Thursday, April 12, 2018

What We Know

How often have we heard, “It’s not what you know but who you know”?  In all honesty, the proper proclamation should be “It’s what you know and who you know”.  Our expertise and experience are just as valuable as those of “who you know”. 

The Parkland CAFA (Canadian Association of Farm Advisors) Chapter gathers monthly for their regular learning event.  It is a meeting of the minds to learn something we might know very little about.  The presenter on a given topic is the expert. We tap into their resources and access their authoritative wisdom and knowledge. At any given meeting, the two professionals or agri-business experts know something the rest don’t. Their willingness to share is an opportunity for us to learn.  When applicable, we even refer clients to the appropriate professional who can better help them.

I believe everyone understands you can’t know everything.  Having an expert in your network circle is a valuable “fill-in” for the information and experience you lack.  A fitting expression, “Mind the Gap”, heard when you travel the rail system in London, can also be applied to our knowledge gap.   A person can only know so much, has only so much brain capacity, and has only interest in a specific area of expertise.  There may be some logic to the statement “a jack-of-all-trades and a master of none!”  When we try to be everything, we have to ask ourselves, “Is this fitting for what I am trying to accomplish for my clients?” As a CERTIFIED FINANCIAL PLANNER®  professional, I know my limitations and rely extensively on other professionals.  I appreciate having them in my network; they’re my links to information and experience.    

This past month’s learning event highlighted two hot topics:  Trusts and the Need for Them, both from a tax and legal perspective; and TOSI (Tax-on-Split-Income), the new rules and the exceptions-to-the-rules.  Our professionals, Jason Heinmiller, a tax expert, with Collins Barrow and Shawn Patenaude, a lawyer, from his legal firm, Shawn Patenaude Legal Prof. Corp, are privy to the latest updated information.  Procedures and processes are constantly changing. This is especially true when there’s a change in government.  In 2017 the federal government implemented new rules regarding the way income is distributed to shareholders of private corporations. The experts, Jason Heinmiller and Shawn Patenaude, addressed the impact this new legislation has on tax vehicles such as trusts and corporations.

Our professionals discuss new legislation with their peers. They dissect and analyze the logistics of the information to fully understand the new proposals: how they apply, when they apply; what exceptions exist; and who they affect. They exchange thoughts, ideas, and ask each other, “If we can’t do this, can we do that?”

The best professionals work together in tandem with other professionals to decide on the ideal strategies for their mutual clients.  The collaboration is important especially with multiple generational and blended families. Family business situations are both complex and complicated. Because peoples’ intentions are different, a strategy which might work well for one family operation doesn’t mean it fits another.         

When we try to work in isolation and try to do it all, we do our clients a disservice.  When professionals work together as a smart team, their clients benefit from the best quality advice and service.  When the clients receive a wealth of information from all the angles, they are able to make the right decisions. I’ve said before, “Good information leads to good decisions.”  Good decisions avoid financial and costly errors.  Some strategies cannot be undone and are permanent arrangements with dire consequences.  

This is an example of a costly consequence.

A father included his son as a joint owner on a piece of real estate.  Their relationship became estranged.  When the father requested that his son relinquish his ownership to the property, the son refused.  The courts decided if the father wanted the son’s name off the title, the father was obligated to buy his son’s half-share interest at the current fair market value.  We don’t know if the father sought legal advice when he was deciding to make the real estate joint with his son.  However, if he had, all the possible outcomes would have been discussed. 

Advisors help farmers make informed decisions around management, finance, marketing, tax, or legal issues.  If necessary, they network with other CAFA members. This networking creates links to a wealth of knowledge and expertise. When a basketball or football team executes play after play, they work together to accomplish a goal. That goal is to secure a win.  Win after win create champions.  We are all champions when we work together as a team.  John Wooden said, “A player who makes a team great is more valuable than a great player.”  

Thursday, April 5, 2018

Resolve Money Arguments

Fighting over money isn’t unusual. In fact it’s more common than you think.  Surveys have attested to this fact.  Concocting the ideal recipe, to repair a couple’s relationship broken because of money, isn’t easy. Certain methods are required to create meaningful conversations in order to make any progress. The ultimate goal is to live in peace and harmony without money woes to disrupt the home. If you find yourself in a stressful relationship, hunt for the secret ingredient that helps resolve arguments about money.  Here are a few thoughts and ideas.       

