Here are my posts for the past two weeks: Email Replies Small Business Here are some short takes and some weekend reading: Preet Banerjee interviews John de Goey who says “there are way too many advisors in the business,” and “we could easily get rid of one-third of all advisors in Canada and not make a ripple in terms of access to advice.” I agree with this. Most financial advisors are paid for their sales effort and not for their advice. The only way to lower Canada’s unreasonably high cost of investing is to lower the total amount of money that goes to advisors and fund managers. This necessarily means there will be fewer advisors. Jason Zweig has 19 questions to ask your financial advisor along with the “correct” answers. While this is an excellent list of questions, few advisors would have the best answers, and those who do would likely only handle wealthy clients. Canadian Couch Potato explains the upcoming change to stock-trading settlement periods. Boomer ...

What do you think of when you hear “small business?” Maybe you think of a roofer who has enough work to employ three helpers. Or maybe you think of a hair-cutting place. Do you ever think of lawyers who make half a million dollars per year and incorporate themselves to defer and reduce their income taxes? Opponents of the Trudeau government’s planned income tax changes for private corporations have been vocal lately. They have a lot to lose. The “tax planning” opportunities using private corporations are very effective at reducing taxes. There are some good arguments on both sides of this debate, but one part of it irks me: referring to incorporated professionals as “small business.” It’s not that this is technically wrong; it’s that it’s deliberately misleading. The public has sympathy for the types of businesses they think of when they hear “small business.” This sympathy dries up quickly if we talk about highly-paid professionals reducing their income taxes. Getting in...

Reader feedback is the best part of writing my blog. But some of the email I get is less welcome. Here is another installment of replies to emails I usually ignore. Dear Brenton, Thank you so much for the chance to register for your lucrative trader service. Your list of 15 triple-digit winners in just 8 months is indeed impressive. If you had started with $10,000 and let it ride through these great picks, you’d now have 736 million dollars! But, I’m puzzled. Now that you’re so wealthy, why do you need me to pay when I register? Sincerely, Michael -------------------- Dear Melanie, I’m so glad that my blog passed the test to join your publishing partners network. One of the tricks I use to keep quality up is that I never run advertorials. If I were to start publishing the “customized and relevant content” you provide, I’m afraid that my blog would then drop below your standards. It seems we’re caught in a catch-22. Sincerely, Michael -------------------- ...

I managed only one post in the past two weeks: Create the Retirement You Really Want Here are some short takes and some weekend reading: Tom Bradley at Steadyhand has a funny and accurate take on a letter from bondholders trying to avoid losses on poor investments by warning the U.S. Fed not to raise interest rates too fast. Preet Banerjee comes back from an extended hiatus to explain asset classes in his latest video. Big Cajun Man found that all of his credit card limits counted against the size of mortgage he could get. Salman Ahmed at Steadyhand has some suggested questions for the guy who brags he earned a 30% return last year. Potato says the advisor vs. adviser distinction is a meaningless distraction from finding good financial advice.

Most retirement books focus strongly on finances and investing, but in Create the Retirement You Really Want , Clay Gillespie looks at a wide range of retirement issues from figuring out what you want to do during retirement to leaving a legacy. Readers are likely to find some topics relevant to improving their own retirements. The book is a mix of standard non-fiction style writing and story-style using hypothetical retirees. Thankfully, the stories get to the points quickly rather than trying to be good fiction. I found this worked well. I would not have had the patience to read longer fictional parts. I was surprised the book contained so little about investing. The hypothetical retirees deal with an advisor who offers three portfolio possibilities with targeted real returns of 2%, 3%, and 4% per year. Apart from varying the allocation to stocks, there was little mention of how these returns would be achieved. I thought it would at least have made sense to discuss the imp...

Here are my posts for the past two weeks: The Behavior Gap You Can’t Have Your Sears Cake and Eat it Too Here are some short takes and some weekend reading: Estate administrator Scott Terrio explains why today’s low mortgage delinquency rate means almost nothing in predicting future mortgage delinquencies. Freakonomics Radio has a very interesting investment podcast called “The Stupidest Thing You can Do With Your Money.” The Blunt Bean Counter explains the Liberal government’s new tax proposals for private corporations. He says “the impact of these proposals is potentially massive,” and “I don't think most small business owners have any idea what is about to hit them.” Financial Services Commission of Ontario explains how to protect yourself when renting a car. Many of us have had that moment of doubt about whether to pay for the rental company’s insurance coverage that often increases the rental cost by 50% or more. This article explains how to get coverage w...

It’s well known that Sears Canada has been having financial trouble for some time. As often happens in these situations, the Sears defined benefit pension plan is underfunded. According to Steven G. Kelman, “Ill-advised government policies” have resulted in former employees getting only “81% of the commuted value of their defined benefit pensions.” What we have here is a tension between trying to keep companies afloat and keeping pension plans fully funded. It’s easy to decide today that Sears should never have been allowed to delay properly funding their pension plan. But, if Sears had been forced to fully fund the plan sooner, they would have gone bankrupt sooner. If we go back to a time when there was still hope to save Sears, few people would have agreed to force Sears into bankruptcy over their pension funding. But allowing sick companies to let their pension obligations slide inevitably leads to some bankrupt companies with underfunded pensions. We can agree that it’s u...