Bridex Accounting Services Inc.

Protect your family through an insurance and estate plan

Protecting your family from the COVID-19 virus has been a priority for many parents and families recently. Purchasing face masks, hand sanitizer and disinfecting wipes are some of the investments many have made to combat the virus. Over the long term, life insurance coverage is something that can protect your family as well.
Although we don’t like to ponder our mortality, the recent pandemic has obviously made us hyperaware of the fragility of life. Given the current situation, today, many insurance companies are providing life insurance coverage faster and easier than ever before.

Happy Friday! I hope you enjoy your weekend.

Preserve Cybersecurity While Working Remotely

Most organizations have moved their work forces to some form of remote work as a result of the COVID-19 pandemic. Surprisingly, remote work has proven effective for many organizations, and they are now contemplating updating their remote work policies to allow employees more flexibility in a post-COVID-19 world. However, from a cybersecurity standpoint, remote work presents unique challenges and risks.
Employees may be accessing sensitive corporate data from their personal devices, or they may be using company-issued devices for corporate and unauthorized personal use. In both instances, hackers will prey on these distracted employees: sending them phishing emails in hopes of gaining access to the organization’s network, or stealing credentials which they sell to criminals who may then launch cyberattacks.
Use these technical tips for a more secure network
That said, there are some basic steps organizations can take to improve their cybersecurity posture. Here are few technical steps you can use as a good starting point.
1. Multi-factor authentication (MFA). Having a strong password is no longer sufficient. Organizations that allow employees to access their work accounts with a simple username and password often fall prey to hackers. If a user’s credentials are stolen by hackers, MFA will offer an extra layer of protection since the hacker will not be able to access the additional unique, randomly-generated code.
The extra step in the MFA process could be an email or text message confirmation, a biometric method, such as facial recognition or a fingerprint scan, or something physical like a USB fob.
2. Updates and patches. During the pandemic, most IT departments were focused on moving a large portion of the organization’s workforce to remote work. This may have put other IT tasks on hold, such as patching and implementing non-critical updates.
Hackers will take advantage of this delay to access networks and potentially steal data. Thus, implementing any updates and patches as quickly as possible should be a priority.
3. Securing home routers. Employees working from home are relying on the Internet and Wi-Fi access at their residence. Did they change their router password after it was first installed? If not, their home network may be vulnerable.
It is important to take simple steps to protect home networks and prevent hackers from having access to connected devices. While changing a router password is a good first step, your employees should take additional measures. For example:
• Ensure that firmware updates are installed, so that security vulnerabilities can be patched.
• Make sure the encryption is set to WPA2 or WPA3.
• Restrict inbound and outbound traffic.
• Use the highest level of encryption available.
• Switch off WPS.
Employees needing help with these measures should connect with your IT department.
4. Beware of remote desktop tools. Many employers allow staff to access their work networks via remote desktop protocols (“RDPs”). While this access method can be secure, several studies have found security problems with some of the most popular RDP tools for Linux and Windows. Ensuring that these tools are properly configured and tested for security is a critical step to take.
5. Strong password protocols. Everyone knows the importance of having strong passwords. Unfortunately, many still use the same password across multiple accounts. This means that all it takes is one compromised password for a criminal to take over all accounts associated with that user. They take leaked usernames and passwords and attempt to log into other online accounts, a tactic commonly known as “credential stuffing.”
Passwords should be unique for every account and should comprise a long string of upper- and lower-case letters, numbers and special characters. Additionally, organizations should consider implementing shorter periods for password resets, for example, going from a 90-day to a 30-day reset cycle.

Happy Weekend! I hope you have a fantastic day.

Voluntary Disclosures Program

The Canada Revenue Agency (CRA) refers to the Voluntary Disclosures Program (VDP) as a second chance to correct your taxes. The program has both income tax and GST/HST streams.



Contact Baldip Moore, CPA, CGA to learn more.

Today’s investment options and expectations: Which is best for you?

