Friday, December 21, 2012

Happy Holidays


Amid the bustle of the holiday season, it’s nice to take a quiet moment to reflect how privileged we are to have helped make home ownership dreams come true for our many families and friends.

May your home be a wondrous place for celebrating your own unique traditions.

Warmest Holiday Wishes
Yours truly,

Sanata has a List....

Santa has a list, but does he have a plan? Financial planning tips specially created for Santa Claus
Dec. 18, 2012 /CNW/ - At this time of year, Santa Claus is understandably busy with pressing global priorities. However, the end-of-year period is a particularly crucial time for financial planning. That's why RBC would like to offer the "jolly old elf" some financial planning tips specifically tailored to his unique financial needs and lifestyle.
"Santa is not only Canadian, he is also a prominent philanthropist, business owner, senior citizen, extensive traveler and last of all, a taxpayer. This makes his financial planning needs highly unique," said Richa Hingorani, regional financial planning consultant, RBC Financial Planning. "Because of that, he needs to take into account several taxation and financial planning considerations this time of year as do many Canadians, regardless of whether or not they celebrate Christmas. That's why we've come up with this handy list so he can focus his attentions on more important issues this season."
1. Charitable donations. Santa is one of the world's most prominent philanthropists. Fortunately, most of his donations will be made by the December 31 deadline so that credit can be made on his 2012 tax return.
2. Income Splitting. This is an important consideration as Mrs. Claus is not (as far as we know) employed. Santa might want to consider income splitting with Mrs. Claus to minimize his annual tax liability by using a prescribed rate loan to Mrs. Claus. Depending on the amount loaned (the current interest rate is one per cent), the amount of tax paid by Santa could be substantially reduced.
3. Avoid the Old Age Security (OAS) Clawback. Santa's OAS will start to be clawed back once his 2012 income reaches $63,511.
4. Santa does extensive travelling. Because of that, he needs out-of-country travel insurance for his Christmas Eve flight. He should also consider out-of-country medical insurance, just in case.
5. If Santa has made investments, the last trading day to ensure losses can be used to offset gains from this year is December 24 for Canadian transactions and December 26 for U.S. transactions.
6. Is Santa getting ready to RRIF? If Santa has yet to turn 71, he will need to start drawing down his RRSP in 2013. The minimum withdrawal amount will be 7.31 per cent.
7. Santa is an (incorporated) business owner with an eternity of active years ahead of him. As such, he should consider opening an Individual Pension Plan (IPP). An IPP is structured to provide tax relief for the corporation and enhanced retirement savings (more than an RRSP) for Santa.
8.Santa will need some hard-earned relaxation after the holiday season. As a Snowbird heading south for the winter, he will need to keep in mind that if he should stay in the U.S. for more than 183 days in two consecutive years, he may be considered to be liable for U.S. income tax.

Tuesday, December 18, 2012

Your money behaviour: Are you normal?

