Filling out Form T2151 is a common occurrence in retirement planning for Canadian workers looking to maximize their savings for later in life. The form is but one step in the process of streamlining and jostling your various retirement accounts and savings pools in order to gain the highest return on your investments, and it likely doesn’t factor heavily into your overall thinking. Still, making sure that you fill out paperwork like this in the right way and being sure to create an overriding strategy that will carry your investments forward will pay dividends in the long run.
Building a savings strategy takes a long vision.
Canadians looking to boost their overall savings will have to understand that stocks, commodities, and alternative investment holdings all factor heavily into success over the long term. In order to retire in the style that you’ve become accustomed to in your working years, you’ll have to create the equivalent of a second income stream built off of your investment profile. Many investors do this by engaging with the market over the long term. Many investors have gotten rich while watching aggressive index fund buys grow exponentially over the course of a few decades.
Index funds are a particularly strong inclusion in anyone’s retirement portfolio. Index funds are managed by investment banking firms that specialize in targeting specific sectors of the market with quarterly rebalancing designed to continually maximize returns on investment. The market on its own grows at a rate of about 8 percent every year, adjusted for boom and bust years. Over the centuries that people have traded stocks on the open market, the market itself has continued through feast and famine to perform admirably. This leads many investors to rely wholeheartedly on continued good performance over the years and decades to come. With a strategy invested solely in the indexing of the marketplace, you can relax and watch your capital grow. However, the returns are limited without the infusion of new risk and targeted buys as well.
Turn your savings into a viable business opportunity.
As you continue to mature as an investor, you’ll likely come upon alternative investment opportunities that take you and your cash back out of the market altogether. This is only natural. There are many other commodity markets that offer a major increase in the potential returns available. Real estate is perhaps the most lucrative of these additional marketplaces.
Professional realtors have been steering high net worth clients toward real estate investments for generations. John Foresi, the Venterra Realty CEO, is a huge proponent of real estate in both major investment styles: home flipping and the generation of rental income.
Rental income is a particularly lucrative opportunity for homeowners looking to expand their footprint and savings portfolio at the same time. Purchasing real estate that you intend to hold will grow your overall net worth while providing a valuable asset in the short term that generates monthly cash flow as well. Those who grow their real estate holdings will need to involve some tertiary services in order to fully spread their wings, though. Check printing is a major benefit to those managing one or more investment properties that are generating monthly rental income.
Automated services cut down on bookkeeping mistakes and improve your overall experience in the industry itself. Rental income can quickly supplement and then overtake your actual salary if you lean into the process of acquiring and managing rental property. The most important thing to remember about real estate investments is the ability to leverage current property into future buying opportunities. Your own home’s equity can be mobilized in order to secure a new mortgage loan with favorable repayment terms on your rental property. Also, the income generated by this second home can go directly toward paying down the monthly payments on its mortgage, making the buy a break-even cost as soon as you find a tenant for your home. You might even begin to turn a profit in your first year if you’ve found a high-quality home at a good price.
Alternatively, you could opt to flip houses instead, which is a vehicle for delivering large, lump sum payouts rather than a trickle of monthly rental income. With this strategy, you focus on foreclosed homes or other houses selling at a discounted rate and then fix them up in order to resell the property at an increased price. Because of the fast paced nature of this strategy, many home buyers can turn around a home in a month or less and essentially negate the interest owed on the mortgage loan that was used to purchase the property to begin with. Once again, taking advantage of the equity in your own home is a great way to reduce your repayment burden as much as possible so that any gross profit you make on the sale can find its way into your pocket instead of the bank’s.
Channeling cash into the precious metals market is another winning long term strategy.
Another great way to produce long term stability is with gold or silver buys. Precious metals are typically regarded as a long term investment as their value changes greatly over the long term buy fluctuates in a semi-flat pattern in short term trading sessions. Gold or silver bullion is also useful as a collateral commodity that can be leveraged to take out low interest loans for other purchases.
Evaluating your long term savings goals is an important part of any Canadian’s life. Understanding where you hope to be in ten, twenty, or thirty years’ time is the best way to begin to save in pursuit of that plan. Growing wealth for the long term takes research, constant dedication to hitting these savings targets, and a consistent strategy of rebalancing that may see your retirements accounts shift locations and investment types on multiple occasions. The best way to create the wealth that you want is to treat your savings accounts and goals as if they were a business. Being in the business of your own success is a great position to find yourself in, and it’s the only way to drive long term growth for your retirement.