Given that today’s bank savings rates are close to nil due to historically low interest rates, Canadians will likely need to explore other options outside of guaranteed investments to achieve their retirement goals. In so doing, they will need to be comfortable with risk.

In the context of investing, risk can be defined as “the loss of money due to negative fluctuations in investment value.”

Risk: Why take it? And what level of risk is right for your savings?

Investors risk their hard-earned savings in riskier investments with the expectation of earning a higher rate of return than less risky investments. Typically, investors require higher rates of return to reach their financial goals, or else those goals may be negatively impacted.

There are two key factors that should dictate how aggressive (or risky) you should be with your savings):

your ability to take risk (i.e., factual details about your finances)
your willingness to take risk (i.e., your attitude toward risk and potential losses)

When combined, these factors provide your “risk tolerance” (i.e., the amount of investment loss you can tolerate and not panic).

What are the risks of different investment types?*

Traditionally, there are three types of investments:

equities (stocks)
fixed income (bonds)
cash (or cash equivalents)

These three groups of investments are called “asset classes,” which are groups of investments that exhibit similar characteristics and move similarly in the marketplace. These three asset classes are the predominant choices for Canadian investors, whether completed directly or indirectly through a mutual fund or exchange traded fund (ETF).

Labour Day reminds us that we have worked hard enough for the year and we must take a break….. So don’t let your work interfere with your enjoyment and enjoy this official holiday to the maximum…. Best wishes on Labour Day.

It's Friday! I hope you have a fantastic weekend.

Real estate and measures for Canadian homeowners

Canadian homeowners, including landlords, may be eligible for up to $40,000 of interest-free loans to make their homes more energy efficient through the Canada Mortgage and Housing Corporation.

Happy Friday! I hope you have a fantastic day.

We’ve all received email ads for websites that can help us find our credit score, with monthly updates, for free. It’s little wonder that many Canadians are now fixated on that three-digit number. Surely a good credit score means that you are on the right path to financial security, right?

Unfortunately, no! A high credit score is no guarantee that you will not face financial difficulty, or even bankruptcy, in the future. There are many misunderstandings about what the credit score is, what factors affect it and who it was developed for (hint: it’s not you).
What is a credit score?
Credit scores are a product developed by credit bureaus to sell to banks and other lenders as well as insurance companies. They are portrayed as a “measure of trust” – that is, a higher credit score provides lenders with more confidence that you will pay them back. Lenders are primarily interested in maximizing their profitability, which depends on you carrying balances and paying interest as well as paying them back. What’s in their best interest is not necessarily what’s in yours.
The credit bureaus access data from your financial institutions and phone and utility companies. They then apply their algorithms to come up with a three-digit score. Credit scores from different credit bureaus can be different, as they weigh the importance of certain factors differently or use different time frames for your
credit history.
How can you improve your credit score?
Once you understand the factors that do and don’t affect your credit score, you can assess whether some of the common suggestions for improving it are in your best interests or in the best interests of the lenders. Obviously, making sure that you make all minimum required payments on all your debts is important to maximize the payment history.
There are several ways that you can keep your utilization rate under the 30% target. You might consider making multiple payments during each month if you have a significant purchase, or if you are approaching the target because of regular charges throughout the month.
Two methods that are often suggested, but should be approached with caution, are to ask for an increase in your credit limit or to take out an instalment loan to pay down the balance on a credit card (which could also have a positive effect on the credit mix factor). Both methods come with the risk of additional borrowing if you are not disciplined about managing your finances. It’s also worth noting that carrying credit card balances of up to 30% of your credit limit means that you will be paying a significant amount of interest each month.
You could improve your credit history by taking out longer loans, but, like many of the other suggestions, this will result in you paying more interest to the banks.
It is important to know your credit score and to check your credit report from each of the credit bureaus annually to ensure that there are no mistakes. Just remember that the credit score was developed by and for lenders, and that it was not designed as a measure of your personal financial health. And those free services with monthly updates? They make money by recommending financial products to consumers, for which they receive a referral fee. Some even have “coaches” to provide personalized tips to improve your credit score and offer product recommendations. So, if you receive a recommendation to get a consolidation loan to pay down your credit card balances, remember that that’s how these services make money. Don’t focus on improving your credit score by making decisions that are in the lenders’ best interest and not your own!

