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What is life insurance?
Life insurance helps protect your loved ones financially if you pass away while your policy is in force. You can tailor your life insurance policy to help sustain your dependents’ current lifestyle, housing and education to name a few typical expenses, using a “death benefit” (a lump sum of money). How does this work? When you purchase life insurance from an insurance company, you designate one or more beneficiaries. These beneficiaries (often family members) are the people who will receive a tax-free death benefit upon your death. That being said, in order for the death benefit to be payable, you must keep up with your premiums. These premiums will vary depending on how much life insurance you purchase, as well as your health, age and general lifestyle at the time the policy is issued. Some policies allow you to make additional deposits over time to build up a policy cash value, and some also include built-in cash values. You can use these cash values to cover policy costs, which provides flexibility to stop and go with your future out-of-pocket premium payments.
Do you need life insurance?
The short answer is, “it depends”. Life insurance may seem like a morbid topic, but it is just as important as (if not more than) home insurance, car insurance and travel insurance. Your mid 20s are a great time to start thinking about purchasing life insurance as the younger and healthier you are, the less expensive it will be. Life insurance may be right for your family if you:
Would like to make sure that your spouse is financially stable if you pass awayHave children, or you are pregnant with your first childWant peace of mind knowing that your family will be financially protected if you dieHave personal debts that you do not wish to pass on to your beneficiariesHave a mortgage to pay offOwn a small business and want to ensure a smooth transition
If you answered yes to any of these questions, you may want to purchase life insurance.What’s Next? Now, what kind of life insurance should you buy? Well, that also depends. There are two basic types of life insurance: term and permanent. Term insurance is very popular among young and healthy people, and you can purchase it for a pre-agreed upon duration of time. This type of insurance is attractive as the premiums are usually relatively low because as the name suggests, term insurance protects you from the financial impact of death for a set period instead of your lifetime. Term insurance is beneficial for young people with children or a mortgage. This is because the term they agreed upon will be as long as it takes for the children to be financially independent, or for the mortgage to be paid off. That being said, if you choose to extend the coverage period of your term insurance beyond the initial term, the premiums will be significantly higher (up to 10 times higher in some cases). Additionally, term insurance does not allow you to make additional deposits, nor does it include any built-in cash values. On the other hand, permanent insurance covers you for your whole life. To reflect this, the premiums are higher at the outset but can be less costly over the span of your life. Permanent insurance is a great investment in the long run as your premiums rarely vary and any cash value being built-up grows on a tax-deferred basis. In addition, the cash value can be withdrawn (which may result in a tax liability) or be borrowed against throughout your lifetime. In many policies, all or a portion of any cash value is also payable at death, increasing the tax-free death benefit payable to the beneficiaries. Layered Plans If you’re still unsure about which type of insurance would be best for you, you’ll be happy to know that it is very common to purchase a combination. Purchasing both permanent and term life insurance is also called a layered plan. Many people do this as their financial situation and goals may change. Purchasing both is a way to ensure that coverage is tailored to their desired lifestyle over time. Additionally, a young family can require over $1 million in coverage to account for their children’s education, income replacement and other expenses, making permanent insurance nearly unaffordable for many. Layered plans allow you to buy a blend of permanent and temporary coverage within your initial budget. Further, they provide benefits and flexibility that allow you to shift your coverage from temporary to permanent as the policy values grow, as your needs change, and as your budget allows.
Need further help understanding the life insurance options available to you?
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Market volatility is a fact of life. While there might be a perception that the combination of rising rates, stock market volatility and politically induced trade friction is something new or the ‘Perfect Storm’, it’s neither. Investors need exposure to a well-constructed portfolio of equities that trade in the stock market and despite the current low rates, there is a place for higher quality bonds as well. What is more important is to focus on diversification and to keep the allocations to stocks and bonds moderate enough so that market events that we saw this week don’t nudge us off track.
Weather in the markets is political, and the perfect storm that has set down on global markets is no different. This week has seen the major indices take a loss of 5%, with the TSX reporting the largest single day loss in 3 years.
To highlight a few performance numbers:
Between October 3rd and October 11th the S&P 500 was down 6.7%;From recent highs to October 11th the TSX 60 is down 7.1%Investors have taken losses in bonds as US 10-year rates moved from 2.82% to 3.23%Rising rates create losses for bonds already issued at lower rates
In short, with both stocks and bonds down the average investor had nowhere to hide.
With our focus on diversification our Medium Risk Portfolio has endured a correction of 0.6%.
Although reports coming out are leaning towards a stop in the steep decline by the end of the week, this storm has a story of investor fear in the stock market that may leave lasting effects. There has been much speculation as to the top three concerns that seemed to have sparked the sharp selloff, but little information regarding why there was no warning.
Tech Stocks - The general sentiment is that Tech is a risky business, and this week sentiment turned into action as the Tech Stocks that led the majority of the Bull market fell 4.8% - the largest drop in 7 years. Among the top performers with a serious decline were Amazon with a 6.2% loss, and Netflix at 8.4%. However, sometimes investors sell what they can, not what they should; and, most investors are more willing to sell winning positions than losing positions. There may not be a lot of information here.
