I don’t recommend RESPs, self-directed or not.

Why?

Well, one reason of many is that when you cash the RESPs to pay for your children’s education, it reduces their eligibility to loans and bursary programs….

Maintain your independence and keep your options open at all times….

For example:

1. Begin contributing to an insurance policy on behalf of your child…

2. Begin contributing to a non registered investment account in your name…

3. “Borrow to invest” – this strategy will give you the biggest “bang for your buck” after “the insurance policy strategy”…

“Click Here” to download a free report that I authored on RESPs and your alternatives…

We will show you why you should never have paid into an RRSP.

It is was the worst investment you could have made!

YOUR RRSP And THE TAXMAN

“It’s better to plan for taxes than have the government tax your plan”

What will you do with your RRSPs and RRIFs?

Are you counting on your RRSPs to supplement your pension?

Will your RRSPs help you buy a new car or motor home?

Renovate your home?

Take a cruise?

Help the kids?

Maybe you haven’t even thought about what to do with your RRSP or RRIF.

User the following quiz to see if you’re planning for taxes or if the government will be taxing your plan.

Have your retirement years been better financially than you had planned? Y/N

Do pensions and other income cover your day to day expenses? Y/N

Are your RRSPs meant for the ‘little extras’ rather than day to day living? Y/N

If you answered yes to these questions, you could be in for a big surprise when you start withdrawing money from your RRSPs or RRIFs.

The Canada Revenue Agency is the surprise.

High income taxes, lost benefits and claw backs all await the unwary retiree.

When you withdraw money from a RRSP or RRIF, you could lose up to 50% to the Canada Revenue Agency!

In a report called “Poverty Traps” the CD Howe Institute highlights the plight of low income retirees where the combination of taxes and lost benefits will cost them as much as 75 cents of every dollar they withdraw.

You can get the FREE report by Clicking Here

Now tell us if that isn’t the least bit frustrating!

The Frustrations of Retiring after Working Hard and Saving Carefully.

It is a sad reality for many people when they discover that the money they saved so carefully in their RRSPs is not all theirs.

The money in your RRSPs includes a lot of unpaid taxes, and the Canada Revenue Agency is waiting impatiently to get its share.

That’s pretty frustrating after all that talk of “tax-free’ RRSP savings. It’s only tax-free until you try to use it; then the taxes can be punishing.

What use are your savings to you if you can’t use them?

Once you turn 65, those registered savings can become a source of considerable frustration…

DON’T LET THE TAXMAN TAKE HALF YOUR RRSPs!

The Problems of Retirement Savings.

Problem #1:
Withdrawing money from your RRSP or RRIF may put you in a higher tax bracket and not all the money you withdraw is yours!

The taxes you deferred while your RRSP investments grew come due when you start withdrawing that money; however, when you withdraw funds from your RRSPs that money is added to your other income from that same year. Your taxes are based on all your income including government programs such as Canada Pension Plan (CPP) and Old Age Security (OAS).

By withdrawing money from your RRSPs you might put yourself into a higher tax bracket.

Then what happens?

The following April when income taxes are due where does the money come from to pay those extra taxes?

Some of you may have to make another withdrawal from your RRSP or RRIF to pay the taxes. That money is then included as income in that year and you’ll pay taxes on it the following year.

The year after, where does the money to pay the higher income taxes come from?

From your RRSP or RRIF.

It’s a vicious circle.

Now you can see that some of the money in your RRSP and RRIF is yours, but the rest is the taxman’s.

The RRSPs were supposed to ‘help’ you with the little extras.

Instead, they are being used to pay the taxes in the higher income bracket you were put in when you withdrew money from your RRSPs for the ‘little extras’.

Problem #2:
When you withdraw money from your RRSP or RRIF, you could lose your government retirement benefits.

Most government seniors’ programs are tied to how much money you earn. The government treats your pensions as earnings, so even though you are retired you are still paying income tax.

Each year, the government determines your eligibility for seniors’ programs. They look at your earnings.

If you earn too much, you lose all or part of your benefits…

So, how much is too much?

• Your Guaranteed Income Supplement (GIS) is clawed back based on every dollar of earnings you have; your pensions are considered earnings. When you reach $14,904 you no longer qualify for GIS.

• Your Age Exemption starts to be taken away when your income reaches $32,470. It is gone by the time your income reaches $64,043.

• Your Old Age Security (OAS) is clawed back when your income reaches $63,511. And when your income is over $102,685 you no longer receive any OAS!

• If you are a lower income renter, you could lose the Shelter Aid for Elderly Renters (SAFER) grant from the provincial government.

The frustrating reality is that after years of prudently savings for your retirement you may lose all or part of your GIS or OAS for the following year when you withdraw funds from your RRSP or RRIF.

What’s worse is that to make up for the lower GIS and OAS payments you may have to take out even more RRSP/RRIF monies to survive. And that can put you in a higher tax bracket. It’s a vicious cycle in which no senior should be trapped.

