Life insurance is a unique product in Canada. There are a few key pieces of legislation that make insurance planning so effective.

1.) The death benefit is almost always paid out tax-free. There are circumstances were a death benefit would not be tax-free, the most common being from a policy held within a RRSP. You also can choose a variety of policies with either a fixed death benefit or with a growing benefit, increasing over time.

2.) Money that is invested inside a life insurance policy, known as the policy’s Cash Value, is allowed to grow and compound tax sheltered. There are limits, but they are based on the amount of insurance.  The more the insurance face value, the more money can be invested and tax sheltered.

3.) The tax laws around borrowed funds, or leveraging, provides tax free income to the borrower. Money borrowed is not money earned, and hence is not taxed. Life insurance policies with cash value can be used as collateral for a loan. This allows life insurance policy holders in Canada to invest extra money into their policies over time, have the advantage of a tax sheltered investment plan, and borrow money from their insurance policy tax free.

These unique legal features of life insurance and leveraging money allow you to invest substantial funds into a life insurance policy, reduce taxation both now and ultimately to your estate, and possibly even have access to tax free income in the form of loans.

Health Officials have proposed that warning signs be placed on all alcohol bottles to tip off drinkers about the possible peril of drinking a pint or two of any alcoholic beverage.

1. WARNING: Consumption of alcohol may cause you to wake up with a breath that could knock a buzzard off a wreaking dead animal that is one hundred yards away.

2. WARNING: Consumption of alcohol is a major factor in dancing like an idiot.

3. WARNING: Consumption of alcohol may cause you to tell the same boring story over and over again until your friends want to assault you

4. WARNING: Consumption of alcohol may cause you to thay shings like thish.

5. WARNING: Consumption of alcohol may cause you to tell the boss what you really think of him.

6. WARNING: Consumption of alcohol is the leading cause of inexplicable rug burn on the forehead.

7. WARNING: Consumption of alcohol may create the illusion that you are tougher, handsomer and smarter than some really, really big guy named Psycho Bob.

CORPORATE MEMO

To: All Staff
Date: December 1
Subject: New “Twelve Days of Christmas” Policy

The recent announcement that Donner and Blitzen have elected to take the early reindeer retirement package has triggered a good deal of concern about whether they will be replaced, and about other restructuring decisions at the North Pole.

Streamlining is due to the North Pole’s loss of dominance in the season’s gift distribution business. Home Shopping TV channels and mail order catalogues have diminished Santa’s market share. He and the Board could not sit idly by and permit further erosion of the profit picture.

The reindeer downsizing was made possible through purchase of a late model Japanese sled for the CEO’s annual trip. Improved productivity from Dasher and Dancer, who summered at the Harvard Business School, is anticipated. Reduction in the reindeer will also lessen airborne environmental emissions for which the North Pole has received unfavorable press (gas and solid waste).

We’re pleased to inform you that Rudolph’s role will not be disturbed. Tradition still counts for something at the North Pole!

Management denies, in the strongest possible language, the earlier leak that Rudolph’s nose get red, not from the cold, but from substance abuse. Calling Rudolph “a lush who was into the sauce and never did pull his share of the load” was an unfortunate comment, made by one of Santa’s helpers and taken out of context at a time of the year when they are known to be under ‘executive stress’.

As for further restructuring, today’s global challenges require the North Pole to continue to look for better, more competitive steps. Effective immediately, the following economy measures are to take place in the “Twelve Days of Christmas” music subsidiary:

1.) The partridge will be retained, but the pear tree, which never produced the cash crop forecasted, will be replaced by a plastic hanging plant, providing considerable savings in maintenance;

2.) Two turtle doves represent a redundancy that is simply not cost effective. In addition, their romance during working hours could not be condoned. The positions are, therefore, eliminated;

3.) The three French hens will remain intact. After all, everyone loves the French;

4.) The four calling birds will be replaced by an automated voice mail system, with a call waiting option. An analysis is underway to determine who the birds have been calling, how often and how long they talked;

5.) The five golden rings have been put on hold by the Board of Directors. Maintaining a portfolio based on one commodity could have negative implications for institutional investors. Diversification into other precious metals, as well as a mix of T-Bills and high technology stocks, appear to be in order;

