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Crypto is included in Alternative Investments (shows up as OTHER).
Let me think about adding it as a separate asset class in funds and portfolios. I was already thinking of adding Preferred Shares as a separate asset class, as that has also been often requested. We get all kinds of investors.
Why does it even matter? For rebalancing accounts to their target asset allocations, to allow you to set rates automatically according to asset allocation, and for the app to set the default rates when new investments are imported from Wealthica.
Stay tuned.
Yes, for ETFs and Mutual funds, you can select more than one asset Type and Location.
When you first entered the funds, or they came in from Wealthica, we assigned default values based on the information we have from Fundata for what category of fund it is. You can change that default by editing the investment. You'll see two multi-select boxes: one for asset types, and the other for asset locations.
For Asset Types(s) you can choose one or more from Cash, Fixed income (ie bonds), Equities, Alternative investments. There are also Balanced and Target-date types you can choose from, but if you choose either of these, it will ignore any of the other choices. VBAL and VGRO are Balanced funds by default.
You can then combine that with a mix of Asset Location(s). You can pick one or more from Canada, the US, North America, Great Britain, Europe, Japan, China, Asia Pacific, Emerging Markets, International, and Global.
So for VBAL, you would choose Equities and Fixed-income for the Asset Types, and US, Canada, Emerging, and Global for Asset Locations.
That's 2 types and 4 locations so 8 asset classes. When you click Save, a table appears for you to enter the target for each asset class:
It will look like this:
| Asset class | Target % |
|---|---|
| Target % should sum to 100 | 100.00 |
I filled out the table for you with the numbers you gave, but on the forum post, the changes don't stick for some reason.
Just fill it out as you want in the app, and always remember to click Save and Continue.
The MoneyReady App is a web app. It works with any modern browser on any device.
A laptop or a large tablet is preferable.
Note that some versions of the Safari browser have a bug that can cause you to get logged out or send you back to the dashboard. If you have any problems with it, please use a different browser.
Thanks!
This version has my face: https://www.youtube.com/watch?v=98VNxOhUAzo
We've made substantial changes that apply to CCPCs to improve accuracy, clarity, and optimisation. If you have an incorporated small business, read on.
- The first changes you will see are in the CCPC PROFILE. There you will enter the CCPC Owner (you or your spouse). For each of you, and any DEPENDENTS entered, we require their percentage ownership of the company, and if they are allowed to receive dividends before the CCPC owner turns 65 (usually not the case for non-voting shareholders of professional corporations).
- You can also set a date when you want to wind down your CCPC. On that date, CCPC accounts will be liquidated and its loans paid off. Any remaining cash value of any life insurance contracts owned by the CCPC will be received. After the corporate taxes are paid, the CCPC will distribute the remaining cash as dividends in a tax-efficient manner to the shareholders in accordance with their percentage ownership.
- In INCOMEs, you will see 2 additional income types you can add for incomes coming from the CCPC (Optimised Dividends, and Salary and Optimised Dividends). For these, the amount of income from dividends issued by the corporation will be divided into capital dividends, eligible dividends, and non-eligible dividends in a tax-optimized manner to maximize the depletion of notional accounts. If income is still needed after that, for the first option, non-eligible dividends are paid, whereas in the second option, a salary to the CCPC owner will be paid.
- These 2 new income entries can also be Joint with a spouse, and in that case, the dividends paid will be shared equally between the spouses, if the spouse can receive dividends.
- We describe in the eBook how to set up a SCAN to find the level of salary versus dividends to apply that maximizes the estate (including the value of the CCPC) at the death of owner,
- For better accuracy of the current year's calculations, there are additional inputs in the CCPC tax input form to capture the year-to-date gains in your CCPC investment accounts.
- We have clarified the CCPC table headers, and there are now detailed year reports for the CCPC that also include a Sankey cash-flow diagram for each year (just click on the year in the CCPC Time Table). There is also a detailed cash-flow report for all years.
As always, lots of explanations in the eBook and Help pages. If this sounds complicated, well it is. CCPCs are very complicated and you should always consult with professional advisors (accountants and lawyers) that are specialised in this area.
I had a nice chat with Bruce Sellery last week for his podcast:
So great to hear! Thanks
Hi,
Yes of course you can run multiple scenarios, that is what the MoneyReady App is all about! There are no limits to the number of changes you can make to scenarios.
