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Welcome to Dynamic Wealth Management

Welcome to Dynamic Wealth Management's brand new website.  Please take a look around and take a moment to read the blog.  I will be posting my thoughts on investing and the markets every Monday, so check back every week to get the latest news.

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RRSP Myths Revealed PDF Print E-mail
Written by Kalson Jang   
Monday, 04 October 2010 22:56

When it comes to RRSP’s, I have noticed that many individuals have an RRSP, but many people aren’t aware of what an RRSP can do for them and what they can do with their RRSP.  If you do not know what an RRSP is, please read this article to familiarize yourself what an RRSP and TFSA is:

http://dynamicwealth.ca/index.php/home/23-tfsa-vs-rrsp-vs-cash-which-is-best

As a result of this lack of knowledge, I thought it would be helpful for me to clear up some of the common misconceptions I’ve come across with regards to RRSP’s.

1. RRSP Transfer

One of the most common misconceptions about RRSP’s is that it cannot be transferred to a new dealer once it’s been opened.  Many people believe that they are locked-in with the company that opened their original RRSP for them.  I have a lot of clients tell me that they are unhappy with the current Financial Advisor who is handling their account, but think that they cannot do anything about it because they believe that their money is locked in with this advisor; this is absolutely NOT true.  The most common solution to transfer the holdings of one RRSP to a new RRSP is by doing a T2033 rollover.  This is a Canada Revenue Agency (CRA) form used to transfer the assets from your old RRSP to your new RRSP without triggering any tax-consequences.  In other words, if you have $20,000 in your RRSP with Company A, you can sell all those assets and transfer them to Company B using a T2033 rollover.  This form tells CRA that you are selling your assets in RRSP A and are transferring the funds directly into RRSP B.  All you have to do is sign the forms and wait for the transaction to be processed.  You can do this as often as you like to transfer funds from one RRSP to another RRSP.

In fact, you are allowed to open multiple RRSP accounts from more than one financial institution and have them all working for you at the same time.  Using a T2033 rollover form, you can transfer money across all these different RRSP accounts any time you wish.

2. Best Investments for RRSP’s

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Where to Make Money in Today’s Uncertain Market PDF Print E-mail
Written by Kalson Jang   
Monday, 20 September 2010 20:37

In today’s market, I see a lot of people who are unsure of where they should be putting their money in order to see some good returns.  Some people are so unsure of the markets that they would rather hold their money in cash because they are afraid of losing it.  However, by doing so, those people are actually losing money because inflation is slowly eroding their money’s buying power.  That is why you should always be fully invested.  The only thing that should change is where your money is invested in various stages of the market cycle.  In my opinion, there are always places for you to make money in every type of market; however, finding those sectors is often the hardest thing to do.  That is why it’s important to partner yourself with a good Financial Advisor that has the expertise and knowledge to point you in the right direction.

Once again, my belief on where the best place to make money investing is Gold and Precious Metals.  For people who follow my blog on a regular basis, I may sound like a broken record because I have been preaching Gold and Precious Metals for quite some time now, but as the markets have shown, I definitely made the right call and the results speak for themselves.  Out of every asset class in the market, nothing and I mean absolutely no other asset class has outperformed Gold and Precious Metals this year.

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What Segregated Funds Are and Why You Want Them PDF Print E-mail
Written by Kalson Jang   
Monday, 23 August 2010 22:42

Most investors today are aware of what Mutual Funds are, but not as many investors are aware of what Segregated Funds are.  Simply put, Segregated Funds are the Insurance Industries version of Mutual Funds.  In many cases, Segregated Funds are actually clones of other mutual funds and hold the exact same stocks with exactly the same proportions.

This brings up the question as to why someone would consider a Segregated Fund over a Mutual Fund.  There are a variety of advantages that Segregated Funds offer over Mutual Funds which I will get into today.

When comparing Segregated Funds to Mutual Funds, the advantages of Segregated Funds are as follows:

Maturity Guarantee – Segregated Funds offer investors a Maturity Guarantee of either 75% or 100% of their net deposits after 10-years.  For example, if you invested $100,000 in a Segregated Fund and the market collapsed the next day and 10-years later, the market value of your investment was $10, the insurance company would cut you a cheque for $75,000 if you had a 75% Maturity Guarantee or $100,000 if you had a 100% Maturity Guarantee.  This guarantee is great for investors who have a very low risk tolerance, or for clients who anticipate that they will retire in 10-years and need to know with absolute certainty that the money they invest now will be 100% protected.

That being said, the probability of any fund being down after 10-years is very low, but the markets are unpredictable so if this guarantee helps you sleep better at night, it might be worth it!

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How to Get Someone Else to Pay for 35% of Your Child’s Education! PDF Print E-mail
Written by Kalson Jang   
Monday, 30 August 2010 22:39

This week’s article shows you how you can receive a government grant of 20% and an Education Bonus of 15% for a total of 35% by doing something as simple and important as saving money for your child’s education!

First off, I will define what an RESP is.  An RESP is a Registered Education Savings Plan whose purpose is to help you save money to pay for your child’s future educational expenses.  This investment is registered with the government and any money growing within the plan is not subject to any taxes and is allowed to grow tax-free within the plan.

When it comes time for your child to attend post-secondary education, the money in this plan will then be used to help pay for your child’s education expenses.

In addition to tax-free growth, opening an RESP provides the benefit of allowing you to receive the “Canada Education Savings Grant” (CESG).  This grant is provided to you automatically by the Government of Canada when you open an RESP.  The CESG is equal to 20% of your contributions per year up to a maximum of $500/year.  The lifetime grant amount is capped at $7,200.

For example, if you were to contribute, $2,500/year to your child’s RESP, the Government would grant you a 20% CESG equal to $500/year.  Therefore, your RESP account would have a total of $3,000 invested and working for you (instead of $2,500) Tax-Free!

In addition to this, you can setup a special investment plan that will provide an Education Bonus of up to 15% of your contributions towards your child’s education.  This Education Bonus is deposited into your child’s RESP account at the end of your agreed upon deposit period.  Using the previous example, your $2,500/year contribution would yield an Education Bonus of 15% of $2,500 = $375/year.

In total, your annual contribution of $2,500 into your child’s RESP will provide a total of $875/year in grants and bonuses which is equal to 35% of your annual deposit!  This is on top of any investment return you receive on your RESP contribution and CESG grants!

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Diversification – A MUST for Every Investment Portfolio PDF Print E-mail
Written by Kalson Jang   
Tuesday, 03 August 2010 21:59

When putting together a proper financial plan, proper diversification of investments is an absolute must for any investment portfolio.  In case you do not know what Diversification is, Diversification is the process of reducing risk by investing in a variety of assets so that “all your eggs are NOT in one basket”

Mutual Funds by definition are diversified, because they contain a number of different stocks.  In many cases, the weighted-average risk of a mutual fund is lower than the risk of the least risky investment contained within the mutual fund.  It is important to never be too concentrated in one stock as it opens you up to the possibility of “losing everything”.  No Mutual Fund will ever “lose everything” as the diversification of stocks reduces your risk dramatically.  Here’s a great example of what I mean:

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