Autumn 2015 Newsletter

Autumn 2015 Update mc-wealth-nov-2015-newsletter-docx     Our Contact Information: Debbie McCulloch – debbie@mcwealthmanagement.ca Anne Marie Mucci – annemarie@mcwealthmanagement.ca        www.mcwealthmanagement.ca  Investia Financial Services...

Summer 2015 Newsletter

Summer Update mc-wealth-june-2015-newsletter-pdf     Our Contact Information: Debbie McCulloch – debbie@mcwealthmanagement.ca Anne Marie Mucci – annemarie@mcwealthmanagement.ca        www.mcwealthmanagement.ca  Investia Financial Services...

Spring 2015 Newsletter

Spring Update mc-wealth-newsletter-may-2015 We are Moving! After over 10 years on Sunray Street and 18 years in Whitby, we are moving. Debbie has sold the Commercial unit and it is time for change.We are very excited to be moving to a great office in Ajax as of the end of May. Our new address and phone numbers are: 50 Commercial Avenue, Suite 200 Ajax, Ontario, L1S 2H5 Phone: 905-427-4406  Fax:  905-427-4407  Toll Free: 1-844-427-4406 Contact Information: Debbie McCulloch – debbie@mcwealthmanagement.ca Anne Marie Mucci – annemarie@mcwealthmanagement.ca         www.mcwealthmanagement.ca        ...

Four critical retirement investing mistakes

Four critical retirement investing mistakes to avoid From failing to plan to ‘extreme’ investing, these financial missteps are standing in the way of Canadians’ retirement goals. By: PAUL BRENT Date: July 30, 2015 It can be a challenging time to guide Canadians to a secure and successful retirement. Defined benefit pensions are becoming a relic of the past, rock-bottom interest rates have crimped fixed income returns and tepid global growth has made equity markets unpredictable and unstable. When you add in record personal indebtedness, a weak Canadian economy and an aging population, it becomes clear that for financial advisors and their clients, the stakes are higher than ever before. To keep retirement goals on track, it is critical to identify and avoid the common investment and retirement planning errors that typically trip up Canadians. 1. Absence of a financial plan Perhaps surprisingly, the weakness that continues to crop up most often is the absence of a well-thought-out financial plan, says Kari Holdsworth, vice-president of individual wealth at Sun Life Financial in Waterloo, Ont. “People don’t plan to fail, but they often fail to plan,” she says. The 2015 Sun Life Canadian Unretirement Index, a poll conducted by Ipsos Reid that tracks Canadians’ attitudes and expectations about retirement, reported that just 33 per cent of people work with a financial advisor and just 22 per cent have a written financial plan. “People without a financial plan potentially don’t have the assets they need to achieve their goals,” says Ms. Holdsworth. “But more importantly, they don’t have a crisp understanding of what their goals are and whether there is a gap...

Canadian Struggling with Financial Decisions

Canadians struggling with financial decisions One in two Canadians feel personal finances are more complicated now than they were 20 years ago, survey finds By Tessie Sanci | February 20, 2015 10:30 While 66% of Canadians are saying they could benefit from additional financial knowledge or advice, 46% of Canadians are also not planning to see a financial advisor in the next year, according to a poll conducted for CIBC. One in four respondents also say they lack confidence in their overall financial knowledge, and 52% say they have struggled with making a financial decision because they felt they lacked the necessary knowledge. “While the majority of Canadians generally feel confident about their overall financial knowledge, they may want to seek advice when making certain financial decision that occur less frequently, such as renewing a mortgage, or determining where to invest an inheritance,” says Christina Kramer, executive vice president of retail and business banking for CIBC. The survey also found that 53% feel managing their personal finances is more complicated today than it was 20 years ago. “As personal finances have become increasingly complex with greater choice available in the market and more and more information driven through technology, it’s not surprising that Canadians are feeling overwhelmed,” Kramer says. The survey was conducted online with 1,510 randomly selected Canadian adults who are also Angus Reid Forum panelists. It took place between Jan. 16 and...

Mortgage, RRSP or TFSA?

