Here's an interesting article on the differences between Permanent and Term life insurance. Talk with you financial advisor to see which type of coverage makes the most sense for your situation. Click the link below for the full article.
Term or Permanent Life Insurance - MSN Money
Showing posts with label Financial Planning. Show all posts
Showing posts with label Financial Planning. Show all posts
Tuesday, February 21, 2012
Thursday, June 30, 2011
Have The Discussion
A recent article I came a across was somewhat timely, as I had just met with a young woman who had recently lost her husband, and his premature death was coupled with the reality that he was severely under life insured.
The situation was compounded with the fact that they had a child, and the income potential for the new widow was not going to be adequate enough to meet their needs.
It is stories and situations like that, that makes a financial advisor realize the importance and impact they can have with the recommendations they make for their clients.
Although life insurance involves having a discussion that is around the death of a loved one, I would encourage you to have it. Having it in place will make for peace of mind, and many less worries in the event something should happen.
Please read it, have the discussion, and put a plan in place.
Couples avoiding insurance talk
When it comes to communication skills, women are often considered innately advantaged. Except when the subject of discussion is life insurance.
According to a TD Insurance poll, it’s men who are driving the conversation about insurance on the rare occasions that it is broached.
Aptly titled Look Who’s Talking, the poll revealed discussing life insurance is still considered a taboo for Canadian couples. Thirty-one per cent of Canadian couples have never discussed life insurance with their partners, many of whom have children; among those who did, men led the conversation 57% of the time, as opposed to 43% women.
“It doesn’t matter who’s driving the conversation, the important thing is to talk about it,” says Dave Minor, vice-president, TD Insurance. “Considering how integral finances are to a family’s well-being, it was surprising and concerning to find that some couples aren’t talking about life insurance at all.”
The situation was compounded with the fact that they had a child, and the income potential for the new widow was not going to be adequate enough to meet their needs.
It is stories and situations like that, that makes a financial advisor realize the importance and impact they can have with the recommendations they make for their clients.
Although life insurance involves having a discussion that is around the death of a loved one, I would encourage you to have it. Having it in place will make for peace of mind, and many less worries in the event something should happen.
Please read it, have the discussion, and put a plan in place.
Couples avoiding insurance talk
When it comes to communication skills, women are often considered innately advantaged. Except when the subject of discussion is life insurance.
According to a TD Insurance poll, it’s men who are driving the conversation about insurance on the rare occasions that it is broached.
Aptly titled Look Who’s Talking, the poll revealed discussing life insurance is still considered a taboo for Canadian couples. Thirty-one per cent of Canadian couples have never discussed life insurance with their partners, many of whom have children; among those who did, men led the conversation 57% of the time, as opposed to 43% women.
“It doesn’t matter who’s driving the conversation, the important thing is to talk about it,” says Dave Minor, vice-president, TD Insurance. “Considering how integral finances are to a family’s well-being, it was surprising and concerning to find that some couples aren’t talking about life insurance at all.”
Wednesday, June 1, 2011
Are your plans lagging?
Many Canadians plan for many things. We plan to escape our crazy northern winters, we plan weddings, we plan birthday parties, we plan homes or even decks for our homes.
The reality is we don’t plan for a time that in some cases may be a third of our life; retirement. Or if there was a sudden unexpected death/disability of an income provider in the family, are we or our loved ones taken care of financially with our current insurance coverage?
These issues and others require investigation of current circumstances, design of a plan, and implementation and review. Check out this article showing that Canadians need to address their financial plans...
Canadians Lag in Financial Planning
http://www.advisor.ca/news/canadians-lag-in-financial-planning-49372
… should this article motivate to you review your current plans, don’t hesitate to give us a call.
The reality is we don’t plan for a time that in some cases may be a third of our life; retirement. Or if there was a sudden unexpected death/disability of an income provider in the family, are we or our loved ones taken care of financially with our current insurance coverage?
These issues and others require investigation of current circumstances, design of a plan, and implementation and review. Check out this article showing that Canadians need to address their financial plans...
Canadians Lag in Financial Planning
http://www.advisor.ca/news/canadians-lag-in-financial-planning-49372
… should this article motivate to you review your current plans, don’t hesitate to give us a call.
Friday, May 13, 2011
It's been awhile but we're back!
Over the last few months, we have been working on reorganizing the flow of our office and revitalizing the services that we offer our clientele. In the midst of all of that, some of our client communications were put to the back burner while we endeavored to ensure that our message remained clear and consistent.
Now that that much of the hard work is behind us, we felt that our first new message here should be directed at what we believe our core value is to you, our valued clients.
Yes, it is true that Algoma Financial offers one of the largest selections of financial products in Northern Ontario, from nearly every available financial institution. But it is not financial products selection that make us different than our competition, it is the fact that our focus is to understand your unique financial needs, and to put together personal recommendations that will help you achieve your financial goals. The products that we recommend are nothing more than a solution to your financial planning needs.
To give you some examples of how we can help you, please read the article linked below. It demonstrates how a financial advisor can help simply and streamline your financial life and how we can help you stay focused on your long-term goals.
http://dl.dropbox.com/u/29129394/ws_nolookingback_e%5B1%5D.pdf
If you haven't reviewed you financial plan in while, or would like a second opinion on things you already have in place, please don't hesitate to call and make an appointment to speak with us. We always look forward to seeing you and listening to your needs.
**Debt Management Luncheons Spring/Summer 2011**
Many people these days are interested in getting their debt and mortgage payments under control. And with the threat of potentially higher interest rates in the the future, this is becoming a growing concern among Canadians. If you find yourself in this situation and would like to learn more about some unique tools that we have to help you save on interest payments, consolidate debt and help you get out of debt sooner, please consider coming to our Debt Management Luncheons schedule through out the Spring and Summer, held here at the comfortable confines of the Algoma Financial Group boardroom. There is no charge for these luncheons and we offers a great menu from Panna Bar & Grill. All luncheon take place from Noon to 1pm so you can get back to work on time.
Our luncheons on Debt Management are scheduled for:
May 17th
May 31st
June 14th
July 12th
August 18th
If you are interested in attending, please RSVP with Clare Weatherby here at Algoma Financial. Our phone number is (705) 949-1316 or by email at cweatherby@algomafinancial.com
We are excited to be back and writing for you once again; and you can look forward to more exciting changes coming from Algoma Financial and Manulife Securities in the coming months. In the meantime, please consider follwing us on Facebook and Twitter.
Cheers,
Kevin & Ellen
Now that that much of the hard work is behind us, we felt that our first new message here should be directed at what we believe our core value is to you, our valued clients.