Problem #3:
If you earn less than $14,000 from your pensions (including CPP) and withdraw money from your RRSP or RRIF you could be ‘paying’ the government 75% ‘tax’ on your withdrawal.

What can you do to stop the government from taking your savings?

“It’s better to plan for taxes than have the government tax your plan”

Our focus is to help Canadians reduce their taxes by taking advantage of the
very same strategies that the very wealthy use to stay very wealthy!

If you have a minimum of $50,000 in RRSPs or RRIFs and you don’t need the money for day-to-day living expenses, you may qualify for some of our tax strategies the legally and legitimately reduce the taxes you pay.

Our reason for being is intended to help soon-to-be, just retired and retired Canadians reduce the taxes they pay when they withdraw money from their RRSPs and RRIFs.

We spearhead a team of qualified experts who have the knowledge and resources that specialize in working with retirees and soon-to-be retirees…

While most financial planners, banks and financial institutions continue to tout the benefits of RRSPs for those under 65, our group has the vision to look ahead, and see what is happening to retirees and their RRSPs and RRIFs.

Many accountants and financial planners are unaware of the tax planning strategies needed to help retirees keep as much of their RRSP money in their own pockets, not in the government’s pocket.

Regular tax strategies aren’t enough once you reach 65 years.

Our group combines a variety of financial products from different companies to implement advanced tax strategies on behalf of our clients.

Don’t you deserve to keep your wealth?

Even if your RRSP is currently less than $50,000 but you don’t want to fall into the RRSP trap

Contact us for your complimentary review.

1. Fill out the form below and fax it to our secure fax at 1-604-207-9971

2. Once your information is received, we will confirm successful transmission and our team of specialized individuals will review it. Based on details you provide, we will prepare a personalized report that outlines the benefits, strategies, and options that are available to you.

3. Then we’ll call you within 7 days and set up an appointment to explain the options and the opportunities that you have available to you.

There is no cost or obligation to you!

It’s that easy.

The information you provide for us is kept in the strictest confidence.

We will use it only to assess how best to structure a program that best meets your needs.

There is no cost or obligation to you.

It’s your choice.

You can continue to pay taxes up to 50 cents or more of every dollar you withdraw from your RRSP or RRIF, or you can take a few minutes to find out how we can help you keep YOUR fair share of YOUR money.

Your next step

Click Here for How Your RRSPs May Devastate Your Retirement Plan! – Worksheet

The following will make sure you are clear on the basic truths of investing.

It goes without saying that successful investors understand and tolerate the vagaries of investment markets. However, to be successful one needs some investment education – and to review it whenever necessary.

Based on over 22 years in the financial services industry – below is my list of investing truths:

1. Over long periods, stocks will have greater total returns than bonds.

There is ample evidence to demonstrate that, over time, stocks perform better than bonds. It is an economic principal that increased risk must offer increased return, or no one would willingly take the risk. The premium is the excess return (compared with the less risky alternative) that investors receive in return for accepting the risk. This premium has averaged roughly 8.0%, evidenced in Ibbotson’s data for 1926 through 1999. This number can be used to rationally estimate expected returns, i.e., the risk premium added to the less risky alternative.

(Click Here to read my report “The Andex Chart-What It Means To You And Me”)

2. Over long periods, bonds will have greater total return than Guaranteed Investment Certificates or money market investments.

Numerous charts support the assertion that bond total returns are greater than money market returns. This can be violated when the yield curve is inverted, but under normal economic circumstances, the individual willing to lend his funds for long periods receives a premium for the risk taken.

3. Over long periods, money market returns will slightly exceed inflation.

This is important to realize if your only goal is to keep pace with inflation. This is assuming that you have more than adequate money to live the life you want. Most individuals do not, which is why they must take on some sort of increased risk. However, when tax is factored into the equation the investor is losing in the wealth creation game.

4. On average, stocks are much riskier than bonds.

This seems obvious for professionals, and most investors would agree. The problem is that their perception of risk may be very different from the risk they will experience. Many investors experience is based on recent investment history. Ibbotson’s data for 1926 through 1999 suggest that in any given year there is roughly a 30% chance that the broad-based stock market will be down rather than up.

5. On average, bonds are riskier than money markets.

Bond risk is normally not appreciated by investors. They feel that if prices go down, they can hold on until it matures. The reality is that bond total returns are negative almost as frequently as stock returns. They do not lose the same value as stocks, however. Since the value of a bond is the sum total of all of its future coupons and maturity value, discounted by some interest factor then adjusted for the potential of default, it is obvious why bonds would frequently decline when stocks decline. In fact, the two have a surprisingly high correlation when it comes to losing value.

6. Money markets are, for the most part, safe.

Most investors do not question the safety of money markets. Using money markets in a portfolio is a way to reduce the volatility of the overall portfolio value.

7. Income trusts and managed futures are risky investments.

On their own both asset classes are possibly more volatile that traditional stocks and bonds. However, by adding these non-correlated asset classes such as income trusts and managed futures to a portfolio does bring down the overall portfolio volatility and enhance returns.

