Most of the time our relationships are formed by circumstances. We’re related to these people. We work with or live near these people. Our children are friends with their children. We went to university together, go to the same church or the same club.
Quite often our friends within a given group happen to be the first people we “clicked” with in some way. We found a common interest with the guy two doors down. We started hanging out with a group at work because someone invited you for an after-work drink the second day on the job.
We usually know a wide mix of people but how many times do you talk to them about something other than your common interest? This is where your opportunities lie.
Get Out There And Network
My father-in-law lived in the same city he was born in for his entire eighty-six years. He never went anywhere without meeting someone he knew, used to know, or knew someone he knew. It didn’t matter whether he was in a grocery store, camping, or even when he was in the hospital. He always had a source for a good used car, someone to paint his fence, free tickets to a sporting event and anything else he could want. My children used to ask, “Does Grandpa know everybody?”
You need to get to know a wide variety of people – not just the group you first befriended. Don’t be limited to work related gatherings (we used to call it networking) where you meet with people in the same business as you and exchange business cards (and most are never looked at again).
At parties or family get-togethers be sure to meet and speak to as many people who attend as possible instead of staying with your normal cluster. At work, head a committee, especially if it will bring you into contact with higher up managers and executives. This is a great way to be noticed at work and your name may be at the forefront when a new position comes along. You can meet many like-minded individuals when you join a club or organization that’s of interest to you.
Don’t Be Afraid To Stand Out
Volunteer for a project or activity instead of keeping your head down to avoid eye contact at meetings. Even if you’re not sure how to proceed, you can find out. There’s lots of information on-line and people always like to help someone who’s sincere. Ask for advice or ideas and offer up your own. You are bound to learn something new that will benefit you in your future enterprises.
People from different groups will be exposed to different information and different opportunities and they’ll think of you when something comes up that you may be interested in and will try to inform you as soon as possible. Positive relationships constantly contribute opportunities and value to your life. And the more people you know, the greater your benefits.
Consider your needs before taking cash from investments. Are you having a short-term financial dilemma, making changes to your lifestyle or starting to fund your retirement? To preserve your wealth you should think about market timing, tax consequences and paying the least amount of taxes possible.
Your assets usually fall within three categories.
1. Tax Exempt Assets
Principal Residence:
You may be able to tap into the equity that has built up in your home for short-term funds via a HELOC (Home Equity Secured Line of Credit) through your bank. The loan will have to be paid in full when the house is sold, reducing the amount of sales proceeds.
A Reverse Mortgage or Home Income Plan allows you to receive up to 40% of the value of your home. You have the option of receiving a lump sum or ongoing advances, or a combination of the two depending on your needs. There is an age qualification of 60+ years. Money received is not added to taxable income so it doesn’t affect benefits. No payments are required as long as you live in the house and the full amount becomes due when the home is sold.
Many people opt to downsize by selling the family home once the children are gone and purchasing a smaller residence. The difference between the sales proceeds and the purchase price of the new home can provide immediate funds or be invested for future income.
Life Insurance Policies:
You can obtain cash from investments such as permanent or “whole life” insurance. These policies include a savings component or cash value that can be made available or used as collateral on a loan.
Tax-Free Savings Account:
The earnings inside a Tax Free Savings Account are tax-exempt. A good feature is that you can replace any amount that is withdrawn.
Other:
This would include regular savings accounts, term deposits, Canada Savings Bonds, and personal items that can be easily sold (think eBay or garage sale).
2. Tax Pre-Paid Assets
These include investments like shares, mutual funds and bonds held inside non-registered accounts, personal property purchased for investment purposes (art, antiques) and revenue properties.
These investments will have been made with “after tax” money (as above) but, depending on the asset, your tax bracket and changes in the market you must be careful when selling to get cash from investments like this in order to best realize profits. The increase in value will accrue on a tax-deferred basis until they are disposed of but when sold 50% of the gain will be taxable. Losses, however, are only deductible against other capital gains, but can be carried over.
3. Tax-Deferred Accounts
An RRSP is a registered account for which a tax deduction was received when the capital is invested. The purpose is to fund a retirement lifestyle, but can be used for periods of unemployment or maternity leave when other actively earned income sources diminish or disappear. Because earnings are sheltered within the plan it is often best to continue the tax deferral as long as possible. The withdrawal of funds from an RRSP is fully taxable so tax efficient strategies should take into account marginal tax rates during your lifetime and at death.
