Becoming Your Own Banker | Keep Taxes Away From Your Wealth

Every single step of the way you are getting taxed. Who's the one in actual control? Is it you? Is it the bank? Is it the government? Who's in actual control of the money that you have earned? Just using a general Canadian family two income household earning family, there's one household earner and then there's another household earner. And that income that is being generated or worked through is defined as what's called earned income. And this is if you're earning a T4 salary, it will attract and specific rules related to the Income Tax Act. And that's going to fall into what's called income taxes. And it also falls into another category related to the Canada pension plan. And that's also going to get deducted from your T4 salary. Now the employers who employ you also are paying their portion of cpp. And then there's the EI deduction. And this is for insurance. Specifically related to in case you lose your job, you may be eligible to receive that employment insurance. When you work for a company or you have earned an income, you are actually signed up for a contractual amount. Let's just throw out an arbitrary number of $100,000. But you know, you don't actually receive $100,000. Someone else actually receives that money first. Because before you do, the second thing is the second individual in the household will earn another form of income. In this case, I'm just using another example of an earned income. And also just before whatever the contractual agreed amount between the employer and employee, that's not the exact money that you're going to get deposited to you. It's actually going to be reduced related to income taxes, CPP and ei. That money after you've earned it, there's a predefined timeline of when you're going to get paid. Now it's going to subtract the deductions, income taxes, CPP and ei. And the next place that money goes to is actually it gets deposited into a bank. You know, before you start the position, typically they're going to give you some administrative forms to fill out and a destination of where that money needs to be deposited. So that actually flows into the banking system. Now you're going to receive that and put it into common products like a checking account and you and then you may move it to alternative locations. And this is where you're going through the next stage, which is called that wealth accumulation stage. And in this wealth accumulation stage you are using a variety of accounts, tools or vehicles. There's things like the tfsa, there's the rrsp. And then for some who don't want to put money in the financial institutions related to TFSAs and RRSPs, the next place they're going to put their money in is they want to put it into real estate. From there there's what's called government controlled financial institutions because those accounts are actually under the control of the government. They have visibility or they're required from the bank to report the balances to the government and the CRA is actually responsible for administering those amounts. Now if you move that money into alternative locations like real estate, well, you've put a down payment into a property and most of the time the down payment is somewhere around anywhere from like 5% to 20%. That 20% is actually funded by you and then the other 80% is funded by the bank. In substance, the bank really owns it. So that's why I haven't labeled as bank control. People believe that Canadians have title to the property. But in substance, the one who actually funded the property is the bank. If you even tried to not pay the bank, mostly what's going to happen is the bank is going to exercise a call on the loan and most people don't have that money available to pay that loan. And so they have the property as collateral and they're going to take that collateral of that property. Now here I'm introducing the government and people decide to at some point of time, let's say age 65, decide to retire. So when they retire, they're going to receive these government entitlements and benefits from, from the government, which is the Canada Pension Plan, Old Age Security and the Guaranteed Income Supplement. Now what happens when you actually receive that income? That's what you want to retire on, that income. And for most of you, I don't think it would be a surprise for me to say that if you're relying exclusively on these retirement benefits from the government, you are retiring in financial abundance and you are completely enjoying your retirement. Not only is the money that you're contributing to these systems, when you finally go to retire and draw on from the government to get this money, they actually are going to charge you taxes on this money you've contributed to these funds. And when you withdraw on these funds or you draw on it on that time, by the way, with the permission of the government, they're getting taxed. That's not the only thing that's taxed because you've been built up a mountain. That wealth accumulation, one of your portfolio requirements is you're building a real estate property that is paying rental cash flow. Well, that rental cash flow that comes to you from the tenant and after the expenses you pay, well, the net cash flow that you get that actually isn't tax free. I mean, you have to file that on your tax returns and that's going to be included in your income and get taxed. Then you have RRSPs where you put money into it, you've gotten a refund for that, and then now you have to draw on it and get that money out and you're going to get taxed on that also. So ultimately, you can see in this journey that I'm just sharing with you in a very high simplistic perspective, every single step of the way you are getting taxed. Who's the one in actual control? Is it you? Is that the bank? Is it the government? Who's in actual control of the money that you have earned? So one of the most popular programs that was released back in 2009 is called the Tax Free Savings Account, which is the TFSA. In 2009, when the TFSA was created, created, it was touted to be a tax free method to grow your investments. As long as the return on your investments were within this registered account. Are the earnings in your tax free savings account truly tax free? If we kind of take a look at the summary of TFSA contribution room over the years. So from 2009 to 2012, the contribution room, that by the way, was fixed and defined by the government because you're using their account rules, if you've contributed 5,000 from those years, four years, you were able to put in $20,000. And then from 2013, 2014, they've increased it to 5,500. And that accumulation from 2009 to 2014 is 31,000. And