COVID-19

Stressed about money? You’re not alone.

January 11, 2021 by Darcie Doell and Laurianne Osmak

On top of a pandemic to worry about, people are still losing sleep over their finances. In fact, a recent survey on financial stress found that nearly half of all respondents blamed money woes for keeping them up at night. More than one-third admitted that money was their number-one worry, while one-quarter cited personal health as their main concern. Not surprisingly, 44 per cent of participants said the COVID-19 pandemic has had an impact on their level of financial stress.

If you’re feeling stressed out about money, talking over the situation with your partner, family members or trusted advisor and then taking action can help relieve your financial worries. Here are some ideas.

WATCH: Money stress, a video about some of the things you can do to reduce stress about money.

Create a budget

If you don’t already have one, get started by creating a household budget – it’s an invaluable tool to help track income and expenses. When you know where your money is going each month, it’s easier to make adjustments to free up cash that can go towards savings or paying down debt. Examine your spending to see what can be eliminated or reduced, and take a hard look at discretionary (or non-essential) items. Explore free or lower-cost alternatives where you can. For example, try negotiating a better deal on certain products and services (think bulk purchases and bundled discounts). A budget works best when everyone in the household is on the same page, working towards common objectives.

Not sure where to start? Numerous online applications and tools are available to help. Some banking apps can analyze your bills and spending habits, track your spending, and even help you determine how much you can save and automatically transfer that amount into a savings account.

Pay down debt

Many of us have debt, and most of us don’t like to think about it. The key is being aware of how much interest you’re paying to carry that debt each month. If you can reduce the interest amount, more of your money could go towards paying down the principal. Concentrate on getting rid of debt that has the highest interest first. Consolidate wherever you can, for example, consolidating credit card balances onto a single line of credit at a lower interest rate. You could save money, plus it’s easier to pay one bill instead of several.

If you’re a homeowner who has available equity in your home, think about using it to pay off higher-interest debts. Or you can explore other options, such as an all-in-one account that lets you combine your mortgage and debts into one – a great way to help you pay both down faster at a lower interest rate.

Boost savings

There are three words to live by when it comes to saving: Pay. Yourself. First. Set up automatic payments to deposit a small amount from each paycheque into a high interest savings account or other savings vehicles, such as a Tax-Free Savings Account or Registered Retirement Savings Plan. You likely won’t miss it, and your savings could grow faster than you’d expect.

Start an emergency fund

It’s also a good idea to start a separate emergency fund for any unforeseen financial crises. Put in as much as you can afford weekly or monthly, whether it’s $5 or $50 – a little can add up to a lot. You could also consider opening a line of credit with a low interest rate as well, so that you don’t need to rely strictly on cash savings to pay for an unexpected expense.

Get professional advice

No matter your situation, a professional perspective can be invaluable. Let’s face it, most people have neither the time nor the expertise to tackle the complexities of their financial affairs alone. An advisor will learn about your situation and establish your risk profile. They will work with you to determine short-term and long-term goals and develop a flexible plan of action to ensure those goals are achievable.

Build a financial plan

Work with your advisor to build a comprehensive plan that balances your current needs and future goals. A good plan should be easily adaptable to changing circumstances, while including milestones to help you gauge progress. It will most likely include:

Disciplined savings
A customized investment strategy based on your risk profile and time horizon
Debt management and cash flow planning
Tax strategy
Insurance solutions (life, disability or critical illness) to help protect your family
Retirement plan
Will and estate plan to protect your legacy

And as we all know, life is full of unexpected change, so it’s wise to review your plan regularly.

With a few simple steps and some expert advice, you can take the worry out of your finances. Speak to your advisor to get started.

Small business safeguards: Understanding the importance of having a creditor protection strategy

November 30, 2020 by Darcie Doell and Laurianne Osmak

The Canadian economy is fuelled by the enthusiastic hard work of the small business owner. The Business Development Bank of Canada estimates that 70 per cent of the country’s private labour force is employed by small businesses, and the diversity is amazing – from make-your-own jewellery storefronts to microbrew pubs to the dental clinic in your neighbourhood.

A small business venture may be a deeply personal dream come true, but even dreams don’t always work out. Surprisingly, many owners, officers and directors don’t realize their personal assets can be at risk of creditor claims in the event that something goes wrong with the business. The coronavirus pandemic is certainly a challenging time, and it points to the importance of having a solid creditor protection strategy to help minimize the impact in the event your venture doesn’t continue to flourish.