Happy Friday! I hope you have a fantastic day.

Confused? You would not be the first person to mix up these two GIC investment vehicles: guaranteed investment certificates and guaranteed interest contracts. Although their acronym is the same, the differences between these GICs could have material implications for your money, especially when it comes to transferring wealth to the next generation.
Individuals often find themselves holding a large portion of their wealth in non-registered investments. This may have been a result of an inheritance, shrewd saving, recent downsizing to a condo or the sale of a business. Whatever the scenario, the risk to the non-registered money if you pass away is that your estate and this money will be subject to probate – along with the delays and fees that come with it.
The perils of probate
Let’s first review this key concept: Probate is the legal process where a judge reviews the deceased’s will for validity and authenticity, and appoints the executor of the estate. It comes with a cost that is levied to the estate.
Each province has its own set of probate fees. For example, in Ontario on an estate worth $200,000, the probate costs would be about $2,250, or close to 1.1% of the estate’s value.
Moreover, in Ontario the probate process will delay the release of estate funds by six to nine months. In the meantime, while your estate’s funds are tied up in the courts, your surviving loved ones may be required to pay the cost for certain final expenses, such as funeral and burial costs, and the additional professional service fees that accompany the administration of the deceased’s estate, including accounting, legal and executor fees. In the end, for a $200,000 estate, these costs may subtract another $3,900: for a combined estate cost of $6,150, or close to 3% of your estate.
The GIC that protects more of your assets
So, why does this matter to your non-registered GIC portfolio? Well, if you would like to ensure a smooth, cost-effective transfer of your wealth to the next generation, then choosing the right type of GIC is important.
Although both bank and insurance GICs operate in much the same manner while an individual is alive, it is the treatment of the GICs within the estate that shows the important difference between the two.
If you hold an insurance GIC, it will help protect your non-registered assets from these influences, as you can elect a beneficiary to your insurance GIC that allows the non-registered assets to flow directly to them – and bypass probate. Holding a traditional bank GIC will expose your non-registered assets to the probate, potential delay and additional fees discussed above.

Happy Fri YAY!

Legendary investor Benjamin Graham said that the investor’s chief problem and even their worst enemy is likely to be themselves. Indeed, borrowing to invest is not for the faint of heart.
Why might you consider borrowing to invest in the stock market?
Traditionally, discussions with your financial professional related to borrowing and investing occur at the same time. This typically happens when the two following market conditions are present:

1. Borrowing rates are low.
2. Stocks are cheap after a dramatic decline in stock prices.
With the novel coronavirus spreading rapidly around the world, economies were closed for business as stay-at-home orders were issued in Canada and abroad. Stock markets and interest rates both fell dramatically, offering investors these traditional incentives to pursue a leveraged investment strategy.
Are you fit to borrow to invest?
These two key factors should dictate whether borrowing to invest is right for you:
• your ability to take risk
• your willingness to take risk
To assess your ability to take risk, you would look to the factual details laid out in your financial strategy or retirement plan. If your retirement plan cannot sustain higher expected risk (in other words, your cash flow is tight), then this investment strategy is not something you should consider.
Borrowing to invest is a better strategy for investors who have excess cash flow and need help building long-term equity outside their principal residence and/or business. Those who typically might benefit from this strategy are professionals with their own practices, such as partners at law, accounting firms, doctors or dentists.
Next, consider your willingness to take risk. If you can’t sleep at night because your portfolio of investments using your own money has declined in value – never mind other people’s money that you are considering borrowing from the bank – then this strategy is not right for you. However, if you are among the investors who have survived previous “bear markets” (i.e., stocks declining 20% or more) and have not panicked, then this strategy is one for you to consider.
Another situation that favours this investment strategy is that Canadians are traditionally very good at paying down debt, but they may struggle with building equity through savings outside their registered RRSP and TFSA accounts. So, this leveraged strategy of borrowing to invest could make sense – it forces the investor to save while they focus on paying down debt, which they have historical experience doing aggressively.

