for Cash flow
to Generate Steady, Tax-Friendly Income From Your Portfolio
BRIAN G. KONRAD CFP, Financial Consultant
a lifetime of hard work, youve arrived. Now that youre
retired or fast approaching retirement, its time to
review your financial plan to consider what your future income
needs will be. Some of your expenses, like mortgage payments,
will likely be lower. Others, like travel or medical expenses,
may be higher.
youre like a growing number of Canadians, youre
looking to generate capital appreciation and a steady, tax-friendly
cash flow from your investment portfolio. How do you get there
your cash flow needs, you first need to consider what sort
of lifestyle you hope to lead throughout retirement and, based
on your financial resources, determine how to reach your goals.
flow analysis is an effective way to gain a clearer understanding
of your retirement picture. This analysis includes a review
of all income you will receive from various sources such as
OAS, CPP, company pension plans, and income you may receive
from an investment plan. On the opposite side of the ledger,
you will want to review all expected expenses.
of this analysis is to show the cash flow you will have available
to support your retirement lifestyle. See Figure 1.
retirement income strategy
have examined your cash flow needs for the future, we will
customize an investment strategy targeted at achieving a consistent
level of cash flow that will support your lifestyle. Quite
often this will entail making adjustments to your current
investment portfolio as retirement is a time when investors
need to protect their investment assets that have grown over
the years. So it is not uncommon to reduce exposure to assets
that are geared towards long-term capital growth and shift
towards financial products that primarily focus on providing
you with income.
safe haven investments like bonds, mortgages and
guaranteed investment certificates have been the product solution
to meet cash flow needs since they typically offer the lowest
price volatility. But they also typically produce the lowest
relative return and can have immediate tax implications. The
problem with this tradeoff is that while you may be protecting
your capital, you are not adequately protecting your purchasing
power which could decline rather rapidly due to the ever present
effects of inflation. To support your retirement lifestyle
you will likely have to move beyond the relative stability
of guaranteed income securities into investments that offer
the potential for greater returns and potential tax efficiency.
your income needs with your risk comfort level can be challenging.
Thats why one of the more effective methods used to
meet cash flow needs is to take a portfolio approach. With
this approach we can not only structure a well balanced investment
portfolio that meets your cash flow needs, but also give consideration
to protecting purchasing power by seeking moderate capital
portfolio designed to meet your objectives we can combine
investments in such a way that the income flow received is
derived from a number of different asset types that produce
different types of income.
Group offers a complete selection of dividend funds designed
to provide a stable and steady income stream, and considerable
capital growth specifically to support individuals in retirement.
have determined your optimal investment portfolio, your investment
strategy should give some consideration to how you will withdraw
cash flow from your portfolio. Taking a fixed dollar amount
at regular intervals is certainly the simplest method, but
during periods of market declines it accelerates the draw
down of capital and increases the possibility of outliving
your nest egg. As long as you are still able to meet your
expenses, a slight variation could entail taking out a fixed
percentage at regular intervals. This improves the capital
preservation capability of your portfolio, as you take less
out in down market cycles.
together, you and I can appropriately gauge your future cash
flow needs and eliminate any complexities in designing and
managing your investment portfolio. Through investment alternatives
such as the Alto Monthly Income Portfolios, Investors
Group offers investment planning solutions that are geared
for steady cash flow, and can help protect your purchasing
G. KONRAD CFP
(204) 489-4640 ext. 246
100-1345 WAVERLEY STREET
WINNIPEG, MB R3T 5Y6
(204) 489-4640 ext. 267
This report specifically written and published by Investors
Group is presented as a general source of information only,
and is not intended as a solicitation to buy or sell specific
investments, nor is it intended to provide legal advice. Prospective
investors should review the annual report, simplified prospectus,
and annual information form of any fund carefully before making
an investment decision. Clients should discuss their situation
with their Consultant for advice based on their specific circumstances.
Commissions, trailing commissions, management fees and expenses
all may be associated with mutual fund investments. Mutual
funds are not guaranteed, their values change frequently and
past performance may not be repeated.
Trademark owned by IGM Financial Inc. and licensed to
its subsidiary corporations.
