Creating new wealth while reducing taxes and protecting existing assets is a lofty goal.
However, strategies and solutions do exist to achieve the desired results, explains Chris Karram, founder of SafeBridge Private Wealth.
He says most of his clients are in an interesting frame of mind as they are intent on finding ways to reduce, defer, or even eliminate tax, while simultaneously maintaining liquidity to seize upon investment opportunities as they arise.
“Many of our clients are in wealth-creation mode, so they want to ensure they have funds available when they need it,” says Chris.
SafeBridge Private Wealth often addresses the tax situation by finding the right asset class for their clients’ portfolios. They design and implement financial plans for those who are establishing, or have already established, their wealth.
This is where life insurance is an essential investment tool and offers similar benefits to a Tax-Free Savings Account, without the annual maximum contribution limits. A well-designed policy can even be funded using personal or corporate tax dollars – or both.
Life insurance has been paying dividends since 1848 in Canada, with today’s dividend yields paying out between 5.1 and 6.2 percent. They have averaged over 7 percent annually in the past 30 years, with a lower standard deviation than a traditional five-year GIC portfolio.
“Life insurance is a core asset that can be exceptionally effective and offers tremendous benefits,” says Chris. “It is continuing to be a cornerstone of quality financial portfolios due to its ability to grow wealth within a tax-free environment.”
Included in the tax-sheltered life insurance policy is an ability to access funds immediately when a great investment opportunity comes forth; more than simply getting money out, it’s about keeping the portfolio growing at the same rate.
This can be achieved by borrowing against the existing funds within the life insurance policy, much like borrowing against the equity in a home or cottage to invest elsewhere.
“However, you’re leveraging the funds in one portfolio to invest in another area and double the opportunity to grow your wealth,” says Chris. “Your growth within the life insurance asset doesn’t slow and your capital is available for new investments.”
These are only a couple of examples of the Safebridge Private Wealth “build, protect, multiply” approach, which considers all aspects of acquiring and maintaining family wealth. Their team will design and plan portfolio solutions to meet your personal financial goals.
TEXT CHRIS OCCHIUZZI
PHOTOS SCOTT TURNBULL
