New answers tagged

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The biggest thing that seems to be missing is compounding interest on investments. The sheet just calculates a growth rate of 500% based on "...5% growth over 10 years. Obviously that ignores compounding." -- firstly, that's not how percentages work, secondly it's a very weird thing to gloss over and renders the whole thing pretty close to useless in my mind-...


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The clawback for 2013 is based on your 2013 income. Yet the withholding is based on your 2011 and 2012 income (over the course of the year.) If there is a dramatic change in income from year to year, too much or too little might be with-held -- not as a result of incompetence, but because 2011 and 2012 income didn't predict 2013 income. The paragraph you ...


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A TFSA is probably the best place to hold your money for a short-term savings like that. The issue is that a TFSA is essentially just a bucket that can hold assets-- you can have stocks, bonds mutual funds, GICs etc... inside your TFSA. I believe the question you're asking is what should you invest in that will earn you some interest over that period but ...


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In my country (the United States) they advise to bank on a community bank, because they treat you as family, rather than big banks that see you only as a number ($). A checking account is for convenience - you can pay by using debit card or by check. I stopped using credit cards; we follow what the bible said: "a borrower is a slave to the lender". For ...


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Yes, most bank plans have a required minimum amount to avoid monthly fees. It's about $3000 (minimum balance in a month) to avoid about $10 in monthly fees, or ($5000 for $25, $1500 for $5 etc.. depending on your account). This works out to $120 / $3000 or 4% annual interest, ie. more than your savings account. So always keep at least the minimum balance ...


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Depends on the saving account. A good account yieds 2% and makes a savings account worth having. In this situation your strategy makes since. Earn some dollers before paying off the credit card each month. As long as your credit card charges don't exceed your long term saving goals. I use checking to avoid Reg D's 6 monthly transactions and rarely when ...


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What does this indicate about rate prediction over the next few years? It indicates that the market believes that the near-term interest rate will drop below 2.89% (to bring the average down from 3.49% to 2.89%) over the next 5 years.


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You said, Whenever I see things like this, they are always tied to moving money from your checking to your savings account. The reason why that's the mechanism they're suggesting is because most people treat their checking account as their primary transaction account - they leave their paycheck there, and spend out of it for daily purchases, bills, and ...


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If you submit paperwork documenting your mileage, and you are paid according to the tax code then the money isn't taxable. If your employer gives you money for auto expenses, and you don't have to submit paperwork to prove/document your expenses, then the money is taxable. But if they give you $x per pay period or $y per month, then require you to refund ...


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Don't bother. It's a stunt, and a wasteful one. The whole point of it is emotional: wanting to believe this is your money, blah blah. But money is fungible: there's no difference of this, vs your RRSP loaning to somebody else's mortgage while you borrow from a bank. The RRSP money is tax sheltered, "restricted" money. It's not your money (yet); it's ...


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First to answer your question: Because it is the law. Period. No discussion allowed there - yes, some laws make no sense, but still, that is the reason. DO not like it? Vote for someone who will change it. The reason is that the money there is pre-tax and you are not allowed to USE it for yourself before retirement. Having a mortgage which pays market rate ...


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When you make a RRSP contribution, the amount of the contribution is subtracted in the calculation of the taxible income. For example, the person in the 21% MTR bracket who has an income of $30,000 and makes a contribution of $5,400 has reduced his taxible income from $30,000 to $24,600 (30000 - 5400). The calculation of tax on an income of $24,600 is 21% *...


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When you contribute money to an RRSP you get a refund of the income tax that you paid on it. This is why RRSPs can be thought of as a tax-deferral system, i.e. you don’t pay income tax on it in the present, but you will have to pay it in the future. Many people fixate on this aspect and complain about how they’ll have to pay taxes on their withdrawals at ...


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These are two separate questions— one is about which savings account you max out first, the other is about what funds you put in there. For short-term savings where you will need the funds within 1-5 years max out your TFSA account first. For any long term savings max out your RRSP followed by your TFSA. Note that there are other considerations— e.g. if you ...


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I am in the united States but I would be very surprised that a banking institution would not credit/charge interest on weekend days. Trying to calculate interest would be more complex if they also had account for weekends and holidays. On this site you will see questions about calculating interest. Some want to know if the bank uses the actual number of ...


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I'm guessing you were pre-approved at a Big 6 bank. They are expecting you to find a house that you want to live in that requires no tear-down. I would recommend contacting a mortgage broker and asking them. A mortgage broker knows far more lenders than the Big 6, and can find a lender who is interested in working with you. One way to structure the deal ...


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If the account that you put your shared rent payments into was only used for the purpose of paying rent, and you have proof of those transactions, and of the paying of rent, this should be sufficient in the case of an audit.


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This is actually noted in the fact sheet for the fund: The management fee is equal to the fee paid by the Vanguard fund to Vanguard Investments Canada Inc., and does not include applicable taxes or other fees and expenses of the Vanguard fund. This Vanguard fund invests in underlying Vanguard fund(s) and there shall be no duplication of management fees ...


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No, your MER on VFV is 0.08% the reason why it’s higher than the 0.03% is that if you held the underlying asset VOO you would be subject to foreign withholding fees. You can actually use this to your advantage though by buying VOO in your RRSP (which allows you to waive the foreign withholding fees because it’s a retirement account) and holding VFV in your ...


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Actually this is one of the items that triggers an audit. You list percentage of house used. Sure they have internal checks that can do some self checking. Like a 2500 sq ft home, 2 adults 3 kids and you put down 1/3 the house and half the utilities: that will trigger an audit. If the person was single and did all work from the home. I have always had a room ...


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Most Canadian banks have an account type that allows you to make unlimited free ATM withdrawals and they don’t charge you an annual fee e.g. CIBC smart account. The catch is that you have to maintain a certain minimum balance in your account (in the case of CIBC it’s 3K). If you can maintain that type of balance then all you need to do is switch to the no-...


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I have been audited, but that was after we were incorporated. The business rents part of the house from the humans, who declare the rent as income and deduct hydro, insurance etc for that fraction of the house. The written Canadian rules are very clear that you can do it by square feet, by "one room out of 5 so 20%", or anything else that seems reasonable. ...


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