|
Taxes (pg. 5)
|
View this Thread in Original format
| Fir3start3r |
| quote: | Originally posted by rabbitjoker
Dood. Tell me then how I can grow my money (tax deferred) until I retire in a more effective manner than RRSPs??
|
Dood. Real Estate is a great example of this.
| quote: |
The point with RRSPs is this:
Your tax bracket today (or soon) will be much higher than your tax bracket in retirement:
i.e.: If you make $100k+ today you'll paying at least 47% tax. When you retire your house and expenses will be paid off and thus your requirement for income will be much less - and thus your tax bracket will be lower.
Thus today you'll get a bigger bang from contributing to your RSP - since you'll be paying less taxes later.
There is not a more effective means of preparing for retirement than an RSP.
You don't have to trust me on this - but do the math. Taxes are only going down over time, RRSP contribution allowance is only going up, and your income requirement will be lower with age.
Show me the math that NOT contributing to an RSP makes more sense than not.
|
RRSP/RSPs are great for sheltering one's income, cause after all, it's all about saving it from being eaten by the tax man.
But lets not forget taking in account that inflation doubles every 10 years.
I'm not saying RRSPs/RSPs are bad; not at all.
In fact I applaude anyone that's actually doing something about their retirement.
The government expects us to live on 2/3 of our present day salary when we retire. Of that, 1/3 comes from CPP, 1/3 from Company Pension Plans (yea right...), and 1/3 from our vast savings...
By the time you and I retire, CPP with be none existant once the baby boomers start retiring in the next 7 years or so and personal debt is at an all time high here in Canada, (Source) yet we continue on like we always have in our personal finances, why??
Because we're still using Industrial Age thinking in a new Information Age world.
There has to be a change and it starts with learning about our own personal finances (even the basics).
| quote: |
Oh, and I've bought and read "rich dad, poor dad". Concepts are good - but the advice is 100,000 foot view on something that needs a 1000 foot view.
You can invest on a 100,000 foot view - but I'm interested in making money (which requires a 1000 foot view).
I agree about the educating of yourself about your finances - but some "get rich, simple science" book isn't going to do it.
|
But have you read the series? (especially the book I mention above; it's a real eye opener).
That's just the basics with a little background.
Making money isn't about a short term thinking, it's about long term, continual wealth that doesn't stop after one retires.
Good debate btw. :D |
|
|
| Crazy Serb |
| quote: | Originally posted by rabbitjoker
Dood. Tell me then how I can grow my money (tax deferred) until I retire in a more effective manner than RRSPs??
|
Yeah, Real Estate is a great example... buy a house, rent it out to 2-3 people, collect the rent, pay off the mortgage and expenses and have a few hundred left over each month, tax free.
| quote: | Originally posted by rabbitjoker
Oh, and I've bought and read "rich dad, poor dad". Concepts are good - but the advice is 100,000 foot view on something that needs a 1000 foot view.
You can invest on a 100,000 foot view - but I'm interested in making money (which requires a 1000 foot view).
I agree about the educating of yourself about your finances - but some "get rich, simple science" book isn't going to do it. |
Yeah, but have you actually read the book? Even I found the concepts and ideas to be straight forward... if that book didn't make much sense, I'd definitely recommend getting the 2nd and 3rd book in the series, "Cashflow Quadrant" and "Guide to Investing"... |
|
|
| tw1tch |
| quote: | Originally posted by Crazy Serb
Yeah, Real Estate is a great example... buy a house, rent it out to 2-3 people, collect the rent, pay off the mortgage and expenses and have a few hundred left over each month, tax free.
|
Don't forget you can depreciate the house AS it goes up in value. More tax deductions. |
|
|
| Tudo Beleza |
| hey how did you guys and girls do your taxes, yourself or pay someone? As this will be my first year of filing. |
|
|
| Skipper |
You save a TON of money contributing during your high tax bracket years and withdrawing during your low tax bracket years.
And guess what - you don't withdraw all at the same time once you retire. You take it out as you would receive a normal income, so yes, you get taxed. BUT YOU'RE NOT WORKING.
You don't get taxed twice on that savings. Only once, and it's in your retirement years - when your tax bracket is the lowest.
When you're serving me margaritas at my local country club when I'm 70, I will point, and laugh.
Have fun slaving away until you die.
(PS - rental income is NOT tax free.) |
|
|
| Fir3start3r |
| quote: | Originally posted by Tudo Beleza
hey how did you guys and girls do your taxes, yourself or pay someone? As this will be my first year of filing. |
Mine isn't complex enough to get an accountant to do it (yet ;)) so I just go out and buy tax software and then submit via the web for direct deposit; works great! :tongue2 |
|
|
| Skipper |
www.ufile.ca !!
You don't have to buy software. The software is yours to use online. If you make less than $20K/yr it's FREE! (Over 20K is only 12.95!)
I've used it two years in a row - simple and effective. Got my return in 9 days after I sent it in via netfile. |
|
|
| StereoPrincess |
| quote: | Originally posted by Skipper
(PS - rental income is NOT tax free.) |
that's what i was thinking.
that would be sweet and i would be getting a mortgage right now. |
|
|
| Slag |
| quote: | Originally posted by Skipper
When you're serving me margaritas at my local country club when I'm 70, I will point, and laugh.
Have fun slaving away until you die.
|
lol Sarah |
|
|
| tw1tch |
| quote: | Originally posted by Skipper
(PS - rental income is NOT tax free.) |
No, but it is taxed at a significantly lower level than earned income. |
|
|
| tw1tch |
| quote: | Originally posted by Tudo Beleza
hey how did you guys and girls do your taxes, yourself or pay someone? As this will be my first year of filing. |
Having an accountant prepare mine this year. |
|
|
| rabbitjoker |
| quote: | Originally posted by Crazy Serb
Yeah, Real Estate is a great example... buy a house, rent it out to 2-3 people, collect the rent, pay off the mortgage and expenses and have a few hundred left over each month, tax free. |
DOOD - You have to pay taxes on income. Rent would be considered income on your investment (similar to a dividend/distribution).
Yes - you can deduct expenses from that income - but if your expenese = your income (and thus no tax) then you aren't making any money (and nothing is left over).
| quote: | | Yeah, but have you actually read the book? |
I've got the book - and I've read the book. Mm 'kay? Thanks. |
|
|
|
|
