Once the uncertainty was over a stimulus package would create another slingshot one month later we see it happened exactly THAT WAY. >>READ MORE HERE
Dan Tiffin
For more than 30 years, Dan Tiffin has been a financial advisor helping individuals and families achieve their financial planning goals.
Thursday 28 July 2016
Wednesday 13 July 2016
DO YOU OWN AN RRSP? Then you can do this.
The Ultimate
RRSP strategy.
Step number 1 .Transfer your RRSPs to us so we can
increase your returns using our Demographic approach along with our” connecting
the dots strategy”.
As of
December 31ST 2015 .We have over the last 9 years averaged 22% using
the above methodology.
However there is no guarantees on the rates of
return, but we feel confident that because you cannot change Demographics, the
future results should be similar.
Step number 2. Purchase a collateral Loan from B2B
bank where the cost of such a loan is interest only per month with no margin
calls.
An example
of this loan would be $300 interest cost per month per $100,000 borrowed.
The interest
on this loan is tax deductible if it has the potential to increase your income.
The proceeds
from the loan are invested into a segregated fund. The investment is then
assigned back to B2B bank as the collateral for the loan.
Which means at any time, you can cancel the
loan by just handing over the proceeds of the investment, back to the bank. The
result is that you’re never locked in.
Also this
type of investment loan does not change your net worth as the loan is off set
by the asset. They balance out.
Step number 3. Set up a withdrawal program with
your RRSP’s to cover the cost of the loan.
An example
here would be withdraw a net of $300 per month from your RRSP’s each month to
pay the $300 for the interest costs.
The $300
coming from the RRSP each month is taxable income but because the interest on
the loan is exactly the same and is a tax deduction, one cancels the other one
out. It’s a wash.
It is also very important to
understand that all RRSP’s/RRIF’S turn into a tax time bomb as eventually you
have to pay taxes on 100% of withdrawals and when you Die it all becomes
Taxable and up to 50% may go to Taxes . So we are using future money ear marked
for taxes to fund your investment, in other words we are using government money
to create your wealth.
Step number 4. Find out how much unused RRSP room
you have accumulated.
Now from the
investment loan portfolio wait until you can take profits to cover this amount
and purchase your unused RRSP’s.
An Example
of this could be you have unused room of $30,000 that can be used to buy a new
RRSP. If you have made 30% return on your $100,000 then you have the required
$30,000 needed to buy your RRSP.
Remember this money was created by
the Original RRSP you have now. I am not asking you to save money to purchase
this .Your existing RRSP is doing this for you.
STEP NUMBER 5. Your new RRSP is added to your original
RRSP to top it up, so it can continue to fund the loan continuously.
You may even
decide to increase your collateral loan/investment as you have more RRSP funds
to fund the increase cost. This allows you to take out more money from the
RRSP’s without paying Taxes because of the increased Tax deduction.
You have now
created the ultimate RRSP program .
You no
longer have to use your own money to buy your RRSP in the future this does it
for you . Just think a huge tax deduction every few years funded by your
Original RRSP you are now using money that would have been paid in Taxes.
It is important to understand that
the investment used with the loan come under Capital gains which is taxed at
50% less than the RRSP’s are. So the RRSP purchase will offset the capital
gains first and the balance will be used to offset your personal income
tax. You should also be aware we have
another strategy that we use to create 100% tax free income .You can ask about
that one.
Now a look
at costs and rates of return. In our example we used a cost of $300 per month
for a $100,000 collateralized loan which adds up to $3,600 per year.
If you were
using an RRSP that has $100,000 in value to fund this.
You would be
taking out a net of $3,600 to fund the $3,600 interest only cost. If you did
not use the proceeds to fund a loan and just withdrew this amount of money you
would have paid about 1/3 in taxes on it. Therefore the net withdraw or your
money at risk is $2,400.
Let us say
your return was only 10% on both your RRSP’s and your investment. That means
you made $10,000 on your RRSP’S minus your $3,600 cost of loan .Which shows we
are only using your profits not your principle and again the more money you
make in your RRSP’s the more you pay in Taxes and claw backs. So by taking some
of this money now you are creating wealth but using CRA s money.
Now you also made $10,000 on your investment loan. And the costs were shared by your
net $2,400 and CRA tax deduction of $1,200.
So your rate
of return was not 10% or 20 % or even 30% .When you divide $2,400 into $10,000
your returns are 416%.
Which means
the more you borrow the more you make. It’s how the rich make money using other
people’s money.
So this
happens if you’re investing using Demographics where we have averaged 22% for
the last 9 years?
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