US & China Trade Wars - When the two largest economies in the world begin a trade war based on power and control, everyone gets nervous. With New NAFTA essentially completed, many feel that President Trump will now focus the attention of his government on their trade relations with China. With weekly Tariff standoffs the confidence investors had just 12 months ago is gone, and this has only worsened this week with the statement by the IMF cutting the 2019 forecasted growth for both countries.
Rising Interest Rates - We have no choice but to be realistic - when the US raises interest rates, all Canadians (and the rest of the world) feel it. The cost of borrowing will increase for Canadians, and foreign goods will become more expensive causing increased Canadian inflation.
Finding Shelter in Diversification.
At the end of the day, investing solely in the stock market is a risk - it fluctuates like the weather, and everyone continues to speculate and pontificate as to 'why'. Asking why isn't the solution - to shelter yourself from the increasing volatile global markets you need a diversified portfolio.
For years excessive volatility and inconsistent returns have been the central frustrations of investors. This is especially true for investors who are currently limited to stocks, which are often too volatile, and bonds, where returns are too low. Canadians have been highly exposed to the ebbs and flows of the Oil & Gas sector, and have taken refuge in Tech or more recently Cannabis stock as the solution - but to create shelter against volatility, investors need to hold assets in their investment portfolio that do not increase risk through the lack of a diversification strategy.
WealthCo portfolios are rich in allocations to less correlated alternative asset classes such as real estate, private equity, hedge funds, private mortgages and debt; and our size and scale gives our clients access to exclusive investment managers, larger real estate and private equity deals, preferential rates, and lower costs.
Our strategy for navigating global financial volatility is diversification, risk reduction and discipline. This is the cornerstone of our philosophy and investing model, and the reason our clients can remain confident that we will continue to work not to weather storms, but to plan and prepare for the shelter required when they hit.
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If you’re Elisabeth Vathje, Women’s Skeleton Athlete, you see yourself standing proud on more international podiums.
WealthCo is honoured to stand behind this strong and successful young woman as part of our own dedication to supporting future leaders.
Fresh from hitting the Top 10 in the 2018 Winter Olympics, Vathje remains committed to excelling on the international stage as she takes aim at the next Olympics Beijing in 2022. The young athlete shows the kind of dedication and perseverance that true winners embody.
Successes in her sport include three silver and one bronze medal in previous World Cup championships (St. Moritz, Lake Placid, Winterberg, Iglis), and 9th place in the most recent 2018 Winter Olympics in Pyong Chang, Korea.
We are proud to have sponsored the young athlete in her rise on the global stage and have repeatedly committed ourselves to supporting the future leaders of our community. WealthCo will continue to watch, and cheer on, this dynamic young woman in her rise to the top.
Team Vathje is a team effort and it requires a special kind of alchemy to help turn Olympic dreams into gold. Now more than ever, Canadian Olympic hopefuls like Elisabeth need the support of their communities. Funding has been decreased moving towards the 2018 Winter Olympics, with Skeleton taking a significant cut at 80%. Through your support, Elizabeth is able to keep her eyes on the prize and represent Canada on the international podium.
We have partnered with Play4Them, a “fun-raising” platform that makes giving even easier and enables you to “make a difference by having fun!” Donate today to help us get Elisabeth Vathje closer to her goals at the 2022 Olympics in China: www.play4them.com
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Effective wealth management is more than about managing your money. It’s about creating time.
It is said that “we don’t make plans, we make time for them.” What this means in a rapidly changing world filled with political and economic uncertainty is that we have to be more conscientious of the ways in which we spend our time and prioritize what is important each day. It is important to make time for ourselves always.
There are numerous demands on our time. We focus on creating a healthy work/life balance while still trying to address demanding career, family, volunteering, and other social priorities.
Managing your wealth personally, and maintaining regular contact with trusted advisors (Accountants, Lawyers, Insurance and Stock Brokers, Bankers, etc.) can become overwhelming. The outcome of each choice affects the entirety of your life, impacting the very same things we are attempting to balance. The careful coordination of communication between all of these independent entities can become draining on one's time and resources.
Why spend time managing money and advisors when you can spend more time enjoying life to the fullest?
