The Rob Tetrault Show

Auto-callable notes are a really neat investment product that have gained a ton of traction, especially in the last 10 years and it could be a fit for your portfolio. An issuer, usually a bank, would issue a note. More specifically, an auto-callable note is an investment note structured and issued by a bank where the underlying asset was measured and will be evaluated at specific intervals.

By directly owning physical real estate, you now must interview potential tenants, collect the rent, pay down the mortgage, pay down the insurance, account for potential vacancy and hopefully you are cash flow positive. That’s certainly one strategy that works for many successful investors and how many investor’s start dabbling in the market. The downside of course, is that this requires a large amount of capital and a low liquidity to access your capital.

Today, we’re discussing the importance of retirement and estate planning. It’s a broad subject that covers a lot of ground. Given the variety and complexity these topics can have, there is no one size fits all cookie cutter approach that can be taken. The most important thing that we’re going to review is the importance of tax planning when it comes to your retirement cash flow and how it fits into your overall retirement peace of mind.

Today, we’re talking about Robo Advisors and why I think you should NOT have one. Clearly, I’m a little biased here. I guess, some would say they are my competition. You’ve seen the commercials, right? They’re out there saying computers better at this than everyone else. Robo-advisors are not able to take advantage of opportunities in the market. They’re not able to structure the alternatives, not able to do anything principal protected and they never look at private debt of any kind.

I remember people used to say, you need $1,000,000 to retire. Well, the reality is things have changed; and as you may know, there’s a lot of different types of pensions that exist. Now you’re going to be drawing down an income from the pot of assets that you’ve accumulated that needs to be done in the most tax efficient way possible. This needs to be done in a way where you want to enjoy and spend money, but also gives you the peace of mind that you will not outlive your financial resources.

The first step to determine your risk tolerance is assessing your ability to stomach movement in the market. Are you losing sleep at night? Are you stressing over a market correction? Another important factor is deciding whether you need your money in 6 months, 1 year, 2 years, 10 years or only at retirement. This, will have a significant impact on your investment strategy. Over time, you should reduce your allocation of longer-term investments as you near the end of your investment time horizon.

A Principal Protected Note is a form of a structured note and it’s a bond type instrument that’s issued by the banks. Other forms of structured notes are auto-callable notes and equity linked notes. Usually the Canadian banks are issuing a lot of these in this space and they have a guarantee on the capital at maturity. They’re very similar to bonds. They actually classify as bonds under the fixed income section in a lot of investment policy statements that we see.

All your assets might be in an RRSP account, a registered account or a locked in retirement account. Essentially, an account that you’re not able to pull the money out means the funds in that specific account are not liquid. I think it’s extremely important and I believe people should have exceptional liquidity management not only in their accounts but also in their net worth, on their balance sheet and in their personal net worth statement.

In Canada, this is quite an attractive way to save for your children or grandchildren’s post-secondary education. There are a number of different factors to consider. The government is essentially encouraging you to begin putting money aside for future education costs. You want to get this right. Ideally, you want to take advantage of the government’s free grant money, provided you’re not hurting your own personal cash flow.

It’s likely a very stressful time after someone close to you has passed away. Having a clear and informed mindset is important when dealing with the responsibilities of an inheritance. Perhaps you have never had this huge amount of wealth, or it could have even doubled or tripled your net worth. There are many different aspects you need to factor in when deciding how to move forward. First, I would suggest you surround yourself with people you trust with your accounting, legal, and investment needs.

A REIT is effectively ownership of a bunch of different parcels of real estate that is managed by a company. Generally, they are publicly traded companies and trade on an exchange. Generally, real estate is less correlated to the stock market’s performance. It can provide tax efficient income and it can appreciate over time. REITs provide tax free and tax efficient income. It’s fantastic for non-registered accounts and for corporate accounts as well.

I’m often asked questions like: “Should I be timing the stock market? Should I buy on the lows and sell on the highs? Are there key market timing signals that I can study to be a successful investor?” Should you experience an inheritance or windfall, sell a piece of property or win the lottery, there are several strategies to consider when investing those funds. With these considerations it is important to remain defensive, protect capital and reduce market timing risk as much as possible.

We’re elaborating on divorces and the financial ramifications of going through one. I know it’s not pleasant, but at least you can start to consider all the financial moving parts that need to happen when you are going through this. A lot of things are happening and obviously the change in your financial plans is a big one.

The thing with selling or transitioning your business, is that you must, at all costs, explore and look at the fine details or else it could be extremely expensive tax wise. Are you incorporated? If you are not incorporated, well now you’re selling something that is going to be completely taxed in the year that you are doing it. If you’re not incorporated and you’re selling this for a significant sum around $50,000, $100,00 or higher, then you should certainly consider incorporating your busi

Do you want to contribute to the charity of your choice in a more tax efficient manner? Are you concerned about leaving some money at some point to a charity after you’ve passed on and you also want to leave as much as possible to your kids? Obviously, these strategies are best suited if you’re making significant donations, but even if you’re donating 5 or 10 thousand dollars, these strategies can absolutely be used to benefit YOU personally in a much more tax efficient manner.