, say 4% of face, but at redemption you lose money to make the yield to maturity more like 2%.

IOW you trade capital gains for income. So you can only claim half the $20 loss, but must declare all of the coupon payments as income.

There's more intricacies inside an ETF, but the same principle applies.

newguy
by newguy
04 Mar 2016 18:56
Forum: Property: Owning, Renting, Managing, Investing and Mortgaging
Topic: Housing Bust 2016
Replies: 641
Views: 41962

Re: Housing Bust 2016

Well every mortgage I've had obligates the bank to renew the mortgage at the posted rate for the same term. I'm pretty sure all big 5,6,7 banks have similar clauses. Why would you sign something that didn't? My guess is this only happens if people are self or marginally employed and have to shop for a 'special' mortgage. newguy My guess is you haven't really read your mortgage documents. No lender ever writes a contract that says they must lend you money...these contracts are always written in the lender's favour. Remember the golden rule, he with the gold makes the rules. I think if you really read your mortgage documents you'll find you've agreed to an demand loan with no guarantees of renewing. No, I read them all and also asked the not...
by newguy
04 Mar 2016 16:30
Forum: Property: Owning, Renting, Managing, Investing and Mortgaging
Topic: Housing Bust 2016
Replies: 641
Views: 41962

Re: Housing Bust 2016

patriot1 wrote:I think you mean this one:

http://calgaryrealestatereview.com/2012 ... reclosure/

There is a lot of stuff on the web about Canadians lenders refusing to renew. it happens.
Maybe not that site, but yeah. Note this.
As home buyers, you should be looking for a mortgage that guarantees the right of renewal so long as you are in good standing under the mortgage. Most major banks guarantee that right in their mortgage but some of the smaller lenders do not. Getting the lowest rate isn’t all that matters when shopping for a mortgage.
newguy
by newguy
04 Mar 2016 16:10
Forum: Property: Owning, Renting, Managing, Investing and Mortgaging
Topic: Housing Bust 2016
Replies: 641
Views: 41962

Re: Housing Bust 2016

AltaRed wrote:It's been awhile since I've had a mortgage, about 27 years to be exact, so perhaps things have changed? Perhaps an issue around conditions that have changed between original writing and renewal time?
I just did some searching and there are warnings and stories about this happening. On recent one in Calgary 2012 mentioned self-employed and GE capital. I think it's all similar situations, funny employment and secondary lender.

I find it strange you would have signed a mortgage like that if you didn't have to. What leverage it gives the bank to jack up rates on you. Mind you, I trust no one. My parents used to call me for dinner and I'd ask "what's the catch?".

newguy
by newguy
04 Mar 2016 13:24
Forum: Property: Owning, Renting, Managing, Investing and Mortgaging
Topic: Housing Bust 2016
Replies: 641
Views: 41962

Re: Housing Bust 2016

AltaRed wrote:As said upline, there is no obligation on any lending institution to renew a mortgage at renewal time.
Well every mortgage I've had obligates the bank to renew the mortgage at the posted rate for the same term. I'm pretty sure all big 5,6,7 banks have similar clauses. Why would you sign something that didn't?

My guess is this only happens if people are self or marginally employed and have to shop for a 'special' mortgage.

newguy
by newguy
02 Mar 2016 19:23
Forum: Stocks, Bonds, ETFs, Funds, REITS and More
Topic: Tax Efficiency For CCP Vanguard Portfolio
Replies: 7
Views: 652

Re: Tax Efficiency For CCP Vanguard Portfolio

VAB will have a capital loss as it's full of premium bonds. In effect, you trade capital gains for interest. It will have to seemingly pay out a portion capital every month, but it's counted as interest. So you pay double tax.

