Latest news with #ObjectiveFinancialPartners
Hamilton Spectator
2 days ago
- Business
- Hamilton Spectator
Ever wondered what financial experts read? Five books to guide you on your investment journey
When it comes to your financial future, knowledge is power. And yet, many Canadians feel out of touch when it comes to finding the right information needed to make informed decisions about their money, from financing a home to learning how to tackle debt. A 2024 poll from Edward Jones Canada found that 84 per cent of Canadians believe financial education in school would have helped them manage finances with less stress today. And 64 per cent of respondents who did not learn how to manage their money in their younger years are now looking to upgrade their knowledge. Tina Tehranchian, certified financial planner at Assante Capital Management, Jason Heath, managing director at Objective Financial Partners and Scott Plaskett, certified financial planner and CEO of Ironshield Financial Planning, share five of their favourite books that might just include the knowledge you need to kick-start your personal finance journey. Author, John C. Bogle Heath is partial to the classics. First published in 2007, 'The Little Book of Common Sense Investing' from Vanguard Group's founder takes a straightforward approach to explaining the investing world. The book draws on wisdom from financial titans like Warren Buffett, Benjamin Graham and Paul Samuelson to describe the most straightforward and effective investment strategies for building wealth over the long term. 'It talks a lot about the merit of index funds, how difficult it is to beat the markets,' says Heath, and is good for anyone 'looking for a different take on investing.' Author, David Trahair Heath first picked up this book in the nineties, at the beginning of his career. 'It's about how to get through the noise of what the financial industry wants you to buy.' Heath says you likely won't find Smoke and Mirrors on a bestsellers list, but Trahair's book opened his eyes early in his career. 'Like most people, I expected that the financial industry was there to help consumers and look out for their best interests, but that's often not the case.' [part of this quote was incomplete] Author, David McWilliams In this book, Tehranchian says McWilliams masterfully blends economics, history and human psychology to tell the story of money, not as a cold financial instrument but as a human invention shaped by trust, belief and social norms. 'It challenges you to see money not just as a ledger of numbers, but as a cultural force that reflects who we are and how we live,' says Tehranchian. 'Understanding this deeper story equips readers to make more thoughtful, values-driven financial decisions.' Tehranchian also points out that the book is beginner-friendly, as McWilliams gives simple explanations about complex topics. One of Tehranchian's favourite quotes from 'Money: A Story of Humanity' is about how cryptocurrency's volatility renders it ideal for speculation: ' … Who would ever punt on a boring, stable asset? But this is the very same property that renders it dysfunctional as a means of payment and therefore as money.' Plaskett says if you're looking for a book that challenges ('Kills') most of the common financial advice ('Sacred Cows') like budgeting or deferring gratification, Gunderson's book should be next on your reading list. He points out that 'Killing Sacred Cows' helps the reader avoid the most common financial institutions' 'traps,' which primarily benefit the financial institutions more than the client. The core theme of the book, Plaskett adds, is that there is no 'one-size-fits-all' type of advice, and it helps people avoid getting caught in the web of 'one-size-fits-all' [add dashes] advice that is promoted and encouraged by the financial industry. 'This advice is mainly based on fear and scarcity rather than abundance and personal empowerment.' Plaskett explains that his second recommendation is a great followup to 'Killing Sacred Cows.' 'Because once you commit to building financial freedom by aligning your approach to money with your purpose, you end up challenging the masses and bumping up against obstacles.' 'The Obstacle Is The Way' draws on stoic philosophy to help you overcome challenges and achieve personal growth and success, explains Plaskett. 'It is a great book that places the power directly on the shoulders of the reader.' A notable quote from the book, Plaskett adds, is: 'You will come across obstacles in life — fair and unfair. And you will discover, time and time again, that what matters most is not what these obstacles are, but how you see them, how you react to them, and whether you keep your composure.'
