Ted Williams is a production manager at a car manufacturing business,
he earns $85.000 per year, plus bonuses averaging $20.000 per year,
his wife Denise stays home with their two young children, Ben aged 4
and Tammy aged 5. Ted has RRSP room of $8.500, RRSP Carry-forward room
of $25.000 and he has not yet started savings for his children?s
education. Ted asks you what he should do with his $25.000 dollar
bonus, he says that savings for his retirement & saving on his income
taxes is important but saving for his children?s education is now
equally important. Please explain your advice & recommendations in
detail.
Ted mentions that he recently paid off his home and that he recently
read an article in the Financial Post Magazine that touted the
benefits of using conservative leveraging investment strategy (fully
secured against real estate) to build one?s net worth. Ted asks you to
explain the benefits and pitfalls of using this type of investment
strategy. He also asks about tax rules for borrowing to invest and the
rules relating to the taxation investment income. He asks you to show
him a real life example of a $100.000 borrowed against his home,
invested in a Canadian Equity Mutual Fund. Please explain your advice
& recommendations in detail. |
