Fresh Ground Financial

offering you Lifestyle Planning. A plan that's built around the life you want TODAY and TOMORROW. Helping you get as close as possible to the lifestyle that is in your head - that you really want


Giving a Gift That Will Last This Christmas!

Posted on 10 December, 2018 at 16:35 Comments comments (0)
Parents and Grandparents -
Have you thought about the legacy you will leave for you Children and Grandchildren?
Is leaving a legacy important to you?

I often think about the legacy I will leave behind. I think about how my Children and my future Grandchildren will remember me, and what I would like them to remember me for. I also think about the financial legacy I will leave my family. Not just my children, but my grandchildren, and their children and so on. I would love to be able to impact future generations in a positive way, both personally and financially.

The idea of leaving a legacy comes to mind more often around Christmas, The Season of Giving.

Most gifts we purchase are material and for the immediate, but do we think about the future? Do we think about leaving a lasting gift that will bless not only our children and grandchildren but future generations? I do. If I can, I would love to provide for my children and grandchildren when I’m older and even continue to provide for them when I’ve passed away.

A great proven way to leave a financial legacy – and one that Amy and I personally use - is to give our children / grandchildren the lasting gift of a Dividend Paying Whole Life Insurance Policy.

What Did I Just Say? What Kind of Gift is a Life Insurance Policy? Answer: One of the best possible gifts to give.

Let me explain.

Dividend Paying Whole Life Insurance is a permanent insurance policy, so first things first you’ve insured the next generations. You've protected their income and their future families. That’s a gift in and of itself.

This policy however, is not just a death benefit (which already is a great asset). It also grows cash values every day within the policy which can be used throughout the insureds life. It’s basically a GIC on Steroids (cannot lose value, and guaranteed to grow) that your loved ones can use for education, a down payment on a house, to travel and even to use as tax-free income in retirement. That's right, Tax-Free!
(With Government Debt now at over $664,080,990,000.000 (try saying that 5 times as fast as you can) and Baby Boomers hitting retirement, the words tax-free are becoming more and more important)

This entire policy grows every day. The policy stays in force and grows in value every day. whether the loved one you’ve insured lives until age 45, 85 or 105. When they pass it transfers to their loved ones – a spouse or children, whomever they choose.

You - parent or grandparent - can help the next generations in your family through post-secondary school, buy their first house, travel the world, be prepared financially for retirement, and take care of their future families, all with the gift of a small premium (level premium that doesn’t increase, that can be fully paid in 20 years, and that can be paid monthly or annually) towards a whole life insurance policy.

Think about this: You purchase a small whole life insurance policy on your grandchild when they are 1-year-old. Your children know of the gift you bought for their children. Your grandchild grows up and has a family. Your children buy their new grandchildren a small gift of dividend paying whole life insurance, following in your footsteps. Your own grandchildren use the policy you’ve purchased for them to help fund their retirement and when they pass away their death benefit goes to their kids as an inheritance. Now, their kids use part of that death benefit to purchase a life insurance policy on their grandchildren, and use the rest as they please - opportunity. And the cycle continues. For generations you’ve built a legacy of giving, a legacy of opportunity, and a legacy of family wealth. Years and years after you’ve passed away, you are still impacting your family’s lives. All from one gift! Pretty incredible.

Amy and I are very interested to see how our children will use the life insurance gift we’ve given them and what kind of difference in will make in the lives of them and their future families.

If you’d like to learn more about this gift and how to go about giving this gift to your children and/or grandchildren, we’d love to help. Contact us here.

Merry Christmas and a Happy New Year,

From Fresh Ground Financial.

One of the Most Effective, Underused and Risk-Free Money Making Strategies that Everyone Should Use

Posted on 9 August, 2018 at 0:40 Comments comments (0)

One of the Most Effective, Underused and Risk-Free Money Making Strategies that Everyone Should Use.

Today’s blog is all about one of the best strategies for making money. I will warn you however, that this strategy is perceived negatively by some, mostly due to a misunderstanding of the concept. With that said, if this strategy is structured properly, it is - as the title says - one of the most effective, underused and risk-free money making strategies that everyone should use. 