Make your business creditor-proof

The best time to implement a creditor-proofing strategy is either when the business is starting up or while it is healthy and not facing creditor claims. It’s almost impossible to establish a creditor protection plan when a business is in trouble. Tax and legal professionals, with the assistance of your advisor, can help you in developing a plan that covers all the bases. The following tips can help to serve as a guide in the process:

Think about incorporating your business if it is either large or at risk of litigation. Professional practices should carefully consider this option.
Not all debt is created equal. Always pay your statutory debt on time; directors and officers can be personally liable for these debts (see A note on liability below).
Ensure sufficient personal liability coverage (e.g., director’s home and auto coverage). In the event of a serious accident, your personal assets (e.g., home, car, boat) could be seized to pay any shortfall in insurance coverage.
Ensure that your spouse is outside the reach of creditors in the event that anything goes wrong in the business. If your spouse is a director or officer, they can carry liability for debts. If your spouse is an employee, or not involved in the business, you will have much more flexibility in your creditor protection plan.
Make use of spousal Registered Retirement Savings Plans (RRSPs) to transfer wealth to a spouse – and away from creditor risk.
If your spouse is not involved in the business, consider moving your personal assets – such as your house and your savings – to your spouse’s name. You can transfer home ownership to your spouse tax-free.
Hold life insurance contracts personally (not corporately). Name a “family class” beneficiary on life insurance contracts and list yourself as both the owner and the annuitant/insured. Doing so may prevent creditors from seizing the assets, as well as ensuring the assets transfer immediately to your beneficiary at the time of your death. Remember that if the death benefit is payable to your estate, it can get tied up in probate and may be subject to fees and seizure by creditors of your estate.
Place your savings into investment products sold by insurance companies. A segregated fund contract or a Guaranteed Interest Contract (GIC) product purchased through an insurance company offers potential creditor protection when you name a “family class” or irrevocable beneficiary.

Hoping for the best while preparing for the worst is just good planning if you are a business owner. You are investing a great deal financially, emotionally and physically to create a successful venture. Your advisor can help you to create a plan that will protect your hard-earned assets from creditors.

What is a “family class” beneficiary?
A family class designation is a spouse, child, grandchild or parent of the annuitant in all provinces except Quebec. In Quebec, a family class designation includes the spouse, ascendants and descendants of the policy owner.

A note on liability
Business owners, officers and directors can be personally liable for:Any debts they have given a personal guaranteeAny statutory debts, such as wages and vacation payAny source deductions and commodity taxesHealth and safety violations, including environmental damage

Living benefits insurance: Taking the worry out of what-if

November 16, 2020 by Darcie Doell and Laurianne Osmak

The sudden emergence of the COVID-19 pandemic has affected people’s lives in unexpected, if not unimaginable, ways. When Canadians suddenly needed to assess their ability to protect themselves and their loved ones against a serious health threat, many realized how unprepared they were for the effect it would have on their finances, lifestyle, relationships and employment, not to mention their general health and well-being. At times like this, people think, “What happens if I’m not prepared?”

Global emergencies aside, unexpected circumstances, such as an illness or injury, can impact your income and the lifestyle you’re accustomed to. If that illness or injury makes it impossible for you to work or forces you to rely on others to take care of you, it will affect your financial health as well.

Protect what’s important

Canada has a universal health care system, but that doesn’t mean everything is free. All sorts of treatments, therapies, tests and prescription drugs aren’t covered by the system. That’s why taking action to ensure you’re better prepared to cover potential out-of-pocket health care costs with living benefits insurance can be a vital investment in your future. You can also extend that protection to your family and the life you’ve worked hard to build.

Experts recommend purchasing living benefits insurance earlier in life, even though thoughts of illness and disability may seem like more remote possibilities. The advantages include lower monthly premiums and the comfort of knowing you’re protected over the course of your life, not just at an advanced age.

Match solutions with your needs

Regardless of how prepared you are to handle an unexpected event, facing the reality of it can be a very different experience, especially when it comes to your health. If you became disabled or were diagnosed with a critical illness, could you afford the added expenses? In many cases, these expenses go beyond what government-sponsored health coverage provides.

Living benefits insurance offers the flexibility to suit your specific needs. These plans can be tailored to work in tandem with employee benefit plans or recognize the fact that you own and operate a business or work independently. There are two kinds of living benefits insurance:

Critical illness insurance pays a lump sum if you’re diagnosed with an illness or condition that’s covered by your policy. The benefit can help finance health care treatments, cover household and family-related costs, manage business expenses and protect what you have set aside for your retirement, so that you can focus on recovery.
Disability insurance protects your income if you are unable to work as a result of either physical or mental health disabilities. Regular payments provide you with a percentage of your income. The benefit is designed to help replace lost income and, for business owners, reimburse business expenses and fund a buy-out agreement if necessary.

Having a combination of critical illness and disability insurance may be a good solution for you. This way, additional coverage can be matched with your circumstances. Consider someone with a $60,000 annual salary who is diagnosed with a critical illness and unable to work.

The importance of having a plan

The COVID-19 pandemic has been a unique and challenging experience for everyone, but valuable too, in that it exposed our vulnerabilities and reminded us that it’s important to be financially prepared for what can occur. Most people don’t expect to be faced with the reality of becoming disabled or being diagnosed with a critical illness, but we all know it can happen. The protection of living benefits insurance can be one of the most valuable assets you have. Speaking with your advisor is the first step towards understanding the best options available to help take the worry out of the what-if.

What’s your risk?

Your risk of becoming disabled or developing a critical illness changes based on your age, lifestyle choices and other factors. The tables below provide examples of the risks for both a man and a woman, age 35. You can find out more about your personal risk at www.insureright.ca/what-is-your-risk.