In addition to working with WealthCo to manage your wealth, some handy tips to start doing the things you love most include:
Stop answering every phone call. Let the voicemail pick it up.Send less email, receive less email. Phone calls can be faster.Create less commitments or obligations.Stop spending time with people who suck your life energy.Put away the mobile phone and other devices. Sending fewer texts means receiving fewer texts.Turn off the TV.Prioritize and stick to these. Avoid doing non-priority things just because they are easier.Set a time limit on the things you need to do to make the most effective use of that time and stay focused.“Early to bed, early to rise” ... Waking up and going to bed earlier each day ensures you are at your optimal energy levels throughout the day. Nap more often.Outsource or delegate. Why do something that others can do for you?Learn how to say No.Buy less unnecessary stuff. Purchasing, maintaining, placing, replacing, repairing or returning items can eat through valuable time we don’t have.Turn off the computer when you can.De-clutter your home and office.Stop procrastinating. Do it NOW.Automate bill payments and other routine monthly or weekly tasks.Manage your time more effectively. Note how you spend your time each day to see where you can economize and reduce any time wasted.Eliminate some tasks. There many of these that, as it turns out, don’t actually matter that much.Work smarter, not harder. Think of ways to do things easier, cheaper, and more efficiently. Talk to others about how they manage time efficiently despite a busy work/life schedule.Stop doing the things you don’t like to do. Avoiding or resenting tasks can be more taxing mentally than actually just eliminating them from the To-Do list.Reduce time spent on social media.Focus on freeing up time to do the things you love the most. Find ways to live your passion every day.Focus on completion. It may not be perfect, but at least it will be done. Sometimes that is more than enough.Go paperless. Scan and upload important documents to a cloud or backup system. Have every important document at hand with a quick click rather than having to shuffle through paper folders and files.Put your keys, wallet, handbag, and other valuable items that are used daily in the same place. You’ll never lose these if you know exactly where they are each and every time you look for them.Do things differently. If you do what everybody else does, you’ll get what everybody else has.Avoid being overly altruistic or helping “because you should.” Those who take care of themselves first are in a better position to take care of others.Find ways to de-stress and worry less. Being overly concerned about the future can overtax the immune system and waste valuable time imagining “the worst” that may never come to pass.Take the time to regularly reflect on how you are spending your time and your life. Are you truly living an inspired life filled with passion and freedom? If not, what changes can you make today to truly capitalize off of each opportunity?Contact WealthCo today to see how we can simplify your life, create more time for you to enjoy the life you have built, and provide a centralized and clear connection to a better integrated advisory.
For more information on how to create even more time to do the things you love, contact WealthCo today.
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Ensuring that your wealth plan covers your current and future needs is the key to creating success. Defining your goals, considering your resources, and evaluating your options will determine your needs. An Integrated Wealth Advisor can best help you define the best ways forward once you’ve considered the following.
Monthly Budget.
Successfully managing your overall finances is first addressed through looking at your monthly budget. Knowing your current regular recurring bills and expenses can ensure that you create a plan that allows you to meet your future objectives.
Savings.
Building a secure and manageable future relies on saving for the unexpected and the anticipated. Saving is easier when you “pay yourself first” and build automatic savings into your budget now.
Risk Management.
Risk takes many forms. This can manifest as illness, accidents, liability, and natural disasters, among others. Your financial future is jeopardized by any inability to manage risk properly. Smart wealth planning assesses the various levels and types of insurance to carry to ensure alignment with your overall goals and needs. In most cases, insurance can also provide a hedge against inflation, riskier investments, and be used as an effective alternative revenue stream.
Education Funding.
Education costs for children and grandchildren can be staggering and one of the largest expenses you’ll ever incur. Having current information about proactive education savings vehicles can help you plan funding goals while limiting exposures to unexpected surprises or long-term debt.
Retirement Planning.
Deciding on retirement choices can be daunting with options including CPP benefits, employer-sponsored plans, professional retirement savings, amongst others. An Integrated Advisor can guide you towards options that both support and enhance your overall strategies.
Estate Planning.
Effectively transferring assets according to your wishes ensures that the people and charities you care about most are taken care of. Establishing trusts, regularly reviewing beneficiary designations and legal documents, and mitigating tax implications for survivors are vital to your confidence and security... and ensuring the security of your heirs.
Where to Start.
Book an appointment to start the process towards integrated wealth planning. The more information you provide your advisor means the more custom-tailored options that will fit your needs, and your future. A regular review of your plan, current and ongoing financial situation, and future plans will ensure that the best strategy is in place to meet your unique goals.
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WealthCo staff heard the horn and exploded from the gate to join the Big Hearted Mavericks at the 2018 Calgary Stampede Chuckwagon races … and helped make a difference in our community!
We kicked up our heels in traditional Stampede style while enjoying all the incredible western hospitality the Mavericks had to offer during a thrilling evening spent trackside on July 10th.
WealthCo is proud to work with this amazing non-profit organization that raises money for Calgary children’s charities. With over $4 million raised to date for these charities, the Big Hearted Mavericks prove that big hearts can make a big impact.
This group of 25 local businessmen have made it their mission to actively engage in volunteering and fundraising within their community, all while enjoying the great sport of Chuckwagon Racing.
The strengths we share in common are the desire to create a stronger community, built upon the foundations of fun and friendship. WealthCo is happy to call the Big Hearted Mavericks our friends and we look forward to working together to continue making a difference together.
We encourage you to check out more on this amazing organization doing great things!
More on the Mavericks: http://bigheartedmavericks.com
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