Matthew Lekushoff |
India's Plan | TFSAs | Holiday Reading
It's funny to think that one of the biggest financial stories of 2016 could be something most people in North America know little about. On November 8, India's Prime Minister Narendra Modi shockingly eliminated the 500-rupee ($7.30 US) and 1,000-rupee ($14.84 US) notes, which contribute to over 85% of India's money supply. However, Modi will allow the notes to be deposited into bank accounts.
To say this has  inconvenienced much of the Indian population  would be an understatement, especially during the heart of the country's wedding season. The move was part of Modi's plan to attack corruption and unaccounted, un-taxed funds, which are considered to be rampant in India.

The country's long-term plan is to transform from the world's seventh largest economy into the world leader in the digital economy-----  an economy that can be tracked and, more importantly, taxed by the government. I first heard about India's digital economy plan when listening to a Freakonomics podcast, " Why Are We Still Using Cash? " If a personal account of what the country is going through interests you, I have clients travelling in India who  wrote a blog about their financial adventures .
Should this experiment succeed, it's likely other countries, especially those with high levels of corruption, will consider doing the same in the not-so-distant future. This could be the watershed moment when the global digital economy takes its first meaningful steps en route to changing how we use money.

On another note, it's less than a month before the New Year! As of January 1, every Canadian over 18 will be able to add an additional $5,500 to their TFSAs. For those of you who have never contributed to your TFSA, you can currently add $46,500 to it, but that amount will rise to $52,000 once we usher in 2017.
If you've made various contributions and redemptions from your TFSA, contact the CRA or login online to get the official amount. As much as the government is there to work for you, the CRA will have a notable lack of empathy if your calculations are incorrect, and you will be fined.
That's a wrap on 2016! I'd like to wish everyone a happy holiday season and a great start to the New Year!
In the review queue
How Adam Smith Can Change Your Life  by Russ Roberts:  When most people think about Adam Smith, two things come to mind-----   The Wealth of Nations  and the invisible hand . Until recently, his prior book,  The Theory of Moral Sentiments , and its focus on ideas, such as, how to live a moral and virtuous life, had mostly been forgotten. I attempted to read it and found it too difficult to persevere through Smith's writing style. Fortunately, a friend recommended Russ Roberts' book as a more readable way of delving into Smith's most pertinent ideas, while having Roberts' insightful thoughts as an added bonus. If you'd like to learn more about Smith's philosophy on how we can live happier and useful lives, How Adam Smith Can Change Your Life is a great place to start and is far more useful today than you'd think!
Taming the Mammoth: Why You Should Stop Caring What Other People Think  by Tim Urban: A wonderful essay (with fun pictures!) on why many of us worry too often about what others-----  including those we don't like or respect----  think about us. This article offers a very beneficial perspective. 
Great expectations: How to estimate future stock and bond returns when creating a financial plan  by Dan Bortolotti and Raymond Kerzérho: As returns vary from year to year, or even decade to decade, it's difficult to know what our expectations for future portfolio returns should be. In this article, Bortolotti and Kerzérho provide some thoughtful ideas on how to weigh past returns, current valuations, and future environments to come up with more reasonable expectations for future returns.
What Artificial Intelligence Can and Can't Do Right Now by Andrew Ng: You've likely heard a lot about artificial intelligence (AI) over the last year. This article clears up much of what AI can and can't do.
Want to Really Make America Great Again? Stop Reading the News  by Ryan Holiday: "If you wish to improve,"  Epictetus once said , "be content to appear clueless or stupid in extraneous matters." One of the most powerful things we can do in our hyper-connected, 24/7-media world is say: "I don't know." Or, more provocatively: "I don't care." Not about everything of  course -----   just  most things.  Because most things don't matter, and most news stories aren't worth tracking.
For the Bookworm on Your List: 2016 Edition  by Farnam Street: If you're like me and are always looking for the next (or next, next, etc.) book to read, this post is worth your time. Our friends at Farnam Street have created a nice list of not only the books they read over the last few years, but also some recommendations from a number of good sources, such as, Mark Zuckerburg, Bill Gates, and The New York Times.
Going viral: The holiday edition


Matthew Lekushoff, CIMA

Financial Advisor 

Raymond James Ltd.


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