then from 2015 it was 10,000 for that one year and then it was 41,000. And then for those of you don't know, 2016, the Trudeau government came in and then knocked the tax free savings account back down to 5,500 and made it 57,500. And there's a very particular reason why I highlighted this in red, which I'm going to share afterwards. But I'm just kind of walking through that. In 2019-2020 it became 6,000. And so the accumulation 81,500 2023 was 6,580,000. So together from the beginning of the inception of the TFSA all the way to 2023, the amount of money that you can contribute to The TFSA was 88,000 that they say that you can earn money inside completely tax free. Was that really the case in 2018? There was actually a legal showdown between the CRA and asking for 110 million in unpaid taxes from TFSA holders. Now that's a little bit surprising. Why is the CRA going after TFSA holders when it's supposed to be tax free? And I've just taken a little bit of snippets and quotes from that article. Well, that 110 stems from an audit that was conducted over seven year period ending March 31, 2018. And that's up from the 75 million figure that the Globe and Mail reported last July, which accounted for the audits that took place over the five year period. In that article, it also described the CRA seemed to have a threshold and they didn't know what it is. But remember, if it was as of that 2018, that period that I highlighted, the amount of contributions that she could put in was 57,000 around. The CRA was not interested in auditing people who had accounts for less than $100,000. What the CRA spokesperson said was, as there's Nothing unique about TFSAs in the context of securities trading, there's no plan to provide any additional guidance specific to the TFSAs. The question now comes is, is the TFSA really a tax free savings account? Is that a mislabel of the account? What's really important to see here is that the CRA has given additional guidance. And I want to walk you through that additional guidance. The cfa started in 2009 and from 2018 the max contribution was 57,500. What was described was what is too large of a TFSA? Anything higher than that 100,000 approximate balance that they saw. People that got flagged, they all got audited. What will trigger an audit based on CRA's audit criteria? Again, the keyword that I'm using here is based on CRA's audit criteria. The first criteria they had was frequency of transaction. I'm just taking the rules straight from the Income Tax act, which is, you know, I kind of had a bit of paraphrasing, but there's a history of extensive buying and selling or turnover of security. So I thought it was supposed to be tax free. Why can I not do what I can do from my skill standpoint? Earn more money. Day trading in the TFSA account. That's the account. It's supposed to be tax free, History of extensive buying and selling? What is extensive? They didn't define it and it deliberately ambiguous that way? Well, the second criteria was what was the period of ownership? So if you own the securities for a short period of time, that may trigger a flag. What is a short period of time? Is it one day? Is it one month? Is it one quarter? Is it one year? What is that short period of time? It's ambiguous. Does this person have the knowledge of securities markets? So this taxpayer has some knowledge of or experience in the securities markets. What is knowledge of the securities market? Does my ability to learn how to navigate some search engine, to look for some background information of a particular company that I'm interested in putting money in? Does that mean I have some knowledge or experience of a securities market? I know what a stock is, I know what an option is. Does that mean I have some knowledge or experience of the securities market? The next is, is it going through as a business? Now, here's a very interesting term. It's a very broad term. What is a business? Am I having customers? Is that what a business is? Or in this case, security transactions form a part of a taxpayer's ordinary business. What is a business under the definition of a cra? Now, they actually have a definition of what a business means, but they're applying those parameters in a relatively different way in what a regular business would say where you are selling products or selling a service versus what you're doing with the shares. I mean, you can't really do a business of selling shares in your TFSA to a peer or another customer. So it's not really in that format. What is the time spent studying? A substantial part of the taxpayer's time is spent studying securities markets and investigating potential purchases. Are you telling me that I'm not allowed to do due diligence on the securities that I'm going to buy because I want to preserve my capital and not lose it? And in another way I also want to attain a rate of return on the stock that or investment that I'm going to put it into. But if I spend time studying it, that's going to flag a potential issue. Are you financing on margin or do you have a negative account now? I mean, if you're investing in the account, there's a potential for a loss. Now, what if your loss actually became negative? If you had a TFSA balance that ended up negative, it meant that it's losing money. You may not have realized the loss, meaning you sold the securities and had a Debt in hand. But you are now in a negative position, which is not a good position. And that negative position means that the account could be deregistered and you could lose the tax exempt status to offset gains. Now, if you had an unregistered account and you lost money, you would get what's called capital losses. And those capital losses could be offset against gains. If you had a $10,000 loss with a $50,000 gain, you can offset that gain of 50,000 with the 10 to make it a 40,000 gain to be included in your income. Well, in this case, if you lost money in your TFSA and it's in a losing position negative, then it will lose its tax exempt status to apply those losses and you just suck up the losses. Was there any advertisement otherwise made known that the account holders willing to purchase securities soliciting for money to try to make money off of it, that's a different story. And then the nature, is it speculative or a non dividend type transaction that has happened in terms of what has happened in the account? So if you are owning a specific security that doesn't give dividends, it is purely just based on the price, it could be considered speculative. What does speculative mean? Is it like the type of company that I'm doing? We have no idea. What the CRA spokesperson says is those factors are general principles and that