1.  Schedule a meeting in advance.  You might scoff at this crazy idea but think about it.  If spontaneous conversations about money haven’t worked in the past, always ending in the same result -- an argument -- wouldn’t this crazy idea be worth a shot?  Isn’t it better that everyone is prepared?   Emotions erupt when people are caught off guard.  Imagine opening a credit card statement. Suddenly your eyes detect an unexpected transaction for $300 to a clothing store or an automotive shop.  Or imagine the shock when your bank phones to advise that your joint chequing account is overdrawn.  Most likely you “hit the roof”.  Having a rational discussion at this point would hardly be the time. You need time to calm down.  Seeking rather than demanding an explanation will be well received by the accused when your emotions are in control rather than out of control.  When a meeting is scheduled and the agenda is known, people are not as likely to be on the defensive.  Consider creating an agenda about the issues that are tormenting your finances.  The first meeting will feel somewhat awkward.  You need to keep ironing the creases, meeting after meeting, until they run smoothly.  Attempt to schedule a meeting once a month to discuss the cost of current expenses, review bank and credit statements, and plan future expenditures.   Is the dishwasher on the fritz?  Does the truck need new tires? What’s the synopsis for the children’s tuitions?  Like any organization meeting, the agenda includes both old and new business.  I am certain you will never run out of things to talk about but you will run out of time to discuss all the things. All the more reason to table items for the next month’s meeting.

2.  Identify your beliefs about money and their origin.  Some beliefs stem from childhood experiences. You repeatedly may have been told by your parents, “Do you think money grows on trees?” leading you to believe money is scarce.  If money was continually lavished upon you, the belief may be you can buy whatever you want when you want. Imagine your spouse growing up in a totally different home environment than yours.  Can you see how your views about money can differ? Resolve to develop joint beliefs, the ones worth keeping in your relationship.  A simple detail may be calling your “budget” a “spending plan” because you dislike the connotation of budget, causing you to feel restricted.  A more complicated notion may be that your belief is vacations are a waste of money yet both may agree that in exchange for a vacation a hot tub will provide endless enjoyment all year around.  You may also conclude that “stay-cations” could be as much fun.

3.  Discuss your money management to determine what works and doesn’t work.  When managing your monthly expenses, read the blog, Do Joint Expenses Require Joint Accounts?  Discuss whether a change is necessary to the way you presently handle your finances. Try a new approach; review the process in a few months. If it’s not working, change the process again.  Learn as you go.  If one spouse cannot be trusted to manage the finances, then don’t put yourselves in that predicament. Recognize each other’s strengths and weaknesses to benefit both of you.

4.  Learn to be assertive. Assertive means respecting yourself and other people.  It is the ability to clearly express your thoughts and feelings through open honest and direct communication. This means learning how to talk appropriately. I had to learn this new approach. Start your sentences with the unselfish “I” statements.
I feel afraid we won’t be able to handle an emergency.
I am worried we are not saving enough for our children’s educations.
I am thrilled we saved for the down payment on our new home.
I am angry because I feel money is spent on needless things.  
If you would like to learn more about Assertiveness Training, click here.

5.  Consider writing a letter to your spouse. If you can’t express yourself verbally, try writing your feelings. Men and women are created differently.  If you are sincere about learning how to express your feelings, John Gray has a unique way to deal with your emotions.  

In a Feeling Letter, you want to be able to express your feelings of anger, sadness, fear, regret, and then love. My format allows you to fully express and understand all your feelings, so you can communicate those to the other person in a loving focused way.

6.  Provide a mutually supportive and positive learning environment.  This advice is part of the Toastmasters’ mission statement where people come together to develop their communication and leadership skills. If we are instructed to create this unique setting with strangers, then the same should be true in relationships with our loved ones. Most times, building relationships with strangers is easier than with our spouses. We don’t live and communicate daily with the new people on our block the same way we do with our better halves.  We may have been disappointed, angered, or provoked by their foolishness.  These repeated events lingering in our memories are difficult to erase. Therefore, being supportive under these conditions is difficult.  If we feel like that, is there a chance our partners may feel the same? Maybe we could do ourselves a favor.   One of the steps in Twelve Steps Recovery Program is to make a searching and fearless moral inventory of ourselves.  Is there some housecleaning we need to do within ourselves?  Do we harbor any resentment? Why do we become so easily angered? Are we approachable about money matters?  In order to create a supportive environment, we need to begin with ourselves.

