TK Dale Wealth Podcast

I get the question all the time about whether someone should invest in RRSP's or outside their RRSP's.

This is an excerpt from the monthly newsletter and podcast episode.

Enjoy!

For a full write-up please go to tkdale.com

In this episode I go over investment highlights, the investment strategy, wealth management essentials, erosion of life insurance, tax deductible debt and time blocking.
I also cover a case study on whether to invest in RRSP's or not.
Enjoy!
For a full write up go to tkdale.com

Let's start this conversation with as of October 17, 2019 that US and Canadian central bank interest rates are below 2%. 

This is known as the risk free rate.

Premiums are built on top of this.

Liquidity, credit risk, volatility in revenue, tenure, experience, time, country, industry and other types of risk will cause the required compensated return to go up.

I start the conversation with the rule of thumb that over the last 100 years stocks have historically returned around a 6% return before fees.

Presumably things with less risk will have a lower return and things with a higher risk will have a higher return.

You can take a lower risk asset, add leverage and get a higher return in some cases but now you've added risk.

Let's never forget that your ability to save money is the single greatest contributor to your ability to grow your wealth.

My job comes in the form of optimizing and helping you use that money to make more money.

In this podcast I look at stocks, bonds, cash, real estate, alternate investing such as hedge funds, private lending, participating whole life policies, your own company and yourself.

The point is that you should look at each of your options and make a non-emotional decision.

If you run a company you are a special case and I get into that in this podcast.

Check out more episodes like this on Apple Podcast, Google Podcast, Spotify, Stitcher and tkdale.com

Don't forget to subscribe!

I had a friend of mine pass away last week.

I sat next to him at work every day for 7 years. 

I miss him very much and I'm saddened by the family he left behind and how they must feel.

I always try to impart some positivity when I go to a funeral or viewing and I told his wife that he made me laugh every single day. He was very funny and always had a crazy story to tell.

I can't help but reflect on how death is an eventuality for all of us.

It makes me think about life insurance which leads me to strategies which left me with the life lesson:

Death Does Not Freeze Us

It made me stop and reflect. My thoughts were occupied for a couple of days and then I started to move better again.

Join me in this podcast on Apple Podcast, Google Podcast, Spotify, Stitcher and tkdale.com

When it comes to wealth management, it is more than just delivering products and providing good service. It is about understanding someone's entire situation and putting the pieces of the puzzle together.

How does someone's life fit with their investments, life insurance, mortgage, other assets like cottages or rental properties, kids and aging parents? These are all variables to factor in and consider when structuring a plan for a client.

In this episode we talk about setting targets, newsworthy items, economic data and how this translates into my current playbook.

A full writeup can be found at tkdale.com/podcast

Host Trevor Dale, Founder of TK Dale Wealth Management and Creator of MillionDollarMortgage.com, talks about how many veterans in business talk about how using debt is a bad thing.

The thing they don't tell you is that they themselves likely used debt and a lot of it. They probably took themselves right to the edge and risked everything and that pain they have is shaping their advice to you.

It's like telling a developing country not to use coal power plants when they are the cheapest although dirtiest methods of providing power to their citizens. 

They are in a difficult spot... they can't afford the more expensive and cleaner options but still want to grow their infrastructure, provide a better living standard for their citizens and create more industry which will allow them to find cleaner methods later.

It's easy for a developed country to tell them that they shouldn't use coal but they themselves did and the developing country doesn't have many other choices.

To grow or not to grow.

So what's the take away?

Be conscious of the debt that you take on, have a purpose and an expected return by utilizing that debt. Make sure it is only on productive items and not consumables or discretionary spending like restaurants.

Also have a backup plan. Can you sell an asset to pay off the debt if it becomes too heavy? Can you make interest only payments like an interest only mortgage or line of credit?

How can you reduce your cash flows and cash burn rate while at the same time increasing your revenues?

Think about this all the time and do regular reviews. I review my finances weekly...

...KNOW YOUR NUMBERS.

Make big moves and go after it.

In the podcast I talk about rentals and starting your own business.

Subscribe on Apple Podcast, Spotify, Google Play and Stitcher.

For more information go to tkdale.com/podcast

Host Trevor Dale talks about when to use a TFSA, Tax Free Savings Account.

There are three primary considerations which are your debt, RRSP room available and expected retirement income.

I talk about a strategy of how to more efficiently use your savings to reduce your borrowing costs.

Plus I give on strategy when a TFSA could be used as a holding account for future RRSP contributions.

Podcast available on iTunes, Spotify, Google Play and Stitcher.

For a full writeup go to tkdale.com or 
https://tkdale.com/2019/09/12/when-to-use-a-tfsa/

US and Canadian markets were flat but intra-month there was a lot of movement and with different sectors there continues to be changes of leadership.

This speaks to two things. One is the benefit of holding a diversified portfolio. Second is the benefit of using a cash flow based asset allocation.

The cash flow based asset allocation that I deploy with all my clients ensures that we have 3-7 years of cash flow in bonds and fixed income investments - that is the foundation of the portfolio... more below.

In this newsletter I will cover:

• Continuation of investment strategies
• Market overview
• Case study on investments, retirement planning and taxes
• Overview of recent podcasts - Just hit 50 podcasts!!!

For the full write up go to tkdale.com/podcast

Subscribe on iTunes, Spotify, Google Play and Stitcher

Video on YouTube and posted on tkdale.com/podcast

Host Trevor Dale talks about negative interest rate mortgages. It is well known that interest rates and consequently mortgage rates in Canada are historically low.

If I had to guess five years ago where interest rates would have been today I would have guessed that they would have been much higher.

Never would I have imagined that we would be seeing the world's first NEGATIVE interest rate mortgages.

In Denmark I last read that there was a lender issuing mortgages at -0.5%. 

This means that when you get take out a mortgage that you will pay back less than you originally borrowed.

The principle + interest that we traditionally pay is now principle MINUS interest.

The equation changes and things are different.

But what does this mean for mortgages and housing?

This means that people are incentivized to take out the biggest mortgage that they can get because they will pay back less than they borrowed.

This is stimulus. This is encouraging borrowing and likely real estate purchases.

This is great until the buying stops and house prices drop.

Like all things there are benefits and risks. Positive and negative. Pros and cons.

Will we see negative interest rates in Canada? Not in the near future but who knows long term where rates are going.

Interest rates across the world are slowing falling and negative interest rates are a product of that.

While a recession or falling inflation could spur more rate cuts I am optimistic and believe that as humans always do, we evolve and innovate over the long term.

While new technologies make the cost of products cheaper, we are simultaneously becoming more productive. 

This is changing the way we measure inflation as many things are getting more expensive while others are getting cheaper.

The take away: keep long term trends in mind and remember that we are in a historically low interest rate environment. See if it makes sense economically and be mindful of the potential risks to mitigate where possible.

This is a major topic and without accountability why would you be incentivized to continue through.

I talk about some of the mechanisms that I use to keep myself accountable and some methods that you can utilize.

Enjoy!