10
MetroVanIndependent.com
July 2015
Feature
1. How about splurging on something?
Great idea! But don't get too excited yet! I
suggest to read my full article first.
2. Is the money you received taxable?
Very few kinds of income are free of
income tax. In Canada, there's none on
life insurance benefits or lottery wins. But,
almost all other kinds of income or gains
that might fall into your lap will be taxable.
Different rules apply to different kinds of
income.
3. Is there a catch?
Image courtesy of 2nix at FreeDigitalPhotos.net
Is there such a thing as luck?
By Allen Espejo
Is it really luck that brings abundance
in our life or is there more to it?
I personally don't believe in good luck.
I prefer to call them blessings. Sometimes,
blessings come in the most unexpected
ways. But when blessings do come around,
are you prepared for it?
Blessings come in many ways - good
health, great relationships or perhaps a
financial windfall. Financial windfall may
sound the simplest, but in fact, it is as
equally complicated than the rest. Keep
this phrase in mind - money doesn't grow
on trees - but at times it might seem as if
it does.
Do you know what you would do if you
suddenly received a substantial amount
of money? For instance, Canadians love it
when they get a huge fat tax-refund! From
the results of a survey done in 2014, no
fewer than one-third would use it to either
pay down debt or make investments.
Things might be different, however,
in the case of a financial windfall that is
unexpected and more substantial. For
example:
• A lottery jackpot;
• An appreciable gain on the sale of
property;
• A substantial insurance benefit.
In these cases, considering what
to do could take more time, be more
complicated and, very likely, require the
help of a qualified advisor. Here are the
kinds of questions you should be prepared
to discuss:
Your grandfather died and left you a bunch
of money plus his second home? Watch
out, because his estate could also include
debts and taxes that come due to his
death. The gift might not be quite what
you expected.
4. What is the money intended for
in the first place?
A life insurance benefit works on the principle that the capital will generate an income
for the survivors for a number of years. You
don't buy an $85,000 sports car from a
$100,000 life insurance proceeds.
5. How are you doing financially?
A windfall could allow you to get your
financial situation under control: for
instance, pay off credit cards, or reduce
your mortgage or increase your cash flow.
6. Repay or invest?
On the other hand, you might want to run
some numbers. If you have a mortgage at
a very low rate, you could look at investing
the windfall to aim for a higher return
instead of paying off the mortgage more
quickly.
7. And of course, for the most
favorable of all, what about
splurging on something?
Here we are, back where we started!
Stabilizing your situation has probably
always been the best idea, but you might
be able to reconcile that with some more
stimulating ideas: upgrading a house,
replacing your car, taking unpaid leave or
starting a business.
Because in the end, even if the income
is unexpected, the future can be planned!
More than a decade ago, I did not know
how these things work. I thought money
grew on trees!
When I lost all the material things I had,
I thought all my blessings were taken away
from me by God, where in fact, it was my
fault because I didn't know how to manage
the abundance given to me.
After a while, I realized my failures and
mistakes in life and learned to acknowledge
them. I finally understood why God allowed
me to fail: so He can teach me how to
manage the abundance of blessings
that are all intended for me and to the
people around me. Failure purifies us. We
become persistent. Persistence becomes
faith. Faith becomes our virtue. That is a
blessing!
Alteamor “Allen” Espejo lives in Burnaby,
BC where he is a Life Licensed Qualified
Practitioner of the Insurance Council of
BC, a licensed mutual fund advisor in
the Province of BC and a Manager at
Desjardins Financial Security Independent
Network. He is an author of a book entitle B