6.) The six geese-a-laying constitutes a luxury which can no longer be afforded. It has long been felt that the production rate of one egg per goose per day was an example of the general decline in productivity. Three geese will be let go, and an upgrading in the selection procedure by personnel will assure management that, from now on, every goose it gets will be a good one;

7.) The seven swans-a-swimming is obviously a number chosen in better times. The function is primarily decorative. Mechanical swans are on order. The current swans will be retrained to learn some new strokes, thereby enhancing their outplacement;

8.) As you know, the eight maids-a-milking concept has been under heavy scrutiny by the EEOC. A male/female balance in the workforce is being sought. The more militant maids consider this a dead-end job with no upward mobility. Automation of the process may permit the maids to try a-mending, a-mentoring or a-mulching;

9.) Nine ladies dancing has always been an odd number. This function will be phased out as these individuals grow older and can no longer do the steps;

10.) Ten Lords-a-leaping is overkill. The high cost of Lords, plus the expense of international air travel, prompted the Compensation Committee to suggest replacing this group with ten out-of-work congressmen. While leaping ability may be somewhat sacrificed, the savings are significant as we expect an oversupply of unemployed congressmen this year;

11.) Eleven pipers piping and twelve drummers drumming is a simple case of the band getting too big. A substitution with a string quartet, a cutback on new music, and no uniforms, will produce savings which will drop right to the bottom line;

Overall we can expect a substantial reduction in assorted people, fowl, animals and related expenses. Though incomplete, studies indicate that stretching deliveries over twelve days is inefficient. If we can drop ship in one day, service levels will be improved.

Regarding the lawsuit filed by the attorney’s association seeking expansion to include the legal profession (“thirteen lawyers-a-suing”), a decision is pending.

Deeper cuts may be necessary in the future to remain competitive. Should that happen, the Board will request management to scrutinize the Snow White Division to see if seven dwarfs is the right number.

Happy Holidays all!

Social Media Explained

Posted: November 21, 2011 in articles

A Software Engineer, a Hardware Engineer and a Manager were on their way to a meeting. They were driving down a steep mountain road when suddenly the brakes on their car failed. The car careened almost out of control down the road, bouncing off the crash barriers, until it miraculously ground to a halt scraping along the mountainside. The car’s occupants, shaken but unhurt, now had a problem: they were stuck halfway down a mountain in a car with no brakes. What were they to do?

“I know,” said the Manager, “Let’s have a meeting, propose a Vision, formulate a Mission Statement, define some Goals, and by a process of Continuous Improvement find a solution to the Critical Problems, and we can be on our way.”

“No, no,” said the Hardware Engineer, “That will take far too long, and besides, that method has never worked before. I’ve got my Swiss Army knife with me, and in no time at all I can strip down the car’s braking system, isolate the fault, fix it, and we can be on our way.”

“Well,” said the Software Engineer, “Before we do anything, I think we should push the car back up the road and see if it happens again.”

Dead Hare

Posted: November 1, 2011 in Funny, socialmedia, twitter

 

A man was driving along the highway, and saw a rabbit hopping across the middle of the road. He swerved to avoid hitting the rabbit, but unfortunately the rabbit jumped in front of the car and was hit. The driver, being a sensitive man as well as an animal lover, pulled over to the side of the road and got out to see what had become of the rabbit. Much to his dismay, the rabbit was dead. The driver felt so awful he began to cry.

A woman driving down the highway saw the man crying on the side of the road and pulled over. She stepped out of her car and asked the man what was wrong.

“I feel terrible,” he explained. “I accidently hit this rabbit and killed it.”

The woman told the man not to worry. She knew what to do. She went to her car trunk and pulled out a spray can. She walked over to the limp, dead rabbit, and sprayed the contents of the can onto the rabbit. Miraculously, the rabbit came to life, jumped up, waved its paw at the two humans and hopped down the road. 50 feet away the rabbit stopped, turned around, waved at the two again, hopped down the road another 50 feet, turned, waved, and hopped another 50 feet. The man was astonished. He couldn’t figure out what substance could be in the woman’s spray can! He ran over to the woman and demanded, ” What was in your spray can? What did you spray onto that rabbit?” The woman turned the can around so that the man could read the label. It said:

“‘Hare Spray’ Restores Life to Dead Hare. Adds Permanent Wave.”