Globe and Mail
17-07-2025
- Business
- Globe and Mail
How to DIY with retirement paycheques
Many do-it-yourself (DIY) investors have managed to amass a nest egg to fund what they hope will be a comfortable retirement. Now comes the hard part: turning what you've saved while working – your accumulation years – into a reliable and tax-efficient income stream that lasts as long as you do. That can be complicated, says Thuy Lam, certified financial planner at Objective Financial Partners in Markham, Ont. 'The challenging part for do-it-yourselfers is how they build that retirement paycheque.' Welcome to the decumulation phase, the post-retirement years when you need to unwind assets to create a paycheque. This is a time when it's harder to recover from mistakes or setbacks, many decisions loom, and smart strategies are critical. While many Canadians are comfortable making investment decisions, Ms. Lam says planning retirement income can be overwhelming. 'People aren't sure how much, when and how to draw from their investments,' she says. Doing this prudently also involves decisions about when to start government benefits and, for some people, a workplace pension. If you're going it alone, Ms. Lam suggests starting by carefully tracking expenditures before retiring. This provides a baseline of spending habits that you can then project into retirement, adjusting for decreases in costs such as commuting to work, and increases for more frequent vacations. 'Determine what assets are available to you, and potentially when,' says Mark Seed, a semi-retired DIY investor in Ottawa, who blogs about his journey at My Own Advisor. He notes that a major consideration is deciding when to draw on Canada Pension Plan (CPP) benefits and Old Age Security (OAS). Many retirees increasingly opt to defer them in order to receive larger benefits from both, ensuring more guaranteed income later in life. Retirees can bridge any gaps by relying more on their Registered Retirement Savings Plans (RRSPs) and Registered Retirement Income Funds (RRIFs) to cover fixed costs and predictable variable expenses. Registered accounts are fully taxable, which can lead to tax problems down the road in retirement when mandatory RRIF withdrawals increase. Strategic withdrawals from RRSPs and RRIFs earlier can make sense. 'This helps reduce your tax-deferred liability,' Mr. Seed says. Ms. Lam suggests building a retirement income plan based on three buckets. The base income bucket comprises guaranteed income such as CPP, defined benefit workplace pensions, and OAS. Registered accounts (like RRSPs, group plans and defined contribution plans) can be layered on top tax-efficiently as a second bucket for remaining fixed and even variable expenses. The third bucket is for non-registered investments that provide tax-efficient dividends and capital gains income, or tax-free cash in the case of the Tax-Free Savings Account (TFSA). These can be used for large expenses, whether unexpected like a new roof, or planned like helping children purchase a first home. Solid cash-flow planning can help tremendously, Ms. Lam says. 'This involves matching income buckets to categorized spending, and reviewing regularly to ensure you can spend sustainably throughout retirement.' Do investment strategies need to change in retirement? According to Ms. Lam, 'the shift isn't as different as you might think.' She recommends a total return strategy, building income from interest, dividends and capital gains. After all, retirement may last decades. 'You don't have to totally gear the portfolio to generate income at the expense of long-term growth.' Annuities are another option for building retirement paycheque, especially for those without workplace pensions. These insurance products involve giving up a chunk of capital for a guaranteed income stream for a set period, or for life. 'This ensures a long-term floor in spending, while allowing retirees to confidently invest more aggressively with the rest of their portfolio,' says Kyle Prevost, a Manitoba financial educator who has created online courses on a worry-free retirement. To crunch the numbers, there are all sorts of free resources like the Government of Canada's retirement income calculator, and The Globe and Mail's optimal drawdown tool. It's possible to dig far deeper with The MoneyReady App, a subscription-based retirement planning tool for DIYers created by Elisabeth Tillier of Toronto, a retired computational biologist. She first developed the tool for her own retirement. The tool lets users test different withdrawal strategies. 'It's like a cash flow time machine,' says Ms. Tillier.
