Dollar Cost Averaging

If market volatility has caused you to transfer your money into GICs or cash, you may want to ask yourself if you are still on track to meeting your personal goals. Whether it’s saving for retirement, a home or a child’s education, keeping money in a lower-earning investment option may not give you the growth you need.

My goal is to find the most effective way to put your money to work and build up your wealth. There is a tried and tested strategy for investing called Dollar Cost Averaging (DCA), which smooths out the costs of investing by regularly buying over time. One way to do this is investing a lump sum of money into a temporary safe haven investment holding (ex: money market) to avoid market volatility and then systematically switch portions of that into your target investment(s) over a regular period of time. This helps you avoid the risk of market timing.

Another way the DCA strategy can be achieved is by Pre-Authorized Contributions (PACs). PACs allows you to make withdrawals directly from a saving or chequing account and then deposit the amount to a particular investment(s) on a regular basis, such as monthly or bi-weekly. This will allow your savings to grow automatically.

Dollar Cost Averaging is right for all markets

• In a falling market: DCA can let you purchase more securities
• In a rising market: DCA can protect you from paying too much
• In a flat market: DCA ensures you always stay invested

Benefits of Pre-Authorized Contributions:

• Helps you stick to your plan
• Takes advantage of compound growth
• Eliminates the guesswork of when to invest
• Helps you avoid the rush of yearly RRSP contributions

Double your PAC

Even small increases to a PAC can help you reach your long-term goals faster. The chart below illustrates the impact of doubling your PAC on a monthly contribution overtime of $50 increased to $100, and $250 increased to $500.


Assumes a 4% annualized rate of return. Used only to illustrate the effects of compound growth rate and is not intended to reflect future values of any particular investment.


This investment strategy helps you minimize volatility and avoid the risk of market timing. It is not a one-day initiative but rather a continuous long-term activity. The earlier you start investing, the better you will be in the future. I look forward to discussing these with you in more detail and seeing how these strategies could assist you in achieving your goals.

Let’s get started!

Elite Pricing

An important part of investing is making sure you invest wisely. Even if you invest wisely, you might still be leaving money on the table if you do not pay extra attention to your investment fees. You might remember the old saying, “A penny saved is a penny earned”. The same idea can be applied to your investment costs. 

You can potentially save thousands of dollars every year by lowering your investing fees.

One way to access lower investment costs is through Elite or Preferred Pricing programs. Elite Pricing is a great way to ensure you keep more of your money, and it is worthwhile to explore your options.  

How does Elite Pricing work? 

One might think that Elite Pricing or Private Client programs are available only for wealthy investors. Fortunately, Elite Pricing is available through most programs for asset levels starting at $100,000. In some instances, companies will also have automatic discounting available to ensure investors receive fee discounts as soon as they are eligible. So, how does one know if they are eligible and what are the criteria? Most investment companies will provide discounts on fees that are based on the assets invested. The investment company may also look at several criteria for discounting such as: 

• Fund-level discounts
• Account-level rebates
• Householding 

If an Elite Pricing program is geared toward High-Net-Worth clients, investors may also receive added features such as: an annual review, and investment rebalancing services.

As you can see there are many ways that you, as an investor, can qualify for Elite Pricing. Let’s connect soon to discuss your plan, and which Elite Pricing option is best for you.

Contact me today and let’s see how much money you can save! 

RESP Benefits

A Registered Education Savings Plan (RESP) is a special savings account to help Canadian residents save for a child’s post-secondary education.

Benefits include:

• Help you systematically save and plan for a child’s education
  
  
• Tax-sheltered growth – there’s no taxes payable on the money earned in a RESP until it’s withdrawn
  
  
• Government Grants – Government matches 20% of RESP contributions up to $2,500 each year and to a lifetime maximum of $7,200
  
  
• Additional Grants available for low-income families
  
  
• Ability to catch up for any prior years you missed contributing
  
  
• Save on your own schedule - No pre-defined savings structure within lifetime contribution limit of $50,000
  
  
• RESP loans can be used to maximize the Government Grant
  
  
• Most part-time and full-time post-secondary education qualifies for purposes of a withdrawal
  
  
• With a Family RESP, if one sibling doesn’t pursue post-secondary education, other siblings can use their grant money

 
Let me help you make the best choices based on your needs and your situation.    

Maximize your RESP 

The Registered Education Savings Plan (RESP) is an investment program where the Government matches 20% of your contributions. You could even qualify for additional Grants based on your family income. There’s also the Canada Learning Bond where the Government offers up to $2000 for low-income families.

Start Early

Families with young children can benefit the most from the RESP. That’s because they will have more time to qualify for Government Grants, which can be maximized by contributing to the RESP each year. Don’t worry! If you miss a year, you can catch up for one year at a time.