Communication involves expressing your views about money clearly, discussing without any hidden agendas, and understanding your differences could be the “recipe” to strengthening your relationship. Your significant person has thoughts about how life should be enjoyed and how money should be spent.  As long as you can agree on certain specific points, you may release the remaining points and agree to disagree about the way every last penny should be spent.  Striking a balance between keeping your finances and relationship in check (or is that “in cheque”) is important.  Don’t stop hunting for the secret ingredient until you find it. When you do, please share.    

Thursday, March 22, 2018

Why "Give"

The Power of Giving

Julia Wise and her husband, Jeff, typically give 30 to 50 per cent of their income away. One year their charitable donations totaled about $160,000. Julia says it’s a way to help make the world a better place and will help teach her children about the family’s values.  She says, “There’s always someone who needs the money more than I do.”

Do you faithfully carve out a percentage of your income to donate to charities? There are a number of compelling reasons why people do this.  Most would like to see a “better world”.  Sharing the wealth is one way to achieve this. Charitable giving is a very personal and private act of kindness.
Julia states she feels privileged to have acquired a good education which landed her a good job with a good salary.  Her interview on CBC Radio Show “Out in the Open” is fascinating as she addresses the questions and ponders others’ concerns about their extravagant generosity. You can click here and listen to this podcast.

A Different Perspective

A change in our perspectives about the things that really matter was mentioned in a previous blog, When We Have So Much.  Terry Aberhart, CEO of Aberhart Farms Inc. and Sure Growth Technologies Inc. (an agronomic consulting company), shared his experience on a trip to Ethiopia.   I asked you then to imagine going without food, clean water to drink or bathe, and medication to treat a curable ailment.  I believe most would find this unbearable because we have never lived in this kind of environment.

Sometimes role playing isn’t a bad thing when we get too comfortable in our day-to-day lives. I often think about what would happen if my life drastically changed, and I was living in poverty, and looking to the food bank for my daily meal.  What if I had no shoes to wear? What if I had to sleep on a park bench?  These role-playing scenarios sound like a bad dream but there are people who live this daily.

Compelling Reasons

We can empathize with other people who are less fortunate than we are from a health perspective.  Every year, the first weekend in March, the Kinsmen Telemiracle Foundation hosts a 20-hour telethon to raise money for people who require special needs equipment and access to medical treatments. The generosity tugs at your heart strings and brings tears to your eyes as you watch the dollars roll in and the words echo the message, “Which way are we going?”  The only answer is “Higher”.  This year was no exception. The Regina Leader Post headlines Telemiracle Smashes Record with more than $7.1 million in donations.  The sum is an accumulation of both small and large donations.  The largest donation ever was a bequest of $1.5 million from the late Dr. Philip Thacker, Professor Emeritus of the University of Saskatchewan and a Kinsmen member.  Peoples’ compelling stories inspire others to donate and raise money in countless ways.

Philanthropists have their personal reasons for giving. In a rare interview for the magazine, Farming for Tomorrow, Mr. Jimmy Pattison said “The best thing that ever happened to me was that I had no money.”  Today Mr. Pattison is patriarch to one of the country’s largest private companies – the Jim Pattison Group (JPG).  Reading through the article, you learn quickly that he attributes his success to good values, honesty, integrity, and hard work. He has lived and strived through challenges and opportunities which make him grateful for the success he has achieved.  Now he lavishly donates his money primarily to the health-care sector.  The new Children’s Hospital of Saskatchewan in Saskatoon is one of the fortunate recipients of Mr. Pattison’s generosity.  Last May, he presented a donation of $50 million towards the facility.  

The Monetary Incentive

I am not entirely convinced that people donate money primarily to receive tax credits. From a financial perspective, this is certainly an incentive.    Canada Revenue Agency rewards you for your generosity.   If you have taxes owing, your tax credits are like gift certificates to offset your tax bill.  The higher the amount of donations, the greater the tax incentive will be when you file your tax return.   If you are limited to the amount you can donate in any given year, then you might choose to claim your donations together in one year.  You are allowed to carry forward any donations in any of the next five years.

A lower tax rate is applied for donations of $200 and less; and a higher rate for donations over $200 for any given year.  Here is the link to the federal and individual provincial donation tax credits.

Using this donation tax credit calculator is one way to determine your tax credit entitlement for your province of residency.  The following math illustrates the credit for a Saskatchewan resident who has contributed $1,000 in donations.

Federal charitable donation tax credit
            $ 30 (15% on the first $200)
            $232 (29% on the remaining $800)
            $262 is their total federal tax credit.