8. You will make investments that go down immediately after you buy.

A clear reminder that this will happen sooner or later is appropriate, and that when it does not, the investor has luckily avoided the downside risk associated with investing – in the short term.

9. You will sell investments that continue to go up after you are out.

It is virtually impossible to pick a top. It is good advice to not watch a stock after you have sold it, but many investors do—it’s human nature—and some, unfortunately, will use it as an evaluation tool.

10. You will stay in some holdings too long.

This is similar to not knowing exactly when to sell. If things go well, the will find and buy investments that go up. Securities tend to be driven to emotional extremes around a central value. So you will almost inevitably own something that will reach a price peak, decline, and then you will decide to sell. Some investors (again, unfortunately) will view selling a security below its high as lost money, even if they purchased it at a much lower price.

11. The value of the opportunities you miss will far exceed those you take.

This is subtle, but it exists with almost all investors. For example, if investors had only invested in Microsoft when it first went public, before it became the large company it is today, then they would all be rich. The investment that they passed on has almost always made much more than the one they are in.

12. Someone, or some group of people, will always do better than you.

This is easy to understand. Anyone who researches past performance can find an index, mutual fund, or individual investment that did better than what they owned. It is virtually impossible to be the best, but human nature strives for perfection. It is important to understand that there will always be someone or some investment that performs better.

13. Someone, or some group of people, will always do as well as you with less risk.

This is particularly true when the equity market has a bad year. It sounds similar to truth 11, but there’s an important distinction. Money market investors and bondholders may be able to say that they did as well as the stock market, even though they took a lot less risk. The common line you’ll hear is: “I could have been in GICs and done as well—or better.”

14. Yours is the only relevant time frame, not other investors’. Hypothetical mountain charts plotting past performance, for example, are irrelevant to your performance.

Many investors are presented with hypothetical performance numbers. Based on past performance, these numbers are assembled into a graphic illustrating what might have happened had clients’ at-risk funds been invested for some standard period. A mountain chart, for example, might demonstrate the way a dollar figure invested in a mutual fund over the last 65 years could have turned into an amazing end value. The only way most investors could obtain these hypothetical results would be if they had invested $10,000 20 years before they were born and paid no taxes since inception.

15. The investment market is a rapidly adjusting environment, where past performance is an extremely poor predictor of future success.

Investors often become preoccupied with past numbers because they are readily available and easy to understand. In response, people in the investment world say, “Past performance is no indication of future success.” If past performance were a successful predictor, anyone able to read could easily achieve investment success. There are countless examples of highly positive one-year track records followed by significant under performance.

16. You are not paying for information but for knowledge.

We all like to think that we know something others do not, especially when it comes to investments. This is rarer than ever. The Information Age has made information readily available to a large number of people simultaneously. This means that you are not paying for information but for the reason and knowledge that an adviser applies to that information. This does not mean that all information is meaningless, but it is fair to say that most has already been factored into the price of what we might buy.

17. Money can only be made in the future; it is impossible to buy past returns.

As obvious as this is, it is worth repeating.

18. The principal cause of change in investment prices is change in consensus expectation.

Most investors do not have a clear understanding of what causes security prices to move. If all investors agree upon a growth rate for a company, and the company meets its expectations, the price of the company will not change. Prices change when unexpected information surfaces, or when something comes out that the consensus was not considering, such as surprising company earnings reports. This is called a catalyst for change.

19. Get used to uncertainty; like it or not, every investment decision is based on multiple guesses about the future.

I have suggested that readily available information is of little investment value. Advisors make educated guesses about the future, and every decision they make involves concrete details and some guessing. Deciding to fund an RRSP for the next 10 or more years versus investing outside the tax-deferred vehicle, for example, entails making some guesses about the expected long-term return of the assets you will own, the stability of the current taxation laws, and the assumption and probability of future tax rates for distributions.

20. Advisors increase your chances of investment success.

It is no coincidence that prospective clients seek experienced advice. Advisors increase your odds of success by using their understanding of investment fundamentals, knowledge of the past, and, most importantly, sound reasoning about the future.

21. Increasing your odds doesn’t always mean 100% success.

Every investor must realize that there is something random to investment success. Even the application of knowledge and sound forecasting may not work. Financial advisors do increase the probability that you will reach the goals you formulated together at the start of your relationship.

By going over these investment truths and internalizing them you can establish a more realistic basis for YOUR success!

By Dr. Jill Ammon-Wexler,
http://www.quantum-self.com

Imagine each thought you think as a mental photograph.

When the thought is first exposed to your brain, very little happens. But as you expose your mind to that thought again and again, the thought begins to develop and hold an image in your mind’s eye just like an exposed photograph.

In fact, thoughts really ARE that powerful. Anything you focus on mentally DOES develop into a strong interconnected network of neurons. That network then holds that thought as an image. And your subconscious mind will then push you to take the actions that will bring that image into reality.

This is not theory — it is based on the research findings of modern neuroscience.

You need to be careful about your thoughts, judgments, and viewpoints. If you focus your mind on something you DON’T want — you actually strengthen the neural networks containing the image of that something.