Yes, it is true that Algoma Financial offers one of the largest selections of financial products in Northern Ontario, from nearly every available financial institution. But it is not financial products selection that make us different than our competition, it is the fact that our focus is to understand your unique financial needs, and to put together personal recommendations that will help you achieve your financial goals. The products that we recommend are nothing more than a solution to your financial planning needs.
To give you some examples of how we can help you, please read the article linked below. It demonstrates how a financial advisor can help simply and streamline your financial life and how we can help you stay focused on your long-term goals.
http://dl.dropbox.com/u/29129394/ws_nolookingback_e%5B1%5D.pdf
If you haven't reviewed you financial plan in while, or would like a second opinion on things you already have in place, please don't hesitate to call and make an appointment to speak with us. We always look forward to seeing you and listening to your needs.
**Debt Management Luncheons Spring/Summer 2011**
Many people these days are interested in getting their debt and mortgage payments under control. And with the threat of potentially higher interest rates in the the future, this is becoming a growing concern among Canadians. If you find yourself in this situation and would like to learn more about some unique tools that we have to help you save on interest payments, consolidate debt and help you get out of debt sooner, please consider coming to our Debt Management Luncheons schedule through out the Spring and Summer, held here at the comfortable confines of the Algoma Financial Group boardroom. There is no charge for these luncheons and we offers a great menu from Panna Bar & Grill. All luncheon take place from Noon to 1pm so you can get back to work on time.
Our luncheons on Debt Management are scheduled for:
May 17th
May 31st
June 14th
July 12th
August 18th
If you are interested in attending, please RSVP with Clare Weatherby here at Algoma Financial. Our phone number is (705) 949-1316 or by email at cweatherby@algomafinancial.com
We are excited to be back and writing for you once again; and you can look forward to more exciting changes coming from Algoma Financial and Manulife Securities in the coming months. In the meantime, please consider follwing us on Facebook and Twitter.
Cheers,
Kevin & Ellen
Tuesday, July 7, 2009
Protect Yourself from Investment Fraud
In the news, both in Canada and internationally, there have been many high-profile cases of investment fraud that have grabbed the headlines causing the average investor to consider if they have been misled in the advice and products they have purchased in hopes of achieving their investment goals.
The good news for investors in Ontario is that we have one most rigorously tested financial industry in the world and the vast majority of money invested in the province is with legitimate sources.
If you invest with our firm, either though the purchase of investment funds (both Mutual and Segregated Funds), GIC’s or other financial products, you can rest assured that you are dealing with qualified, licensed investment advisors with a process for selecting the best investment vehicles for our clients that is based on strict financial planning guidelines.
Our recommendations and trades on your behalf are approved by a branch manager who ensures that your stated risk tolerance is suitable for the investments chosen and our practice is enabled by a reputable, nationally registered mutual fund dealer in Manulife Securities, who approves the acceptable investments available for our clients’ consideration.
All of this activity is overseen by the Ontario Securities Commission who administers and enforces securities legislation in the province of Ontario. The OSC’s mandate ‘is to provide protection to investors from unfair, improper or fraudulent practices; and to foster fair and efficient capital markets and confidence in capital markets’.
However, we continue to hear about investors who have been duped by rogue advisors, internet scams, mortgage fraud and other untoward activity. If you have investments elsewhere and you are concerned that you may have received unscrupulous advice, or, if you or a loved-one have been approached to invest in what you are concerned might be a scam, it’s important to recognize the signs of investment fraud.
According to the OSC’s website (www.osc.gov.on.ca) you should ask yourself the following questions before you investment.
1.Are you dealing with a registered advisor?
Anyone selling securities or offering investment advice in Ontario must be registered with the Ontario Securities Commission (OSC), unless they are exempt from this requirement. To check whether someone is registered, call the OSC Contact Centre at 1-877-785-1555
2.Can you verify the investment with a credible source?
If you receive an unsolicited investment opportunity, get a second opinion from your registered financial advisor, lawyer or accountant, or call the OSC Contact Centre for assistance.
3.If you are promised a guaranteed return, is the guarantee given by a reputable financial institution?
Ask for proof of the guarantee in writing (it should be included in the prospectus or offering sheet) and remember, a guarantee is only as good as the person or company offering it.
4.Is the risk you are taking reasonable for the expected return?
In general, returns on low-risk investments are in the range of current GIC rates. If the expected return is higher than these rates, you are taking a greater risk with you money. Make sure you understand and can afford the amount of risk you are taking on.
5.Is the investment opportunity based on facts?
The sources of ‘hot tips’ or ‘insider news’ often have ulterior motives.
6.Do you understand how the investment works?
If you don’t understand how the investment works and the seller cannot explain it to your satisfaction, this should be a warning not to invest.
7.Have you had enough time to make a decision?
Don’t give in to high-pressure sales tactics like limited time offers. Take your time making investment decisions and never sign documents you have no read carefully.
All investors should be engaged with their advisors in developing their investment plan. They should take the time to understand the details in the information folder or prospectus that must be given to the client before they invest. As most client/advisor relationships are based on trust, it can be easy to want to just ‘take their word for it’ but this approach can lead being taken advantage of.
And most importantly, all investment advisors must work though a bank, credit union or investment dealer. When a client purchases an investment all cheques will be made out either directly to their advisors employer or firm or to the investment company.
Never write a cheque to your advisor directly or to his or her operating company. This is the most common way for clients to be taken advantage of.
If you would like a second opinion on any investments or other financial product that you current own, please don’t hesitate to call and arrange a meeting.
The good news for investors in Ontario is that we have one most rigorously tested financial industry in the world and the vast majority of money invested in the province is with legitimate sources.
If you invest with our firm, either though the purchase of investment funds (both Mutual and Segregated Funds), GIC’s or other financial products, you can rest assured that you are dealing with qualified, licensed investment advisors with a process for selecting the best investment vehicles for our clients that is based on strict financial planning guidelines.
Our recommendations and trades on your behalf are approved by a branch manager who ensures that your stated risk tolerance is suitable for the investments chosen and our practice is enabled by a reputable, nationally registered mutual fund dealer in Manulife Securities, who approves the acceptable investments available for our clients’ consideration.
All of this activity is overseen by the Ontario Securities Commission who administers and enforces securities legislation in the province of Ontario. The OSC’s mandate ‘is to provide protection to investors from unfair, improper or fraudulent practices; and to foster fair and efficient capital markets and confidence in capital markets’.
However, we continue to hear about investors who have been duped by rogue advisors, internet scams, mortgage fraud and other untoward activity. If you have investments elsewhere and you are concerned that you may have received unscrupulous advice, or, if you or a loved-one have been approached to invest in what you are concerned might be a scam, it’s important to recognize the signs of investment fraud.
According to the OSC’s website (www.osc.gov.on.ca) you should ask yourself the following questions before you investment.
1.Are you dealing with a registered advisor?
