Standard & Poors has devised an excellent list of "dividend aristocrats," which have a long history of paying steadily increasing cash flows to their shareholders. Currently, the list contains over 50 names, I have listed 20 of them below, taking care to eliminate a number of the US financial companies from the list due to our abundance of financial names in Canada:
1 3M Company
2 Abbott Labs
3 AFLAC Inc.
4 ADM Archer-Daniels-Midland
5 Automatic Data Processing Inc.
6 Avery Dennison Corp.
7 BB&T Corporation
8 Becton, Dickinson
9 Century Telephone
10 Clorox Co.
11 Coca Cola Co.
12 Consolidated Edison
13 Dover Corp.
14 Emerson Electric
15 Exxon Mobil Corp.
16 Family Dollar Stores
17 JNJ Johnson & Johnson
18 Kimberly-Clark
19 Lilly (Eli) & Co.
20 McDonald's Corp.
More information on the Dividend Aristocrats can be found at:
http://www2.standardandpoors.com/portal/site/sp/en/us/page.topic/indices_dai/2,3,2,2,0,0,0,0,0,0,0,0,0,0,0,0.html
Friday, April 10, 2009
Saturday, April 4, 2009
Canadian Dividend Growth.
Given the importance of rising dividend income in your portfolio, below is a list of Canadian stocks with a great record of increasing their payments to you:
Bank of Montreal
IGM Financial
TransCanada Corporation
Great West Lifeco
Bank of Nova Scotia
Enbridge
Royal Bank of Canada
Toronto-Dominion Bank
Fortis
Manulife Financial
Toromont
RIOCAN Real Estate Trust
Canadian National Railway
The large number of financial stocks in the above list brings to attention the limited scope of the Canadian marketplace. It is, therefore, important to look outside of Canada as well. In my next post, I will highlight some great names from south of the border as well. Outside of the American financial industry of course : )
Bank of Montreal
IGM Financial
TransCanada Corporation
Great West Lifeco
Bank of Nova Scotia
Enbridge
Royal Bank of Canada
Toronto-Dominion Bank
Fortis
Manulife Financial
Toromont
RIOCAN Real Estate Trust
Canadian National Railway
The large number of financial stocks in the above list brings to attention the limited scope of the Canadian marketplace. It is, therefore, important to look outside of Canada as well. In my next post, I will highlight some great names from south of the border as well. Outside of the American financial industry of course : )
Monday, March 30, 2009
Recession Proof Stocks.
Afraid that the economy might not rebound any time soon. How about investing in some companies with businesses that will keep taking money from people long after unemployment has reared its ugly head.
Typically, the tobacco stocks have always been stalwarts during tough times, how about Altria, ticker MO (NYSE). With a dividend yield above 7 percent, it sure pays you to wait for a recovery.
Food and beverage stocks usually help to fend off the bear as well. Kraft, symbol KFT (NYSE), or Saputo, SAP (TSE) are wise choices, as is Coca-Cola, KO (NYSE).
Lastly, a cheap luxury should do your portfolio some good as well. Try Hershey's, HSY in New York. People's didn't stop buying their delights even during the Great Depression.
Typically, the tobacco stocks have always been stalwarts during tough times, how about Altria, ticker MO (NYSE). With a dividend yield above 7 percent, it sure pays you to wait for a recovery.
Food and beverage stocks usually help to fend off the bear as well. Kraft, symbol KFT (NYSE), or Saputo, SAP (TSE) are wise choices, as is Coca-Cola, KO (NYSE).
Lastly, a cheap luxury should do your portfolio some good as well. Try Hershey's, HSY in New York. People's didn't stop buying their delights even during the Great Depression.
Friday, February 13, 2009
The Financial Review Checklist.
#1 The 10% Rule - Pay Yourself First.
#2 Protect Your Finances With Insurance - The Correct Type and Amount.
#3 Get a Will - Know the Executor.
#4 Take Advantage of your RRSP - The 10% Rule is a Minimum.