You can tap into your RRSP on a tax-free basis if you want to fund the purchase of a new home or are returning to post-secondary school to finance education under the Home Buyers’ Plan or Lifelong Learning Plan subject to repayment terms.
Some people dutifully contribute to their RRSP each year for the tax deduction without any thought to the eventual withdrawals assuming their income will be less at retirement age. At age 71 your RRSP must be converted to a RRIF and minimum withdrawals must be made. If you receive benefits from a defined contribution plan or defined benefit plan (particularly from the public sector) as well as CPP you may end up in a higher tax bracket and in the “claw back” zone with OAS payments substantially reduced or even eliminated, as well as paying more in taxes. Be sure to make the calculations.
Cash From Investments: To Recap
When under pressure, many people think about withdrawing money from their RRSP’s first. This may or may not be the best option as it will be taxable and may make the situation worse.
You need to ask yourself the following questions. How much do I need? Lump sum, or ongoing payments? Can I use my equity to secure a loan rather than cashing in? Can I sell personal property (vehicle, jewellery) for quick cash? How can I minimize losses?
If you need a large amount of cash from investments, or life-cycle changes such as divorce, illness, moving to another city for a new job, or retirement requires asset disposition, carefully review which assets are accessible to you within your time frame. You want to preserve your resources as long as possible and minimize your overall tax cost.
I recently attended a dinner & auction and one of the items being auctioned off was a side of beef donated by a local rancher (yes, I live in Alberta). I’ve thought about buying a side of beef to save money, but I never knew where to buy it, how much it costs and what kind of storage capacity was required.
Where to Buy a Side of Beef?
The best place to buy a side of beef is to find a local rancher who has already established a business of selling beef directly to consumers. In some cases you can buy a side of beef directly online, or you can find ranchers selling in your area on websites like Kijiji.
Even with the convenience of shopping online, it’s probably a good idea to drive out and visit your local rancher. You’ll feel better knowing that you’ve seen the pasture the cows are grazing in, the barn they’re sleeping in, and the papers confirming that they are indeed hormone free, grain fed and government inspected.
If you live near a rural area, sometimes the farmer is literally only a few miles away and can deliver your side of beef right to your door with it cut, wrapped and ready to go.
How Much Does it Cost?
An average beef carcass weighs about 600 pounds and a side usually weighs slightly over 300 pounds. When you purchase a side of beef, you will get a variety of high and low priced cuts. You can specify how the side of beef is cut, and every cut should be utilized in order for your purchase to be considered a good buy.
I spoke with a local rancher who had sides of beef for sale. They were pasture raised, hormone free and government inspected red angus that had been grain fed for 150 days. They weighed approximately 330 pounds per side and cost $2.50 per pound, which including the cutting, wrapping and delivery.
For an upfront cost of $825 you could have over 325 pounds of beef consisting of t-bone steaks, rib-eye steaks, sirloin steaks, round steak, sirloin roasts, round roasts, cross-rib roasts, chuck roasts, lean hamburger, and stew meat. Make sure to ask for a discount if you pay in cash.
What about Storage?
When you receive a side of beef it will likely come in 5 big boxes, which would definitely fill a chest freezer and would require additional storage in your kitchen freezer. Depending on the size of your family, this order could last you upwards of 7-9 months.
Beef can be stored for 9-12 months, but only 3-4 months for ground beef. Most meat items can be stored for longer periods but they will lose some quality. Before you buy, decide whether or not your family can eat an entire side of beef within a year.
When you buy meat in bulk at a grocery store like Costco, you have to repack the meat in portions yourself in order to freeze it. The advantage of buying a side of beef is that the roasts and steaks can be cut to the specific weight and thickness that you desire, and they are packaged properly for long term freezing.
Is it Worth Buying a Side of Beef?
If you are thinking about purchasing a side of beef you should calculate the approximate cost per pound of edible meat (oxtail, anyone?) and then consider if it is cheaper to buy meat from a live animal or carcass, or compare grocery store prices and buy meat when it’s on sale.
Find a source of beef near you, and ask another family to try it out with you so you can split the initial cost, save on storage space and maximize the types of cuts yielded from the side of beef. Some families prefer roasts and t-bone steaks, while you may prefer ground beef and rib-eyes.
Some people swear that purchasing beef directly from the farmer not only saves money but it tastes better too. Have you ever purchased a side of beef, and was it worthwhile?