That is why worrying about something actually drives you closer to that something. Worry is actually a very powerful form of negative goal setting. The more you worry about something, the stronger the neural networks containing your worries become. And the stronger those physical networks — the more likely your subconscious mind will drive you to take actions that actually push you toward what you’re worried about.

The Part Played by Emotion
The more emotion accompanying your worries, the stronger your neural networks will become. Emotion — whether positive or negative — is a neural supercharger. This includes stress — which is driven by emotion!

You’re getting the picture of the negative cycle that worry creates. The more worries, the more stress. The more stress, the less creative and clear your mind becomes. And the less creative you become, the less likely you will EVER solve the problem you’re worried about.

Plus the longer (and more passionately) you worry about something — the faster you are driven straight into the arms of what you’re worried about.

A Proven Solution
There is one, and only one, solution to this. You must step out of the stress/worry cycle, and direct your mental focus elsewhere.

What you focus on grows. This is why it’s so very important NOT to focus on your problems! You instead want to focus on creating positive solutions that create something you DO want.

Here’s a plan of action:
* Convert your problems to goals,
* Create a detailed goal-plan,
* Break your goal-plan into the smallest possible daily steps, then …
* Begin to take action — one step at a time.

And in the meantime:
1. Refuse to worry. Remember — worry is a very powerful form of negative goal setting.

2. Create a new mental image. Create and hold a mental image of how life will be when you reach your goal. The more emotion you pack into that positive image, and the more often you put your mental focus on it, the stronger the neural networks holding that image will become.

3. Bust your stress. Unless you manage your stress, it will continue to build “negative neural networks. Don’t kid yourself about stress — it is at the core of many serious life-threatening bodily conditions, and has a way of “pretending not to be there.” Brainwave training is the fastest answer to instant stress reduction.

4. Build your self-confidence. Take some steps to build your self confidence. A huge medical study showed that low self confidence and negative thoughts cause your brain to physically shrink as much as 20%. Self confidence is not a lightweight issue — it places unrealistic limits on your entire life!

5. Take care of your physical self. It can be easy to just take your mental and physical health for granted until something happens. Simple dehydration equal to two glasses of water, for example, has been shown to reduce your mental performance as much as 50%. Add a walk and 20-minute workout to your life, and you’ll start to produce more feel-good brain neurotransmitters.

6. Grow your mind power. Your brain truly follows the same rule as your muscles — use it, or lose it! And today’s scientific evidence is that your brain is either growing, or it’s physically shrinking.

Dr Jill’s “Take Charge” ecourse guides you step-by-step into amazing mental expansion. Join thousands of success-seekers worldwide — get straight to the core of your personal power and claim lasting success and achievement. For more information go to: Quantum-Self

Do you know the investing strategy that separates the men from the boys – the women from the girls?

It’s doing the things that are “uncomfortable”!

In this case, it’s stepping up to the plate and investing in a prudent balanced fashion (as per your RRSP investment plan) when it seems that everyone around is cowering under their bed covers…

It’s that simple – yet that powerful.

Why?

Because you are employing a “telescopic view” on your financial world – not a “microscopic view”…

It’s this formula that makes for real wealth creation!

I am reminded of the short but memorable time that I got to spend with Sir John Templeton in the Bahamas over 15 years ago. I have included my recollections of that conversation at the end of this post.

While it’s always a good thing to be putting money aside into your RRSPs each year – this time – this year – it’s even better!

I realize that it may seem tempting to put off contributing to your RRSP account when you have just finished watching the evening news on television or read the morning paper.

However, with all the doom and gloom talk abounding, it’s time to look at the other side of the coin.

Remember: there are always two sides to a story…and in this case the media has been overzealous in its portrayal of the economic slowdown as being just short of the Apocalypse.

(On a side note: In a new poll, Opinion Research Corporation found that 77% of Americans feel the media are making the economic situation worse by feeding consumers a constant diet of bad news.

Survey respondents said the negative news reports are eroding consumer confidence and deterring investment. One lawyer has even suggested that the media should be exposed to legal action for its alleged role in further depressing the economy.)

Now, let’s look at the positive aspects that economic slowdowns can and do bring!

Tough economic slowdowns mean the shrinking of the economy, it can and does bring with it many benefits to the everyday person and family.

Economic slowdowns can be a good thing!

Yes, economic slowdowns offer great opportunity for those who prepared for this eventuality. However, the vast majority unfortunately never ever prepare.

This is the precise reason why the prepared few find the vast opportunities! The action takers!

Who benefits the most from a recession? The Buyers!

Why?

Because it puts fiscal responsibility back on the top of the list.

Here Are 6 Reasons Why Economic Slowdowns Can Be A Good Thing

1. Value Stocks are Plentiful – With recession comes fear in the markets. The human emotion of fear is usually a bad thing for the stock market except if you are a buyer! With strong stocks trading at historically low prices, it can be a field day for investors who have cash. And that is exactly where we are right now – cash at “RRSP season” looking for a home to be invested in!