Keep your leveraged investment plan clean and tax deductible
Borrowing to invest is tax-deductible in Canada when money is invested in a non-registered account. To keep your cost of investing clear for the Canada Revenue Agency (CRA), set up a line of credit dedicated only to your leveraged investment strategy. That way, it will be crystal clear how much it cost you to invest.

Happy Friday! Make today a good one.

If you work in the private sector and are wondering how you can replicate the “gold plated” pensions of your friends in the public service, envy not! You can enjoy a similar pension experience while complementing your private investment savings (e.g., RRSP, TFSA, etc.).

Contact Baldip Moore, CPA, CGA to learn more.

Happy BC Day! I hope you enjoy a fantastic long weekend!

TGIF!

Disasters come in many shapes and sizes. Natural disasters are certainly cause for concern, but chances are that disruptions to your organization are more likely to involve application, communication or hardware failures. Properly planning for such unexpected events will not only help you respond effectively; it will also save you a significant amount of money.

What is a disaster recovery plan (DRP)?
The cost structure of potential downtime will dictate many of the specific components of the DRP and where emphasis needs to be placed. Typically, a reasonable DRP will include the following:
▪️ formal documented sets of steps, lists and instructions needed to return to normal business operations
▪️ instructions of a precautionary nature as well as prescribed reactions for recovery
▪️ list of assets, key applications and data
▪️ important details, such as locations and other relevant information
▪️ contact information for all relevant personnel (both internal and external) and key third-party resources

Happy Monday!

Happy Friday!

A reality of the economic and demographic trends occurring in Canada is that everything costs more, especially in urban centres. Take real estate costs, for instance, which for new parents might be eight to ten multiples of their combined income to acquire a detached home. For new or expecting parents, this is increasingly a key question in family planning.

As a result, the cost of bringing a new child into a family is a very important consideration. Parents may wonder about the ability of their children to succeed with a middle-class upbringing or the fact that they could jeopardize their own finances if they are not careful. It’s imperative for families to discuss the financial aspects of raising children because, in reality, children are cost centres – and finances are typically cited as a leading driver of divorce in Canada.

To maintain your family’s long-term stability, it is recommended to review your family finances and the cost of raising children ahead of time. This will help new parents avoid a scenario where they are worrying about their mortgage payment while their child is screaming at 3 a.m.

As we all seek out new and better norms, having experienced a global pandemic, one thing for sure is that the journey to get to where you want to go ought to feel as satisfying as possible. Consider becoming aware of and striving for whole life harmony – for when you are in harmony within yourself, you are in harmony with life surrounding you.

What is “whole life harmony”?

Harmony is defined as “a pleasing arrangement of parts” (dictionary.com). Think of a musical orchestra: The sound and experience is about the quality contribution of each instrument, not its quantity. On a human level, it’s a pleasing, quality arrangement of the individual showing up to the eight facets, or chords, of life. They are career, family and friends, marriage, health and self-care, fun and play, physical surroundings and personal development.

Harmony is unique to the individual. It’s what each one of us defines as important, what feels right. It’s our values-based DNA. Honouring your values is a process of alignment, and it’s this alignment that creates a steady, grounded, energized, fulfilled individual.

Smile it's Friday! 🙂

Both the Registered Retirement Savings Plan (RRSP) and the Tax-Free Savings Account (TFSA) allow you to build savings in a tax-sheltered environment. So, what are the differences between the two – and when does it make sense to invest in one over the other?

The purpose of the RRSP, as its name states, is for long-term savings for your retirement. The TFSA is a more flexible vehicle to save for more immediate goals, such as buying a new car or a house, or creating an emergency fund. And it may also be used to save for retirement. To learn more, contact Baldip Moore, CPA, CGA.

Happy Canada Day!