The best way is to run one scenario, and save it by clicking the Save run & Scenario button just below the Timetable result. You’ll give that run a name and you can add comments so you can remember what it’s about. For example you could call you current scenario “Base scenario"
You can then make any changes to your current entries. For your examples:
- a) add an INCOME, not taxable, with start and end date the same date for the lump sum expected as inheritance and/or
- b) add a Property in RealEstate. Just enter your fraction.
- c) Enter the gifts to your sons as EXPENSES (again, with start and end date the same date for the lump sums)
- d) Edit the loan you entered and click Modify loan
- e) Either enter another Property in Real Estate, or just another EXPENSE gift to your son if you are just buying it for him.
You can make each change individually or in combination as you want the new scenario to be, then run it and save it.
Your saved runs will appear in your list of saved runs in your dashboard, and you can restore them. So you can run a), save it, then restore “Base scenario”,
Then make the changes for b) and run that. Then restore Base scenario again, and make change c) & d) for example, run and save that, etc...
You can compare the results of any two scenarios runs side by side, just select any 2 to compare in your list of saved runs.
You will also be able to restore and run them again with updated account values at a later date if you want.
You may want to download the eBook and read the sections on Saving, comparing and restoring scenarios for all the details. Then keep reading the SCANs section to learn how to generate parameter scans that will automatically run multiple scenarios at once for one or more parameters of a scenario.
Have fun with it!
I'm happy to announce we now support permanent LIFE INSURANCE in the MoneyReady App.
We cover Term to 100, Whole Life, and Universal Life. Any of these, plus regular term insurance can also be owned by a CCPC.
We also support collateral LOANS secured by the policies.
Projecting permanent life insurance values in time requires a lot of information, some of which is proprietary to the insurance company and not available. This limits the calculations we can do. However, your insurance advisor can provide you with an Illustration for any scenario you would like to model using their company's software. This includes the source of premiums paying for the policy, and taking policy loans or partial cash-value redemptions of the policy. Their software can handle all the parameters for these flexible and complicated policies to calculate the death benefit, cash value, and adjusted cost basis at any point in the future given their assumed rates of growth and other assumptions. I realise that life insurance Illustrations may be complicated so you may need to discuss them with your insurance advisor.
We have added the ability to upload into the MoneyReady App the information from such illustrations that it needs for the TIME MACHINE. It's a lot of numbers to enter, so we provide a template you can fill in Excel and then paste it in. Once entered, the TIME MACHINE will be able to determine changes in your cash flow, including any tax implications of including the life insurance policy into your financial plan. The TIME MACHINE is limited to that illustration you upload and will follow it to the penny. It will not change it in Simulations or the Optimizer. The best we can do is to stick to what your insurance advisor projects.
I leave you to read the updated eBook and Help pages for details. The LIFE INSURANCE chapter was rewritten from scratch.
Let me know if you have any questions or comments. If you have specific questions about entering your illustration data into the app, please contact me. I may ask you to send me your illustration.
I think you are interpreting the results correctly. You can see that adding a large expense would not surprisingly increase the chance of running out of money in volatile markets.
The Choose your Legacy tool, finds the level of expenses in every year such that you leave a legacy of your choosing AND not have a cash-flow problem, that is not run out of money. However, that is calculated based on the rates you set for investment growth, interest rates, and inflation rates.
The Choose Your Legacy tool can handle those set rates changing in every year, and it is possible to run it on rates coming from the market model for simulations. You can actually do that now. First, in RATES/YIELDS/CURRENCIES you can Set-up new Market Simulation. Then you can choose the option to Run a TIME MACHINE with Market Model Simulation. You will then have the option to run the Choose Your Legacy tool on that run, it will use the same simulated rates.
So I suppose we could run Choose your Legacy on each of 100 simulated runs and then report an average (or median) value for the Legacy EXPENSES to add. Or something like that, as it will take some thought and experimentation to determine how best to report on the results. The Choose your Legacy tool algorithm runs the TIME MACHINE many times itself, and it's not possible to know in advance how many runs it will take. Doing that 100 times could be very slow.
So the short answer is yes, it's possible but not trivial. I will look into it but it could take a while.
The Alternative Minimum Tax is now implemented (federally and for all provinces) and we make it available for MoneyReady App subscribed users only.
