Episode 165: How to Start Your Canadian Real Estate Investing Journey Without Fear or Failure

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What would you do if you had $60,000 available on your Home Equity Line of Credit (HELOC), a stable job, and a dream of real estate investing—but fear, family dynamics, and financial uncertainty kept holding you back?

You’re not alone if you’re sitting on opportunity yet paralyzed by “what ifs.” Maybe you’re eager to dive into Canadian real estate investing, but the numbers feel tight, you’re unsure who to partner with, or you’re worried one wrong move could strain your Canadian finances—or your relationships. This episode unpacks those exact tensions, helping you turn potential into an actual Canadian wealth building plan.

Listen in to discover:

1. Why stretching yourself too thin—even with a “perfect” rental property—can sabotage long-term success.
2. How to create a Canadian real estate investing entry plan that includes margin, emergency cushions, and smart capital structuring.
3. Real-world alternatives to solo investing—including joint venture (JV) partnerships and family agreements—that reduce risk while building momentum.

Hit play now to hear how Randy’s Canadian real estate investment story could mirror your own—and the concrete next steps to get off the sidelines and into action.

Resources:

• Ready to take a deep dive and learn how to generate personal tax free cash flow from your corporation? Enroll in our FREE masterclass here. 
• Book a Discovery Call with Kyle to review your corporate (or personal) wealth strategy to help you overcome your current struggle and take the next step in your Canadian Wealth Building Journey!
• Discover which phase of wealth creation you are in. Take our quick assessment and you’ll receive a custom wealth-building pathway that matches your phase and learn our CRA compliant tax optimized strategies. Take that assessment here.
• Dig into our Ultimate Investment Book List
• Follow/Connect with us on social media for daily posts and conversations about business, finance, and investment on LinkedIn, Instagram, Facebook [Kyle’s Profile, Our Business Page], TikTok and TwitterX. 
  

Calling All Canadian Incorporated Business Owners & Investors:

Consider reaching out to Kyle if you’ve been…

• …taking a salary with a goal of stuffing RRSPs;
• …investing inside your corporation without a passive income tax minimization strategy;
• …letting a large sum of liquid assets sit in low interest earning savings accounts;
• …investing corporate dollars into GICs, dividend stocks/funds, or other investments attracting cordporate passive income taxes at greater than 50%; or,
• …wondering whether your current corporate wealth management strategy is optimal for your specific situation.

Are you a Canadian business owner or incorporated professional looking to unlock the full potential of your personal and corporate wealth? In this episode, we explore how to strategically use home equity, optimize financial buckets, and decide between RRSP contributions or real estate investing through tools like the Smith Maneuver. Discover how to balance cash flow, minimize tax, and build a resilient wealth plan—without compromising your lifestyle or family dynamics. Whether you’re sitting on untapped home equity, weighing investment risks, or building a long-term legacy, this episode delivers a practical framework for smarter wealth creation in Canada. Press play to turn hesitation into a confident financial move.

Transcript:

What would you do if you had $60,000 of untapped home equity, a steady income, and a dream of investing, but felt stuck between financial fear and some family pressure? In today’s episode, we sit down with Randy, a pseudo name in this particular case, a Regina police officer and father of two who’s at a crossroads. He’s ready to start building wealth, but.

not at the cost of relationships or sleepless nights. Stick around as we unpack his options and the emotional and financial traps you’ll want to avoid.

do this. All right, let’s get into Randy’s situation. I know the two of you had a good chat about some of his concerns, some of his wonders. So Kyle, us a snapshot. What we were hoping to do here in this show is to kind of unpack what Randy was looking for, where he was looking for some guidance, because that’s what we do with our calls primarily, is to provide value, learn about people’s situations, and then provide them some of those.

those secret sauce moves, like what are some of those moves that you may have been missing out on? That’s what we do on those calls. That’s why we say record them and also, you know, can share back to the community like we’re doing here. At the end of this call, we’re kind of gonna give kind of an overview of Randy’s next steps, but also where Randy falls in our kind of four zones, our four phases of wealth creation and wealth and when your wealth journey plan. So kind of a financial audit or a financial health audit. is what we are gonna be doing here for Randy. So we’ll stick around for that at the end.

