While we’ve enjoyed several years of equity markets rebounding from the lows after the financial crisis, before we start to get too complacent, it is a good time to review and consider what it means to be a smart investor. If the past has taught us anything, it is that in times of choppy or declining financial markets, rational and savvy investment decisions often get lost in the fear and panic of the moment. Following these few key points can help you avoid making poor investment decisions and become a smarter investor.
Know Your Risk Tolerance: Prior to making any investment, you should know how much risk you are prepared to accept. All investments carry some type of risk. If making a specific investment makes you significantly uncomfortable, or keeps you up at night, then you probably need to rethink it. Anything that has the potential to increase considerably, also carries the same potential to decrease significantly. If this happened, would it seriously jeopardize your financial plans? Read more
Transferring a Life Insurance Policy to a Corporation
The Corporate Extraction Strategy involves transferring a personally owned life insurance policy to a corporation for its fair market value (FMV). When handled properly, it will result in withdrawing capital from the corporation tax free!
The preferred candidates for this strategy:
Own a life insurance policy that they wish to maintain;
Own all the shares in a corporation;
Are usually older and/or would be rated or declined for life insurance due to health concerns. Read more
We all face many risks – contracting a critical Illness is one of them. Being diagnosed with a life threatening illness is not something anyone wants to contemplate; however, you can purchase critical illness insurance to protect against the financial impact. The Back Story
Critical illness insurance was invented by Dr. Marius Barnard. Marius assisted his brother Dr. Christiaan Barnard in performing the first successful heart transplant in 1967 in South Africa. Through his years of experience with cardiac patients, Marius observed that patients with minimal financial stress, recovered more often and much quicker than those with financial hardship. He came to the conclusion that he, as a physician, could heal people, but only insurance companies could provide the necessary funds to create the environment that best promoted healing. As a result, he worked with South African insurance companies to issue the first critical illness policy in 1983.
Medical practitioners today will confirm what Dr. Barnard observed – the lower your stress levels the better the chances for your recovery. Read more
In August the Department of Finance published their changes to the taxation of life insurance as previewed in March 2013 Federal Budget. When final legislation is passed later this year, these changes will result in an updating to the “exempt test” which determines how much tax-deferred value can accumulate in a life insurance policy before it is subject to accrual taxation. The new rules take effect and will apply to policies issued January 1, 2016 and later.
Highlights of the new rules and their affect
For Cash Value Life Insurance:
Effective with policies issued after 2015 the new rules will reduce the ability to tax-shelter accumulating cash values;
The world of investment choices can be confusing. Do you sacrifice security for higher returns? Or do you take the safe path and take the guaranteed route, locking yourself into low returns? Fortunately for Canadian investors there is another option: Segregated funds.
What are Segregated Funds?
Segregated funds are similar to mutual funds but are only offered by life insurance companies. This allows for the special “insurance” features that can make segregated funds a safer investment and provide added advantages.
Like mutual funds, segregated funds have a wide range of investment choices: Read more
Most successful business people feel a strong desire to give back, but what is the best way to make a meaningful contribution? Is setting up a foundation better than giving direct to a charity? If so, what is involved and what are your options?
Setting up a foundation gives you much more control than simply donating to charity. Even if you are very committed to a charity, charities change over time, and so may your interests or priorities. With a foundation, you can manage how your donation is spent, and can create a legacy of charitable giving for many generations. (If you want philanthropy to be a family tradition, you will need to accommodate different choices from other family members.)
Less than half of young and old Canadian workers are covered by employer sick leave and disability leave plans, which means that when they need time off due to an illness or disability, they can’t have it. Canadians facing mental health issues are also vulnerable when it comes to coverage.
This is according to a new report by the Conference Board of Canada, calledDisability Management: Opportunities for Employer Action.
The study shows that only a third of employees between the ages of 18 and 24 have any paid sick days or short-term disability coverage. Just one quarter have coverage in the event of a long-term disability. Read more
This information is designed to educate and inform you of financial strategies and products currently available. As each individual's circumstances differ, it is important to review the suitability of these concepts for your particular needs with a Qualified Financial Advisor.