Collateral charge
It is a great tool for investors or clients wanting to purchase rental properties, and can be used effectively for tax efficiency. The product is called a “charge” because it is secured on a property for 100% of its appraised value at the time of setup. The client signs for the full value of the property, but will have access only to 80%, thereby meeting the guidelines of a conventional lending platform.
One of the biggest drains on a person’s income is taxes: taxes from your employer, on things you purchase, and on your home. If you are looking for an alternative investment that offers tax advantages while still providing a solid return on a tangible asset, rental properties are your answer.
Insurance provides protection against loss, and should always be applied when you take on more risk.
Fixed income investing is primarily a rules-based investment philosophy that takes all emotion out of the equation. You simply follow the rules and get a solid return. Laddering is the most common method used with bonds, and today $11 trillion is invested in this method.
Fixed income products consist mostly of different types of bonds, and buying bonds is much like buying real estate.
I have always favoured institutional compounding strip bonds, which are great for a Canadian RRSP portfolio since the gains are not taxable while in the plan.
clients advice about protecting their future, we always reference our acronym WILT, which stands for Wills, Income Protection, Life Insurance, and Tax Planning.
Insurance is a great tool to pay for capital gains tax that your estate will owe upon your death; if you are a business owner, it provides benefits that are protected against creditors.
Consider getting a term policy that is renewable and/or convertible so that, when you are reaching the end of your term, you have the choice to continue the policy without having to go through the qualification process again.
Whole Life Insurance Policy
mortgage life and disability insurance policy
Now that you are older and more experienced, this time you need to make sure you protect your assets and never create uncertainty about your financial future.
Alimony alone is too risky for a lender to accept on any secured or unsecured loan, and is one more indication of the new rules and regulations now mandated to tighten the financial industry.
Most people get consumed by failures in their personal finances. They mentally beat themselves up and think they should have more. Stop the pity party! Everyone has setbacks in their lives.
Once you turn the focus back to the basics, you will start to see how easy it really is. Concentrate on positive ideas for change, and find opportunities that will help lower debt and create savings. There are opportunities all around us; we just have to be open enough to see them and make a plan to act on them.
Ask yourself: “What’s my biggest asset?” Most right away will think it is their home, their savings and investment portfolio, their car, and so on. But it’s not your possessions, it’s YOU. Your ability to make money is your greatest asset. Even if you are in your sixties, do not discount your ability to continue to earn income.
Try not to get lured in by larger homes, better lifestyles, and more things that advertisers and the media try to convince us every day that we need. Life should be a fabulous journey filled with more than just monetary trophies. Life is about relationships, friendships, and treasured accomplished goals we have striven for and rejoiced at upon their completion. I have said throughout this book: do not overextend yourself. Please do not go too deep or too fast into debt with little time to recover. My dad always told me that if you can’t decide, no matter what it is, say NO. He said you will never regret it, and it might stop you from taking a risk in life that could affect you for many years. Be smart. If you are unsure, can’t decide, or think that the risk might be too great, say NO.
Always remember, if you are not planning and thinking about the future, how can you expect to have one? The fact is, you should always be moving ahead, gaining ground, and aspiring for more. You will feel great about your accomplishments and milestones, big or small. Don’t let worry about money have a toxic effect on the rest of your life. Believe you are worth more.