apply throughout the Income Tax Act. The CRA lovely enough says they cannot provide anything more specific for TFSAs. There isn't a separate definition for business for TFSA in paragraph 12 of the Bulletin says the term business includes an adventure or concern in the nature of trade. It's an ambiguous passage that could be interpreted in various ways. And then there's another wealth advisor vice president that I've taken. And in my opinion the CRA has not given any definition as to what the limit of tax free income is. And with a tax system that is more getting more and more complicated and needs an expert to navigate, CRA has a duty to provide clear and concise rules that the average taxpayer can understand and work within. So they launched a new program, the tfsa. They allow people to deposit money on a specific set of rules that they've set out to be. When the individual or the Canadian taxpayer in this circumstance has done better than what they would like, they have triggered audits. For a lot of Canadians that sounds very troublesome. When your money is sitting into a bank account, as a bank, if they're the one managing your trades, they're going to earn Commissions and they're going to earn potentially a management fee in respect with all of that. There's also government body because it's a tax free savings account and with that term, registered means that the information is getting communicated to the government basically on what you own in that account. Since they have visibility in seeing, all they have to compare is how much money was allowed to be contributed into the account. And if your account is way too big because you were too successful, they will trigger an audit to see if you were doing something suspicious. I think that's a very, very peculiar way of success. As a Canadian, Nelson Nash will say those who have the gold makes the rules. Well now the next account I want to dive into is called the Registered Education Savings Plan. What else can be used for this program? Can you use this money for anything else? It's been designated specifically for funding education. There's some restrictions because they want you to save for, let's say your children's future education. But they've set up limits to how much you can put into it. And the maximum lifetime contribution limit to the RESP is $50,000 per child. And once the limit is reached, there's no further contributions that can be made. I teach at a particular post secondary university. I know that $50,000 to fund an education for four years is getting very, very difficult to save and fund for. So they're restricting how much money you can put in and invest for your child's education. It's subject to specific rules. It can only be used for qualified educational expenses. Ineligible uses can result in taxes and penalties. So you're putting the money in an account for your child's education and some of them may decide to go pursue education in a different way and have other expenses like boarding or other things, but that's not allowed to be used and that's going to result in tax and penalties. Isn't it your money? Shouldn't you be the one dictating how you want to use that money for the needs of your own family? There's limited investment options. The feature of the RESP is focused on making sure there's amount of money available for your child's education to ensure that there's no speculation going on with the accounts. They offer limited offerings in what you can get and that means generally safer things. That means it's going to limit the amount of returns you can get and the growth you can get. And there's also some other options like utilizing sponsors to help pool money into a cohort of a fund and those will actually end up charging you quite a lot of fees. When it comes down to it, that is because their feature that they pride themselves on is that they're making sure that there's enough money. But I don't know if that's really truly the case. Then there's age limitations. You built a fund if you started when they were 2 years old. You're only allowed to make contributions only until 31. And then there's restrictions on those withdrawals after the beneficiary turns 21. Whose money is it? I would say it's yours. But who's setting the rules on your money? It doesn't sound like it's you. The most attractive feature that people get into when they hear about the resp. Oh, there's free money from the government in the form of grants and bonds. Now these grants depend on several factors like age, family income, residency status, so it's not given to everyone. And there's actually another factor in these government grants and bonds. There's actually contingency on when you would get that grant and bond. The part that people don't realize is they try to make the process so easy to get the money in. But if you want to get the money out in the form of a withdrawal or if you withdraw too early, well, you end up forfeiting grants and bonds. And that's going to be approximately 7,200 from the CESG. And in order for you to get the maximum 7,200, you've got to put in 36,000 into that. Here's the other thing that many people are actually not aware of. If the account subscriber, whoever puts the money into the institution that is sponsoring the resp is successful in earning income on top of the contributions that's made. So let's say instead of 36,000, there's 50,000. So a $14,000 gain and you're like, I don't like this resp anym. I want to withdraw everything out that extra $14,000 is going to receive, not only be included in the subscriber's income, so let's say parent one is the subscriber. It's going to get included in their income. So it's going to bump their income up, put them into a higher tax bracket potentially. And to make things even nicer, they're going to add a 20% penalty on that $14,000 gain that you've earned in that account because you didn't follow the rules of that money and what it was supposed to use for so you are getting charged an extra 20% penalty of taxes. And the next plan, it's called the Registered Retirement Savings Plan. Before I dive into the Registered Retirement Savings Plan, I want to put some information into some context for all of you. The first thing is I want to introduce you to a concept that people believe that when you put money into an rrsp, one of the most common comments people will say is, well, you are in a high tax bracket earning tax bracket today. Put the money in an rrsp, and then when you need to get the money out, when you retire at a particular age, you're going to be in a lower tax bracket. Now, that's a statement. I don't know if anybody actually has really verified that statement. So we're going to go through