Entries tagged as ‘Investors Group’
In response to my RRSP week, there have been quite a few questions regarding the effective use of the homebuyers plan; again I approached Aaron Theilade from Investors Group for some guidance.
Does it make more sense to pay off your mortgage or to invest in a Registered Retirement Savings Plan? Perhaps you’re expecting to receive some extra money from an inheritance or an employment bonus, and you’re not sure which route to take. The truth is, there is no easy answer. There are many variables that must be taken into account. Concentrating on paying down a mortgage may be the best route for one person, while focusing on an RRSP may benefit another. Here are some factors to consider:
♦ Your age. When you’re young, it is wise to make your RRSP a priority. The sooner you get money into a sheltered retirement plan, the longer it will grow on a tax deferred basis. But don’t overlook the need to build home equity. It can give you a head start on the expenses of moving to a larger home as your family grows.
♦ Your income. The more you earn, the higher the rate of tax you’ll pay. That means you must earn more in before-tax dollars to make mortgage payments. If you’re a high income earner you may want to quickly reduce this expensive debt.
♦ Investment returns. Pay attention to the general rate of investment returns you could reasonably expect to earn when you make your decision. Astute investors could be further ahead by investing their money than paying down the mortgage. The benefits of investing are magnified by an RRSP, with tax-deferred growth within the plan and the tax deductions on contributions.
♦ Your mortgage rate. If your current mortgage rate is low, it may make more sense to invest in an RRSP. In times of good returns for financial markets, low borrowing costs make a compelling case for contributing to your RRSP.
Categories: Advice · Banking · Education
Tagged: Investors Group, RRSP, RRSP early withdraw, RRSP Home Buyers Plan, RRSPS, tax deferred growth
5 steps to help you plan ahead. It’s hard enough these days to be thinking about how you are going to cover necessary items let alone save for the future, but as they say we don’t plan to fail- we fail to plan! This week Aaron Theilade from Investors group shares 5 simple principles to find that hidden money and start saving today for a better future.
Investing regularly is important. If you’re going to achieve your retirement and other financial goals, you should consistently contribute to your RRSPs and non-registered investments. “Paying yourself first” through monthly contributions is an excellent strategy to build an investment portfolio. If you’re like most Canadians, however, you are not sure where to look to find the extra money needed to invest. There is a way – in fact, there are four good ways to perhaps uncover “hidden” money you already have, which you can use to start an investment plan on a regular basis. All it takes is a bit of smart money management using the strategies set out below.
Review your household budget Carefully reviewing “how” your family spends its money and making changes can free up cash flow. Start by determining if expenses are essential, including your mortgage and utility payments, or if they are non-essential such as buying lunch at a restaurant every work day. Then ask yourself, what can I do differently? Small and simple changes like ensuring you turn off lights when you leave a room can make a major difference in how much money you have left to save each month. * The GVRD has created a great money-saving guide to reusing, repairing and renting goods in the lower mainland, to recive a copy, send me an email I would love to pass it along!
Debt consolidation can increase your ability to invest “Debt consolidation simply means paying off a number of higher interest rate loans or other high-cost debt by taking out a single loan at a lower interest rate for a consolidated overall lower monthly payment,” says Jane Olshewski, Senior Specialist – Financial Planning Programs at Investors Group. “You can choose to consolidate debts such as car loans, education loans, credit cards or lines of credit and benefit through a single, more affordable monthly payment which is lower than the sum of the many monthly payments you were making previously.” It can be an effective way to regain control of your finances, manage your monthly cash flows, free up money for other purposes and reduce stress. Additionally, any repayment plan that can allow you to move from simply servicing your debt balances to actually eliminating them is positive as well. If you own a home, you can also consider consolidating your debt using a home equity loan. Your loan is secured by your home at usually a much lower interest rate than you currently pay on most credit cards, which can often range from 19 percent to over 28 percent. By paying less interest monthly, you’ve created additional cash flow that can be used towards your retirement, other financial goals or paying down your principal. * A TD Canada Trust HELOC or Home Equity Line Of Credit is a simple interest account that can be an extremely efficient way to manage cash flow and save thousands on interest costs, send me an email at david.hudson@td.com
Restructure your mortgage Sometimes, changing the structure of your mortgage can help you find the money you need to make regular investment contributions. Many individuals set their mortgage repayment at the highest amount they can afford in order to minimize interest payments and pay off their mortgage as quickly as possible. Although these are two important goals, other goals like building an investment portfolio to prepare for retirement and protecting against uncertainty through insurance products also need to be taken into consideration. Does it make sense to pay off your mortgage over a different term to provide you with the cash flow you need to start an investment portfolio or to fund the monthly premiums on a life and/or disability insurance policy? If you have built up extra equity in your home, does it make sense to use the equity to cover your RRSP contribution or to start an RESP? With the help of a personalized comprehensive financial plan including a cash flow analysis prepared by a Investors Group Consultant you can decide how quickly you want to pay off your mortgage while working towards your financial goals.