Anyone selling securities or offering investment advice in Ontario must be registered with the Ontario Securities Commission (OSC), unless they are exempt from this requirement. To check whether someone is registered, call the OSC Contact Centre at 1-877-785-1555
2.Can you verify the investment with a credible source?
If you receive an unsolicited investment opportunity, get a second opinion from your registered financial advisor, lawyer or accountant, or call the OSC Contact Centre for assistance.
3.If you are promised a guaranteed return, is the guarantee given by a reputable financial institution?
Ask for proof of the guarantee in writing (it should be included in the prospectus or offering sheet) and remember, a guarantee is only as good as the person or company offering it.
4.Is the risk you are taking reasonable for the expected return?
In general, returns on low-risk investments are in the range of current GIC rates. If the expected return is higher than these rates, you are taking a greater risk with you money. Make sure you understand and can afford the amount of risk you are taking on.
5.Is the investment opportunity based on facts?
The sources of ‘hot tips’ or ‘insider news’ often have ulterior motives.
6.Do you understand how the investment works?
If you don’t understand how the investment works and the seller cannot explain it to your satisfaction, this should be a warning not to invest.
7.Have you had enough time to make a decision?
Don’t give in to high-pressure sales tactics like limited time offers. Take your time making investment decisions and never sign documents you have no read carefully.
All investors should be engaged with their advisors in developing their investment plan. They should take the time to understand the details in the information folder or prospectus that must be given to the client before they invest. As most client/advisor relationships are based on trust, it can be easy to want to just ‘take their word for it’ but this approach can lead being taken advantage of.
And most importantly, all investment advisors must work though a bank, credit union or investment dealer. When a client purchases an investment all cheques will be made out either directly to their advisors employer or firm or to the investment company.
Never write a cheque to your advisor directly or to his or her operating company. This is the most common way for clients to be taken advantage of.
If you would like a second opinion on any investments or other financial product that you current own, please don’t hesitate to call and arrange a meeting.
Friday, June 19, 2009
Historically Low Interested Rates - Now Is The Time To Save
Another important consideration that we want to share with many of our clients concerns debt management. With many Canadians worried about their jobs, and other financial insecurities, I believe that all my clients who have debt should take advantage of the historical low rates right now to consolidate and reduce the principal of their borrowings. Based on comments earlier this year from the Bank of Canada, I am confident that rates will stay low for at least the next year before they start rising again. The next 12 months represents a once-in-a-lifetime opportunity to save on interest payments and put yourself in better financial shape for the future.
We believe that the The Manulife One Flexible Mortgage from Manulife Bank is the best solutions to help you achieve this goal. If you are not familiar with this product please check out the website at www.manulifeone.ca. It should be noted that you don't have to wait until your mortgage renews to take advantage of Manulife One. Our banking consultant, Karen Clancy, can help you decide if it is in your best interest to pay a penalty to break out of your more expensive mortgage now and start saving interest payments immediately, or even consider opening a Manulife One account in a second position until your current mortgage renews.
For more information on Debt Managment Solutions, please visit www.manulifeone.ca
We believe that the The Manulife One Flexible Mortgage from Manulife Bank is the best solutions to help you achieve this goal. If you are not familiar with this product please check out the website at www.manulifeone.ca. It should be noted that you don't have to wait until your mortgage renews to take advantage of Manulife One. Our banking consultant, Karen Clancy, can help you decide if it is in your best interest to pay a penalty to break out of your more expensive mortgage now and start saving interest payments immediately, or even consider opening a Manulife One account in a second position until your current mortgage renews.
For more information on Debt Managment Solutions, please visit www.manulifeone.ca
Friday, November 21, 2008
Everything you wanted to know about the new Tax-Free Savings Accounts…but were afraid to ask.
By now you have probably heard some information about the new Tax Free Savings Accounts available to Canadians either on the news or through TV commercials that are currently running. Maybe you have some questions, or are not sure what they are all about? Hopefully the information provided below will answer all of your questions and then some.
Until the year 2009, most Canadians will have held their savings in their RRSP, where they could claim a deduction on their contributions, while have the growth of the account go tax deferred until retirement or withdrawal. The newest savings vehicle available to Canadians is called a Tax-Free Savings Account (TFSA). Whether you are saving for the short term (0-5) years or for the longer term (6+) a TFSA could be a valuable addition to your financial plan. So what is it all about? Well here are some frequently asked questions and answers taken right from our own Government of Canada’s web site that will provide most of the information to bring you up to speed.
Q.1 What is the Tax-Free Savings Account (TFSA)?
A.1 The TFSA is a registered savings account that allows taxpayers to earn investment income tax-free inside the account. Contributions to the account are not deductible for tax purposes, and withdrawals of contributions and earnings from the account are not taxable.
Q.2 Who would be eligible to open a TFSA?
A.2 Any individual (other than a trust) who is resident in Canada and 18 years of age or older would be eligible to establish a TFSA.
You would be able to open an account at most financial institutions such as Canadian trust companies, life insurance companies, banks, and credit unions (the same institutions that are currently eligible to issue a Registered Retirement Savings Plan). You would have to provide the issuer with your social insurance number when the account is opened. You would be permitted to hold more than one TFSA.
Q.3 When can I open a TFSA?
A.3 January 2009.
Q.4 How much can I contribute to the TFSA per year?
A.4 Each year you can contribute an amount up to your contribution room for the year. Your contribution room would be made up of three amounts:
1. Each year you would be allocated and allowed to contribute at least $5,000 (this annual amount will be indexed to inflation and rounded to the nearest $500 on a yearly basis). See also Q.14.
2. Any withdrawals made in the previous year would be added to the contribution room for the year.
3. Any unused contribution room from the previous year would be added to the contribution room for the year.
For example (assuming no indexing):
• In 2009 you would be allocated and allowed to contribute up to $5,000. If you only contribute $2,000, an amount of $3,000 would be carried forward to 2010.
• Your contribution room for 2010 would then be $5,000 plus $3,000, or $8,000.
• If in 2010, you do not contribute but decide to withdraw $1,000, your contribution room for 2011 would be $5,000, plus $8,000 (carried forward from 2010), plus the $1,000 withdrawn, or $14,000.
Q.5 If I don't have the money to invest in a given year, would I be able to use any unused contribution room in a future year?
A.5 Yes, there no limit on the number of years unused contribution room could be carried forward.
Q.6 What happens if I contribute more than my contribution room?
A.6 Excess contributions would be subject to tax of one per cent per month, for each month that the excess remains in the plan.
Q.7 Would there be any restrictions on withdrawals?
A.7 No, you could withdraw any amount in the account for any reason.
Q.8 Would contributions and withdrawals have any impact on my taxes and income-tested benefits?
