31Oct
Five wealth-building ideas in an era of low interest and potentially higher tax rates – Financial Post

To tap these opportunities Ted Rechtshaffen looks at the entire financial picture — investments, tax, debt, real estate and insurance

Author of the article:

Ted Rechtshaffen

Publishing date:

Aug 13, 2021  •  August 13, 2021  •  7 minute read  •  Join the conversation If you borrow money to generate income, the borrowing costs of those funds are tax deductible. Photo by Getty Images

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Taking a snapshot of the world can sometimes present ideas that are especially valuable based on the current environment.

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We like to look at the entire financial picture — investments, tax, debt, real estate and insurance — when doing this, since it can take combining a couple of disciplines to create a wealth-building opportunity.

Today, the key underlying themes are: very low interest rates; the risk of increasing tax rates, especially capital gains tax; and another opportunity to profit from an eventual global demand recovery

With all that in mind, here are the five wealth-building ideas to consider.

Flow-through shares and specialized flow-through shares

In a nutshell, flow-through shares take advantage of federal and sometimes provincial tax credits that support exploration and development. They work particularly well for individuals with taxable income of more than $250,000 and for those wishing to do larger ($25,000-plus) charitable donations.

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The net results of flow-through shares are generally very positive after tax, but they also spin off a lot of capital gains because of the way they are structured for individuals. This is all factored in, but if capital gains tax rates go up …….

Source: https://financialpost.com/personal-finance/five-wealth-building-ideas-in-an-era-of-low-interest-and-potentially-higher-tax-rates