Invited by a former ag retailer and farmer to conduct an investing workshop, I was once again surprised by how few had heard of the “Rule of 72.” While working through this simple formula someone asked, “Why don’t they teach this in school?”
Tag Archives Registered Retirement Savings Plan
The ‘Rule of 72’: Why don’t they teach this in school?
Investing for Fun & Profit: A couple of important but simple math exercises for those new to investing
A couple looks for a low-tax route to turn their farm into retirement income
With no kids who want to take on the farm, a low-tax exit strategy is needed
A couple we’ll call Chuck, 68, and Liz, 66, farm 1,000 acres in south-central Manitoba. Their all-grain operation is profitable, but they want out. Their children, two middle-aged daughters, are not interested in farming. That leaves the sale of the farm as the best and only way for the couple to quit the business and […] Read more
Long-term U.S. successes, and blemishes
Adding U.S. stocks to your portfolio brings diversification and a chance to profit
Previously, I shared examples from my Canadian portfolio that contributed to long-term investment success. The Canadian market is just three per cent of the world market and isn’t very well diversified, with financial and resource companies dominating. This makes international diversification a key success component. My longest standing stock account is an RRSP. Many years […] Read more
Long-term investment successes… and a few blemishes
Herman VanGenderen reveals the ups (and a few downs) of his stock investing history
Success through simplicity entails buying the right companies and holding them a long time. This reduces stress and workload managing investments, and leads to better outcomes. But do I follow my own advice? My first decade of stock investing was unsuccessful so when I transferred my RRSP into a stock account in 1993, I began […] Read more
The much-maligned RRSP
RRSP’s have a bad reputation lately, but for many investors, they’re a good option
By the time you read this the 2018 Registered Retirement Savings Plan (RRSP) deadline will have come and gone. However, I suspect most readers will have contribution room available, which can be found on your annual income tax “Notice of Assessment.” Many Canadians have tossed the RRSP into the trash bin, favouring the TFSA. I […] Read more
Farm Financial Planner: What to do with farm equity?
With no children and no debt, farming couple needs a wealth transition plan
A couple we’ll call Mark and Susan, both 59, have been farming in south-central Manitoba for three decades. They have had off-farm work too, both in a machine shop Mark owns where Susan does administrative work as an employee. The farm, 1,440 acres valued at $3.45 million, and the off-farm business, organized as a corporation, […] Read more
The most important investment number
The “Rule of 72” is one of the most fundamental principles of investment
One of the most fundamental investment principles is the “Rule of 72.” Understanding this rule is key to understanding investment returns, the benefits of tax-advantaged accounts, and why starting with limited funds can still lead to great outcomes. The year 1972, for those of us old enough to remember, was a year that will forever […] Read more
Farm Financial Planner: Time to decide what to do with the land
After years of renting out the land, this widow is ready to make her next financial choices
In southern Manitoba, a widow we’ll call Eleanor, 73, wants to decide what to do with 420 acres of farmland she inherited two decades ago when her husband died. She never farmed the land, just rented it to a neighbour. Each of her three sons has a successful off-farm career. The decision? What to do […] Read more
Farm Financial Planner: Income issues block couple’s retirement
Working, good investments and selling the land, will fund this couple’s retirement
In south central Manitoba, a farming couple we’ll call Jorg, 59, and his wife, who we’ll call Carole, 57, want to retire. Their 480-acre mixed cattle and grain operation has not been very profitable for many years. To keep the farm going, they have had off-farm jobs, diverting their income to the operation. Now, nearing […] Read more
Farm Financial Planner: Manage assets for farm transition
Asset management solves the risk of heavy tax when couple shifts ownership to their son
In western Manitoba, a couple we’ll call Ezra, 58, and Lucy, 56, operate a third generation family farm with 1,280 acres of feed grains, oilseeds and a herd of 60 beef cows. The farm, with a value of $1.25 million plus $100,000 for the farm house, is profitable, but its future is clouded by the […] Read more
Cyber-Savvy Farmer