Provincial charitable donation tax credit
            $  22 (11% on the first $200)
            $120 (15% on the remaining $800)
            $142 is their total provincial tax credit

This Saskatchewan resident has a combined federal and provincial tax credit for 2017 of $404 ($262 + $142).

Never Too Small or Too Large

I believe that the majority feel a tug on their hearts to be generous with their money.  No one can make someone do this. We have often heard a child use this phrase, “You can’t make me!”  A small child may refuse to participate in a game or eat their veggies.  But once they have had the experience, they are more willing to experience more of the same.  I associate this with charitable giving or philanthropic giving.  The ultimate payoff is witnessing the benefits of the donations. People find this rewarding and desire to do more good in the world.  Philanthropists are financial helpers willing to promote the welfare of others, “especially by the generous donation of money to good causes which meets basic needs.”
Regardless of the amount of any donation, it’s the contribution that matters. Donations are not limited to size; they are not measured as too small or too large.  In the end, the accumulated dollars create and impact a better world.  Let’s all keep on giving whatever amount we can to a beneficial cause.  

Thursday, March 8, 2018

Long Term Care Insurance: An Overlooked Need

The Reality

Most people love a good reality show but only if it turns out well.  We occasionally watch a clip when an accident occurs and the person escapes grave injury.  They are able to get up and walk away.
Imagine this.

The towering poplar and maple trees’ branches lean over the farm buildings.  When the rain drips down from the leaves, the shingles deteriorate. When the leaves fall and remain on the roof, even more damage occurs. One day, the farmer evaluates the situation.

“A chain saw and ladder will fix this problem,” he thinks.  The ladder is cautiously propped up against the tallest maple tree. After precise calculation, he determines the branch that needs to be cut.  There’s only one problem: he miscalculates and the law of physics prevails. The ladder falls to the north; the chain saw to the south, and the farmer and the ladder bounce onto the ground below. 

“This is going to hurt!” is my husband’s first thought when he comes to terms with what just occurred.  He’s winded and cracks a couple of ribs.  

For me, when reality kicks in, my first thought is, “This could have been much worse!”  

My husband is generally not accident prone. He doesn’t usually get caught in situations like this but sometimes an accident just happens by accident.  That’s reality.

The unknown in his situation is the “what if”. 

Being self-employed and working on your own comes with a disadvantage. You are the sole-proprietor and key operator of your farm business.  You don’t have the privilege to phone your supervisor, tell him you are injured, expect someone to step into your farmer boots, and take over during a lengthy recovery.

The reality is present in any sole proprietorship where there is limited amount of excess cash for medical expenses and hired help.  The value of your business is invested in the assets, the equipment, buildings and land. You can see the assets but cannot and do not want to liquidate them. This is when an injection of insurance money helps fund, at the very least, the health care expenses while one recovers.

The Mistake in Identity

The most common mistake most people make is associating Long Term Care (LTC) Insurance with funding the cost of living in a long-term care facility or nursing home.  But quite frankly, this type of insurance can be beneficial during anyone’s life time.  Many health situations can have a lengthy recovery period.  You may recall someone you know who has been in this situation. Whenever a person is restricted from performing any two daily living activities, they are entitled to make a claim for benefits.  These activities are defined as:
  • Eating
  • Bathing
  • Dressing
  • Toileting (being able to get on and off the toilet and perform personal hygiene functions
  • Transferring (being able to get in and out of bed or a chair without assistance
  • Maintaining continence (being able to control bladder and bowel functions)

Think about it.  Any unexpected debilitating illness or an accident could limit your activity and warrant the need for long-term care insurance at any age.

The Push-back 

I often recognize there’s a “push-back” to insurance.  Fighting your financial battles can be done by carefully evaluating your own personal situation and the associated risks. 

The real questions are:

          How many types of insurance do I need?

          How much can I afford to pay for the coverage?

When you face the decision of funding your health care costs, you can choose to self-fund, share the risk, or transfer the risk.

Sun Life Financial describes these choices best in this brochure, A Health Conversation featuring Long Term Care Insurance.  

A.  Self-funding means to allocate a portion of existing assets into a “health fund”.  This approach requires discipline and risks underestimating who will need care, when care will begin, how long it will last, and how much it will cost.

B. Share the risk means to self-fund initial care and transfer the risk of a catastrophic need to long term care insurance.

C.  Transfer the risk to insurance means that all risk of an unexpected illness or need for care is transferred to long term care insurance or critical illness insurance if the individual is still in good health.