Family Time

If you have more than one child, you can open a Family RESP. It allows you to keep your savings in a single account, it simplifies managing the investments, and if one child doesn’t go to school, a sibling can use their Government Grant money without penalty (up to a maximum of $7,200 per child).

Paying for Education

Most post-secondary programs qualify for educational withdrawals: academic programs, skilled trade programs, full-time programs and part-time programs. Studying abroad also qualifies!

Top Up

If you haven’t yet maximized your RESP contribution for the year, you can still make a deposit before the end of December. I can help you calculate the optimal amount to contribute for this year, or as a regular monthly deposit.

Let me help you get the most government money that your child qualifies for.   

Beat the Banks 

The traditional approach to banking means that each month millions of Canadians jump through financial hoops to meet their expenses, pay their bills, cover borrowing costs and (try to) put something away into savings and investments.

Most Canadians manage their finances by doing two things:

1. Depositing their income and other short-term assets into chequing and savings accounts.
2. Borrowing when they need to, through mortgages, lines of credit, personal loans, and credit cards.

Sounds simple enough. Unfortunately, they usually receive low or no interest on the money they deposit, while they pay high interest on the money they borrow.

Wouldn’t it make more sense if the deposits and borrowings were combined? Why not have every dollar you earn paying down your debts until you need to spend that money?

All-in-one account

One of the most efficient ways of managing debt and cash flow is to use an all-in-one account, in which all your savings are directly applied to all your debt.

In that way, your savings and income automatically reduce your debt to save you interest.

You can have a combination of your borrowing with a fixed rate and another portion of your debt in an open line of credit. The fixed-rate accounts can help provide payment certainty in a rising interest rate environment. This approach can reduce interest costs and lower the risk of overspending in the account. You can create a tailored debt management system based on your needs:

• Income
• Lifestyle
• Cash flow surplus (undesignated money left over at the end of the month)
• Interest rate risk tolerance
• Understanding of good debt versus bad debt
  

Fixed or variable mortgage rates - which one is right for me?

If you’re looking for a traditional mortgage, you may not completely understand the difference between fixed rate and variable rate mortgages. Each has its own benefits, and your choice will depend on your situation and your personal preferences. I have partners that not only can help with this but have amazing rates too!

Chequing vs Savings

Instead of juggling between a chequing and a savings account, why not have an option where you can enjoy the best of both?

Most banks want you to operate with multiple bank accounts. It's important to know that you're not maximizing your money by using a separate chequing and savings account.

There are solutions that can help you benefit from the higher interest rate of a savings account, along with the liquidity of a chequing account.

Allow me to refer you to one of my partners that can assist with any of your banking needs! Together, we can beat the banks! 

Introduction to Segregated Funds

Investing your money is an effective way to put your money to work and build your wealth. By investing smart, it helps give you more flexibility to earn more on your money, build more security for your retirement, and ultimately give you the chance at achieving your financial goals and dreams. However, investing comes with risks. Segregated funds can help prevent these risks!

Segregated Funds: Investing with peace of mind 

Segregated Funds allow you to invest your money and help grow your wealth but also gives you peace of mind knowing that you have protection against uncertainty.

Unlike other investment options, segregated funds give you features that aren’t found in the typical investments (ex. Mutual funds, stocks and GICS):

• Guarantees on your principal – money you invest is guaranteed up to 75% or 100% upon maturity and death
• Reset Options – lets you lock-in market gains that can increase the amount payable upon maturity or death
• Bypass probate – death benefits paid directly to named beneficiary instead of your estate ensures privacy and helps avoid the lengthy and costly process of going through probate
• Potential creditor protection – by designating a qualified beneficiary, investments may be exempt from creditors in the event of bankruptcy or litigation
  
  

Who are Segregated Funds for? 

• Pre-retirees looking for wealth accumulation but want to avoid potential losses with maturity and death guarantees
• Individuals looking to preserve their legacy and transfer their estate in a timely, private, and cost-effective manner
• Business owners looking for creditor protection planning
• Anyone who wants the ability to achieve the same type of investment returns as mutual funds but with the security and protection in knowing that their money is protected against any uncertainty

Segregated Funds vs Mutual Funds

Investing helps you be more secure and confident about your financial situation. It is not a one-day initiative but rather a continuous long-term activity.  The earlier you start investing, the more well-equipped you’ll be in the future. I wish to work together with you and help put the roadmap in place that will help guide you towards your financial goals. Let’s get started!  

ESG Investing

More and more, Canadians want their investments to reflect their personal values and we want our investments to have an impact for positive change in the world. 

There are many approaches to responsible investing, including:

Climate change

• Women in leadership
• Community development
• Excluding fossil fuels, weapons, and vices
  
  

Companies that perform well on environmental, social and governance screens may also experience higher profitability and lower volatility. It’s entirely possible to do well by doing good.

