Friday, May 5, 2023

Short Takes: Loosening up on Spending, What Advisors Know, and more

My most recent post is:

Finding a Financial Advisor

Here are some short takes and some weekend reading:

Mr. Money Mustache has decided that he has become too frugal and needs to loosen up.  He’s not alone.  I know many people who spend way below their means, although they are greatly outnumbered by overspenders.  I’ve been told by high-end financial advisors that a high proportion of their clients are underspenders, but that’s an extreme example of survivorship bias.  Underspenders need to learn to spend a little in ways that will make them and others they care about happy.  Sadly, because people tend to embrace arguments they already believe, Mr. Money Mustache’s article is likely to resonate with overspenders more than it reaches underspenders.  Given the reach of his blog hopefully he’ll help a few people with these ideas.

Tom Bradley
explains the many things that nobody knows, but people think financial advisors do know.  He goes on to explain the things that financial advisors should know.  If you have at least $500k invested, you have a chance of finding an advisor who meets Bradley’s standards.  If you have much less, your chances are very low.

The Blunt Bean Counter explains the importance of tracking and documenting the adjusted cost base of an inheritance.  There is a lot of money at stake in capital gains taxes, but not right away, which makes people complacent.  Unfortunately, by the time you’re in a battle with CRA over a 5- or 6-figure sum in extra taxes, it may be too late to find the necessary documentation.

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