A.8 No, contributions to a TFSA are not deductible in computing income for tax purposes, and no amount earned in or withdrawn from a TFSA would be included in computing income for tax purposes.
Withdrawals would not be taken into account in determining eligibility for income-tested benefits or credits delivered through the income tax system (for example, the Canada Child Tax Benefit, the Working Income Tax Benefit, the goods and services tax credit, and the age credit).
Furthermore, these amounts would not reduce other benefits that are based on the individual's income level, such as Old Age Security benefits, the Guaranteed Income Supplement, or Employment Insurance benefits.
Q.9 What kind of investments could I hold in my TFSA?
A.9 A TFSA would generally be permitted to hold the same investments as a registered retirement savings plan. This would include savings accounts, mutual funds, publicly traded securities, GICs, bonds, and certain shares of small business corporations.
Q.10 Is interest on money borrowed to invest in my TFSA tax-deductible?
A.10 No, interest on money borrowed to invest in a TFSA would not be deductible for tax purposes.
Q.11 Could I use my TFSA assets as security for a loan?
A.11 Yes, you could use the TFSA assets as security for a loan.
Q.12 If I provide funds to my spouse or common-law partner to invest in a TFSA, would the income earned in that account be attributed back to me?
A.12 No, the attribution rules would not apply to income earned in a TFSA where you provide funds to your spouse or common-law partner to take advantage of their TFSA contribution room.
Q.13 What happens if the account holder passes away?
A.13 Generally, earnings that accrue in the account after the account holder's death will be taxable, while those that accrued before death would remain exempt. However, it would be possible to maintain the tax-free status of the earnings if the account holder names his or her spouse or common-law partner as the successor account holder. Alternatively, the assets of the deceased's TFSA could be transferred to the TFSA of the surviving spouse or common-law partner without any impact on the survivor's existing contribution room.
Q.14 Could I still contribute to a TFSA if I become a non-resident of Canada?
A.14 If you become a non-resident, you would be allowed to maintain your TFSA, and you would not be taxed on any earnings in the account or on withdrawals; however, you would not be allowed to contribute, and no contribution room would accrue for any year throughout which you are a non-resident.
Q.15 What would happen if there was a breakdown of a marriage or a common-law partnership?
A.15 In such a situation, an amount could be transferred directly from one spouse or common-law partner's TFSA to the other's. The amount of the transfer would not affect either person's contribution room.
Q.16 How would I know what my TFSA contribution room is for a given tax year?
A.16 The CRA would determine TFSA contribution room (based on information provided by issuers) for each eligible individual who files an annual T1 individual income tax return. Individuals who have not filed returns for prior years (because for example, there was no tax payable) would be permitted to establish their entitlement to contribution room by filing a return for those years or by other means acceptable to the CRA.
Hopefully that will provide you with enough information to inquire about the TFSA with your Financial Advisor. Here at Algoma Financial, we can accept early applications now, and can provide you with advice and printed marketing material to help you make the best decision for your tax-free savings.
Until the year 2009, most Canadians will have held their savings in their RRSP, where they could claim a deduction on their contributions, while have the growth of the account go tax deferred until retirement or withdrawal. The newest savings vehicle available to Canadians is called a Tax-Free Savings Account (TFSA). Whether you are saving for the short term (0-5) years or for the longer term (6+) a TFSA could be a valuable addition to your financial plan. So what is it all about? Well here are some frequently asked questions and answers taken right from our own Government of Canada’s web site that will provide most of the information to bring you up to speed.
Q.1 What is the Tax-Free Savings Account (TFSA)?
A.1 The TFSA is a registered savings account that allows taxpayers to earn investment income tax-free inside the account. Contributions to the account are not deductible for tax purposes, and withdrawals of contributions and earnings from the account are not taxable.
Q.2 Who would be eligible to open a TFSA?
A.2 Any individual (other than a trust) who is resident in Canada and 18 years of age or older would be eligible to establish a TFSA.
You would be able to open an account at most financial institutions such as Canadian trust companies, life insurance companies, banks, and credit unions (the same institutions that are currently eligible to issue a Registered Retirement Savings Plan). You would have to provide the issuer with your social insurance number when the account is opened. You would be permitted to hold more than one TFSA.
Q.3 When can I open a TFSA?
A.3 January 2009.
Q.4 How much can I contribute to the TFSA per year?
A.4 Each year you can contribute an amount up to your contribution room for the year. Your contribution room would be made up of three amounts:
1. Each year you would be allocated and allowed to contribute at least $5,000 (this annual amount will be indexed to inflation and rounded to the nearest $500 on a yearly basis). See also Q.14.
2. Any withdrawals made in the previous year would be added to the contribution room for the year.
3. Any unused contribution room from the previous year would be added to the contribution room for the year.
For example (assuming no indexing):
• In 2009 you would be allocated and allowed to contribute up to $5,000. If you only contribute $2,000, an amount of $3,000 would be carried forward to 2010.
• Your contribution room for 2010 would then be $5,000 plus $3,000, or $8,000.
• If in 2010, you do not contribute but decide to withdraw $1,000, your contribution room for 2011 would be $5,000, plus $8,000 (carried forward from 2010), plus the $1,000 withdrawn, or $14,000.
Q.5 If I don't have the money to invest in a given year, would I be able to use any unused contribution room in a future year?
A.5 Yes, there no limit on the number of years unused contribution room could be carried forward.
Q.6 What happens if I contribute more than my contribution room?
A.6 Excess contributions would be subject to tax of one per cent per month, for each month that the excess remains in the plan.
Q.7 Would there be any restrictions on withdrawals?
A.7 No, you could withdraw any amount in the account for any reason.
Q.8 Would contributions and withdrawals have any impact on my taxes and income-tested benefits?
A.8 No, contributions to a TFSA are not deductible in computing income for tax purposes, and no amount earned in or withdrawn from a TFSA would be included in computing income for tax purposes.
Withdrawals would not be taken into account in determining eligibility for income-tested benefits or credits delivered through the income tax system (for example, the Canada Child Tax Benefit, the Working Income Tax Benefit, the goods and services tax credit, and the age credit).
Furthermore, these amounts would not reduce other benefits that are based on the individual's income level, such as Old Age Security benefits, the Guaranteed Income Supplement, or Employment Insurance benefits.
Q.9 What kind of investments could I hold in my TFSA?
A.9 A TFSA would generally be permitted to hold the same investments as a registered retirement savings plan. This would include savings accounts, mutual funds, publicly traded securities, GICs, bonds, and certain shares of small business corporations.
Q.10 Is interest on money borrowed to invest in my TFSA tax-deductible?
A.10 No, interest on money borrowed to invest in a TFSA would not be deductible for tax purposes.
Q.11 Could I use my TFSA assets as security for a loan?
