Note: I received a free copy of this book so in this post I shared my thoughts about it. There’s no affiliate link in this post.
In the second part of my post Canadian Tax Courses: Online and In-Class, I mentioned IFSE Institute on which you can take online classes relevant to finance such as investing and life insurance.
Days later I had a free copy of Tax-efficient Investing for Canadians in the mail.
This is my first book review with the actual book given to me. Another milestone for me as a blogger. I’ll venture into personal finance in this post because of how important it is to manage our finances regardless of your residential status in Canada.
Who is This Book For
This book is not for a newbie in investing. I mean, yes, you can dive straight to Chapter 9 which is about Investment Vehicles.
Still, I think it would be best for you to start with the classic finance book like The Wealthy Barber by David Chilton or How to Pay Less and Keep More for Yourself (favourite) by Rob Carrick. These books cover the basics and more, yet you wouldn’t have the feeling of having to take an acid test in the end that could make or break your career.
Speaking of career, those who are serious to take the path of building a career in finance should get this book and also consider taking the online course of IFSE Institute.
It’s a must to have a copy of the book. Highlighting and writing notes on it helped me to follow along and quickly refer to a topic whenever necessary.
Having said that, I think Canadians should read this book at some point in their investing journey preferably before making huge investment.
Tip: Brush up on investment terms (and most importantly fees) before meeting a financial advisor or even simply setting up an investment through an RRSP or TFSA in a Canadian bank.
What I Like About Tax-Efficient Investing
The book has 144 pages. It is a paperback with a non-intimidating size. If it’s a self-help book, it’s definitely a quick read.
But it’s not so what I did is to start at the last chapter, to the front, then somewhere in the middle. That’s the good thing of not reading a novel, you can start at any chapters and still follow along. No need to wonder why the heroine met an unfortunate fate or lost a crown and a kingdom.
The Take-away is the part I love the most. It comes before Chapter 1. This is a quick reference to the important points in the book. You can read this part and decide to run away with it and drop the book. Here’s the gist of the book.
Tax-efficient investing is about maximising after-tax returns, not minimising taxes.
The take-away has seven principles for all types of investors or fund investors:
- Defer the payment of tax on capital gains
- Know your marginal tax rate
- Think of taxes at each stage in the investing process
- Consider your stage in the life cycle
- Be careful where you hold your assets
- Mind your choice of investment vehicle
- Beware psychological traps
This section of the book alone is enough for some, while others want more details.
If you belong in the latter group, you’re somehow quite serious with your finance or likes math. (Or you have an exam for a designation or something. Got it.)
Is this Book for You?
You must have attention to details. Are these words on the job board feel like talking to you? Ponting fingers at you?
You must be one of the people who will keep reading the book way pass The Take-away, as in read the book cover to cover.
I did. But I can’t remember most of it other than I was making wrong assumption about dividends and capital gains. Well I have the book with the notes to go back to in times of confusion, which happened to me most of the time while reading the book.
I get right away some ideas, while sometimes I moved on to the next hoping enlightenment might catch up later on. Based on experience, it is best to read and analyze the book. Pay attention to the sample computations.
No need to rush. Nor delay. Do not leave a lot of time before reading another chapter.
When I finally had the time to read Tax-efficient Investing for Canadians, I finished reading it in two weeks way faster than I did with To Kill a Mocking Bird.
This book is a must-have study companion especially for those who will take the online class on IFSE. For the rest of us, have a peek and take what you need. Some ideas may stick around.
Final Thoughts
Referring to my notes, I decided not to be technical with my reviews, that is, mentioning financial terms that I’ve heard or never known before. I do not endorse myself to throw terms that I cannot explain in layman’s vocabulary.
With this experience, I advise you to skim through contents if you are in a library before borrowing a book.
This will help you assess whether you are prepared to take in such information or go to a beginner’s or advanced book.
As for me, I’m right in the middle. I know basic information to follow along but knew little when it comes to the taxation aspect of investing. All I’m concerned is how to get the highest consistent return. (Is that possible at all.)
Taxation is something that our present selves should pay attention to for our future selves, even if we don’t want to.
Tax-efficient Investing is one of the resources to help you maximize after-tax return. Have you read it and what are your thoughts about it?
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