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Inflation , TZ3, Interest Rates and #MoneyTalk

Estimated reading time: 5 minutes

Of Inflation, space rock TZ3 and Interest which is most likely to do the most damage? Currently, Inflation and Interest rates are more likely, as TZ3 will miss the Earth by about 5 million kilometres. Rumour has it Pierre Poilievre is planning on firing TZ3 if Interest Rates go any higher (if he becomes PM). Maybe I have that story a little off, still need to confirm that one.

Inflation continues on at about 6.7% with gas prices in Ottawa high (between $1.85 and $1.99 per litre). Interest rates look to be putting a crimp in the “red hot” real estate world, but that remains to be seen.

The Ontario Provincial Election is a topic of conversation. Plenty of muck flying, accusations and outright lies being told (on all sides). Politics need to make everything a red panic button is becoming a bit overdone. The Ontario Party is attempting to add a more American feel to the election. Mercifully it is a relatively short election period.

Some Numbers for the Middle of May

Inflation (year over year March 2022) 6.7%
Bank of Canada Overnight Rate April 13th 1.00%
Unemployment Rate (as of March 2022)5.3%
Real GDP By Expenditure (Q4 2021)(quarterly change)1.6%
The population of Canada (Est Q4 2021)38,526,760
CIBC current prime rate3.20%
BMO current prime rate3.20%
Scotiabank prime lending rate3.20%
TD prime lending rate3.20%
Tangerine prime lending rate3.20%
Some Useful Financial Data for Canadians as of May 13th, 2022

Stay on Topic!

Various folks, including one of the advertising firms I use continue to berate me for not staying on topic. Frankly, I ignore those commentaries, I write about what interests me. With that in mind, I am adding an exciting new section. I would also have to figure out what the main topic of this site is, which might be harder than I think.

Books I Am Reading

Those who know me, know I am actually listening to these books while I commute to the office. Yes, I am an “in the office” kind of guy.

Creativity A Short and Cheerful Guide by John Cleese (Audible)(OPL)

This is an hour-long audiobook or a booklet, so an easy read. It is Mr. Cleese chatting about what he thinks creativity is and how it works. The book reaffirmed a few ideas I had seen about your brain working on things, even when you didn’t think you were. If you really don’t want to waste your time reading this, just watch a YouTube video from 1992, which effectively is the same thing. I am not allowed to include it, so just click here to watch it.

Cheated: The Inside Story of the Astros Scandal and a Colorful History of Sign Stealing (Audible)

An interesting set of allegations about the infamous Astros/MLB cheating scandal of 2018. It is also a very interesting set of stories about alleged cheating (specifically sign stealing) in Major League Baseball throughout the years. There were many examples I was unaware of, so I found them enlightening. If you love baseball, this is worth a read. If you wouldn’t know a spitball from a hairball, you might want to give this one a pass.


The Latest from Me

Had a sudden eruption of writing the past few weeks, we shall see if I can keep up this momentum



Other folks’ writings


Free Banking

Of course, there are plenty of folks that offer free banking


Social Media

When Oligarchs tweet, they really should let their “fixer” see it first. I had bosses that would insinuate this kind of, “you aren’t working hard enough” stupidity. Wonder why no one wanted to work for them?

Rounders is a movie I really liked. It was before the big Poker craze (which might have even caused it). Unfortunately (for Matt Damon), an adage he made has aged far too well.


Random Thoughts from the Past

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If your child has a disability, which has been recognized by the CRA (with a Disability Tax Credit), there are things you can claim along with the DTC. If your child needs to attend a specialized school or needs tutoring, due to their disability. School fees, in specific, can be a considerable expense.

The rules continue to evolve, so here are the latest rules (May 2022)

School for persons with a mental or physical impairment – an appropriately qualified person, such as a medical practitioner or the principal or head of the school, must certify in writing that the equipment, facilities, or staff specially provided by that school are needed because of the person’s physical or mental impairment.

Details of Medical Expense CRA April 2022

I have written about what to include when you appeal for these expenses. It seems now a letter from the school would be good to add to your submission. Remember, the more details explaining how the program helps the child’s disability, the better. This makes it easier it is for the CRA to understand your claim.

A simple letter saying, “I think my kids’ school fees are a medical expense,” will not work with the CRA. It would help if you had detailed explanations of why the school directly helps your child.

  • The RDSP Page is the Overview of all articles I have written about the RDSP (including DTC and other areas).
    • RDSP : Laying the Ground Work (first things first)
      What needs to be done BEFORE you can apply for a Registered Disability Savings Plan? A major aspect of this is the Disability Tax Credit (DTC), make sure you click on this page to get started.
    • RDSP : Working with The Account
      Now that you have succeeded in getting your Disability Tax Credit (DTC) you need to open an RDSP account with a bank or such, but how is that done? It is not as easy as you might think. This page outlines many of the issues that have arisen for my family working with an RDSP account.
    • Disability Tax Related Topics
      Thanks for my RDSP and DTC work I then had to learn a great deal about the tax implications of having a disabled child.
    • Autism Specific Articles
      Being the proud Father of a child on the Autism Spectrum I also ended up writing a great deal about Autism specific things as well.

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Three Solid Ideas For Your HeLOC

Given the rising interest rates, if you have been using your HELOC (Home equity Line of Credit or Secured Line of Credit) for investing or for debt payments, here are 3 solid ideas to do with that account.

  1. Reduce the principal
  2. Pay it Off
  3. Close it

With interest rates rising, paying off debt has now become a solid investment plan. It will pay upwards of 4% in this situation (as of May 2022).

