the loan. Based on your financial situation, it may bewise to borrow for RRSP purposes, or begin makingmonthly contributions for the next tax year.Additionally, consider investing outside of your RRSP byusing the Tax-Free Savings Account (TFSA). You cancontribute up to $10,000 per annum to your TFSAaccount. Depending on your goals and retirementobjectives, you most likely will need to invest for otherincome sources.

4. I’m over age 55, so I’ve failed as an investor. Someenter retirement gradually, by remaining in the workforceon a part-time basis. Part-time working income can alsohelp to preserve some of your RRSP/RRIF portfoliobecause you will need to withdraw less.

Considerations: By waiting to take your CPP and OASlater, you can achieve a higher government pensionincome. The main question to consider is “What doesretirement mean for me?” For some, it means havingchoices to do leisure activities, for others it may mean theability to go back to school, to travel, to get another job. Formany it will mean scaling back expenses, perhaps movinginto a smaller home, or renting. Retirement at 55 dependson your situation and what you wish to do after 55.

We are only a phone call away. As an advisor, I wouldlike to help you maximize your retirement income.

Tax-Free Savings Account(TFSA) Investing

• Neither income earned within a TFSA nor withdrawalsfrom it affect eligibility for federal income-tested benefitsand credits, such as Old Age Security, the GuaranteedIncome Supplement, and the Canada Child Tax Benefit.• Compare the TFSA to the RRSP For retirees with low

income, every dollar withdrawn from your RegisteredRetirement Savings Plan (RRSP) or RegisteredRetirement Income Fund (RRIF) will reduce theGuaranteed Income Supplement (GIS).• Similar to the RRSP After you file your tax return eachyear, the government will determine your remainingavailable TFSA contribution limit for the coming year.Any unused contribution room gets carried over to thefollowing year.• You can have more than one Tax-Free Savings Accountinsofar as you don't exceed your contribution limit.• Those who expect to be taxed at a lower marginal taxrate in retirement may be better to contribute to anRRSP before a TFSA. If you will be in a higher averagetax bracket, the TFSA offers a better tax advantage.

Your shrinking time to invest

The older you get, the more you might say, “I don’tknow where the time went—it just flew!” Many peoplewill have very little money invested to live on in anincreasingly expensive world. Get time on your side toinvest and see the miracle of compound interestworking. Plan and act now to do what you need to do atwhatever your juncture of life. Invest as much as possibleto hit your retirement income target.

Source: Adviceon®

Wealth Creation: Insights for Successful Investors

4 ©FINANCIAL POSSIBILITIES: PERSONAL WEALTH & FINANCE ©FINANCIAL POSSIBILITIES: PERSONAL WEALTH & FINANCE 1

Finance for Life. Wealth for Living.©

WINTER 2016 • PERSONAL FINANCE VERSION 1087

Continued on page 2...

The following article will look at the wisdom of some ofthe top investors. All of them are billionaires. Wealthcreation has a lot to do with a combination of wisdomand discipline plus learning from those who have advisedothers how to create wealth.

Listen only to successful investorsMedia can encourageyou to invest or discourage you. A few columnists onlyseem to offer negative predictions to their reader.

Warren Buffet, the billionaire is known as one of thewisest investors of all time. He indicates that an investorsimply needs self-discipline: “We have to be moredisciplined than the rest.” He also notes that those thatare fearful can become stuck inneutral and do not progress increating wealth, whereas those thatinvest look for opportunities whenmarkets are volatile or dropping.Investors think opposite to thecrowd: “We simply attempt to befearful when others are greedy and tobe greedy only when others arefearful.” If everyone is fearful, it isgenerally a good time to buyinvestments because the value isbetter—fund units may be at lower

prices in many sectors. It makes sense to buy investmentsthat are at bargain prices (for a fund investor this meansbuying at lower unit values). Often positive viewpointsoffered by seasoned investors may go unnoticed, orsimply be filtered out by negative doomsayers that canparalyze an action plan to invest for years. The mediafrequently offers bad news.

Avoid missing opportunities to invest If the marketbecomes bullish, rising up in value, a procrastinator canmiss what is actually occurring. The Canadian S&P/TSXComposite Index value rose rapidly from its low of 7,590in 2009, to 15,400 in 2015, more than doubling itsvalue. Source: Google Finance

Professional fund managersunderstand the wisdom of PeterLynch, another wise investor: “Ifyou don’t study any companies, youhave the same success buying stocksas you do in a poker game if you betwithout looking at your cards.” Evenpositive media and rising marketmomentum can conflict with fearfulnotions one believes about investingif there is not a professional to guideus in our decisions.