I love it. I love it. Yes. And so let’s dig in here. We’ve got a married couple, couple of children. They’re doing well, live in a primary residence. They’ve got some equity built up. And as you had already mentioned there, John, re-advanceable mortgage. So that home equity line of credit is going to get larger with each and every passing month and mortgage payments. So they have about $60,000 available.

They have some investments, believe, a pension plan, right, through, I guess it’s not Omers, because they’re not here in Ontario, but something similar there. And they’re looking to do something more. when Randy first reached out to us, he was specifically looking at the Smith maneuver. And as we’ve mentioned before, the Smith maneuver is sort of like,

not just borrowing against your house. It’s actually this routine in a way. It’s like a process. It’s like every dollar I put on this mortgage opens up a dollar, and I can reinvest that dollar. Well, here he’s talking about more or less taking one big chunk all at once. And really, it’s just a straight up investment loan. You’re looking to use your home equity line of credit for an investment loan. It’s not really the full Smith maneuver, but same idea. We’re going to get this opportunity to write off interest. And as we dug in,

It sounds like rather than say doing traditional Smith maneuver, taking a dollar and reinvesting it right into the market, something that’s easy to do, right? And it’s a process driven sort of approach, right? Where you could just routinely do this every week or month or year, whatever you’re choosing to do. It’s like, want to take this money. want to get it into real estate and

He’s really digging in. So he’s listened to our show. He’s listened to that Nick and Dan, he was saying on the Canadian Real Estate Investor podcast. And he’s listened to all kinds of other great shows out there to help along the journey. So the real question that we want to unpack here is sort of like, how do we get ourselves started when we do have access to some equity, however, there

is a little bit of hesitation, and rightfully so, because the reality is that $60,000, while that’s a good amount of credit, the problem is that nowadays with house prices continuing to rise, it seems like they’re never, you know, I mean, we have actually seen a little bit of a blip over the last couple of years, but nothing significant enough to make it like a fire sale where, you you could just dive right in. It’s now wondering like, what do I do to get going?

We’ve got some ideas. Let’s dig in. The first one that sort of came up, like my concern was right away, and let’s make sure we’re clear about it is, let’s pretend there was a perfect property and all he needed was 60,000 for a down payment. Let’s say it was 50,000. And then there was that 10 for like closing costs and all the other things that are going to surprise you when you close on the property and so forth. So he’s going to use this whole 60,000. Like my biggest concern right there is that now you’ve got a rental property.

And of course, on paper, it’s cash flowing, right? So we’re making sure these are cash flowing properties. The numbers look good. They pencil out. But what happens if something goes wrong and goes wrong in, the first year or two? How do we address that? And that is sort of the main sort of hiccup in his strategy or in his sort of journey here as he’s trying to dig in.

Yeah, for sure. if he’s, you know, he’s maximum, he’s stretching himself thin, right? If that’s the case that he’s saying, I’ve got equity in my, my HELOC, I’m going to use that, but that’s it. Like where else do I have? Now, first, like you said, that’s assuming you’ve got a cash flowing property. And so is it likely you can get that cash flowing property? And if so, because you did the numbers and like you’re saying, we’re assuming it’s perfect. It’s a perfect scenario. but then where’s the cushion? You know, where’s your margin of safety?

that you’re building into this plan. Like is the margin of safety in the cash flow? Like are, is it enough cash flow that you can then you’ll put that over here and go, that’s my margin of safety for when say, you know, the on Christmas Eve, the water heater breaks and you know, and it floods the basement below or it floods the rental unit below. up a lot and it sounds to me like it’s actually just a fictitious story here.

It’s one of those ones that always comes front of mind. But you know, like where is that? So if it’s cash flow, great, like you have a plan for that. But if you’re, say, break even or you’re low, you know, it’s just cash flowing, then where is that margin of safety come from? And so that’s the risk here that he’s up against is to say, even if I have the perfect property, do I have, that emergency fund structured somewhere

that I could pull from? do I have more home equity line of credit that I actually maybe just didn’t tell you about that I do have access to another blank amount, but then that’s my margin of safety, that’s my emergency fund, that’s my reservoir that I can pull from when the time is right or when we need to, get some extra value in here, or do I have to find that somewhere else? And the finding somewhere else is the part that’s super risky.

