Comments on: Live Smith Manoeuvre Example, July update

By: The Financial Blogger

The Financial Blogger — Thu, 12 Jul 2007 10:48:44 +0000

FP, thx for the info!
So if I understand correctly, I pay more in MER to pay less taxes… seems like there is a cost of opportunity to consider!
Cheers,
FB.

By: FourPillars

FourPillars — Wed, 11 Jul 2007 23:58:56 +0000

FB – capital structure or capital class funds have a slightly higher MER but they allow you to switch between different funds in the same structure without incurring a taxable event. I think most, if not all of the big mutual fund companies have them. Generally the class funds are the same funds as their regular products.

Mike

By: The Financial Blogger

The Financial Blogger — Wed, 11 Jul 2007 22:36:18 +0000

Hi Brian,
Honestly, I do not know about capital structure funds. Would you mind elaborating on this?
It seems pretty interesting (any time I can save taxes, I’m in!).

Thx!

By: Brian Poncelet, CFP

Brian Poncelet, CFP — Wed, 11 Jul 2007 06:56:16 +0000

Hello FP,

Are you using capital structure funds, so you don’t have to pay capital gains taxes, when you switch funds?:wink:

By: The Financial Blogger

The Financial Blogger — Fri, 06 Jul 2007 16:16:03 +0000

Hi FP,
Iâ€™ll definitely consider the tax rebate at the end of the year. In the mean time, as I do not receive any cheques until the end of the year, I prefer to use the real cost of interest that affects my cash flow.

Funny remarks on uranium stock . I already have Paladin (PDN.TO) in my regular portfolio. I tend to be more conservative when I leverage.

By: FourPillars

FourPillars — Fri, 06 Jul 2007 12:49:26 +0000

You might want to consider just using the net amount of the interest in your calculation – ie subtract the tax rebate you will get next year.

Why don’t you put all the money in uranium stocks??

Mike