Personal Finance Quotes

When bankers see a lot of inquiries on your file, they regard you as a credit seeker. And even worse, if there are no recent loans, mortgages or credit cards to match each inquiry, they'll assume you were declined for financing at another institution, and therefore you must be a bad credit risk. (Please note: Your own inquiries about your file at the credit bureau's office are not recorded on your file in most jurisdictions). [2009] - Don R. Campbell

Beacon Score: Credit scores range from 400 to 850; The average consumer has a score of 700; First-rate bankers want a score of at least 640; Second-level bankers want a minimum score of 600 or higher. The number of inquiries on your file can negatively impact your score. Unsophisticated investors who shop loans to many institutions, or apply for a bunch of credit cards as a way to invest in real estate, will have lower scores. [2009] - Don R. Campbell

Most banks have a list of acceptable appraisers. When appraisers do appraisals for a bank, they tend to protect their trusted position with the bank. When they do appraisals for vendors, they tend towards the higher end of the range. [2009] - Don R. Campbell

Bad debt is any debt where you CANNOT use the interest charge as a deduction on your tax return. There is only one kind of debt where you can use the interest charge as a deduction, and that is debt incurred to produce income whether passively through investments or actively through a business. In only these two cases can the interest costs of borrowing money be applied against the income being earned with that borrowed money. You simply pay tax on the difference. [2008] - Dwayne Daku

If your RRSP returns are substantially above your mortgage rate, continue to invest in RRSPs. Generally that rate needs to average at least 2% points higher than your mortgage interest rate for ALL the years of the investment, in order for it to be better than paying off your mortgage. The same basic rule applies to any other debt that you may be servicing. A good rule of thumb is to get rid of the debt first, unless the investment guarantees a return above the interest rate you are paying on the debt. [2008] - Dwayne Daku

Life Insurance Tax Shelters (LITS) offer an option that will not only permit your money to grow Tax-Free, but if structured properly, will permit you to access the funds without tax ramifications. Each insurance company has their own name for their unique plan, but the plans basically operate like this. You participate in an insurance plan that also permits you to deposit money into it. The amount deposited can be very flexible and may change as you desire over the years, however, you will always be required to participate in the insurance coverage. Our recommendation is that you subscribe to the lowest "decreasing term" possible. You want your actual insurance premiums to be the lowest necessary to keep the plan active, because you want to take the extra money and deposit it within the plan as an investment. [2008] - Dwayne Daku

Here is what makes LITS the GREATEST Tax Shelter available in Canada: Instead of withdrawing the money, visit your bank (your insurance company may also do this for you) and borrow money using the policy as the security. Generally , do not borrow the full amount all at one time, but annually as you have need of it. The arrangement you make for the loan is that no repayment will ever be made on it, but at the time of your death the funds from the LITS will be used to cover the total owing. This permits you to access the earnings from this money Tax-Free because loans have no tax ramifications and so the money is totally yours. [2008] - Dwayne Daku

If your business is successful, when selling the business you can claim up to $750,000 as capital gains exemption, which moves that amount into your personal hands without tax ramifications. If you are doubly fortunate in that your marriage survived the venture and your wife was a partner in it, you can double that $750,000 to $1.5 million. [2008] - Dwayne Daku

If you want to leave a portion of your assets (whether cash or physical property) to a charity, why not structure it a little differently now, so that you can use the tax credits on your current tax returns, rather than having them apply in a lump sum to your assets? This procedure is a little more complicated but can have major tax benefits, now. The program is called a Charitable Remainder Trust. [2008] - Dwayne Daku

You take out a life insurance policy with the charity as the beneficiary and the tax department permits you to claim the premiums as a charitable donation. Then upon your passing the charity gets the full proceeds of the policy. [2008] - Dwayne Daku

There are times that the government does come up with a plan to help certain sectors of the economy, that can be a great opportunity to save on taxes and earn income. This they did in a program called Flow-Through Shares. The risk is that sometimes shares can become worthless. Also, sometimes it takes much longer to bring the product to market than was expected and you have to wait for a long period for a return on your investment. There is also the fact that you cannot sell the shares for a period of 18 to 24 months as dictated in the share structure. The upside is, if your research into the investment was thorough, you could have valuable shares to sell or a nice income stream of dividend income for years to come. [2008] - Dwayne Daku

If you moved at least 40 kilometres to start a new job or business, you can deduct most of the expenses of that move. [2008] - Dwayne Daku

Your medical expenses must exceed $1,844 or 3% of your net income to be claimed as tax credit. You can claim for any 12 month period, so note the dates when tallying and use a period of time that will give you the highest total. Also, if you are paying any health care premiums these can be added into the total. Like charitable donations it is also possible to combine the medical receipts under one taxpayer. [2008] - Dwayne Daku

A currency's purpose is to acquire assets, assets that are either appreciating in value or producing cash flow. [2008] - Robert T. Kiyosaki

It's dangerous to let people know you are rich. [2008] - Robert T. Kiyosaki

Those with a high financial IQ have wills, trusts, and other legal means of protecting their wealth and final wishes from death predators. [2008] - Robert T. Kiyosaki

The problem with cutting expenses, increasing debt, and selling assets is that it usually makes the situation worse. Increasing income, rather than reducing expenses, was a better way to solve the problem of a budget deficit. [2008] - Robert T. Kiyosaki

We saved money until we had over a year's expenses in cash. Instead of holding cash in a retail bank, we hold it in gold and silver ETFs (exchange-traded funds). [2008] - Robert T. Kiyosaki

The higher percentage you direct to your asset column, the higher your financial IQ. Today, we direct approximately 80 percent of our income directly into the asset column and do our best to survive on 20 percent. [2008] - Robert T. Kiyosaki

There are two financial concepts: control and leverage. The major flaw in paper assets such as savings, stocks, bonds, mutual funds, and index funds is the lack of control. The definition of leverage is doing more with less. If a person has control, leverage can be applied with very little risk. One of the reasons why I stay clear of most stocks and mutual funds is because I have no control over expenses. Assets such as a business or real estate require more financial intelligence, allow for more financial control, and permit a higher degree of leverage with very low risk. [2008] - Robert T. Kiyosaki