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Should Aiden, 25, pay off his mortgage or invest in stocks?



Aiden wants to retire at age 55 with lifestyle spending higher than he has now and enjoy the good life – skiing in the winter, concerts and travelling.Todd Korol/The Globe and Mail

Aiden is 25, single and the proud owner of his first home, a half duplex in Alberta. He’s enjoying his second career job, earning $85,000 a year in public relations. He previously worked for the government.

“I saved my salary while I worked from home and lived with my parents during the worst of the COVID-19 pandemic to make the down payment,” Aiden writes in an e-mail. He also emptied his tax-free savings account. He put 20 per cent, or $85,000, down on a house that cost $425,000 in 2021. With the improvements he has made, including a basement apartment, he thinks his house could be worth $550,000 now. He has about $323,500 remaining on his mortgage.

Should he pay off the mortgage or invest for the future?

“Traditional personal finance wisdom suggests I pay the house off ASAP,” Aiden writes. His mortgage rate is low – 1.74 per cent – but he is averse to debt and concerned about having to pay a higher interest rate when his mortgage comes up for renewal in 2024. He could probably earn a higher rate of return in stocks – or even a guaranteed investment certificate, Aiden adds. Should he use his surplus cash flow to pay off the house or invest for the long term?

He also wonders whether it is worthwhile to open a registered retirement savings plan (RRSP) given that he has substantial contribution room in his TFSA.

Long term, Aiden wants to retire at age 55 with lifestyle spending higher than he has now and enjoy the good life – skiing in the winter, concerts and travelling.

We asked Jason Heath, an advice-only financial planner at Objective Financial Partners in Markham, Ont., to look at Aiden’s situation.

What the Expert Says

Aiden has roughly a $250,000 net worth, which is pretty good for a 25-year-old, Mr. Heath says. Granted, nearly half of that has come from home price appreciation on the house he purchased in September, 2021. “He bought a house he could afford, he has an emergency fund in his TFSA, and he has monthly payments he can manage while continuing to save,” the planner says. “So good on him.”

Once Aiden is done paying off an interest-free loan from a relative for his student debt, he will have an extra $1,000 a month to use to pay down his mortgage or invest, the planner notes. “Aiden asks whether he should pay down his mortgage more aggressively but is leaning toward buying stocks.” If his 1.74-per-cent fixed-rate mortgage renews at an assumed 4.5 per cent in September, 2024, Aiden’s payments would need to rise by $455 a month to $1,855 to maintain the same amortization.

Some of Aiden’s mortgage interest is tax deductible because he rents out his legal basement suite, so this makes his cost of borrowing a bit less, Mr. Heath says. If Aiden thinks he can earn a higher rate of return investing in his TFSA than the borrowing rate on his mortgage, he may come out ahead by investing. “That said, the new normal of higher interest rates makes investing rather than debt repayment less compelling.”

In the long run, there may not be a compelling advantage to paying down his mortgage versus contributing to his RRSP or TFSA, assuming the mortgage interest rate and investment returns are similar. Both investing and debt repayment are good because they increase your net worth (net worth = assets minus liabilities). Aiden mentions being debt averse, so considering a lump-sum payment against his mortgage at renewal, or increasing his payments, should be considered.

Aiden has never contributed to a registered retirement savings plan. “He is just on the cusp of going from a 30.5-per-cent marginal tax bracket to 36 per cent, so this is the tax refund rate he could expect on his first dollar of RRSP contributions as an Alberta resident,” the planner says. It is likely he will withdraw money from his RRSP at a 30-per-cent tax rate in retirement, making RRSP contributions advantageous for him if his income continues to rise.

Once Aiden pays off his student loan later this year, he should consider directing at least some of his $1,000 of extra monthly cash flow to RRSP contributions, Mr. Heath says, “especially given he has a healthy TFSA balance of $30,000.”

Aiden’s budget seems light on planning for future home repairs and renovations, as well as an eventual car replacement, the planner says. In preparing his forecast, he added in $500 a month for each item to bring Aiden’s monthly expenses up to $4,045 a month, excluding debt repayment, saving and taxes.

Aiden’s $12,000-a-month desired after-tax spending in retirement is “way higher” than his current spending, adjusted for inflation, Mr. Heath notes. Even with the extra $1,000 a month added to his spending, assuming a 2-per-cent inflation rate, his current after-tax spending would be about $6,500 a month by his age 50. “It is not unreasonable to want to spend more in retirement, especially in the early years for travel, for example, but that’s nearly doubling his current standard of living,” the planner says.

