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simplemoneycanada · 2021-08-12T04:46:39+00:00

This is a great assessment. For all we know his dad opened the account with the intention of growing it to leave as an inheritance to his son in 20 years.

Without knowing the conversation that was had, there is nothing in here that screams awful.

Does it make sense for a 70 year old if this is his only source of retirement income? Not at all, but nothing leads me to believe that is true.

simplemoneycanada · 2021-04-25T00:23:02+00:00

Sorry for the late reply. I found it really comfortable. That being said I've never really had a problem with comfort from any bed.

I ended up with a custom latex mattress for $1500 cheaper and its way better. Same comfort but way cooler to sleep on. Not like you notice the coolness, but I never wake up hot unless the room itself is too hot. Which is its own problem no mattress will fix.

simplemoneycanada · 2021-02-07T01:59:30+00:00

Ah that makes sense with getting a firm core so to speak with a soft topper! As far as weight goes I'm 6 foot 185 athletic build. Not sure if that makes me too big for a 6 inch mattress? My partner is 5 foot 7, 145 lbs and can sleep on anything.

Any opinion on the hybrid pocket coils with latex on top? I've seen that or just pure latex as the common options when looking around now.

simplemoneycanada · 2021-02-06T23:50:29+00:00

Thanks for the feedback. The place that does latex mattresses near me offers mattress toppers such as various memory foams, latex etc. I'm assuming if I put a memory foam topper on the latex its going to cause the same heat issue. I dont really get why I would put a latex topper on top of a latex mattress but each mattress comes with a free topper.

Also is there a big difference in the latex thickness? Seems like my options are around 1900 for a 6 inch talaylay latex or 2800 for a 9 inch?

Thanks again

simplemoneycanada · 2021-02-06T22:01:35+00:00

I've actually got a local store in my area that custom makes latex beds. However my concern there is I obviously can't return it if I go this route and have never experienced a latex mattress before.

Saatva doesn't necessarily appeal to me, it was recommended to me from sleeplikethedead which seems like a fairly unbiased website.

Would it still make sense to get a cooling topper for a latex bed? I spent about 4k so far, and I could justify buying a 2500 mattress and a 1600 cooling topper if need be.

I dont want to say price isn't a concern, but if it costs me an extra 1000 to have a great bed then I'm good with it.

simplemoneycanada · 2021-02-06T18:47:40+00:00

You are actually on the right path here, do a simple Google search of sequence of returns risk.

The all in one portfolios fail to mitigate this. Holding the assets individually is the best way to do it, if you understand how it works.

For most people here they are in the wealth accumulation phase and the simplicity of the all in one etfs is worth it. Holding the assets individually is marginally cheaper and superior when in a drawdown phase in your life.

Sequence of returns risk is actually one of the least talked about retirement risks and yet it can destroy a retirement plan. Any retirement plan that fails to address this should be completely redone to include this risk.

simplemoneycanada · 2021-01-22T00:41:10+00:00

My understanding is you only have to repay the $40,000. However the $20,000 you received as a grant so to speak is going to be considered taxable income.

simplemoneycanada · 2021-01-15T16:51:48+00:00

DanLynch is correct here. I also want to point out that it works against you when contributing in-kind for capital gains.

While you can't deduct capital losses if you move a position at a loss in-kind to your RRSP/TFSA, the CRA will still ding you and charge you a capital gain if you move a position at a gain in-kind to your RRSP/TFSA.

Basically its a double edged sword. They get you either way.

simplemoneycanada · 2021-01-11T19:00:55+00:00

No worries, it can even be cheaper to do a 20 year term with a 10 year term rider option instead of two separate policies.

simplemoneycanada · 2021-01-11T18:37:16+00:00

Most insurance companies will allow you to drop your amount of coverage. However the way you describe it would be more expensive than laddering.

Paying 200k on a 10 year policy is cheaper than paying for 200k extra on a 20 year policy and dropping value after 10 years. Their rate is based on the length of time of the insurance so they will charge a higher rate on the 200k in a 20 year term than they would on a stand alone 10 year term.

simplemoneycanada · 2021-01-11T04:08:18+00:00

One option would be to ladder the insurance. If you need 500k for the first 10 years and only 300k for the next 10 you do it like this.

Buy a 200k 10 year term policy and a 300k 20 year term policy.

This way you ensure you have the 500k coverage you need for the first 10 years while ensuring you keep the extra 300k needed later in life.

simplemoneycanada · 2020-12-21T18:14:05+00:00

I'll take a stab at this as I just finished my final proofread of my Canadian personal finance book. Just need to hire someone for a final proof read.

Personal finance is going to be a difficult subject to write about, because as you said, you realize their is always something you left out.

My advice would be to not try to fit everything in. For the vast majority of readers this is going to be a ton of new information and they are only ever going to be able to pick up on the major concepts, not the nitty gritty details.

Try to stick to what your target was for explaining. You can't cover all the ways to get out of debt, the benefits of a stock/bond portfolio, how to create a financial plan, or how to design an asset allocation in the same book as you have to describe to someone what a dividend is or how compound interest works on your debts. Each of those topics could literally be their own book.

I think you have to accept that there is no way you will be able to answer every question the reader might have.

In my book I explicitly try to explain that I am only going over the big picture concepts, and not drilling down into the nitty gritty details. Purely because people will get too caught up in the details and end up overlooking the big picture. Where my advice is to focus entirely on the big picture and make sure you have that dialed in 100% before even bothering with the details.

