Good personal finance books, like this one
, have really good simple titles. “Stop Working!” by Derek Foster is one of them too. This book inspired me to start investing in stocks. That was about 7 years ago. I’m 34 this year, the same age Derek retired as the “youngest Canadian retiree”. Sadly, I’m not retired yet. But interestingly, indirectly I think it start my career in the Canadian fiancial services industry, since interesting personal finance books like his, made me get interested in the personal finance field (my major in university was something totally different). I read 3 of his books, “Stop Working”, “Lazy Investor”, and “Money for Nothing”, and they are all easy to read, entertaining, and there’s something to learn.
I had forgotten about his strategies for a while (since I’m mainly in cash right now – thinking of becoming a homeowner) until very recently I stumbled upon this videoclip of Derek on BNN with Patricia Lovett-Reid. It looks like he has written 3 more books since then (and his 5th baby on their way – wow! - the video clip is 2009 so maybe he has 10 books and 10 kids!? just kidding). Gotta check it out! As for his strategies – definitely simple to understand, and I’ll discuss how I implemented his strategies and my thoughts on it in my next blog post.
TFSA-successor-holder-cartoon
If you name your spouse the TFSA successor holder upon your death, there may be some tax benefit. Disclaimer: for full details, please consult the CRA page, as anything that has anything to do with the government, often, er, changes.
It seems to depend on couple of factors, but if the deceased account holder’s spouse is named as the “successor holder”. If named as the successor holder, the survivor will become the new holder of the TFSA immediately upon the death of the original holder.
If there was excess contribution to the TFSA (i.e. over-contribution) before death, then there’s more paperwork, so beware! Please consult the CRA site, they have different examples.
Generally speaking, for registered plans like RSP and TFSA, you can name a “beneficiary” – which means it won’t go through the deceased person’s estate. Why do you want to do this? From my understanding, anything that belongs to the estate goes through a legal process called “probate” which means it goes through probate tax – so the estate gets taxed (kinda like a death tax). According to this article by TD Waterhouse, the fee can be as high as 1.4% in British Columbia and 1.5% in Ontario. There are no probate fees for notarial Wills in Quebec and the maximum probate fee payable in Alberta is $400.
So one key recommendation is to make sure you and your family’s registered plan’s beneficiaries/successor holder are set. But I don’t recommend you doing this at the Thanksgiving dinner table…(awkward silence)
Am I doing this if I buy a real estate in Vancouver now?
To buy this image click here.
My boyfriend and I decided to not renew our lease of our lovely apartment in False Creek. We decided that it’s time to move to a crappier apartment for a year to save up more for a down payment, so we can at least pay the 20% down and avoid paying the CHMC insurance(or was it CMHC!? oh the acronyms…). We currently pay about $1700 for a very nice apartment, but we’ll be moving to Burnaby for about $1100, which includes pretty much everything except for cable & internet.
The new place is a cave compared to our current apartment but I became really excited about the thought of becoming a home owner (even though I have no idea what we want or CAN afford). I’ve been renting for all of my 20s and in my early 30s, and it always makes me cringe when I add up the rent cheques I’ve been paying all these years. At the same time, the hot topic of the past 10 years have again seemed to re-surge in cyberspace: HOUSING BUBBLE IN CANADA is going to POP POP POP (insert red neon sign here).
When I immigrated officially to Canada, it was 2005, where people were already saying that a big housing bubble exists and that it’s going to pop anytime. As a renter who watched half of my friends becoming homeowner and starting a family, and the other half (including me) being renters or living at home with parents, I felt better reading blogs like housingpanic and Vancouver Condo Info. But it’s still 2012 and I don’t think I heard the POP! sound yet. Would that ever going to happen?
Then came the recent report from TD Economist Craig Alexander. This seems to have made the media start to talk about the housing bubble again. So it got me start poking around the web with keyword searches like “HOUSING BUBBLE VANCOUVER”, and landed on pages like Greater Fool. Reading the posts and also other reader’s comments, it feels like any first time homebuyers trying to buy now is the Greatest Fool (are they talking about me?)…but then reading other comments on the web like “paying rent is like paying for a dead horse” kind of makes sense too, especially if we’re planning to live at the place for a while. My all-time favourite investor Warren Buffett has been living in the same home he bought 52 years ago for about $32,000. He believes smart ways to own real estate has 3 elements, which are: fixed mortgage, affordable payments and long-term hold.
Sandwiched between two different views about Vancouver’s Real Estate, and as one of the Generation F****d, I’m really not sure what to do!!! If we were to buy soon, are we buying high and going to be selling low, like the above diagram?
The only sure thing, at this time, is that it’ll be interesting to be at a party full of bubble proponents and real estate agents.