VXC is Canadian domiciled so there will be unrecoverable withholding tax in your RRSP (and TFSA, and a bit in non-reg). Something like VT will have no withholding tax between the US and your retirement account (RRSP only, not TFSA). It will have some small amount of withholding between non-US companies and the VT fund. But you have to do a gambit to buy it cheaply in US dollars.

newguy
by newguy
26 Feb 2016 13:10
Forum: Financial Planning and Building Portfolios
Topic: First Post - My Portfolio Plan
Replies: 16
Views: 1203

Re: First Post - My Portfolio Plan

If I were to go with RBC ETFs, what choices should I consider? It all depends on you. Like others have said, you're young and bond returns are limited. I would go with VT in the RRSP, that's all the stocks in the world (not quite, but close). The issue is it's only worth it if you do something they like to call here "Norbert's Gambit". Use the search box up top, but IIRC RBCDI is good for it. VT is US domiciled so they won't withhold tax on dividend payments. In the TFSA they would. Some foreign stocks in the ETF will have unrecoverable withholding tax between the foreign country and the US, but it's not much. Then in the TFSA some Canadian domiciled fund, probably XIC. Bonds/GICs you could put anywhere, In the RRSP is good becau...
by newguy
25 Feb 2016 18:51
Forum: Financial Planning and Building Portfolios
Topic: First Post - My Portfolio Plan
Replies: 16
Views: 1203

Re: First Post - My Portfolio Plan

TML_YYC wrote:My reasoning for sticking with index funds is that RBC does not seem to have competitive rates for ETF trades
Welcome to FWF :)

Without looking them up, I would be willing to bet RBCDI charges $10 for trades. All big discount brokerages are pretty much the same price.

I wouldn't go with currency neutral stock funds. There is quite a drag for Canadians as our currency is correlated to world equity performance.

newguy
by newguy
18 Feb 2016 10:17
Forum: Financial Planning and Building Portfolios
Topic: Home bias risk doesn't show in the data
Replies: 26
Views: 2463

Re: Home bias risk doesn't show in the data

JohnnyFactor wrote:For all the pros and cons discussed of Canada vs the world, the ultimate outcome has been a difference of 2 points.
Which is huge. It means you'll have less then half as much if only invested in tsx over that time frame.

newguy
by newguy
13 Feb 2016 12:56
Forum: Community Centre
Topic: AI and automation
Replies: 6
Views: 127

Re: AI and automation

I think what will happen is more talk about guaranteed income like Finland and Switzerland. Even today the puppet masters only allow the proles enough to live on, it will just become more explicit.

Plus they'll need someone to buy everything that the robots are making.

newguy
by newguy
13 Feb 2016 12:52
Forum: Property: Owning, Renting, Managing, Investing and Mortgaging
Topic: Housing Bust 2016
Replies: 641
Views: 41962

Re: Housing Bust 2016

Flaccidsteele wrote:And the answer to the question of foreign ownership
The question is foreign buyers, not ownership. The prices are driven by buyers. Only a small percentage of homes sell every year.

newguy
by newguy
13 Feb 2016 12:48
Forum: Community Centre
Topic: Science is amazing
Replies: 818
Views: 55673

Re: Science is amazing

kcowan wrote:Yes who knew about gravitational waves? They discovered them and I did not know they were missing!
For 100 years GR has passed every test of it's theory, I put this news in the yawn category.

https://en.wikipedia.org/wiki/Tests_of_ ... relativity

OTOH, I bet the super accurate optics used in the test will have a much greater impact on science and our daily lives.

newguy
by newguy
12 Feb 2016 15:43
Forum: Community Centre
Topic: Windows Update
Replies: 466
Views: 10767

Re: Windows Update

Norbert Schlenker wrote:As I'll need a workable Windows environment to run UFile for the upcoming tax season (I'm a Linux user day to day)
I tried StudioTax in wine but it didn't work. Something about dotnet. Luckily I still have a windows machine or I would do the virtual thing as well. I've decided that instead of daeling with the windows privacy issues, I'll use linux full time as of now.