verifying that statement today. And this is what I would call the Senior High Income Tax trap. But before I go through going through that, I want to highlight a few things. I will go into a bit of details describing this. Now, when you file your tax form, there's a particular piece of form that you do. Now, most people will use software and everything along those lines. Behind the scenes, the government, the way that they receive the information is filled out in these numbered boxes that you're familiar with. And these numbered boxes is actually what gets communicated from what you file and what a particular institution or employer files. And it aligns in those boxes. So let's say in box 12,000, the taxable amount of dividends you receive From ABC Public Company, they're going to report they paid you a $10,000 dividend and they're going to give it to you in a T5 slip that is going to have that box number 12,000, filled with the amount of dividends that they paid. And then when you receive that slip and you file your personal tax returns, you're going to correspondingly put that into that box. Now, you don't have to do that anymore because the software will guide you, oh, how much eligible dividends have you received? And you just type in the number and that's it. But that is what the software is doing is actually transposing it into these government forms. So there's a whole bunch of these boxes that get filled out. The thing is, the beauty of software is it makes things easier for you, it makes things more efficient for you. But one thing that you don't know is how it's actually derived and put together. It's kind of like a lot of people have gotten very used to using a calculator for calculating numbers. And they're not able to do it in their head anymore because they haven't gone through the mental mechanics of how numbers are to be calculated. If you have to multiply two numbers 11 times 11, they don't know how to do that. And they'll just quickly grab a calculator and just try to work through that number. Well, that's essentially what software has done. It's a good blessing, but it's also a bad blessing, depending on how you want to see it. But what I want to highlight is this is an example of a tax form where there are particular lines that I wanted to highlight for you. When you receive capital from some source, it's going to get labeled in a particular definition in the Income Tax Act. It's either going to be in the form of eligible dividends or ineligible dividends, interest and other income or taxable capital gains, or as I talked about earlier, starting this earned income, however you received that capital, it will fall into that definition. And then that definition is going to attract a particular set of tax rates, accumulating all of this. When you get to retirement, there's a very particular line, and it's called the line 23,400 net income before adjustments. And this number, when you are going through retirement, you're going to draw on all your sources of assets, I'll say, to give you that form of income, but how you draw on those income is going to be filled up in a different box, attract a different tax rate, but it's all going to get added up into the IS23400 line. So why am I kind of walking through that? Well, let's kind of highlight that the RRSP people know that they're putting money in. But sometimes there's a little bit of a confusion thinking that when I put money in, I'm getting a refund from the government today and I'm good. I'm tax free. I got extra money from the government. I would like to have you think about if you were receiving a continuing refund today, how much is it going to cost you when you need to get the money out later? And most people forget and they build up a huge mountain in their RRSP and then they don't think about how am I going to get that money out later. Register Retirement Savings Program. Will you pay less taxes when you draw from your RRSP when you retire? For most Canadians, it's not likely. And I'm going to introduce you to something called the entitlement clawback. These are the hidden money fees. There's three income tested benefits for 2022. I'm using 2022 because 2023 just got out a little bit and they're still updating all of that. But nonetheless the government is two months behind. But that's a separate story. So there's the old age security. And in 2022, the annual amount seniors will receive when they receive it at 65 is $7707. Now if you earn and have more income above 81,761, 1 15% 15 is going to get clawed back from the old age security. So you're going to have less than 7,707. And if you earn 133,141 full 100% is going to be eliminated from you. Then there's another income tested benefit which is called the age credit and is a non refundable credit. And you get 1,460 annually for 2022. And if you earn more than 39,008, 26, 15% is going to get clawed back. And if you earn 92,479, 1,460 is going to get clawed back. And then there's what's called the guaranteed income supplement. And that monthly amount is actually 1,026, 96 is for 2022. And this is available to low income seniors who receive old age security and report less than 20,832. But here's the part that I just wanted to highlight for you. So for 20,008, 32, how many seniors are actually living on 20,008, 32. I actually do have someone, but I won't disclose that. But for every $24 you earn, you lose $1 of benefit up to the maximum of that 1,026, 96 per month. So what I've just shared with you is if all you receive from your sources of income, everything that you have, was only old age security, you would get the full 1,026, 96. As soon as you earn more than dollar.

Start subtracting $1 per month from it. Every $24 you earn more, they start giving you less of that by $1 and it goes $1 and $1 and $1 all the way to 20,008, 32, they give you zero. So let's walk through the old age security clawback using $10,000 as capital. And if you remember that form that I talked about, that 23, that line 23,400, if you receive the income in the form of dividends, from $0 to.