Globe and Mail
09-07-2025
- Business
- Globe and Mail
Canadian investors ditching U.S. stocks at record pace as they seek ‘significant derisking'
Canadian investors divested from U.S. equity funds in the first quarter at the highest rate since the start of the pandemic, moving their money into more conservative investments, according to a new report from Sun Life SLF-T. But people aren't cashing out. Overall withdrawal rates remained stable, suggesting that investors are staying committed to their long-term savings. The report, released Tuesday and based on data from 1.5 million group retirement plan members, also found average contributions to group retirement plans rose to more than $9,500, a six per cent increase from 2022. Sun Life draws its data from defined contribution pension plans and group registered savings plans, where members typically make regular payroll contributions matched by their employer. 'While some are adjusting their finances, it's encouraging to see that they aren't reactively pulling their money out of the market,' said Dave Jones, senior vice-president of Group Retirement Services at Sun Life, in a statement. 'They're engaged and taking their financial future seriously while navigating through turbulence.' The report found that many Canadians are undergoing what it calls 'statistically significant derisking,' especially among members investing in U.S. equities. Many shifted funds into guaranteed investment certificates or money market funds, which are lower risk options that can offer more stability during periods of uncertainty. Jason Heath, managing director of Objective Financial Partners in Markham, Ont., said that he is seeing the same thing with his clients. 'Regardless of what's going on politically and with trade and with tariffs, it's probably a good thing that people are more hesitant about U.S. stocks,' he said. Many Canadians are more exposed to U.S. markets than they realize, Mr. Heath said. That is in part owing to the success that U.S. stocks have had in recent years compared with equities in the rest of the world. In 2010, U.S. stocks made up 48 per cent of the MSCI World stock market index. Now, that share has grown to around 72 per cent. 'On that basis alone, if people have not rebalanced their portfolio, they're probably overweight U.S. stocks because their U.S. stocks have done so well compared to everything else in their portfolio,' he said. Some of this shift may also reflect a growing interest in 'buy Canadian' investing, said Mr. Jones in a statement, which gained popularity earlier this year. At the same time, more members are turning to target date funds, which are portfolios that automatically adjust to become more conservative as a person nears retirement. These funds now hold 42 per cent of member balances, up from 29 per cent in 2018, the report found. Historically, people who invest only in target date funds have outperformed those who invest in non-target date funds in eight of the last 10 years, according to Sun Life. 'This is investing on autopilot,' Mr. Heath said. 'It takes away some of the potential for an investor to sell at the wrong time or making poor investment choices.'
Globe and Mail
27-06-2025
- Business
- Globe and Mail
Can Romesh, 54, and Gayle, 52, retire in a decade if they spend $125,000 on a basement renovation?
Romesh and Gayle are in their mid-50s with one child, a combined income of $150,000 a year and a house with a $475,000 mortgage in Toronto. Gayle earns $65,000 a year in education plus another $20,000 a year freelancing, while Romesh averages $65,000 a year as a self-employed freelancer. 'I went back to school during the COVID-19 pandemic and switched careers, leaving a well-paying job as a journalist with a pension to become a teacher,' Gayle writes in an e-mail. 'I dipped into my RRSPs to pay my tuition and took a significant pay cut as a new teacher,' Gayle adds. 'Now my salary will gradually increase every year, maxing out at $110,000 when I turn 60.' In the short term, they want to renovate their basement at a cost of $125,000, which will add to their debt load. They wonder if it would be worth spending an extra $50,000 to add a basement suite they can rent out for extra income. They'd also like to travel more while their son is still young. 'Can I afford to retire at 62?' Gayle asks. 'Can my husband retire at 65?' Their retirement spending goal is $8,000 a month after tax. We asked Jeff McCartney, a certified financial planner with Objective Financial Partners Inc. in Markham, Ont., to look at the couple's situation. Objective is an advice-only financial planning firm. Romesh and Gayle have three main goals, Mr. McCartney says. The first is to renovate their basement for about $125,000, which will need an increase to their mortgage or a line of credit to finance. The second goal is to retire when Romesh is 65 and Gayle is 62 and the third is to travel together as a family while their son is still young. Ezra and Leanne, both 63, fear they don't have enough to retire. Should they take a hard look at their spending? 'Starting with the most attainable goal first, they set an annual vacation budget target of about $6,000,' the planner says. 'Given their current approach to spending, this expense is reasonable, barring no change in their current financial trajectory,' he says. 'Their projected savings rate, even with the vacation cost, appears to have them on track to retire at their target date.' To achieve their two bigger goals, they must start by considering the cost of an increased mortgage or line of credit payment, and the impact that it will have on their long-term savings rate, Mr. McCartney says. His analysis assumed that a $125,000 mortgage increase would have an interest rate of 4.2 per cent and an amortization period of 15 years. 