Paying down low-interest debt, such as a mortgage, can negatively impact retirement savings, says CIBC’s Jamie Golombek By Tessie Sanci | February 19, 2015 11:00 Almost three-quarters of Canadians would prefer to pay down debt over adding to their retirement fund, according to a poll conducted for Toronto-based CIBC. “The decision to pay down debt at the expense of retirement savings is often an emotional one that isn’t driven by logic,” says Jamie Golombek, managing director of CIBC Wealth Advisory Services. More than half of Canadians, at 56%, say they want the financial freedom of being debt free while 20% believe they have too much debt and want to pay it off. Only 11% believe the interest rate on their debt is too high and prefer to repay their debt instead of investing into a registered retirement savings plans (RRSP). Canadians who are paying down mortgages while interest rates are low may be depriving themselves of the benefits from investing extra money into an RRSP or tax-free savings accounts (TFSA), says Golombek. This is if the individuals in question do not have a high level of debt, can handle an increase in mortgage interest rates and can tolerate some risk in their investment portfolio, he adds. “Of course, if [someone is] holding high interest debt, paying that down is almost always the best choice,” says Golombek. Golombek explains how paying down low-interest debt, such as a mortgage, can negatively impact retirement savings in his new report, Mortgages or Margaritas: Is paying down debt putting your retirement at risk? The report illustrates the potential benefit of long-term savings in an...

The Financial Planning Process

Various Aspects of Financial Planning Retirement Planning Estate Planning Tax Planning Education Planning MC Wealth Managements’ team of professional Financial Advisors provides you the following six steps to assist you in identifying your needs today and in the future. We are not here to sell you products you do not need or want, but to provide you with suggestions, guidance, and a workable financial plan to serve you, your individual needs, and your family’s needs. Step One – Collecting the Data Together with your MC Wealth Management Financial Advisor we collect essential information by completing a detailed questionnaire. The questions are non-judgmental and assist us in forming a profile of your financial situation and lifestyle. This process is supported by: Examination of past Income Tax returns Analysis of life, disability, home and property insurance policies Asking about wills of all family members Ascertaining of “soft-data” (lifestyle preferences and risk tolerance with respect to investing) Derivation of cash flow and net worth statements from pertinent information Examination and analysis of “Employee Benefit Plans” when applicable Step Two – Identifying Your Goals and Objectives Next, we determine in as much detail as possible, your actual goals and objectives for the future. For families, we encourage both spouses to be actively involved in this process. We look ahead to your retirement; do you want to retire early? What do you plan to do during your retirement – play golf six days a week? Travel? Pursue a hobby? Do you need to provide educational funds for children? We talk about managing your money and your concerns. Step Three- Identifying Your Financial Needs Our...

Have you ever heard of the Dower Act?

Don’t be embarrassed if you haven’t, because most people don’t have a clue what it is even though it’s very valuable information to have– especially if you’re planning on getting married one day. The textbook definition of The Dower Act is: “a provincial legislation that prevents a married person from disposing of the homestead without the consent of the other spouse. This includes the right of the surviving spouse to a life estate in the homestead as well as the personal property of the deceased married person.” History of the Dower Act The Dower Act was founded in the early twentieth century by a Canadian feminist named Emily Murphy. Murphy met a woman one day who had been left homeless after her husband abandoned her and her children, and sold their family farm. Seeing the injustice in this, Murphy devoted several years to appealing to MLAs. Eventually the Act was made a law in Alberta in 1917, and later became the standard across the nation. What does the Dower Act mean? In essence, the Dower Act prevents two main situations from happening: 1) A spouse selling the home without his family’s consent, thus forcing them to leave 2) A widow being forced from their home after the death of their spouse (even if the home has been left to somebody else, for instance the deceased’s offspring, they cannot claim the home for themselves until the widow has also passed or chosen to leave) Does the Dower Act Apply to Me? If you feel like you’re in a position to enact the Dower Act, but aren’t sure, don’t be stressed. There are only...

Do you have a Collateral Mortgage?

A mortgage is the biggest debt that most Canadians will ever incur. For this reason, it’s of utmost importance that you do you research and know what your options are to minimize the damage to your bank account before you sign any dotted lines. You’d probably like to think that you can trust your mortgage broker to make sure you get the best deal, but the only way to guarantee that is by doing your homework beforehand and being fully informed about the different types of mortgages. One of these options is a collateral mortgage. Not familiar with the term? Luckily, we at MC Wealth Management are here to walk you through to explain all the ins and outs of collateral mortgages and help you decide if this is the right option for you and your mortgage rate. What is a Collateral Mortgage? The online definition of a collateral mortgage is: “A mortgage that secures a loan by way of a promissory note. The money borrowed can be used to buy a property or can be used for another purpose, such as a home renovation or a vacation.” In plain English, a collateral mortgage lets the lender borrow more than the home’s value—up to 125% of the property value, to be exact. That extra cushion of cash sounds great, but be aware that there’s always a caveat. Unlike a standard charge mortgage, a collateral mortgage can be discharged, but not switched or transferred. Keep this in mind if you’re planning on moving in the short term or if you might want to move your mortgage under somebody else’s name. What...

