So this was what I planned on doing as of August of 2007 that I posted on here. I got a lot of feedback on it previously that it wasn't aggressive enough.
Aug 29th, 2007, 09:48 PM
Here's my plan:
Goal: Total financial Freedom by Age 40 (12 years) with a passive after tax income of at least $35,000/year
Defensive plan. Goal: provide a defensive wall around my finances in the event of serious illness, disability or death. I am self employed so I have no group disability plan and I am not eligible for Employment insurance, so if I am disabled or seriously ill and not able to work, my financial plan in shot.
$100,000 in life insurance (paid up at age 47) – will pay out dividends eventually providing residual income even after it is paid up. Benefit amount will be used for final expenses.
$100,000 Critical Illness insurance – Return of Premium on death and at age 65 will provide a lump sum in the form of ROP, or benefit if diagnosed, later in life to keep income stream in place or to preserve savings in the earlier years.
$50,000 in Long Term Care (paid up at age 55) – goal is to use as an income stream in later years or to preserve savings if used earlier in life.
Offensive plan. Goal: Build net worth and passive residual income.
Pay out Mortgage as fast as possible. Use Re-advancing Mortgage so the Line of Credit can be used for investment purposes keeping the debt tax deductible (mortgages in Canada are not Tax deductible, so I need a way of converting my debt from non-deductible to deductible). Capitalize the interest so no payments need to be made. Life insurance will pay out loan upon death.
Build a well-diversified DRIP portfolio. Use DRiP into new shares until retirement age. Upon retirement dividends are paid in cash to provide residual passive income. Dividends will be taxed lower than earned income from revenue properties so this provides a more tax efficient income stream.
Use value of DRIP portfolio and cash values of insurances as security on another investment loan to purchase commercial/revenue property. Borrow as a loan instead of a mortgage so interest in tax deductible. Capitalize interest so no payments need to be made. Secured insurance benefits go towards paying out loan.
Business Plans. Build successful businesses to add to net worth and passive income.
Financial Business: Builds residual/passive income from trailer fees to service block of business.
2008 (All dates are "at the latest")- Hire a part time assistant. Main focus would be to do prospecting, cold calling and arranging appointments. As business grows more admin work is done
Establish solid relationship with Property & Casualty issuer (home/auto/travel insurance).
2013 - Hire at least one associate advisor.
2017 – I move to management role - Start independent office (X Financial) that offers comprehensive insurance and investment planning services (property & casualty insurance, individual and corporate life and health insurances, and investments). 8-10 employees including fulltime admin person, 2-3 associate advisors, 2-3 P&C advisors, 4 part time customer service desk help for motor issue/renewals. Potential expansions could include a real estate division and/or a mortgage/loan broker division to have a ‘one stop shop for all financial needs.
2019 – I move to business owner role. Hire manager to run X Financial. I continue as agent of record for business so residual income (trailer fees) continue.
Property Management Company: Provides residual/passive income from rent paid by tenents.
Feb. 2008 - Completion renovations to finish basement suite at Property A (current residence). Get suite renter to provide passive residual income of $200-$300/month to put towards paying off mortgage faster.
2015 - Mortgage Paid out. purchase a second property. Live in Property B when renovating. Property A now used as full rental unit for $700/month. Revenue from property A used to pay out new mortgage on Property B. Repeat as often as possible. As assets grow move up to apartments and larger commercial properties. When 10 properties are accumulated create a holding company and hire a property manager. Move to business owner position.
2020 - Write a book about how awesome I am. Sales from book will provide more residual income.
2029 – Age 50 fully retired. Become strictly an investor…no work or direct link to the businesses, just providing private equity to companies.
I'll post replies as updates as they come. gotta run right now, but I'll through a reply up later tonight...
Aug 29th, 2007, 09:48 PM
Here's my plan:
Goal: Total financial Freedom by Age 40 (12 years) with a passive after tax income of at least $35,000/year
Defensive plan. Goal: provide a defensive wall around my finances in the event of serious illness, disability or death. I am self employed so I have no group disability plan and I am not eligible for Employment insurance, so if I am disabled or seriously ill and not able to work, my financial plan in shot.
$100,000 in life insurance (paid up at age 47) – will pay out dividends eventually providing residual income even after it is paid up. Benefit amount will be used for final expenses.
$100,000 Critical Illness insurance – Return of Premium on death and at age 65 will provide a lump sum in the form of ROP, or benefit if diagnosed, later in life to keep income stream in place or to preserve savings in the earlier years.
$50,000 in Long Term Care (paid up at age 55) – goal is to use as an income stream in later years or to preserve savings if used earlier in life.
Offensive plan. Goal: Build net worth and passive residual income.
Pay out Mortgage as fast as possible. Use Re-advancing Mortgage so the Line of Credit can be used for investment purposes keeping the debt tax deductible (mortgages in Canada are not Tax deductible, so I need a way of converting my debt from non-deductible to deductible). Capitalize the interest so no payments need to be made. Life insurance will pay out loan upon death.
Build a well-diversified DRIP portfolio. Use DRiP into new shares until retirement age. Upon retirement dividends are paid in cash to provide residual passive income. Dividends will be taxed lower than earned income from revenue properties so this provides a more tax efficient income stream.
Use value of DRIP portfolio and cash values of insurances as security on another investment loan to purchase commercial/revenue property. Borrow as a loan instead of a mortgage so interest in tax deductible. Capitalize interest so no payments need to be made. Secured insurance benefits go towards paying out loan.
Business Plans. Build successful businesses to add to net worth and passive income.
Financial Business: Builds residual/passive income from trailer fees to service block of business.
2008 (All dates are "at the latest")- Hire a part time assistant. Main focus would be to do prospecting, cold calling and arranging appointments. As business grows more admin work is done
Establish solid relationship with Property & Casualty issuer (home/auto/travel insurance).
2013 - Hire at least one associate advisor.
2017 – I move to management role - Start independent office (X Financial) that offers comprehensive insurance and investment planning services (property & casualty insurance, individual and corporate life and health insurances, and investments). 8-10 employees including fulltime admin person, 2-3 associate advisors, 2-3 P&C advisors, 4 part time customer service desk help for motor issue/renewals. Potential expansions could include a real estate division and/or a mortgage/loan broker division to have a ‘one stop shop for all financial needs.
2019 – I move to business owner role. Hire manager to run X Financial. I continue as agent of record for business so residual income (trailer fees) continue.
Property Management Company: Provides residual/passive income from rent paid by tenents.
Feb. 2008 - Completion renovations to finish basement suite at Property A (current residence). Get suite renter to provide passive residual income of $200-$300/month to put towards paying off mortgage faster.
2015 - Mortgage Paid out. purchase a second property. Live in Property B when renovating. Property A now used as full rental unit for $700/month. Revenue from property A used to pay out new mortgage on Property B. Repeat as often as possible. As assets grow move up to apartments and larger commercial properties. When 10 properties are accumulated create a holding company and hire a property manager. Move to business owner position.
2020 - Write a book about how awesome I am. Sales from book will provide more residual income.
2029 – Age 50 fully retired. Become strictly an investor…no work or direct link to the businesses, just providing private equity to companies.
I'll post replies as updates as they come. gotta run right now, but I'll through a reply up later tonight...
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