From: atbowler@thinkage.ca   
      
   On 2017-09-26 3:15 PM, arghbarg wrote:   
   > If I had taxable interest of $1800 in a year, given todays banking rates >   
   for CD's and/or savings accounts what would my balance need to be.   
   >   
   > I think I understand that if I have an APR of 1% that would mean I had   
   > about $180,000 in the bank for the year, correct?   
   > And at 2% that would mean about $90,000.   
      
   You have funny way of wording it, but yes 2% of 90,000 is 1,800.   
      
   Note   
        1800 / 2% = 1800 / 0.02 = 90000   
      
   The problem with a 2% of lower interest rate is that present   
   monetary policy is aiming at a 2% inflation rate.  So even if   
   you were paying no taxes, a 2% GIC is just standing still.   
   Outside a sheltered account (TFSA, retirement account or RESP),   
   you have taxes to pay on the interest, and you are losing money.   
      
   This is fine if the deposited cash is being held as a standby   
   (emergency fund, saving for down planned big purchase or other such).   
   Think of the loss as an insurance premium.   
   However for long term goals you also need to invest other funds   
   in something with some more risk and higher long-term expected   
   payout.  (Low-fee stock broad index fund or ETF is a good start.)   
      
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    * Origin: you cannot sedate... all the things you hate (1:229/2)