2010 May | Balance Junkie - Part 3

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Taxes: The Missing Step
I don't know if I can live on my income or not - the government won't let me try it.
~ Bob Thaves, "Frank & Ernest"

When I wrote about the 10 Steps to Fiscal Fitness, I may have overlooked one potentially huge factor that can affect your financial health, and that's taxes. Whether it's sales taxes, property taxes, provincial or federal income taxes, a pretty big chunk of our income goes to pay all sorts of levies. Strictly speaking, I guess taxes aren't really a step to financial security on their own, but good tax management ...
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GIC or Savings Account?
I recently had two reasons to look up the going rates on GICs and savings accounts. I thought I'd share what I found with you today and raise the question: Is it worth it to put cash into a 5-year GIC when some savings accounts are paying almost as much while offering the same safety and more liquidity?
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Millionaire Teacher Book Review
To stay out of harm's way financially, we need to build assets, not debts. One of the surest ways to build wealth over a lifetime is to spend far less than you make and intelligently invest the difference. But too many people hurt their financial health by failing to differentiate between their "wants" and their "needs."
~ Andrew Hallam, Millionaire Teacher

If you're a novice investor wondering how to get started on the road to a worry-free retirement savings fund, I've got the perfect book for you. If you're a seasoned personal finance aficionado, I think you'll find this ...
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TFSA vs. RRSP Duel: Who Wins?
The inability to make a decision has often been passed off as patience.
~ Author Unknown

At this time of year, many Canadians are trying to figure out where to put their savings in order to reap the greatest tax and long term investment advantage. With the introduction of TFSAs, that decision has been complicated a bit. There has been great debate over which are the best investment vehicles to choose for your TFSA and whether RRSPs are a better retirement savings option.

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RRSPs: Taking Money Out
Life is not long, and too much of it must not pass in idle deliberation how it shall be spent.~ Samuel Johnson

Our series on RRSP Basics continues today with some information on how and when to take money out of your RRSP.
Withdrawing Money Before You Retire
The idea behind RRSPs is that you won't be taking any money out until you retire. But as we all know, life happens. Here's how it works if you encounter an emergency where you absolutely need to take some of your money out:
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TFSA: Investment Gains, Withdrawals and Contribution Room
Money often costs too much.
~Ralph Waldo Emerson
Last year I wrote about TFSA Withdrawals, giving some examples of how they work. In the last couple of weeks, however, I've received a lot of questions from readers on how capital growth affects your TFSA contribution room.
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The Law of Diminishing Returns
You can never get enough of what you don't need to make you happy.
~ Eric Hoffer

Remember when you were a kid and you begged, pleaded with, and nagged your parents to buy you something for months on end? You wanted it so badly. It would solve all of your problems and provide you with endless happiness.

When your birthday came along and you finally received the desired treasure, it probably did give you the boost you predicted. But how long was it before that treasure ended up collecting dust somewhere and you moved on to the ...
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TFSA Contribution Limit for 2012
Simplicity is the ultimate sophistication.
~Leonardo DaVinci

Most people have calculated that if the CPI (Consumer Price Index) runs around 2%, that would mean we should exceed the threshold as of 2012. While that looks likely to happen, the CRA hasn't officially announced the 2012 TFSA limit yet. I spoke to someone at CRA last week and they said that the official announcement hasn't come yet, but that it will (obviously) be out by the end of 2011. He advised us to keep watching the CRA website for TFSA updates.
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RRSP vs. Paying Down Debt
Today, there are three kinds of people: the haves, the have-nots, and the have-not-paid- for-what-they-haves.
~ Earl Wilson
RRSPs work best for the haves. The have-nots might be better off starting with TFSAs, and the have-not-paid-for-what-they-haves should pay down debt first. That would pretty much sum up my general view of using RRSPs.
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Financial Outlook for 2012
We are rapidly coming to the point where we can no longer stuff the dirty clothes and toys under the bed. There is no more room. We are going to be forced to actually deal with the mess.
~ John Mauldin, 2012: A Year of Choices

Just a few weeks into 2012, markets have been mostly positive - until Friday's rumours of European downgrades and JP Morgan's disappointing earnings results derailed the enthusiasm. The warm holiday glow of optimism seems to be fading and 2012 is already starting to feel a lot like 2011, with all of ...
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20 Cents from April 2010

By 2 Cents on May 3rd, 2010 | Category: 20 Cents | 3 comments

I can’t believe how quickly April passed! It’s already time for the next edition of 20 Cents. This is a collection of 10 articles from around the web that I thought you might find interesting. Obviously, I can’t highlight every great post, but I point out some good ones each day on Twitter. You can follow me @BalanceJunkie. Happy Monday!

1. Don Sutton at Canadian Business had a great article asking this very timely and poignant question: Will You Be Pulled Under If U.S. Banking Reform Fails?

2. Canadian Capitalist posted Book Review: The Big Short on Michael Lewis’ newest book. It details the events in the mortgage market that lead to the U.S. housing crisis and subsequent economic meltdown. Check out the 60 Minutes video he has embedded at the end of the review. I watched the same [...]

Read on and enjoy … 20 Cents from April 2010

Your Money Ratios Winner & Weekend Reading

By 2 Cents on May 2nd, 2010 | Category: BJ News | Leave a comment

I recently reviewed Your Money Ratios by Charles Farrell and the publisher was kind enough to offer a free copy to one of my readers. If you left a comment on the review, you were entered in the draw. I received 8 comments, so I numbered them from first to eighth. I asked my youngest son to pick a number between 1 and 8 to choose the winner. He chose 7, so Simple Savings will receive the book.

With all that’s happening in the global economy at the moment, it should be a pretty interesting weekend. Meetings are being held in Europe to figure out some way to help Greece manage its untenable debt load. It’s a good time to stay up to date with current events, especially if you have money on the line in the markets.

Still, the types of events that are currently transpiring have [...]

Read on and enjoy … Your Money Ratios Winner & Weekend Reading