Plus: Buffett hits the bank buffet March 27, 2023 Sign Up | Made in Canada IN THIS ISSUE Estimated read time: 6 min 🤝 Bitcoin bet 🏛️ Crypto conflict 💵 Tax tips It’s tax season! What’s the best way to celebrate? By getting your taxes done and out of the way, without making any silly mistakes. See the Big Important Story for how. | Wealthsimple THE WEEK IN MARKETS Everything is … fine? Just when we were getting used to the weekly drumbeat of financial-industry panic, last week the world threw us a curveball: no banks had to be rescued, financial stocks steadied (albeit at lower valuations), optimism re-emerged, and only one eccentric wealthy influencer made a US$2 million bet that money would be worthless by summer (see Balaji, below). The rest of the markets rallied: the U.S. S&P finished the week up 1.5%; the tech-heavy Nasdaq was +2.5%; the TSX rose, too, though a bit less since it’s heavy on financials. All three are up on the year. Why the optimism? Mainly because of speculation (hope?) that these banking-system hiccups may be enough to discourage lending, decrease spending, and dampen inflation without further rate hikes. Investors are now betting that central banks will cut interest rates soon, and by a lot (about 1% by year-end in both the U.S. and Canada). Is it still possible to dodge both inflation and a recession before all is said and done? Fingers crossed. THE WEEK IN ONE NUMBER $12 The price one Fido customer paid for sending a single text message while briefly visiting the U.S. The CRTC believes Canada’s mobile carriers are ripping off customers and plans to investigate roaming rates. WHAT HAPPENED LAST WEEK IMPORTANT Inflation deflated. StatsCan released February’s inflation numbers Tuesday. The bad news? Prices are 5.2% higher than a year ago, which is a long way from Tiff’s 2% goal. The good news? That’s down from 5.9% in January, which is the biggest monthly drop since April 2020, back when inflation was just something you did to an air mattress when your friend showed up to visit. Investors see this as good news, especially in terms of when rate cuts will arrive. But best not to inflate your lungs (and hold it in) quite yet. Canadian banks ask for a stronger safety net. As you’ve probably heard a few dozen times lately, the U.S. guarantees at least US$250,000 (CAD$342,000) of funds per account holder at American banks. In Canada, though, that number is CAD$100,000. Well, last week a group of smaller banks asked Ottawa to consider doubling or tripling those protections. A higher limit would make bank runs even less likely, but it comes with a drawback: it could encourage banks to take more risk. Coinbase is about to get a slap on the wrist — or a knife to the heart. On Thursday, America’s largest crypto exchange got what’s called a Wells Notice from the SEC. It basically tells Coinbase some kind of charges are coming, without giving details. Which makes it part professional heads-up, part phone call from Liam Neeson. If the issue is small, it could be easily resolved with a fine. But if it’s big — like say, labelling 90% of the exchange’s offerings illegally traded securities — Coinbase could be fighting for its life. INTERESTING Is Warren Buffett bank shopping? With every bank that fails, new rumours fly about who’s going to swoop in and get a great deal rescue them: JPMorganChase’s Jamie Dimon could buy First Republic; Warren Buffett could buy one (all?) of the others. Both have a ton of money to spend and a habit of actually spending it when others are too scared (see Bank of America and Goldman Sachs for Buffett and Bear Stearns and Washington Mutual for Dimon). Similar crises have been resolved by a combination of two things: the government stepping in (which we’ve seen) and strong players eating the weak (which seems to be in the works). If this one is the same, this could be a sign the crisis is moving into the rearview mirror. Super wealthy crypto influencer bets money will be worthless by summer. Last week in proof that some people are way too rich, former Coinbase bigwig Balaji Srinivasan bet US$2 million that Bitcoin would hit US$1M by mid June. Why? He says hyperinflation — when prices rise by at least 50% per month — is coming. It’s not a smart bet, mathematically (and maybe not a legal one), but Srinivasan doesn’t seem to care. Since he owns so much BTC, he doesn’t need things to go full Weimar Republic. As long as he can stoke fears and drive people to crypto, he stands to make way more than the $2M he’d lose. BlackBerry bets old BlackBerry patents won’t be worthless by summer. The brand that ruined the idea of ever truly leaving the office stopped making its own phones — along with any real revenue — seven years ago. But last week it announced a new plan to bring in cash: selling what’s left of its IP to a company that basically yells “copycat” and sues others for patent infringement. The deal is worth roughly US$200 million (plus up to $700 million more in incentives) and should keep BlackBerry in business at least long enough for the movie to come out. FROM OUR SPONSOR THE FOMO INDEX by Stacey Woods IMPORTANT 🤖 ChatGPT briefly taken down after sharing users’ chat details and taught essential human trait of not being a little blabbermouth. Source 🫢 City of Regina shamefully withdraws sexy new tourism slogans after complaints. Not sure what this means for BC’s upcoming Chilliwack-off. Source 🌕 Rolls Royce building a nuclear reactor on the moon. It’ll be the Rolls Royce of nuclear reactors on the moon. Source 😏 Pornhub’s new owner is an Ottawa private equity firm called Ethical Capital Partners. It’s a lot kinkier than it sounds. Source CRASH & BURN TO THE MOON 🍁 Survey shows Canadians’ satisfaction with Canada down 10% in the last 2 years as everyone became 90% harder to please. Source 🦴 Fitness bro goes viral for eating dog food for protein. It tastes terrible, but his coat’s never been shinier. Source 🐢 A 90-year-old endangered tortoise named Mr. Pickles becomes a father for the first time. Source 🫶 A 92-year-old