Monthly Archives: May 2014

Your tax haven right here in Canada

discover your tax heaven here in Canada
discover your tax heaven here in Canada

Let’s make one thing clear, tax avoidance is legal. Governments waste lots of money, why give them more money to waste? Tax avoidance is finding ways to reduce present and future tax bills.

We all have heard the stories in which rich people take the money to tax havens in order not to pay taxes on their gains. Well, now everyone in Canada has the opportunity to open an account and legally not pay taxes on its gains.

The government of Canada offer you a wonderful opportunity to invest money and not to pay taxes on your gains. You hear that? ZERO taxes on your gains. This wonderful opportunity is called the Tax Free Savings Account (TFSA).

What is a TFSA?

It is a savings account which you can use to make investments such as stocks, bonds, and mutual funds, and the gains from those investments can be withdrawn 100% tax free.

How does it work?

It is as simple as going to your local financial institution and telling the teller that you want to open a TFSA account. You fill out the papers, deposit the money and that is it!

Once the account is open, you have to decide what kind of investment you want to make. You can decide to invests in stocks, bonds, or mutual funds.

You don’t have to be employed to be able to contribute.

You have to be 18 years +

As of 2013 you are allowed to contribute $5,500 per year

The  contributions are cumulative and the system have been operational since 2009. From 2009 to 2012 the limit contribution was $5,000 per year. So if you were to start today, your limit would be $31,000 ( $20,000 from 2009 to 2012 and $11,000 from 2013 to 2014)

You can withdraw money when you want, for whatever reason you want. No explanations to anyone.

If, in a given year, you withdraw some money, you are allowed to redeposit the same amount the following year.

Some strategies.

Remember, the benefit of having a TFSA is that you don’t have to pay taxes on your gains, either interest, dividends or capital gains, so you want to put investments that are highly taxed inside your TFSA. If you have an investment that pays out small returns, like Guaranteed Investment Certificate (GIC) which pays about 1.5% per year, you might as well keep this amount in your regular savings account. However, if you were to have investments that pay around 5% or higher, then a TFSA becomes more interesting. Since interest income is taxed higher than dividends or capital gains, a TFSA is an ideal place for high yield bonds.

I beg you guys, consider this investment vehicle. It is cheaper and safer than opening an offshore account, plus it is the most acceptable tax avoidance vehicle in Canada.


On June 29th we will have our next money talk meeting. We will get together to discuss business, personal finance and self improvement. If you are interested in coming, please send me message.

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Do consumers at luxury brand stores buy more when they feel snubbed?

INatalianterview with Morgan Ward PhD, marketing professor at the Cox School of Business at Southern Methodist University.

Research done by Professor Morgan Ward and Professor Darren Dahl shows that under certain conditions, consumers who feel snubbed by luxury brand salespeople tend to make impulse purchases to show the salesperson that they are able to afford the item.

Highlights of the conversation

About Morgan Ward PhD

  • Born in upstate New York
  • Bachelor of Science in textile and apparel from Cornell University
  • Worked in Retail for Abercrombie & Fitch as a designer and merchandiser
  • PH.D in consumer behavior and MBA in marketing from the University of Texas McCombs School of Business

About the research:

  • The research started with personal observations. Morgan who was a poor student found herself being mistreated or condescended to by sales personnel at luxury boutiques. When snubbed, Morgan’s desire for the luxury brand increased.
  • Informal initial research indicated that many people had the same experience
  • Snobbiness is described by subtle body language or a verbal suggestion to the consumer that they are in the wrong store when the consumer doesn’t meet the profile of a wealthy person.
  • Morgan doesn’t think that sales personnel are being trained to be snobs, they just become snobs over time
  • Luxury brands attract salespeople who identify with the brand.
  • When surrounded by luxury, the salesperson personifies the brand and adopts an elitist attitude and dismisses those who might not look the part of the ideal client.
  • Snubbing clients could increase sales in the short term, but in the long term it creates a long lasting negative feeling towards the brand and the boutique.

Other topics

  • How to protect yourself against great salespeople who make you buy a lot.
  • Working with co-author professor Darren Dahl at the Sauder School of Business in Vancouver Canada.
  • What are students expected to learn in her marketing class.
  • How has marketing changed in the Internet era
  • Questions and Answer from the audience: Jonathan, Lorrie, Brent.
  • What does Morgan do as a hobby

The interview was based on a research entitled: “Should the Devil Sell Prada? Retail Rejection Increases Aspiring Consumers’ Desire for the Brand “which will appear in the October 2014 edition of the Journal of Consumer Research

The many faces of retirement

Senior citizens working at low skill jobs.
Senior citizens working at low skill jobs.

What is your definition of retirement? When we think of retirement, we have this image in our mind of a couple sipping cocktail drinks while their feet are being caressed by the ocean waves. Do you know of anyone who is living this kind of retirement? I don’t!

As with many other fantasies sold to us by advertisers, the illusion of retirement and what really happens when one retires are very different.

Let’s assume that you buy the fantasy, and that, at 65, when you start getting your first pension checks, you decide to go to the Caribbean. How long would you stay there? Two weeks? One month? Three months?

At one time in my life I decided to move to Aruba, a beautiful Dutch island in the Caribbean. After three months of doing all the things that one is supposed to do in paradise, I was bored to death.

Lying in a hammock for 20 years is not my idea of retirement. In fact, it sound like a wasted life.

With our new found vitality, our extended longevity, and all the technological advances, retirement is taking another meaning altogether. People can retire at 65 but are living until age 85. There are millions of things that vital older people can do with their time. People want to feel engaged, useful, active in the community. Retirement does not mean to wait for death in a rocking chair.

When it comes to retirement, three groups of people come to my mind.

  1. Those who don’t want to retire
  2. Those who want to start an encore career or community work
  3. Those who feel stuck in a job but don’t have enough money to quit.

1. For many people, to stop working at 65 is more of a punishment than a reward. Many of the CEOs of North America’s largest corporations are older than 65. Warren Buffett is 83, Donald Trump is 67, Bill Clinton is 67. For some of these people, retirement would be the worst thing that could happen to them. For this group of people, with high marketable skills, their revenue continues increasing at a rapid rate.

2. For another group of people, if they have the means, they will do a dramatic change in their life, such as an encore career or community service. I, for example, have decided to become a writer and a public speaker. My friend Michael Gallagher, who I interviewed not too long ago, has decided to become a writer. Bill Gates has devoted himself to serve the African community and to fight poverty. In the end, even if we can afford to stop working, we want to continue doing something that is meaningful to us, whether we get paid or not.

3. The third group wants to stop working but generally cannot afford to do so. This group has very little savings and their pension payments are not sufficient to pay for their living expenses. Generally they are doing low skill labor for very little pay.

For this group of people, the ideal thing to do would be to enroll in continuing education programs that will enhance their skills. This way, they will be able to find better paying jobs which most likely will be more rewarding.

It would be ideal if the government considers subsidizing continuing education for senior citizens. If these individuals find jobs that are satisfying, they will stay in the workforce longer, they will continue paying income taxes and their medical expenses will be lower.

What will your retirement look like?


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