You'Ll get the full old age security. As you start increasing more than that 81,761 up to 133, you end up with zero. And somewhere in between they're going to claw back 15% of that on top. Whatever's above the 81,761. So of that $10,000, there's a particular set of rules that it gets attracted for eligible dividends, which is called there's a GROSS up of 138%. What that means is that 10,000 is actually from a income tax reporting filing standpoint, you actually earn 13,800. So that bumps you up to a higher income. Assuming you are, I'm using the example that you're above 81,007, 61. So you're now 94,500. Their Old Age Security clawback is going to be 2,070. So because you earned an extra 13,800, the government's going to remove 2070 from you. Think about that for a second. Well, what if it is in the form of a non eligible dividend, which is a different rule, same 10,000 capital. You are above the 81,000 line, but it's in the form of a non eligible capital. So it's grossed up by 115%. And that taxable income actually becomes 11,001, 500. And the clawback to that is now 1725. So you earned an extra 11, 500 and they're subtracting the claw back. They're going to take the government benefit of 1,725 away from you. The next one I'm going to use is what's called the capital gain. Well, that capital gain of 10,000. Well, 5,000 is now included in your income instead of the 10,000. So only 750 is clawed back from you. Don't you find it peculiar that because you're so much successful earning more income, the government is now removing what, in my opinion old age security is a government entitlement. You've been a citizen of Canada for 40 years. You paid your dues, you are entitled to receive some benefit, right? No, not in the government's definition. You're earning too much income. I need to claw back this benefit from you. What if you have to withdraw this money in the form of an RRSP, a RIF or a pension, that capital is 10,000. Well the taxable income is 10,000, so the clawback is 1500. Again, 15%. 1500. So that was the clawback trap. Let's kind of dive into the age 71 trial in the year you turn age 71, if you, in case you didn't know, your RRSP actually ends. And when it ends, you actually have three choices with the money in your RRSP, if you built 590,000 in your RRSP, if the first choice you make is you can withdraw it all and you bring the whole amount into your taxable income. And what does that look like? Well, if we put 590,000, I just use a income tax calculator. It's not exactly precise, but it's using an idea just for educational and illustrative purposes. I just wanted to share with you 277,000 of that would be paid to the government in the form of taxes. So what's left of that 590 that was sitting in your RRSP is not 590. You only get 312,805. The tax that you're paying on that is actually 47%. And I'm using today's rates. If you ever followed any of the videos that I've made, I've showed you how much debt the government is in. If the government is in so much debt, and if I also showed you how much money the government is losing on an annual basis, which is called a deficit, they're going to need to get money someplace and the only place they can get it is through our taxing citizens. And how are they going to do it? By raising the taxes. My father didn't earn a lot of income. He's no longer here with me. But the time that he was here, he was saving as much as he could into his rrsp. He was earning a low income. He was generally paying around 15% in taxes, but the amount that he was receiving as a refund would be 15%. But he built up a sizable RR scheme balance. If he needed to withdraw that money out, let's say it's this amount, he would be paying 47% in taxes. I'm not sure the refund would was anywhere near the amount of taxes he had to pay to get that money out. The second option I wanted to share with you is you can. Which is the most popular option, just speaking out of hearsay, is to transfer it to a registered retirement income fund, also known as a rrif. Now, RIF is a new rollover of the RRSP which has its own set of rules. And one thing I want to highlight is there's a forced mandate on a minimum withdrawal you must make every single year when you reach age 71. I know the numbers look a little bit small, but it's about 4%. And then it increased 4.17, 4.35, so on and so forth all the way to when you get to 95 and older, they're requiring you to withdraw 20% of the balance. So what does that actually look like? And I just wanted to show an illustration. If that same $590,000 was the starting balance at age 71, well, now that rate at age 71 to force withdrawal is 5.28%, you don't have a choice. You actually have to bring that into taxable income. And that's going to be 31,000. So imagine if you had other sources like a pension, old age security, you had guaranteed income supplement or whatever you had in terms of the benefits and you didn't draw on your RSP for a very long time until 71. And then, whack, another 31,000 comes in and that puts you above the 81,000. And then, hello, the government's going to say you made too much money. Time to claw some of that old age security back to you. You don't have the ability to control your annual income the way you want it. Maybe one year you were successful and you sold one of your properties and you had a big gain. So you don't want to withdraw them, but you can't. You don't have a choice. The government's design plan for this RIF is forcing you to draw money out every single year at an increasing level of percentage of the balance. And so what does that mean? This could mean the loss of the old age security, it could mean the loss of the age credit, it could mean the loss of guaranteed income supplement for most people. And what I just shared with you, it's most people don't even count on getting this guaranteed income supplement. So let's walk through an example because the highest number I just wanted to pull out for you for the old age security is 133,141. Now if a regular Canadian like you who's still in the workforce, what you see on the left is a normal Canadian citizen earning money with a total income of 133,141. That is that top level line for the old age security. I deliberately chose that number. The total tax you would Approximately pay is 38,073. So your after tax cash flow is 95,068. With an average tax basically dividing 38 divided by 133 is 29%. If you earned as a retired Canadian 133 in the whatever sources of way you earn it. That taxes you're supposed to Pay is the 38,073. No different there. However, because you are accessing the government benefits, the old age security, you've now tapped into the maximum clawback of 7700. You are going to be actually required to pay that money back or not receive anything from the government. Age credit clawback of 100460 is all surrendered to the government because that's around the 39,000. You're above 39,000. Then there's the guaranteed income supplement clawback 12,324. The total taxes if you include the clawbacks is 59,000. Compared to the working individual who is earning 38,000. The after tax cash flow is 73,577. So if I add up the tax plus the clawback divided by the income source earned, that's 45% or 50% and above. So I'd love to challenge anyone to share with me the statement that when you retire you will be in a lower tax bracket