We are told by banks, government, and traditional financial advice to save money in our RRSP’s because you get to grow your investments tax deferred. Now, what does DEFERRED really mean? What that actually means and many do not understand or even if they do it often gets forgotten…you pay the tax LATER is what that means.
Do you know what the tax rate will be in the future? I would suggest to you that it will be higher than it is today – during the great depression the highest tax rates increased. With the current state of the world I would bet your going to see increased taxes over the coming decades to pay for the assistance the Governments around the world have had to put into the economy.
When you start taking your RRSP funds out when you retire you will have to pay whatever tax rate that the feds decide to set at that time. Have 1,000,000 saved? That could only really be 600K or 700K you could actually spend – scary thought right?
I believe in Cash flowing assets – real assets like fully optimized single family homes (contact us to learn more about what that means) and multi-family assets. No matter the tax rate in the future, people will always need to have somewhere to live, and rental rates are tied to inflation protecting your earning ability.
RRSP’s only really benefit the owners if they are Self-directed and you use them for real estate backed arm’s length mortgages. This is something we help people with on a regular basis, after learning the TRUE COST of most mutual fund investments people are shocked at what a ride they are being taken on….in favor of the bank’s/mutual fund companies interest and not their own.
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PS: If you would like to learn more about how to analyze the fees your being charged on your investments/how to build a cash flow machine for generations through real estate. Contact us for a complimentary discovery call
To your success,
-Respect The Hustle