How can you choose responsible investment funds? Providers of investment funds use a variety of approaches to incorporate values-based responsible investing into their investment processes. As an independent financial advisor, I can recommend investment funds that invest in companies who:

• promote environmental sustainability and reducing carbon footprint
• foster social justice and responding to concerns of local communities
• have an independent board of directors and a diverse management team
  
  

If you’d like to review your portfolio and discuss how ethical or values-based funds might fit in your portfolio, please phone me. 

Benefits of Segregated Funds

As you know, I’ve helped you manage your risk be it with life insurance, critical illness, or disability insurance. I also have expertise in helping you with your investments and managing risk there too. As an independent insurance advisor, I’m uniquely qualified to offer you segregated funds, which are an investment product with principle guarantees, lifetime income options, and protection against premature death.

Segregated Funds: Investing with peace of mind 

Segregated Funds can only be sold by a licensed insurance advisor.  They are similar to mutual funds but have guarantees and advantages that mutual funds do not.


Guarantees
A segregated fund policy includes both a maturity guarantee and a death benefit guarantee. These guarantees range from 75% to 100% of your principal investment. 

Increasing your guarantees
Segregated funds can include reset options. This allows you to increase your guarantee values to a percentage of the market value, thus locking in your guarantees.

Potential creditor protection
Investments within a segregated fund may be protected from your creditors, in the case of bankruptcy or a lawsuit.  This feature is especially important for small business owners and self-employed professionals

Privacy of your assets
When you pass away some of your investments are subject to probate and becomes public record. Segregated funds allow you to bypass probate and keep those assets private.

Efficient estate planning
By using a segregated fund with a named beneficiary the proceeds are paid directly to the beneficiary bypassing probate, thus saving fees and time allowing the assets to quickly pass to those that need it the most.  

Lifetime income options
Some segregated funds feature lifetime income options to guard against market risk in retirement or when guaranteed income is needed.

Who can benefit from owning Segregated Funds?

• Long-term savers looking to mitigate risk
• Business owners and self-employed professionals
• Retirees
• People planning for their estate
• Those looking for guaranteed income

Let me help you make the best choices based on your needs and your situation. 

TFSA

A Tax-Free Savings Account (TFSA) is a personal savings account that can be used to save for any goal. After-tax money can go into a TFSA, but your investments grow tax-free and you won’t pay any tax on withdrawal.

Who should invest in a TFSA?

• Canadians who have reached the age of majority
• Great for short term, medium-term, and long-term savings
• Best suited for low to medium-income earners or as a complement to an RRSP
  

Benefits include:

Earn investment income, tax-free - Interest, capital gains, dividends you earn in the account are not subject to tax

Flexibility to withdraw from TFSA - Withdrawals are tax-free and can be at any time, for any purpose that you choose

Flexible savings plan - Any unused contribution room in TFSA can be carried forward. Any withdrawals from a TFSA in one year, can be recontributed in the next calendar year

Government benefits stay the same - Withdrawing from a TFSA and receiving any amount will not affect the government benefits you get (ex. Child tax benefit, GIS, etc.). Current contribution limit per year is $7,000 as of 2024 and $95,000 if at least 18 years old in 2009 and never contributed to a TFSA.

Let me help you make the best choices based on your needs and your situation.

Registered Retirement Savings Plan

The Registered Retirement Savings Plan (RRSP), is a personal savings plan that lets you save money over your lifetime on a tax-sheltered basis, so your money grows faster.

Who should invest in a RRSP?

• Canadians under 71 years of age who earns employment income and wants to save for retirement by reducing their tax bill
• Great for long-term retirement goals and generating ongoing income in your later years
• Best suited for medium to high income earners 

Reasons why you should invest in an RRSP:


Tax-deductible contributions

• Claim your RSP contributions as a deduction on your tax return
• Can carry forward deduction from contribution to future years when income might be higher

Tax-free growth

• Won’t have to pay any taxes on investment gains as long as it remains in the RSP
• Allows retirement savings to grow faster
  
  

Generate retirement income for stability

• When you’re ready to retire, you can convert your RSP to a RRIF or annuity to receive regular payments
• Income from the RRIF will be taxable but in your later ages, you will potentially be in a lower tax bracket and pay less tax
  
  

Spousal RSP benefits

• Split income in the household by contributing into spousal RSP
• Retirement income can be split more equally between you and your spouse, generating a reduced amount of tax that higher income earner pays
  
  

Government withdrawal benefits

• Make withdrawals without paying any tax if you pay the money back within the specified time periods for:
• Home Buyers Plan – withdraw from your RSP to contribute towards your first home purchase
• Lifelong Learning Plan – withdraw from your RSP to contribute towards education costs
  
  

Let me help you make the best choices based on your needs and your situation. 

