About 5 years ago, my colleague advised me one day about how a relative of hers “John” had had a heart attack

At this point in time, that little creature that was sitting on John’s shoulder promptly exploded.  The little creature could no longer hold up the “It’s Never Going to Happen to Me” flag.

We all have one. A little creature that is, and every single one of them carry that same flag.  We live life invincible, and as my four year old would say “I’m playing superhero”.

John was admitted to the Royal Victoria Hospital in Barrie.  Although a smoker, he was in average health / weight at 46.  Employed full time, his life was massively changed for the next few months and for the future.

Under Doctor’s orders:

• he was off work for 6 months
• was prohibited from driving for 4 months
• had to start a prescription pill regime for life

Let’s discuss the financial impact, no employment income, and medications for this family run between $200 – $300 a month.

It gets worse.

John is now an insurance nightmare.  If he wants to travel, coverage is astronomically priced.  Although John has existing term insurance coverage, upon its expiry, obtaining new coverage may include excessive rating or exclusions for issues related to the heart.

In hindsight, John now wishes that he had obtained Critical Illness insurance coverage, as well as permanent insurance for life. His financial situation and future would have a much brighter outlook.

For me, my husband and I were advised at Christmas time that my 75ish grandfather-in-law, had a stroke and was in the hospital.  When talking with him after, he told me that he had felt the signs, and ignored them.  He survived the stroke, and now on his limited budget, has the great pleasure of taking a cocktail mix of drugs daily.

In the late 1960’s, my mother, at 12 years old was taken to the hospital for back pain.   The doctor came out shortly after and advised my grandmother that they were admitting her daughter, and that she was being prepped for heart surgery.  The surgery, which had only been done for 5 years, was to re-open a valve that was closing in one of her arteries.  My mother still bears the scar today.

I have various family members on blood thinners, blood pressure pills and other pain medications.

Heart and Stoke issues affect us all.  To find out if you’re at risk, go to www.heartandstroke.ca and take the “Risk Assessment Quiz”.  I love the fact that the quiz is sponsored by Desjardins, an insurance company that I’ve worked with to put insurance coverage on my clients.

If you have determined that you are at risk, it’s time to take action.  Visit one of our Insurance Structures to find out how our team of insurance advisors can mitigate the negative financial impact of a future heart attack or stroke so that you can focus on healing.

Follow us on Twitter: @investorssource or @isinsure.   Like us on Facebook!

For every new like on Facebook during the month of February we will donate 1$ to Heart and Stroke!

• Food
• Mortgage
• Utility Costs
• Transportation Expenses
• Fun Spending
• Debt Reduction
• Family Savings
• Insurance Coverage

I find this to be a slightly ironic list because, for someone like me, the top 3 are blatantly incorrect (apologies Mr. Maslow).  My top 3 financial priorities would be in this order:

• Insurance Coverage
• Food
• Mortgage

I want you, my friendly blog reader, to understand why I’ve restructured the list with Insurance Coverage as my first priority.  Why?  Because as a Canadian, I take many things for granted, including my health care.

If I were to get the flu, off I go to a walk in clinic.  If a family member breaks an arm, it’s a quick drive to our local Urgent Care Clinic.  Finally, if someone I know has a heart attack, it’s off to the emergency ward at the local hospital (www.rvh.on.ca).

The question that bears answering is what happens when you don’t get better quickly?

Last time I checked, my municipal, provincial and national government didn’t cut me a cheque to ensure that I could buy food for my family.   If we’re off work for a week sick, no big deal.

But what if you had a heart attack and the Doctor told you that effective immediately, you were off work for a few months in order to recuperate?  You aren’t thinking about the deadline for work, you’re thinking about how you will pay the grocery bill and the mortgage in the coming weeks.

As an insurance company, we have the financial solution to your insurance needs and the Heart & Stroke Foundation has answers to improve your heart health.  February is Heart & Stroke month so visit: www.heartandstroke.com for more information and watch the video: “Death Loves Women”.  As a woman, I’m disturbed watching this.  I relate to the 30ish woman toilet training her toddler, while holding her baby.    Who do you relate to?   Is your mom, sister, child, colleague or friend represented?

These videos are powerful and should motivate all of us to re-evaluate both our health, and our insurance coverage.

