The Motley Fool Discussion Boards

Previous Page

Retirement Discussions / Retire Well on Less


Subject:  Re: Others with un-retirement? Your ratio? Date:  11/12/2007  10:41 PM
Author:  telegraph Number:  1186 of 1911

Vermonter: " Several of the Canadian Royals, as they are called, or energy stocks, pay monthly dividends that can add up to 10 or 15 percent or more, if you can ride out the price fluctuations. (Consider if you withdrew 6 percent per year but were earning 12 percent!? Not too shabby!) A few of these include PGH, PVX, HTE, and several others. Some of the bulk shippers pay nicely, too, like EGLE, DRYS, and some others. Before buying any for real, you can try them in that make believe account and see how they work out."

Many of the Canadian Royalty Trusts (CANROYS) are the same as limited partnerships in the USA. THey were set up to meet the Canadian gov't requirement for tax avoidance.

Most of them are not paying 15% dividends, based upon earnings, but are returning a portion of your capital to you, just like a limited partnership does. They are self liquidating. At some point they become 'worthless' unless other factors come into play. That may be a decade or more off.

The Canadian gov't has now proposed significant tax changes that will reduce the 'earnings' of the CANROYS and how they are taxed at significantly higher (and sooner) rates. That is why many of them have been yo-yo-ing up and down like crazy.

If you hold them in IRA, you are exempt from taxes. If you hold them in taxable account, you pay some Canadian tax on earnings. It could go up by a factor of 3. They are still fighting over it.

Copyright 1996-2019 trademark and the "Fool" logo is a trademark of The Motley Fool, Inc. Contact Us