Just moving it back up a bit. Some who might find it useful may not have seen it earlier. That amount that a single person can earn without being liable to pay one cent of income tax claimed above is incorrect. The correct figure was $46,345.00. in 2006 ... if solely dividends on Canadian stocks, with no other income, no income tax is payable by a single taxpayer. Have yourselves a lovely late?-winter weekend, everyone. ole joyful

I found that, though I can have certificates issued for mutual fund ownership (no fee), or stocks (about $35. each), I cannot have a stock certificAte issued for an Exchange-Traded Fund (ETF) in Canada. Which means that I cannot use the evidence of ownership of an ETF as security to arrange a line of credit or loan with my bank/credit union, at low rate of interest. I can use it as collateral with the stockbroker who holds the fund, as well as others of my assets, in his electronic data base ... but my experience has usually been that the stockbroker usually charges at least 1% higher rate than at the bank, which is an appreciable difference, when compounded over time. Sometimes I have little asset easily available as ready cash, or that I choose to liquidate now to make available as money in case of an emergency, as I may not like the price available, or the sales commission required. As I sometimes lack available ready-cash, I have a fully-secured Line of Credit, backed by certificates of stocks and mutual funds, to obtain a low rate of interest - currently about 6.25%, but unused at the moment. Then I can use a credit card in an emergency, then use my line of credit to pay off that amount in full before it starts accruing interest, unless the credit card carries 0% rate, which is not the case, as I have had my card for several years. The trouble is that the interest paid on a loan used for an emergency or consumption is almost always not deductible and I prefer to use loans for investment, thus making them deductible. So when I use an emergency loan for emergency, which is seldom deductible, I stop investing for a while and use that part of current income to pay off that non-deductible-interest loan as quickly as possible. Then I start using that regular saving to begin investing again, plus may borrow to invest, if I feel that the situation justifies it. Also, in my Canadian situation most of the time, I can borrow for investing at almost no net cost. Are you familiar with the Rule of 72? Divide 72 by the rate of gain/growth that you are getting and the result will show you the number of years that it will take for your investment to double. Thus, investment return of 6% will double in 12 years ... at 9% will double in 8 years. But it's not the raw figure that counts. If your bond pays 5% and you are in 20% tax bracket, that means that 1% is lost to tax, so your after-tax rate of return is actually 4%. But when your bond matures, you'll get back only the number of dollars invested originally, so those equal-value dollars suffer annual erosion of value due to inflation. If you assume inflation to be 3%, that leaves your effective rate of return at only 1%. Which means that it'll take 72 years for my $1.00 current return on invested asset to become $2.00. I bought a long-term quality Canadian stock 40 years ago for $4.20, that paid me about a dime or so a year in dividend, which is tax-advantaged here. Over the years, it's paid about 3% or so, or about 2.5% after taxes. A few months ago I could have sold that stock for $107.+ per share, and a few months later for about $89.50, and since it recovered to about $101.00, then last Friday dropped to about $96.50. Did I choose ot sell it? Not on your life! It has grown well for me over the years, and is currently a high quality stock. As the stock has grown well over the years, you can see my reasoning when I say that I do not feel the need to make any calculated deduction from current dividend rate to allow for the erosion of value of the basic investment due to inflation. Current after-tax income of 2.5%, divided into 72, shows that those dividends reinvested will double in about 30 years ... to my mind, a lot better than taking 72 years to do it. When I calculated the rate of growth of the stock a while ago, I think that I calculated that to be about 7% compounded. So you can see my reasons for being happy with that investment. That's one of my better ones - one of my equity-based mutual funds has taken over 20 years to slightly more than double. I'm not very pleased with the folks who have managed it over the years - and they've changed several times. Good wishes as you pursue your savings and investment program. ole joyful