A.11 Yes, you could use the TFSA assets as security for a loan.
Q.12 If I provide funds to my spouse or common-law partner to invest in a TFSA, would the income earned in that account be attributed back to me?
A.12 No, the attribution rules would not apply to income earned in a TFSA where you provide funds to your spouse or common-law partner to take advantage of their TFSA contribution room.
Q.13 What happens if the account holder passes away?
A.13 Generally, earnings that accrue in the account after the account holder's death will be taxable, while those that accrued before death would remain exempt. However, it would be possible to maintain the tax-free status of the earnings if the account holder names his or her spouse or common-law partner as the successor account holder. Alternatively, the assets of the deceased's TFSA could be transferred to the TFSA of the surviving spouse or common-law partner without any impact on the survivor's existing contribution room.
Q.14 Could I still contribute to a TFSA if I become a non-resident of Canada?
A.14 If you become a non-resident, you would be allowed to maintain your TFSA, and you would not be taxed on any earnings in the account or on withdrawals; however, you would not be allowed to contribute, and no contribution room would accrue for any year throughout which you are a non-resident.
Q.15 What would happen if there was a breakdown of a marriage or a common-law partnership?
A.15 In such a situation, an amount could be transferred directly from one spouse or common-law partner's TFSA to the other's. The amount of the transfer would not affect either person's contribution room.
Q.16 How would I know what my TFSA contribution room is for a given tax year?
A.16 The CRA would determine TFSA contribution room (based on information provided by issuers) for each eligible individual who files an annual T1 individual income tax return. Individuals who have not filed returns for prior years (because for example, there was no tax payable) would be permitted to establish their entitlement to contribution room by filing a return for those years or by other means acceptable to the CRA.
Hopefully that will provide you with enough information to inquire about the TFSA with your Financial Advisor. Here at Algoma Financial, we can accept early applications now, and can provide you with advice and printed marketing material to help you make the best decision for your tax-free savings.
Monday, September 29, 2008
6 Principals to Help You Through The Economic Storm
Many of our clients have questions about the recent news regarding the U.S economy and the volatility in the world’s stock markets. These are very confusing and sometimes scary times, as financial institutions around the world are reacting to the biggest economic crisis in 80 years. There are not a lot of answers to be found about the short-term strength of the Canadian economy.
What we do know is that Canada’s lending practices are more regulated than those in the U.S. and because of this our economy and our financial institutions are doing significantly better than those in the US for the time being.
We also know that know that our economy is still growing (thanks mainly to our oil and gas exports), but may economists predict that Canada may experience a significant slow-down in the coming months should the U.S. enter a long recession.
Let’s always remember that the economy operates in a cycle, and periods of growth and recession are natural market forces.
In good times and in bad times, my golden rule when it comes to financial planning is not to let your emotions guide you in making important decisions about money. History shows us time and time again that fear and greed are the two biggest enemies to your financial health. It may be that a recovery for the stock markets are just around the corner and you will benefit from staying invested. But either way, it should be understood that those adhere to a disciplined process to handling their finances will come out ahead in the long-term.
These basic principals to proper financial planning have not changed in since Mankind began thinking about money. These principals will help you be successful in bullish and bearish times of our economy.
Here are 6 actions you can take today to make the most of your money:
1. Build a budget, reduce your debt & live beneath your means.
We’ve all heard of the importance of knowing how much money you have and what your expenses are. The basic fundamental of financial planning is to spend less than you make. When times are tough, it’s even more important to know where you are spending your money and making sure you make the most of every dollar you have.
This is also not the time to take on more debt. In fact, it may be a good idea to reduce your debt load as much as possible. Canada’s economy is usually 12-18 months behind the US., so take this time to reduce the amount of debt you are being charged interest on. With the inflation rate creeping up in Canada, it is likely that interest rates will follow.
Here at Algoma Financial and Manulife Securities we have some of the most sophisticated debt management tools and products available in Canada to help you reduce the cost of your debt.
2. Review your savings goal and stick to your savings and retirement plan.
Having an emergency fund is an important tool to any financial plan. One never knows when we might find ourselves in need of cash. Saving 3-6 months of income can help you, your family or your business weather troubled times. We can help you achieve such a fund using our Advantage Account with Manulife Bank. The account has no service fees, pays 2.9% interest, and it CDIC protected up to $100,000.
When it comes to your investments, our process will help you build a long-term investment plan. This program will help you set your investment goals, create a plan to achieve it, and help you keep track of your progress.
To ensure that you're saving enough money to achieve your investment goal, you need to check that your plan is on track at least once a year. We are committed to meet with our clients regularly to review your investment needs.
3. Assess your risk tolerance and your time horizon for your investments.
Once you know what you need to save, choose investments that match your risk tolerance and time horizon. Our Investment Needs Analysis will help you assess not only your tolerance for losing money, but your tolerance for not making enough money as well.
If your investment needs are long-term (over ten years before a child’s education, retirement etc.) you should not be overly concerned about the short-term volatility in your investment portfolio’s value. Our economy has weathered many financial storms in the past and the markets have always rewarded those who have the time-horizon and the discipline to stay committed to an investment plan.
4. Diversify, diversify, diversify.
With a mix of stock, bond and money market funds. Over the long term, almost all investments grow. But over the short term, a specific investment will go up and down depending on market conditions. All investments don't move the same way all the time. Some may go up while others lose money over the short term. By diversifying and choosing different types of investments, you can take advantage of the long term growth potential while reducing the short term volatility. Our process helps you determine the optimum asset allocation of investments to provide a diversified mix for each investment style.
5. Don't try to time the market.
Selling stock funds when a market is depressed means you are selling at a loss. Moving back into stock funds when the market begins to climb means you will likely miss out on the recovery. If you carefully chose your equities based on your risk tolerance, stick with them. They will not let you down in the long term.
6. Maintain the saving habit.
When you invest a specific sum at regular intervals, you benefit from the magic of compounding. And you reap the rewards of dollar cost averaging. When markets are down, the unit value of investments decreases. That means you can by more units for the same amount of money. When the markets start going up, as they inevitably do following a major decline, so will the value of your units.
If you have any concerns about your current financial situation or your investment plan, please don’t hesitate to contact us. With a review of your needs and current situation, and a commitment to these six basic principals of money management, we can help that you stay on course no matter what the economic conditions.
What we do know is that Canada’s lending practices are more regulated than those in the U.S. and because of this our economy and our financial institutions are doing significantly better than those in the US for the time being.
We also know that know that our economy is still growing (thanks mainly to our oil and gas exports), but may economists predict that Canada may experience a significant slow-down in the coming months should the U.S. enter a long recession.
Let’s always remember that the economy operates in a cycle, and periods of growth and recession are natural market forces.
