Media & Press

Where do the millionaires live … Toronto has 118,000

via The Globe and Mail | May 2013

Toronto is home to more than a quarter of Canada’s millionaires, according to statistics compiled by English consulting firm WealthInsight.

Look around Toronto, because there are some seriously rich people walking (but more likely, flying in private jets or being driven in limos) among us.

So says the London-based wealth consultancy firm WealthInsight, which has found that 28 per cent of Canada’s millionaires live in the city of Toronto.

To be specific, Hogtown is home to 118,000 millionaires, 1,184 multimillionaires (defined as those with net assets of $30 million U.S. or more) and a mere five billionaires. All numbers exclude the worth of their primary residences.

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How to make an inheritance windfall count

via The Globe and Mail | May 2013

Andy and Cora live comfortably in their mortgage-free home in London, Ont., where he teaches at a nearby university. He is 50, she is 47.

Recently, some urgent house repairs wreaked havoc with their budget, forcing them to borrow on their line of credit. Despite Andy’s $130,000 salary, they’ve been struggling to pay it off.

“We seem to spend more each month than we take in,” Andy writes in an e-mail. Still, “life is good,” he adds. Financially at least, their lives are about to get even better thanks to a $260,000 inheritance from Andy’s father. They’re wondering what to do with the money.

“Should we use up our RRSP contribution room?” Andy asks. “How can we put the remainder of it out of reach so we don’t slowly spend it month over month?”

Andy, who enjoys his job, plans to work to the age of 65 and perhaps longer. When he retires, he will get a pension from the university. For the past 15 years, Cora has stayed home to take care of their daughter, so she has little in the way of savings.

We asked Matthew Ardrey and Warren Baldwin of T.E. Wealth, in Toronto, a fee-only financial planning firm, to look at Peter and Cora’s situation. Mr. Baldwin is regional vice-president, Mr. Ardrey manager, financial planning.

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Ontario Budget Commentary – May 2, 2013

Introduction

Finance Minister Charles Sousa delivered Ontario’s 2013 Budget, his first as Finance Minister, on May 2, 2013. The Budget is projecting a deficit of $9.8 billion for 2012-13, $5 billion lower than projected a year ago, and increasing to $11.7 billion for 2013-14. The 2010 Budget put forward a plan to cut the deficit in half within five years and to eliminate it in eight years. The government remains on track to meet the fiscal targets outlined in the 2010 Budget beyond 2013-14. This includes steadily declining deficits and a return to balanced budget by 2017-18.

There are very few tax related measures included in the Budget. Those that were introduced are summarized below.

Personal Taxes

Tax Rates

The Budget proposes no changes to personal income tax rates. Accordingly, the top marginal rates for 2013 are as follows for taxpayers with taxable income of $509,000 or less:

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Sabbatical-planning 101: Professor prepares for reduced income

via The Globe and Mail | April 2013

Benjamin is a university professor about to take a year’s sabbatical, during which time his salary will
drop by 60 per cent. He is 47, single, and lives in suburban Vancouver.

While he is off, researching and writing, Benjamin plans to continue paying for his benefits, including
making pension plan contributions, so money will be tight. He is contributing more than necessary to
his defined contribution pension plan so he will have a larger income when he retires at age 65. His
retirement spending goal is $55,000 a year.

He wonders whether he should give up his apartment and put his stuff in storage for the six months to
a year he will be in Asia. He could also sublet it.

Early on, Benjamin decided against home ownership because of the work involved, so he has a fair
amount of capital to invest – most of it sitting in cash – and is seeking some advice on how to go about
building a portfolio. He has no debt and lives fairly modestly, paying $1,250 a month in rent.

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Beyond the windfall: The art of making an inheritance last

via The Globe and Mail | April 2013

As artists, Lucy and Joseph feel they are “on very volatile grounds” financially because their income is so unstable.

It is also modest. They brought in less than $62,000 between them from their artistic endeavors last year. They also had some income from their basement flat and the occasional rental of their cottage.

So when Joseph learned he was about to inherit a substantial sum of money, he knew he needed a plan.

Joseph is 53, Lucy 51. Their goal is to build a more solid financial base over the next 10 to 15 years for their and their children’s security. Their sons, ages 15 and 20, live with their parents in their downtown Vancouver home.

“We grew up where family values were to save and invest in real estate as best we could for our future and our children,” Joseph writes in an e-mail. “I have just received my first $100,000 and immediately paid off our mortgage so we are officially DEBT FREE!!!” he writes. Altogether, Joseph will receive about $900,000 over three years.

“How should our money be invested so that we can live off our investments from retirement age onward, yet leave a comfortable amount for our children and grandchildren when we die?”

We asked Matthew Ardrey, manager of financial planning at T.E. Wealth in Toronto, to look at Lucy and Joseph’s situation.

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Where to invest your money, ahead of the RRSP deadline

via The Globe and Mail | April 2013

You’ve been here before. The deadline for RRSP contributions is bearing down and you don’t
know where to invest your money.

Isn’t there something, anything, you can buy for your registered retirement savings plan and
forget about, you wonder? Something that will let you sleep at night?

It depends on how well you sleep. Although some market watchers argue that the traditional
“buy and hold” strategy doesn’t work any more, investment products abound that need little
more than an annual checkup. Forgetting about them entirely is not advisable.

“All investors should take a look at their investments at least annually to see if they still meet
their objectives and to rebalance” among asset classes, says Robert Gorman, chief portfolio
strategist at TD Waterhouse Group Inc. in Toronto.

Here are some long-term investments for people with different means and risk tolerance.

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