If you have enough equity in your home you can get a second mortgage or a line of credit to purchase your investment property . You can also refinance your mortgage to pull equity out from your home in order to invest.

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I am in the process of settling my divorce. i have just recently purchased a house and now have a fairly substantial mortgage. i am hoping to retire in 5 years. the money that i was hoping to get from the settlement is a little less than i was hoping for but figured i could swing it anyways. however , i have just now been informed that i will not be getting cash (as i had hoped) but will be getting my ex's rrsp investments transferred over to me. therefore, unless i want to be taxed at 43% of 160,000$ this year for income tax i cannot withdraw the money and pay off my mortgage. whatever i withdraw is apparently added to my income and i have to pay taxes on the whole thing. so...what would be the best way to pay off my mortgage in a reasonable time frame so i am not being taxed to the hilt and not having to eventually be living from pension cheque to pension cheque each month, paying off a mortgage, bills, food, etc, for the rest of my life and not knowing where the next $ will be

Withdrawing the money to pay down the mortgage may be a bad idea even if the tax man were not lurking in the shadows -- mortgage money is cheap, and the RRSP investment may have a higher yield than the mortgage interest rate. So, leave the mortgage in place and draw, if you must, on the RRSP at the smallest rate that you can manage.

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Hi all, my location is ontario, canada. i'm considering registering a self directed rrsp second mortgage on an investment property(triplex) that i currently own. wanted to ask: - should i ask the mortgage broker (who is arranging the first mortgage) if i can do that in advance or can i just do it even after the purchase/closing date is fine? - should i have a lawyer register the self directed rrsp second mortgage or not necessarily? - does it affect me negatively, in a way, because if i register a 2nd mortgage i will show more debt in my next mortgage application? in other words, does registering a self directed rrsp/2nd mortgage affect our credit negatively? and lastly: - what is the main purpose investors do that - to be able to claim interest as a deductible expense? that's it? i would appreciate any advice on the topic. thanks & regards.

You had better go see a very, very good accountant before you do this. The CRA rules are very narrow, and the consequences are severe.

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I have a canadian investment account. if i purchase a us stock do i pay taxes under us tax guidelines or canadian tax guidelines? also i was wondering...in canada you pay taxes on 50% of net capital gains from equities. doesn't this mean if you buy and hold a stock for 10 years it will be tax free for those 10 years making it the same as if it were in an rrsp?

Question number 1: You pay tax in Canada, unless you are driving to the US and trading your shares in the US. You made your profits in Canada. Question number 2: When you realise the gain you are taxed on it, correct. However, It is not the same as being in an RRSP, because you do not receive a tax break for contributing to your regular stock acount. If it was in a self-directed RRSP you would get a break for buying it (ranging from 16-49% depending on your province and income). Let's do a simple example. Two brothers, Goofus and Gallant, each want to buy $10K in Company X shares. Goofus contributes the money to a self-directed RRSP and buys the shares, while Gallant purchases them through his regular discount brokerage account. Both of them make $100K per year in Alberta, so they have identical tax situations. Goofus buys through his RRSP and gets a tax return of $3600, which he contributes again to his self-directed account, which gives him a $1296 return the following year, which he reinvests again, which gives him a $466.56 return the following year, which he reinvests... After ten years, the total amount he's re-invested from tax returns would be $5624.94. In his ten years he would've paid somewhere around $400 in fees to purchase on an annual basis (this is a rough number, as he probably wouldn't have reinvested after year five as his fees would have been more than his return). Assuming Company X continues paying their regular dividend of 1.5%, he would receive $2420 in dividends (assuming the re-investment of dividends). So, at year 10, Goofus would have $17645 in Company X shares. If he were to cash those in and pay the appropriate income tax (36%) he would shell out $6352 in taxes, with an end result of around $11,293 after tax (assuming the price doesn't change over ten years for simplicity). Gallant, his cunning brother, buys $10K in Company X through his cash account, and gets no tax break. At the end of year one, he collects his $150 dividend, pays 13.10% on those dividends, and takes the remaining $130.35 and reinvests it. He does this repeatedly for ten years, and assuming he buys his $100 worth of stock each year with the dividend money he pays $550 in fees for his purchases. At the end of ten years, he would have $10,832 and have to pay capital gains on the gain ($832-$550 times 18% tax =$50.76 in capital gains ). He'd have roughly $10780. In this case, Goofus would have done better in his self-directed RRSP. That's a simplified version of the math. Had the stock value gone up 10% per year, the end result is the same. Goofus would have $45,475 (dividends and 10% stock move) and would pay $16,371 in taxes when he cashes it in, ending up with $29,104 (assuming the top income bracket at 39% keeps moving and Goofus stays below it including this cashout). Gallant would have $30,101, and would have paid $339 in taxes on dividends on the way. In this situation, Gallant has a capital gain of around $16,963, and pays $3053 in taxes. He ends up with $26,498. If, on the other hand, they are both in the lowest income bracket, and the stock gets 10%, then Goofus ends up with $29,456 and Gallant would have $27,388. This is assuming they stay at their current tax rates (which they wouldn't if they made too much) and that their income is $100K. If their income was lower Goofus' benefit to using an RRSP would not be as great, since the reinvestment of tax savings would be less. To summarize, an RRSP is a better vehicle in both circumstances as you get more invested up front by reinvesting your tax return. If you don't reinvest your tax returns, the unregistered comes out on top hands down. Hope this helps.

