Your advisor is the foundation of the four cornerstones of your financial plan. He or she can help guide you with knowledge and expertise to meet your specific goals. They will typically apply their experience in several financial disciplines while using the best-suited products to help you achieve financial success.

Create a Strategic Financial Plan. The very first step in any financial plan is to coordinate your goals within a timeframe that looks at your current and future plans as circumstances change. Your financial plan will reflect your strategic life plan in relation to the achievement of all your various life goals. If you do not have a financial plan, chances are that achieving your future goals may be missed since they have never been identified. An advisor will help you establish assertive priorities in areas such as:

• Establishing a fiscal relation to our major life goals.
• Saving for short-term goals such as buying your first home.
• Considering your potential need for life and disability insurance to create income if a breadwinner passes on.
• Creating an income and expense budgeting snapshot.
• Saving for an emergency/opportunity fund.
• Establishing a retirement income plan using RRSPs and TFSAs.
• Creating a net worth statement to see how you are progressing.
• Protecting you against the financial risk of a critical illness.

Meeting short, intermediate, and long-range goals. Your professional advisor will recommend specific short, medium and long-range plans to meet your goals with a mandate for creating, growing, and preserving wealth. In conjunction with these plans, your advisor will want to help you ensure your financial security by recommending income protection products such as life insurance and disability insurance.

Tax issues should also be addressed in your plans, and as your estate grows in value, there may be legal issues such as Wills and Trusts that need to be addressed.

Invest to accumulate wealth. Reduce and eliminate credit card debt. We are living in a world where people want immediate gratification by purchasing things they cannot afford. Credit cards have very high interest rates (many are 14-28%) which normally exceed any rate of gain one can achieve on an investment. Thus, you may reduce your positive investment gain potential by such debt.Essentially credit card debt places you into a negative reduction of those comparative assets (investment gains on assets versus interest on the credit card liabilities of a similar sum). It is important to plan to pay off credit card debt beginning with the highest interest rate first. Some store cards will charge upwards of 28% interest, so from a financial perspective, a person should consider paying off this debt first.

A professional advisor may also advise you to see a debt consolidation specialist to design a plan for you to pay off your credit cards, and provide a lower interest rate. This may also be achieved via a home equity loan.

Deduct and defer tax using RRSPs. For those employed, an RRSP is your biggest tax break. Recent studies indicate that we need to be regularly investing in our own RRSP if we will acquire sufficient capital to sustain our necessary retirement income! If you are investing in non-registered holdings, but have not maximized your RRSP, you may be losing the opportunity to deduct up to the maximum contributions from income. You also miss out on the pre-retirement tax deferral!

You can defer these tax liabilities on investment income, until you withdraw the funds held within your RRSP or RRIF.

Defer tax using the Tax Free Savings Account (TFSA). You can invest up to $5,500 per year using a TFSA to defer investment gains. Though you do not receive a tax deduction on your income, all future monies grow tax free, and are not taxed when withdrawn. The TFSA is a very useful financial tool and can complement your retirement savings plan. Ask your advisor how you can invest up to $5,500 annually in addition to your RRSP.

1. Implement Tax Strategies to conserve wealth.
   Consider income splitting. Income splitting is the idea of moving income away from high-income earners to family members who are in a lower tax bracket. To split family income with your spouse, you can invest the lower-earning spouse’s income, while the higher earner pays family living expenses and taxes.You may also want to contribute to a spousal RRSP. If you own a business, where applicable, pay your spouse a salary for work performed on behalf of your business. To split income with children, they can be employed in a family-owned business. As well, you can gift them cash, or any other assets (if they are over 18). Where there are children younger than 18, consult with your advisor to learn more about attribution rules.
2. Structure your investments for tax. To avoid paying high taxes on income from earnings or interest, structure your investments to earn primarily capital gains outside of your registered accounts. If you have lost money on equity investments consider using tax loss selling techniques. Your advisor or tax consultant can advise if this is appropriate in your situation.Donate to philanthropic causes. Charitable donations are effective wealth management tools because they provide you with a tax break while allowing you to make a real difference for a cause important to you. In times of crisis, such as the Haitian earthquake, or the Alberta 2013 flood, you may consider a monthly donation to World Vision or a similarly credentialed charity.
3. Estate Planning to maintain wealth.
   Just about everyone can benefit from the development of an estate plan. Young or old, wealthy or middle class, an estate plan can reduce the taxes and expenses of an estate, simplify and speed the transition of assets to the next generation, and ensure that beneficiaries are protected. At some stage, you may need to implement one or more of these aspects of a financial plan.
4. Carry life insurance. When you are young and have a small family reliant on your income, you will need life insurance. If you die, your earned income that pays for your family’s lifestyle will disappear. It is important to speak to an advisor and establish a life insurance needs analysis to determine the correct amount of coverage for your situation. There are different life insurance products that can be structured to provide the insurance required and still fit your budget. Life insurance can create cash for your family and protect them when you can’t.
5. Disability insurance. Many feel that they will remain healthy or never have an accident. It is good to think positive. However, if a breadwinner were to become disabled, how would his or her income be replaced? Disability insurance is designed to replace up to 60-70% or more of your regular income if you become disabled. If you have this coverage at work, inquire as to how long it will last. Some plans run for only three to six months. Personally owned disability plans can last to age 65.Where disability never occurs, many plans can be structured to return a significant portion of the premiums.Consider Critical Illness (CI) insurance that can provide a lump sum benefit if you face a disability caused by a critical illness.
6. Create trusts. Trusts are ideal if you hope to transfer income and/or capital gains to a beneficiary. If you own a business, you can even use trusts to pass the business on to your children for tax purposes while still retaining some control. Make sure you obtain expert advice from an accountant before setting up a trust.

Please contact me to discuss wealth creation.