and pay less taxes. I guess that's possibly true. But if you incorporate the money that you are entitled to to receive and not receive back from it, that is pretty much like a tax. You are not getting the money that you are entitled to receive. The third option I want to highlight is what's called purchasing an annuity. I won't dive into this detail because it's different products and however it's structured. But what this does is it gives you a guaranteed taxable income. However, the longer the term you do it like lifetime, the lower the regular income stream would get. And typically these programs are matched to some form of an interest rate. And if it's based on low interest rates then and you've secured that annuity at a low interest rate. Unfortunately that may not be enough from a monthly perspective to receive and by the way, I just forgot to highlight it was taxable income that you received. And here's another part that a lot of unsuspecting Canadians may not know is that when you die that annuity payment is going to stop. And if you put 590 in there and you it made sense for you to get $12,000. I'm just making up a number. Those that remaining fund A 590 subtract the 12 that you receive actually is going to be kept by the insurer of the product that you got. So that full rest of the 500,000 plus is surrendered to the financial institution who got set up with. So you didn't even get to enjoy that money and you just lost it. For the mindset of securing a annual cash flow, isn't that a very big surprise? There's a new savings account called the tax free first home savings account and this was launched in 2023. I'm not going to dive into the mechanics of that. I mean, you can research and read about what that account is. But I wanted to kind of just walk you through something that really surprised me when there was a budget announcement for this and when it was put into place, because it was very much marketed, that is, we're helping Canadians allow them to build a pool for their home retirement. And for those of you who don't know, in the rrsp, with the government's permission, you can access what's called a home buyer's plan for 35,000. So that home buyer's plan you can withdraw from your rrsp, but you have to repay it back over a particular period of time, otherwise they're going to include that amount in income. But you only get 35,000. Is 35,000 enough for you to buy a home? If you're allowed to get this tax free savings account for first time home buying, you would think that would be another tool to add to the arsenal. You can't use the First Home Buyer Savings account and the Home Buyer's plan from the RRSP at the same time. You are not allowed to use those two government programs together and pool it together to give you a larger amount to buy said home. Are you tired and frustrated of someone else telling you what to do with your money? Do you hide your investment statements in your drawer because it gives you anxiety looking at them? I mean, I see quite a lot of clients on a day to day basis. And one of the common questions I'll ask them is how have your accounts performed in the last few years? Some will respond to me in a way with oh, we've gone down. And I'm like, oh, how much? They're like 10%. I look at their account balance, I ask them, how much do you have? Let's say $600,000. So 10% of $600,000 is $60,000. But it's going to always go up, right? That's a lot of money that was lost in contributions that you had to work for. Now if you earn $100,000, some people will save $20,000 of it. So that's three years of savings lost in one shock of a year. If you're tired of that, I just want to say it's time to stop denying that something is wrong. And it's time to start realizing what the problem is and who and where the problems are stemming from. And the problem is someone else is in control of building your wealth and not you. The solution actually rests within you. But I have a question. Are you ready to hear what that solution is? You are the one to make the change and the solution is actually really, really simple. It's time for you to reclaim your financial control away from others. You've been giving it to someone else. It's time for you to reclaim it back to you. It means minimize, and where possible, stop giving your money to others to manage for you. You have a lot more capability than you actually believe. Part of it is, do you actually believe in yourself when you're putting your money into all these other funds? The banking and government system, they want you to build a sinking fund. You build that money up, it goes through the roller coaster of the financial markets. And then when you need to draw on it, not only does it potentially go down because of what happens in the market, but you need to draw on it. And if you draw on it, the money goes down. And then you have less to earn off of it. That money is called a sinking fund. I think it's time for you to build a floating fund. And it actually starts with becoming your own banker. And if you haven't watched this yet, make sure you visit watchibc.com for a free 90 minute training on becoming your own banker. I'm not here to dive into those details here today, because that is your journey to go through learning how to become your own banker. Because if you become your own banker, you don't need to rely on someone else to be your banker. And just so that you know the tool for the job to allow you to practice the process of banking. Now, the process of banking involves a depositor, a borrower, which is what most of you have may have been accustomed to. But there's what's called the bank owner and the banker. And someone else is building that architecture which you've stored the money with them as a depositor or a borrower. When you're accessing that money, they are taking care of those functions. You should be the one practicing and taking all four of those functions and the tool that is allowed to do that. If the tool was the mattress, I would recommend a mattress, but it's not. If the tool was the cupboard in your kitchen, I would recommend the cupboard in your kitchen. But that's not the tool. The tool that allows us to practice the process of banking by changing the location of where you are sending your money. Instead, you are sending it into an entity that you own and control and is contractually legally binding to you. Is a participating dividend paying whole life insurance company. And particularly what we provide and prefer is that it's place with a mutual insurance company. And if you build a collection of these policies, a collection of them will start creating what's called the family bank. And when you create the family bank, instead