Adam Smith Financial Security Advisor / Fralick Financial & Insurance Inc.

Question: I want to start building a financial plan for my 7-year-old daughter. Which of the following options would be beneficial in Canada?

1. open a checking account

2. open a savings account

3. start an RESP

4. apply for a credit card

5. add as an authorized user on my credit card

6. open a TFSA for her

7. take out a whole life policy

Answer: Opening a checking account for your 7-year-old daughter is not necessary at this time, as she is too young to handle the responsibilities that come with it. Opening a savings account for your daughter is a good idea, as it will help her learn about saving money and managing her finances. Starting a Registered Education Savings Plan (RESP) for your daughter is also a good idea, as it will help her save for her post-secondary education. Applying for a credit card for your 7-year-old daughter is not appropriate, as she is too young to have a credit history or to handle the responsibilities that come with having a credit card. Adding your daughter as an authorized user on your credit card is also not appropriate, as she is too young to understand the implications of using credit. Opening a Tax-Free Savings Account (TFSA) for your daughter is a good idea, as it will allow her to save money in a tax-advantaged way. Taking out a whole life insurance policy for your 7-year-old daughter is not necessary at this time, as she is too young to need life insurance. It is always a good idea to consult a financial advisor to ensure you are making the best decisions for your child's financial future.

Question: I want to start building a financial plan for my 7-year-old daughter. Which of the following option would be the best way to start in Canada?

1. open a checking account

2. open a savings account

3. start an RESP

4. apply for a credit card

5. add as an additional user on my credit card

6. open a TFSA for her

Answer: The best option to start building a financial plan for your 7-year-old daughter in Canada would be to open a Registered Education Savings Plan (RESP) and a savings account. An RESP is a government-incentivized savings plan that helps parents save for their child's post-secondary education. Contributions to an RESP are not tax-deductible, but the investment income earned within the plan grows tax-free, and when the funds are withdrawn to pay for the child's education, the funds are taxed in the child's hands, which is typically at a lower tax rate. A savings account is also a good idea as it can help teach your daughter about saving money and managing it. It's important to note that the other options you listed, such as opening a checking account, applying for a credit card or adding her as an additional user on your credit card, are not appropriate for a 7-year-old and should be avoided.

Advisor vs Ai P6 - Debt snowball

Asking Ai for financial advice.

Question: I have some debt that I need to pay off. 1. Credit card one $8000 at 19%

2. Car loan of $13000 at 4%

3. Credit card two $3000 at 8%

4. Student loan of $15000 at 3%

5. Mortgage $265,000 at 2.5%

What would be the best order to pay off these debts?

Answer: The best order to pay off these debts is known as the "debt avalanche" method, which prioritizes paying off the debts with the highest interest rates first. Using this method, the order you should pay off your debts would be Credit card one ($8000 at 19%) Credit card two ($3000 at 8%), Car loan ($13000 at 4%), Student loan ($15000 at 3%) Mortgage ($265,000 at 2.5%) Focusing on the highest interest rate debts first will save the most money in interest charges over time. Another approach is "debt snowball," which prioritizes paying off the smallest debts first to build momentum and motivation. You can choose whichever approach works best for you.

Asking Ai for financial; advice.

Question
I am carrying a balance on my travel credit card that I won't be able to pay off for a year. What is the best option to save me money?

1. Leave the money on the credit card
2. Take out a payday loan
3. Move funds to a line of credit
4. Declare bankruptcy

Ai Answer
Leaving the money on the credit card may be an option, but it is not recommended as it could result in high-interest charges.

Taking out a payday loan is not recommended, as the interest rates on these loans are usually very high and can trap you in a cycle of debt.

Moving funds to a line of credit may be a better option, as the interest rates on lines of credit are usually lower than those on credit cards. However, it's important to compare the terms and fees of different lines of credit before making a decision.

Declaring bankruptcy should be considered a last resort, as it can negatively affect your credit score and financial future. It's always recommended to speak with a financial advisor or credit counsellor before filing for bankruptcy.

