Author: kiara

Have you read on occasion, like I have, of how an individual wins a few million dollars through some kind of lottery draw? Or maybe it’s a group of people sharing a lottery ticket and dividing up a 100 million or more? What about the lucky man or woman, who inherits a million dollars unexpectedly from a relative they hardly even knew?

Then there’s the baby boomers, whom are inheriting money daily as their hard working, thrifty parents pass away.

All common knowledge you say. Heard it many times before.

Well, maybe this part you haven’t heard. These individuals being revisited, just a few years down the road. And guess what?

No more money. All gone.

In some cases the individuals are even destitute. Forced to sell off their newly purchased home, cars, and vacation pied à terre.

Why does this happen time and time again? It’s very simple. We believe this windfall will last forever.

After all, one million dollars, a thousand one thousand dollars.

But, it doesn’t last forever.

A home for oneself. A home for a child. A vacation here and a vacation there. A car for me and a car for you, and before you know it, it’s all gone.

So the above is how not to handle the money!

Rule #1, don’t spend the money.
Rule #2, don’t spend the money.
Rule #3, don’t spend the money.

This is capital that will never be replenished.

> Invest it and spend the earnings it produces.
> Earnings will never run out.
> Don’t kill the goose that’s laying the golden eggs.

This windfall is the goose.

Properly invested it will provide you with security until the day you die and can be passed down from generation to generation to enjoy.

Trained Investment advisors have the skills to show you how to secure the longevity of your new wealth while providing a continuous flow of income.

The upcoming generations must be taught this implicitly.

Don’t kill the goose.

Age 65 or older in 2017?
Take advantage of the $2,000 annual Pension Income Tax Credit.

The pension income amount allows you aged 65 + to claim a federal non-refundable tax credit on up to $2,000 of eligible pension income.

If you don’t have a pension plan at work, there are ways to create pension income that qualifies for the pension income amount. One way is to convert your RRSPs to a RRIF. Another way is to use your RRSP money to buy an Guaranteed Life Annuity.

Qualifying pension income doesn’t include Canada Pension Plan (CPP), Old Age Security (OAS) or Guaranteed Income Supplement (GIS) payments.

To see how this may pertain specifically to you contact your personal Rothenberg advisor or call one of our offices:
T 514.934.0586   Westmount (head office)
T 514.697.0035   Pointe-Claire
T 450.321.0001   South Shore
T 403.228.2378   Calgary

We will explain the details AND we will take care of the paperwork for you!

The holidays light up the darker and colder season of the year, when many spend less time outdoors and more time “cocooning” with family and friends. Many have a holiday season tradition – here are a few of ours:

1. The gratitude jar– During the month of December, every night at dinner everyone writes on a note something they are grateful for and places the note in the jar. At the end of the month (during the holidays) we sit together and read them all aloud.
2. Kind Weekends –At the beginning of December each family member the name of another relative out of a hat. This becomes their “pay it forward” person for the month – the person for whom they will perform at least one act of kindness every weekend. No gifts or things of monetary value allowed!
3. Baking – a baking party with your children, grandchildren or simply with good neighbours or friends. Every year, a nicely decorated box of baked goods is donated to a cause chosen by a different child each time (retirement home, hospital, local soup kitchen, someone in need).
4. One-on-one – Having a “date” with each child individually provides not only a great opportunity for one-on-one quality time, but possibly also some hints and insight into their wishes for the holidays and expectations for the new year.
5. Hand written cards – yes, we still love them and find that there is nothing quite like a handwritten note (or children’s drawings)

Do you have a family tradition for the holiday season? Please add a comment and tell us about it! In January we will post all the family traditions we’ve collected on our blog.

Your bundle of joy has arrived! Or perhaps you are the Grandparent, Aunt, Uncle, or Sibling! What better way to show your love and attention towards this child than helping to save for his/her education.

A Registered Education Savings Plan (RESP) is a government sponsored savings program that helps you save for a child’s post-secondary education.

Your savings grow tax-deferred until withdrawn. When the BOJ (bundle of joy) withdraws from the RESP for educational purposes, the withdrawals are taxed in the student’s hands, typically at a lower rate.

When you open an RESP, you name a “beneficiary” (the bundle of joy) who will be entitled to the proceeds for their education. The person you name must be a Canadian resident and have a Social Insurance Number.

If you save for this child while he/she is aged 17 and under, the Government will also put money into the RESP as a “grant”.

Getting a grant is like receiving free money towards education. The grants stop at the end of the year when the student turns 17.

Canada Education Savings Grant (CESG)
The federal government’s Canada Education Savings Grant (CESG) will match 20% of the first $2,500 you contribute to your plan every year, to a maximum of $500 more every year, up to a lifetime maximum of $7,200.

Quebec Education Savings Incentive (QESI)
The Quebec government adds an additional 10% to your contribution, up to $250 every year. That can mean an additional $3,600 per child over the life of the RESP.

You can make contributions into an RESP until 31 years after you first opened it (by that time your precious BOJ should be supporting YOU).

Contributions: While there are currently no annual contribution limits, you can receive the Canada Education Savings Grant (CESG) only on the first $2,500 in contributions per year, or up to the first $5,000 in contributions, if sufficient carry forward room exists for previous years. It might sound a bit complicated but a Rothenberg Investment Advisor can sort it out for you.