'The good news is that even with this additional mortgage debt, they are still able to achieve their goal of $8,000 per month in after-tax retirement income in today's dollars, albeit with a few additional recommendations,' the planner says. First, Gayle should open a tax-free savings account to take advantage of the tax-free growth that it provides. An additional contribution of $300 per month to this account would have a 'really positive impact' on their ability to maintain their desired lifestyle right through until age 95, he says. Alternatively, putting that same $300 extra per month toward accelerated debt repayment should put them in a similar spot. Their TFSAs would need to earn a higher return than the interest rate on their debt to make investing more compelling than debt repayment. They should also consider using their non-registered investments such as Romesh's crypto ETF account to either fund the renovation or at least to fund Gayle's TFSA, the planner says. 'If you have TFSA room and you have non-registered investments, you are missing an opportunity,' he says. Non-registered accounts are taxable, and TFSAs provide an opportunity to earn a return tax-free. There are no tax issues either for one spouse to give the other spouse money to contribute to their TFSA. Although this is several years away, analysis also indicates that they should delay taking their Canada Pension Plan benefits until age 70, Mr. McCartney says. Delaying CPP from age 65 to 70 will allow them to increase their future payments by 42 per cent. Similarly, they may also wish to consider delaying receiving Old Age Security benefits from 65 until age 70 as well, because this will add an additional 36 per cent to their monthly payments. Romesh and Gayle also wanted to investigate the possibility of spending an additional $50,000 on their basement renovation to make it rental-ready so that it can be used to generate $15,000 a year worth of additional income once they retire. 'This strategy results in an 11-per-cent increase in the family's net worth at Gayle's age 95,' the planner says. Alternatively, Romesh and Gayle could increase their planned retirement lifestyle expenses by five per cent without jeopardizing their financial plan. 'Whether they will want to be landlords in their 70s or 80s is for them to decide, but in the short-term, it could definitely improve their financial trajectory.' There is one significant factor to be aware of here, and that is the change-of-use rules that could limit their ability to claim the full principal residence exemption when they sell their home This exemption allows homeowners to avoid paying capital gains taxes when they sell their primary residence. But under certain circumstances, the Income Tax Act could consider a homeowner to have disposed of either part or all of their principal residence even if they didn't actually sell it. 'This can happen when certain parts of a home, such as a basement, are converted to a rental property, particularly following a renovation,' he says. Romesh and Gayle may want to ensure that their basement apartment's rental use is ancillary to the main use of the property as a residence, that there are no structural changes to the property to accommodate the rental, and that no capital cost allowance is claimed on the property. Can Evelyn, 62, and Ezra, 70, afford to both travel and financially assist their son? Of note, Romesh and Gayle are currently saving $150 per month to RESPs. With a current value of $50,000, they are on track to being able to afford to pay $15,000 per year for four years of postsecondary education when their son is 18. That may be enough to cover the cost if he were to live at home. However, students who go away for university often find the 'all in' costs can range between $20,000 and $30,000 per year, Mr. McCartney says. 'Romesh and Gayle can sit down with their son and discuss the future, what schools will cost, and what he might be expected to contribute.' The People: Romesh, 54, Gayle, 52, and their son, 11. The Problem: Can they afford to renovate their basement and retire in a decade or so with $72,000 a year after tax spending? The Plan: Use Romesh's crypto ETF to either fund the basement renovation or Gayle's tax-free savings account. Gayle should consider contributing regularly to her TFSA to take advantage of the tax-free growth. Alternatively, they could put that $300 a month toward paying down debt. Consider delaying government benefits to age 70. The Payoff: An understanding of the steps they can take now to make it more likely they will achieve their long-term financial goals. Monthly net income: $9,400. Assets: Cash $5,000; his RRSP $300,000; her RRSP $275,000; his TFSA $10,000; his crypto ETF $100,000; registered education savings plan $50,000; residence $1,300,000. Total: $2-million. Liabilities: Mortgage, $475,000 at 2.74 per cent; student loan $15,000 at 2.5 per cent. Total: $490,000. Estimated present value of Gayle's DB pensions: $548,000 for the $25,245 government pension and $542,000 for the $26,490 teacher's pension. This is what someone with no pension would have to save to generate the same income. Monthly outlays: Mortgage $2,300; property tax $390; water, sewer, garbage $75; home insurance $100; electricity $150; heating $50; maintenance $100; car insurance $250; other transportation $290; groceries $1,000; child care $375; clothing $100; student loan $140; gifts, charity $150; vacation, travel $500; other discretionary $60; dining, drinks, entertainment $350; club memberships $160; sports, hobbies $400; subscriptions $50; health care $250; life insurance $200; phones, TV, internet $235; RRSPs $500; RESP $150; TFSAs $400. Total: $8,725 Want a free financial facelift? E-mail finfacelift@ Some details may be changed to protect the privacy of the persons profiled.