2. Real Estate Buyers Market – If you are fortunate enough to be in the market for a home, then there is no better time to buy real estate than during a recession! With fewer buyers out there, houses are sitting on the market a little longer. This creates much stronger motivations in the seller which typically results in lower house prices.

3. Cheaper to Borrow – A slower economy typically means that the central banks jump in and lower interest rates in an attempt to encourage spending – and that’s what we are seeing right now! Lower rates means lower debt servicing payments such as mortgages and investment loans. This is another reason why it’s a great time to be a home buyer – or embark on a prudent “borrow to invest” program!

4. Retail items are cheaper – With retail sales slower due to consumers cutting their discretionary spending, retailers try to boost their sales by slashing prices. It’s a great time to buy items that you have been saving up for – at a greatly reduced prices!

5. Gas is cheaper – With a global slowdown, there is typically a lower demand for oil which in turn translates into lower oil prices. As oil and gas prices usually go hand in hand, a recession means that gasoline prices are reduced.

6. It’s Vacation Time – Lower gas prices along with less people
spending money on luxuries (like travel), makes it a perfect opportunity for a lower cost vacation. Airline tickets, hotel stays and even car rentals are all reduced in price.

Want an example?

My wife just left for 1 week vacation close to Cancun, Mexico… I stayed behind because of “RRSP season” and to service those who always wait until the last minute. (Don’t make me regret not going on vacation with her! )

When it comes to your RRSP investing this year – stick to the plan!

Most millionaires are made because they have positioned themselves for times like today. Remember, the greatest fortunes are begun in times of “greatest despair”…

It is the financially savvy who can take advantage of these opportunities when they come along – and they do with some regularity! For after every excess – there is a cooling off period before the cycle begins again…

Therefore, I truly believe economic slowdowns give the little guys an opportunity to catch up with the big guys if they play their cards right.

And that’s the message that I have always subscribed to and will continue to believe.

Why?

Because history bears this out!

Now, here’s what to do: Do not wait for a change of environment before you act – begin changing your environment by acting today!

Don’t forget that you are going to be spending the rest of your life in your future – what kind of future is it going to be?

Will it be one that feels like “hell on earth” or one that is all and more than you had imagined in your wildest dreams!

So it all comes down to this…

Will your RRSP investment actions be microscopic or telescopic?

When it comes to your RRSP investing this year – stick to the plan!

Now, “be a man” – or “woman” – step up to the plate and “do the right thing”!

My recollections of that conversation over 15 years ago with the late great Sir John Templeton…
http://www.howtobesetforlife.com/articles/the-wisdom-of-sir-john-templeton/

The following advice is over 500 years old!

It comes from one of the original value investors and yet the advice is as relevant today, as it was over 500 years ago.

“Divide your fortune into four equal parts: stocks, real estate, bonds and gold coins. Be prepared to lose on one of them most of the time.

During inflation, you will lose on bonds and win on gold and real estate: during deflation, you lose on real estate and win on bonds, while your stocks will see you through both periods, though in a
mixed fashion.

Whenever performance differences cause a major imbalance, rebalance your fortunes back to the four equal parts.” – Jacob Fugger the Rich, 1459-1525

Now listen to the words of the words of the wealthiest man on the planet: “To invest successfully over a lifetime does not require a stratospheric IQ, unusual business insight, or inside information.
What’s needed is a sound intellectual framework for decisions and the ability to keep emotions from corroding that framework.” - Warren Buffett

Are you getting this?

Remember, the asset class that you have invested in doesn’t lose you money – your reaction to it does!

The appropriate asset allocation accounts for 94% of a portfolios return (or retention of your money in a down market)…

How’s your present asset allocation model working?

Has it totally followed recent market declines?

Or has is acted as a “shock absorber” and helped you preserve your capital so that more of it can participate in the next “up turn” – when it comes…

Depending on your answers, maybe it’s time to do a review and overhaul!

Speaking of asset classes, don’t forget that there were people that invested in Canadian real estate ( as an asset class) in the early ‘80’s that lost money…

Why?

Because they became over extended with the high interest rates “of the day” and were forced to “toss in the towel” and walk away from their home/investment when they couldn’t afford their mortgage payments any longer.

I know, because some of these individuals are my clients today…

It’s important to remember that – no matter the asset class:

Bear markets (in that asset class) always end

Bull markets (in that asset class) are stronger and last longer

In the long run, increases (in that asset class) far outweigh the declines

Risk should not be avoided because it offers you “peace of mind”…

Appropriate “risk” must be assumed because of the opportunity for higher returns – over time!

In particular, equities offer one the highest “real returns” – “over time”.

All investors must realize that they cannot to expect to meet their reasonable goals without accepting some level of “market risk”.

That’s why we buy homes for example!

That’s also why we have equities in our investment portfolios!

But we must also not only understand that the level of “risk” (no matter the asset class) diminishes the longer one holds onto an investment – irrespective of that investment…

Just because home prices may have dropped (temporarily) – are we tempted to sell?