• There is no annual contribution limit but there is;
• Lifetime contribution limit: $50,000

Ideally the student will withdraw funds from the RESP to be used towards post-secondary education at which time the gains will be taxed at his/her income tax rate which normally would be lower. Deposits made to the RESP can be withdrawn at any time by you the contributor. In this case, the eligible Government grants paid to the account on those contributions must be repaid to the Governments.

If the student elects to not attend a post-secondary institution, any accumulated interest may be withdrawn by you the contributor; the gains will be taxed as income unless rolled into a registered retirement savings plan (RRSP), subject to individual contribution limits and applicable rules. Provisions are available for early withdrawal without penalty should the recipient not be eligible for post-secondary education due to circumstances beyond their control.

Self-Directed RESPs offer the flexibility to have multiple investments in one plan. Typically, investment choices have been limited to Bank savings accounts or GIC’s. A self-directed plan allows the RESP to hold individual stocks, bonds, mutual funds as well as the GICs and savings accounts.

Rothenberg Capital Management offers self-directed plans. Your Rothenberg Investment Advisor can help recommend a suitable portfolio to help you achieve your education funding goals. Do not hesitate to call us for a chat.

Let me begin by saying, the following will be easy to understand, and I’m sure each of you will feel more confident as to how to proceed with your own portfolio.

Imagine a mutual fund as a big empty round barrel. Standing next to the barrel are individuals (1 – 10 approximately, depending upon the fund) hired to preside over the contents. The idea is to fill this barrel with as much money as possible. This can range from millions to billions of dollars.

There are sales people that work for the creators of each barrel, that are expected to seek out individuals and convince them that their barrel is a good place to put their money. Either on a monthly basis, or in lump sums. As the money comes in, those individuals presiding over each barrel, known as money managers, begin to invest in the stock market, purchasing shares (stocks) of companies, bonds, treasury bills etc. There are thousands of these barrels (mutual funds) in existence today.

Some specialize in investing in only one country or in one industry while others diversify and spread the funds in many different areas. It’s not uncommon for a fund to hold as many as 50 different stocks or more.

So why invest in a Mutual Fund?

The main reason is diversification with little money. Should an investor have only $1,000 available for investment, his dollars will be put into the barrel and 50 cents of this $1,000 could be in one stock, and 2 dollars in another etc. An impossibility to do on your own.

The other reason is professional management.

Even though past performance is no guarantee of future performance you can get a feel for the astuteness of the money managers. With the help of an investment advisor, not attached to any fund, you can get advice as to which fund would meet your criteria.

So why invest through an independent Investment Advisor?

When one has more dollars available it’s possible to benefit from both worlds. Have some money invested in good solid mutual funds, and in a variety of well chosen companies.

I would like to stress that to obtain unbiased advice, it’s important to deal with an investment advisor that is not attached to any group of barrels (mutual funds) but can choose from almost all of them based on your own individual needs, whether that be income or capital growth.

Why would one invest in Individual Stocks?

Ideally this investment advisor, not licensed to sell only mutual funds, can offer you stocks, preferred shares, bonds, treasury bills etc. There is an absolute benefit in having these opportunities available when growing one’s portfolio. Without becoming too technical, the diversification that mutual funds offer, provide an element of safety, or not. By being so spread out one is vulnerable to stock market fluctuations in general, up or down.

With guidance into individual stocks, one, for example, could have completely avoided the recent drop from $115 in the price of oil to $50.

With guidance this might have been anticipated and any oil stock holdings could have been eliminated.

With guidance one might have been advised to buy the “FANG” (Facebook, Apple, Netflix, Google) group of stocks and multiplied their capital many times over.

With guidance one could invest in chosen companies, each being worth billions of dollars, have at least one billion in cash in the bank, and pay dividends on a regular basis exceeding G.I.C. and Treasury Bill rates of interest.

So there you go.
Eeeeeesy Peeeesy!

What a scary undertaking!

Meeting someone for the first time, that you have to open up to.
Sharing your success or failure up to this point in your life.
Revealing your inner dreams of where you want to be down the road.
It’s almost like becoming naked on a first date.
It is so intimidating that most individuals actually avoid going to see any advisor.

Soooooooo, muster up the courage and begin by deciding on the company you feel you can trust.

Points to consider:

• How long has the company been in business ?
• Have you heard positive things about the company ?
• Is it necessary to have oodles of money to be considered a client or will you be treated with respect regardless the amount of your wealth ?
• Would you prefer to meet with  a female investment advisor or a male ?
• Is your advisor’s compensation (A) based on commissions earned each time he/she buys or sells for you ?
• Is your advisor (B) paid a fee based on assets within your portfolio regardless whether he/she buys or sells for you ?
• Can you choose the compensation method, either (A) or (B) ?
• Is your advisor compensated with a salary and bonuses regardless of whether you invest with him or not ?

More points to consider:

• Do you feel comfortable within his/her presence ?
• Does he/she smile and seem pleased with his/her work environment ?
• Do you feel you can trust him/her and he’ll remember who you are and what your goals are ?
• Did he/she offer to make up a written financial plan as to how you can accomplish those goals ?

Remember, you’re the customer.
You’re the client.
You want and expect good service.
Ideally there’s a real person at the other end of the phone rather than recorded instructions when you call the firm (during business hours).
You want to be able to get through to your advisor or know that your call will be returned within a reasonable amount of time.
If you make your decision using the above criteria, I’m sure your choice will be a positive one.
Remember, every long journey begins with the first step.