Is your money guaranteed for life? What if you spend too much, save too little, live too long, suffer loss in health or business, or other family events arise? Such can happen to anyone, and at the most inconvenient times. Losses can also become permanent! That's why we need "MANDATES" ... a specified approach to help secure your wealth, your life, your dreams and desired lifestyle.
AVOID TIME BOMBS THAT DESTROY WEALTH.
Is your current plan building net wealth year-over-year? Is it protecting against hidden time bombs of inflation, illness, investment losses, fraud, career malfunctions, and rising taxes?
Here we briefly introduction Five Life Income Mandates that powerfully secure people from the time bombs that erase wealth. Sub-links let you click for further insight or simply reach me to discuss how we personally design this for you.
TWO STORIES SET A SCENE.
Beth sold her business but found a problem. She knew all about getting income from a business, but how would she sustain her income after selling? Especially for later years when personal needs (and costs) could rise dramatically. Life Income Mandates can help secure Beth's income for LIFE.
Bill’s concern was to personalize his pension. He decided to exit (commute) the traditional pension for a more generous lifestyle and flexible income. (See more here.) This move nicely escaped risks of chronic pension under-funding, plus it offered more for family in the event of his death. But how to manage investment risks? That's where Life Income Mandates come in.
Are you at all like Beth or Bill? Do you ever stress over money? Do you want a plan that can assure wealth and income for your future and later years? Then let's design your Certified Life & Financial Plan to fully describe your personal needs, hopes, and goals, and the financial process to protect your future. (Also see Life Horizons.)
LIFE INCOME MANDATES.
Here are all five mandates even though you might use just three or four of these. Younger people can avoid annuities. We also include high-growth equities alongside the income-mandates. Point is, just as we have five fingers on a hand, we've found five clear mandates over time will offer the strongest foundation for enduring life-income.
This is not a new fad. It has been effective for 50, 100, even 200+ years. It is simple, commonsense, and it works.
1. Canadian/Global Dividend Income
Dividends were long called “widows and orphans” investments because they are safer than other stocks. They're safe for the rest of us too. Paid from corporate earnings, dividends often rise and help keep pace with inflation. We focus this Canadian & Global Dividend mandate to include corporations of all types and sizes world-wide.
2. Global Real Estate Income
You could buy an extra property and rent it out - residential or commercial. This is a fairly popular idea. To avoid issues with tenants and other management hassles, we can use investment funds or pools to make this much easier. We generally diversify by region and globally, including commercial office, retail, industrial, and residential development. This reduces investment risks while gaining an income that rises well over the years ahead. (See more at Global Real Estate.)
3. Global Infrastructure Income
Not just railroads, highways and toll bridges, Infrastructure Income also attracts income from airports, deep water port facilities, hospital fees, prison services in the U.S., water treatment in the U.K. and developing world, pipelines and electrical grids, telecommunications and renewable energy enterprises. Some of these are government regulated (reliable income forever) while others get stronger with the wider economy.
Naturally many successful pension funds own such infrastructure mentioned here. While a giant pension fund can take years to accumulate 15% to 20% focus on infrastructure, we can secure this for our clients in a single day. (See more at Global Infrastructure Income.)
4. Fixed income: Domestic & Global
This includes Canadian and global bonds (of governments and corporations), also mortgage securities, cash deposits, high yield, floating-rate, etc. One of the greater challenges in the fixed-income world has been super-low interest rates. And when rates rise, bonds lose value that may never be recovered in our lifetime! Low interest rates, high taxes, capital losses, CPI and health inflation, can leave an unwary investor hurting.
Where can this fit for life-income? The answer us -- we have to be very careful. Shorter-duration bonds can function as an "income reservoir" and help safeguard what you'll draw for income over the next few years. Knowing how and when to increase yield can also enhance income over time. Your certified financial plan should clearly show your investor profile and the role of such investments in your immediate and long-term picture.
5. Life Pay-out Annuities
Life annuities are a fifth mandate - sometimes included as fixed-income except they're quite unique. Most people don't understand that annuities aren't based just on interest rates but also “mortality credits” that nothing else will provide. Strangely a life annuity can even guarantee beyond life until a person would have been 90! Only an advisor licensed for life insurance can discuss such strategies.
At younger ages annuity income seems modest, and inflation-indexing is expensive. Laddering annuities can increase the income stream over time. Owning annuities alongside other mandates (above) also provides for rising future needs. Non-registered annuities bring unique tax advantages too. (See more at Life Annuities)
Pictured at right here is a sample of what happened in the 2008 global financial meltdown. World markets fell four-times farther and took as much as six years to fully recover. Life Income Mandates dropped a fraction compared to stock markets yet were able to recover four-times faster.
SECURING INCOME AND LIFESTYLES.
Life Income Mandates can protect wealth, and secure healthy income for life. Combined with other investments, home equity, life and health insurances, and other pension values, these offer a strong and flexible INCOME to support LIFESTYLE through all the changing seasons of life.Yours in Financial Security for LIFE! Brian Weatherdon, MA, CFP, CLU, CPCA. 627 Guelph Line, Burlington, Ontario. L7R 3M7. Certified Financial Planner. Certified Retirement Coach. brian@SovereignWealth.ca 905-637-3500 x 223