Aiden saw his parents retire at 55 and would love to retire by 50 if he can. “I made some assumptions beyond the $4,045 per month of living expenses (including renovation/repair and car budgets),” Mr. Heath says. These include a modest 2-per-cent annual increase in his salary, bonus and basement rental income, 65 per cent of the maximum Canada Pension Plan benefit at age 65 (low because of early retirement), maximum Old Age Security, his small government defined-benefit pension at age 65 (adjusted for 2 per cent inflation from now until then), 6-per-cent returns on his self-directed stock portfolio, 2-per-cent inflation (as inflation subsides), and a 4.5-per-cent mortgage rate for the balance of his mortgage after the 2024 renewal.

“The result is his investments are projected to be depleted by about age 87 and he may need to borrow about 10 per cent of his home equity by age 95,” Mr. Heath says. “Obviously, if he wants to significantly increase his spending to his $12,000 after-tax monthly target, he will have to work way past age 50.”

Given Aiden’s current age and stage, and how much can change between age 25 and retirement, the main thing he can do is just maintain the good trajectory he is on currently. Life changes, such as a relationship or a family, could be material in his long-term planning, Mr. Heath says. Aiden may not always want a basement tenant either.

Because Aiden is financially dependent on himself, he should consider disability insurance, which he presumably does not have available through his employer, the planner says. “The odds of him becoming disabled are much higher than dying [prematurely].” A disability insurance policy that would replace Aiden’s income if he was disabled and could not work is an important risk-mitigation goal for him to consider.

Client Situation

The Person: Aiden, 25.

The Problem: Should he pay down his mortgage or invest for the future? Should he open an RRSP? Can he retire early?

The Plan: Consider opening an RRSP to take advantage of his unused contribution room. Monitor interest rates when deciding whether to pay down the mortgage or invest. Plan on spending much less in his later years if he wants to retire at age 50.

The Payoff: The rewards that come from good spending and saving habits.

Monthly net income: $5,150 (plus $1,150 gross rental income).

Assets: Bank account $1,000; TFSA $30,000; estimated present value of defined benefit pension $21,400; residence $550,000. Total: $602,400.

Monthly outlays: Mortgage $1,400; property tax $300; water, sewer, garbage $110; home insurance $150; electricity $100; heating $130; maintenance, garden $170; transportation $440; groceries $500; clothing $25; interest-free student loan to relative $1,000; gifts, charity $170; vacation, travel $250; political donations $100; dining, drinks, entertainment $400; sports, hobbies $50; subscriptions $20; health care $30; communications $100. Total: $5,445.

Liabilities: Mortgage $323,500; personal loan $7,000. Total: $330,500.


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Investment regulator imposed $14M in enforcement penalties in latest fiscal year



TORONTO — Canada’s investment product regulator says it imposed more than $14 million in fines and other financial enforcements in its last fiscal year.

The Canadian Investment Regulatory Organization (CIRO) says the total also includes imposed costs and the forced return of ill-gotten profits.

The regulator says it also ordered suspensions and permanent prohibitions in a significant proportion of proceedings against individuals.

Enforcement efforts included a $2 million fine against Fortrade Canada for recommending a high-risk product to unsophisticated retail clients, and a $1.7 million fine and permanent ban on securities-related business against Paul Walker for a range of misconduct including soliciting more than $1.5 million in investments for an outside business activity.

CIRO was created at the start of 2023 through a combination of the Investment Industry Regulatory Organization of Canada and the Mutual Fund Dealers Association of Canada.

The new self-regulatory organization says it is focused on harmonizing its regulatory approach to create more consistency and timeliness with enforcement action.

This report by The Canadian Press was first published July 16, 2024.

The Canadian Press



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Conditions on Simandou investment now satisfied



LONDON, July 15, 2024–(BUSINESS WIRE)–All conditions have now been satisfied for Rio Tinto’s investment to develop the Simandou high-grade iron ore deposit in Guinea, including the completion of necessary Guinean and Chinese regulatory approvals. The transaction is expected to complete during the week of 15 July 2024.

Along with the recent approval by the Board of Simfer1, this allows Simfer to invest in and fund its share of co-developed rail and port infrastructure being progressed in partnership with Winning Consortium Simandou2 (WCS), Baowu and the Republic of Guinea.

More than 600 kilometres of new multi-use trans-Guinean railway together with port facilities will allow the export of up to 120 million tonnes per year of mined iron ore by Simfer and WCS from their respective Simandou mining concessions in the southeast of the country3. Together, this will be the largest greenfield integrated mine and infrastructure investment in Africa.