Get tax back now, not later Getting a tax refund cheque from the government each year might seem like a “windfall” profit – but it’s not. By having too much tax withheld from your pay each month, you are actually giving the government your money to use throughout the year – and they aren’t paying interest to you for your kind gesture. Instead, if you are an employee and your employer makes tax deductions on your behalf, you can reduce the amount withheld from your pay cheques each month by filing a T-1213 form with the Canada Revenue Agency (the CRA). The CRA will then issue a “letter of authority” to your employer, authorizing your employer to reduce withholding taxes. You can then invest part of your usual year-end tax refund immediately each pay period.
Thanks to Aaron for sharing these great tips!
Categories: Banking · Education · TD Canada Trust
Tagged: Aaron Theilade, BC Mortgage, canada revenue agency, David Hudson, Hidden Money, Investors Group, Investors Group Fraser Valley, Investors Group Vancouver, langley investors group, Mortgage Sales Force, TD Canada Trust, td mobile mortgage, tddave
One of the growing concerns a lot of my clients have is cash flow for their small business, for them the storm front is becoming just as large on the inside as the outside.
At the end of the day payrolls must be made, inventory purchased and outstanding accounts collected upon.
Although we have recently seen a drop in energy prices-whatever happened to those headlines, it’s like a dream now, the pundits were claiming oil will never be under $100 a barrel again….OOps
Now restrictive credit markets and a sinking loonie, small business owners find themselves in the trenches taking grenades.
Good Friend and trusted advisor AARON THEILADE from Investors Group has been kind enough to share ideas about freeing up cash flow for businesses.
Aaron is a very knowledgeable with the mechanics of cash flow damming a concept that has been growing in popularity for a number of years.
As Aaron explains;
“The cash flow dam is a strategy that converts your personal debt into tax deductible business debt. It’s similar in principle to the Smith Manoeuvre.
Like the Smith Manoeuvre, this strategy was used primarily by higher-net-worth clients. Few others had heard about it. Many that did know about it were uncertain of the tax implications. That’s all starting to change.
Nowadays, big financial institutions are starting to get in on the act. National Bank now has a cash flow dam webpage. Investors Group is quite involved and are looking at implementation as one of our tax strategies. Even RBC has an article on it.
If you’re self-employed and interested in the cash flow dam, consult a good tax advisor.
1. You use your business income to cover your current expenses and gradually repay your personal debts (ie, against your mortgage)
2. You borrow money to cover your business expenses.
3. You can deduct the interest on the borrowed money.
You save on taxes.
Both myself and Aaron can help you implement the cash flow dam and start converting your personal debt into a tax deduction.
Aaron can be reached at
AARON THEILADE
Consultant
LANGLEY, BC
Came across this press release from TD Canada Trust Small Business group, very interesting stuff enjoy!
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Cash flow worries top the list of concerns for B.C.’s small business owners
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- TD Canada Trust Small Business Survey reveals the top challenges and
rewards experienced by small business owners -
>>
TORONTO, Oct. 16 /CNW/ - Making payroll. Suppliers' bills. Rising fuel
costs. According to the TD Canada Trust Small Business Survey, these are the
top concerns that keep small business owners in British Colombia up at night.
The first TD Canada Trust Small Business Survey polled 1,000 small
business owners from across Canada to uncover their biggest challenges in
order to help provide relevant advice for entrepreneurs. The survey found that
more than 30% of B.C. small business owners lose sleep worrying about cash
flow while 14% say rising fuel costs is their biggest concern.