In good times and in bad times, my golden rule when it comes to financial planning is not to let your emotions guide you in making important decisions about money. History shows us time and time again that fear and greed are the two biggest enemies to your financial health. It may be that a recovery for the stock markets are just around the corner and you will benefit from staying invested. But either way, it should be understood that those adhere to a disciplined process to handling their finances will come out ahead in the long-term.
These basic principals to proper financial planning have not changed in since Mankind began thinking about money. These principals will help you be successful in bullish and bearish times of our economy.
Here are 6 actions you can take today to make the most of your money:
1. Build a budget, reduce your debt & live beneath your means.
We’ve all heard of the importance of knowing how much money you have and what your expenses are. The basic fundamental of financial planning is to spend less than you make. When times are tough, it’s even more important to know where you are spending your money and making sure you make the most of every dollar you have.
This is also not the time to take on more debt. In fact, it may be a good idea to reduce your debt load as much as possible. Canada’s economy is usually 12-18 months behind the US., so take this time to reduce the amount of debt you are being charged interest on. With the inflation rate creeping up in Canada, it is likely that interest rates will follow.
Here at Algoma Financial and Manulife Securities we have some of the most sophisticated debt management tools and products available in Canada to help you reduce the cost of your debt.
2. Review your savings goal and stick to your savings and retirement plan.
Having an emergency fund is an important tool to any financial plan. One never knows when we might find ourselves in need of cash. Saving 3-6 months of income can help you, your family or your business weather troubled times. We can help you achieve such a fund using our Advantage Account with Manulife Bank. The account has no service fees, pays 2.9% interest, and it CDIC protected up to $100,000.
When it comes to your investments, our process will help you build a long-term investment plan. This program will help you set your investment goals, create a plan to achieve it, and help you keep track of your progress.
To ensure that you're saving enough money to achieve your investment goal, you need to check that your plan is on track at least once a year. We are committed to meet with our clients regularly to review your investment needs.
3. Assess your risk tolerance and your time horizon for your investments.
Once you know what you need to save, choose investments that match your risk tolerance and time horizon. Our Investment Needs Analysis will help you assess not only your tolerance for losing money, but your tolerance for not making enough money as well.
If your investment needs are long-term (over ten years before a child’s education, retirement etc.) you should not be overly concerned about the short-term volatility in your investment portfolio’s value. Our economy has weathered many financial storms in the past and the markets have always rewarded those who have the time-horizon and the discipline to stay committed to an investment plan.
4. Diversify, diversify, diversify.
With a mix of stock, bond and money market funds. Over the long term, almost all investments grow. But over the short term, a specific investment will go up and down depending on market conditions. All investments don't move the same way all the time. Some may go up while others lose money over the short term. By diversifying and choosing different types of investments, you can take advantage of the long term growth potential while reducing the short term volatility. Our process helps you determine the optimum asset allocation of investments to provide a diversified mix for each investment style.
5. Don't try to time the market.
Selling stock funds when a market is depressed means you are selling at a loss. Moving back into stock funds when the market begins to climb means you will likely miss out on the recovery. If you carefully chose your equities based on your risk tolerance, stick with them. They will not let you down in the long term.
6. Maintain the saving habit.
When you invest a specific sum at regular intervals, you benefit from the magic of compounding. And you reap the rewards of dollar cost averaging. When markets are down, the unit value of investments decreases. That means you can by more units for the same amount of money. When the markets start going up, as they inevitably do following a major decline, so will the value of your units.
If you have any concerns about your current financial situation or your investment plan, please don’t hesitate to contact us. With a review of your needs and current situation, and a commitment to these six basic principals of money management, we can help that you stay on course no matter what the economic conditions.
Friday, June 27, 2008
Be prepared to share more information about yourself with financial institutions
The world continues to change since the terrorist attacks of 9/11. The Canadian Government has released significant new amendments to the ‘Proceeds of Crime (Money Laundering) and Terrorist Financing Act effective June 23rd, 2008 which brings the act in line with international standards.
These new amendments to the Act will require financial institutions (banks, investment dealers, and insurance companies etc.) to collect more information on their clients and be more prudent in monitoring client transaction than ever before. Also, be prepared for you financial advisor to ask a lot more questions about your intentions with your money.
Under the new amendments, all financial institutions have an additional obligation to report ‘suspicious transactions’ to the government. If a financial advisor, finds that a client is attempting to request a suspicious transactions (whether or not the transaction is completed), he or she must now file a report with the Financial Transactions and Reports Analysis Centre of Canada.
Further, it is now an Advisor’s duty to understand where your money came from and have an idea of what your purposes are with the money. To be honest, a client does not have to be too specific here. It is acceptable, for example, to tell an advisor, the money comes from your wages and you are saving for retirement.
Also, your financial institutions will have a responsibility to prove their clients identities. Even if you have been dealing with the same person for years, be prepared to provide at least one copy of picture ID for new transactions.
Another new responsibility your advisor or broker will have is to ask if your money is coming from, or being used for, a third person. If you are making an investment for another individual, you will have to answer questions about this person, and your relationship with them. Signatures from the third party may also be necessary in some situations.
Your advisor or broker will also have to know if you or someone from your immediate family has worked for any level of provincial or federal government, including embassies or if you have political exposure to foreign persons.
The act sets out penalties and sanctions against firms that don’t comply with these regulations, so there is no doubt that these new changes will effect all of our financial transactions.
As Investment Professionals, we understand the reasons behind the new regulations and we want to help the government prevent illegal money from entering the system. However, these new requirements will cause more paperwork for everyone in the industry, more frustration for the average investors and at the end of the day will probably raise the costs of doing business for the vast majority of honest consumers. Unfortunately, those that want to break the law will probably find others ways around these regulations.
These new amendments to the Act will require financial institutions (banks, investment dealers, and insurance companies etc.) to collect more information on their clients and be more prudent in monitoring client transaction than ever before. Also, be prepared for you financial advisor to ask a lot more questions about your intentions with your money.
Under the new amendments, all financial institutions have an additional obligation to report ‘suspicious transactions’ to the government. If a financial advisor, finds that a client is attempting to request a suspicious transactions (whether or not the transaction is completed), he or she must now file a report with the Financial Transactions and Reports Analysis Centre of Canada.
Further, it is now an Advisor’s duty to understand where your money came from and have an idea of what your purposes are with the money. To be honest, a client does not have to be too specific here. It is acceptable, for example, to tell an advisor, the money comes from your wages and you are saving for retirement.
Also, your financial institutions will have a responsibility to prove their clients identities. Even if you have been dealing with the same person for years, be prepared to provide at least one copy of picture ID for new transactions.