My Number #1 concern for any aging couple is when their situation changes, where one spouse is required to live in a private care home while the other continues to live in their home.  Essentially, the couple’s total lifestyle costs may have doubled.  They are managing and juggling two homes: the expense of private health care and the expense of home ownership (utility bills, insurance, taxes, and others). They are doing so with the same retirement income they had when they were living under the same roof. 

The Compromise

I totally agree you can’t be fully insured against every risk.  We have many different kinds of insurance: life, disability, property, and medical health insurance.   Now I am inviting you to consider an additional kind of insurance, long-term care insurance.

In every insurance circumstance, you are able to negotiate how much risk you are willing to assume when you self-insure (use your money) and how much premium you can afford when you share the risk with the insurance company.

With long-term care insurance, the task is to tailor your financial need to an affordable premium.  When you choose one option over another, you are able to adjust the cost of the premiums. For example, you can select a minimum number of days, either 90 or 180 days, before you require financial help and are able make a claim.  You can also choose the length of time you want to receive a weekly benefit to be paid, from a minimum of 100 weeks to unlimited.  Your age and health will also have a bearing on the cost of the premiums.  If you are slightly interested in long-term care insurance, make the decision sooner rather than postpone it. Most often, we have a tendency to shrug the decision off with a casual “I’ll-think-about-it.” 
Our Decision   

My husband’s tree incident triggered our decision to get long-term care insurance. When he applied, he chose a five-year benefit period.  We know this will buy us “time” in any catastrophic event to determine whether his health will improve so he could continue to farm or whether he will have to “pack it in and call it quits.” You could say this insurance policy gives us time to make the right decision without any added financial pressure.

The other feature we appreciate is “The return of premium on death benefit”.  No one likes the thought of spending money (or should I say ‘wasting money’) on something they may never benefit from using.  The thought of a death occurring without the opportunity to take advantage of this coverage may cross many peoples’ minds.  For a slightly higher cost, this feature is an add-on which ensures the insurance company will return the premiums if the insured person dies while the policy is in effect. Granted, you personally wouldn’t benefit from the money.  The premium money goes to the estate likened to money sitting in a savings account.

Your Decision

I am a firm believer that good information leads to good decisions. Making the time for a heart-to-heart conversation with your trusted insurance advisor is the only way to receive good information.  If you don’t have an advisor, ask for recommendations from your family and friends. You could interview insurance advisors.  You are like an employer seeking someone to work on your behalf. You must understand the information they are providing to you. You should feel comfortable with their recommendations.  

As a CERTIFIED  FINANCIAL PLANNER® professional, I don’t sell insurance but I do know its importance in a well-constructed financial plan.  Insurance is part of a wealth protection strategy and the premium should never be viewed as an “expense.” I don’t have a preference for any particular insurance company.  They all provide the same kind of products with slightly different features and premiums.  

To learn more about long term care insurance, click this link, to access a guide provided by the Canadian Life and Health Insurance Association (CLHIA).  You may also watch this “Learn and Plan” video produced by Sun Life Financial.  There is no shortage of information, only a shortage of time to sort and sift all of it.  Please make the time to discover the ideal fit for your financial needs.  

Thursday, February 22, 2018

Doing What’s Right Has to Be Right for You

fountain, RRSP, RRSP Loans, Retirement Planning

Good or Bad

No surprise here. February is often associated with Valentines’ Day.  Financial advisors and planners generally look beyond this day to the March 1st deadline which requires clients to make their RRSP contributions.

But what if you don’t have the money for the contribution? Do people consider borrowing money for their RRSP investments?  Curiosity caught up with me. I quickly searched the Internet.    Most articles leaned towards the negative.  Headlines blurted out harsh warnings, “It’s not the smart-money thing to do” and “Why you shouldn’t borrow for your RRSPs.”  

I did. I borrowed money for my RRSP investment.  As a single mom, there wasn’t extra cash to make a lump sum investment.  When you are in your mid-thirties, reality stares at you reminding you the clock is ticking down to your retirement years.  If you don’t start saving, you might not have enough.  I can attest the tax refund certainly helped pay off my loan quicker. 

I agree for the most part on the points made in the articles. But I trust you know yourself best and can demonstrate whether a strategy is the right thing for you.  My rebuttal is, “If the shoe fits, wear it”. When applied to whether to sign up for an RRSP loan, “If the strategy works, use it.”
Sometimes doing what’s right has to be right for you.  When you can’t get into the routine of saving regularly, borrowing the money for an RRSP might be one way to get you started.  First, let’s understand one thing. I am all in favor of an “anti-loan strategy”.  I probably sound hypocritical except for this additional piece of advice: this strategy is only encouraged to eventually wean you from making  RRSP loan payments into making regular RRSP contributions.

