Another blog from the 6O4

I have been reading a bit on Canada’s new registered disability savings plan (RDSP) which will be available in December of 2008.  Normally, I am not a big fan of registered programs and prefer to keep investments in regular taxable accounts.  I am just not convinced I would pay less tax going with an RRSP over a lifetime.  Withdrawals are classed as regular income as opposed to a 50% inclusion rate on capital gains.  Also, I don’t sell for the annual rebalance, I add new money so tax deferral is a non-issue.  I don’t see the HBP as being an advantage either.  If I choose home ownership, I always have the option of borrowing against a non-registered investment by using margin.  Yes, you pay interest, though quite low at least with Interactive Brokers but I am also not giving up investment gains from selling equity positions but anyways I digress.

I am actually a fan of this plan for the simple reason that the government will be supplementing contributions.  For those within the lowest income bracket (income under $21,000) who contribute $1,500, the government will add a $1,000 bond and a grant of $3,500.  At higher income levels, the amounts are reduced.  Income level requirements will be indexed to inflation, the contributions will not.  To maximize government contributions, the plan should receive minimum contributions for 20 years followed by a 10 year waiting period.  After which point, withdrawals may occur without penalty.  So free money, who can argue with that?

It is not clear yet which brokers will offer this.  I expect the big banks will have offerings.  Hopefully there will be self-directed options as well.  QuestTrade does offer RRSP accounts, hopefully they are able to offer the RDSP as well as they would appear to be the cheapest registered game in town right now.

As of 1-june-2007, users of a BMO debit card can earn Air Miles for their regular purchases. The miles accrue at a rate of 1 mile for every $40 spent cumulatively per month. In another admittedly dated post to this blog, we determined that an Air Mile had a value of $0.13 per mile representing a total return to debit card purchasers of 0.325% on purchases. This doesn’t even take into account that a debit card purchase deducts funds immediately so there is also approximately 1 month of interest given up as compared with the grace-free period offered by credit cards. Thanks BMO but I’ll stick with my 1% cashback credit card.

One interesting feature of PostGres I didn’t previously know about is
cursors. I learned the hard way over the past week that when you do a
select in PHP which returns a large dataset. It gets pulled completely into
memory even though you’re looping over and using one row at a time. So
Linux’s fine OOM killer got a workout and fortunately it did nuke the
correct Apache2 processes.

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Some of our household furniture purchases are made from
The Brick
and we are always asked whether we would
like to “take advantage of one of their financing offers.” The offer can vary
from sale to sale but according to the terms of service, the consumer is
given an amount of time to pay from three months and in return, they charge
an administration fee on top of the actual sale. The fee will vary
depending on the amount of time the consumer chooses to defer payments.

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With so many credit card products offered in Canada these days, it can be
difficult to determine which is the best fit for your particular usage. Does
that annual fee justify the additional rewards points or should I be using a
no-frills product. The following attempts a comparison of some popular
canadian credit card products.

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Seeing as Ottawa has finally come to a dicision not to tax income trusts,
I have decided to open a couple new positions in the sector. At this point,
I am a bit uncertain about oil and gas trusts. True, many of them are
sitting on piles of cash from the year’s high oil price but with many of
them having increased their distributions, if the price of oil falls
substantially, they may not be able to maintain such a high payout.

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