Stay tuned for our next blog release coming later this week. We’re getting personal with the Heart & Stroke theme as various team members (primarily me) have family that have been negatively impacted by heart and stroke issues. You won’t cry, but it’ll open your eyes a bit to the realities of how your life will change.

As we were releasing today’s blog, we heard through the social media grapevine that after 1 year of fundraising, the RVH Auxiliary  has raised $750,000 (50% of its $1.5 million pledge) for the coronary care unit!

For you social media gurus out there, Heart & Stroke Foundation can be followed on Twitter: @TheHSF.  I can be found at @isinsure

It’s that time of year again when the general retail investor remembers that they haven’t yet made their annual RSP contribution. Whether your memory is jogged by the mass media, advertisements ran by well known brand name bank, investment or insurance companies, or by the annual phone call from your advisor, many people make last minute decisions on how to invest their retirement assets.

The wisest of decisions often take thought and contemplation. I’ve often compared buying an investment to getting married. For us married people, we didn’t get married without considering the attributes of our spouse-to-be first. We took our time, we courted, we tested, we teased, we fought and made up. We watched their interaction with their family and with children (if having kids was on the criteria list). We listened to how they spoke to others and we considered how considerate that person would be. Then if the “offering” was acceptable, we took the plunge, said I do, and hoped that our lives would turn out “happily ever after”.

When you are making an investment buying decision, you should have a criteria list that you put your advisor or the investment of choice through prior to leaping in. If you invest in mutual funds, segregated funds or GIC’s, you often have to consider the time commitment you are making to that particular investment or to the provider of the investment. People, strangely enough, overlook this.

Not by any means am I or my team “buy, hold and forget about it” investment strategists. We watch what’s happening globally, politically and in the various sectors. We think about what client’s need and desire from their investments, and we consider options to present for discussion. We suggest changes when changes are warranted.

We also take the time to schedule our clients for quarterly performance reviews. We don’t forget that its our responsibility to care for our clients’ financial assets. This is an immense responsibility and one that we do not take lightly.

Recently, an existing client advised us that they were disgruntled with the return they received from their nationally recognized banking institution. A few years prior to working with us, this person invested some savings in their RSP, and now the GIC is free to be moved. After a few years, the client earned about $300 in interest (do you hear the sarcastic “whoopee”). This person is lucky to have the original principal because that $300 has “poof” disappeared once we factor in the tax consequences of interest income and inflation. GICs are not as perfect as advertisers would have you believe. In fact, we jokingly call them “Bankruptcy on a Plan”.

When making an investment decision this RSP season, do your homework. Ask yourself what your priorities are. Here are some questions to ask:

If you are contemplating using a GIC, ask yourself this:

1. What is the time commitment to leave the assets invested?
2. What benefit do I get at the end of that period and how will it be taxed? (in other words will there be anything left over?)
3. Is there any chance that I may need to access that RSP investment ( first time home buyer, going back to school, or fankly I just need the money due to an unfortunate change in mine or my family’s circumstances financially)?

If you are contemplating using a Segregated Fund, ask yourself:

1. Who is the insurance company that my advisor is talking to me about and what are they known for?
2. What are the benefits to the insurance investment, are there bells and whistles and bonuses that I get to stay invested?
3. What is my time commitment? Are there penalties to leave the investment if I need the funds unexpectedly?
4. How does my advisor get paid and does that affect my decision?
5. Is there a broad spectrum of investment funds that I can choose from?
6. What principal, market growth and death benefit guarantees do I get access to?

When you invest this RSP season, spread the love a little. Make sure that you don’t run back to your local bank just because that’s where you’ve always gone. Shocking for many investors, is the day that they don’t get what they expected and they wake up to the realization that banks are a business. They are there to make a profit, end of story.

Take your time, consider your options and speak to the independent financial service people in your local community (like us!). They will give you the advice you need and they will appreciate your business much more than you could ever realize…

If you had a money machine in your basement and it printed off $5000/month until you turned age 65, would you insure it?

We can help you insure your money making machine (note: the money making machine is you!)

We’re hosting a seminar designed for accounting professionals who advise clients on wealth management, estate planning, tax planning/reduction. Attendees will benefit by hearing about the “value adds” that will make their business stand out while producing tax and other savings for their clients.

Please see the attached invitation for full details and information on the speaker Lea Koiv, BComm, CMA, CA, CFP, TEP Senior Advisor, Taxation & Pension with Standard Life. Lea is an expert in the field of taxation, is an accomplished speaker and a regularly published writer on tax issues.

