Most companies offer a retirement plan and if you are smart you are participating. Company sponsored plans are always a good deal. There are three types of company sponsored plan. There is the defined benefit plan, the defined contribution plan, and the group RRSP plan. The defined benefit plan is rarely offered to non-governmental and non-quasi-governmental (teachers, nurses, etc.) employees. The defined contribution plan and the group RRSP plan are prevalent in the private sector. The standard arrangement is the employee contributes to the plan and the employer matches the contribution up to a maximum. For example, the employee contributes 5% of salary and the company matches. Each ye

I trade with my local grocery store. Yesterday I bought three strip loin steaks for $22. Why did this trade happen? I valued the three strip loan steaks at more than $22 cash and my grocery store valued my $22 cash more than they valued the steaks. Trade is voluntary. I didn't have to buy the steaks and they didn't have to sell them. At a $22 price, we both benefit from the trade. This is true when nations trade. Both sides benefit. There will be winners and losers within each country but both countries are net beneficiaries. There is a much talk in the US about the negatives of trade with threats of ripping up trade agreements. Trade agreements should be updated periodically and t

There are three themes to the website. I’ll state them. Investing in markets is a positive sum game but a zero-sum game around the market return. The ramifications are that active managers in the aggregate add negative value after-cost. The second theme is that cost matters, and matters greatly. Everything else being equal, a 10-basis point cost factor is better than a 100-basis point cost factor and is much better than a 200-basis point cost factor. The third theme is that financial planning and investment management is not difficult if you understand a handful of key concepts and utilize broad market, passively managed ETFs. Robo-advisors are on the rise in Canada and the rest of the

Love him or loath him Trump’s tax package is yet another supply side economic experiment. All other supply side experiments have ended quite well. Both JFK in the early 1960s and Ronald Reagan in the early and mid 1980s slashed personal tax rates across the income spectrum and especially at the highest tax brackets. The economy boomed in both cases. There are many other examples. Trump is doing for the corporation what JFK and Reagan did for the personal side. And, at the same time, he is slashing onerous regulation. Regulation is necessary, but regulation is cost. Excess regulation is excess cost. It is important to understand that corporations do not pay tax. Human beings pay tax.

We got lucky. We bought a home in the GTA 15 years ago. We borrowed $200,000 and paid $250,000 for our small home. The value has grown to $750,000. Seems like a great investment but let’s look at the arithmetic. Growth from $250,000 to $750,000 in 15 years is an average annual rate of return of 7.6%. That is a fantastic rate for an asset that is supposed to be a slow growing, stable, boring investment. But, did we really pay $250,000 for our home? We have 15 years of property tax, interest, maintenance, insurance and other expenses. Adding this to the cost base changes things. We paid about $50,000 in property tax, $50,000 in interest, and about $30,000 in everything else. As an i