Summary
The BMO Retirement Institute is proposing to the government to give people more control over their savings. One of the main concerns is the age restriction in the registered retirement savings plan (RRSP). BMO recommends allowing them to choose when to withdraw money, instead of having to convert their RRSPs at the age of 71. They are also proposing to change the tax rates for the income, stating that investment returns should be taxed at the same rate as investment income from other plans. The final suggestion is to increase the maximum contribution limit for the plan.
Connections
This article connects to chapter 16.2 and the registered pension plan deduction. Most employees are enrolled in the registered retirement savings plan (RRSP), which exempts the money saved up in the plan from income taxes. The book leaves out some key points regarding this payroll deduction and gives a very vague description of the plan. The book doesn’t point out that banks are the source that gives out this plan. According to this article, BMO, a bank, wants to give Canadians more control over these savings. Why would BMO want to do this? I think they are simply just trying to make this plan more attractive so more people would open RRSP accounts. More of these accounts lead to more money for the bank’s investments which leads to more revenue, assuming the savings go to the bank.
Reflection
As a future employee myself, I am planning to open an RRSP account, whether my employer requires me to or not. I think this is a good way for me to manage my money and will give me something to live on when I retire in the future. Despite the fact the bank only wants to make revenue off my money, it is hard to ignore the benefits. The removal of the age restrictions could allow workers to keep the savings in the account as long as they want and obtain more savings. The exemption from income taxes is a good addition as well. What surprised me the most was that Canadians did not have full control of these savings. Canadians should have always had control of their savings since it is their money that they earned.
http://www.cbc.ca/consumer/story/2010/04/22/con-bmo-retirement.html
Thursday, April 29, 2010
Sunday, April 11, 2010
GM posts $4.3B US loss
Summary
In the second half of 2009, GM has suffered a $4.3 billion (US) loss. Despite this, GM believes that they can make a profit this year. In the first half of 2009, GM has earned $109 billion. These figures however, cannot be compared to previous years because of the changes in accounting, which allowed GM to revalue their assets. Also, in the beginning portion of 2009, GM stated that they earned $47.1 billion in revenue and $57.5 billion in the second half. GM has also received $52 billion in aid from the US government. The company has promised to pay back $6.7 billion and hopefully before June this year as stated by the new chief financial officer of the company.
Connections
This article relates to chapter 15.3, which talks about ratios. More specifically, this article connects to to the rate of return on net sales ratio. The company made $47.1 billion in the first half of 2009 and $57.5 billion during the second half, resulting in a $10 billion dollar increase in revenue. The performance of the Detroit based company however, cannot be judged based on revenue alone. According to figures stated in the article, the net income % in the first and second half are 231.4% and -7.5% respectively. Upon further research, I have discovered that GM gained $128 billion in reorganization funds. Realistically, without the reorganization gains, GM has a net loss of $19 billion in the first half, which changes up the percentages to -40.3% and -7.5%.
Reflections
Just coming off a near bankruptcy, GM has managed to increase their revenue by 10 billion and the rate of return on sales ratio by 32.8% since the first half of 2009, both of which are more than healthy increases for the company. I think that this is a sign of good things to come for the automotive company. If they can continue to raise their revenue and more importantly, their net income, they can hopefully stay away from bankruptcy. It is clear that no one wants to see GM go bankrupt, including the US government, who has given the company $52 billion in aid. If GM does go into bankruptcy, it will definitely have an impact on the economy, let alone the automotive industry.
http://www.cbc.ca/money/story/2010/04/07/gm-loss.html
In the second half of 2009, GM has suffered a $4.3 billion (US) loss. Despite this, GM believes that they can make a profit this year. In the first half of 2009, GM has earned $109 billion. These figures however, cannot be compared to previous years because of the changes in accounting, which allowed GM to revalue their assets. Also, in the beginning portion of 2009, GM stated that they earned $47.1 billion in revenue and $57.5 billion in the second half. GM has also received $52 billion in aid from the US government. The company has promised to pay back $6.7 billion and hopefully before June this year as stated by the new chief financial officer of the company.
Connections
This article relates to chapter 15.3, which talks about ratios. More specifically, this article connects to to the rate of return on net sales ratio. The company made $47.1 billion in the first half of 2009 and $57.5 billion during the second half, resulting in a $10 billion dollar increase in revenue. The performance of the Detroit based company however, cannot be judged based on revenue alone. According to figures stated in the article, the net income % in the first and second half are 231.4% and -7.5% respectively. Upon further research, I have discovered that GM gained $128 billion in reorganization funds. Realistically, without the reorganization gains, GM has a net loss of $19 billion in the first half, which changes up the percentages to -40.3% and -7.5%.
Reflections
Just coming off a near bankruptcy, GM has managed to increase their revenue by 10 billion and the rate of return on sales ratio by 32.8% since the first half of 2009, both of which are more than healthy increases for the company. I think that this is a sign of good things to come for the automotive company. If they can continue to raise their revenue and more importantly, their net income, they can hopefully stay away from bankruptcy. It is clear that no one wants to see GM go bankrupt, including the US government, who has given the company $52 billion in aid. If GM does go into bankruptcy, it will definitely have an impact on the economy, let alone the automotive industry.
http://www.cbc.ca/money/story/2010/04/07/gm-loss.html
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