Blog Update

I managed to snap a picture of my x-ray. Spiral fracture of the 3rd metacarpal.

Those who follow Loonie Doctor regularly will note that I disappeared from my usual weekly posting in early December. I have had a bit of a blogging set-back due to breaking my left hand while sparring at karate. Apparently, teenager-bones are flexible while middle-aged-man-bones are crunchy. I got a couple of titanium screws put in to fix that.

I did ask for an upgrade to three retractable adamantium blades, but apparently that wasn’t available via our public healthcare system. Needless to say, my typing has suffered. However, I am now out of my splint and rehabbing well.

As described in detail in my recent guest post on Crispy Doc I have a hard time sitting still. So, I have not been idle. A broken had can still hold cards and build hotels on Boardwalk and I have enjoyed time trouncing my family and friends at various games. Further, I have had use of my left thumb that has allowed me to hit <shift> and <ctrl> while building Excel spreadsheets. I finally made progress on some major projects that I will roll out on the blog over the coming months.

Upcoming Plans

Robocorp

One of the common barriers that docs who want to DIY invest face in starting out their portfolio is deciding “what to put where”. There are some great model portfolios on the internet for different account types on an isolated basis. However, a corporate account adds another layer of complexity that is not well discussed. Further, different account types have different strengths and weaknesses.

How do you build your overall portfolio to take best advantage of those accounts while maintaining your overall asset allocation?

Unfortunately, that question and the complexities can cause people to do nothing out of paralysis. Alternately, many just throw up their hands and buy asset allocation ETFs. That accepts the tax efficiency loss in exchange for simplicity. Not a bad trade-off for most people, but it will add up over long periods and particularly when at the drawdown stage. Tax efficiency is also a big deal for those who will butt up against the new passive income tax limits dues to a high income or high savings rate.

Wouldn’t it be cool if there was a tool where you could just enter how much you want to invest in each account type, your desired asset mix, and then it tells you how much of each ETF to buy in each account in a tax-efficient forward-looking way? Now, there is. Robocorp. Stay tuned.

A Tool To Tackle Some Common Questions

It took me well over 100 hours to build and test Robocorp. I will roll out the simplest version first. It is aimed at beginners or those who won’t need to worry about hitting the corporate passive income threshold. There is also a more advanced version with fancier algorithms that may be helpful for those likely to encounter the CCPC passive income limit.

Much of the time was spent testing the performance of the algorithms over up to 35-year time frames with automatic Robo-Rebalancing. That required building a tool that does annual personal and corporate tax calculations plus annual portfolio projections. Times thirty-five!

I am also going to use that tool to explore a number of common conundrums in detail:

  • Salary and RRSP vs Dividends Only For A Corp.
  • Should I increase my salary to get more RRSP room?
  • If I sell my mutual funds and buy low-cost ETFs instead, how long will it take me to make up for the tax hit? I am going to make an online interactive tool for this one.
  • Tax-efficiently investing vs simply using an asset-allocation ETF – does it actually matter much?

Keep on checking in

Even though I haven’t posted in a month, daily traffic to the blog has been picking up nicely. Most of that is via Google searches. So, I just want to say thanks to those that have been sharing Loonie Doctor with their friends and colleagues.

My mission truly is to try and help fellow Canadian high-income professionals improve their financial health. That will ultimately result in more fulfilling careers. For physicians, dentists, or other healthcare professionals – a healthy and happy provider also makes for better patient care. They are all inter-related.

For all physicians, putting our personal financial houses in order and learning to manage our businesses is vital. Empowered by knowledge, some of us may choose to DIY invest and save a bundle. For others who want to outsource, choosing the right advisor that has a pay model that favors us is important. All high-income professionals need to choose the right accountant.

Very few advisors and accountants co-ordinate our investments with our tax planning. So, it is still essential that we learn how our corporate and personal investment accounts work to build a cohesive strategy and bridge the gap between the financial professionals that we enlist. Educated patients get the best care. Physicians as financial clients are no different.

I remain committed to developing high-quality (and hopefully not dead-boring) material to help our community of Canadian high-income professionals in these regards. Thanks for your patience with my recent slow-down and keep on checking-in as I ramp it back up.

Please help us grow by sharing what is going on here with your colleagues (unless you don’t like them in which case keep it a secret).

15 comments

  1. Wahoo! Glad your back, and, you didnโ€™t come empty handed. Canโ€™t wait for the all goodies you mentioned. Robo Corp sounds fantastic:)

  2. Wow Loonie Doc, that is terrible news about your hand. Glad to see you have recovered and getting back to blogging again.

    I can’t wait to see this tool you have built for DIY investors. I can only imagine how much work it must have took to create it and test it before you felt comfortable sharing it with the public.

  3. Happy Belated New Year LD!

    Sorry to hear about your injury. Did you at least win your sparring match? ๐Ÿ™‚

    Looking forward to seeing “Robocorp” in action. This will definitely help a lot of DIY investors.

    All the best in 2019 to you and family!

    DN

  4. Hey LD,

    My hubby and daughter are life long martial artists. They all keep beating each other up (or shall I say practice) weekly.

    I think asset allocation ETFs are tax inefficient outside of a tax free or tax deferred accounts due to premium bonds.

    So many think that there is some magic sauce. But really it is make more, save more and do this consistently.

    Our accountants have many voodoo skills. Mine recommended an estate freeze for us.

  5. Sorry to hear about your injury, LD. That X-ray looks painful. good thing it hasn’t robbed your sense of humour, or maybe it’s opiates ๐Ÿ™‚

    Looking forward to your future posts, the Robocop sounds exciting. I am getting worried about T2’s reaction to wealth tax proposed from our progressive leaders down south.

    1. Yeah. The U.S. has some wealth and estate taxes already, but they have lower income taxes to compensate. Governments everywhere will certainly be on the prowl for more revenue to pay for the interest on the money they’ve already spent. The thing about money is that it is pretty mobile. Especially for the ultra-rich. If they were targeted, their money would disappear. Foreign investment in Canadian companies has already dropped by over 50% since 2015. Our government can’t buy it all to fill that vacuum. Docs and other small business owners don’t have that much money to take ๐Ÿ˜‰ Imbalances usually correct themselves after over and under-shooting. Who knows?
      -LD

  6. Loonie Doc,

    Thank you again for your generous workaholic cutting back post, all the more kind in retrospect since this was the period of your injury and recovery.

    Robocorp sounds intriguing! I realize it is intended as a tool for Canadians. Once you’ve reached proof of concept, do consider developing a U.S.-based equivalent since that may broaden the appeal and the income potential should you elect to monetize it.

    One of many looking forward to great things to come from you,

    CD

    1. Hey Crispy Doc,

      I will eventually make a US version also. Many of the concepts are transferrable. If anything, the US seems more straight forward from a tax standpoint (although that may just reflect ignorance on my part).
      -LD

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