The majority of people we talk to do not understand how Tax-Free Savings Accounts (TFSA) work or how to best utilize them. This is partly due to how TFSA’s have been marketed by the banks. Here are some key things to know about these valuable tax shelters the government implemented in 2009.

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Are RRSPs overrated?

For many years RRSPs (Registered Retirement Savings Plans) were viewed as the best option available for retirement savings. However, the truth is that there are several variables to consider for your best investment options.

Here is a short list of questions to ask yourself:

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Would you be surprised to learn that the stock market has out performed real estate in Vancouver over the last decade? According to the MLS Home Price Index , which began collecting data 11 years ago, real estate prices throughout the greater Vancouver area have grown on average from 100bps in January 2005 to 187.75bps in January 2016. This growth represents a 5.89% annualized rate of return and a total return of 87.75%.

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In life and finances, the government is our biggest business partner, usually in the form of taxes.

If you are a business owner:
1.  You are a tax collector (payroll taxes, GST, PST).
2.  The government is your business partner (corporate taxes).

As a family, taxes are often your largest expense:
1.  Income tax (as high as 45.7% of every dollar you earn).
2.  Sales taxes (GST, PST).
3.  Property taxes, and so on.

Fortunately, the government has provided different vehicles to help us plan when we pay our taxes (RRSP, TFSA, pensions, IPPs). These can all be great vehicles to help us defer, smooth out and/or lower our tax bills.

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In a world of constant investment changes, it’s hard to keep up with all distinctions between the various fund options. Mutual funds tend to be fairly straightforward, but when it comes to segregated funds, they do offer some distinct differences that some people may not be aware of when differentiating the two. What is a segregated fund you ask? In simple terms, it’s a mutual fund wrapped around an insurance contract with a tidy bow on top. But what does that actually mean to me as an investor?

Segregated Funds offer three fairly distinctive advantages and disadvantages: Read more

For many Canadians the perfect retirement includes owning a vacation property. For some the decision to buy turns out to be a dream come true but for others it can be an expensive nightmare. Here are some things to consider before making the emotional decision to buy a vacation property.

Why do you want it?

Possibly owning a vacation property will allow you to spend more time at a destination you love, it will become a place where you can take your family and friends or you feel it will be a great investment. Whatever the reason, it is important to understand what your motivation is and then evaluate if that’s realistic and reasonable given your current situation. Read more

Financial Difference Makers…

How can I build wealth? How can I save enough for retirement?

As a financial planner I hear these types of questions on a regular basis. People in general want to know, what is the secret to success?

I find that I like to look at clients that we have that are already in retirement to see the traits that have led to their financial success. We can learn a lot from our history, and I find it interesting to hear about people’s lives. Read more

The way we look at it, if you’re going to own something you might as well get paid for owning it. The more things in life that can produce cash flow, the closer you will be to subsidizing your income as we prepare for retirement. Take real estate for example – you own a piece of land, you have the option to rent it out, and not only does your property have the potential to appreciate; you get paid while you own it through rental income. Any viable investment should produce some sort of income. That income values you, the investor, for putting your hard earned money into it. In fact, many of you are getting paid on your investments right now, without even realizing it. The way you get paid to invest is through earning dividends. Read more

Canadians have two great tools available for accumulating wealth, Registered Retirement Savings Plans (RRSPs) which were introduced in 1957 and Tax Free Savings Accounts (TFSAs) which were introduced in 2009.

We often get asked by clients which account type is better to contribute to, RRSPs or TFSAs. Read more

Know What You’re Getting From Your Financial Advisor

Do you know how much you are paying your financial advisor? Are they doing a good job for you? Those both seem like reasonable questions, but most people cannot answer them. Can you?

One of the services that financial advisors provide is to manage your investments. When it comes to the world of investments, there are many different types you can choose from as well as many different people that offer them. So it’s no wonder that it can leave consumers with their head spinning. Here’s some information to help you make sure that you are receiving the best service for your situation. Read more

Not knowing could cost you thousands!
Did you purchase the coverage offered to you by your lender? Most people have a mortgage in Canada and it is typically the largest debt most Canadians will ever assume. Before buying a house people will research and compare to find the best mortgage rates and terms but not necessarily the best insurance coverage. Read more

Did Your Pension Move When You Did?
Do you have a UK (United Kingdom) pension? There are a good number of British expatriates who are now Canadian residents that have pensions back in the UK. Have you forgotten about that plan from an old employer? Do you know your options?

When I create a retirement plan for a client I review what savings and pensions they may have. Quite often, past pension plans can be forgotten or misplaced, so this exploratory part of the process is critical so that nothing is missed. Read more