All Forum Posts by: Michael Masters

You could always invest directly in the funds rather than going through the manager of funds. This link gets you to the "fund facts" document where you can see the top 10 investments: https://www.fidelity.ca/cs/Satellite/doc/FF_UGBP_B_en.pdf Here's are those top 10 investments: TOP TEN INVESTMENTS (FEBRUARY 28, 2019) 1 Fidelity Global Bond Investment Trust 18.8% 2 Fidelity Canadian Bond Fund 9.2% 3 Fidelity Emerging Markets Fund 8.7% 4 Fidelity U.S. All Cap Fund 8.2% 5 Fidelity International Growth Investment Trust 8.2% 6 Fidelity Canadian Growth Company Fund 5.2% 7 Fidelity Global Intrinsic Value Investment Trust 4.8% 8 Fidelity U.S. Focused Stock Fund 4.6% 9 Fidelity Canadian Disciplined Equity Fund 4.3% 10 Fidelity True North Fund 3.0% Total percentage of top 10 investments 75.1% Buy these directly and you can avoid some of the additional management charges. Of course, this may not be ideal if buying 10 funds instead of 1 is too troublesome.

@Connie Chan

I have a pool at my personal residence and it had a heater that was there when we moved in. I’ve used that heater maybe 6 times in 7 seasons. Very expensive to run.

I bought bubble cover and it not only heats the pool but also stops evaporation which reduces the water bill.

No to heater, yes to solar bubble cover.

@Leah Stuever

Thanks for the suggestion. I’ve heard of this before but had forgotten. I will definitely check it out.

@Raphael Collazo

I think cap rates won’t rise until interest rates do. As long as borrowing costs are low, investors can still make acceptable returns with lower cap rates.

When will the Fed go back to raising rates? Probably not until next year or later.

What a bunch of garbage. It’s not like we’ve got discussions where landlords are hoping for a recession.

Oh wait, never mind.

;-)

Originally posted by @David Greiner:

@Joe Splitrock

We live in the most prosperous country during the most prosperous time in history. Everyone has a computer. In their pocket...

Why is the depression rate so high?

You answered your own question: people are depressed because everyone has a computer in their pocket. When I take the my dog to the park I purposely leave my cell phone at home and just enjoy some quiet time.

I'd prefer a nice little increase in inflation so I can increase my rents with my main expenses (mortgages) staying flat! Nothing too crazy, just like 5% or so!

My son, who is 14, recently told me he wants to learn more about investing. Not just real estate, but all opportunities (in fact, I'd rather start with stock investing).

Does anyone know any good starter books?  The "for Dummies" books are good but are there any others?

Originally posted by @Matt Ferch:

Originally posted by @Dominick Austria:

@Matt Ferch If you were to leave your job or be laid off, the 401(k) loan will be due in full by the tax return filing date. If you do not pay the loan back, then this will be considered an early distribution. You will assess a 10% penalty on the balance. I know you probably do not forsee leaving your job, but I think that should be taken into consideration as well. There is more risk associated with the 401(k) loan as opposed to a regular loan.

I discussed this with the 401(k) administrator (Voya) and was told that if I left, I would just continue making payments, the only difference would be instead of it coming directly out of my check it would be payments that I would make as if it were another bill. 

Your 401k administrator is wrong, you will have to pay it back by October 15th of the year following your departure from your company.  October 15th is the filing deadline for taxes after you request a 6-month extension.  So if you left your job on January 15, 2020 then you would have to pay off the loan by October 15, 2021.  This is not an option for your company to decide, it is a 401k rule.

I took out a 401k loan for a real estate purchase last year so I have given it some thought.  I'll give a fuller answer later but for now here are the tax implications:

(1) You are not losing out tax-wise on the principle from taking out a 401k loan.  You are borrowing $50k and putting $50k back in, so no loss there.  Yes, you will eventually pay taxes on this amount when you take it out but you would have anyway.

(2) You are losing out tax-wise on the interest you pay.  This will happen when you eventually take it out.  The 6.5% interest you pay in was already taxed elsewhere and now you are putting it into a pre-tax account where it will get taxed a second time.

(3)  Loans from a 401k are NEVER tax-deductible.  Even if you use it for real estate investment, it cannot be claimed as an expense.  Someone above said you can deduct this, they were wrong.  I will find the tax-code and quote it for you later, its a special rule for 401k's. 

More to come later.