Shopping Around For Your Mortgage?

SHOPPING AROUND FOR YOUR MORTGAGE? Here’s the inside scoop on how to do it right!   First:     Make sure you are working with an experienced professional loan officer.  The largest financial transaction of your life is far too important to place into the hands of someone who is not capable of advising you properly and troubleshooting the issues that may arise along the way.  But how can you tell?   Here are four simple questions your lender absolutely must be able to answer correctly. If they do not know the answers…RUN…DON’T WALK…to a lender that does!   What are mortgage interest rates based on? The only correct answer is the Bank of Canada rate for variable mortgages and mortgage backed securities, specialized mortgage bonds, or Government of Canada Long Bonds for fixed rates. A professional mortgage originator ought to at least know the basics of how your interest rate is determined.  Do not work with a lender who has their eyes on the wrong indicators, or worse yet, has no idea what the indicators even are.  At Northwood Mortgage Ltd we constantly review these indicators and you can therefore be confident in our ability to suggest sound mortgage strategies up front and to manage your mortgage for the long term.   What is happening in the market today, and what do you see in the near future and why?   If a lender cannot explain how Mortgage bonds and interest rates interact and where they are headed, why would you trust their advice for your costliest investment?   What strategy are you recommending and why?   The key here...

Be careful when using your Emergency Savings

Canadians take nearly $8,000 out of emergency savings for non-essentials By IE Staff | September 12, 2014 11:50 Two-thirds of Canadians have dipped into their savings for a non-emergency, taking an average $7,955 to cover indulgences, including electronics, non-essential home renovations, vehicle upgrades, vacations and large gifts, according to a recent survey. The annual BMO Rainy Day Survey, conducted by Pollara, revealed that women are more likely than men to dip into their fund for a non-emergency, but men dip in deeper: The survey found that seven-in-20 women (68 per cent) dipped into their fund for a non-emergency, compared to 61 per cent of men. Men have taken an average of $10,351 for a non-emergency, while women have taken $5,920. While women’s top three non-emergency expenses included vacations, home renovations and large gifts, men’s top three included vacations, electronics, and home renovations. “While it’s promising to see that Canadians consider their rainy-day savings to be primarily reserved for emergencies, their willingness to dip into their fund for an indulgence could be a threat to their financial security,” said Christine Canning, head of everyday banking, BMO Bank of Montreal, in a release. “A better approach would be to hold a designated fund for indulgences, to help keep expenses in check.” The survey was conducted by Pollara between August 5-7, with an online sample of 1,001 adult Canadians. The margin of error for a probability sample size of 1,001 is plus or minus 3.1%, 19 times out of...

Are you a “House-Plus” buyer?

I have observed that there are some general differences between that are generational.  The following article is an interesting study of the Gen X era, those born approximately 1961 to 1981, after the Baby Boomers. TD Survey finds most Gen Xers want budget flexibility to afford other things in life TORONTO, Sept. 9, 2014 /CNW/ – Today’s Gen X Canadians overwhelmingly consider themselves “House-Plus” buyers who want enough flexibility in the budget to afford things like travel after paying their monthly mortgage. Only one in seven (14%) Gen X Canadians consider themselves “House-All” buyers who go to the higher end of what they can comfortably afford when it comes to their mortgage, leaving less room for discretionary spending. But, according to a recent TD survey, Gen Xers are fairly evenly split between those who see themselves living in their current home forever (42%) and those who see it as a stepping stone to a different property (45%). “More than two thirds of Gen X Canadians have told us they don’t want their entire budget allocated to mortgage payments,” said Nupi Zubair, Associate Vice President, Retail Products at TD. “It’s possible to own a home and not feel handcuffed to the mortgage, but it does require careful saving and planning before signing on the dotted line. Buyers need to purchase a home at a price they can afford, while still budgeting for the other things on their list of priorities.” Zubair says that, in addition to the sale price of the home, Gen X Canadians need to factor in other costs of homeownership – such as taxes, maintenance, closing costs and...