For now, we’ll use a few letters to name this strategy - DPWLI. So what makes this DPWLI strategy so great?

1) Guaranteed Growth that actually gives a decent return.

The most frustrating thing about investing is that we generally have to risk our money in the markets if we want a return that keeps up to, or surpasses inflation rates. If we do not want to risk our money, our best option seems to be GIC’s. GIC’s usually give a return somewhere around 2%. Inflation rates are around 3%. With GIC’s, we are losing money value.

The DPWLI strategy works likes a GIC on steroids. It offers - over the long term - an annualized rate of return around 4.5%. Now that may not seem all that high but let me explain something. Most people see the Average Rate of Return on their investment statement. But I said Annualized Rate, and Annualized Rate of Return and Average Rate of Return are quite different. You can expect to need an Average Rate of Return of about 2% higher to have the same amount of money in your account as what an Annualized Rate of Return will give you. If you have money in the markets (ex. RRSP’s in mutual funds or index funds), you would need an average rate of return of about 6.5% to match the 4.5% Annualized Rate of Return that the DPWLI strategy offers. You may be thinking to yourself that 6.5% isn’t all that great. That may be true but it’s already better than the return most people are getting. There’s more to consider however… point 2.

2) It’s all Tax - Free

When the DPWLI strategy is structured properly, all the money you take out to use - now or in retirement – is received tax free. No Taxes! At all!

When you have your money in an RRSP, your retirement income is fully taxed. Taking into consideration the tax implications of this type of investment, you would now need an average rate of return around 8.5% over the investment’s lifetime to have the same amount of money in your account as the annualized tax-free 4.5% rate of return that the DPWLI strategy gives you.

Tax Free Savings Accounts also offer tax-free income, but you are significantly limited to how much you can invest in a TFSA, and you need to find a place to put your TFSA. Most people leave their TFSA at the bank gaining 2% (again, losing value). If you have your TFSA in the markets, you are dealing with the risk of loss.

3) You can use it during your life time and the value keeps growing.

One of the most amazing things about the DPWLI strategy is that you can use the money that has grown using this strategy without losing the value of the investment.

Albert Einstein said “Compounding interest is the 8th wonder of the world. He who understands it, earns it… he who doesn’t, pays it.”

I think most of us understand this statement to some degree. None of us like taking money out of our investments (our RRSP’s, TFSA’s, etc.) because when we do, we are taking away the opportunity for our money to grow on itself. We are depleting the value and potential of our investment. We do not want to do that. This leaves us with two choices to ensure that we have money to deal with emergencies or issues that come up, or for opportunities that arise.

The first option would be to save money in an emergency or savings fund.

The problem with this strategy is that we now have a pool of money that is not working for us. This “emergency” fund is just sitting in an account making 1%, waiting for something to happen.

The second option is to borrow money from the bank.

There are a few problems with this strategy. First, we need to qualify to borrow from the bank. Second, the bank controls the whole arrangement. You’ll have set payments and interest to pay. And finally, plenty of issues arise if something unfortunate happens and you cannot continue your monthly payments, even if only for a short period of time. Your credit score will drop, and you will start paying interest on interest on interest.

With the DPWLI strategy, you are in control. You can use the money that you have gained and the value of your fund does not decrease. It actually continues to grow in value, even if you have used it. The principal of your investment continues to grow interest on interest on interest, increasing the value of your policy and you can use that money for emergencies or opportunities. This strategy relieves you from the need to have an emergency/savings fund, and helps you avoid the bank for loans.

4) The moment you put any money into the DPWLI strategy someone you care about is guaranteed to receive a large sum of money - tax-free.

This strategy has an inheritance - a guaranteed death benefit - attached to it.

The DPWLI strategy allows you to grow money at a decent rate in a guaranteed and safe manner. It allows you to receive all the money gained through its lifetime tax-free in retirement and to use that money in your lifetime – for emergencies and opportunities - without losing any value. And it allows you to give people you care about an inheritance.