#5 Debt Reduction & Good versus Bad Debt - Reduce debt service
payments on "bad debt" to no more than 10% of income.
#6 Own or Rent. - Is it better to own the property or rent and invest
the difference?
#7 Do not pay more taxes than necessary. - Invest and save for a
higher after-tax return.
#8 RESP - Take advantage of the free government grant. Aim for between
$2000-$4000 per child per year.
#9 Develop an Estate Plan Before it is too Late - Ensure that
everything is as beneficial for your survivors as possible.
#10 Ensure you own the Right Type and Mix of Investments - Asset Allocation.
#2 Protect Your Finances With Insurance - The Correct Type and Amount.
#3 Get a Will - Know the Executor.
#4 Take Advantage of your RRSP - The 10% Rule is a Minimum.
#5 Debt Reduction & Good versus Bad Debt - Reduce debt service
payments on "bad debt" to no more than 10% of income.
#6 Own or Rent. - Is it better to own the property or rent and invest
the difference?
#7 Do not pay more taxes than necessary. - Invest and save for a
higher after-tax return.
#8 RESP - Take advantage of the free government grant. Aim for between
$2000-$4000 per child per year.
#9 Develop an Estate Plan Before it is too Late - Ensure that
everything is as beneficial for your survivors as possible.
#10 Ensure you own the Right Type and Mix of Investments - Asset Allocation.
Friday, January 23, 2009
Tax Deductions Regarding Your Investments.
You can claim the following carrying charges and interest you paid to earn income from investments:
- Fees to manage or take care of your investments (other than administration fees you paid for your registered retirement savings plan or registered retirement income fund),including safety deposit box charges.
- Fees to have someone complete your tax return but only if:
you had income from a business or property;
accounting was a usual part of the operations of your business or property; and
you did not use the amounts claimed to reduce the business or property income you reported. - Most interest you pay on money you borrow for investment purposes, but generally only as long as you use it to try to earn investment income, including interest and dividends. However, if the only earnings your investment can produce are capital gains, you cannot claim the interest you paid.
For more information on this topic, go to: http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/ncm-tx/rtrn/cmpltng/ddctns/lns206-236/221/menu-eng.html
The Smith Manoeuvre.
Does the "Smith Manoeuvre" Work, and is it a Good Idea?
The Smith Manoeuvre has been talked about in the national newspapers and all over Internet message boards for some time now. It is an attempt to financially engineer your personal finances to make the interest that one pays on their mortgage somehow tax deductible, thus transforming bad debt, into "good debt," as many bloggers have put it. The way this works is by taking advantage of the fact that the Canada Revenue Agency allows interest on an investment loan to be deducted from one's taxes
How to implement the strategy?
Get a home equity line of credit (HELOC). This allows you to borrow against the equity in your house each month as you pay off the principle. The more you pay off, the more you can borrow.
Since interest on money borrowed to invest is tax-deductible, you can then invest the borrowed money to generate returns in a non-registered investment account. If you are in Ontario's highest marginal tax bracket, you will save over forty cents in taxes, for each dollar in interest you pay. Chopping the cost of your loan by a wide margin.
What happens if your investments decline in value? You still owe the money, so make sure that any investments you do buy are well-diversified, and low-risk in nature... ie., stick with either blue-chip dividend paying equities or investment-grade bonds. The rate of return in your investments will have to be above your after-tax cost of borrowing the money, which should not be all too difficult in the present climate going forward. However, if interest rates on your VARIABLE (meaning it will fluctuate) line of credit increases to an uncomfortable level, it is best to pay off the loan to avoid a disaster scenario... Picture trying to invest to outpace interest on a 15% loan... remember the 80's.
Therefore, the strategy works, and yes, it is a good idea. But only if a number of assumptions hold true. Mainly, interest rates on the loan should be comparable to a low-risk rate of return, and you do not let it get out of hand... Do not get greedy and bet the farm just because your investments appear to be doing well for the time being, inevitably you will hit a hiccup.
