The latest financial news and accounting tips from KWB.
Principal Residence Exemption
If you have sold your home and it is your principal residence then you should be able to use the principal residence exemption to reduce or eliminate any capital gain for income tax purposes on the sale of the property. CRA states that a principal residence can be a house, cottage, condominium, apartment, trailer, mobile […]
Beginning in 2019, the CPP rate will be gradually enhanced. This means you will receive higher benefits in exchange for making higher contributions. The Canada Pension Plan (CPP) enhancement will be rolled out in two phases. The 2018 CPP rate was 4.95% of your salary to a maximum yearly CPP contribution of $2,564.10. Your employer […]
Registered Education Savings Plan (RESP)
An RESP is an education savings account that is registered with the Government of Canada that helps you save for a child’s or grandchild’s post-secondary education. With an RESP, you may be able to receive other saving incentives, such as the: Canada Learning Bond Basic and Additional Canada Education Savings Grant There are two different types […]
Spousal Loan – Tax Savings Opportunity
If you are in a much higher income tax bracket then your spouse and have investments outside of an RRSP or TFSA then a spousal loan could reduce your taxes. Money that is earned directly by you through employment or investing is considered yours and can’t just be given to your spouse to invest. That […]
The Enlightened Investor-Retirement Income
Eventually investors move from the “saving-years” to the “drawing-years”, when they want to start drawing retirement income from their portfolios. This can be confusing. For many the natural inclination is to liquidate their diversified portfolio in favor of income-producing stocks or bonds. However, the idea that retired individuals should load up on dividend-paying common shares […]
Retirement Planning Alternatives
We have all been told to plan for our retirement. Yet, have you ever wondered why you need to consider the different retirement planning alternatives? Perhaps you have a plan, most people do, but is it the right plan? In the following example, it is clear how advanced planning can make a huge difference for you and […]
The Enlightened Investor – Fees & Expenses
Fees and expenses are the single biggest reason professional money managers fail to outperform the market return. Learn a little more about what are reasonable fees and what makes up most investment fees.
US Tax Filing
Are you a US citizen? Do you spend more than 120 days per year in the US? If so you may be required to file a US personal tax return.
If one of your New Year’s resolutions was to save more money, then the Tax-Free Savings Account (TFSA) may be a good option for you to use. Learn more about the TFSA rules and limits.
The Enlightened Investor: Powers of Attorney for Property
A power of attorney for property is a written document by which a grantor appoints an attorney to act as a substitute decision maker with respect to the grantors property or financial affairs. This grant of power becomes effective immediately upon the grantor signing the document unless otherwise indicated. While a General Power of Attorney […]
Estate Planning Gifting Strategy
An estate planning gifting strategy is basically when you start to give away some of your assets prior to death in order to optimize taxes within the family. Usually, an estate planning gifting strategy refers to how we will distribute our assets when we die. But you might be overlooking significant tax savings by not considering […]
The Enlightened Investor: What is meant by “market return”?
The investment industry and media often refer to the “market” and the “market return”. Or that the market was up or down on the day and that a portfolio manager’s return outperformed or underperformed the market return. So what exactly do they mean and how does it relate to you? The market generally refers to […]
The Enlightened Investor – Moving Small LIRA’s to Your RSP
When you have a job transition, you may transfer your pension plan savings to a locked-in-retirement account (LIRA). LIRA’s are similar to Retirement Savings Plans (RSP’s) but with more restrictions. Adding another investment account will also add extra administration to managing your retirement savings. Alberta pension legislation allows people age 50 or older to transfer […]
The Enlightened Investor: A Diversified Portfolio vs. a Collection of Investments “The Only Two Things You Need to Know About Modern Portfolio Theory”
Our best technique for protecting portfolios is called Modern Portfolio Theory. This Nobel Prize winning idea said it is insufficient to look at investments in isolation as is done in the traditional approach of picking stocks and bonds. Rather rational investors will seek out “efficiently diversified portfolios” offering the highest expected return for each level […]
The Enlightened Investor: A Diversified Portfolio vs. a Collection of Investments – “Recovery Returns”
Do you want a portfolio that’s vulnerable to wild swings in value? Likely not. In fact less volatile portfolios are both easier on the stomach and they help you achieve better long-term returns. For example, a portfolio that declines 10% this year requires an increase of 12% next year to recover its losses. If your portfolio […]
The Enlightened Investor – Risk (ETF’s)
Investors often remark that the world economy has changed and that it’s more volatile than ever. They are less trusting of stock markets and they don’t want to take risk. I can’t say I blame them. I might ask though, if the world has changed, if it is more volatile, “how are you changing the […]
What will interest rates do in 2015
When it comes to interest rates here in Canada and around the world, the only thing we know is that we don’t know. For the past 4 years economists around the world have expected interest rates to increase and not go lower. What we do know is that Stephen Poloz, the Governor of the Bank […]
The Enlightened Investor: Is Your Portfolio Leaking Tax?
It may be obvious to state that an investor only keeps the after-tax return. It is less obvious how to minimize the tax leakage from your portfolio. A good starting point is to identify the two primary causes of tax; portfolio turnover and an inefficient portfolio structure. Taxes resulting from portfolio turnover can cost you […]
The Enlightened Investor – A Game Plan
Do you make investment decisions according to what looks good at the moment? These purchases are often based on opinion and influenced by emotion. It can be exciting – much like buying lottery tickets. Clearly, following a predetermined, diversified, well-thought-out, long-term investment strategy is preferable. Here’s why. Dalbar’s study of investor behavior shows how investor […]
The Enlightened Investor-Understanding Returns
One thing frustrated investors often lament are their returns. So here's a question. Do you know what your returns really are? Find out more about how to measure your returns including some great but simple investment benchmarks over the last 5 years.