DPWLI stands for Dividend Paying Whole Life Insurance. Most people view Life Insurance as an expense, but it doesn’t have to be. When your life insurance policy is structured properly, it is an asset. It is an investment, a TFSA account, an emergency and opportunity fund, a retirement account, a legacy for your family. It’s like a GIC on steroids wrapped in Life Insurance. And it’s all guaranteed whether you live till 40, 70, or 105.

To top it all off, the value of your life insurance policy - the death benefit - increases in value every year too.

Now, you may be thinking “what if I wouldn’t qualify for life insurance?”
You do not personally need to be healthy/insurable to use this strategy.

Or maybe you’re thinking “I’m too old for this, it’ll be too expensive.”
Not true. You can still do this with a very small investment amount. 

This truly is one of the most effective, safe, predictable, underused, and all-encompassing money making and family wealthy building strategies available.

Interested? Let’s talk. 
There is no charge to meet with us, so it’s probably worth it!

5 Strategies to Protect Your Business and Grow Your Wealth.

Posted on 16 July, 2018 at 10:40 Comments comments (1)

Imagine this:

A few years ago you decided to open a business. It’s been steadily growing since opening day and you’re finally making some money. Maybe you’ve even got a few staff. Things are looking up and the expectations are high for the upcoming year.

But then…

You go to the doctor for a checkup and he tells you that you’ve got cancer. There’s a good chance for survival but you must start treatment right away and you realistically won’t be able to work for at least half a year.


Your take a weekend canoe/camping trip with family and friends. You hurt your back, can’t do the required tasks of your job and it takes nine months for you to become healthy enough to work full time again.

What’s going to happen to your business?
Can the business sustain itself without you there?


You are in a partnership and one of the two above scenarios happens to your partner.

Can you handle the work-load by yourself while your partner is away?
Can you afford to hire someone to replace your partner in the meantime

Or worse

Your partner passes away.

Do you have a way to buy out their share of the business?

These may seem like unlikely events, but statistically they are not.

Currently in Canada about..
1 in 2 people will be diagnosed with cancer in their lifetime,
1 in 5 will have a heart attack, 
1 in 9 will have a stroke.

There is also nearly a 50% chance that someone 40 years of age or younger will go on disability for more than 3 months during their lifetime. If that occurs, the average time on disability is anywhere between 2.5 & 3 years.

When this happens to someone owning a business the consequences can be detrimental and many businesses are ill-equipped to deal with a situation of this nature.

Is your business equipped to handle a situation of this nature?
Have you thought about how to prepare for such a situation?
Did you know there are strategies available to protect your business if something unexpected and unfortunate happened?

There are too many businesses in Canada that are not prepared financially to deal with the fall-out of any of the events above.

Here are a few solid strategies to protect your business from unexpected illnesses, injuries or deaths. A couple of these strategies can even help you build wealth now and for the future.

1) Disability Insurance & Business Overhead Expense Insurance

Disability Insurance protects you - the business owner - if you are unable to work due to an injury or an illness. It typically covers about 60% - 70% of your pre-tax income - tax-free, and will help you continue to cover expenses such as bills, groceries, and family needs. Often business owners are not actually taking much of an “income”, but insurance companies will work with you to ensure your personal needs can be met.

Business Overhead Expense Insurance protects your business. This is great for Sole Proprietors, as you are often responsible for earning much of the business’s profit. If you are unable to work, Business Overhead Expense Insurance covers the monthly expenses for your business - such as wages, office space, and supplies - so it can stay afloat while you are on the mend. Having Business Overhead Expense Insurance ensures that you do not need to dip into your savings or increase your debt load to maintain the business while you’re injured or ill.

2) Shared Ownership Critical Illness Policy

This is a great financial strategy for a business to protect the business owner, and to receive retained earnings tax-free in the future.

Personal Critical Illness policies pay a large lump sum of money when the insured person has a Critical Illness. The major four illnesses are Cancer, Heart Attack, Stroke, Coronary Artery Bypass, but about 25 illnesses are covered under these policies.

