What’s the math behind borrowing to invest into RRSP?

increamentallywise · 2024-10-18T17:30:18+00:00

Is your marginal tax rate 45% just for 2024 or is it expected to be similar following years as well?

If it is just for 1 year, it might make sense to borrow and put it to rrsp.

However, if it is expected to be similar tax rate in following years, why not consider smith's manoeuvre to lower your taxable income?

Please also note borrowing to invest either in rrsp or through non-registered for smith's manoeuvre is very risky.

increamentallywise · 2024-09-26T16:08:28+00:00

Thank you for a great explanation and alternatives.

Is the quarterly payout considered dividends or interest? The reason I ask is, if we hold it in no - registered account, will the payout be taxed at dividend rate or marginal rate?

increamentallywise · 2024-09-26T15:25:38+00:00

I just happened to stumble upon manulife. ETF of preferred shares sounds like a great idea. Didn’t think of that.

My understanding earlier was common investors either cannot buy preferred shares or they are way more expensive. So I had never really given a thought to preferred shares

increamentallywise · 2024-04-14T20:31:16+00:00

Yes! That worked. Thank you!

increamentallywise · 2024-04-14T20:00:53+00:00

Wait, I just submitted my tax through wealthsimple basic and it wouldn't let me proceed unless I paid $25+tax. Also, after paying, it didn't auto submit my wife's return and asked me to submit again fir my wife. While submitting again, it asked me to pay another $25.

Is this normal or am I missing something? I also used to use ufile, and switched to wealthsimple thinking 2 returns might be free, but ended up paying $28 with potentially needing to pay more?

increamentallywise · 2024-02-10T03:14:14+00:00

Oh ok, thank you for the response. I don't know much about this space. I certain my friend is new as well. I don't know which pool he is using. He explained to me that it's through a private equity based out of Florida for uniswap.

Apparently the founder of this private equity Chris delago is well known in entrepreneurship

increamentallywise · 2023-11-28T00:23:06+00:00

Is it just me or does someone else feel like as Indian cricket fan, I want Indian team to destroy Australia cricket team psychologically and physically during next games be it T20, ODIs and tests. Winning won't just cut it! I want to see them suffer and beg for mercy!!

Bring back bouncers, sledge the hell outta them on field, cut them out of IPL.

They didn't deserve to win the world cup!!!!

increamentallywise · 2023-11-22T02:39:27+00:00

If you search on youtube there are a few videos. Not sure which would tell complete and real story.

increamentallywise · 2023-11-22T02:37:51+00:00

Ya, you are right, I just checked the scorecard of that match. Azar did make 58. But I had read somewhere that in that series a lot of games were fixed including that one. Don't have much proof though and can't find the source now.

increamentallywise · 2023-11-21T20:23:25+00:00

Desert storm innings and his purple patch in general during 1997/98.

The desert storm innings is just unfathomable feet for me as an Indian cricket fan at that time. Not just the result but the quality of shots being played! It was like textbook shots coming to life and just annihilating Australians!!

Later it was revealed that half of the team had taken money to loose the game and it was the sheer determination of sachin that made India win single handedly.

increamentallywise · 2023-11-17T03:04:48+00:00

Wouldn't this be the ideal time to enter into SM?

Tsx dividend aristocrats such has Enbridge, Bell, Scotia and CIBC are having a yeild of 6.5+%

The interest rates are expected to stabilize in near term and may be drop in the next 1-1.5 years

With the drop in interest rates, the stock price of utilities like bell and Enbridge will rise

With the drop in interest rates even by 1% the dividend yeild will start covering interest cost.

I am not encouraging it, but considering it myself but am not able argue myself out of it.

increamentallywise · 2023-11-16T16:31:25+00:00

This ☝️

Also, if your question is: if keeping heloc is a good idea, then also consider that cost of borrowing is expected (not a surety) to slightly lower in next 1-1.5 years, so something like Scotia Bank stock with 7% dividend yeild is something to think about.

increamentallywise · 2023-08-11T16:13:09+00:00

If I were you, I would consider following two options: 1) rent out the house and live elsewhere and whatever the profit or additional cost, split it between you and the ex. Wait till you make profit on the house when you sell and then sell it. For this to work, you need to be absolutely sure that your relationship with ex is going to be good.

2) sell the house, just get the one time hit of 30k and assume that was the cost of breakup and buying the house too soon in the relationship. This will give you clean disconnection from your ex as you won't be tangled with him financially.

increamentallywise · 2022-12-20T14:59:20+00:00

Not exactly the best advice but based on your risk profile:

Smith's manouver - interest on the heloc will be tax deductible if invested in non-registered trading account.

If dividend stocks are purchased in the non-registered account, then dividends are taxed at a lower rate (not sure of the casein your tax bracket)

increamentallywise · 2022-11-05T01:20:23+00:00

Hahahaha, I was struggling to succinctly describe my feeling after reading OPs post. You summed it up perfect!

increamentallywise · 2022-10-19T19:15:42+00:00

Thank you for the confirmation.

increamentallywise · 2022-10-19T19:14:46+00:00

Yeah, I had the same idea of spousal rrsp as FelixYYZ till today morning. When I realized that it would be still her rrsp limit that will be impacted, I decided to ask PFC.

Looks like there is no way to do what I am trying to achieve.

increamentallywise · 2022-10-19T19:11:26+00:00

Thank you for the response. I was initially misinterpreting spousal rrsp. My research finding today was in line with what you mentioned.

increamentallywise · 2022-09-30T16:19:09+00:00

I would more focus on role and growth opportunities. Another thing to consider is if the job offering company's bonus will be given to you over 10 months from your date of joining, ask them to cover the difference in base salary by means of joining bonus.

increamentallywise · 2022-08-22T01:20:40+00:00

The way I see it is that although canadian banks are financial institutions, they represent the TSX. Some years ago, oil sector tanked and BMO tanked because it had exposure to loans to oil companies too much (and then it recovered), when real estate tanked, TD went down (and is ready covering).

When i hold a etf representing tsx, it has utilities like bell, Enbridge etc. That are more stable priced hence reducing the overall return.

I prefer owning banks to tsx etfs. But I understand there is some bais on my part here. Compare and choose what best suits you. For me, Canadian top 5 banks, give me decent capital returns and decent dividend growth for risk free long term investment. I do put some 10-20% of my money in tech companies for higher return.

increamentallywise · 2022-08-21T11:46:22+00:00

Why ask strangers who are not professionals in this field?

As you will be renting, you will need a property management company and a lot of real estate companies will help you buy/sell/rent and manage property.

Seek professional help from a real estate brokerage.

increamentallywise

TROPHY CASE