Preserving Wealth: The Next Generation
by Jack Lumsden, MBA, CFP®
GENRE: Non-fiction (Business and Finance)
"Toronto-based research firm Strategic Insight projects that approximately $1 trillion in personal wealth will be transferred from one generation to the next in Canada between 2016 and 2026, with roughly 70% of that in the form of financial assets." – Advisors Edge January 30, 2018
"70 % of Wealth Transfers fail." – The Future of Estate Planning. Trusts and Estates June 2010
"65% of Canadians say it's likely they will leave an inheritance to their heirs or estate but only 46% of Canadians have a will." – Sun Life Canadian UnretirementTM Index, 2015.
Experts estimate that $1 trillion of inheritances will pass from one generation to the next within a decade in Canada. In addition, many individuals are selling their businesses, resulting in substantial gains. Accordingly, the ability to effectively manage one's wealth and prepare and implement a proper estate plan is no longer just prudent. It's crucial.
Jack Lumsden is an experienced financial advisor who uses an easy-to-read narrative style to clarify financial planning concepts that everyone needs to know. Preserving Wealth explains:
•Investment strategies to provide for growth and protection of capital,
•How to develop an effective estate transfer plan to reduce estate costs and taxes,
•Strategies to preserve wealth and safeguard an inheritance or gift for the next generation,
•How to select an executor, and what to do if you are an executor,
•The critical discussions to have with your family, and
•How to assemble a financial team.
I also had wondered about an emergency fund. The advisors in the media always say to have one, but is it really necessary?
“Well,” Uncle Wayne answered, “everyone should have either an emergency account or a line of credit equal to at least three months’ expenses that you can get your hands on easily and quickly for emergencies, such as losing your job.1 The best place to keep your emergency stash is in a high interest savings account.
“Once that’s taken care of, the next thing you should do is pay off all your debts in this order: credit cards, personal loans, car loans, and then your mortgage.”
“Why in that order?” Sally asked.
“Because the first debt to get rid of is the one with the highest interest rate, and that’s usually credit cards, followed by the others I mentioned. However, there’s one exception to this rule. Don’t pay off loans for which the interest that is payable is deductible for tax purposes. For example, being self-employed, Mark may have some interest payments on loans that he can deduct as business expenses on his tax return, and these you would not pay off immediately.”
“It’s probably good advice,” Alice said, “but frankly, Uncle Wayne, it’s not very exciting. Wouldn’t we be just as far ahead by investing a lump sum right away? At least then we could build something up.”
Uncle Wayne looked at the rest of us. “Can anyone answer that question?”
Mark took a stab at it. “Well, I’ve been mortgage-free for a few years now, and with those payments gone, I find I have a lot of extra money every month to spend or invest.”
“You have to remember,” Uncle Wayne added, “that mortgage payments consist of principal and interest. When you pay off a mortgage, you wind up keeping the cash equivalent of all the interest you would have paid over the years. You save a tremendous amount and then you can invest that money to achieve your long-term goals.”
1 As this book was being published, many people were being laid off due to the COVID-19 pandemic, and a three-month cash reserve would have been beneficial.
AUTHOR Bio and Links:
JACK LUMSDEN, MBA, CFP®, is a financial advisor with over twenty years of experience. He has enjoyed building a strong career and loyal client base. In addition to helping clients preserve and transfer their wealth, he focuses on those who are or will be making the transition from their working years to retirement with the need to develop a lifelong income and cash-flow strategy from the financial assets they have accumulated.
A lifelong resident of Burlington, Jack dedicates much of his spare time to staying active and coaching high school football. Spending time with family is another of his core values. He enjoys attending sports events with his son, Connor, and country music concerts with daughter, Paige, while he and his wife, Sandi, like to travel with friends and explore new destinations.
Jack's education includes a BBA from Wilfrid Laurier University (where he met Sandi), and an MBA from McMaster University. He is also a CERTIFIED FINANCIAL PLANNER® or CFP® professional.
The publisher is running a Goodreads giveaway in conjunction with the tour: 10 print-copies. Anyone in Canada on Goodreads can enter
Connect with Jack Lumsden
Financial Planning: jacklumsden.com
Author website: preserving-wealth.ca
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