You can now add LOANS specifying that you are the lender and "Other” is the borrower. This feature was added recently so you might want to get the latest eBook version and read the "Loans payable to you, your spouse, or your CCPC” section. The interest, and any principal repayments, will go to your Wallet account in the TIME MACHINE.  My understanding is that interest income does not count as earned income so would not add to the RRSP room and we haven’t set up any way to directly contribute interest income to RRSPs. But I suppose you have RRSP room from other sources of income and there are 2 ways the TIME MACHINE can move the money from the Wallet into an RRSP:

1. Put the RRSP at or near the top of your deposit PRIORITIES, so any funds left in the Wallet will go there, up to your RRSP room.

2. You can also set up an AUTOMATIC deposit to the RRSP.  You’ll have to estimate the interest amount you will be receiving when entering that, so that’s a little trickier. The TIME MACHINE results will show you the net amount of payments from the loan, so you can use that to guide you.

The TIME MACHINE will make the deposit as you asked for in AUTOMATIC deposits, but it can make additional deposits to accounts if you still have funds not saved or spent in the year. Those could go to your TFSA if you have TFSA room, and your TFSA is high enough in you deposit PRIORITIES. Set a limit on the deposit PRIORITY for the TFSA to 0, and/or bring it lower in your list of deposit priorities so that extra funds are deposited in one of your other accounts if that is what you want.

You need to add an ACCOUNT, select the type as CCPC  Investment account, the owner will automatically be set to your CCPC once you click submit.  You can have it grow as Cash at 5%  and leave it that, or you can add specific investments to that account as you can for your own. This is advisable to do as the tax treatment and will be different if your CCPC is collecting dividends itself trough stock investments.

It's a Web app. It works on all modern browsers under all Operating Systems.

No there’s nothing like that. It’s easy enough to create free accounts though,

and you can direct them to get the sample plan https://www.moneyreadyapp.ca/sampleplan

Make sure you enter your current contribution room in the screens that show up from the TIME MACHINE, right before you actually run the TIME MACHINE. You will see the contributions as deposits to the RRSP accounts in the results.

You can enter planned contributions as AUTOMATIC SAVINGS to those accounts and they will be made (up to your contribution room) but you don’t have to. If you have the room and money  at the end of the year in the TIME MACHINE, deposits will be made to according to your PRIORITIES for deposits, so you can put the RRSPs high up in priorities. Again. you will see the contributions as deposits to the RRSP accounts in the results.

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You are entering them correctly. However you have to realize what the TM is doing. At maturity, if not renewed,  it sells the GIC, but it does not delete it, it’s value is set to 0, and maturity set to null. The money goes into the Cash investment of the account. At the end of the year, it rebalances the account that held the GIC. Your GICs are each in their own account, which are set to 100% fixed-income allocation, since the GIC is fixed-income, it puts the money there, essentially reinvesting it.

Now that may seem odd way to do it, but that is the difficulty with my model that lets you track investments. It realizes that these are your investments today, and knows it may not be your investments in the future, but that when you replace them you will do so with similar ones in terms of rates and asset allocations for the accounts they are in. I’ve been thinking about writing a blog about that.

To remove the expired GICs, you need to take the money out of the accounts they are in. You can move the accounts higher on the Withdrawal priorities so they are emptied first if you need money. Or to guarantee the withdrawal, you can set an Automatic withdrawal for -100% of  the account balance with start and end date on the maturity date. You would also set Deposit Priority limits to 0 to make sure no money gets deposited there if you ever have a surplus at the end of the year.

I call all fixed-income investments Bonds because they all act the same way, sorry of that confusion.

You’re right, there was an issue with AB. I had missed that the restoring of indexation had been made retroactive for 2022.

I’ve checked the new tax calculation of the MRA and for 2022 with 30K interest and 40K of dividends it gets Prov: (AB) $1,568.60.

This includes the Climate incentive of $490, so without it, it’s $2058.60. Taxtips.ca says $2056 but they tend to round before each calculation.

I can see the rules not allowing some dividends depending on the notional accounts, but if you have the revenues, then it should be able to pay out a Salary. To pay the salary, the program checks that there are enough retained earnings or corporate account balances it can draw from. To prevent a circular calculation, it uses the previous year’s retained earnings, because the current year retained earning are not yet calculated (and depend on the salary paid out).

In your scenario, the revenues don’t start until 2023, the same as salary, so it limits the payout in 2023 to what’s in the corporate account. After that it’s fine because 2023 earnings can pay the 2024 salary etc…

We can't easily fix this problem because of the circularity of the retained earnings calculation as mentioned, and the additional complication that any salary paid will add to personal taxes.

In the meantime, now you know how it works, can you start the revenues earlier?

Yes I understand. I put it on my to do list. Thanks

It’s a good article to start thinking about taxes and inflation and how they affect your returns, but obviously I don’t agree with just adjusting your rates of return (the “shorthand metric” at the end), that is way too simplistic and downright misleading. He also misses some points about taxable accounts, many people do.

