The Knowledge Bureau is all about financial education. You need financial education
- Emerging Tax on Capital
- Saving money
- Precautions (manage risks due to living longer)
- Readiness (for Black Swan events)
- Defensiveness (against ongoing financial problems)
Things she expects to happen over next 5 years.
|Item||2012||2016||3 month Treasury||0.9%||2.3%||10 year Gov. bond||2.1%||3.5%||Inflation||2.1%||2%||US/CDN $||99.6||100.7|
It is a bumpy road ahead, but there is also light at the end of the tunnel. We have too much government debt, both federally and provincially. In Canada, the individual average net worth was $148,350 in 2005. In 2012 the average net wealth was $192,000. The increase was due to house prices.
Our government says that self-reliance is the best for us. The recent trends are changes to CPP and OAS age eligibility. We have new pension vehicles called Pooled Registered Pension Plans (PRPP), Pension Income splitting, business asset write-offs and new auto log rules under E.I. for the self-employed.
The new 2% tax on rich will raise ordinary rates from 46.41% to 41.97%, capital gain rates from 23.2% to 23.98%, dividend rates from $32.57 to 34.52%. Average tax increases in the period ending 2017 will be 5.4%. There will be surtax on RRSP/RRIFs. Getting an inheritance is like winning a lottery (in that we tend to spend it fast). High government debt will lead to high taxes.
In investing, what comes first? We should invest in this order
- Tax Free Savings account (TFSA)
- Registered Retirement Savings Plans (RRSP)
- Registered Pension Plans (RPP)
- Individual Pension Plans (IPPs)
- Pooled Registered Pension Plans (PRPP)
- Registered Educational Savings Plans (RESP)
- Non-registered accounts.
- Reach back and recover capital losses on current capital gain (Go back 10 years)
- Tax loss selling
- Charitable donations
- Political contributions
- Medical Expenses (glasses, dentist)
- Business assets and expenses
- OAS clawback starts are $69,532.
He started with selling assets for capital loss. If you sell a stock for a capital loss, you cannot buy it back before 31 days are up or it is considered to be a superficial loss. ETF and mutual funds can be easier to replace. You cannot buy the exact same one, but you could buy something similar. Capital property is Real Estate, bonds, metals, stocks, options, art etc.
If you are buying and selling stocks full time, that is a business and you cannot use capital gains and capital losses. You should read the rules concerning a business and amateur trading. You need to write down your specific goals. If you have investment goals unwritten, they are attained 50% of the time. If you write them down, they are attained 95% of the time.
This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. See my website for stocks followed and investment notes. Follow me on Twitter or StockTwits.