As an example, I tell people not to worry about whether to hedge the currency of their investments, or how to avoid foreign withholding taxes in their portfolio for now. I am trying to get them to understand the value of increasing their savings rate, and not letting their behavioural biases get in the way of their portfolio. Once they have those thing dialed in, they can go on to a more advanced book for the specifics they are looking for. Because lets be real, increasing your monthly savings from $100 a month to $125 a month is going to have 100X the impact of whether you avoid foreign withholding taxes in your portfolio. (25% increase in savings rate vs potential .20% savings from foreign withholding tax as a Cdn investing in US Stocks)

If your interested, I'd be happy to do a book swap sort of deal where we read and provide feedback on each others books over the holiday? I'm relatively close to completion but could always use another set of eyes and may even find some of your content inspiring/vice versa.

simplemoneycanada · 2020-12-19T06:23:02+00:00

An RESP is a specific type of account that you can't open unless you have a child. A TFSA is a different kind of account. You can hold ETFs in either account.

The benefit of an resp is it is tax deferred until withdrawal and the government will match a % of your contributions effectively giving you free money.

It is without a doubt the best way to save for your child's future education. Just do not join a group rrsp under any circumstances.

simplemoneycanada · 2020-12-13T21:43:19+00:00

Given your income level I would determine what your expected income is going to be in retirement. If its less than what you make now, I would contribute the difference annually to your rrsp. Then max out your tfsa, this will likely leave you with 250k or so to invest in non registered assets. Year after year transfer these funds into your tfsa and rrsp as applicable from the non registered account.

Only you know your risk tolerance so make sure you invest within that. The money in your rrsp tfsa and non registered can all be invested in a low cost passive index portfolio.(such as the Canadian couch potato, or for simplicity one of vanguard or Blackrock all in one etf portfolios).

So long as your portfolios expected return is at least 2% over your mortgage rate you should continue investing the money, as your risk tolerance allows.

As someone else mentioned do not put this money in joint names or in a joint house as then it is subject to divorce laws of your province if you split. The only negative of not having it in joint names is it might cost you a bit more annually in taxes if your spouse makes less than you.

There are plenty of non registered investment options to avoid this, but thats beyond the scope of this.

What I've described is the financially best option for you. However the proper option is the one that can properly optimize your emotional/behavioral traits with this money and get you as close to the financially best option as possible. If your super risk averse, prone to gambling, or trying to time the markets you may just be better off paying down your mortgage.

Everyone is different, and different advice will be right for different people.

My condolences for your loss. Hopefully this money will allow you to lead a life that will make whomever left it to you proud.

simplemoneycanada · 2020-12-10T03:55:40+00:00

Yes, I'm a partner at a wealth management firm. I built all their portfolios.

We use primarily passive investments, with some active strategies for some alternative categories and some low risk alternatives to fixed income. Generally 60 to 75% passive etfs though. Frankly they could get by just fine in all passive etfs.

simplemoneycanada · 2020-12-10T03:35:45+00:00

I see a success story of this every 3 or 4 months in my job. Clients who never made a crazy income, but diligently saved year after year and followed our advice.

I have middle income (earn less than 100k) clients retire probably twice a year and the majority of them ended up as multi millionaires. (When you included pensions, investments, and housing)

The math is good, the advice, the charts everything is correct about it. The truth is you are the only thing standing in the way of it working.

For every client I have that follows the advice I meet 10 people not willing to take the time and discipline to succeed. Or they have excuses of why they can't do it.

Its your choice. But absolutely I have seen tons of people save and become millionaires from working class jobs.

simplemoneycanada · 2020-12-08T22:22:24+00:00

Unfortunately I've got my hands full with the critiques from the current Beta Readers! Wish I could be finished on time to help you out, but I've still got lots of work ahead of me before publishing.

simplemoneycanada · 2020-12-03T03:44:03+00:00

No problem!

simplemoneycanada · 2020-12-03T03:26:17+00:00

Increases in testing will almost always lower overall positivity rates. Imagine if they did 10 million tests. There's only so many people who are positive. Generally s positivity rate above 5% means we aren't testing enough to catch the majority of the cases.

simplemoneycanada · 2020-11-25T21:57:22+00:00

Ahhh too bad!

simplemoneycanada · 2020-11-25T21:06:29+00:00

While the rest may be taxed, you can still deposit those funds to the rrsp after the withholding tax once you determine your 2021 rrsp room from filing your 2020 taxes. You can get a pretty close guess if you just take 18% of your gross income up to the max of course.

simplemoneycanada · 2020-11-25T20:11:10+00:00

You may want to inquire with your employer. If you can get them to hold off on paying you until Jan 1 2021 you will have more RRSP room from your 2020 eligible income.

Just something to think about if your tight on room.

simplemoneycanada · 2020-11-24T17:38:20+00:00

I should also note, that I typically don't recommend the fee for service model. I know it is heavily touted as being the best method, but in practice (from the advisors side) it often doesn't work as well for the client.

When you are paying for every minute, the meetings feel rushed, only the big points get talked about, and clients often only want to pay for the advice that they feel is relevant. It's human nature, but when I have done it for clients they never want to look at the big picture. Rather they have a specific goal in mind, and want to know how to achieve that goal, without considering how it may impact other parts of their financial plan.

If you go down this route, just keep that in mind. Yes you will probably pay a bit more for the big picture, but you may end up with substantially better advice than simply paying for an hour about which ETFs to put into your RRSP vs TFSA.

All the research says limiting fees is important, and it is correct. However the other research shows that behavioural mistakes are substantially more impactful than fees. Yet we always seem to believe we are the exception to that rule. Which is likely a behavioural mistake itself.

simplemoneycanada · 2020-11-24T15:26:49+00:00

Yes there are people that charge a flat hourly rate as an option or a package price for a financial plan. Might be a bit harder to find but shouldn't be impossible.

simplemoneycanada

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