Financial Advice

I met last night with a financial advisor who was recommended to me by someone I work with. I was interested in speaking with him about my declining Mutual Fund portfolio.

Did you know that Stats Canada says that 95% of all Canadians fail to properly plan for their retirement needs? Have you heard a more frightening statistic lately???

It was a very informative session and I learned quite a bit about investment vehicles I knew nothing about (he said most people are not aware that these vehicles are out there). He talked about traditional mortgages vs. HELOCs (I already have a HELOC) and how to make your HELOC work smarter for you (I still need to learn more about this and this will be part of our next session) and he showed me the Rule of 72, which no one had ever shown me before. It is Einstein's Rule of 72, regarding how long it takes your money to double and what that means if you are earning 4, 6, 8%, etc., on your investments, vs. the bank who is lending out your money (that they are paying you the measly 4% on) at 18% to someone else in the form of a credit card loan. The results are staggering.

We also talked about "Open" investments vs. RSPs and the tax advantages on both and I am going to be learning much more about these "open" investments as well as these appear very attractive over RSPs given the tax advantages of open investments. On an RSP you are taxed at 100% when you make a withdrawal but only at 50% with an open investment and you still get the tax break when you put money into an open investment just like you do with an RSP.

All in all it was an educational first session that got me thinking about things I was not previously aware of and I think the next session will make me more intelligent when it comes to managing my investments.

Oh, another thing I liked about this company and their approach is that he is not paid by me. He is paid by whichever company's product I may decide to go with and he is paid the same amount by all the various companies he works with, of which there are many, so there is absolutely no need to try to steer me to any one product over another as he doesn't make more off of one product than he does another. I got a really good vibe from this place.