Don't overreact to the US government shutdown

The US government partially shut down Saturday 22 December after Congress and the White House failed to agree on a short-term spending bill to keep it funded through 8 February 2019. While Congress works to resolve the impasse over whether to provide funds for additional border security measures, investors may have questions about how a shutdown could affect markets. Understanding a partial government shutdown A shutdown occurs when either Congress does not meet a deadline to pass a funding bill for discretionary spending programs or the president refuses to sign such a bill. Examples of discretionary spending include funding for the National Park Service and many federal education and trans

Should You Buy or Rent

WE HEAR A LOT ABOUT CANADA’S HOUSING MARKET in the news – record home sales and steadily rising prices. In fact, house prices in Canada’s biggest cities more than doubled from June 2005 to April 2017. As year-over-year growth rates reached over 14 per cent in July 20171 , some Canadians were rethinking home ownership and embracing the lower cost and flexibility of renting.2 Making the decision When it comes to deciding whether to rent or buy, the housing market isn’t the only factor to consider. Your age, cash flow, location, job, family situation and lifestyle can all affect your decision. For example, couples who have young children (or are planning to) might want to put down roots in a fa

How To Start Investing

“DON’T PUT ALL YOUR EGGS IN ONE BASKET.” That’s common advice for investors, and for good reason. Spreading assets across different baskets – such as stocks and bonds – can help to lower risk if one or more baskets hit a rough patch in the markets. This type of diversification can get quite sophisticated, breaking down the big asset baskets into smaller ones such as small-cap, large-cap, Canadian, U.S. and international stocks, as well as government, corporate, Canadian, U.S. and international bonds. But strategic, active asset allocation adds another important dimension. In contrast to simply diversifying a portfolio, active asset allocation moves eggs between baskets based on current oppor

Children, Step-Children, Blended Families and more!

CANADIAN FAMILIES COME IN ALL SHAPES AND SIZES. About one in eight (12.6 per cent) are blended families (or stepfamilies) in which one or both adults brought children from a previous union into a married or common-law relationship.1 Merging two households with children can be full of promise, joy and excitement – but it can also be financially complicated. As couples with children from previous marriages or partnerships start to consider joining their lives together, they also need to think about the financial implications of integrating their incomes, expenses, assets and debts, selling one or both homes, and filing taxes. Open communication is key. It’s important to make sure everyone is o

Are you a millennial entrepreneur?

IF YOU’RE A MILLENNIAL who is considering starting your own business, or if you’ve already taken the leap into entrepreneurship, you’re in good company. A recent multi-country study1 found that people under age 35 are becoming business owners earlier in life and running larger enterprises than those age 50 and older. Millennials start their first business when they are an average age of 27, while baby boomers started theirs at an average age of 35. Meanwhile, millennial entrepreneurs are managing an average of 122 employees, compared to just under 30 employees for Boomer entrepreneurs. So there’s clearly potential for you, as a millennial, to quickly build a going concern. As you lay the gro

Leaving a Legacy Behind

DO YOU HAVE AN “ESTATE”? It may sound grand, but you probably do. Your estate may include many kinds of assets – such as money, property, a bank account, investments, a car, a house or other possessions. So, if you have an estate, you would be wise to consider the benefits of an estate plan. Estate planning is an essential part of overall financial planning. It enables you to identify your beneficiaries. It helps you protect your family. It can also reduce taxes. There’s no question that it can be uncomfortable to think about mortality. But creating an estate plan can help save extra expenses, extra time and extra pain for loved ones. A well-prepared estate plan can help you leave the lastin

Yes, You need a financial advisor.

IT MAY NOT SEEM IMMEDIATELY OBVIOUS, but financial wellness is a key element of our overall physical and mental health. When people feel financially well, they exercise more, eat more fruits and vegetables, and get health checkups more regularly. They tend to worry less about money. However, according to a recent study, 40 per cent of Canadians feel financially unwell. They are less knowledgeable about investments than their financially well peers, are less likely to feel prepared to deal with a financial emergency, and are highly unlikely to be on track to reaching their retirement goals. A follow-up study reveals that over half of individuals who seek professional help to deal with life is

Insurance with a Twist

FOR A LONG TIME, INSURANCE HAS BEEN REGARDED as simply part of a smart financial plan. Traditional products provide protection “just in case” – often purchased and then forgotten about – and certainly not what anyone would call fun or engaging. That’s starting to change. Innovative companies have designed new solutions to keep pace with a broader trend of encouraging healthy living, offering rewards and savings to help motivate people to achieve their health goals. By connecting insurance to day-to-day lifestyle decisions, these creative programs can make necessary protection feel much more relevant, tangible and even fun and engaging. Encouraging healthy choices More than two in three Canad


The Financial Infidelity survey, commissioned by Financial Planning Standards Council (FPSC) and Credit Canada in time for Valentine’s Day (February 14), reveals more than one third (36%) of Canadians are victims of financial infidelity. The Leger poll asked Canadians the following question: “What is the worst form of financial infidelity you have been a victim of from a former or current partner?” Here are some of the standout findings: 34 percent of those in a relationship keep financial secrets from their current romantic partner. 36 percent of those in a relationship have lied about a financial matter to a partner. Younger adults who are not married, aged 18-54, tend to be victims of fin