35-year-old male, non-smoker*
Risk of disability before age 65	19%
Risk of critical illness before age 65	26%
Risk of dying before age 65	6%

35-year-old female, non-smoker*
Risk of disability before age 65	26%
Risk of critical illness before age 65	19%
Risk of dying before age 65	4%

Take action against fraud: How to recognize scams and protect your financial assets

October 19, 2020 by Darcie Doell and Laurianne Osmak

In 2019 in Canada, there were 19,285 victims of fraud and $98 million lost to fraud, not including unreported cases. Scams affecting individuals come in so many different forms that the Canada Anti-Fraud Centre has compiled an alphabetical list.

One challenge is that those who perpetrate fraud are constantly trying out new strategies that don’t yet appear on a list. As COVID-19 spread around the world, for example, private companies started trying to sell “faster” tests, people showed up on doorsteps offering “decontamination” services and fraudsters posing as workers for charitable organizations offering free medical products (for example, masks) for a donation.

That’s why it’s so important to be alert to red flags and to keep a watchful eye out for signs a loved one may be a victim of fraud. Keep in mind that when advisors have the name of a “trusted contact person” [link to article], they can play a more active role in protecting their clients from fraud.

Scams to look out for

Investment fraud specifically targets investors with a deceptive offer. Examples of investment fraud include the following.

Pyramid schemes

These scams recruit people to buy merchandise or invest in a business and then in turn to recruit more people to do the same thing. Each layer of people collects money from the layers below, but it doesn’t take many layers to reach a point where it becomes necessary to recruit more people than there are living on the entire planet. This is why pyramid schemes are unsustainable. When they collapse the people in the lower layers can lose a lot of money.

Ponzi schemes

A Ponzi scheme often promises high returns with low risk, but it pays those returns from the money other investors contribute. There may be no underlying investment; when new investors stop coming, the returns dry up and the promoter may disappear with whatever investor contributions are left.

Boiler room scams

These scams offer shares for sale just before a promising company lists on the stock exchange. The trouble is that the promising company doesn’t actually exist. It’s just a group of people making calls from a temporary office (or “boiler room”), and they vanish once investors hand over their money.

Pump and dump scams

The promoters of the scheme aggressively hype a specific stock that they are heavily invested in. As investors buy the stock, they drive the stock’s price up – then the promoters sell, the price sinks and the shares become virtually worthless.

RRSP scams

This scam promises a way to take money out of a Registered Retirement Savings Plan (RRSP) tax-free by withdrawing and then buying shares of an “RRSP-eligible company.” But the company collapses once it has the money, and the taxes are still due.

Forex scams

These advertise foreign exchange (forex) investment opportunities that either don’t exist (fraudsters simply take the money and run) or that are much more risky than advertised. Either way, money evaporates.

Be proactive to protect your investments

Even if you hear about an opportunity through a trusted source, such as a friend or family member, don’t skip steps. Research the organization and see if the securities regulator has taken any action against it. Talk to your advisor about it as well – they can be your partner in sidestepping fraud.

In general, fraudsters tend to prey on fear and greed, so be suspicious if someone’s tone is threatening or an offer seems too good to be true. It’s good practice to deal only with registered advisors (check the list on the Canadian Securities Administrators website at www.aretheyregistered.ca), to write cheques only to registered firms (not to individual advisors) and to invest only in products that have filed a prospectus with the securities regulator.

Request documentation on any investment you’re considering, and never sign a blank form or a form that you do not completely understand. Remember that reputable advisors are happy to take the time to fully explain products and answer all your questions.

Overall, greater awareness may be the best defence. Learning about fraud, educating friends and family, and discussing it with your advisor can help you better protect your assets from its financial and emotional consequences.

Who falls for investment fraud? Anyone can fall for investment fraud, but the most likely victims share certain characteristics.

Investors who have these tendencies should be especially careful when evaluating new investment opportunities – but everyone should be on the lookout for warning signs such as the promise of high returns with no risk, pressure to make quick decisions or a demand to keep an opportunity secret.

No in-person meetings during COVID-19 crisis

March 24, 2020 by Darcie Doell and Laurianne Osmak

Due to the recent announcements from the Saskatchewan Government, we have made the decision that no in-person meetings will be scheduled including walk-ins. Conference calls, webinars and online meetings are available to help serve your needs. We feel this is the best option for the health and safety of our clients, team, and the community.

To schedule your non-face-to-face meeting or have any questions, please reach out to us as noted below:

Phone: 306-922-2020
Email: Michelle, Wealth Associate – officeadmin@dowealth.ca
Email: Darcie Doell, Wealth Advisor – darcie@dowealth.ca
Email: Laurianne Osmak, Wealth Advisor – laurianne@dowealth.ca
Website: www.dowealth.ca

We appreciate your understanding during this time of uncertainty and promise to keep you posted. Stay positive and enjoy this time with your family.

From all of us at Doell Osmak Wealth Management, we thank you for your loyalty over the years and we look forward to seeing you again soon!