Absolutely, absolutely. And I will give and disclose here that, again, they do have a little bit of, they have some other buckets. So they got TFSA money. They’ve got about $33,000 in TFSAs. They’re contributing $300 bi-weekly, so around $600 a month, which is a nice, that’s a nice clip, right? So like right there we go, okay, there’s some money there. There’s a little bit in RSPs, but again, we don’t want to use that as an emergency fund.

I’m a big fan of like the cross contamination of buckets. it’s like, I feel like you’re just, moving, you’re structuring buckets by TFSA, RRSP, real estate, you know, other investment opportunities. This, you know, maybe in all those things, maybe in say different asset classes, but I just, I’m not a fan of going like,

It’s like very dangerous. Yeah.

Oh, my emergency fund is I’m gonna pull from this thing over here, which is actually structured to grow at this, you know, this way. And it’s helping me reach my ultimate goal or my ultimate financial plan. But then when push comes to shove, if I have to borrow from that bucket, does that actually throw me off my plan? And that for that, the, you know, me being a very, you know, Process driven, that’s

That’s good way to say it. Process, structure, but like very focused on what that outcome is going to be and making sure and ensuring that we’re covering the plan and the goal and making sure that the pathways will reach there, like almost guaranteed to reach there. Like that’s the way I think. 

The one thing I will say here is while I 100 % agree with you, so here’s where the more more digging has to happen is like, what was the plan for that TFSA money? He has some joint savings about $9,000 in joint savings. So let’s say about, we’ll call it 30, 40, just over $40,000 between savings.

and tax-free savings account. And I would argue that the goal here for that money, Randy’s thinking he’s like, I want that money to eventually go to RS, or not to RSP, sorry, to real estate. So I know that’s his big plan. And I think that’s one of the reasons why they started putting in the tax-free savings account. And right now, they’re actually not invested in any sort of growth long-term type investment. So they’re in very low risk.

fixed income like products. let’s, I know it’s not formally GICs. It’s more or less emergency fund, but also I think it’s a bit of this opportunity bucket. So now we combine these two and we go, if I could buy that property with 50 down or 60 down, I do have a little bit in this bucket and it’s available for me. And there’s a little rule of thumb. Again, rule is probably the wrong word. It’s a good starting point.

And the first time I heard it was actually from Dan Crosby, who’s the owner of Canadian Protein and BioSteel. They actually just purchased BioSteel on his podcast. They actually said, you know, if you want a capital expenditures sort of calculation, a good way to do it is to take a percentage, 0.1%, not a full percent, 0.1 % of the value of the property.

the number of years the prop the building has been in existence so said another way if it’s a 50 year old building and you bought it and it was worth say 350 you take 350 you take point one percent of 350 and then you multiply by how many years old it is to get you a nice account a nice capital expenditures account so let’s say this this property for sixty thousand dollars if I take sixty thousand

and we know that that’s only say 20%. That means a $300,000 property in order to do it. Let’s say it’s 50 years old and I take 0.1 % of it. That means you need about $15,000 to start with in a capital expenditures account. So I would argue things might pencil for that property. The problem is though, is that they actually can’t find a property worth that amount, that $300,000.

perfect scenario is that, you find this? And likelihood is that if you can find that, it’s not going to be the perfect property. The crap is going to start breaking down. Or you’ve got a tenant that you can’t get out. We’ve done all these things. We’ve done all. So it’s like you’re taking out the.

Have we ever done that before, Yes, we have.

taking on that risk there. So that’s why you have to have more margin of safety in that case. So then the question now turned into for Randy here is like, well, what do I do? I want to get into real estate. How do I get into real estate when I know that I just don’t have enough funds yet to buy that property or get to the property that I think is the right property?

Yeah, you know, there’s some different options. Like, we kind of started floating into this idea of, like, maybe family or friends, you know, might be a place to start. Now, there’s a massive risk there, of course, right? Because again, this is going to be the first investment property for this individual. So if it’s your first property, like, it’s your first rodeo, you know? Like, so you’re coming in, and if you’re talking to family and friends, you’re

don’t want to be- be the down payment from, let’s say, mother, father, family, like just saying, hey, I don’t have enough for the down payment, can you, you know, can you gift me that down payment? Which- Maybe it’s an option.