Continued from page 3...

The High Cost of Waiting

Invest $10,000 Annually

Investment

Period

@4% average

return per yr.

@6% average

return per yr.

@8% average

return per yr.

@10% average

return per yr.

25 years $416,459 $548,645 $731,059 $983,471

Wait 5 years $297,781 $367,856 $457,620 $572,750

Wait 10 years $200,236 $232,760 $271,521 $317,725

Assumptions: Registered Investments.

Sunil Chugh, M.Comm, CFP

PROFESSIONAL WEALTH ADVISOR Bus:(905) 568-8338Fax:(905) 568-4554Toll Free:1-866-254-3334Email: progresscapital@on.aibn.comWebsite: www.progresscapital.ca

PROGRESSCAPITAL MANAGEMENT The Personal Prosperity ProgramTM

Coopers Business Centre5755 Coopers AvenueMississauga, ON L4Z 1R9

Mutual funds provided through FundEX Investments Inc.

This newsletter was written and produced by Adviceon and is information provided for your convenience only, and is not anendorsement of any product or information provided by any other party. No representation, warranty, or guarantee of the informationis offered. Consult a professional before investing in or buying any financial product. Please read the prospectus before investing.Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Mutualfunds are not guaranteed; their values change frequently and past performance may not be repeated. Any indicated rate of returnis for illustration purposes only and is not intended to reflect future values of returns on investment. Any amount allocated to amutual fund or a segregated fund is at the risk of the contract holder and may increase or decrease as it is not guaranteed.Borrowing to invest can magnify the risk of investing. You should not act on, or make any decision based on, any information in thispublication, as it is meant for general purposes only and it may not accurately apply to your specific circumstances, nor should itbe applied as professional advice for the reader. References in this publication to third-party goods or services or trademark namesare not endorsements. The publisher does not guarantee the accuracy and will not be held liable in any way for any errors oromissions, including statements or statistics in this publication, though we seek to present information based on material believedto be precise, reliable, and complete. Reproduction by any means without written permission of Adviceon, the publisher who retainsall rights, is strictly forbidden under copyright law. ©Adviceon • email: admin@adviceon.com [07/01/09]

2 ©FINANCIAL POSSIBILITIES: PERSONAL WEALTH & FINANCE

Peter Lynch has spent his professional lifetime investing.Investing is not like buying a ticket in the lottery.

“Although it’s easy to forget sometimes, a share is not alottery ticket. It’s part-ownership of a business.”

Peter Lynch

Avoid selling when the market is unpredictable Marketsare never predictable. They move in relation to themarket cycles, government intervention such as the USFed’s low interest rate debate, wars, job statistics andeven bad weather. Media can create a lot of emotion andsometimes panick. If someone sold their investments tooearly due to fear (for example in the 2008-9 debt crisis),they would have lost the potential for the marketturnaround when it entered a long bull market phase ofappreciating gains. Emotional over-reaction can cause aninvestor to lose money.

“Investing is the intersection of economics and psychology.”Seth Klarman

Aside from considering taxation, an investment witheither a gain or a loss, once sold, ends any futurepotential of that investment rising in future value. Toavoid this mindset one should have a disciplined writtenplan worked out with an investment advisor for buyingand or selling investments at the right time without fear.

“Based on my own personal experience—both as aninvestor in recent years and an expert witness in yearspast—rarely do more than three or four variables reallycount. Everything else is noise.”

Martin Whitman, Investor

Avoid getting stuck on one viewpoint “Anchoring” aninvestment viewpoint occurs when someone assigns areference number, like a 52-week high or low, tocompare a price of an investment fund’s unit value. Pastprice movements are poor predictors of future priceperformance. When you invest for the long-term forretirement, very often only seasoned investors such asfund managers see the big picture. Joe Grenblatt knowsthat not everyone has the skill to understand theunderlying value of an investment:

“But it’s critical that you understand why the market isn’tseeing the value you do. The back and forth that goes onin the investment process helps you get at that.”

