Proving income when all you have are investments?
- Thread starter stinkynuts
- Start date
It can also be owning Bonds that pay interest or Stocks that pay regular Dividends; but even that is not a guarantee that the income will continue into the foreseeable future.
Real Estate Investment Trusts (REITS) were favoured by investors due to their high yields....will, things have gone to shit now....people and companies can't pay their rents, and the REITS pay their distributions to the Unitholders from those rent payments.
H&R REIT just slashed their payout by 50%, for example.
https://www.cibc.com/en/personal-ba...l-funds/income-funds/monthly-income-fund.html
The loophole, I think is to invest in funds that pay you a monthly income. I think this would work.
The loophole, I think is to invest in funds that pay you a monthly income. I think this would work.
Keep in mind that Bank Mutual Funds have high MERs
www.cibcassetmanagement.com/email/fund-facts/pdf/cib_512_en.pdf
For Class A units on this particular fund, the MER is 1.50%, which is charged directly to the fund and diminishes your returns over time
Banks can certainly give you Investment Secured Loans....but this is above the pay grade of most Personal Bankers you meet in the Branch...you would need to speak to a Credit Specialist
If you can't get your Broker to give you a Margin Loan based on the value of the securities you own, Stinkynuts, and you can't get a loan from the Bank, then you probably have to go to a Private Lender...which means the cost of borrowing is going to be significantly more.
As I read the various posts I think the question is whether the increase in value counts as income...specifically with a bank. For sure not. Just like your house. Until you sell it is just an estimate of value. Now a bank may lend you money on a secured line of credit on a house, for example. And that is based on the value of the property...but also you would need to have sufficient income to cover payments. Aside from the valuation.
So...with a portfolio of investments the only way I know to show it as income is to invest in income generating things... stocks that pay dividends, fixed income investments that pay interest, perhaps preferred shares...those sorts of things. My favorite is dividend paying ETF's... lower MERs than mutual funds, lots of diversification possible, but none or limited active management by anyone. But generating 80K from 1M in assets...that is pretty ambitious by today's standards. 4% might be easier to arrange...and with current volatility your capital value can be all over the place.
So...with a portfolio of investments the only way I know to show it as income is to invest in income generating things... stocks that pay dividends, fixed income investments that pay interest, perhaps preferred shares...those sorts of things. My favorite is dividend paying ETF's... lower MERs than mutual funds, lots of diversification possible, but none or limited active management by anyone. But generating 80K from 1M in assets...that is pretty ambitious by today's standards. 4% might be easier to arrange...and with current volatility your capital value can be all over the place.
How old are you stinkynuts?
Do you have any RRSP contribution room?
You could always contribute a substantial amount of it into an RRSP, assuming you have contribution room, then convert it to a RIF, and what you withdraw is considered income. It will show up on your T4-RIF. When you contribute it to the RRSP capital gains will be deemed taken.
In addition, don't confuse withdraw with sell. You could transfer the assets in-kind back to a non-registered account (i.e. still keep them as is) but the movement itself counts as a withdrawal. You will have to pay tax on the withdrawal, but the contribution you made can offset that.
I think that that would work, unless you don't have any substantial contribution room. Could be wrong though, an expert tax person would need to analyse this idea.
Do you have any RRSP contribution room?
You could always contribute a substantial amount of it into an RRSP, assuming you have contribution room, then convert it to a RIF, and what you withdraw is considered income. It will show up on your T4-RIF. When you contribute it to the RRSP capital gains will be deemed taken.
In addition, don't confuse withdraw with sell. You could transfer the assets in-kind back to a non-registered account (i.e. still keep them as is) but the movement itself counts as a withdrawal. You will have to pay tax on the withdrawal, but the contribution you made can offset that.
I think that that would work, unless you don't have any substantial contribution room. Could be wrong though, an expert tax person would need to analyse this idea.
From my experience.
Investments are good but you also need a cash reserve, bankers will look more favourably on you if you show liquidity. Also, hire a quality accountant to deal with the CRA, their charges pay for themselves. My rule for hiring an accountant: If he or she looks modest or disheveled, hire them. If the accountant looks dapper, RUN AWAY!
Even though the current interest rate is worse than shit, I still deposit money into my savings account every month.
Investments are good but you also need a cash reserve, bankers will look more favourably on you if you show liquidity. Also, hire a quality accountant to deal with the CRA, their charges pay for themselves. My rule for hiring an accountant: If he or she looks modest or disheveled, hire them. If the accountant looks dapper, RUN AWAY!
Even though the current interest rate is worse than shit, I still deposit money into my savings account every month.
If you only have investments the best thing you can do for yourself is to build some good credit. I did not get my first credit card until I was 35 years old. I was brought up to pay cash and if I did not have the cash I had to do without. Since I got my credit cards ( World Elite Canadian Tire and World Elite Presidents Choice ) I have never paid a annual fee or interest fee on the cards. The Canadian Tire World Elite gives you free emergency auto towing and one free oil change a year. Now I pay at the end of the month and build up about $500-600 on each card in points annually. Regular payments on any card will get you a good credit score then step up to the Mastercard World Elite cards, that is sort of a higher tier of credit credibility.