Rio Tinto Executive Committee lead for Guinea and Copper Chief Executive Bold Baatar said: “We thank the Government of Guinea, Chinalco, Baowu and WCS for their partnership in reaching this milestone towards developing the world class Simandou project.

“Simandou will deliver a significant new source of high-grade iron ore that will strengthen Rio Tinto’s portfolio for the decarbonisation of the steel industry, along with trans-Guinean rail and port infrastructure that can make a significant contribution to the country’s economic development.”

Under the terms of the transaction, Simfer will acquire a participation in the WCS project companies constructing rail and port infrastructure, commit to perform a portion of the construction works itself and commit to funding its share of the overall co-developed infrastructure cost, in an aggregate amount of approximately $6.5 billion (Rio Tinto share approximately $3.5 billion)4.

Chalco Iron Ore Holdings Ltd (CIOH) has now paid its share of capital expenditures incurred or required by Simfer to progress critical works up to completion. A first payment of approximately $410 million, for expenditures until the end of 2023, was made on 28 June 2024, and a second payment of approximately $575 million, for 2024 expenditures, was made on 11 July 2024. These amounts settle all expenditures incurred up to date.

The co-developed infrastructure capacity and associated cost will be shared equally between Simfer, which will develop, own and operate a 60 million tonne per year5 mine in blocks 3 and 4 of the Simandou Project, and WCS, which is developing blocks 1 and 2.

Under the co-development arrangement, Simfer and WCS will deliver separate infrastructure scopes to leverage expertise. Simfer will construct the approximately 70 kilometre Simfer spur rail line and a 60 million tonne per year transhipment vessel (TSV) port, while WCS will construct the dual track approximately 536 kilometre main rail line, the approximately 16 kilometre WCS spur rail line and a 60 million tonne per year barge port.

Once complete, all co-developed infrastructure and rolling stock will be transferred to and operated by the Compagnie du Transguinéen (CTG) joint venture, in which Simfer and WCS each hold a 42.5% equity stake and the Guinean State a 15% equity stake6.

First production from the Simfer mine is expected in 2025, ramping up over 30 months to an annualised capacity of 60 million tonnes per year5 (27 million tonnes Rio Tinto share). The mine will initially deliver a single fines product before transitioning to a dual fines product of blast furnace and direct reduction ready ore.

Simfer’s capital funding requirement for the Simandou project as a whole is estimated to be approximately $11.6 billion, of which Rio Tinto’s share is approximately $6.2 billion, broken down as follows.

US dollars in billions (nominal terms) Simfer


  Rio Tinto
Mine and TSVs, owned and operated by Simfer
Development of an initial 60Mt/a mine at Simandou South (blocks 3 & 4), to be constructed by Simfer $5.1 $2.7
Co-developed infrastructure, owned and operated by CTG once complete
Simfer scope (funded 100% by Simfer during construction)

Rail: a 70 km rail-spur from Simfer mine to the mainline, including rolling stock
Port: construction of a 60Mt/a TSV port

$3.5 $1.9
WCS scope (funded 34% by Simfer during construction)

Port and rail infrastructure including an approximately 552 km trans-Guinean heavy haul rail system, comprised of a 536 km mainline and a 16 km WCS rail spur

$3.0 $1.6
Total capital expenditure (nominal terms) $11.6 $6.27

Rio Tinto’s share of expected capital investment remaining to be spent from 1 January 2024 is to be $5.7 billion. Rio Tinto’s expected funding requirements for 2024 and 2025 are included in its share of capital investment guidance for this period, with project funding expected to extend beyond this timeframe.

Further details on the Simandou project can be found in the 2023 Investor Seminar presentation at

As Chinalco, Baowu, China Rail Construction Corporation and China Harbour Engineering Company are Chinese state-owned entities, and given Chinalco indirectly holds 11.2% of shares in the Rio Tinto Group, they, and WCS, may be considered to be associates of a related party of Rio Tinto for the purpose of the UK Listing Rules. Rio Tinto’s funding commitment pursuant to the infrastructure co-development arrangement (Rio Tinto share $3.5bn) is a smaller related party transaction for the purposes of Listing Rule 11.1.10R and this announcement is, therefore, made in accordance with Listing Rule 11.1.10R(2)(c).