Overall, it's essential to plan to pay off the debt as soon as possible and avoid taking on more debt.

An emergency fund is a savings account set aside for unexpected expenses, such as a job loss or medical emergency. The best option for an emergency fund is typically a savings account or a certificate of deposit (CD) at a bank or credit union, as these options offer easy access to cash and relatively low risk.

Mutual funds, bonds, and stocks can be volatile and may not be the best options for an emergency fund. Exchange-traded funds (ETFs) can also be volatile and may not be the best option for an emergency fund. GICs are low-risk, but they have a long-term lock-in period and should be used as a long-term investment.

It's also important to consider the interest rate of each option and make sure it's high enough to keep pace with inflation. Ultimately, the best option for you will depend on your personal circumstances and risk tolerance.

Best Way To Save For Vacation - Advisor vs Ai Part 3

Question: I want to save money for a vacation in 12 months. What is the best account type to use in Canada? Should I use an RRSP RESP TFSA RDSP?

Answer: The best account type to use in Canada for saving money for a vacation would likely be a Tax-Free Savings Account (TFSA). TFSAs are flexible and allow you to withdraw money at any time without penalty, which can help save for a specific goal, such as a vacation. Contributions to a TFSA are not tax-deductible, but the investment income earned in the account (including capital gains and dividends) is not taxed when withdrawn.

A Retirement Savings Plan (RRSP) is typically used for retirement savings, and contributions are tax-deductible, but withdrawals are taxed as income.

A Registered Education Savings Plan (RESP) is used for saving for a child's post-secondary education, and the government provides a grant based on contributions up to a limit.

A Registered Disability Savings Plan (RDSP) is for an individual who has a disability and is eligible for government grants and bonds and generally not for saving for a vacation.

It's important to consider your personal financial situation and goals when choosing an account type, and you may want to consult a financial advisor to determine the best option for you.

Asking Ai Financial advice Part two. Mortgage insurance?

Question: I just bought a house. What type of life insurance would be best to pay for the mortgage if I die? Term life or Whole life?

Answer: A term life insurance policy is generally the most cost-effective option for providing coverage to pay off a mortgage in the event of your death. This type of policy provides coverage for a specific period of time, such as 20 or 30 years, and pays a death benefit to your beneficiaries if you die within that time frame.

Whole life insurance, also known as permanent life insurance, is a type of policy that provides coverage for your entire life and includes an investment component. While whole life insurance can provide some financial protection for your beneficiaries, it is typically more expensive than term life insurance. It may not be the most cost officiant option for paying off a mortgage. When choosing a life insurance policy, it's essential to consider your financial goals and the needs of your beneficiaries. You may want to consider working with a financial advisor or insurance professional to determine the type of insurance best fits your needs.

Asking chatgpt some financial advice

We have only a few weeks left in 2022. Is there any financial discussion that you should have before the end of the year?

Many features are available to you when deciding which credit card to get. But, the interest may be overwhelming. Do you know what credit card would best meet your needs?

Would you know what to do if you received an unexpected lump sum of money? Regardless of where the money came from, here is a process to help organize your money.

November 2022 is Financial Literacy month in Canada. How are your personal finances? Do you understand how to invest? Over this month, many videos will help you understand the simplicity of the financial system.

You continually hear the importance of an emergency fund. Here are three different types you might have. The last option is the best.

Interest is calculated annually, so what does that mean? If you're taking out a car loan or a mortgage at 3% or 5%, whatever it is, that percentage is charged every year on the amount that you owe. Some people think I'm getting a car for five years, and it's five percent, so that's one percent a year. It doesn't work that way, so just be careful you need to fight for every interest rate savings that you can, and in companies, they have the ability to give you a lower rate if you ask, so you save yourself some money and put more money in your pocket and enjoy life.

