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Dan Tiffin - Global Demographics Group

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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 31^ST 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?

- Dan Tiffin, Global Demographics Group