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Hi, i'm getting my divorce settlement tomorrow and i'm planning to deposit it to my personal savings account. i will leave the money there for a few months (3-6) until i'm ready to purchase property. should i put the money in short term (risk free) investment, into tax free savings account even though i'm making monthly contributions, into rrsp account or something else? or should i change my savings account to a high interest savings account? any idea? i live in ontario btw. thanks!

just keep it in your regular checking acct - you won't make any money short term anywhere else

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March 2nd is the rrsp deadline. i have some savings that i want to invest however i am unsure where to put the funds. here is my situation: last year was the first time i invested in an rrsp (low risk), however, as everyone knows, the market was bad last year, so i have lost about 18% of the initial investment. i want to put my savings into something safe that will decrease my taxable income for 2008. keep in mind that i also will be wanting to access my funds within the next year (possibly 2 at the very most) for a 1st time home purchase. i am afraid to put the money into another mutual fund - i do not fair well with money stress, and just like to know my savings are safe, but also working for me in terms of decreasing the taxes i pay. any advice? i heard about a gic but dont know a lot about them. thanks signed, newbie to the investment world

It is understandable that you are looking for a different place to put your money. "Investing" for a short term is really gambling not investing. You should have your money in something that has a guaranteed floor and rate of return and provides access to your money at anytime without government restrictions. In short, you should own your own bank using the Infinite Banking Concept (IBC). Using IBC to make your home purchase will provide many more advantages than taking that money from an investment and then spending it on a down payment. There is a lot you can do to educate yourself and I would begin by getting the book "Becoming Your Own Banker" by R. Nelson Nash. You can get the book at either of the websites below. I'm a CPA and Financial Advisor using these methods both personally and professionally and I'm happy to answer any questions you may have. Lane

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3.for each of the following closed-economy cases, indicate which of the provided diagrams best illustrates the impact of the stated event. also indicate the effect (i.e. increase ­, decrease ¯, no change Ø, or indeterminate i) on [i] national savings, [ii] investment, and [iii] productivity in the closed economy. [a]the federal government withdraws tax benefits previously available to firms purchasing new equipment. figure 4, national savings decreases, investments decrease, productivity decreases. [b]provincial governments cut spending while maintaining existing tax revenues. figure , national savings are indeterminate (as provincial and national savings are different), investment will decline, and productivity will decrease (since spending decreases, there may not be much of an incentive to keep working). [c]the federal government increases the amount people can contribute to rrsps. national savings is indeterminate, investment increases, productivity increases. figure 7 because supply (of “investment”) is increased, which increases the number of people putting money into their rrsp account. [d]the gst is increased; businesses are confident about the future strength of the economy. national saving increases (revenue from gst makes extra money, and we can’t be sure that the businesses are doing anything about this “confidence in the strength of the economy”), investing may or may not increase because gst goes up, but strength is known to be in the future of the economy, productivity increases. figure 6.

They certainly look like answers. Good luck.