RRSP Loan

An RSP loan can help make sure you’re taking advantage of RSP tax-deferred investing.  Maximizing your annual RRSP contribution is one of the best ways to build a secure retirement. 

It could make sense to borrow from your RSP if you:

• Are looking for a smarter way to manage contributions and cash flow
• Missed making your full contribution in a previous year
• Have a lot of catching up to do
  
  

Advantages of RSP Loans:

• Great way for you to meet your retirement goals
• Allows you to maximize the benefit of saving for your retirement
• Increase the potential tax refund that you receive
• Utilize unused contribution room from past years to accelerate tax-deferred savings
• Maximize investment opportunities with a larger access of cash to invest
• Easy term set up, generally can benefit from lower rates than usual during RSP season

A few RSP Loan features include:

Reduce your taxes - By making a contribution up to your maximum contribution amount, it may help to reduce the taxes that you are required to pay

Repayment schedule - Choose a repayment schedule that works for you

Interest rate options - Choose between a fixed or variable interest rate

Deferred payment option - Defer when the payments start; but interest still accrues

Retirement Income Enhancer - Insured Annuity

You are nearing or in your retirement years and want:

• Guaranteed Supplemental Retirement Income
• 100% Capital Preservation

A guaranteed income certificate (GIC) will work perfectly.  The problem is that GIC revenue is interest income and is taxed at your marginal tax rate.  Also, in today’s interest rate environment, you will earn approximately 4.0% before tax.

An alternative is to take your lump sum of cash used to invest in a GIC and purchase a life annuity.  This pays you a regular income for the rest of your life.  You then use a portion of that preferentially taxed annuity income to purchase a permanent life insurance contract.  This will replace the money used to purchase the annuity when you pass away.  This strategy will typically produce a pre-tax rate of return between 5%-6% and is guaranteed for life.  

Benefits of the Retirement Income Enhancer 

• Higher amount of net spendable income
• Income guaranteed for life
• Preferential tax treatment on the annuity income
• Capital replaced at death and paid directly to your heirs
• Beneficiaries can be changed at any time
• No probate fees on the life insurance death benefit 
  
  

Example:

• Male 65 non-smoker regular health
• Non-Registered Funds
• GIC rate= 4.0%
• Marginal Tax rate= 40%
  
   

An increase of 31% or $1,882/year

Example:

• Male 70 non-smoker regular health
• Non-Registered Funds
• GIC rate= 4.0%  
• Marginal Tax rate= 40%
  
   

An Increase of 34% or $2,046/year
Rates are from July 2023 and are subject to change.

If you are interested in discussing this strategy and to see if it works for you, please let me know.

Enhance Your Charitable Giving Using Life Insurance

According to Statistic Canada, over $10,000,000,000 was donated from 5,000,000 Canadians to charity in 2019. All these donations are eligible for a non-refundable tax credit.

By using Life Insurance, you can increase your overall charitable donation benefiting a cause that really means something to you. Donating funds to the Canada Revenue Agency through taxation just doesn’t provide the same legacy.

Enhance Your Charitable Giving Using Life Insurance

Below are two structures that allow you enhance your donation to the charity of your choice and potentially pay less tax.

Personally Owned Life Insurance:

1. Purchase a Life Insurance policy where you are the owner/payor of the policy with your chosen charity as the beneficiary.
2. Policy growth is tax-free increasing your overall donation.
3. When you die the charity receives the death benefit tax-free.
4. Your estate receives a tax credit of up to 100% of net income for both the year of death and the year immediately preceding it.
5. You have access to the cash value during your life as the owner of the policy.
6. Can change the beneficiary at any time.

Charity owned Life Insurance:

1. Purchase a Life Insurance policy and make the charity the owner and beneficiary.  You pay the premiums.
2. Every year you receive a tax credit in the amount of the premium paid.
3. Maximum donation credit is 75% of net income per year while living.
4. Unused credits can be carried forward up to 5 years.
5. Charity has access to cash value and they control the policy.

Case Study
Personally Owned Life Insurance vs a Non-Registered Investment (Balanced Fund)
 

Using Life Insurance, you have enhanced your charitable contribution by 13.25% and increased your tax credit by $57,663 that can be used to reduce estate taxes and increase the amount your beneficiaries receive.

Case Study
Charity Owned Life Insurance VS Charity Held Investment (2% Growth rate as charities have disbursement quotas limiting the ability for compound growth)
 

Using Life Insurance, you have enhanced your charitable contribution by 33.42%.

The option you choose is dependent on your income tax situation and where you want to use the non-refundable tax credit (annually or at the time of death). With both options, the legacy that you can provide a charity has been significantly increased.

If this is something that resonates with you, please reach out to discuss enhancing your legacy.