Investment and tax plan: make it…then share it

Posted on: February 6th, 2011 by George E. Dube

Early in the year, we frequently receive questions about the tax implications of investing, including “How much should I invest in RRSPs?” Unfortunately, many of these decisions are rushed, focused on immediate tax savings but devoid of an overall investment and tax plan. This ultimately costs people unnecessary time and money.

We encourage people to create an overall tax plan for today, the medium- and the long-term. Learn some of the options for more basic investments, such as RRSPs, TFSAs, RESPs, stocks/mutual fund portfolios, and more advanced investments, such as real estate, insurance, private investments. All have tremendous pros and cons. Different types of investments are not mutually exclusive. While I personally invest more in real estate and private business, I also use many other types of investments to meet my objectives. Take the time to figure out what is right for you not what works for everybody else.

We also find that in couples we deal with, one is often more knowledgeable about the investments and tax planning strategy than the other. If you are taking a back seat in driving your investments, make sure you know at least the overall map of your investment strategy. Similarly, if you are the more active investor, take the time to make sure your partner is part of your investing decisions. Even involve older children. Sharing meetings with your advisors is a great way to start. That way, if one of you is unable to deal with your investment and tax planning strategy for a period time, each of you will be comfortable making decisions and will have a relationship with your advisors.

Originally written for The Investment Show, February 5/6, where George appeared on the Real Estate Panel.

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