of flowing the money through those institutions, you are flowing the money in your institution. You flow your capital through your own family banking system. Because when you flow your money through your banking system, it no longer falls into the categories that other people can get dibs on. How you get into the situation, how you've gotten there, everyone's situation is very, very different. And it requires an individualized experience. It's not something that I can recommend. Oh, just get a policy and everything's done and you're all good, you know how to go. That's not true. You didn't get into the situation that you're in overnight. Your goals that you want to achieve is not something that can happen tomorrow. It takes time to build. There's always a prerequisite, set steps of actions that will lead you to open new doors along the way. And this process does take time. But if you're dedicated in understanding that who is actually taking all of your money, this is the vessel, this is the facility, this is the tool that will allow you to kick others out from taking your money when you don't have to rely on them. And you have built the reservoir yourself, you become self sufficient in your own system. And even though I say it's a gradual thing, benefits can be actually experienced immediately. And here's just the testimonial from clients who, you know, love what we do. And these are people who just give their thoughtful comments and say, seeing my team member Sarbil Gill, and he mentioned his entire team, they were patient to say the least. With someone like myself, who's not savvy with investments such as this. However, I'm much more versed now through guidance and training and what a great team and an awesome opportunity to manage my money better now than I have ever imagined before. And here's the most common comment we always hear. I only wish I heard of this program 30 years ago. Well, if you didn't hear about it 30 years ago, the best time to hear about it is yesterday or today they've already started their kids up, started the momentum up early for them. Benefits can be experienced immediately and benefits can also be experienced gradually. Ascendant financial is a pleasure to work with. Going through the process of gradually replacing big banks with our own private banking system. And the team is great and there's a ton of learning information made available to clients. Highly recommend. And here's something that people very rarely think about, but the benefits can also be experienced multi generationally. And what I'm sharing with you is the family of our CEO, Mr. Jason Lowe and his family, who's at a family banking meeting where all of those individuals have created as part of the family banking system and they have deposited money into that system. So if you imagine the amount of money that's moving in and out of that system and that's no longer flowing through those third party banking systems, how powerful, how much freedom they would receive. I just want to make sure you are cautious of not doing this alone. I'm just going to go jump and do this right away and I'm going to be able to do this well. One thing I just want to give you some caution on, success is not always done alone. It's usually done in a team and it's done with good people who have your interests aligned. And I want to highlight some very, very well known athletes like Michael Jordan, known as the basketball greatest of all time, but he's always had a coach, Phil Jackson, who's also a Hall of Famer. Coach Novak Djokovic, 22 time Grand Slam champion with his coach Goran Ivanuzovic. And then of course there's Wayne Gretzky, who is known as the hockey greatest of all time, who had Glenn Sather as his coach. Everyone who has achieved their own unique experience of improvement has had a coach push them. And it's really important to realize the people that you work with, do they work with you to help support you or do they really work for the system and support the system? I want you to think about that for a bit because that might open some eyes for you to consider. The ideal coach in this situation is not just a licensed insurance advisor because just because we're using a whole life insurance policy, there's some particular parameters and it's not just about designing the insurance policy. There's a specific type of training this coach goes through. So be careful of finding the right coach for the job. And one of the first recommendations I would just suggest is this coach is someone that is an authorized infinite Banking practitioner from the Nelson Nash Institute. We're talking about the process of becoming your own banker. Why not learn from the coaches who've learned from the pioneer of the concept, Mr. Nelson Nash? Aside from looking at searching the individual and their, let's say, credentials, you also want to work with a coach that has demonstrable proof that they are actually practicing this process of banking themselves. They don't just design the policy, say, oh yeah, I know how to do the policies, and then they give it to you and say, here it is. You've got to make sure they're actually living it, breathing it and doing it. And coaches others on utilizing their family banking system to achieve their specific goals and objectives. It's about the utilization of the banking system. How do banks make money? It's not what they tell you to do, which is to keep the money sitting in there. It's putting the money in motion. And with your coach, they're going to work with you to put the money in motion in places that's going to be advantageous for you to start making progress and improve and get closer to your goals and objectives much, much faster. This is where Ascendant Financial just so happens to be the gold standard in educating Canadians about becoming your own banker. And I just want to highlight with, with you just the team members that we have and the positive feedback that we get. And now you know about the team at Ascendant Financial. But there's an important step for you. You've invested time tonight. You can take that time and sit on that information and just say, yeah, I've learned some information. You've learned who's taking your money and you can just decide to do nothing with it. If you do nothing with it, you're like, you're going to follow the same patterns that you have gone through. And that means you've chosen to continue leaving your wealth in the hands of others. And what does that look like? It means paying more taxes to the government, building a future of retirement in poverty where you depend on the banks and the government and what they give you. You can continue feeling that anxiety when you open your registered