Yes the dividends are taxed, so that’s a haircut, but if you’re a low income Canadian invest your non-registered portfolio in Canadian stocks, the dividend tax credit can be a boon. If you’re high income, avoid dividend paying stocks, go for growth in non-registered accounts. That growth is tax-free until you sell, and you get the capital gains exemption when you do. That tax break is lost in registered accounts. 

Anyway, not so simple, but luckily Canadians have the MoneyReady App  Maybe I should write a blog post..

There is some reason to my madness for presenting it this way. It is part of my aim of trying users to think in terms of cash-flow like the TIME MACHINE does. So Gross income is all your external sources of income. From that you pay your expenses and taxes. If there’s money left over you save it, if you have a deficit you need to make withdrawals. I don’t think of those withdrawals as income because it’s your money! Unlike actual income from a salary or pension, you have complete control over that spending. Increasing your spending (or taxes!)  should not make you feel richer because you increased your “Gross Income”. It hurts more to see these withdrawals as spending rather than income, but that is what they are.  People generally have no problem with my view of it before retirement, they realize withdrawals are for spending then, but they don’t like it after retirement. 

Now it’s just semantics really, I’m not so attached to it as I sounds. The best argument against my view I think is that withdrawals made from accounts include growth and income earned from your investments and thus could be called income.

Ok, that was my speech for the day, that was fun for me, I hope you enjoyed it! Mostly it allowed me to procrastinate for a few minutes on the on the hard problem of making the reports clearer. It’s hard because I don’t want to confuse users with the changes, don’t want to add columns here as the table is already too big, and it needs stay backwards compatible so that old runs are still comparable.

Here’s what I’m thinking for the TIME TABLE which I think can make both of us happy given what you suggested and my constraints:

1. Rename GROSS INCOME to EXTERNAL INCOME, same calculation.

2. Remove NET INCOME

This removes tax-sounding terms which are kind of misleading here. For a tax calculation you should really look at the year report.

3. Add ACCOUNT WITHDRAWALS. This would be the sum of account withdrawals from all accounts (but excluding Wallets which are external. I’m tempted to call this INTERNAL INCOME but I won’t :)

4. Move TAXES to after ACCOUNT WITHDRAWALS. Same total tax calculation.

Essentially you get: …  EXTERNAL INCOME, ACCOUNT WITHDRAWALS, TAXES, SPENDING, SAVINGS, NET WORTH ...

I think I can make these changes retroactive for backward compatibility in comparing old runs.

Only one graph is affected, I could change it to Net total income and Spending. Net total income being external + withdrawals - taxes.

Then there’s the year reports, and the big report but those won’t require much change. I already added the "Foreign taxes paid” to the year report, unfortunately that is not retroactive.

Thanks for your thoughts and suggestions, sorry for using you as a sounding board!

Yes I made some changes in reports to clear up confusion. “GROSS INCOME” is now called “EXTERNAL INCOME”. No changes to calculation.

Retirees were confused that I didn’t consider account withdrawals as income.

“NET INCOME” is gone (it used to be simply gross income - taxes, so easily calculated if you need it). 

It was replaced by ACCOUNT WITHDRAWALS, which is just the sum of all account withdrawals (not Wallets), and loan proceeds.

SAVINGS is now called NET SAVINGS, No change in calculation.

This removes tax-sounding terms which are kind of misleading here. For a tax calculation you should really look at the year report or the tax values in the spreadsheet.

The year reports were also modified, as was the full report for clarity mostly.

The year and full report  has an additional tax entry called “foreign taxes paid” when relevant (mostly for my USA expats with IRAs), may add that to the spreadsheet too. I’m handling US withholding taxes on Non-registered investments slightly differently than for the IRA (they are calculated, but not in the reports), so I need to see if those investment withholding taxes could be reported there too for completeness.

Sorry I forgot about you, will try to remember to give you a heads up next time,

It partially went to spending. The account deposits in the report is a net value for the year. That account is first of your list of withdrawal priorities, so if you need money in 2023, it’ll take it from there first.

You will see if you compare a run without that automatic saving with a run with the saving, that your Net worth is increased by a 100k in 2023 with the saving.

Without the deposit, there’s a withdrawal of $36,628 because you need money:

With the saving you get $63,371 instead:

What we call ‘EXTERNAL INCOME’ represents the total of your entered INCOMES, CPP, OAS, and other calculated government benefits (CCB for example), pretax.  It will also include net withdrawals from Wallet account(s) but it does not include withdrawals from other accounts. It does not include investment income and is not used to calculate taxes.

External  income = Net income + Taxes

Net income = Spending + Savings

Savings = sum of all net deposits to accounts

The TM does record the shares value as a deposit to the account on the strike date, it also will increase taxes. This is how external income is calculated:

External income = Net income + Taxes

Net income = Spending + Savings

Savings = sum of all net deposits to all accounts

Savings is increased by the deposit, but decreased by the increased taxes that are paid out from accounts. So the boost in External income you are seeing is the net effect of the share value - taxes. So I agree, very cool!