I've posted before, but a reminder that msoft provides free virtual machines for testing that would outlast the tax season.

https://dev.windows.com/en-us/microsoft ... vms/linux/

newguy
by newguy
12 Feb 2016 15:28
Forum: Property: Owning, Renting, Managing, Investing and Mortgaging
Topic: Housing Bust 2016
Replies: 641
Views: 41962

Re: Housing Bust 2016

http://news.nationalpost.com/news/canad ... ina-buyers
The dominant influence of Chinese investors in Vancouver has finally been proven with comprehensive data.
...
Of 32 homes sold for more than $4 million, 94 per cent of owners were ethnic Chinese and the rest were corporations.
Don't forget a bunch of them are left empty. They're supposed to try and count them soon.

newguy
by newguy
05 Jan 2016 17:51
Forum: Retirement, Pensions and Peace of Mind
Topic: The Plight of the Y2K Retiree
Replies: 204
Views: 30884

Re: The Plight of the Y2K Retiree

I don't get it. The title says under 4% inflation. Is that for the swr only? If there really was 4% inflation the bonds would have cratered and the stocks would be kicking butt. Not to mention the 80 yo geezer is now living it up with his ever increasing real income (yaay, go divvies!). It seems like there's confusion around the RRB performance. It's all due to the fact that everyone looks at long durations for RRBs. Here's a fair comparison from iShares, but they only have data back to 06 so I can't really compare from 2000. xrbxlb.png They only out perform when inflation is higher than expected. Here's an update of cpi vs break even spread from some R code I posted somewhere. Rplot.png If the red line now is below the black line back when...
by newguy
23 Nov 2015 20:14
Forum: Taxing Situations
Topic: Income Tax Rate Increases
Replies: 81
Views: 4404

Re: Income Tax Rate Increases

With so many people in the lower tax bracket, ie. everyone. A tax cut is more expensive and/or much smaller.

BTW the link for the new tax stats http://www.cra-arc.gc.ca/gncy/stts/t1fnl-eng.html

newguy
by newguy
23 Nov 2015 18:16
Forum: Taxing Situations
Topic: Short bonds for DIY mortgage?
Replies: 0
Views: 796

Short bonds for DIY mortgage?

I was wondering if it's possible to short a bond in order to create a virtual tax deductible mortgage.

-What if I had $104k in my TD account.
-They say 104% margin for shorting bonds.
-I short a $100k 20yr-ish govt bond at 2.5% and make all the interest payments (shorters have to pay the interest).
-I now have $204k in my account but only need $104k.
-Withdraw $100k, buy house.
-I now have a 20yr, locked in, low rate, open pay, virtual mortgage.

Do I deduct the reversed interest payments from the positive income in the account? Note that with about $150k in the account initially, I could buy all dividend payers that are eligible for 30% margin and still have enough for the bond margin.

newguy
by newguy
12 Nov 2015 14:48
Forum: Financial Planning and Building Portfolios
Topic: Time in the market
Replies: 8
Views: 883

Re: Time in the market

chufinora wrote:newguy I am not sure what your table is showing (What does 1 yr 60.6% mean in your table?)
It's the same as the table you posted but - real returns, no redundant negative column, and posted horizontally.

There were 60.6% positive months. Also the average 30 yr real return was 660%, much worse or more realistic than saying the worst was 850%. Over 30 years, inflation (or deflation) is a big deal.

Here's a good website with all kinds of charts. http://www.advisorperspectives.com/dsho ... -Highs.php

newguy
by newguy
10 Nov 2015 16:55
Forum: Financial Planning and Building Portfolios
Topic: Time in the market
Replies: 8
Views: 883

Re: Time in the market

Is that real total returns? Here's what I got from Shiller's data with divs reinvested monthly (1871-2015). All periods rolled monthly.

Code: Select all

1 mo	 1 yr	 5 yr	 10 yr	20 yr   30 yr	 30 yr av
60.6%	68.5%	79.9%	88.1%	99.9%	100.0%	660.69%
newguy
by newguy
30 Oct 2015 20:08
Forum: Taxing Situations
Topic: [options] strangle tax - cost basis
Replies: 5
Views: 468

Re: [options] strangle tax - cost basis

cardhu wrote:Taxes for options are always determined on an individual contract basis ... combinations involving multiple contracts arent' taxed as a single entity.
AFAIK, this is also true for everything else. I guess an ETF is a basket of stocks, but then there's covered call ETFs.

Also when combined with stock, the option gain/loss is linked to the share purchase/sale.

newguy