With a Shared Ownership Critical Illness Policy, the policy is jointly owned by the corporation and the business owner. Both parties share in the monthly premium payments, but the corporation pays the majority of it. Because you are both the corporation and the owner, this strategy allows you to benefit financially, no matter what the outcome.

The three possible outcomes to this strategy are:
If the owner is diagnosed with a Critical Illness, the corporation gets paid the large lump sum of money.
If the owner passes away, the corporation gets their premium payments paid back to them, in full.
If the owner stays healthy for a set period, say 15 years, the owner will receive all of paid premiums back – both the corporations share and their own – tax-free.

Using this strategy, you protect your business financially in the case you get ill, if you pass away your corporation does not lose a dime, and you’ve created an opportunity for yourself to receive your retained earnings as tax-free income in the future.

3) Dividend Paying Whole Life Insurance

A properly structured Dividend Paying Whole Life Insurance policy acts like a guaranteed tax-free GIC on steroids.

This is a great strategy for business owners to protect their families, to build a tax-free pension for themselves, and to finance their needs - personal or business - throughout their life without dealing with a bank.

How it works:

Once you’ve purchased this life insurance policy, your family is automatically guaranteed a death benefit. It is a permanent insurance policy, so if you pass away - no matter what age you are - your family or other loved ones are provided for financially. Your policy will also be earning interest and dividends, so your death benefit is guaranteed to grow every year.

In the meantime, cash values (savings) are also guaranteed to grow within your policy on daily basis, which can be used throughout your life for emergencies, business or investment opportunities, and anything in between. 

Come retirement time these cash values can be withdrawn against your policy - tax-free. Your pension.

This can be structured so all premiums are paid through the corporation but you, the owner still have all the control.

4) Immediate Financing Agreements

Lots of business owners like the idea of, or at least know they should have life insurance but would rather put their earnings back into the business instead of using it to protect themselves.

An Immediate Financing Agreement allows you to purchase a life insurance policy but receive the entire annual premium back immediately to invest in your business at a low interest rate from the bank.

This is an awesome strategy for all business owners that qualify, as it ensures that you are insured and that your family and business are well protected. The insurance policy is creating a healthy tax-free pension for you in the form of cash value growth, which we spoke about under strategy 3. Every dime that you paid into the insurance policy as a premium payment, will also be immediately given back to you to use for, and grow your business.

5) Funding Buy-Sell Agreements.

Insurances - especially Disability Insurance and Life Insurance - can and should be used for buy-sell agreements for businesses with partnerships. Many businesses will have buy-sell agreements in place in preparation for unexpected situations, but do not actually prepare for how to fund these agreements.

If your partner passes away, do you have the cash to buy out their shares?
Do you have a plan in place to buy out your partner if they become disabled and can no longer function in their leadership role?

Purchasing Insurance policies on partners is a simple and wise way to fund buy-sell agreements.

One Example:
Bob and Jane each own 50% of their business worth $500,000.
Bob buys a policy on Jane for $250,000, making himself the beneficiary. J
ane unfortunately passes away. Bob receives the $250,000 benefit to buy out Jane’s shares of the business and provide for her family.

This of course would also be done by Jane, in the case that Bob passes away.

Protect your Business

It is hard work to start a business, to make it sustainable, and then successful. It’s tough to watch people go through so much to create and sustain a business they love, only to see it disappear because they were unprepared for an unfortunate event like an injury or illness and didn’t have the cashflow to hold it together. And it happens all too often.

When we meet with clients and their families to build a healthy financial plan, one of the first things we tell them is that their greatest asset it not their house, or their business, or their car. It’s their HEALTH!

Without your health you are unable to work, to bring in an income and provide for yourself and loved ones around you. The foundation to any healthy financial plan should be insurances, because insurances protect what you already have and ensure that an income is always coming in, even if you can’t provide it.

It’s the same for your business. Protect what you have.

