Home Mortgage Ontario

04/30/2024

It was a pleasure to chat about all things real estate, investment and the Canadian economy in 2024 on The Canadian Real Estate Show with T.K. Butler and Darryl Frankfort.

Thanks for having me and I encourage those in my network to join in the conversation over on YouTube or your favourite podcasting platform.

Looking forward to having you both on Canadian Wealth Secrets real soon!

https://www.youtube.com/watch?v=kJyV_irkISU

Canadian Real Estate ShowDarryl Frankfort from DealCore Properties and TK Butler fro...

03/31/2024

The Bank of Canada will ultimately “make another mistake”.

How do I know?

Because central banks historically are late to act in both directions.

Why?

They are basing their decisions on trailing data that happened months prior and, once the data begins to suggest that something should be done, central bankers get cold feet as the thought of intervening in a “free market” creates analysis paralysis.

So, what often happens?

A decision to wait for more data to confirm what they are seeing to “make sure.”

They’re always late on the way up, and late on the way down.

I don’t anticipate that to change this time around.

What are your thoughts?

03/27/2024

What do you think this means for interest rates when the Bank of Canada is now claiming we are in a “productivity emergency?”

When interest rates rise, central banks are intentionally slowing the wheels of the economy in order to stamp out inflation. The problem we have in Canada is that much of our inflation was caused by printing money that went to government waste instead of economic growth opportunities.

The challenge ahead for Canada is that we still have inflation and our productivity had already been lagging simultaneously.

The shift downward is coming and this statement is the first “pivot” in messaging, but my concern for our economy is how we can balance both - productivity and lower inflation - at the same time.

03/25/2024

Switzerland is the first to begin rate cuts in a “surprise move.”

I’m sure the first cuts by the Fed and BoC will also be surprises when they do come in the not so distant future.

When do you think the first BoC cut is coming?

03/15/2024

Are you well-informed as to the difference between the taxes you pay on active income earned in your corporation and investment (passive) income?

The low corporate active income tax rate on the first $500,000 of net operating income is incredibly attractive. The problem is that most do not recognize the tax on any investment (passive) income earned inside a corporation is over 50% in most provinces/territories.

In this week’s episode of Canadian Wealth Secrets podcast, we dig into the weeds and offer some of the easiest ways to protect those retained earnings and provide ways to turn your corporation into a tax sheltering machine.

Apple:
https://podcasts.apple.com/ca/podcast/canadian-wealth-secrets/id1662013072?i=1000649030918

Spotify:
https://open.spotify.com/episode/2P13p1x4rpt0Pkqd9pEVHJ?si=n5ebirszSHW5SnlteneFhQ

Listen to this episode from Canadian Wealth Secrets on Spotify. Are you wondering if incorporating your Canadian business is the wealth-building powerhouse you expected, and how to navigate the complexities of corporate wealth management and tax saving strategies?This episode directly addresses the...

03/02/2024

Things you may not have considered before contributing to your RRSP.

1 - Contributing to your RRSP is a tax deferral, not a refund or credit.

When you contribute to an RRSP, you are making a choice to pay the taxes on the income you are contributing in a future tax year in exchange for the right to grow that higher amount of capital, tax-free.

While being able to invest more money now in a tax deferred vehicle, you will ultimately pay income tax on all of the investment capital, all of the interest or dividends, and all of the capital gains in each year you take the money out as income.

So while this is a great way to start with more and “jump-start” your investment growth, one must be aware of the tax bracket they are in when contributing and where their income tax bracket might be when they begin to take income from their RRSP.

For example, a teacher who is early on in their teaching career and earning less than $60,000 will want to avoid contributing in those years since they will be earning more than $60,000 when applying the cost of living allowance over time.

2 - Investment Growth Leaves You Paying More

Most don’t recognize that focusing on growth inside of an RRSP means paying more in taxes over the lifetime of the investment.

How?

By paying income tax on the entire capital gain in the year you take income from your RRSP as opposed to only paying tax on 50% of the capital gain outside of your RRSP.

For example, if you bought shares of Amazon at $100 and they grew to $1,000, that is a capital gain of $1,000.

If purchased in an unregistered account, you would pay capital gains tax on half of the gain - or on $500 in this case. If we think of this another way, you’re paying half of your tax rate on the gain instead of the full tax rate at your current income tax bracket.

While you do not pay any tax on the capital gain when selling those stocks inside your RRSP, you will pay income tax on 100% of those dollars in the year they come out.

Therefore, you would be paying tax at your income tax rate in the year you take that $1,000 as income. Major bummer.

Did you learn anything here?

Any other helpful tips you can share?

Share in the comments!

02/19/2024

The vast majority of Canadian business owners spend over 40 hours per week growing their businesses with every extra dollar of profit earned being taxed by about 50% by the time it hits their personal pockets.

Imagine the realized after tax growth in personal profits if taxes were minimized by more than half?

Yet, most business owners are “too busy” to focus on corporate wealth management strategies.

Wealth Secret Sauce:

Focus on your corporate wealth management strategy to minimize the passive corporate taxes and personal taxes you pay so you can maximize the investment of your time and capital for optimal growth.

02/18/2024

Hey Business Owners & Entrepreneurs:

What would you say is the biggest “pebble” in your wealth creation shoe?