Investing for Cash flow ©2007 Investors Group
Inc. (07/2007) MP1063
more in the Jun
21 -Jul 18/2010
issue of Senior Scope)
William J. Thomas
healing farm in Morris, Manitoba -
How barnyard animals teach people how to live
Dianne Shaw live on a 25-acre menagerie near Morris, Manitoba
which they call a hobby farm. They should refer to it as a
healing farm. Their rural homestead, bordered by the infamous
Red River became the focus of international media attention
recently when a couple of four-footed residents came together
to create an improbable family of two.
the baby lamb was born to Moon, the mother sheep, who rejected
him almost immediately. Nobody knows why this kind of birth
betrayal or maternal disowning happens. But it might explain
is suddenly sheepdip out of luck as far as surviving goes
when into the barn saunters Sunny, the Shaws three-year-old
golden lab with a disposition that matches her name. Sunny
was a mother once herself several years ago, so she knew exactly
what to do.
simply and morphed into the motherhood role. She nudged, licked
and snuggled the little black baby lamb until the newborn
felt he was alive and loved. And then, in front of the rest
of the barnyard crew, Sunny suckled the rejected offspring
of the farms only adult lamb.
minds that look to science for answers, Sunny produced enough
milk to nourish the lamb and allow him to live. Sheeba, the
male newborn lamb, so named by a family friend who is not
particularly good at gender reckoning is most definitely going
to live. Indeed, with Sunny at his side, hes thriving.
They romp around the hobby farm together, yellow lab and black
lamb garnering very surprised looks from the geese which,
as you know, mate for life. (For the record, Ray and I disagreed
on the monogamy of geese. He believes they are life partners
until death. I believe if geese could afford lawyers, theyd
never mate for life.)
and day, together the dog and the lamb look a lot like Ebony
Sunny has a baby lamb,
Whose fleece is black as coal,
And everywhere that Sunny rocks,
Sheebas sure to roll.
the biological mother is going to need an animal ethics lawyer
to get her son back now.
you keep sheep for their wool? I asked Ray, hoping the
answer was not for meat!
actually I hate to cut grass, he replied. Rays
an accountant who doesnt waste words or money.
is now two months old and fast becoming the size of Sunny,
his surrogate mother. Sunnys in for a bit of a bad surprise
right about now because according to Ray, the lamb is now
teething. OUCH! Yet, in one more month, Sheeba
will be able to take a bottle and after that watering hole.
little miracle of cross-species nurturing, theres a
lot more happening on Ray and Dianne Shaws 25-acre hobby
farm along the banks of the Red River. Theres that watering
said Ray, but Ill bring in a hen and that chicken
has a distinct personality. And then Ill introduce a
rooster to the farm and the hens personality changes.
Then I brought a goose here, pretty vicious at first and the
rooster protected the hen so that they changed too.
the fence, Ray explained they all get along the chickens,
the geese, the ducks, the ginny hens, the wild turkeys, the
sheep, the dog and oh yeah, Holly the donkey. (Think Babe,
the movie, with the animals playing non-speaking roles.)
all drink from the same watering hole, said Ray.
very loose, very calm around here with all the animals mingling,
added Rays wife Dianne.
the leader of them all, said Ray. The irony of an ass
being the leader of this barnyard zoo and the guy in charge
of that federal circus in Ottawa was not lost on either of
the fence, Ray discovered another level of companionship.
He was asked to assemble a little petting display at Morris
thought a few people might drop by, but crowds began to form.
You could see the natural joy people felt petting the animals.
The humans really let down their guard. The animals couldnt
wait to go back to the fair.
kid, Ray described as having a rotten personality
just melted into a giggling softie as he stroked the rabbit
in his lap.
a lot more going on inside the Shaws fence than meets
the eye of even Holly, the lead of this unlikely band of waddling
brothers and cackling sisters.
60s, both Ray and Dianne suffer from depression.
tried all manner of assistance including those self-help tapes
by Tony Robbins, recalls Ray.
helped bring Ray and Dianne out of their dark moods like the
animals around them.
the way they react with each other, just watching them all
get along and occasionally help each other
well, it takes the bad stuff away.
Ray repeated a line Id like to hear every delegate to
the United Nations recite in unison: We all drink from
the same watering hole.
Diannes adventures at animal farm have confirmed what
Ive been saying for years that cohabiting with
animals strips away the self-importance of people, that caring
for our pets replaces our egos with a greater purpose and
badly needed humbling. The love we have for our pets is unconditional.
The love we have for each other sometimes requires a prenuptial
they drive us crazy and they make us better people.
J. Thomas lives in Wainfleet, Ont.
For comments, ideas and copies of The True Story of Wainfleet
go to www.williamthomas.ca
more in the Jun
21 -Jul 18/2010
issue of Senior Scope)