"Local Small Business Advisors are available to help small business
owners manage their cash flow in order to help make their lives easier," says
Norm Attridge, Regional Sales Manager, TD Canada Trust. "Small Business Week,
October 19th to 25th, is the perfect opportunity to visit a TD branch and
learn more about business financing and how to start - and grow - a small
business."
Despite concerns about cash flow, 2008 is proving to be a good year for
small business owners. Seventy-two per cent of B.C. business owners graded
their business' performance as an A+, A or B, indicating that they have had
solid growth or that they did as well as they expected. Twenty-six per cent
gave their business a C saying that they did not have the year they planned
and only 2% gave themselves a failing grade.
For small business owners that gave their business an A or A+, 37%
attributed their great year to innovating with the right products and services
at the right time. This was followed by hiring great talent and retaining the
right people (27%).
Looking ahead to 2009, small business owners anticipate that the biggest
business challenges will be similar to what they worry about now: cash flow
(23%) followed by managing growth (18%). Rising fuel costs was the third most
common challenge cited (16%).
Owning your own business has its benefits
The best thing about owning a business, according to B.C.'s small
business owners, is controlling their own destiny (37%) and having a better
work-life balance (34%). Only 6% of respondents said that making more money
was the best thing about owning their own business.
Advice from B.C. small business owners
The top piece of advice from small business owners for those wanting to
start their own business is to raise enough capital before starting.
Twenty-two per cent of owners said they would have raised more capital if they
started their business today. The second change they would have made was to
diversify their services more (19%). Small business owners across Canada who
have been in business less than a year, are most likely to say that they
should have raised more capital (41%), whereas business owners who have been
in business 11 or more years, say that they would diversify services more
(22%).
Small business and the environment
The environment is a top priority for small business owners. In fact, 79%
report that it is important to run an environmentally responsible business.
The biggest barriers to adopting more environmentally friendly measures are
cost (40%) and lack of credible industry providers (26%).
Small business and technology
The TD Canada Trust Small Business Survey also asked business owners
about their views on technology. Half of B.C. small business owners say that
e-mail is often a more effective communication tool than using the phone.
Seven per cent of respondents are so dependent on technology that they would
rather have a root canal than give up their BlackBerry.
About TD's sponsorship of Small Business Week
Small Business Week is a nation-wide celebration of entrepreneurship,
October 19th to 25th, 2008, organized by the Business Development Bank of
Canada (BDC) to pay tribute to Canadian small business. With the endorsement
of the Canadian Chamber of Commerce, organized events such as conferences,
trade fairs and seminars provide an opportunity for entrepreneurs to network
and exchange ideas to enhance business growth. TD is a sponsor of Small
Business Week and to recognize its small business customers, TD is conducting
a national advertising campaign, sponsoring SOHO (small office home office)
conferences in Toronto and Vancouver and sponsoring regional events with
chambers of commerce and business associations across the country. To see
events that TD is sponsoring, visit
http://www.tdcanadatrust.com/celebrate/index.jsp?id=2. As well, TD will host
in-branch customer appreciation days at more than 280 branches staffed by a
small business advisor.
About the TD Canada Trust Small Business Survey
The TD Canada Trust Small Business Survey polled small business owners
from across the country to uncover their biggest challenges and to help
provide advice for entrepreneurs interested in starting a business. The survey
was conducted by Angus Reid Strategies from September 4 to 8, 2008 with
English and French speaking small business owners (defined as business owners
with fewer than 20 employees) across Canada using the Angus Reid Forum. The
sample size included 1003 men and women.
Categories: Advice · BC Small Business Owners · Banking · Canadian Economy · Education · TD Canada Trust · bank of canada
Tagged: BC Mortgage, TD Canada Trust Mortgage, tddave.com, TD Mortgage Rates, Cash Flow Dam, The Cash Flow Dam, BC Small Business Owners, Investors Group, Aaron Theilade, Smith Manoeuvre, Tax deductible Mortgage, RBC, National Bank, TD Green Home Equity Line Of Credit, small office home office