You want to retire someday, so how do we get you there? One tool available to you is called an RRSP (registered retirement savings plan). How does it work, and how do taxes work? You go to work and earn a paycheck, split that paycheck into two parts. A part goes into your bank account, and the part goes towards taxes. You can then decide to take some of your income and move it into your RRSP account. When you do that, you pretty much tell the government, "I haven't made this money yet." Then the government says, "oh, you paid taxes on that money; let me give you some back. Then you can put that in your account or in the RRSP. Now your RRSP over the years is growing, and then you can make the decision when you retire to take that money out and pay the taxes then. Take the money out, pay the taxes, and then you're making more money here than you are here. That's the goal of the rsp, and you can save a lot of money by taking the money out at a lower tax rate than a higher tax rate.

Will you benefit from opening a TFSA? Or would an RRSP be better for you?

Financial planning award 2021!

Follow these steps to help you start to build your financial plan.

How to turn $1 into 4,000,000,000.00

Are your investments meeting your needs? The last few years have introduced new uncertainty into the markets. You work hard for your money, and I understand that it is hard to watch the markets decline. Now, more than ever, reviewing your investments, allocation, risk, and management fees is essential. A few simple changes may help your money grow to its full potential. If you want to review your portfolio, you can contact me.

Part two: I am not a huge fan of the new Tax-Free First Home Savings Account. I feel that very few Canadians will benefit from that account. We already have the home buyers' plan within an RRSP. Why not change that plan to become more like the new account. Here are two suggestions I would make that would help people get closer to buying a new home sooner.

We are now half way through 2022. I have been an extra busy 6 months in the markets. Here is what some industry professionals have tried to piece together for us.

Today I watched another seminar about global macros. A few things are going on in the world right now, as you know, so I'm trying to keep up with everything. I'll let you know if there are any highlights. Well, that conference was pretty intense. I'll show you some of the charts we're looking at, and as you can see, they're pretty in-depth with a lot of variables. In the end, the breakdown of the conference was that commodities are the best performing asset right now. There is no surprise there, but that's not always good news because of the variables in place of why commodities like oil are going up so high. The second item that kind of intrigued me was the question, "what is gold?" People always used to consider it a store of value and a hedge against inflation. It hasn't really been those things; he says it's still a store of value to him and a hedge against inflation. Then also he said that bitcoin has also met that need over time which was kind of neat to hear. Thirdly he talked about a bond yield curve, I feel you're going to hear more people talking about this, and it is not a good sign. So, what is going to happen if the bond yield inverse curve happens? There was a lot of in-depth information. I'll try to break it down some more in other videos, but it's always good to learn. If you want to review your portfolio and if you have any questions, you can contact me. If you enjoy this content, please consider like share and subscribe.

For anyone who tells you to invest in the S&P 500 only, here are four concerns I have as a financial advisor. If my clients came to me wanting to do that, this is a chart of different indexes worldwide, and this dark blue is the S&P 500. You can see it's always been in the top five over the past 10 years, but it's never always consistently on top. There's only one year it is on top, and that's 2019. My second concern is that it's really easy giving financial advice looking backwards in time and then forwards in time. This is consistently on top but will that continue? My concern is this is the S&P 500. Compared to other indexes, this channel might not happen forever, so that means the S&P 500 might taper off, or these will be better options over time. Finally, diversification. Diversification, to me, is way more important on the sell than it will ever be on the buy; if you wanted to sell in 2018, your bond portfolio would be the best option, not the s p 500, and as you can see, every single year you might have better options to sell than the s p 500 if you only invest in that one sector I don't feel you're diversified enough if you want to review your portfolio you can contact me.

When you're buying a house for the first time, you need to consider three different kinds of insurance. The problem is most people get them mixed up the first kind of insurance is a default insurance; not everybody needs to get this, but when you do, it protects the bank from you going bankrupt and not paying them back. Its loan insurance on what they are giving you the second insurance would be like house insurance, so if there's a fire or a flood it's coming, you are covered and will be able to get to everyday life as soon as possible the third kind of insurance is a mortgage insurance and mortgage companies have this application of insurance built into their application process which means you might not even know that you are applying for insurance when you're there for a mortgage I'm not a huge fan of mortgage insurance life insurance has way more flexibility than mortgage insurance ever will if you want to review your insurances to make sure you have the best product to meet your needs you can contact me.