If you think that your accountant may be interested in finding out more, please share the link with them!

Seating is limited so please RSVP to ttayler@isinsure.ca via twitter @isinsure

Whether your assets are in a RRSP, RRIF, TFSA, GIC or a good old fashioned bank account, you can create your own pension plan. $10,000 gets you started and you can guarantee your income. In my examples I used a static initial investment. I didn’t even touch on the fact that ongoing contributions further increase the benefits the investor will receive.

I’m going to go back to Lisa.  Last week, I killed off her portfolio, but still ensured that she received an annual $20,000 income off of money that wasn’t completely hers, (free money!).   This week, Lisa becomes an even bigger winner.  If you remember John (part 4), and how his portfolio started at $500,000 and over 20 years grew to $774,198, Lisa is going to make that look like peanuts.

I know you’re intrigued.

Lisa invests her $200,000 inheritance using Investors Source’s Guaranteed Pension Plan Structure™.  At 50, she doesn’t need the money until she’s 70.  By deferring to take the payment and having growth in the global investment markets, Lisa’s original $200,000 is worth $840,954 when she’s 70.

Here’s how.

If you recall, by staying invested, and not taking any of her money out, Lisa automatically receives a notional bonus from the insurance provider calculated as 5% of the market value of her investment.  For the first 3 years, Lisa receives a notional bonus of $10,000 a year ($200,000 x 5% = $10,000 free money!).

These programs automatically reset every year to lock in market growth.  Therefore, in year 3, Lisa’s original $200,000 grew to $231,266.   Her 5% notional bonus has increased from $10,000 to $11,563 for the next 3 years.

Over the next 18 years, I’m going to demonstrate a perfect situation.  Growing markets, 5% notional bonuses and market resets.   By the time the 18th year rolls around, and the 6th reset kicks in, Lisa’s original $200,000 portfolio is worth $731,265.  She receives an income bonus of $36,563.   On the 20th year, the portfolio has grown to $840,954 and if the market growth continues to the 21st year, she will be GUARANTEED an annual income of $42,048.

Did I mention that she still has the $840,954 invested?  She gets to put $42,048 into her jeans each year, and maintains a whopper of an investment.

Look at the graph.  Do the math.  Call us.  The Investors Source Guaranteed Pension Plan Structure™ program is amazing.

(Click to view larger image)

Contact our office today at 705-733-3338 and find out how we can get you started with a Do It Yourself Pension Plan.

In part 3 and 4 of my series I used John as my example. Thanks for showing up John, but now we move over to Lisa. Lisa is an even bigger winner than John. She’s got less money to start with, but the benefits she receives are better than John’s

Lisa is 50 years old. She received an inheritance of $200,000 and wants to invest it.  Her intention is to retire at age 70 and wants to draw an income at that time.  Her biggest concern is protecting the inheritance against market loss, while maintaining an income stream.   Lisa investigates and proceeds with the Guaranteed Pension Plan Structure™.

Unfortunately, the same bad markets affect Lisa that affected John.   The value of her $200,000 is significantly less in 20 years when she is ready to draw an income.  However, because Lisa kept her money invested for 20 years, she has been bonused by the insurance company.  They have given her a notional bonus of $10,000 each year for 20 years.  That notional bonus equates to an additional $200,000.

Lisa hasn’t doubled her money, but what she has done, is increased the level from which the insurance company provides her with guaranteed income.  Lisa has guaranteed and increased how much income she can receive when she turns 70.

Just like John, Lisa wants 5% as a guaranteed income stream.  At 70, Lisa now gets 5% calculated from the $400,000 (her original $200,000 and the notional bonus of $200,000).  That means Lisa will receive $20,000 a year guaranteed for life.

This is like getting free money!

Check out the graph and call us to find out how Investors Source can do this for you.  A Do It Yourself Pension Plan starts at as little as $10,000.

(Click to view larger image)

The Guaranteed Pension Plan Structure™ is the key to reducing stress going into retirement.

Contact our office today at 705-733-3338 and find out how we can get you started with a Do It Yourself Pension Plan.