Of course not! We still keep paying the mortgage!

So then, what about when the values of our investment portfolios are off?

Well, unfortunately, the answer to that varies…

The ones who “stay the course” invariably win!

Those that do not – well, they lose out!

You must remember that stock markets are “forward looking indicators ” from 3 to 6 to 12 months out.

On the other hand, real estate is a “lagging indicator” and often “trails” the economy as an indicator by up to 2 years!

Right there you have 2 differing asset classes that work and make us all money but are “priced” in 2 differing ways over the same time periods.

Remember, the pendulum always swings!

If things seem too good to be true in one asset class – they probably are.

On the other hand, if markets seem depressed, and the news media is predicting “doom and gloom”, a turn for the better is probably not that far away…

In fact, I know this to be true with over 22 years of experience in the financial services industry.

I believe that the “free market system” that we enjoy here in Canada (and by extension, North America at large) is more elastic than most people believe.

Over the years “the system” has shown a remarkable way of correcting excesses – both on the downside and as well as on the upside.

The pendulum always swings, but as long as innovation continues, and productivity increases, markets will rise over the long term – but not without its halts and/or “regressions” along the way.

How does an investor make sense of this?

With the resources and amount of information on the Internet, investors today can view markets on a minute to minute; an hourly basis; daily; weekly; monthly and yearly basis.

I refer to this as “noise”!

Why?

Because of the infinite amount of information that goes into the minute by minute movements of markets.

The Internet, and twenty four hour a day business channels add to the proliferation of information of news that affect stock markets.

Factors like weather, political comments, economic comments, corporate reporting, consumer buying reports, inflation updates, wars, assignations, terrorist attacks, and human emotions all go into
the minute by minute changes in the market.

Each new piece of information affects millions of individual decisions that cause markets to move.

However, this “noise” has minimal impact on – the long term!

Remember, as long as innovation continues, and productivity increases, markets will rise over the long term – but not without its halts and/or “regressions” along the way.

So, remember: “No matter what asset class that you are in – you will do well – over time!”

However, to reduce the volatility in your portfolio – and to give you “peace of mind” along the way – make sure to keep it all “in balance”!

In stressful financial times like these the media likes to breathlessly report as if “the sky is falling” and that there “will be no tomorrow”… and also to remind us of other stressful times in our history.

That being said, I vividly remember the first one that I “was adult enough” to experience in 1987.

Why?

Because it happened just one year after I had begun my now 22 year career in the financial services industry.

When I look back upon that one (and the others that have followed since) – I realize that while not fun, or a great place to be at the time – it (they) in fact didn’t scar me for life…and it all came out all right.

And now while challenging, economic downturns act as a constant reminder that life is full of change – and change generally scares folks…

So, as a “counter balance” to all the negativity…I have put together my top 9 ideas to help you better cope with the financial stress you may be feeling at the moment in the hopes that this recession will be a soon forgotten memory for you.

1. Turn Off And Tune Out
Author Barry Neil Kaufman says “We stare bug-eyed at the eleven o’clock news, striving to be well informed, as if knowledge of the latest disasters will enhance our sense of well-being.”

Why do you need to watch or listen to the news? Very few people NEED to get their information this way. Short of a tornado headed to your house, you can live your life quite nicely without 24/7 news.

Try it for a week and see what happens.

2. It Will Not Last Forever
Og Mandino is his book “The Greatest Salesman in the World” gave four words that “have been passed down from the ancients that will carry me through every adversity and maintain my life in balance.

These four words are: “This too shall pass.”

He’s right. It WILL pass and 5 or 10 years from today we’ll be reading about this in the paper and we’ll think…”oh yeah, I remember that” and it will make a great story to tell your kids or grand kids.

Who said it?…”the only difference between “tragedy” and comedy is time”…

3. Zip It!
Quit “spouting off” about the economy to everyone you meet. “Pity parties” help no one on any subject – so keep the complaining to a minimum. And don’t hang around people who insist on wallowing in all the negativity.

Ed Diener, author of “Happiness, Unlocking the Mysteries of Psychological Wealth”, says “It’s not that you shouldn’t think about (the economic crisis) but think about it to the extent that you can control it.

If you put your money into places that you were comfortable with a year or so ago, deal with it, review where “the chips are”, make adjustments if necessary – feel good – don’t look back – and move forward.”

4. Laugh
Since 1922, Reader’s Digest has been telling us that laughter is the best medicine. Take daily laugh breaks.

I have always subscribed to that notion and so in fact, on my financial planning site, I have a section entitled “On A Lighter Note” to help us all to maintain a sense of perspective and to encourage laughter!

You can check it out hare at: http://www.howtobesetforlife.com/on-a-lighter-note/

Again, it’s so easy with the internet.

Go to http://Youtube.com and search for “game show bloopers” and you’ll be laughing AND feeling smarter in seconds. “Family Feud” and “The Newlywed Game” bloopers are my favorites.

