Tim Paziuk’s Blog

Where Are Your Children Going to Go?

April 28th, 2014

I hope that everyone who has children has taken the time to get a will. If you have a will, I hope you’ve made arrangements for someone to be the guardian of your children. If you have, congratulations!

However, what arrangements have you made for your children if you’re incapacitated?

Not too long ago, a husband and wife with two young children were involved in a horrible accident. The father was killed, the mother severely injured and the children escaped with minor injuries.

The father’s will had left everything in his estate to his wife and left the children in her care. There were provisions in their wills for guardians in the event of a common disaster (both parents dead) which left the […]

Advisor, Salesman or Thief?

April 21st, 2014

If you like rants read on…

I’ve had it with an industry that screws young people because of its own greed. Why is it that the government has absolutely no concern for the well-being of the next generation? Is it because most of them don’t vote? If that’s the reason it’s a cop-out (not by the young, but by the older ones who should know better)!

Now that you know I’m annoyed, let’s be specific about who is upsetting me. Yet again, it’s the mutual fund industry. This $1 trillion industry has become so powerful that no one provincially or federally is “big” enough to stand up to them. They are free to abuse and steal from people however they see fit. […]

Don’t Get Upsold – Treat Your Bank Like a Store

April 15th, 2014

Is our financial system broken or just designed to take advantage of the average person?

I recently read an article which posed the question: “Is your advisor wearing a product hat or an advice hat?” This got me thinking about all the discussions that have been going on within the financial services industry over the last number of years about fiduciary responsibility and commissions.

Coming from a life insurance background, I was brought up on commissions. When your income is determined by what you sell, there is a temptation to up-sell and cross-sell. Up-selling is convincing a customer to buy more than what they need or to add on extras. Sometimes it even involves selling something to someone who doesn’t need it […]

Don’t Use Your RRSPs To Invest in Private Companies

April 5th, 2014

I don’t have to graphically describe how a leg trap works, but it suffices to say chewing an appendage off to escape is a horrible exit plan.

When it comes to investments, I consider most investments in private companies to be human leg traps. Why? In most cases the only way to escape is by “sacrificing” the part that’s invested (or in this case trapped). Let me explain.

New companies are always looking for investment capital. Business owners often have lots of ideas and no money, so they look to private investors for capital. Most of these arrangements give the investor a stake in the company by way of common non-voting shares that have the potential for growth. It’s not unusual for […]

Can You Account For the Cost of Friendship?

March 26th, 2014

In my book The Financial Navigator – Managing Your Success, I wrote a section which I called “The Cost of Friendship.” It deals with the price people are willing to pay to maintain relationships with the people they perceive as friends.

I’m often reminded about the power of relationships when I’m making recommendations to prospective clients. I might find that their banker is overcharging them or their accountant is less than adequate, only to hear them say that they can’t move their business because the person they deal with is nice or maybe even a friend.

Here’s a common situation: For the last few months, I’ve been trying to get a client’s corporation reorganized. This is something that is common practice if […]

Is the Financial Sky About to Fall?

March 10th, 2014

Is it time for Chicken Little to stop worrying about falling acorns? Depending on which version of the story you read, I’m inclined to believe that Foxy Loxy has been inviting us into his lair to someday, maybe soon, “eat” all of us.

When I say eat, I’m not talking literally, but I am talking financially. Let me explain my concern.
In 2008, I put together a lecture which I called ‘The Perfect Storm’. During my lecture, I pointed out that the United States federal debt had increased to $9.54 trillion (this was as of June 30, 2008). At that time, I was concerned that the US was on a crash course and that if something wasn’t done to slow their rate […]

The Difference Between a Mutual Fund and a Seatbelt

January 29th, 2014

When I was growing up, we didn’t have seatbelts in our car. I remember going on long road trips and moving around in the car. While my father would drive through the night, I slept on the ledge in the back window while my brother and sister would sleep on the back seat. Mom would usually have the youngest child on her lap or in the front seat between her and dad. It was comfortable, but obviously not safe.

After untold numbers of preventable deaths, the government finally passed legislation making it mandatory for car manufacturers to install seatbelts and to enforce consumer’s to use them. Currently, all provinces and territories in Canada have mandatory seatbelt legislation with Ontario being the […]

Is Debt the New Addiction?

December 19th, 2013

What is the real cost of living on borrowed money?

Have we become a society addicted to debt? Based on some recent surveys, I would have to conclude that the answer is yes.

For the last few years, RBC has conducted a debt poll. According to their survey, 38 per cent of those polled said they were very comfortable with their debt, while 38 per cent said they were very anxious about their debt. The other 24 per cent were neither very comfortable nor very anxious about their level of debt. Based on these numbers, how can I conclude that we’re addicted to debt? The answer lies in another RBC number: only 24 per cent of Canadians are debt-free, which means 76 […]

How Do You Imagine Your Retirement if it’s 30 Years Away?

November 19th, 2013

How do you envision your retirement? Do you see yourself as being rich or poor? Will you be self-sufficient or financially dependent on someone else?

I imagine that for most retired (or nearly retired) people, you’ll have a better idea of what life will be like; but what if you’re 20 or 30 years away? I think most people in that age group would have a harder time giving a confident response.

When I started in the financial services industry in 1979, a lot more people had access to defined benefit pension plans in addition to Canada Pension Plan and Old Age Security. Today, more and more people are left trying to figure it out themselves, with little to no help from […]

What the Mutual Fund Industry Isn’t Telling You

November 19th, 2013

Are you apathetic when it comes to financial advice? Apparently, if you own mutual funds, you are. At least that’s the conclusion of a recent survey conducted by the Investment Funds Institute of Canada (IFIC).

I don’t think this is a huge revelation considering we all have different opinions, but what I do find interesting about this particular survey is the way the information was (as result of the questions) presented.

I don’t believe the average person has any idea of what an embedded commission is or how it affects them. As a matter of fact, I wouldn’t be surprised if most investors of mutual funds had a better understanding of how a black hole works.

The root of this conundrum is that […]

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