account statements. You can continue feeling the fear and wondering whether the bank of Canada is going to continue increasing interest rates again and again, even though they say that they're, this is the last time they're going to do it. Working long hours because of increased taxes and increased inflation. If you've ever gone to the grocery store, I'm sure if you look at romaine lettuce or chicken breasts, or anything along those lines. The prices are not the same as what they were even a year ago. And for many, you could be leaving behind a burden of debt for your loved ones. I want you to take the time you invested today to create the financial abundant future you deserve. And all it requires is for you to take the next step. Thinking does one thing, but action is even more powerful. And so if you aren't a client, make sure you text Schedule 780-809-4599. You've got to want this more than we do. We've got our lives, we've got other people we're trying to serve. It's your future and it's not ours. This is just an introduction for you to realize where your money is going and where the flow of the money is going and who's getting all of your money. But you've got to work on now learning about what the system can entail and how it can benefit you. And that starts with getting educated first with watchibc.com for that free 90 minute training on becoming your own banker. The second thing I just want to encourage is get yourself a copy of this book. Because this $30 book is 92 pages. It takes about an afternoon to read. 70 pages of it is actual content. And the hardest job actually for a lot of us when we work with people is actually getting people to read 70 pages of large fonted text. It's really, really surprising. And so if you are really wanting to do something before you want to see all these illustrations and everything like that, the book actually has a whole bunch of them already. But it's about reading the book and really realizing the power that this book can provide you. But you've got to take action. Again, that's just information. But you've got to take action. And if you are a client, make sure you email your coach and schedule a meeting to evaluate. Now that you know who else is taking your money, do you want to reposition and relocate that money somewhere else into an entity that you own and control? I can't see any reason why you wouldn't. And when you do that, here's what's going to happen. Be in a tax advantaged situation. Build a future of retirement in abundance and where at Ascendant Financial we do this very, very well. Help structure ways to help you receive tax free cash flow at retirement and no longer and potentially depending on your situation, Minimize the impact of losing those government entitlements because we know the definition that they're trying to meet is income. But what if the cash flow you're receiving, which by the way, I'm using a particular term, cash flow, is not income. It doesn't fall into those forms and therefore it doesn't meet their definition to penalize you for taxes. That should be very, very empowering for you to look at. Imagine if you can minimize all that financial drama that's happening with what the bank of Canada is potentially going to do with interest rates. Imagine where you can work smarter and have a foundation and a reservoir of pool of money growing every single day with without working for it. And because that pool of money doesn't fit in the Income Tax act, that's not a taxable environment for the in government. So that allows you to work smarter and be there for your family and not sacrifice and have those long hours, missing recitals or missing games or missing anything. And you know what the best part is? Because of the type of product that is being used, the inherent nature of it being an insurance product, you will leave behind a tax free bonus for your loved ones instead of a burden of taxes coming to a city near you. We are doing quite a few live events to meet Canadians just like yourself. And I really encourage you to attend these live events because the experience there is so much different. It's actually very joyful for myself when I get to meet my clients in person, give them a hug, just feel the energy of the impact that I've been able to help them with. And I know my team members feel the exact same way when they're able to meet their clients and even potentially new people that are very interested in this themselves. And I want to give all of you a very special preview. I'm co authoring a book with my team members Jason Lowe and Richard Canfield. And one of the main challenges of building wealth for Canadians is knowing that how much the government is excessively taking from them. Most of you, and not your fault, have inherited a set of rules that you actually don't even know. And it takes a bunch of professionals, lawyers, tax specialists, whatever you name it, to read and dissect that code. And as you saw from the tfsa, there's also ambiguous definitions on what they're using and what they would audit you with. What you've learned was those government programs and knowing that they have the goal and they set the rules. I may have used some terminology that may have seemed foreign to you and a lot of that is actually going to get more clarified when you read this book. And also, I don't know about you, but most of the time speaking to other tax professionals, they fall into this very complex technical language lingo that is so hard to understand what they're trying to say. Five minutes in Even for myself, it goes way over my head. So this book is broken down into very simple five steps strategies to learn how to start seeing how the system is designed and how you can navigate to reducing your tactics. It's not telling you to go to do it, how to do it, but it's specifically going to help you arm you with better information and education on having a much more productive discussion with your tax professional or team members like us at Ascendant Financial. Aside from just the book, there's also going to be an additional portal. There's going to be some never before yet seen videos recorded specifically for Tax Focus and learning more about some of the things that I already shared and there's some things that I talk about the CPP Canada pension plan. There's other things about walking through how the income tax brackets are applied in Canada and those are things that you are welcome to receive when you get a copy of the book is tied into that book all free for you when you get a copy of the book to go through. And again arm yourself with more information so you can preventatively minimize the amount of people that are attacking your wealth.