Globe and Mail
02-06-2025
- Business
- Globe and Mail
With a new GST rebate coming, here's a refresher on other tax breaks for first-time homebuyers
The federal government is moving ahead with a new GST rebate for first-time homebuyers, which may complement existing programs aimed at making housing more affordable. Advisors who help clients, or their clients' children, navigate the purchase of a first home can broaden and deepen their relationship with both the client and family. 'It ends up putting you in situations in which you're having more holistic conversations with a client,' says Jason Heath, a managing partner at Objective Financial Partners Inc. in Markham, Ont. While some tax programs for first-time homebuyers are well known, others are sometimes overlooked and missed, Mr. Heath says. In general, to qualify for these federal tax programs, a first-time homebuyer is someone who has not lived in a home that they or their spouse or common-law partner owns either in the current year or any of the previous four years. Here are the key programs and credits that already exist, in addition to the proposed new first-time homebuyers' GST cut. The FHSA, introduced in 2023, allows a first-time homebuyer to save up to a lifetime limit of $40,000 toward a home purchase. Annual contributions of $8,000 (plus up to a maximum of $8,000 of carry-forward contribution room) to the FHSA are tax-deductible, while withdrawals from the account to purchase a qualifying home, including any growth, are tax-free. Ideally, a first-time homebuyer would open and begin contributing to an FHSA at least a few years before buying a home, Mr. Heath says, because FHSA contribution room begins to accumulate only after someone opens an account. However, a first-time homebuyer can still open an FHSA in the year they buy a home and contribute $8,000 before making a withdrawal. That's because there's no minimum number of days that contributions must be held in an FHSA before being used to make a qualifying withdrawal. What is a qualifying withdrawal? An FHSA withdrawal counts as a qualifying withdrawal if the account holder has a written agreement to buy or build a home by Oct. 1 of the following year, or has bought a home within 30 days before making the withdrawal. Also, the FHSA holder must not have lived in a home they owned in the year of withdrawal or any of the previous four years. Whether the FHSA holder lives in a home their spouse or partner owns isn't a determining factor when making a qualifying withdrawal. The HBP allows a first-time homebuyer to borrow from their RRSP to buy a home without being taxed on the amount. Last year, the federal government increased the amount that can be borrowed to $60,000 from $35,000. 'The old limits didn't allow you to access very much RRSP money,' Mr. Heath says, so the increased amount might allow for a bigger down payment. The borrowed amount generally must be paid back in instalments over 15 years. If the annual minimum repayment isn't made, that amount becomes taxable. Under a temporary change made last year, for withdrawals between Jan. 1, 2022 and Dec. 31, 2025, instalment payments don't have to begin until five years following the year of withdrawal, up from two years under the regular HBP rules. Unlike the FHSA, contributions to an RRSP must remain in the plan for at least 90 days before they can be withdrawn for purposes of the HBP. The Income Tax Act allows first-time home buyers to access both the FHSA and the HBP to purchase the same home. And spouses and partners can each use their own FHSAs and access the HBP to buy the same house. The HBA allows a first-time homebuyer to claim a non-refundable tax credit of $1,500 (which is calculated as 15 per cent of the $10,000 HBA). While the HBA is meant to help first-time homebuyers offset costs associated with buying a new home, those claiming the amount don't have to track expenses. If both spouses qualify as first-time homebuyers, the amount can be split between spouses but the total credit remains $1,500. (The Liberals have proposed a cut to the lowest income tax bracket from 15 per cent to 14 per cent, effective July 1, which would affect the value of the credit.) Mr. Heath says eligible homebuyers sometimes miss claiming the HBA if their tax software doesn't prompt them or if they don't inform their tax preparer that they've bought their first home. The credit is claimed in the year the home is acquired. Provinces and cities may offer their own tax breaks or credits for first-time homebuyers. For example, Ontario provides first-time homebuyers with a land transfer tax rebate, as does the city of Toronto.