Watch out for identity theft

Identity theft has become one of the fastest growing crimes in North America. There are a number of ways identity theft can happen:

  1. Card theft: theft of credit cards from wallets or purses or even newly issued cards from your mailbox.
  2. Shoulder surfing: looking over your shoulder for your Personal Identification Number and using a fake ATM device to read your debit card’s data.
  3. Skimming: using a special device to swipe your credit card at a restaurant or gas station which records the personal information from your card.
  4. Spoofing: creating fake websites or emails that ask for credit card information.
  5. Theft from databases: identity thieves stealing large databases of personal information.

There are steps you can take to protect yourself:

  • Sign all credit cards when you receive them and never lend them to anyone.
  • Cancel and destroy credit cards you do not use and keep a list of the ones you use regularly.
  • Carefully check each of your monthly credit card statements and your bank statements. Immediately report lost or stolen credit cards and any discrepancies in your monthly statements to the issuing credit card company or bank.
  • Shred or destroy paperwork you no longer need.
  • Do not give personal information out over the phone, through the mail, or over the Internet unless you are the one who initiated the contact and know the person or organization with whom you are dealing.

If you are a victim of identity theft, immediately contact your bank or credit card company, your local police and the OPP/RCMP Phonebusters Unit at 1-888-495-8501, E-mail: info@phonebusters.com

http://www.dynamic.ca/eng/learning/Personal-Finances/Consumer-Watch-Out-For-Identity-Theft.asp

When the economy (and financial markets) are at it’s extremes, either doing extremely well or extremely poorly, dangerous financial products and ideas become more prevalent.

Portus, Eron Mortgage Corp, Shire International Real Estate Investments, and Arbour Energy and just a few Canadian examples. The one common denominator they share, is they all are catagorized as Exempt Market Securities.

What are Exempt Market Securities?

…when companies (issuers) sell securities such as stocks, options, or bonds, they are generally required to file a prospectus. This document contains material facts about both the issuer and the security. However, in certain cases securities can be sold without a prospectus and these investments are called exempt securities; the sale is called an exempt distribution or a private placement.

What should I know about Exempt Market Securities?

These investments are not for everyone. A prospectus is meant to ensure an investor has key facts to be able to make an informed decision. Without it, you may be taking a greater risk with your money. Be aware that:

-If you buy an exempt security, you may not have the same legal rights as you do under a prospectus.

-Most exempt securities are subject to resale restrictions. This means you may not be able to sell them for a certain period of time.

-Even if no resale restrictions apply, there might not be a market for the securities you purchased, either because you would not be able to find any purchasers or they may not qualify to purchase the securities.

-Some exempt securities are not liquid. Liquidity means that you can sell an investment in a short period of time and turn it into cash. Some exempt securities, such as hedge funds, may require longer periods to redeem.

-Because these investments are bought without a prospectus, there may be very limited information available on which to base your investment decision.

-When an issuer sells its exempt securities, it may not use a registered dealer as an agent. This means, when you buy from an issuer, you may not get the same protection you would get when you buy from a registered dealer.

–from a release by the Nova Scotia Securities Commission and cirrulated by the other regulators. (footnote 1)

A disclosure document put out by the BCSC includes this simple explanation (footnote 2):

They are called exempt market securities because two parts of securities law do not apply to them. If an issuer wants to sell exempt market securities to you:

-The issuer does not have to give you a prospectus (a document that describes the investment in detail and gives you some legal protections), and
-The securities do not have to be sold by an investment dealer registered with a securities regulatory authority.
There are restrictions on your ability to resell exempt market securities.Exempt market securities are more risky than other securities.

Disclosure documents (be it a Prospectus, when regulated by the Securities Act, or a Policy Contract/Information Folder, when regulated by the Insurance Act), exist for a reason, To protect the investing public. There is no evidence proving the absentence of disclosure documents increases potential return, but it is well known to increase risk.

Policy Contracts and Prospectuses are the financial world’s equivalent to seat belts. Hopefully you won’t have to depend on them in a life or death situation. The best option for most regular folks is to just avoid these dangerous investments. Just like it always advisable to wear your seat belt.

How many puppies can you find?