Friday, January 30, 2009

Buy, Buy, Buy - Sale ends soon

Working on: research for CBTC
Listening to: silence!
Reading: RITA book #3

This morning has been a mish mosh of work - first I did the banking, then I did some research, I have answered e-mail, had a phone conversation with my husband, and then did more research and sent out a few inquiries. I still feel a little shy sending out an e-mail introducing myself and asking for research help. But I am nearly always glad I've done it, so I bite my lips and hit the send button - like I did this morning. At least I am getting better at navigating the Canadian Forces site. :-)

But this post is really about a very boring subject - MONEY. Some of the phone and e-mail convos this morning have been about the new tax free savings accounts available to Canadians. It's a very cool new development. You can deposit 5k a year into this account, and pay no tax on the dividends. You can open one as a mutual fund account, or a GIC, or cash. Either way, you do not pay capital gains on any interest earned. If you do not use the whole amount in a year, it carries over. So if I put in 3k this year, next year I could put in 7. If I put in five but took out two, next year I could replace that 2k and add 5 more. In theory, in twenty years I could have 100k that I could draw upon completely tax free, as opposed to registered funds which provide the tax break now but you pay tax on when you withdraw.

Will I use this as a long term savings? Probably not. BUT it is a fantastic way to put money away and keep it liquid.

I then received an e-mail from our financial planner with some general info and I e-mailed him back, as, like everyone else on the planet, the economy is a major topic right now.

You know, things are tough. We see it all over. People are losing their jobs. Their homes. Their savings. The headlines are full of how tough things are. Am I personally feeling it? A little. Not so much in my day to day life. We can still buy groceries, we cringe at the heating bill, and yes, we think twice before spending huge amounts of money. But through it all, my overall feeling is that of prudent optimism. When things look bad I think there is value in looking beyond the NOW, even though sometimes beyond feels very very far away.

There are times I feel guilty for talking about investing when there are so many who don't have enough to live on. But then...if I invest, I am boosting the economy. This is a good thing. And the truth is, right now I can invest and buy scads of units at bargain basement prices. If you ever wanted to buy low...this is the time people.

As my planner said in his reply: I too am optimistic and trying to encourage as many clients to your way of thinking as I can - buy buy buy, sale ending soon!

Shirley Jump did a post on propping up the economy on Romancing the Blog the other day and I loved what Kimber Ann said in her comments about being greedy when people are fearful and fearful when people are greedy. If you can manage it, I truly believe the silver lining in this financial mess is the opportunity it can pose.

On the flip side of that...I cannot forget that there are many struggling, so please when you're buying, put a little in the food bank jar. One of the hardest hit areas during a downturn is charities.

Food for thought....

2 comments:

  1. Hey Donna - I came over to see what your title was because it didn't show up on my BlogList this morning.

    And you give me free fantastic financial advice. Wow! Even to someone who's just been told her daughter's braces cost 1200 now and 185/month for the next 3 yrs. Ouch!

    I hadn't heard about the new savings accounts - probably b/c I don't listen to the news anymore - so thank you for that.

    Really glad to know the writing's paying off - or at least I'm assuming since you have so many copies out in other languages and you should be rec'g royalties now - finally, eh?

    Have a great day.

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  2. Well, I didn't say I was investing a LOT. LOL I do wish I had more I could squirrel away. But it is nice to earn even a small income these days, as it makes a big difference to our family. I was a SAHM before selling. And being paid irregularly probably helps. We don't count on that money to live on.

    I may as well save now - braces are in my imminent future. Within the next few years for sure. And my dd has no idea of the appointment in store for her next month...*insert evil mom laugh*

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