I love watching small local businesses pop up and grow. I also hate watching them fail. This is especially true when it could have been avoided by simply protecting the themselves and their business.

If you’d like to learn more about these strategies, we’d welcome the opportunity to sit down with you to discuss how you can protect yourself and your business, save some taxes and interest, and build a tax-free retirement income.

Your Financial House. Part 1 - The Secure Foundation

Posted on 29 May, 2018 at 14:30 Comments comments (0)

Your Financial House 

Part 1: The Secure Foundation - Insurances

As most of us already know, building a house upon a strong foundation is important. I recently read an article about building a house that read: “A proper foundation does more than just hold a house above ground. It also keeps out moisture, insulates against the cold, and resists movement of the earth around it. Oh, and one more thing: It should last forever.. without a good one, you’re sunk!”

When it comes to our financial houses, the foundation to build our house upon is the personal insurances. These insurances are Life Insurance, Critical Illness Insurance, and Disability Insurance. Just like a proper foundation of a house allows it to stand strong when elements out of its control are happening around it, insurances allow our financial houses to stand strong when things we cannot control happen to us and around us. And as we all know life doesn’t often go as planned and things that we don’t want to happen, happen all the time. If are foundation isn’t built properly - just like a house without a proper foundation - we’ll be financially sunk.

The role of all three insurances is to protect you, your family, your income, your current lifestyle, and offer you financial stability in the midst of hardship. Most people view insurances as an expense but they really are investments in yourself and your family, ensuring financial stability no matter what happens. And the younger you get them cheaper they will be.

Life Insurance is designed to protect your loved ones in the case you pass away. This applies to both the income earner and the stay-at-home parent. The stay at home parent does a lot of work that has ecumenic value, and thus replacing their efforts would cost a significant amount of money. Would the income earner be able to afford those extra costs? The wage earner makes a lot of money in their lifetime. How will the family live without that income for years to come? A good rule of thumb for life insurance is 10 x ones annual salary plus all debts owed. Realistically, the rule of thumb is still not enough to match most peoples economic value.

Term insurance is cheap to start but gets expensive later on in life, however, often we need a lot of insurance when we’re young and this can be a great way to make sure your family is well protected at a affordable cost. Permanent insurance lasts forever - like a strong foundation should - and it grows in value every year if properly set up, so this is can also be a really great option.

Death is mandatory, so ensuring you have a well valued life insurance policy is a good way to start building your strong foundation.

Disability Insurance (DI) is designed to protect you and your loved ones in the case you cannot work due to a disability or critical illness. Stay at home parents unfortunately do not qualify for DI, but it would be very wise of the wage earner to ensure they have a disability policy that covers their income. DI pays 60 - 70% of ones gross monthly income tax free, on a monthly basis. This ensures that ones needs and expenses can be met whether it’s groceries, bills, daycare costs etc. Six months of disability can wipe out 5 to 10 years of retirement savings. Having a monthly income from an insurance company helps protect those savings or prevents going into debt, when your typical paycheque is not available.

Critical Illness Insurance (CI) - just like DI - is designed to protect you and your loved ones in the case you are diagnosed with a critical illness. Cancer, Heart Attack, and Stroke are the 3 major illness but most policies will cover 20 - 25 different illnesses. This pays out a lump sum of money (starting at $25,000) when diagnosed with a critical illness. This lump sum payment allows you and your loved ones to cover the costs of the illness without having to use regular income, retirement savings, or borrow. You can use the money however you choose: pay for medications, for personal care, travel for specialized treatments. It can also allow a loved one to take time off work to support and provide care without having to worry about their own income. A good rule of thumb for CI is 1 to 2 times your annual salary and - if set up properly - CI can last forever, and if you don’t ever use it your family can receive all the premiums back - meaning that in the long run you haven’t lost a penny.

When something unexpected happens insurances provide financial stability, allowing us to continue paying off debt, meeting todays’ needs, and saving for the future. It also allows us to deal with the emotional turmoil of such an occurrence without having the financial stress. When uninsured or under insured, an unexpected illness, disability, or family death can have a tremendously negative and lasting impact on our finances.