To read more on this topic in general:
http://www.theglobeandmail.com/servlet/story/GAM.20090122.RCESTNICK22/TPStory/TPComment
The Smith Manoeuvre has been talked about in the national newspapers and all over Internet message boards for some time now. It is an attempt to financially engineer your personal finances to make the interest that one pays on their mortgage somehow tax deductible, thus transforming bad debt, into "good debt," as many bloggers have put it. The way this works is by taking advantage of the fact that the Canada Revenue Agency allows interest on an investment loan to be deducted from one's taxes
How to implement the strategy?
Get a home equity line of credit (HELOC). This allows you to borrow against the equity in your house each month as you pay off the principle. The more you pay off, the more you can borrow.
Since interest on money borrowed to invest is tax-deductible, you can then invest the borrowed money to generate returns in a non-registered investment account. If you are in Ontario's highest marginal tax bracket, you will save over forty cents in taxes, for each dollar in interest you pay. Chopping the cost of your loan by a wide margin.
What happens if your investments decline in value? You still owe the money, so make sure that any investments you do buy are well-diversified, and low-risk in nature... ie., stick with either blue-chip dividend paying equities or investment-grade bonds. The rate of return in your investments will have to be above your after-tax cost of borrowing the money, which should not be all too difficult in the present climate going forward. However, if interest rates on your VARIABLE (meaning it will fluctuate) line of credit increases to an uncomfortable level, it is best to pay off the loan to avoid a disaster scenario... Picture trying to invest to outpace interest on a 15% loan... remember the 80's.
Therefore, the strategy works, and yes, it is a good idea. But only if a number of assumptions hold true. Mainly, interest rates on the loan should be comparable to a low-risk rate of return, and you do not let it get out of hand... Do not get greedy and bet the farm just because your investments appear to be doing well for the time being, inevitably you will hit a hiccup.
To read more on this topic in general:
http://www.theglobeandmail.com/servlet/story/GAM.20090122.RCESTNICK22/TPStory/TPComment
Monday, January 19, 2009
Current Tax Rates in Canada
Current Federal and Ontario Tax Rates:
Federal
15% on the first $38,832 of taxable income.
22% on the next $38,832 of taxable income (on the portion of taxable income between $38,832 and $77,664).
26% on the next $48,600 of taxable income (on the portion of taxable income between $77,664 and $126,264).
29% of taxable income over $126,264.
Ontario
6.05% on the first $36,848 of taxable income, +9.15% on the next $36,850, +11.16% on the amount over $73,698.
For those earning over $126,264 in Ontario, that is over 40%! Dividends and capital gains sure are a lot better than working for a living : )
For more info go to: http://www.cra-arc.gc.ca/tx/ndvdls/fq/txrts-eng.html
Federal
15% on the first $38,832 of taxable income.
22% on the next $38,832 of taxable income (on the portion of taxable income between $38,832 and $77,664).
26% on the next $48,600 of taxable income (on the portion of taxable income between $77,664 and $126,264).
29% of taxable income over $126,264.
Ontario
6.05% on the first $36,848 of taxable income, +9.15% on the next $36,850, +11.16% on the amount over $73,698.
For those earning over $126,264 in Ontario, that is over 40%! Dividends and capital gains sure are a lot better than working for a living : )
For more info go to: http://www.cra-arc.gc.ca/tx/ndvdls/fq/txrts-eng.html
The Most Expensive Cities in the World
The Top Ten Most Expensive Cities in the World:
1) Moscow
2) Tokyo
3) London
4) Oslo
5) Seoul
6) Hong Kong
7) Copenhagen
8) Geneva
9) Zurich
10) Milan
New York City is not until # 22
Toronto is # 54
Calgary is # 66
Montréal is # 72
To read more go to: http://www.finfacts.ie/costofliving.htm
1) Moscow
2) Tokyo
3) London
4) Oslo
5) Seoul
6) Hong Kong
7) Copenhagen
8) Geneva
9) Zurich
10) Milan
New York City is not until # 22
Toronto is # 54
Calgary is # 66
Montréal is # 72
To read more go to: http://www.finfacts.ie/costofliving.htm
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