Joe Grenblatt

Get professional help People are very busy and put offinvesting – they simply procrastinate. We generally needsome professional guidance and motivation to begin and stickto investing according to a written plan. If your circumstanceschange, your plan can be tweaked with the help of youradvisor. An investor can refer to written investment goals thatalign with the person’s risk tolerance, with well-establishedgoals (short-, medium- and long-term).

Let professionals help you form your investor style thatfits your risk profile. With the help of an advisor, thisagreed-to plan is important to create mutually with one’spartner/spouse, to avoid differences and stay on track ifa doubt arises.

5 Options of a Buy-SellAgreement

When a co-owner/partner dies, the surviving businessowners usually have five options in dealing with thedeceased owner’s business interest:

1. Buy-out the heirs of the partner with Life Insuranceproceeds.This is usually the most preferred option. Afterall, the surviving owners/partners know how to run theirbusiness. It usually makes sense to buy out the heirs whoare not engaged in or lack expertise in the business andcarry on business from there.

2. Keep the family heirs in the business. This wouldonly be advisable if the heir was actually involved in thebusiness for some time, or has skills that can advance thecause and profitability of the business.

©FINANCIAL POSSIBILITIES: PERSONAL WEALTH & FINANCE 3

Finance for Life. Wealth for Living.©

3. Take on an outsider who purchases the deceased’sbusiness interest. A good buy-sell agreement cancircumvent the need to have an outsider buy into yourbusiness if that arrangement would harm the currentbusiness partnership or the business. In some cases anoutsider may already have an investment in, haveexpertise in, or a common business goal with yourcompany that would mutually benefit everyone in thebusiness. In this case, advance planning could allow suchan individual to be part of the buying side of the buy-sellagreement. The same individual may need to be abeneficiary on the insured lives of all the partners, intandem with being written into the agreement.

4. Selling to the family heirs may be an option.This maybe an option when some of the heirs are involved andsuccessful in the same line of business with primary seniorfamily members of the earlier generation who began yourbusiness. In this case the considered heirs should receivefunding from the proceeds of a well-planned fund tocover capital gains taxes, and fund operations, and pay forthe owners shares.

5. Liquidate the business or sell it to a third party. If thisis the main goal, it is wise to involve discussions with thepotential buyer long before one dies. If the business is largeyou may need to hire a firm that specializes in valuing andselling businesses. It is wise to estimate your capital gainsexposure and cover any tax liabilities, as well as redeembusiness debts with the proceeds of life insurance whichcan be paid out to the beneficiaries tax-free.

In most cases, option #1 offers thebusiness owners the best choice,with a small expenditure to buy lifeinsurance that makes a payment toheirs with the use of a buy-sellagreement.

Myth BustingConsiderationsfor Wealth Creation

Many are asking “will I be ready toretire?” When we discuss the cause

and effect realities with most who have not saved muchfor retirement we find they generally admit these reasons:

1. Procrastination is my main problem. Waiting toinvest can leave you near-broke or dependent on thegovernment in retirement. You may already be lookingback in time, and acknowledge one or more investormyths.

Considerations: Successful investors have learned that itis important not to believe everything that you hear inthe media or from hearsay—financial myths can createfear and can keep you from creating wealth.

2. I never seem to have a lump-sum to invest in myRRSP. Some may think that they do not have enoughmoney, or must invest all in a lump sum at once.

Considerations: Get cracking—you don’t need a largelump sum to start investing now. It is more important toengage in a consistent retirement savings plan. Try dollarcost averaging (DCA)—a plan that allows you to buymore fund units when the markets are down, and fewerwhen it is up, smoothing the effect of the marketfluctuations. DCA plans work well when trying toachieve long-term growth with equity funds (they tendto fluctuate more than other funds). As well, you canstart with as little as $100 per month.

3. I usually wait until the RRSP deadline to invest inmy RRSP. Investing in an RRSP offers a significant taxdeduction from your income and ongoing tax deferral

on retirement savings.

Considerations: You can makemonthly contributions and/or alump sum contribution to yourRRSP ($24,930 for the 2015 taxyear). If an investor is unable tomake a lump sum deposit, there isalways the option of using an RRSPloan. This strategy allows a personto make the RRSP deposit andreceive a tax refund though futuremonthly payments will bedue to pay back the loan. Bear inmind that any income tax moniessaved can be used to help pay back

Finance for Life. Wealth for Living.©Continued from page 1...

Continued on page 4...