As sable said above, it is a choice if mutual funds offered under the 401k plan and often stock with the company (employer). When I was working, my employer contributed 50 cents for every dollar I chose to put into my 401k, up to 6% of my salary. Bingo...I immediately made 50% on my money, but there were stipulations. That 50% was not really mine until I had my account for 5 years I believe and became fully vested. The 50% that they 'gave' me was in the form of company stock, GTE or Contel at the time. These funds are NOT in the investor's control. Once your money is in, you're allowing someone else to make decisions for you--and trusting that they're as concerned about your future as you are (unreasonable, right?). Not to mention--they aren't as safe as we've been led to believe. There are people already who have LOST their investments in these instruments. Not a common thing, but it is possible. Are you speaking of 401Ks? Did those who lost everything maybe choose to put all their eggs into one basket, by just holding company stock in their 401?...not a good thing at all. All 401k that I know of, have a choice of investments to choose from...see link from my post above. The employee controls what funds their money is in within the 401, and can change the allocation at any time. Some employees just choose to do an equal mix of things...say 10 funds, putting 10% into each of them. Others maybe choose a 1/3 mix of aggressive, moderate, and conservative. Placing one's savings, whatever it is, 401, sep, IRA, is not for those who do not understand the market and its many ups and downs. Because of that, some will lose sleep over what appears to be lost, even if it is just temporarily. About 30 years years ago, I remember my (company) stock climbing a good bit in one day. I made $5,000 in one day! Boy was I ecstatic! When it later came down, did I lose money? No. Did I really make $5000 that day it climbed so much? No. I only would have made the money if I had chosen to sell it while it was up. It later came down some, went up some, came down some, etc, and has served me well to this day with its nice dividends. Often times one loses on a stock, or fund, if they choose or must sell when the market (stock or that fund) is down. Sue

jane ny, So far, my annual tax bill has been low. Partly because I don't have a large number of investmetns, and partly because I seldom sell any so have not had to answer to the Canada Revenue Agency on the increase in value ... ... and won't, until I either sell them - or die - neither of which I intend to do, this week or next. However, there's another possibility, detailed below, which triggers a capital gain - but not at a time of my choice. With regard to distributions from my equity-based mutual funds (which most of mine are) they are re-invested, and I pay tax on those amounts annually - but at varying rates. I goofed - I should have kept track of the annual amounts over the years, which is over 20 years for some of them, for I need those amounts to add to the amounts originally invested in order to calculate my adjusted cost base, which I need when I sell them (or die, at which time is is deemed that I sold all of that kind of stuff the day before, so become tax-liable on the whole of it in that year ... which my executor has to figure out). I deduct that amount from the value at the time, in order to calculate the amount of my capital gain - taxable, but at a reduced rate. And if I give the certificates to a charity, there is no tax on the capital gain on that portion of my asset. As for foreign-based stocks, on some of them I am taxed in the originating country, and usually there is a tax treaty with Canada and I get a credit here with regard to that amount; if they are U.S.-based companies, I must declare full amount here and can claim credit with regard to that amount withheld and paid to the foreign country - I used to find that for $3.00 paid to I.R.S., I'd get about a $2.00 credit from the Canada Revenue Agency. When I own Canadian stocks that pay annual dividends, I pay a much reduced rate on those dividends, at that time. For some of them, they have a Dividend Reinvestment Plan (which I have not used, but should have). In that case, I need to keep track of annual payments which were used to buy more shares, to calculate my adjusted cost base when I sell them. When I sell a stock, I need to deduct the amount that I paid (adjusted cost base), in order to calculate the capital gain, then I pay tax at regular rate on half of that amount. I've been wondering whether I should sell some, then buy them back (or of a similar company) in order to crystallize the capital gains now, and be taxed now, but at a lower rate, as I'll be taxed at top rate on a substantial portion of that year's income, on death. And the residue of my tax-deferred retirement accounts (I had to begin to liquidate them, beginning at age 70, at a specified minimum amount annually, which precentage increases annually till age 90) will all be added into income in the year of death. However - there'd be brokerage fees to sell, then when I re-buy. And the amount paid in tax would no longer be available to invest. However ... in this year, one investment that I'd wondered about selling, as I'd owned it for a number of years, was involved in a reorganization, such that it would be deemed a sale, so I'll be taxable on that capital gain this year. Another company was sold, so my shares are (forcibly) luiquidated. And a third company, whose shares I bought earlier this year, was involved in two reorganizationas (one related to the first one that I mentioned) so there'll be capital gain involved with that one, as well. All in one year. Drat!!! So - I guess that I'd better start finding money, looking toward writing a cheque of substantial size to the Canada Revenue Agency at the end of next April. Wish me luck! One advantage, though, of buying stocks whose value rises and not selling them for a sustantial period, is that I don't become tax-liable on the increase until I sell (or get sold involuntarily) (or die) so I achieve tax deferral, which achieves one of the major purposes of a tax-deferred investment account, but without the restrictions. ole joyful Hope this helps.