How RESPs Work - They're Not Just For Kids

WHEN MOST PEOPLE THINK OF REGISTERED EDUCATION SAVINGS PLANS (RESPs), they think of a savings vehicle to help fund a child’s future college or university education. But savvy investors can benefit from the plan as well. In fact, self-funded RESPs can be a great investment for adults who are planning to go back to school, and they can even be used as an income-splitting tool. How do they work? By opening an individual RESP and naming yourself both the subscriber and the beneficiary, you can contribute up to $50,000 over the life of the plan. A variety of investments can be held in an RESP, including mutual funds and segregated fund contracts, and the investments can grow taxfree until you mak


THE DEBATE OVER WHETHER TO INVEST in a Registered Retirement Saving Plan (RRSP) or a Tax-Free Savings Account (TFSA) comes up every year. Both are excellent tools that allow you to shelter investments from taxes, and both have their place in a well-defined financial plan. Here are some factors to consider as you decide which type of account to save in. Registered Retirement Saving Plan RRSPs are generally used for saving for retirement. Contributions are taxdeductible and investments grow tax-free within the account. Both the contributions and investment earnings are taxable upon withdrawal, but the idea is that these withdrawals will happen after retirement, when your income and tax rate

Frugal or Smart? Here's How You Can Save The Most Money All The Time

WHETHER IT’S HIGH HOUSING AND GAS PRICES or your regular household bills, you may be feeling squeezed financially. You work hard for your money – and you want to spend it wisely. That’s why it pays to do a little legwork to ensure you’re getting the best value for money. It may take a bit of time (something that very few people have in abundance), and requires that you ask the right questions (something that can seem a bit intimidating). But it can be done. Below, we’ve outlined a few key steps to help you ensure your purchase is worth every penny. Be prepared Assess your needs. Before you purchase that new product or service, figure out what you need and what features you require. For examp

The Only RRSP Strategy You'll Need this Year

AS THE CALENDAR YEAR WINDS DOWN, many Canadians start thinking about contributing to a Registered Retirement Savings Plan (RRSP). Whether they make a single lump-sum contribution each year or contribute year-round with a “top up” before the annual RRSP deadline,1 there’s a strategy that can help save more taxes this year and provide a head start on tax-deferred compounding. The first step is to work with an advisor to determine how much to contribute to help reach retirement goals. Of course, not everyone has enough cash on hand to contribute that ideal amount. In that case, there are two options: 1. Contribute an affordable amount now and contribute the resulting tax refund when it arrives.

Make the Most of Your RRSP

CONTRIBUTING TO A REGISTERED Retirement Savings Plan (RRSP) is one of the most effective ways for Canadians to save for retirement. If an RRSP is part of your investment plan, here are some valuable suggestions you can take advantage of: 1. Make it automatic With a biweekly or monthly pre-authorized plan, you can avoid the rush before the contribution deadline and benefit from tax-deferred growth on your contributions throughout the year. If your workplace offers a group RRSP, sign up. Contributions can be deducted before calculating payroll taxes, lowering the taxes withheld from your paycheque. Some employers also match contributions. 2. Contribute more during peak earning years If you

The ABCs of ETFs

MANY INVESTORS ARE LOOKING FOR DIVERSIFIED EXPOSURE to global markets. One solution is an actively managed mutual fund, in which a portfolio manager analyzes and selects individual securities (tradable financial assets like stocks or bonds) within a specific area of the market. Another option is a passively managed exchange-traded fund (ETF) that tracks an index representing a specific area of the market. Recently, innovative solutions have emerged that combine some of the benefits, and help avoid some of the disadvantages, of each of these approaches. They’re ETFs that incorporate elements of active management, and they have the potential to deliver market-beating growth within a lower-cost

Planning for Rising Rates

For years, interest rates in Canada have been at record lows allowing for affordable borrowing through mortgages, car loans and lines of credit. Many Canadians took advantage of the “sale” on debt to spend more, but recent interest rate hikes were a wake-up call for those carrying large debt loads. Here’s what they mean – and how to prepare for potential future rate increases. Although interest rates are still relatively low, this sparked a flurry of discussion among financial experts. What will happen if rates rise a full percentage point? How about two? Are Canadians prepared for continued increases? Research conducted by Manulife Bank suggests that many Canadians aren’t in a position to a

How to Retire: 9 Answers to Questions You Need To Know

YOU'VE BEEN WORKING and saving for this moment for most of your working life – now retirement is on the horizon. But you’re not done planning yet. In fact, there’s never been a more important time to talk to your advisor. Start with these nine questions: 1. CPP/QPP – now or later? The amount you receive from the Canada/ Quebec Pension Plan partly depends on when you take it. At 60, you’ll get less than if you wait until you’re 65. Ask which option is right for you. 2. How should I withdraw from my RRSP? It’s time to convert your Registered Retirement Savings Plan into an income stream. Ask when to make the jump, what assets you should hold and whether there are alternatives to a Registered R

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Certified Financial Planner

Fee-Based Financial Planning
Burnaby & Metro Vancouver

©2018 by Clement Chung.