By | 30 Nov, 2012
Managing your money is a bit like developing your personal style: There is simply no 'one-size-fits-all' way to do it. In order for it to really work, you have to love it enough to work it. And yet it's hard to live your own financial reality without wondering what's going on in other people's bank accounts.
With that in mind, here are some statistics regarding your fellow Canadians' money habits. So go ahead...take a peek at your neighbors' finances. But be forewarned — while everyone wants to be 'normal', sometimes it's best to go your own way.
1) Savings
We all know we should set some money aside, but sometimes life — and a few little shopping indiscretions — can get in the way. Is that normal?
Yup, that's totally normal.
According to Statistics Canada, the personal savings rate among Canadians in the second quarter of 2012 was 3.6 percent. Based on the average income, a typical family puts away about $2,275 per year. That doesn't sound too bad until you consider it's being stretched between an RRSP, a TFSA and maybe an RESP for your child's education.
If you're average on savings, congrats — you've started a great habit. Unfortunately, that savings rate just isn't high enough to allow people to prepare for contingencies and set aside funds for the future. Now it's time to look for ways to rise above the crowd.
2) Debt
For many people, debt is a dirty little secret; you get to sport all the spoils of your credit card exploits, and no one ever needs to know how it was financed. Unfortunately, that little secret is getting increasingly hard to sweep under the rug. According to TransUnion's latest quarterly analysis of Canadian credit trends, the average level of non-mortgage debt among Canadians stands at $26,768, a number that has ballooned by more than 37 percent since 2007 and represents a record — although it probably isn't one you want to shoot for.
Debt can really put a drag on your ability to save, invest and build a better financial future. With the level of debt many Canadians are carrying, this is one category where it's best to stand out, rather than fit in.
3) Retirement Savings
Did you contribute to your RRSP last year? Do you plan to this year? About a quarter of Canadians contribute to their RRSPs each year and, according to a survey released by the Bank of Montreal in March of 2012, they contribute an average of $4,670 each.
If you're among this rather elite group of contributors, that's better than nothing — we'll take it! But if you're feeling smug about it, keep in mind that the contribution limit is 18 percent of your earned income up to a maximum contribution of $22,970. Remember, this is a fund you're going to have to live off of one day.
4) Investing
Most Canadians don't invest in their child's education (42 percent) or retirement (44 percent). In fact, one-third of us don't save or invest anything at all, according to the 2012 Canadian Omnibus Poll.
Yikes! If there's any way to protect yourself from financial hardships such as layoffs, illnesses and unexpected expenses — not to mention fund a secure retirement — it's having money in the bank. And once you save it, failing to put it to work is just a waste of potential (kind of like that adult kid who's still deciding 'what he wants to do with his life'...).
5) Budgeting
When it comes to budgeting, the results among Canadians are, well, average. According to the Canadian Omnibus Poll, 46 percent of Canadians have a budget. Not surprisingly, those on the lower end of the income scale were more likely to budget their money, and the number of avid budgeters drops off as income increases. It would seem to make perfect sense: having more money makes spending it all less likely.
Or...not. If you're one of the lucky few in the high tax brackets, don't let that fool you into thinking you're off the hook. No matter how much money you make there's always more to spend it on, which means it's easy to overdo it, no matter what your income (just ask Donald Trump...who has filed for corporate bankruptcy several times).
6) Household spending
You probably do your best to live within your means and make ends meet, but how does your spending really stack up? According to the Survey of Household Spending released by Statistics Canada in April 2012, Canadians spent an average of $53,016 on all goods and services in 2010. That means that the average Canadian spent:
  • $17,000 on mortgage payments (or $10,000 on rent)
  • $10,974 on transportation (couples with children spent the most)
  • $7,422 on food
  • $2,066 on restaurant meals
  • $731 for cell phone expenses
Clearly, some of the expenses in this list are essential, while others are expendable. But here's something you may not have considered: all of them are flexible. Sure, you have to pay your rent or mortgage, but the place you choose to call home — and how much it costs you — is within your control. This is even more true for expenses like transportation, restaurant meals and cell phone bills. In truth, what you spend in any area is largely up to you. In this category, you get to define what's normal based on your own priorities.
Are you normal?
Wanting to fit in is human nature, but when it comes to your finances, following the crowd offers little to no advantage. Managing your finances isn't just about looking good, it's about feeling good, too. Rather than following other people or trends, try getting creative, learn to be consistent when you find what works, and have confidence in the choices that make you feel secure. If you manage all that, you'll probably stand out — and that's a very good thing. When it comes to money, why settle for average?

Monday, December 17, 2012

GET THE INSIDE TRACK: Work with a mortgage broker

If you’re like most Canadians, your mortgage is one of the biggest investments you’ll ever make. That means you need to manage it carefully – not just at renewal time.
The past year has seen several significant changes in the mortgage market – and everyone is watching the rate environment very closely these days. It’s never been more important to have reliable, timely information. As a professional mortgage consultant, I can give you the inside track on managing your mortgage.
Maybe you’re thinking about buying your first house… or your next. Perhaps you’re looking at your overall debt picture. Maybe you want to make an investment, or find funds for a renovation or a vacation home. Or maybe your mortgage is just coming up for renewal. A well-designed and carefully managed mortgage can be your key to wealth-building – and save you thousands of dollars.
Resist the temptation to put your mortgage on autopilot until it’s time to renew. That’s why my clients appreciate receiving timely mortgage updates. I’m a trained and accredited mortgage professional, with access to a large range of traditional and non-traditional lenders. You’ll get top-notch advice, the best range of options, and the inside track on smart mortgage management.
Your mortgage should be the centerpiece of your financial picture – and your most flexible and powerful financial tool. I can make it work for you.