Additionally, you can find many cartoons, full length movies and sitcoms at: http://Hulu.com

5. Face Your Finances
They won’t get better by ignoring them. They won’t go away. Your credit score might be hurt if you can’t pay your bills or your get behind – but you won’t go to debtor’s prison!

It’s no fun jumping every time the phone rings for fear it’s a creditor. So, if you think that you may need help in Canada go to http://www.nomoredebts.org/ or http://www.creditcounsellingcanada.ca/

6. Keep Track
Be ruthless in tracking your spending and income. By ruthless I mean keep track of every penny. We all have a problem with “mental accounting.” We don’t look at 50 cents as real money and thus would likely not even consider tracking expenses that small. Fifty cents a day over a year is $182.50. It really does add up.

Don’t believe me? I have a “brown bag” calculator on my financial planning Website.
http://www.howtobesetforlife.com/calculators/

This calculator will show you how much you could save if you brought your own lunch to work instead of eating out. It will also calculate the savings if you begin your day with coffee at Tim Horton’s rather than Starbucks…

Keeping track of all your spending can be an eye-opening experience. You’ll often discover unnecessary waste that is easy to fix.

I have created a couple of tools to help you here at: http://www.howtobesetforlife.com/resources/

Just go the bottom of the page and “download”:
“Where Does It Go” And “Set For Life” – Starter Kit

7. Go For A One Minute Walk
It’s been proven that those who regularly exercise have lower stress levels than those who don’t.

In his book, “one Small Step Can Change Your Life – The Kaizen Way”, Robert Maurer, Ph.D. states that the part of our brain called the “amygdala”… “sets off alarm bells whenever we want to make a departure from our usual, safe routines. The brain is designed that way so that any new challenge or opportunity or desire triggers some degree of fear”.

He suggests we take VERY small steps so as not to “wake up” our amygdala.

My favorite example in the book was a client he wanted to march in place, in front of the TV for one minute a day. That would be her exercise routine. Just one minute.

Eventually she marched for 3 minute commercial breaks and then for whole shows.

“Soon her ridiculously small actions had grown into the firm habit of running one mile each day. Note that this gradual build up to a steady program is the exact opposite of the usual pattern, in which a person starts off with a burst of activity for a few weeks, but then returns to a comfortable spot on the couch”.

8. Start Another Income Stream
People who work 9-5 and do nothing else to earn money have always perplexed me.

They get up every day, shower, drive to work, work, drive home, do whatever they do at home, go to bed and start it over again every day for 40 years.

At home they worry about job security, promotions, raises, benefits and the like but they do little if anything to ensure their own future, content to rely on an employer who may or may not be around in 5 years.

Spend some of your worry time researching ways to make extra money. Yes, any bookstore or library will have many books on the subject, but the Internet “is where it’s at” these days…

Get your children involved. Make it a partnership. What an incredible gift to give your children. The gift of independence.

Yes, there may be laws and rules and regulations you need to follow but don’t let those stop you. They are many resources available to help.

Start at the “Small Business BC” resource Website here in Vancouver http://www.smallbusinessbc.ca/

9. Play The Lottery!
No, not the BC Lottery, also known as “a tax on people bad at math”.

I’m talking about the Unclaimed Balances Service run by our very own “Bank of Canada”.

Deep in the heart of the Bank of Canada building in Ottawa, half a dozen civil servants toil at what may be the most satisfying job in the country. Their task, day-in and day-out, is to hand out money to people.

They work in the Unclaimed Balances Service of our central bank. This is where dormant bank accounts go after 10 years of inactivity.

How much money is sitting there, just waiting to be claimed? A large fortune actually. At last count, the Bank of Canada was looking after 938,000 unclaimed accounts worth about $320 million.

You can search the databases online. Most won’t tell you how much is owed but some will give you a range. Search for your name and the names of all your friends and relatives in whatever states they live.

When you find some money that is owed, point your friend or relative to the appropriate website and collect the gratitude (and hopefully a finders fee!) Soon you’ll feel like Santa at Christmas handing out wads of cash.

The site to begin your search is:
http://ucbswww.bank-banque-canada.ca/scripts/search_english.cfm

While you are at it you can get creative and search for the various resources that are available online or through 1-800 numbers to search for:

Unclaimed credit union accounts
Unclaimed life insurance benefits
Unclaimed income tax refunds
Unclaimed Canada Savings Bonds
Unclaimed bankruptcy proceeds
Old stock certificates

So there are nine ideas for you to try.

None of them are hard and most you’ll find rather fun.

Now, repeat after me, “If there is a recession – I refuse to participate”.

Turn off the TV and the radio…ignore the nattering nabobs of negativity and begin to live a less stressful and more peaceful life.

In fact, I have created a FREE Ecourse that will help you – now and in the future!

Join me and others as together we make this the best year ever with:
“21 Days To Your Success”…

http://HowToBeSetForlife.com/motivation

According to a recent survey by the BMO Financial Group – Canadians say that they are aware of the current economic conditions and claim that they are taking the necessary steps to protect themselves

But their actions appear to fall far short of their claims…

The BMO Savings Monitor survey found that nearly two-thirds of Canadians say that they will cut back on their spending, while more than 40% plan to adjust their current investment mix to better withstand economic pressures.