Session 1 of our Summer Series Financial Planning for Young Families will dive deeper into all three of these insurances, and more. Check out the Financial Education page for more information and to register.

When Should I Start Saving for Retirement?

Posted on 16 April, 2018 at 15:20 Comments comments (0)

I recently read an article about a survey that examined the financial situation of seniors in the U.S. The article opened with this line: "When it comes to building a comfortable retirement, proper preparation is key. But as a new survey suggests, people tend to set aside too little — and realize their mistakes too late.

Below you can read the rest of the article which offers insight into why most American seniors are not set up to have a comfortable retirement and a few things that we can learn from their mistakes to increase our chances at a lifestyle in retirement that we feel comfortable with. Below the article, I'll also offer some insights as to when, how, and where to save your money.

"In its latest poll of 1,000 senior citizens aged 65 or older, US-based student loan platform LendEDU examined the financial situation of older Americans. Among the respondents, 55% said they haven’t saved enough for retirement, 27% felt that they have, and 18% said they weren’t sure." 

The survey also asked respondents to name some financial decisions from their 20s that they regret today. Not saving enough for retirement was the biggest mistake for a plurality of respondents (21%), followed by spending too much on non-essentials (17%), not investing their money (12%), and incurring too much debt (10%).

“I put off starting to save for retirement … until I was a bit over 31 years old,” Timothy Wiedman, a senior and professor at Doane University, told LendEDU. “I justified this by telling myself that I could always "catch up" later on my long-term financial plans after establishing a solid career and seeing my income increase. But the earning power of compound interest is based on time, so an initial delay can have severe consequences.”

One question asked what seniors know or understand about personal finance today that they did not at 25 years old. The top answers included “how to live within my means” (29%), “how to budget” (26%), “how to save for retirement” (16%), and “how consumer credit works” (15%).

Because of their lack of retirement savings, many respondents in the poll said they were critically dependent on social security (69.1%) as well as life insurance (46.9%)."

Now while this is an American survey, I would suggest that we as Canadians are in a similar situation. Currently, the average debt for Canadian seniors is around $15,000 (not including mortgages), 30% of retirees report growing debt, and government data shows that the number of Canadians working past the age of 65 continues to rise. 

Here are a few thoughts for everyone - whether you are 20 or 50 - that can help you be better prepared for retirement. 

1) Start Saving Now -  55% of the survey respondants said they had not saved enough for retirement. Start saving. The earlier you start saving for retirement the better. As mentioned in the article "The earning power of compound interest is based on time, so an initial delay can have severe consequesnces." The more time you give your money to work, the more it will grow. 

2) Pay Yourself First. Try to save 10%. The more you save, the more prepared you will be. Warren Buffet said "Do not save what is left after spending, but spend what is left after saving." Paying yourself first is key. Make saving money for yourself your first priority. You'll thank yourself later. Warren Buffett also said "If you cannot control your emotions, you cannot control your money." Take control of your emotional spending (a coffee here, a burger there, whatever it may be) and make saving for yourself a discipline. 

3) Grow your money in places that offer Tax Free Retirement Income as much as possible. Many people love the idea of saving on taxes now by putting money into RRSP's, but you are actually just  deferring your tax bill. If you plan to have a similar or better lifestyle in retirement as you have now, and all your retirement income is taxable, you could pay all the taxes you "saved/deferred" back to the government in only a few years. And in retirement you'll likely no longer have all the other deductions that you do now. Research has proven over and over again that people who have at least a portion of their retirement income coming to them guaranteed and tax free are happier and live longer. 

It can be difficult to think about retirement in our younger years (20s to 50's) as we've got other things to worry about like buying a house, raising kids, building our business, and enjoying what we have. These are all valid, but I would bet the last thing we'd like to do is take a pay cut come retirement.  I think most of us would rather continue in retirement with a similar or better lifestyle to the one we had during our working years. 

If you'd like to chat about some good strategies to prepare well for your future years, we'd be glad to help.