Swooping in or chickening out are not terms that we use at TIER One Planning. Our Clients enjoy a balanced approach to investing one client at a time.

Financial Strategies

The investment world is full of great products. It takes good strategies, however, to integrate tax, investments and personal objectives.

This section is designed to overview the variety of differing ideas and planning tools that we use for people of differing ages and different objectives.

Debt Conversion

Is your Mortgage (or your car, cottage, boat etc.) tax Deductible? That is a question we love to ask as we have some good solutions for those who say no.

We would like to provide you on three ways one can use this strategy. We have also produced a DVD that you can listen to. Please request a copy.

We find this is an excellent way to receive passive tax deductions, pay one's house down faster and develop long term savings. One does it by converting non-deductible debt into tax deductible debt. It is your personal tax rate on the interest that is saved. Most people do this without any extra cost on a monthly basis.

Debt Conversion requires little attention after it is properly started. You will need to make adjustments once a year.

One of the key parts is to have the "right" banking; banking that allows all the benefits of the plan to take place. We will be glad to review this for you.

The Money House

The Money House is an in-house name for a process that simulates all of the positive attributes of a rental property without the hassle of tenants and repairs. To be overly simplistic one borrows money like they would do if they were to buy a rental property. The money is then invested in any number of investment choices where the capital grows similar to a property. The investment pays a monthly distribution just like rent and this pays the associated cost of the loan. We have also produced a DVD that you can listen to. Please request a copy.

This strategy can also be used as an alternative to RRSP’s as you receive a tax deduction and, depending on the investment choice, your money can grow tax free. The real advantage of this over an RRSP is that you have preferential tax treatment upon redemption (taxed at 50% capital gains not 100% income) and you are not locked in for a lengthy period of time.

Flow-Through Shares

Flow Through Limited Partnerships represent an opportunity to invest in a portfolio of Canadian resource and exploration securities that in turn offer investors substantial tax benefits and credits. As a result, investors are able to acquire a pool of securities at a substantial discount, as the acquisition is effectively underwritten by tax savings. One needs to hold the shares until they are transferred over usually a 14-18 month time frame. This is when they are sold and profits or losses made.

This is one of the last remaining tax shelters available to Canadians through the Federal Tax Code. This product is only available to those in Ontario considered to be Accredited Investors.

We have also produced a DVD that you can listen to. Please request a copy.

Tax Sheltered Retirement Strategy

Universal Life is a product that takes after tax dollars and allows that money to grow tax free and be withdrawn tax free. This strategy works best for those individuals that have lump sums of money after tax to put aside on a yearly basis to fund their retirement. This strategy increases the duration and amount of retirement income over traditional savings methods.

Individual Pension Plans

Unless you work for the government or are a teacher you probably don’t have a good pension.

Canadian insurers, wanting to compete in this market place have created a product with underlying guarantees that allows you to create your own personal pension. These underlying guarantees give you a steady stream of capital throughout retirement. With guarantees on life and capital, as well as transferability to a spouse and beneficiaries on death at 100%, this strategy has certain benefits over traditional Pension plans and is a way to provide a base level of income for retirement.

Can you have too much money in RRSP's?

The simple answer is yes!

If you are a lower income earner having any money in RRSP's over and above what will give you and your spouse the $2,000/year tax free RRIF income can be too much. RRSP income and withdrawing RRSP’s can cause you to lose government benefits.

If in retirement and over age 65 you earn more than $63,000 (changes annually) you will be subject to the “Senior’s tax”. This is an age based discriminatory tax that will take your marginal tax rate from 42% to 57%. The way the government does this is by clawing back the Old Age Security at 15% for every dollar you earn over the limit. People get into Seniors Tax trouble very easily. All you have to do is decide to use your RRSP to buy a car rather than going to get a loan. It will be the most expensive car you will have ever bought.

We help people plan to avoid this but sometimes clients come to us with the problem fully developed. The following are some articles and opinions on strategies that can reverse the problem.


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