1 Approval has been granted by the Board of Simfer Jersey Limited, a joint venture between the Rio Tinto Group (53%) and Chalco Iron Ore Holdings Ltd (CIOH) (47%), a Chinalco-led joint venture of leading Chinese SOEs (Chinalco (75%), Baowu (20%), China Rail Construction Corporation (2.5%) and China Harbour Engineering Company (2.5%)). Simfer Infraco Guinée S.A.U. will deliver Simfer Jersey’s scope of the co-developed rail and port infrastructure, and is, on the date of this notice, a wholly-owned indirect subsidiary of Simfer Jersey Limited, but will be co-owned by the Guinean State (15%) after closing of the co-development arrangements. Simfer S.A. is the holder of the mining concession covering Simandou Blocks 3 & 4, and is owned by the Guinean State (15%) and Simfer Jersey Limited (85%).
2 WCS is the holder of Simandou North Blocks 1 & 2 (with the Government of Guinea holding a 15% interest in the mining vehicle and WCS holding 85%) and associated infrastructure. WCS was originally held by WCS Holdings, a consortium of Singaporean company, Winning International Group (50%) and Weiqiao Aluminium (part of the China Hongqiao Group) (50%). On 19 June 2024, Baowu Resources completed the acquisition of a 49% share of WCS mine and infrastructure projects with WCS Holdings holding the remaining 51%. In the case of the mine, Baowu also has an option to increase to 51% during operations. After Closing, Simfer will hold 34% of the shares in the WCS infrastructure entities during construction with WCS holding the remaining 66%.
3 WCS holds the mining concession for Blocks 1 and 2, while Simfer S.A. holds the mining concession for blocks 3 and 4. Simfer and WCS will independently develop their mines.
4 A true-up mechanism will apply between Simfer and WCS to equalise most of their costs of constructing the co-developed rail and port infrastructure. The figures shown here are pre-equalisation.
5 The estimated annualised capacity of approximately 60 million dry tonnes per annum iron ore for the Simandou life of mine schedule was previously reported in a release to the Australian Securities Exchange dated 6 December 2023 titled “Simandou iron ore project update“. Rio Tinto confirms that all material assumptions underpinning that production target continue to apply and have not materially changed.
6 Ownership of the rail and port infrastructure will transfer from CTG to the Guinean State after a 35 year Operations Period, with Simfer retaining access rights on a non-discriminatory basis and at least equivalent to all Third Party Users.
7 By the end of 2023, Rio Tinto spent $0.5 billion (Rio Tinto share) to progress critical path works. Rio Tinto’s share of expected capital investment remaining to be spent from 1 January 2024 was $5.7 billion.

This announcement is authorised for release to the market by Andy Hodges, Rio Tinto’s Group Company Secretary.

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Category: Simandou



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BlackRock Pulls Ad Featuring Trump Rally Shooter Thomas Matthew Crooks



A screengrab of Thomas Crooks from the BlackRock ad that aired in 2022.

Thomas Matthew Crooks, the 20-year-old who shot at former president Donald Trump at a rally in Pennsylvania, had briefly appeared in a 2022 advertisement for BlackRock Inc, the world’s largest money manager.

The ad, filmed at the Bethel Park High School in Pennsylvania, featured Crooks and several other unpaid students in the background, said the investment giant in a statement. Crooks graduated from the school in 2022.

BlackRock said it has pulled the ad but the video will be available to authorities. The ad, however, is being widely shared by social media users.

“The assassination attempt on former President Trump is abhorrent. We’re thankful former President Trump wasn’t seriously injured, and thinking about all the innocent bystanders and victims of this awful act, especially the person who was killed,” the company added in its statement.

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BlackRock, whose earnings figures are expected today, has faced scrutiny after shooting incidents since some of its index funds own shares in gunmakers.

Trump Assassination Attempt

Trump survived an assassination attempt on Saturday after a gunman opened fire at him at a rally in Pennsylvania ahead of the Presidential elections. The attack left him with a bloodied face as the former president said the bullet pierced his “upper part of right ear”.

Latest and Breaking News on NDTV

A bystander died in the attack while shielding his family and Crooks – a registered Republican – was shot dead by a Secret Service sniper.

Trump, whose Republican candidature will be finalised today, shared a message of unity after the attack and said Americans must not allow “evil to win”. “It was God alone who prevented the unthinkable from happening,” he said on social media.

Biden, too, appealed to the nation to “lower the political temperature” in a rare Oval Office address. “Politics must never be a literal battlefield, God forbid a killing field,” he said.

The US markets are expecting Trump trades to gain momentum after the attack. It has already been pinning hopes for the return of Republicans, especially after Biden’s poor performance in last month’s debate. Those trades are likely to take deeper hold as the attack sparks a wave of sympathy and support for Trump.


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