The Battle between “If” and “But”   

river bridge RRSP, RRSP Loans, Retirement Planning

Here’s the war-on-words.

If you do this, you achieve success. But when you do that, you will be defeated.

If you borrow the money to invest into an RRSP, you begin saving for your retirement. 

But when you neglect your loan obligations and are unable to make your loan payments, then you have defeated your purpose and destroyed your credit in the process.

If you invest the borrowed money into an RRSP, you save on income taxes and the investment income compounds and the savings grow.

But when you withdraw money from your RRSP savings prior to your actual retirement date, you have lost sight of your retirement goal. 

To win the battle, you have to understand the commitment and consequences before you apply for the RRSP loan.  

An Impressive Balance Sheet

castle forest RRSP, RRSP Loans, Retirement Planning

Borrowing money is the very thing many people are currently doing.  They are willing and able to set money aside for loan payments to buy vehicles and pay for their vacations {among other tangible and intangible things}.  Often loan payments are seen as a form of “forced savings”.  Borrowing money rather than saving is often considered the only way to acquire an asset. If we are willing to borrow, then let’s make a play for an important need. Why not implement this forced savings strategy as a temporary measure to build your RRSP savings?

The ultimate goal is to forge ahead and pay off your loan. When you do, your Balance Sheet will look impressive.  Eventually your Net Worth increases because you will still hold your investment asset once your loan is paid.   

Balance Sheet
RRSP Investment  $1,000
RRSP Loan          $1,000

Net Worth            $       0

Balance Sheet
RRSP Investment  $1,000
RRSP Loan          $1,000

Net Worth            $1,000   

Behind the Scenes

flowers, RRSP, RRSP Loans, Retirement Planning

In essence, we are trying to instill a new habit. When you create room for a loan payment in your budget, the intent is to eventually ditch the loan payment for a regular RRSP contribution.  When you also pay attention to the amount of interest paid on the borrowed money, you will ultimately be driven to avoid using a loan strategy as a means to build your retirement savings.  The overall plan is to kick start your retirement savings.  According to the 2016 Statistics, two-thirds of households are setting aside money for retirement.  The question is whether it is enough.

Your “Why”

Castle, RRSP, RRSP Loans, Retirement Planning

Being aware of your circumstances, limitations and weaknesses, helps you make sound financial decisions that are right for you.  One piece of financial advice, from either this blog or anyone else’s, does not necessarily trump the other.  The financial strategies and advice are designed differently because peoples’ needs are different.  
Borrowing money for an RRSP investment might not be the ideal long-term plan.  The goal is to transition regular loan payments to monthly RRSP contributions.  The underlying motive is to plant a habit of investing a consistent amount of money to replace the income you currently earn. A small sacrifice today means a secure income for the future. 
How can we make this easy for you?  Children often ask the “Why” question. “Why do I have to do this?”  “Because” might be the answer which works for them; however, it might not work for you.  Understanding your “why” will cement your conviction to save when you are tempted to do other things with your money. Definitive SMART goals, whatever they may be, allow you to maintain your focus.
·       I want to work full-time until I am 55 years and then retire.
·       I want to be able to live my retirement dream with an annual income of $60,000.

Problematic Hurdles

Even before considering a loan strategy, you have to determine whether you would qualify for a loan. Borrowing money can often be equated to jumping hurdles I believe the important question which begs an answer is, “How much of a monthly payment can your income handle?  

Pushing through temptation to strive towards your goal might require a trade off.  You may need to make room for the payment by nitpicking through the details of your spending habits. What can you possibly give up that will help you meet your goal?

The Promise

train Bridge RRSP, RRSP Loans, Retirement Planning
When you embark on the strategy of borrowing money for an RRSP investment, you must pinky swear to make your loan payments on time and never-ever withdraw any money from your RRSP investment until you retire.

This strategy, like any other, is a way to achieve your retirement goal.  Your attitude and commitment determines the most appropriate fit for your financial plan.    When you rationalize borrowing money as a short-lived strategy to secure your retirement, you will meet success.

The real goal is to do something.  When you begin to shift your thinking to “this-must-be-done”, you will discover there are no shortcuts and quick fixes. Remember, you are doing this for your family and you. Once you make the connection, there’ll be a willingness to follow through consistently.  “It’s just the way it has to be because it is right for me.”