The AMT is a separate tax calculation done to make sure that wealthy Canadians that have little or no regular tax to pay due to claimed tax deductions and credits, still have to pay a minimum tax. This has always applied rarely, and it will be even more rarely applicable with the recent changes to the AMT calculation itself, and the recently announced changes to the capital-gains inclusion rate.
Because it applies so rarely, you can set whether to have it calculated it or not in your PREFERENCES. Most of you can leave the feature off, as it will slow down your TIME MACHINE runs. Just turn it on if you are running a scenario where you think it may apply, or if you have made AMT payments in the past.
It will always be calculated for Advisor clients.
If you do choose to have it calculated (and have a valid subscription), you will be able to enter any AMT tax paid in the last 7 years in the tax input screens before running the TIME MACHINE. The TIME MACHINE also calculates any refund of the previous year's AMT payments.
The TIME MACHINE will show a Warning if the tax is applied and the detailed year reports will show you any AMT paid or any AMT carryover applied.
Important change for everyone:
To accommodate the AMT calculation we now need to ask you for the current year's capital losses and the previous year's carried-forward capital losses separately in the tax input screens.
Please treat all tax calculations in the MoneyReady App as approximate as we do not consider everything.
Let me know if you have any questions or issues.
Yes, indeed it does.
You may want to make partial conversions of an RRSP to RRIF at age 65 and until the RRSP is converted. This is because withdrawals from an RRIF are eligible for the pension tax credit and can be split as pension income with your spouse, whereas RRSP withdrawals are not. You can arrange with your RRSP provider to make partial conversions, to withdraw enough from the RRSP for the tax benefits, without converting the full account (which would then force yearly taxable withdrawals). This is automatically implemented in the TIME MACHINE. Withdrawals from an RRSP from age 65 are automatically considered pension income. You may want to force those withdrawals by setting an AUTOMATIC Withdrawal starting the year the account owner turns 65. This also applies to all other RRSP-like account types (GRSPs, DPSPs, DCPPs, and LIRAs).
To speed up analyses like Simulations, Scans, and the CPP/QPP and Withdrawal Optimiser that require many TIME MACHINES runs, we now distribute those runs over several machines so that they are done in parallel. Mileage varies, but our testing has shown the analyes are now 3 to 8 times faster, which is a great improvement. We hire machines on demand just for your own individual jobs, so that only under extreme traffic conditions will they be waiting in queue.
The only downside is that showing you the actual progress of an analysis is a little more complicated, as progress is no longer linear.
You will now see "0% done" at the start as a worker is hired which gets the jobs ready to distribute. You'll then see "Distributing tasks (x% done)" with the x increasing up to 99% as the tasks get distributed to other workers. It could look stuck there for a bit, as it waits for tasks to come back, then you will see "Tasks done (x%)". This last one increases pretty quickly as the tasks come back finished.
Although the analyses are much faster, they can still take some time so please be patient.
Enjoy the long weekend!
The latest Federal budget proposed a higher capital gains inclusion rate for capital gains of 66.67%. This would apply to all capital gains for corporations, and to capital gains above $250,000 for individuals. This is supposed to be applied from June 28, 2024. Many people have asked for its implementation in the app already, and the app applies it for all of 2024 (since April 19, 2024 when we implemented it).
The TIME MACHINE has mostly a one-year resolution. Do not use the app for last-minute tax planning, you should use a tax advisor for that. We will roll back this change if the proposal does not pass although it seems likely to pass. We will be implementing other tax changes announced in the latest federal and provincial budgets in the next few weeks, so you may see slight differences in tax calculations.
You can create an AUTOMATIC WITHDRAWAL.
From the Select Account for deposit/withdrawal dropdown menu, select the RRSP you want to withdraw from.
From the Select Contributor of deposit or recipient of withdrawal dropdown menu, select "Other". Normally taxes are applied to the owner of the account, but making the recipient "Other" will make it not taxed.
Then fill in the amount and the dates to begin and end (same date for a lump sum).
The funds will be taken from the account tax-free and will be considered already spent. It'll show up as "Withdrawal to Other" in the year report.
You can adjust the pension income for that entry in INCOMES.
Thanks, I'm glad you are finding it useful and sleeping soundly! I like to say the app is only as complicated as is your financial situation. That said, it's easy for a financial situation to get complicated quickly given Canada's tax and pension systems. We do try to make it as easy as possible and still be comprehensive and accurate.