endangered tortoise named Rupert Murdoch will become a husband for the fifth time. Source WHO CARES WHAT’S UP THIS WEEK Ottawa releases the 2023 federal budget (Tuesday). Finance minister Freeland promises a little relief from inflation and mortgage rates. The First Home Savings Account officially launches (Saturday). You can save up to $40,000, tax free, toward buying your first home — just as soon as the banks are ready. SHARE TLDR WITH YOUR FRIENDS 🤝 Put this link in your group chats, your Slack threads, tattoo it on your back — whatever works for you! THE BIG IMPORTANT STORY TAXES Four Ways to Utterly Wreck Your Tax Season It’s tax time! Sorry to be enthusiastic, because, of course, we’d all rather be doing anything else — shovelling the walk, trying to clean our dog’s teeth with one of those finger scrubbers, whatever. But we’re here to tell you it could actually be worse. There are a few avoidable mistakes that Canadian filers consistently make — and by doing so create stress, cost themselves money, and generally cause financial mayhem come the May 1 filing deadline. Here we lay them out and explain how to avoid them. Mistake #1: Filing late or making unforced errors This might seem obvious, but it’s one of the most common and expensive tax problems: missing the filing deadline carries a painful 5% penalty on whatever you owe, plus 1% for each additional month you’re late. The fine for failing to report all taxable income runs even higher: 50% of the understated tax on top of what you owe. About 55% of Canadian filers get refunds, and you don’t want such penalties to cut into yours. Luckily, the CRA, in all its bureaucratic benevolence, offers payment plans if you can’t cover your full tax bill by the deadline. Which is better than missing the deadline. Mistake #2: Paying an accountant when you could DIY If you own multiple companies or conduct overseas business, you might need an accountant to handle your taxes. Otherwise, your return is probably straightforward enough that you can easily and accurately file it with online tools. Here’s a test: if you used an accountant in the past, punch your old return into a DIY tax software. If you get the same or a similar result, you’ll know how to save yourself $50–$150 this year. Mistake #3: Not saving receipts in a folder Having your receipts together makes filing 1,000 times easier. Our tip: create a folder on your phone, then take photos of your receipts when you get them and file them away. No receipts in 2022? You can work backward. Start by looking at the available tax deductions (e.g., childcare, work expenses), then search your inbox or your online-shopping history for invoices that apply. And please: start saving receipts for 2023! Mistake #4: Not putting money aside if you’re self-employed Freelancers should expect to owe 30% of their annual income in taxes. But what if you’ve been using your spare cash to, say, amass a giant cookie-jar collection? Fortunately for you, self-employed folks enjoy a later filing date — June 15 — so you’ve got time to save. But, just like our advice for Mistake #3, this is an ideal moment to start doing the right thing for 2023. Our hot tip: set up auto bank transfers to pull 30% of your monthly income into an account dedicated to taxes. BONUS TIP: Pay less next year with an RRSP Only about 22% of Canadians who file taxes contribute to a Registered Retirement Savings Plan — which is a shame because any money you contribute goes toward your retirement and gets deducted from your income. If you earned $85,000, say, but you contributed $10,000 to an RRSP, the government will tax you as if you made only $75K. The 2022 RRSP deadline has already passed (womp, womp), but you’d be wise to start contributing for 2023. OTHER VERY GOOD READS 🏝️ A Vacation for “Lonely Millennials”* A group-travel company promises “meaningful friendships” | The New York Times 🤖 When Sexting Chatbots Dump Their Human Lovers* And you thought getting dumped IRL was bad… | Bloomberg 🤑 Is It Better to Pay Down Your Mortgage or Invest? As with most things — it depends! | Wealthsimple Magazine 🚗 Taken for a Ride A guy goes on a Tinder date, ends up short one Jaguar | The Verge *Article is paywalled, which, yeah, is kind of annoying. But we think good journalism is worth paying for. THE WISDOM OF TWITTER If you’re not yelling into your phone, are you even closing a deal? THOUGHTS ON TODAY’S ISSUE? Love it Good So so This week’s newsletter contributors: Brennan Doherty (writer), Devin Gordon (writer), Stacey Woods (writer), Sarah Rieger (news writer), Ambrose Martos (fact checker), Ciara Rickard (copy editor), Sara Black McCulloch (fact checker), Jared Sullivan (senior editor), Peter Martin (senior editor), Kat Angus (managing editor), and Devin Friedman (editor-in-chief). A contributor to this newsletter owns stock in JP Morgan Chase. Wealthsimple Media Inc. 80 Spadina Ave Suite 400 Toronto, ON, M5V 2J4 Replies to this email address are not monitored. Have questions? Visit our Help Centre or submit a request to our Client Support team. PRIVACY POLICY UNSUBSCRIBE TLDR is offered by Wealthsimple Media Inc. and is for informational purposes only. Any views expressed are those of the individual author and/or of Wealthsimple Media Inc., not of Wealthsimple Financial Corp or any of its other subsidiaries or affiliates. The content in TLDR is not investment advice, a recommendation to buy or sell assets or securities, nor any other kind of professional advice. TLDR is not a research report and should not serve as the basis for making investment decisions. Wealthsimple Media Inc. does not endorse any third-party views referenced in this content. When you invest, your money is at risk and it is possible that you may lose some or all of your investment. Past performance is not a guarantee of future results. Historical returns, hypothetical returns, expected returns and images included in this content are for illustrative purposes only. Always research before investing. © 2023 Wealthsimple Media Inc.