Another new responsibility your advisor or broker will have is to ask if your money is coming from, or being used for, a third person. If you are making an investment for another individual, you will have to answer questions about this person, and your relationship with them. Signatures from the third party may also be necessary in some situations.
Your advisor or broker will also have to know if you or someone from your immediate family has worked for any level of provincial or federal government, including embassies or if you have political exposure to foreign persons.
The act sets out penalties and sanctions against firms that don’t comply with these regulations, so there is no doubt that these new changes will effect all of our financial transactions.
As Investment Professionals, we understand the reasons behind the new regulations and we want to help the government prevent illegal money from entering the system. However, these new requirements will cause more paperwork for everyone in the industry, more frustration for the average investors and at the end of the day will probably raise the costs of doing business for the vast majority of honest consumers. Unfortunately, those that want to break the law will probably find others ways around these regulations.
Monday, January 21, 2008
Don't Sell Quality - Article from The Globe and Mail
No doubt you are aware of the recent stock market declines. We came across a great article today in the Globe and Mail that we would like to share with you. It sums up nicely our position on long term investing through a 'Bear Market'.
The most important aspect of any investment plan is to ensure that your investment choices meet your time horizon and risk tolerance. If you would like a review of your current investment portfolio, please don't hesitate to call and make an appointment.
This is no time to sell quality
Rob Carrick
Monday, January 21, 2008
Beware the one-two punch of plunging stock markets.
Not only do they decimate your portfolio, but they also lure you into making bad investing decisions that help ease your short-term anxiety but then hurt you in the long term. That's how it is that investors sell perfectly good stocks and mutual funds, buy principal-protected investments and make other mistakes with lasting repercussions.
Selling quality right now is probably the worst error you can get fooled into making by a plunging stock market. The rationale here of protecting your money against further losses makes sense, especially because it's hard to imagine there aren't more bad days ahead for the market.
But what comes after that? If you sell today you'll have your money languishing in money market funds, where returns are on the decline because of falling interest rates. You'll eventually get an itch to find something with a higher return and, quite likely, you'll end up in the stock market again. By then, stocks will have jumped from their lows and you'll be buying at elevated prices.
Some people, amateur and professional, get lucky timing their moves in and out of the market. The masses get it wrong and thus end up in a cycle of selling low and buying high that robs of them of returns and extracts unnecessary fees and commissions.
Another mistake is to give up on the risks of the stock market and instead buy guaranteed investments like principal-protected notes or segregated funds. The appeal of these investments is obvious – you get exposure to stocks with no risk of losing money in down markets like we're seeing today. The problem is with the cost of the guarantee – it cuts into returns so deeply that it's simply not a good value.
Buying guaranteed investments at times like now make less sense than usual because the stock markets have already lost a lot of ground. They may fall further, but savvy investors know that the current decline is setting up the next move up for the markets. Sellers of guaranteed products will make out like bandits when stocks rebound. Investors, not so much.
With registered retirement savings plan season just about here, gun-shy investors are poised to make yet another mistake, which is failing to make an RRSP contribution. If a plunging stock market is freaking you out, invest your RRSP money in a high-interest savings account until the dust settles and then move into a long-term investment when you can.
The best move would be to take your RRSP money and put it into the highest quality, most beaten down stocks or funds you can find. But one step at a time.
© The Globe and Mail
The most important aspect of any investment plan is to ensure that your investment choices meet your time horizon and risk tolerance. If you would like a review of your current investment portfolio, please don't hesitate to call and make an appointment.
This is no time to sell quality
Rob Carrick
Monday, January 21, 2008
Beware the one-two punch of plunging stock markets.
Not only do they decimate your portfolio, but they also lure you into making bad investing decisions that help ease your short-term anxiety but then hurt you in the long term. That's how it is that investors sell perfectly good stocks and mutual funds, buy principal-protected investments and make other mistakes with lasting repercussions.
Selling quality right now is probably the worst error you can get fooled into making by a plunging stock market. The rationale here of protecting your money against further losses makes sense, especially because it's hard to imagine there aren't more bad days ahead for the market.
But what comes after that? If you sell today you'll have your money languishing in money market funds, where returns are on the decline because of falling interest rates. You'll eventually get an itch to find something with a higher return and, quite likely, you'll end up in the stock market again. By then, stocks will have jumped from their lows and you'll be buying at elevated prices.
Some people, amateur and professional, get lucky timing their moves in and out of the market. The masses get it wrong and thus end up in a cycle of selling low and buying high that robs of them of returns and extracts unnecessary fees and commissions.
Another mistake is to give up on the risks of the stock market and instead buy guaranteed investments like principal-protected notes or segregated funds. The appeal of these investments is obvious – you get exposure to stocks with no risk of losing money in down markets like we're seeing today. The problem is with the cost of the guarantee – it cuts into returns so deeply that it's simply not a good value.
Buying guaranteed investments at times like now make less sense than usual because the stock markets have already lost a lot of ground. They may fall further, but savvy investors know that the current decline is setting up the next move up for the markets. Sellers of guaranteed products will make out like bandits when stocks rebound. Investors, not so much.
With registered retirement savings plan season just about here, gun-shy investors are poised to make yet another mistake, which is failing to make an RRSP contribution. If a plunging stock market is freaking you out, invest your RRSP money in a high-interest savings account until the dust settles and then move into a long-term investment when you can.
The best move would be to take your RRSP money and put it into the highest quality, most beaten down stocks or funds you can find. But one step at a time.
© The Globe and Mail
Wednesday, January 16, 2008
Staying Focused
With the recent volatility in the markets, it can be easy to lose sight of your long-term financial goals. That's why we encourage all of our clients to meet with us on a regular basis to review the financial plans we have made together. Goals and needs can change quickly and it is important that your plan remains focused and adaptable.
It's important to also understand what's happening in the markets and how these changes can affect your plan Our most important goal when working with together is to make sure your time-horizon (the amount of time your investments can stay invested before your need to make withdraws),your risk-tolerance and portfolio diversification strategies are kept up to date.
While we take the time this time of year to contemplate our future financial goals (like your RRSP contribution for this year for example), we would like to leave you with a short presentation on investing through the natural cycles of the financial markets and how to separate our emotions from guiding us toward the wrong investment decisions.
We look forward to meeting with each of you in the near future to ensure that your financial plans stay on track. Please don't hesitate to call and book a meeting.
Kevin Lamour & Ellen MacDougall
It's important to also understand what's happening in the markets and how these changes can affect your plan Our most important goal when working with together is to make sure your time-horizon (the amount of time your investments can stay invested before your need to make withdraws),your risk-tolerance and portfolio diversification strategies are kept up to date.
While we take the time this time of year to contemplate our future financial goals (like your RRSP contribution for this year for example), we would like to leave you with a short presentation on investing through the natural cycles of the financial markets and how to separate our emotions from guiding us toward the wrong investment decisions.
