Phantasmix Stock Market Blog

Yes, there is such a thing as good tax news!

In addition to lowering GST rate from 6% to 5%, effective January 1, 2008:

The GST/HST threshold for quarterly instalment payments will be increased from $1,500 to $3,000. If you are an annual filer whose net tax for a fiscal year is less than $3,000, you will not need to make quarterly instalment payments throughout the next fiscal year. – Revenue Canada

Don’t let the word “increased” scare you. This is actually good news! Our GST payable (after deductions) is typically between $3-5K, which easily exceeded the $1,500 threshold. We were forced to either do one big prepayment before filing the GST return so the tax payable would be under $1,500, or suffer through the quarterly instalment payments.

Instalments are not a problem, really, but they are a hassle. And if you’re late with one of the instalments, you’ll be penalized. You’re potentially setting yourself up for 3 penalty occasions a year. I always opted for the prepayment option, which is a much smaller hassle: just 1 extra check and 1 extra form to fill out.

This year we have a bunch more ITC’s (input tax credits), so the GST payable may very well be right under the $3,000 threshold.

In conclusion, while this change doesn’t directly mean tax savings, this little change has the potential to make lives a bit easier.

You can invest to either maximize profits (by concentrating, my current strategy) or preserve your wealth (by diversifying).

A well-diversified portfolio should include exposure to all 10 major sectors of the economy:

• Oil & Gas - Oil & Gas Producers; Oil Equipment, Services & Distribution
• Basic Materials - Chemicals, Basic Resources (Forestry & Paper, Industrial Metals, Mining)
• Industrials - Construction & Materials; Industrial Goods & Services
• Consumer Goods - Automobiles & Parts; Food & Beverage; Personal & Household Goods (Household Goods, Leisure Goods, Personal Goods, Tobacco)
• Health Care - Health Care Equipment & Services; Pharmaceuticals & Biotechnology
• Consumer Services - Retail; Media; Travel & Leisure
• Telecommunications - fixed and mobile
• Utilities - Electricity; Gas, Water & Multiutilities
• Financials - Banks; Insurance; Financial Services
• Technology - Software & Computer Services; Technology Hardware & Equipment

“Resolutions” is really a very big word, my goals are not very ambitious. Smoking/food habits/fitness are pretty much under control, it’s an ongoing improvement process with no clear end result. In 2008 I’ll aim to improve my productivity and improve the quality of my spare time via these:

1. Take at least 2 weeks of vacation (preferably away from Toronto)
For most people vacation is something they take for granted, not something to strive for. We find it hard to take 2 weeks off for a “formal” vacation every year. Vacations take time to plan, so there’s the laziness factor. Then, there are “control freak” issues since I’m just unable to let things go and want to be there for the clients (which has really spoiled them to an incredible degree, don’t recommend it). And third, since we have the luxury of taking time off whenever we need it, usually 2-3 days, burn-out creeps up slowly, not on a regular annual basis.

2. Watch TV maximum 2 hours per day
This includes watching DVD’s which is what I’ve been doing lately. Waiting through the commercials is such an aweful waste of time. Even if I’m usually in a listening mode and rarely sit still to watch anything, 2 hours per day of TV means about 30-40 minutes of commercials, or about 180 hours of commercials a year. That’s more than a typical work month!

3. Email less but with more substance
Email eats up 1-2 hours of my time a day, and I don’t get paid for it. I’m getting email-weary. Calling and chatting is much more pleasant and somehow takes less effort. And I think it also builds better relationships and more meaningful connections than email unless you take time to write out deep conversation-style letters.

4. Be kinder to people and complain less
Yes, this is also a productivity goal in a way.

“I have learned through bitter experience the one supreme lesson to conserve my anger, and as heat conserved is transmuted into energy, even so our anger controlled can be transmuted into a power which can move the world.” — Gandhi