1. Reduce the HELOC Principal

If your HELOC rate is at 4.5%, every dollar you pay to the principal saves you 4.5%. That money stays in your pocket, so it can be used for other things, and it is risk-free. This makes it an excellent investment.

This gem has disappeared for a long time, due to very low-interest rates. With rates now going up, paying off debt is a good investment, again.

2. Pay it Off

This fits in nicely with the Debt is Bad view that I have. This is also a follow-on to (1) Reduce the Principal. Having no debt creates so many choices and options in your life. You can then invest the money you were paying off the HELOC principal with.

3. Close It

This assumes you have achieved (2) by paying the line of credit off. Why close it?

I am confident many financial planners will poo-poo this perspective. I have always found borrowing to invest a risky thing to do, but paying off debt is never risky. You could put that money in a HISA for the moment until you decide what to do with it.

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April Ends, Tax Time, Pandemics and #MoneyTalk

May Day is almost here when the workers will take control of the means of production! The concept of the Oligarch wasn’t well understood by Trotsky, but maybe it is an idea whose time has come?

Who had war in Europe on their 2022 Major Events bingo card? Just when you thought we might have a respite from the Pandemic, life continues to morph. We have the odd concept of nearly full employment, and folks refusing work? Not sure that is completely true, but unemployment is not an issue currently.

The Pandemic may be over in many folks’ eyes, but for me, I continue to lose at least 20% of my team each week to either exposure or actual cases of COVID. We’ll have to live with this? Do I need to have my team 20% over-staffed? Not sure I like this brave new world.

Ottawa lived through the (alleged) Freedom Convoy, and now we have Rolling Thunder coming to visit. No, it is not Bob Dylans’ Rolling Thunder Review or the bombing campaign over Hanoi, it is a group of Motorcyclists that are protesting. I’ll get back to you on the exact topic, one day.

April 29th is the last banking day to pay your taxes (in 2022). If you owe the CRA, time to pay up, or face interest charges and the like. Go pay your taxes, if you can. April 30th is the CRA’s deadline for 2022. Hopefully you won’t get any errors if you log into the CRA web site.

Questrade

Some Numbers for the end of April 2022

Inflation (year over year March 2022) 6.7% ⬆️
Bank of Canada Overnight Rate April 13th 1.00%⬆️
Unemployment Rate (as of March 2022)5.3%⬇️
Real GDP By Expenditure (Q4 2021)(quarterly change)1.6%⬆️
The population of Canada (Est Q4 2021)38,526,760⬆️
CIBC current prime rate3.20%⬆️
BMO current prime rate3.20%⬆️
Scotiabank prime lending rate3.20%⬆️
TD prime lending rate3.20%⬆️
Tangerine prime lending rate3.20%⬆️
Some Useful Financial Data for Canadians as of April 29th, 2022

Interest rates are now in the, isn’t that interesting, period. The bank prime is up 3/4% since January, might be time to lock in?


The Latest from Me

Been a quiet year (2022), due to family issues. I am learning far too much about Wills, Power of Attorneys, Homologation, Dementia, and Quebec law in general. When I find time, I will attempt to elaborate on my financial journey of the past year or so.

  • TD Mutual Funds to Directline? thanks to how the E-series funds were going to be dealt with in TD Mutual Funds, I had to move 2 accounts to Direct Line. I should have done this sooner and both moves were, not without some excitement
  • Retiring at 40 FIRE! as a mathematician I felt I could do a version of a “Math Dad Joke”. Didn’t really cause too much of a stir.
  • Inflation at 6.7% March 2022 in Canada remember all those articles I wrote saying it was coming? Well, it did finally arrive. It does prove even a broken clock is right twice a day.
  • RDSP Grant Entitlement 2022 is another in a series about this information for RDSP holders.
  • Did I mention to pay your taxes? Just a reminder, make sure you pay them, or make arrangements with the CRA.


Other folks’ writings


Social Media for 2022

Sometimes my Twitter Feed has some oldies that folks get interested in.

With the aging of the population, will Dementia and related topics become more important?

How will your finances work if Dementia creeps in?

Random Thoughts from the Past

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RDSP Grant Entitlement Statement 2022

As with each year, we receive a Grant Entitlement Statement for my son’s RDSP. This year is no different, but things may change soon.

Estimated reading time: 2 minutes

RDSP Grant Entitlement 2022

Statement of Grant Entitlement 2022
Statement of Grant Entitlement 2022

As you can see, this is an essential piece of information. I now know that in 2022, I can deposit $1000 in my son’s RDSP, and it will be matched with $1000 in grants.

This amount will increase once my son is over the age of 17 19, as the income they will use to determine the grant will be his income instead of our household income. When he turns 18 19, his grants should be much higher due to his estimated income (based on his income from age 17). (Age is 19, thanks to Ron Malis for correction).

When he turns 18, my son will also have to re-qualify for his Disability Tax Credit (this is due to his DTC expiring at that age). This is what we learned from the last time he had to re-qualify. If he should not get a DTC right away, the rules have changed.

Previous Posts on Grant Entitlements

  • 2021 Statement of Grant Entitlement
  • 2020 Statement of Grant Entitlement
  • 2019 Statement of Grant Entitlement
  • 2018 Grant Discussions
Home » Page 2
When do I get an RDSP Grant Entitlement Statement?

The RDSP recipient will receive an update every year, which outlines how much in Bonds and Grants they will receive every year

Will I get an Entitlement Statement without an RDSP?

No, you need to have a DTC, which then allows you to open an RDSP.

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