And though the research found that some Canadians are unfazed by recent economic conditions, nearly 70% of respondents said they did not have a financial plan in place!

And 80% said they did not think that economic uncertainty was enough of an incentive to get one.

Frankly, I am so speechless all I can say is: Wow!

However, rather than me talk about the benefits value of having a plan… Listen to one of my clients talk in her own words about the value she has found by having one.

Click Here-To Listen To “Planning Makes Perfect”

Now, while this statement may be seem obvious to some, it’s one I feel needs to be made.

Your retirement will last longer than this market correction — much, much longer.

It might be hard to think about this right now, given how the markets have dropped and all, but it is important to keep perspective in these times.

Its important to understand that investments will rebound and continue to grow during retirement – which for most will be 30 years or more…

You will pull through this market adjustment!

Trust me – I’ve been through 5 of them in my 22 years in the financial services industry.

The real risks in retirement and to retirement income are: longevity (outliving your money), inflation, withdrawal rates, asset allocation and health care.

How many of you are looking through the current volatility to the important long-term issues of planning for income in retirement?

Now, what’s your plan for tackling each of these risks?

Longevity
The simple fact is that retirements are getting longer. In some cases, they can be as long as your working life — 30 years or more for many people. But as retirements increase, so do the risks of outliving your capital. The longevity of Canadians is not going to reverse just because markets are volatile and the economic outlook is uncertain.

Even if some of you choose to retire later than had originally planned, the length of your retirement is likely to be just as long as if you hadn’t delayed.

Inflation
Canada will likely experience an average annual inflation rate of at least 2% per year going forward.

How will this affect retirement income plans! Well, with inflation at 2% annually over a 25-year period this reduces the purchasing power of your retirement income to approximately 60% of its original value!

Interest rates on short-term government securities and longer-term government bonds may rise a little over the next few years as investors move away from the safety of government securities and back to other types of securities in search of higher returns, but interest rates on government securities are not likely to rise enough to provide the protection against inflation that most retirees are looking for.

Therefore, you will still need to look beyond the current urge to be in “cash” and consider the role equities should play in their retirement portfolio.

Withdrawal rates
There will always be discussions about appropriate annual inflation-adjusted withdrawal rates from your retirement portfolios. Some individuals will be thinking of raising their annual withdrawal rates in order to maintain specific income streams from portfolios that are valued less than they were a few months ago.

However, research has demonstrated time and again that for people in their mid-sixties, an inflation-adjusted annual withdrawal rate of 4% is the ideal rate to extend portfolio life to its maximum.

This raises the very basic question of how to keep your withdrawal rates low when investment portfolios are also down. There aren’t any easy answers.

However, one strategy is to always have 2-3 years of basic “living expenses” set aside as “cash”. Then “harvest” profits from portfolios to add to this “cash cushion” when markets are good and draw on the cash when markets are down.

Asset allocation
This brings us to the fourth risk to retirement income which is asset allocation. There are some basic rules for asset allocation that apply to almost everyone — equities, fixed income and cash.

All research shows that having equities in a portfolio is likely to result in the longest portfolio life.

The mistakes made most often in asset allocation are having too much of one asset category.

Having to much in “cash” is just as bad as having to much in fixed income or equities…

Health care
The fifth risk to retirement income is health-related expenses. Not only out-of-pocket health costs but also age-related costs such as the help that may be required for housing and daily care in the later years of retirement.

Like longevity, the need to prepare for health-related expenses doesn’t change just because markets are volatile.

However, what volatile markets may accomplish is to make individuals give serious thought to these costs, and to their choices now and as they age.

Another specific planning area to consider is to build a separate ‘health-care’ fund. In addition to its practical usefulness, a health-care fund will increase individuals’ peace of mind, because they are actually addressing a potential risk to retirement income.

So, while none of us can control the markets there is a great deal we can control and this is the time to do just that.

Knowing all sources of retirement income and their characteristics, facing various economic and market prospects head on and preparing to be flexible enough to react to events as they unfold are likely to improve your retirement prospects in a big way.

So, keep these things in mind when you contribute to your RRSPs this year!

You are going to aren’t you?

Because, as you will be spending the rest of your life in your future: it would be best to do everything possible now to make it a future worth living in! Right?!

I have just completed another Ebook – with audio: The Smart Way To Buy A Car – The UnCanadian Way.

To download your copy immediately (with the audio embedded audio link): Just “right click” on the link below and “save as” to your computer “desktop”…

http://HowToBeSetForlife.com/Reports/TheSmartWayToBuyACar-TheUnCanadianWay.pdf

To download the audio only of this report: Just “right click” on the link below and “save as” to your computer “desktop”…

http://HowToBeSetForlife.com/Reports/TheSmartWayToBuyACar.mp3

All I ask in exchange for this valuable free information is that you “comment” on this blog below…

Let us know what you think!