February 2016 SWM Letter

We can briefly answer a few questions this month, with special thanks to clients and various readers who enjoy receiving our monthly letter.  ... By the way, special thanks for one who suggested "A Lifetime of Health" as a companion to my 2013 book, "A Lifetime of Wealth - and How Not To Lose It."   Wouldn't those two volumes go well together?   🙂


Pic _ headphones _feb2016These are wonderful on long inter-continental flights and in how we treat the daily barrage of business news.  Emotions and News can be hard on Wealth.  In the 1970s they said house prices were too high so Jack and his family kept renting …until they retired and owned nothing.  In the 1980s Time Magazine said investments were expensive and risky so Jill and her family stayed away from anything like that, losing out on dividends and growth that would have multiplied their money >10-fold.

Imagine someone who avoids flying because the TV forecasts poor weather.  Wouldn’t it be smarter to find the gate, prepare for lift-off, don the noise-canceling headphones and relax to our favourite music?


It’s clearest at a time like this when investment markets have fallen 25%  since last April.   Our accounts fared far better because “the FORCE was with us” in two ways.  (a) We strategically and globally diversified investment funds and managers.  (b) We focus on income you’ll continue receiving through strong mandates for life-income.  Picture if you owned an office building and the value dropped in a year from $3 million to $2 ½ million but you received $200,000 net income to put in your pocket.  Would you sell the building in disgust?  Or would you keep on track as planned?  Wisely you’d choose to stay on track, letting the capital value grow when it will, along with a rising supply of income that will make your future richer.  (PS:  news reports are typically silent about this, but combining dividends, real estate and infrastructure income as we do can reward you handsomely.)

WOULD YOU CHOOSE 0% or 4.0%?   

Pic _ BEAVERBanks are paying near-nothing on deposits but their dividends are yielding 4% to 5%.  American news media have been saying to sell off banks and park money at 0%, to buy them again when they’re more expensive for a yield under 3%.  An industrious beaver would turn off the TV, keep the banks, pocket the dividends, and enjoy 15-20% rise when markets settle.


Enjoy this if you have a flash-player.  This Andex chart is now interactive so you can play with it on-screen.  If you cannot open it, ask me for a different link or I can give you a hard-copy.  The result is clear:  as markets fall they also rise.  The sweetest news is that : (a) rises exceed falls,  (b) rises outlast falls.  Click on the “Bull and Bear Markets” box to enlarge that segment and see what I mean.   (Caution:  clicking on this Andex with your Valentine can be hazardous in the absence of Chocolate.) 

LIFE ANNUITY VALUES – final two questions today.

One family asks about Life Annuity income in their late-70s.  We can build a cash-flow between 6% to 9% -- even tax-free.  If people are afraid they’ll live to 90 or 100+ and outlive their money, this life-annuity can pay income forever as long as you’re living (or to age 90 if you die sooner).  This is a powerful investment to safe-guard life income and reduce tax.  As I’ve shared before on Life Annuities we parallel this with other income mandates to ensure high-income plus flexibility while living and for your estate.    (Link here to Life Annuities.)

Another family asks about Life Annuities for an adult child who is an alcoholic.  Thoughtless estate planning can be most destructive when heirs have substance abuse and various other illnesses.  Child is 40 and the question is whether aging parents should arrange a life annuity instead of a cash inheritance.  The opportunity is to arrange life-income to help a child without giving them money to destroy themselves.

Problem is, 40 is very young for a life annuity, and it currently pays < 4%.  We'll want to discuss how to protect the inheritance without hurting the heir.  We can also identify stronger income investments, likely owned in a Trust that outlives that heir and protects capital for the heir’s later-needs and other survivors.


Thank you for any and all questions you share with us.  Life raises all kinds of needs, worries, and opportunities which allow us to be of service.  We are grateful to serve – this is why we’re here.  Today’s letter is brief:  consider if something here is worth sharing with a friend, if it will answer a need or introduce how we serve.

Yours in Financial Security for LIFE!


Brian Weatherdon, MA. CFP. CLU. CPCA. CRC. MDRT.  905-637-3500 x 223
627 Guelph Line, Burlington, Ontario. L7R 3M7.   1-877-937-3500 FREE x 223
Ret.Coach SEALAmazon (2013): “A Lifetime Of Wealth — And How Not To Lose It.”
Amazon (2015):   Your Business, Your Retirement: Halton Retirement Study.
** This monthly letter touches on key strategies in Canadian and global investing and financial planning. This letter is not an offer to sell any kind of security, insurance, or program. Historical returns and risk measures are not a valid guide to future performance. For information on near 10,000 investment funds and other financial structures please feel free to contact me directly. Returns shown are from Morningstar and other major financial news media. Research is sourced from leading sources including GLC, RBC, CIBC, Franklin Templeton, Mackenzie, and a wide range of highly reputed firms. Opinions reflected in this letter belong solely to the author and no other body is responsible for the content expressed here. We value opportunity to serve alongside your legal and accounting advisors with whom we can best protect your financial security and advance your goals. We are grateful always to receive your comments and questions.


  1. Hello Brian ~ As usual well done, this newsletter is a ‘wealth’ of information 😉
    And if you’re interested in the “Lifetime of Health” then I’m in for writing it for you!
    Thank you for your insight and for sharing your vast knowledge.

    • Dear Suzanne, I’ll look forward to your “Lifetime of Health” …that’s awesome. We can share it here with our readers too. Wealth and Health aren’t just poetic — they’re LIFE. 🙂

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