Last week, I introduced you to John. If you recall, John age 65, had saved $500,000. Upon retiring, he needed to draw on his savings as he didn’t have a pension. John wanted a 5% payout every year, which equated to an annual income from his savings of $25,000. At 81, 16 years in, his original investment was gone due to lousy global markets. However because he created a Do It Yourself Pension Plan, he still received $25,000 a year until he passed away at 85. For 20 years, he got his money, GUARANTEED.

Let’s change the scenario.

Rather than depleting John’s assets in 16 years, now we’re going to say that the markets are going to do extremely well over the next 20. John is still going to pass away at age 85, but what does he get to live off of during that time frame? Is it still $25,000?

Nope. It’s more.

The unique thing about a Do It Yourself Pension Plan, is that you are in control. You can change your holdings and take advantage of asset allocation and diversification. Let’s pretend that John gets to live through 20 years of a great market until he’s 85 years of age.

Every three years, John’s income is automatically increasing. As the value of his original $500,000 grows over time, he is still taking out 5%. However, the 5% is now based off of the increased value of his investments.

Let’s pretend that by the time the 18th year rolls around, the markets peak. John’s income is reset because this is the 6th reset (every 3 years). At this time, John’s original $500,000 grew to $774,198. He now gets 5% as a guaranteed income off of the value of the $774,198, which equals to $38,710.

In year 19, the markets slide. The value of John’s investments fall from their high of $774,198, but John’s income is not affected. He will continue to receive the $38,710 each year until he passes away.

Check out our graph that demonstrates how this works. (Click to view larger image)

The Guaranteed Pension Plan Structure™ is the key to reducing stress going into retirement.

Contact our office today at 705-733-3338 and find out how we can get you started with a Do It Yourself Pension Plan.

At Investors Source we fix broken investment plans. When we get a new client, our first job is to erase the fear that we can see in their eyes. Then we work on converting their worries into a feeling of calm and happiness. It’s a big job, but so worth it. Our greatest successes have been to show people how to create their own pension plans.

Creating your own Pension Plan is an extremely effective solution to compensating for the worries about having enough retirement income.

The third part in this series on Do It Yourself Pension Plan is to show you how the Guaranteed Pension Plan Structure™ can generate guaranteed income for life. It doesn’t matter how the markets perform, the investor will still get their cash flow.

Let’s use an illustration and a graph (us financial people love graphs) to show how this works.

John, age 65, has saved $500,000. He is retiring this month and since he doesn’t have a pension from his employer, we’re creating one for him. Once he stops working, John needs the income from his savings to live on. John decides he wants a 5% payout every year. That is an annual income from his savings of $25,000.

To make this an extreme situation, but we’re going to use the example that the portfolio declines in value to be at zero in 16 years. Suddenly, at age 81, John is too old to work and his life’s savings are gone. However, John will still receive his $25,000 a year until he passes away.

Check out our graph to see how this works. (Click to view the larger image)

Watch for our next post to see what happens to John in an up market and how he can get $38,710 a year for life GUARANTEED!

Contact our office today at 705-733-3338 and find out how we can get you started with a Do It Yourself Pension Plan.

We see it all the time. From professionals such as teachers and nurses to labourers’ and technically skilled individuals, regardless as to what they do everyday for employment, they all seem to have this misconception that maxing out their Registered Retirement Savings Plans (RRSP) is not a tactically advantaged thing to do.

They couldn’t be more wrong.

On your annual Notice of Assessment (NOA) that the Canada Revenue Agency (link http://www.cra-arc.gc.ca/menu-eng.html ) issues to all taxpayers (aka everyone) after filing their taxes, there is a line on page 2 that determines how much you can put into your RRSP each year after compensating for any pension adjustment.

Got a pension? Great. Make an RRSP contribution.

No pension? Make an RRSP contribution.

If the government of Canada allows you to shelter money in a tax efficient vehicle, it bears asking why people don’t take advantage of sheltering their hard earned money.

Here’s the kicker. You can have TWO PENSION PLANS, the one that is provided to you by your employer and the one that you create yourself. Why not do everything that you can for yourself? After all, you’ve worked for your lifestyle and you don’t want to lose it due to a lack of income come retirement.

Creating, managing and sustaining wealth is what we do at Investors Source. We can show you how to convert your RRSP into a pension plan. Our plans come with annual bonuses that will increase your GUARANTEED retirement income.

Contact our office today at 705-733-3338 and find out how we can get you started with a Do It Yourself Pension Plan.