We look forward to meeting with each of you in the near future to ensure that your financial plans stay on track. Please don't hesitate to call and book a meeting.
Kevin Lamour & Ellen MacDougall
Friday, November 16, 2007
Do Your Investments Match Your Values
One of the fastest growing investment concepts to emerge in the last few years is the area of Socially Responsible Investing (SRI) which some people refer to as ethical investing. Recent studies show that this segment of the investment market is growing at twice the rate of the total investment market.
So, what is SRI? Simply put, it is the practice of incorporating a person’s beliefs and values into their investment portfolio. This can reflect someone’s wishes to exclude a particular industry from their portfolio (eg. tobacco manufacturers or military contractors) or to include only companies with excellent records on international human rights (eg. sweat shops) or environmental impact.
A person’s motivation for doing this may be purely personal or it may stem from a societal-impact view. On the personal side, someone who has witnessed the negative effects of gambling on another person or family may choose to exclude any companies that derive revenue from the gaming industry from their portfolio. From the societal impact side, an investor may want to look for companies which respect the diversity of our society as a whole and have programs in place to ensure that there is fair representation of all types of persons within the company. Still others may choose this approach because of their religious convictions and another group may be looking for ways to support only those companies that respect the natural environment wherever they operate.
Whatever your motivation, the number of mutual funds available for investors who wish to incorporate their social, ethical and environmental concerns into their investment decisions has never been larger than it is now and the diversity of concerns that one can incorporate into their portfolio continues to grow. What was once a niche movement is quickly becoming mainstream.
The number one question that most people ask about SRI is, “What effect will this have on my return?” Good news! There is a growing body of evidence that suggest that there will likely be no impact on your return; or, if there is an impact, it may be a positive one. Socially screened indices in the United States have consistently outperformed their non-screened comparative indices by significant margins. For example, the Domini Social Index in the United States is an index of 400 companies screened according to a number of social and environmental criteria. Over the ten year period ended October 31, 2006, this index averaged 9.02% per year while the Standard and Poor 500 averaged only 8.66%. (Source www.kld.com)
Could it be true that companies with better environmental policies and more effective employee programs have more efficient workforces and are less likely to be the subject of negative press and lawsuits and thus, generate higher returns for their shareholders. Whatever the future financial returns, many SRI investors appreciate that they are also able to get a good social return on their money. In effect, they have a triple bottom line when it comes to their investments: financial, environmental and social returns weigh into their investment decisions.
If you have never thought about this or have a current portfolio that you believe may be inconsistent with your views on a number of social, ethical or environmental issues, please feel free to contact me. Rest assured, you will not be alone in your efforts to use your investments to shape the future. Remember the old saying, “Money makes the world go around”. Well, some of that is your money, so you should be able to have some say in its impact on the world.
So, what is SRI? Simply put, it is the practice of incorporating a person’s beliefs and values into their investment portfolio. This can reflect someone’s wishes to exclude a particular industry from their portfolio (eg. tobacco manufacturers or military contractors) or to include only companies with excellent records on international human rights (eg. sweat shops) or environmental impact.
A person’s motivation for doing this may be purely personal or it may stem from a societal-impact view. On the personal side, someone who has witnessed the negative effects of gambling on another person or family may choose to exclude any companies that derive revenue from the gaming industry from their portfolio. From the societal impact side, an investor may want to look for companies which respect the diversity of our society as a whole and have programs in place to ensure that there is fair representation of all types of persons within the company. Still others may choose this approach because of their religious convictions and another group may be looking for ways to support only those companies that respect the natural environment wherever they operate.
Whatever your motivation, the number of mutual funds available for investors who wish to incorporate their social, ethical and environmental concerns into their investment decisions has never been larger than it is now and the diversity of concerns that one can incorporate into their portfolio continues to grow. What was once a niche movement is quickly becoming mainstream.
The number one question that most people ask about SRI is, “What effect will this have on my return?” Good news! There is a growing body of evidence that suggest that there will likely be no impact on your return; or, if there is an impact, it may be a positive one. Socially screened indices in the United States have consistently outperformed their non-screened comparative indices by significant margins. For example, the Domini Social Index in the United States is an index of 400 companies screened according to a number of social and environmental criteria. Over the ten year period ended October 31, 2006, this index averaged 9.02% per year while the Standard and Poor 500 averaged only 8.66%. (Source www.kld.com)
Could it be true that companies with better environmental policies and more effective employee programs have more efficient workforces and are less likely to be the subject of negative press and lawsuits and thus, generate higher returns for their shareholders. Whatever the future financial returns, many SRI investors appreciate that they are also able to get a good social return on their money. In effect, they have a triple bottom line when it comes to their investments: financial, environmental and social returns weigh into their investment decisions.
If you have never thought about this or have a current portfolio that you believe may be inconsistent with your views on a number of social, ethical or environmental issues, please feel free to contact me. Rest assured, you will not be alone in your efforts to use your investments to shape the future. Remember the old saying, “Money makes the world go around”. Well, some of that is your money, so you should be able to have some say in its impact on the world.
Monday, June 4, 2007
Get Mortgage Insurance Working for You, Not Your Bank
Are you paying too much for your mortgage insurance?
You may have taken out the insurance that your bank or credit union offered you when you applied for a mortgage. If you did, that was good thinking. What you owe on your home is probably the single biggest debt you'll ever incur, so it makes sense to have it fully insured.
But, like many other people, you may not have known that you can obtain better coverage at a lower rate by buying your own individual insurance policy!
• Generally speaking, the insurance offered by the bank is a "one size fits all" product. Individual insurance, on the other hand, is based on your own medical condition. If you're in good heath, why would you want to pay the same rate as someone who smokes a pack a day?
• Should you change banks when your mortgage renews, you may lose your bank insurance coverage and have to reapply at your new lender. With an individual policy, you're free to shop the market for the best rate at renewal — you can take your insurance coverage with you without ever having to submit new medical information.
• The financial institution is named as beneficiary on insurance from the bank. You pay the premiums, but they'll get the money should something happen to you. An individual policy, however, allows you to name your own beneficiary — meaning your loved ones can decide when (or if) they want to pay off the mortgage or if they'd rather invest the proceeds instead.
If you're interested in getting a comparison quote or learning more about how an individual mortgage insurance policy could work for you, please don't hesitate to contact me.
Wednesday, May 16, 2007
Money Talks launches just a few days
In keeping up with our commitment to bring you up-to-date news and information about investing and financial planning, Money Talks - The Blog Edition will launch on June 1st. Please visit this site and subscribe to our blog for commentary on the news that affects all of our financial plans.
See you soon,
Kevin Lamour
See you soon,
Kevin Lamour
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