Over the last 9 months, Canadians have become world-leaders in saving. This is a nice contrast to the record high household debt-to-earnings ratios that were so prominently written about not even a year ago. However, the new emphasis on saving might simply reflect the absence of opportunities to spend rather than a true sea-change in people’s personal financial habits. This would mean that our pent-up demand could manifest as tremendous spending when restrictions are lifted. This article gives a terrific outline of how to use this unusual (and hopefully never to be repeated) period to reset your personal financial situation and set yourself up for success.

 

Click here to read the full article on The Globe and Mail

Despite coursework that is entirely online this term, my son opted to return to his university campus for the second year of his degree. He is sharing a “house” (read: glorified slum) with 3 other boys and 4 more young people live in the completely separate, second story unit. This year’s education in cleaning, cooking and basically keeping himself alive may actually be more useful than the coursework itself. Among the skills that he has had to acquire is budgeting for groceries etc. I shared this article with him and it appealed to his young sensibilities. He also enjoyed the ad campaign from The Real Canadian Superstore with the tagline, “Shop Like a Mother(source: Canadian Grocer) although that one was arguably more targeted to my generation with its Heart-inspired guitar riff and it’s spotlight on every bad shopping habit that I have.

 

Click here to read the full article on Daily Hive

I have only purchased one item using a “buy now, pay later” offer. It was a book-case for a television and I was on maternity leave with my son. Money was tight. What was tighter was the feeling in my chest that if I missed the deadline to repay, interest would be charged back to the date of purchase. I decided then and there that it wasn’t worth the bother.

This article provides valuable context in light of the strain that the pandemic has placed on many household’s cash flow. Newer deferred payment options have cropped up and the research sited in the article shows that consumers are spending more if they can pay by instalments over several months. Furthermore some of the retailers that are offering these plans likely have younger client bases who might lack the discipline to repay on time – costing them interest and the integrity of their credit rating.

 

Click here to read the full article on The Globe and Mail

I love to learn about families that have successfully separated and reinvented themselves. This article highlights the key aspect of successful separation: keeping the children’s interests top-of-mind. While not all ex-spouses will spread love and accolades about a new wife, this article shows that when the children and civility are the highest priority, Family 2.0 doesn’t have to be wrought in conflict and contempt.

 

Click here to read the full article on Distractify

Charitable giving has been important to me since my days at The Hospital for Sick Children Foundation in Toronto. The Foundation offered me my first taste of tax-effective charitable giving and estate planning. Working with colleagues and clients who share my love of philanthropy is one of the greatest pleasures of my career. I am privileged to have clients on both sides of the fence: donors and fundraisers. The pandemic has had a very powerful effect on the charitable sector as donations have either dropped considerably (and understandably as a result of job losses and instability) or been diverted to the health-care sector (again, profoundly understandably). With the holiday season quickly approaching, it will be interesting to see whether donors will be as generous and diversified as they have been in the past. This article is an interesting reminder of some of the metrics that can help us to direct our charitable giving.

 

Click here to read the full article on The Financial Post

I attended the 2020 CIFPs National Conference last week. With no budget to discuss, the conference focussed on discussions of the US Federal election and the manners in which the Canadian government will pay for COVID-related stimulus. Before making strategy decisions to ward off possible increases in the capital gains inclusion rate (the portion of a capital gain that is taxable), GST increases and the elimination of the principal residence exemption, consider the argument put forth in this article. The article suggests that as long as interest rates are low, and the government is the primary purchaser of domestic bonds, funding stimulus on borrowed money will help the economy to grow its way out of this very deep and pervasive recession.

 

Click here to read the full article on The Globe and Mail

It’s hard to find opportunities in the pandemic market and few Canadians would look to their vehicles as a source of equity. This article presents an interesting idea on how to take advantage of the difference between the “buyout price” on a leased vehicle (which was established before the pandemic) and the market’s renewed interest in used-car purchases (a reaction to the perceived concern over the spread of the infection on public transit) – presenting a rare opportunity to create equity from a leased vehicle.

 

Click here to read the full article on Forbes

Even phenomenal wealth can be squandered. For example, Michael Jackson – who was arguably the most successful recording artist of all time – died insolvent. An of course, the fact that lotteries are won and lost is the stuff of popular reality television programs.

But once in a while, we learn of a celebrity, industry leader or politician who’s wealth and influence lasts far beyond his or her initial successes. For example, did you know that McDonald’s built is vast share value on the real estate holdings upon which the restaurants are built? Similarly, did you know that the recently departed Eddie Van Halen – guitar impresario – has a very successful line of amplifiers and other specialized equipment? If you have ever wondered what makes some people survive – outwit, outplay and outlast others well beyond their retirements, this article provides some interesting insight.

 

Click here to read the full article on Forbes

When the government of Canada offered retirees the opportunity to reduce their minimum RRIF withdrawal because of investment markets’ reaction to the pandemic, you might recall that I suggested keeping the withdrawal at its usual level. My reasoning was that taking out the same dollar amount requires deregistering more units of a depreciated mutual fund or ETFs which could allow you to reinvest the proceeds in a TFSA or non-registered account. In this strategy, you are essentially pre-paying the tax at a lower rate because of the prevailing market softness.

This article expands on that strategy for small business owners who probably have seen revenues decline or drop off as a result of the pandemic. If your business revenue has suffered in 2020, you may wish to draw out income from other sources (additional dividends from a private corporation or RRSP withdrawals, for example) at a time when your salary is artificially low.

 

Click here to read the full article on Entrepreneur

Many home-owners – especially young ones – still think that they can make money by buying homes, renovating and trading up periodically. There continue to be many arguments for and against this strategy. In support of this strategy is the concern about the future of the principal residence exemption – the rule that exempts the appreciation of one personally-occupied residence per household from capital gains taxes. Home renovations could increase the adjusted cost base of the property in some cases; meaning that renovations could reduce capital gains taxes if the principal residence exemption is changed or rescinded.

Contrary to this renovation strategy is the oft-forgotten yet inevitable costs of selling a home which can be estimated at roughly 10% of the value of the home. These costs of sale typically include: realtor fees (5 – 6% of the home’s value), legal and other fees as well as the actual costs of moving. Historically, home values have increased with inflation despite the perception that home prices outpace inflation. At the current inflation rate of 2% per year, it would take just under 5 years to recoup the costs of selling the home; threatening the utility of this buy, renovate and trade-up strategy.

 

Click here to read the full article on The Star