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We avoid it, hate paying for it, but need it
When it comes to insurance, there are three almost universal truths: Canadians hate thinking about it, begrudge paying for it and the majority of us don't have anywhere near enough of it.
The first two attitudes are easy to understand. Insurance is a downer. Besides that whole “death or dismemberment thing,” you are betting against the future health of yourself and your loved ones. And then you have to pay for it, when that cash flow could be put to “better” use paying down the mortgage, starting an education fund for the kids or replacing the rattling family beater.
“Nobody likes insurance. Generally when you mention insurance, people want to grab the waste paper basket and throw up into it,” said Brian Poncelet, who is an insurance specialist and independent certified financial planner based in Mississauga.
Like others in the field, Mr. Poncelet starts with the assumption that young families are seriously underinsured when it comes to covering the earnings of the breadwinners, even if they had group insurance through their employers. He also takes the approach that most twenty and thirty something families have limited ability – or desire – to buy additional insurance.
Because of that reality, he finds ways to pay for additional coverage within the family budget. One surprising source: existing insurance policies. A good example is raising the deductible on home insurance, as Mr. Poncelet did on his own policy, bumping it from $500 to $5,000 and freeing up $500 annually which can be put towards insurance against the loss of income. “Same thing with auto insurance,” he said, noting people generally carry a pricey low deductible on an aging vehicle that in many cases would not be worth committing to expensive repairs.
The above is an exerpt from the Globe and Mail article "We avoid it, hate paying for it, but need it" By Paul Brent Dec 9, 2009. To read the full article and learn more about "how much is enough" CLICK HERE. Everyone has a different financial situation, so please feel free to contact me should you have any concerns or questions regarding whether you have enough insurance to protect your family.
Other stories2010 Year End Tax Strategies
It is very hard to believe that 2010 is coming to an end only a few short weeks away. With this in mind, I find it important to provide you with some very important reminders that may very well help you with keeping some of your tax dollars. Mackenzie Investments provides an excellent list of final tax strategies that can assist with reducing your taxes for 2010. Below we have listed some of these stragegies. Should you have any questions pertaining to this list (or any other concerns or comments you may have) please feel free to contact me.
Here are a few of the strategies mentioned in the 2010 Year End Tax Stragies document:
- Initiate trades before investment deadline
- Trigger accrued losses before year-end
- Donate securities to charity
- Contribute to your TFSA
- Base RRIF withdrawals on age of younger spouse or common law partner
- Make your required HBP repayment
- Consider missing your HBP repayment
- Create eligible pension income
- Make an advanced RRSP contribution (if 71 by the end of this year)
- Defer your bonus
- Identify income splitting opportunities
- Take advantage of new tax credits
- And many more...
CLICK HERE for the complete list, and further details.
Why you should be an investor, not a gambler
The link below will bring you to an article read in the Globe and Mail from October 26th. I find it really quite interesting because the author, John Heinzl, speaks about how many individuals try to “play” the stock market like one plays at a casino. Many people who spend a lot of time at the casino anticipate a lot of winnings….but unfortunately, many are not so lucky. I’m sure you would agree that planning for your financial future should not be relative to playing a game - or by trying to "play" the stock market!
Take a look at this interesting article by CLICKING HERE. Also commenting in this article is Warren Buffet, who gives some excellent insight “…. To prosper from companies whose dividends increase regularly, an investor has no choice but to buy and hold. It is a get-rich-slow strategy that rewards patience and commitment”.
Enjoy and if you have any questions or comments, please do not hesitate to contact me.
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