Excerpts from the Book – Preserving Wealth – written by Jack Lumsden, MBA, CFP®
Having a reputable Financial Advisor is a good start. For the short term, one should be looking both at the safety of the money and at the interest rates they can earn.
“If you deposit the money at your bank or trust company in a savings or chequing account, it’s guaranteed by the Canada Deposit Insurance Corporation (CDIC), but only to a limit of $100,000 per person per financial institution (bank or trust company). That means if you wind up putting $120,000 into a bank account and the bank fails, you will lose $20,000. So, banking your entire inheritance in a traditional account is not necessarily safe. Also, the interest rates paid on these accounts are notoriously low, in the range of 1/4%.”
“For the first little while, put 95% of the money, or more, into a high-interest savings account at a major bank or financial institution. These types of accounts also qualify for the $100,000 CDIC insurance, they pay higher interest than savings and chequing accounts, and they are liquid in about three to five business days if you need the money. Also, many financial institutions have several options within them, so you can spread out the investment to achieve the $100,000 CDIC insurance if that’s important to you.”
Make a “Double O” list of what you own (RRSPs, cash, cars) and what you owe (mortgages, loans, credit cards). In addition, draw up a list of your monthly income and expenses, and gather all personal documents, such as wills, powers of attorney, mortgage documents, insurance policies, tax returns, pension plans, and other personal and financial documents.
For more information on a Double O List you can refer to Chapter 2: The Double O’s – What You Own and What you Owe, from the book Preserving Wealth The Next Generation – The definitive guide to protecting, investing and transferring wealth by Jack Lumsden, MBA, CFP®
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Jack Lumsden, MBA CFP® Financial Advisor, Assante Financial Management Ltd. 905.332.5503 or email [email protected]
This material is provided for general information and is subject to change without notice. Every effort has been made to compile this material from reliable sources however no warranty can be made as to its accuracy or completeness. Before acting on any of the above, please make sure to see me for individual financial advice based on your personal circumstances. The information provided is for illustrative purposes only. Commissions, trailing commissions, management fees and expenses, may all be associated with mutual fund investments. Mutual funds are not guaranteed, their values change frequently, and past performance may not be repeated. Please read the Fund Facts and consult your Assante Advisor before investing.