Another Raise

On February 23rd Transcanada Pipelines announced it had agreed to increase its quarterly dividend from $0.38 to $0.40; and increase of just over 5%.  The new dividend is payable April 30th for stockholders of March 31st record date.   

While a $0.02 quarterly raise won't put me in the Financially Freedom Club quite yet, it will certainly help to get me there faster.

Happy DRIPing!

March 1st, 2010

Today is the last day to make any RRSP contributions for the 2009 tax year. If you are unsure as to whether you need to top up, you can always make a contribution and then have the choice of whether to claim it on your 2009 or 2010 income tax.


As far as where to invest the funds, rather than make a rash decision, just make the contribution and you can decide on where to allocate your funds later when you have time to make an informed decision.  Best to meet with your financial planner to discuss  your individual situation.


Happy Investing!

Changes to Mortgage Financing Rules

Today Canada's Ministry of Finance, Jim Flaherty, announced three new changes to the rules regarding mortgage financing:

1. All borrowers must qualify at the 5 year fixed mortgage rate regardless of whether or not they are taking a lower term or rate;
2. For refinancing, the maximum on owner-occupied homes that can be advanced is 90% versus 95% previously;
3. Minimum downpayment for speculative (non-owner occupied) financing is now 20% for all government backed insured mortgages (e.g. CMHC).

These changes have come about as a means to slow growth in the housing market.  With the current low mortgage rate environment there is some concern that prices and debt levels have increased too fast.  With the threat of increasing rates in the 3rd quarter, consumers may not be able to afford the increase in their mortgage payments (variable rates in particular).  By tightening the requirements for mortgage borrowing, there is hope that Canadians will use their house as a savings vehicle and not a speculative investment.

These changes take place on April 19, 2010.

As an ex-banker, I can only applaud these changes.  I think making individuals have more at stake in their investments (homes) leads to a more stable environment.  On the plus side, should house prices  continue to increase in value, individuals will have more equity (savings).  While on the negative side, should house values decrease, individuals have a 10% cushion before they owe more than the house is worth.  It is much harder to walk away from your home if you have put your own savings into it than if you have borrowed it all. 

The first house we bought was in 1989 during a real estate bubble and 2 years later we walked away with $50K less than what we had paid.  A very hard lesson to learn, but even more costly had we put 5% down because we would have been more than $60K in the hole by the time the dust settled.

Online Tax Preparation

Million Dollar Journey has a new contest that is giving away 10 free copies of  Ufile online tax preparation.  The usual cost is $15.95 but by entering the contest at Million Dollar Journey either by signing up for his newsletter or leaving a comment on his blog you are automatically entered in the contest. 

Contest closes at 5 pm on February 20, 2010 so don't delay in signing up.

Online tax preparation is one of the fastest ways to complete your income taxes especially if you are expecting a refund.

Happy Accounting