Edmonton Real Estate Blog

Driven by emotions, investors have tended to pour money into equity mutual funds following a period of strong growth, and then move to the next ”hot” asset class during market troughs. A strategic asset allocation approach to diversifying your portfolio will help take the emotion out of investing and can result in higher overall returns.

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Not all debt is created equal. Interest expenses incurred for the purchase of non-registered income generating investments are generally tax deductible. Interest on loans to purchase personal assets, pay personal income taxes or buy your home, however, are not. What is Debt Swapping? Essentially, it is converting non-deductible debt into deductible debt. How? Sell your non-registered assets to pay off your non-deductible debt. Next, take out a line of credit to repurchase non-registered securities and deduct the interest! Your after-tax cash flow increases, but your overall level of debt remains the same.

Assumptions:
• Under current income tax legislation, case law and CRA assessing policy, interest incurred on money borrowed to purchase non-registered income-producing investments is tax deductible. Income for the purposes of the
Income Tax Act (Canada) does not include capital gains. Further restrictions on the deduction of interest apply in the Province of Québec.
• Taxable capital gains may be realized when selling investments.
• Capital losses realized on a disposition may not be fully deductible if the same non-registered investments are purchased within a period that begins 30 days prior to their disposition and ends 30 days after the disposition.
• Individuals must qualify for a line of credit/investment loan.
• Lump-sum payments on a mortgage may incur penalties.
• The after-tax cost of borrowing on the Line of Credit (investment loan) must be less than the before-tax interest
charged on the mortgage loan and car loan for this strategy to be effective.
• The CRA has commented positively on the implementation of basic debt swap transactions; however, the CRA is not legally bound by their policy statements. In some circumstances, particularly those involving transactions between non-arm’s length parties, the CRA may consider debt swap transactions a misuse of the Income Act and apply the General Anti-Avoidance Rule to deny any resulting tax benefits. We recommend that clients discuss this matter with their accounting or legal advisor if they have concerns.

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They say you can’t make up for lost time but that’s not necessarily the case with contributions to your Registered Retirement Savings Plan (RRSP). Canadians are allowed to carry forward unused RRSP contribution room until the age of 71. So, if you didn’t maximize your RRSP contributions in past years, you can still take advantage of the opportunity to invest more than your annual contribution limit this year, make up for shortfalls in past years and take advantage of a large tax deduction, all at the same time. Maximizing your RRSP contributions is one of the best strategies to build the retirement you deserve and dream of.

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Throughout the European sovereign debt crisis, little attention has been given to the positive developments that are occurring at the corporate level. Corporate earnings have continued to rise since the market bottomed in early 2009 and most recently the companies listed on the S&P 500 have been delivering record-breaking results. Another positive development relates to the high levels of cash that companies are holding. Once the economic climate begins to clear, it is only a matter of time before corporate spending will again stimulate economic growth. Despite all the negative headlines, U.S. companies are proving their resilience. Similar performance is occurring in Canada, providing the underpinnings for improved equity performance.

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Perfect starter or investment property. 3 Bedroom townhouse, 1.5 bath. Ideally located close to schools, playgrounds, Rundle Park. Upper level has 2 large bedrooms and a 4 pce bath. The basement has a large master bedroom and a 2 pce bath.  Newer hot water tank and furnace. It has it own private fenced yard in the front. All the windows have been recently replaced and all the fences have just been repainted. This is a great bargain so don’t miss out. *For more information visit realtor’s website*.

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To View & Search All MLS Listed Houses for Sale Visit Us At:www.EdmontonHomesforSale.biz

You’ve spent a lifetime planning and building an investment portfolio designed to help fulfill your retirement dreams. Now that you’re at or nearing retirement, the time has come to look at options for drawing income out of your non-registered investments. Ideally, you’d like to do it all – that is, enjoy the active lifestyle to which you’ve become accustomed while savoring the satisfaction of knowing you’ll be leaving a meaningful legacy for your kids.

With an insured annuity, you may be able to do both

A portion of your conservative investments are used to purchase a prescribed annuity contract and a permanent life insurance policy. The annuity can generate a lifetime payment stream, that is partially taxable income and partially a return of capital, that pays the life insurance premiums and tax on the annuity. The remaining amount is used to supplement your income. At death, the life insurance proceeds provide a gift to your heirs or favourite charity.

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Perfect starter or investment property. 3 Bedroom townhouse, 1.5 bath. Ideally located close to schools, playgrounds, Rundle Park. Upper level has 2 large bedrooms and a 4 pce bath. The basement has a large master bedroom and a 2 pce bath.  Newer hot water tank and furnace. It has it own private fenced yard in the front. All the windows have been recently replaced and all the fences have just been repainted. This is a great bargain so don’t miss out. *For more information visit realtor’s website*.

Click here to view more info and photos:

Financial life planning gets to the heart of the matter by reviewing your finances in relation to the rest of your life. This process connects the disciplines of financial planning with your life in order to develop a customized plan that is best-suited to your needs, goals, and aspirations. By taking into account your current financial situation and looking at it in the context of where you’ve been, where you are now, how you got here and where you’d like to go, financial planning gets brought to life, your life – to provide you with the best possible financial plan.

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When drawing retirement income, greater returns, even if accompanied by greater volatility, can increase the amount of time an investor can withdraw from their portfolio. Taking $5,000 a year from $100,000 cash that is not earning income guarantees that the savings will be depleted in 20 years. An investor investing in a moderate portfolio can potentially take $5,000 per year for 32 years.

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Dollar cost averaging can help manage the risks of investing. Dollar cost averaging is an investment technique that involves buying equal dollar amounts of a given investment on a regular basis. Rather than investing all your money at once, making a commitment to invest a smaller amount on a regular basis can lower your average cost per unit by purchasing more units at lower prices. Talk to us about how this strategy can result in a substantial increase in the value of your investments.

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