Welcome to my latest edition of Weekend Reading – inflation and leveraged investing edition.
You can read some previous Weekend Reading roundups below:
Earlier this week, I posted this new post: why you should consider a cash wedge now and for any retirement plan to manage market volatility!
Have a great weekend and I look forward to all your comments!
Weekend Reading – Inflation and leveraged investing
Nice stuff by Money Mechanic on The Maple Money Show – sharing how he and his wife invest with some leverage to help get ahead financially, including private lending. That can be an approach for sure, but it comes with risks. I do believe Money Mechanic was wise to call out leverage as a form of “getting ahead”, an opportunity to use money – if done wisely with a long-term view in mind.
A reminder we have a killer giveaway with Money Mechanic and his partner-in-crime Chrissy at Explore FI Canada:
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Curious about inflation? Want to learn more about how our Consumer Price Index (CPI) works? Thanks to @MoneyGal aka Alexandra Macqueen here is a guide to inflation: price changes, how the pandemic is triggering that, and what it means to your pocketbook.
A good discussion between Tawcan and one of his readers chatting about retirement withdrawal strategies.
On a related note, thanks to Jon Chevreau for featuring why you should not overlook these retirement income considerations!!
Reader question of the week (slightly adapted for the site):
My wife and I own a joint non-registered investing account. We hold some Canadian companies that pay dividends there. My wife recently opened a new TFSA direct investing account. I am wondering if we can make in-kind transfers from our joint account to her TFSA? Is that allowed? Are there are tax implications in doing so?
Great questions. I’ll do my best to answer them even though I’m not a tax accountant!
My understanding is, a jointly owned non-registered investment account can be very helpful to avoid probate when a spouse dies – that’s a big reason why some folks set those up and maybe that’s the reason why you did too! From Canada Revenue Agency’s (CRA) point of view, my understanding is the taxation of jointly held non-registered investments are somewhat straight-forward in that: taxes are paid on the investment according to the original contribution ratio to the investment. The challenge as I understand it (for those that have a joint non-registered investment account – I don’t) is that you will need to maintain detailed records that show who-contributed-what in the event an audit from CRA and for tax-filing purposes.
So, if you’re not doing this already – I would suggest you keep very good records in terms of the date of purchase, name of the equity or Canadian dividend paying stock in your case, quantity of shares purchased, and of course the adjusted cost base.
I wrote about some of the challenges associated with taxable investing in this article below – I have some similar things to navigate because I have a taxable account, but it is not joint with my wife – purposely.
So, I won’t bore you with the TFSA details – you seem savvy enough. As you know, only you are allowed to contribute to your TFSA. However, you may give your spouse or common-law partner money to contribute to their TFSA if they haven’t used their contribution amount. This way you and your partner are making full use of the opportunity to have your savings grow tax-free.
Lastly, when you sell any asset from your non-registered account, you might have a capital gain even if you want to move the assets in-kind (which essentially means “as-is”) so just consider those tax implications and all reporting needs.
I’ll be answering more reader questions next week – stay tuned!
Even More Weekend Reading
Hard to believe but true – mutual funds in Canada outsold ETFs – again!!
Thanks to Fortis (FTS) and Emera (EMA) this week – I received more dividends for my semi-retirement plan based on their dividend raises (again). I hope to share my latest dividend income update next week. Until then….here is where I left off!
Fan of dividend stocks like I am?? DGI&R has a new look for his website where you can download his Canadian Dividend All-Star List.
Dale Roberts from Cut the Crap Investing looked at some dividend aristocrats in his Sunday Reads. For folks not wanting to bother with individual U.S. stocks, there are many great U.S. dividend ETFs to choose from.
Are rising interest rates bad for tech stocks??? Maybe….read on with Ben Carlson.
Bitches Get Riches shared everything you need to know about paying off debt – if you’re struggling.
Many people feel you need to save a bundle for retirement, and that can be true, depending how much you intend to spend. So, can you retire with a $500,000 RRSP? Can you retire without any company pension plan? Here is an answer to a reader we took on!
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Enjoy your weekend!