Monthly Archives: December 2012

Odette Morin

What should you do with your Christmas Bonus cheque if you get one?

What should you do with your Christmas Bonus cheque if you get one? Something smart!

If you have the available RRSP room, it makes sense to direct the bonus to your RRSP instead of receiving the funds in cash. You will save the taxes immediately. The contributions will therefore be bigger than making the contribution after tax. If you do not have RRSP room, consider directing all or some of the funds to your mortgage, other higher interest debts or to your TFSA.

Calling us first would sure be the best thing to do to evaluate your options and their consequences!!

Odette Morin

Smart Holiday spending

This year avoid the Holiday Spending headaches. Be smart, make a list with a budget for each person you plan on buying something for and start early. Last minute shopping will lead you to spend too much.

And do remember that people love YOU not what you give them. Be generous within your means, Spend smart and Be Merry!!

Odette Morin

TFSA limit has been increased from $5000 per year to $5500.

The new limit for 2013 contribution has been increased to $5500. 

Whether you use the Tax-Free Savings account (TFSA) for short-term savings or for your long-term investments, it will be good news to you to be able to shelter another $500 from the tax man. Overtime, it can save you significant taxes especially if you use the TFSA for investments.

If you are not sure whether you should make TFSA or RRSP contribution, visit our blog or drop us a note here. We can help!

Odette Morin

Tax loss selling before the end of the year

It’s the end of the year and time to trigger investment losses if you have any. A capital loss can be a very thing for tax. The losses can be deducted from past gains in the preceding 3 tax years or indefinitely in the future. This is as good as cash.

Don’t be afraid of triggering those losses to benefit from a potential refund or future tax saving. Buy something similar for at least one month and buy back the same investment if you feel you should hold it for the long-term. Selling the investment for at least one month is essential to avoid the “superficial loss rule”.

If any doubt, just ask. We can help but if you are a YOU FIRST client and needed to take advantage of tax loss selling this year, we certainly have already contacted you!

Terry Broaders

Weekly Update

“I Don’t Like Nostalgia Unless It’s Mine” -Lou Reed


Toronto Up – China On The Move

The Toronto stock market closed higher as mining stocks benefited from the release of encouraging Chinese economic data. Elsewhere, the market stalled amid concerns about whether the U.S. can avoid a fiscal crisis at the end of the month. The S&P/TSX composite index was 7.55 points higher at 12,296.72. The Canadian dollar closed down 0.17 of a cent to 101.37 cents US. Chinese stocks surged overnight thanks to an upbeat reading on factory activity in that country.  The Shanghai composite index rallied 4.3 per cent, the most in three years, after the HSBC Flash PMI report came in at 50.9 so far in December, a 14-month high and providing one of the clearest signals yet that the recovery in the Chinese economy is starting to pick up momentum.

U.S. indexes finished in the red as the positive Chinese data was overshadowed by budget talks to stop the automatic imposition of huge spending cuts and tax increases that could plunge the U.S. back into recession. The Dow Jones industrials lost 35.71 points to 13,135.01, the Nasdaq fell 20.83 points to 2,971.33, and the S&P 500 index was off 5.87 points at 1,413.58.  Investors are still reluctant to load up on more equities as negotiations drag on to avert the U.S. “fiscal cliff” of tax hikes and spending cuts set to take hold at the start of January. There continues to be few concrete signs that any deal is imminent. A meeting between House Speaker John Boehner and U.S. President Barack Obama late Thursday was said to be “frank” and the two sides are keeping the lines of communication open. Mr. Obama may have a bit of an upper hand in negotiations given several recent public opinion polls show broad support for his position, and Republicans could get the majority of the blame if a deal isn’t reached.

Market Update as of December 14 2012

The TSX closed at 12296, up 137 points or +1.13% over the past week. YTD the TSX is up 2.9%.
The DOW closed at 13135, down 20 points or -0.15% over the past week.YTD the DOW is up 7.50%.
The S&P closed at 1413, down 5 points or -0.35% over the past week.YTD the S&P is up 12.4%.
The Nasdaq closed at 2971, down 7 points or -0.24% over the past week.YTD the Nasdaq is up 14.1%.


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Six Basic Financial Planning Tips To Review Before New Year 


Sources: Bloomberg; Investment Executive: globeadvisor


Odette Morin

Here are 6 basic financial planning tips to review before the new year:

Tip #1: Get a good financial planner. She or he will be your best investment. A good financial planner will be someone who is a Certified Financial Planner with several years experience working with a team of experts to help you with questions throughout your life. This is someone who can crunch numbers and find solutions. It is rarely black and white. There are many ways to get to your goals. Team up with someone who can highlight the advantages and disadvantages of several scenarios and help you make informed decisions.

Tip #2: When you save for the long-term like retirement, your return needs to at least beat inflation. If you thought that saving in a term deposit is safe. Think again. Term deposits will only pay about 2% currently while inflation is about 3%. Therefore, you are actually loosing 1% per year. Your money looses value overtime and so is your purchasing power. Saving in a GIC or Term deposit gives you a false impression of safety. Invest in good qualify investments to ensure that you beat and exceed inflation otherwise you may find yourself going broke too early in retirement.

Tip #3: Resist drawing from your RRSP even in an emergency situation. Keep your RRSP for long-term accumulation. It is meant to be for retirement and it needs to be there to compound. Keep your long-term money separate from your short-term money. Everyone needs two pots of funds. One to use later in life, the other to use for short-term emergencies or travel or other short-term goals. The long-term money should be invested to beat inflation, the short-term money should be in a high interest savings account away from market risks.

Tip #4: Save 10% of your income for long-term. I know, you have heard this a 100 times. Well, it’s because it is a good rule of thumb. But remember that the older you are, you will likely need to save more. It can vary substantially from one person to another. If you were already smart enough to save a lot or have a pension plan at work, you may not need to save as much. It also depends on your lifestyle and how much of it you want to keep during retirement. To be sure of what YOU need to save, you need to calculate it. Contact us. We can help. You can also go on our website and request an online calculation. But it is never as good as a full planning analysis of your situation.

Tip #5: Are you getting ahead?  Make a habit to update your net worth statement once a year.  December is a good time to do this.  A net worth statement outline your assets and your liability.  The difference equals what you are truly worth.  Did the numbers improved from last year?  Are you growing assets and reducing debts?  Where do you want to be next year?  Looking at the big picture helps the planning process.  It feels awesome and encouraging to confirm our progress.  Make a recurring event in your calendar to update your net worth every December!  If you need a template, contact us.  If you come in for a meeting every year, we will do one for you!

Tip#6: If it is too good to be true, it usually is. This person is going to jail for following a stupid “tax is unconstitutional” scheme”. Sorry, everyone needs to pay tax. That’s how we get to live in this great country with wonderful benefits. There are lots of legal ways to reduce taxes. Play smart and honest. That is the good old time tested way to get ahead.