The disposition effect is an investing bias that refers to our tendency to prematurely sell assets that have made financial gains, while holding on to assets that are losing money. We are driven to sell our winning investments to ensure a profit but are averse to selling losing investments in hopes of turning them into gains. The disposition effect is an investing bias that...
Your financial legacy will be mostly measured by how successful your heirs steward your wealth, after you’re gone. That’s why you should work diligently during your lifetime to prepare them for success. This post describes three ways to codify your legacy to better prepare the next generation for the responsibility of wealth management.
With rising interest rates, some investors should re-consider preferred shares. This post describes what preferred shares are, the different types of preferred shares, and how they might be used by investors.
Investors may wish to harvest capital losses by selling shares and then re-purchasing those shares immediately with a lower cost base. Doing so would result in a tax benefit because investors could use the resulting capital losses to offset capital gains from other parts of their portfolio. But, CRA has closed this loophole by the “superficial loss” rules. To avoid...
Bare trust arrangements can help some investors re-organize their affairs in a way that reduces probate and makes it easier to transfer assets in the future. This post describes what a bare trust is and how it might be used.
A section 85 rollover allows Canadian taxpayers to transfer appreciated property to a taxable corporation without triggering the associated capital gains tax. In other words, a section 85 election allows a taxpayer to defer all or part of the tax consequences that would normally arise on the transfer. This post describes section 85 rollovers and provides two examples of how they might...
When working class entrepreneurs become wealthy, they bring a perspective about wealth much different from those who inherit it. Wealthy inheritors face unique challenges that require distinct approaches to wealth management. This post describes 5 challenges wealthy inheritors face and how to overcome them: Financial AwarenessLifestyle ManagementStewardshipSelf EsteemTrust in Relationships
A private foundation, sometimes called a “family foundation”, is a type of registered charity. Private foundations do not undertake charitable activities directly. Rather, private foundations simply fund other registered charities. Unlike public foundations, private foundations can be controlled by a single individual or connected groups of people. This post describes why investors may want to maintain a private foundation. This post...
Owning some or all your assets in joint ownership with your heirs (your spouse & kids) is common practice for many investors, particularly seniors. The main reasons to hold assets jointly is to avoid probate fees, make the administration of your estate easier/quicker, avoid certain taxes, and provide your heirs with a way to help you manage your finances. This...
Recently, I decided to sell my shares of 3M. I’ve been shareholder for over a decade, which made the decision harder. This post describes my rationale towards making investment decisions based on non-financial (environmental, values) criteria. This post also provides an example of a portfolio faced with a similar decision-making process.
