|  Greenwashing and how to read the label on your sustainable investments Wading through the alphabet soup of acronyms and airy-fairy corporate jargon that surrounds sustainable investing was one of the most daunting things I did when I started out as a personal finance reporter. But now that I’ve been at it for several years, here’s how I would explain it in the simplest of terms. Putting your money into investments labelled as “sustainable” — often you’ll see the word “ESG investments” — is a bit like buying organic food. Even if its says “organic,” you’ll want to check the list of ingredients. That’s even more the case with sustainable investments, for which we don’t even have a standard and transparent definition of what “sustainable” means. At the dawn of ethical consumerism, when there was no standardized certification for organic products, companies could make improbable organic, green or eco-friendly claims without much repercussion, says Tim Nash, founder of Good Investing. That’s the stage sustainable investing is currently at. It’s why greenwashing — marketing as sustainable financial products that really aren’t — is so common. Regulators are increasingly stepping in to bring order to the sustainable investing chaos (with a significant announcement out of the COP26 United Nations conference on climate change that just wrapped up). For now, though, your best defence against financial greenwashing is taking a hard look at what’s actually inside any mutual fund or exchange-traded fund labelled as sustainable. Here’s how to do it.  COVID-19 travel insurance: Another reason to check the fine print The federal government has lifted its blanket advisory against all non-essential travel. The U.S. land border is once again open. If you're planning a southbound escape for the spring of 2022 you're definitely not alone. But what about travel insurance? The good news is COVID-19 coverage is becoming more and more common, and the pandemic hasn't had much of an impact on policy prices. That said, coverage varies significantly. Some policies only cover medical emergencies. If you’re worried about the costs of an unexpected quarantine, make sure you also have trip interruption insurance. And if you want to protect yourself against the risk of having to call off the trip before because of COVID, you'll need trip cancellation coverage. Also, many large resorts are offering some complimentary travel insurance but the coverage cap can be pretty low. Here’s more about what to watch for.  Multi-slotted piggy banks Multi-slotted piggy banks — I had no idea they were a thing, which makes me feel old. Back in the day, the big innovation for me was a porcelain pig with a rubber plug at the bottom that allowed me to take money out, if I wanted, without smashing the thing with a hammer, which seemed unnecessarily gruesome and messy. But now, apparently, kids have piggy banks that let them stash their money in different slots for spending, saving and sharing! That’s one of the many things I learned from Robin Taub's book, The Wisest Investment: Teaching Your Kids to be Responsible, Independent and Money-Smart for Life. Taub, a chartered professional accountant by training, wrote a very digestible, practical handbook on how to help kids develop money management skills. The advice caters to different ages and phases, starting at age five and ending at age 21. My son has already fired off his wish list for the holidays, but I have a feeling Santa is going to add a state-of-the-art piggy bank this year. ________________________ – THE QUESTION – “My husband and I sold property at the height of last spring’s real estate frenzy. We sold it for $637,000 and had paid $408,00 for it originally. We have to pay capital gains, of course. In order to avoid the worst hit in personal income taxes, we are hoping to maximize the contribution to my registered retirement savings plan (RRSP) for the year. I know I can make a larger RRSP contribution, I just don’t know how much! I have quite a lot of RRSP contribution room left. Is there some kind of calculator to help me figure out how much to contribute? (I earn over $130,000 a year).” — A Money123 reader “Congratulations on the nice gain on the sale of your property. Remember, when calculating the capital gain you can add the cost of major renovations to the "adjusted cost base" of the property as well as deduct legal fees upon closing and other closing costs. If your original purchase price was $408,000 and the sale price was $637,000, then the capital gain will be $229,000. Remember that 50 per cent of the capital gain is tax-free. Therefore, the amount to be included in your income would be $229,000 * 50 per cent = $114,500. If you and your husband owned the property jointly, then you would each report half of the amount on each of your tax returns. Each of you would report $114,500 * 50 per cent = $57,250 in your tax return in the year in which the closing of the sale occurs. What will your tax bill be on that $57,250? It truly depends on how much other income, deductions and tax credits each of you have in that particular year. If your other income is $130,000, then adding $57,250 to your income will generate additional tax of $26,605, which is an effective tax rate of 46 per cent on the taxable portion of the gain. You are correct that making a large RRSP contribution in that tax year will reduce the tax bill. This is the online tax calculator I recommend. If your income inclusion from the capital gain is $57,250, you can contribute $57,250 to your RRSP. The net effect on your taxable income will be zero. $57,250 will be added to your income from the capital gain but then $57,250 will be deducted from the income due to the RRSP contribution. This would completely eliminate the tax bill on the capital gain. To calculate how much you should contribute to your RRSP, simply enter the amount of income you have without the capital gain into the calculator. Write down the amount that shows up under "tax payable". Then, enter the amount of taxable income with the capital gain and again, write down the amount that shows up under "tax payable." The difference between those two amounts is the amount of tax owing on the gain. In order to ensure you have the RRSP contribution room, check your notice of assessment from the 2020 tax year. I would also double check by logging in to your CRA My Account online.” — Neal Winokur, co-founder of RealtyTax.ca and author of The Grumpy Accountant ___________________________ Want your money question answered by an expert? Get in touch! | 
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