This year they will use up their RRSP contribution allowance and are looking for additional ways to maximize their wealth.
They have turned to their long time financial advisor, Evan, who specializes in high net worth clients, to develop an investment strategy that is right for them.
Evan has worked with the family for years, he performs a detailed review of Carlos and Marianne's financial objectives, risk tolerances, cash flow and time horizon to ensure that there haven't been any changes in lifestyle or priorities since their last meeting.
Based on Carlos and Marianne's goals, Evan recommends an investment loan.
With an investment loan the couple can use:
- the loan to increase their investment savings; and
- the interest deductibility to reduce their effective borrowing costs
A $300,000 investment loan (x2)
- Interest rate of 3.75 % (Prime + 0.75%)
- Interest only payments, as they will use their tax refunds to pay down the principal of the loan
- Monthly payments of $937.50 (X 12 = $11,250)