Yeah, maybe it’s gifting that money. Maybe it’s, we’ll call it unofficial gift where it’s like, hey, over time, slowly, I’ll make us whole. And you have some sort of family thing on the side. Whatever you choose to do there, there is some risk though, right? Like it’s really important that they’re clear, you’re clear that there’s going to be some things that maybe

come up. Like when I just gave the capital expenditures example, it’s like even though like 15,000 came out of that number, like the calculation we just did, you know me, John, I’m not doing 15,000. I’m gonna want to make sure I have like access to like 30,000. Because I don’t know, you know, we bought a property, this was back in 2020. And within 18 months, we had to spend, you know, was mind you, it was a large building, but we had to

That was later, that was more money. before it was the roof. We tried to repair the roof a few times and then eventually it was just like, you know what, we gotta redo this entire roof and it was a flat roof and multi-use building. So of course a large building and a large cost there. So you just never know. And of course you don’t wanna have too much money sort of sitting and doing nothing, but that’s where I like to keep extra line of credit availability for me because that can act.

as that emergency fund in those cases. if we’re coming back to, let’s say, introducing an idea to family, to friends, is really trying to figure out is like, how are they, like, how are you gonna work with them in order to make this happen? And how are you gonna make sure the expectations are realistic and conservative? You don’t wanna get too aggressive. You don’t wanna get them excited about the opportunity. And, you know, we were chatting about this before we hit record, John, you were saying like, you know, you could even look at family or friends to potentially be

your JV partners like your money partners where they’re in on the deal.

I like that idea better than saying, hey, can I get a loan or an official loan from a family or a friend to go in on this property? Because I think I like the better, but being the first property, doesn’t even have to be family or, I guess family or friend, but mean, find that person who also has the same passion as you that is looking to do the same type of thing and is also brand new. Because then the two of you,

could then go in together and he could find someone that says like, hey, I’m looking for this. So maybe I’m in say the realist group, which is Nick and Dan’s online school group, their community. Maybe there’s someone there who’s also new that wants to go in on this with me. Maybe there’s someone that I’ve met at say a community event or a real estate event in town. I know here in Windsor, we have multiple events like that happening at different times. Maybe that’s a good time to find a person

to say, I’m looking at this property. What are your thoughts on, say, joint venturing forward together, where both are bringing, say, dollars? But maybe we’re both going to also do some of the managing, and we’re now going to of form this. Like, that’s what you and Matt did when you first got started.

That’s exactly what came to mind. In my head, it’s like we often define a joint venture as like money partner, managing partner. One person finds the deal, does all that stuff, and the other person just brings the money, and they don’t want anything to do with it. But basically what you’re saying is actually partnering up. Partnering up with somebody who has similar aspirations. And with me and Matt, it was by chance that we were both eyeing the same property, and we both had the same hesitations.

to buy it independently. And that’s what led us to go, you know what? Let’s do this. And it gave us the courage to do it. But we also recognized that at that time, we had, like, I like the, the thing that really is resonating with me with, with what you’ve just suggested there, John, is like, you’re kind of like bringing and you’re both taking on the same amount of risk. It’s not like one partner over the other is like in

you know, gonna be to blame if something doesn’t work out exactly the way you thought. It’s like you both maybe bring half the money. You both may maybe analyze the deal together, see if you can poke holes. You both do the learning together and therefore you both own the property together. And now you’ve both gotten that start, right? Which of course never as fun as doing it alone, but I’ll tell you.

doing it with and acting on it is gonna be a whole lot easier, especially when it takes the deal size and it halves the required capital that you’re gonna need upfront.

I was going say it’s more fun to do it with someone else. It’s just less profitable.

Yeah, exactly. It’s true.

Now, I like this approach better than say the family approach. Now, if you are, say, going to go family approach, then structure it like this. Treat it like a business. Treat it like, and that can be hard to discuss with family members because you don’t all of a sudden want to like, should I write a contract or should we build this? And it’s like, yes, yes, and yes. It’s just.

Sometimes you feel awkward doing that because it’s like, well, family trusts each other, but at least you’re setting the clear expectations on the roles. And that’s why typically you would stay away from family because like, do you wanna add that element to your relationship? Right. And now you have a business relationship which has some financial, say, gains, but also some financial, say, liability attached to this relationship. So this is why you’d stay away.

But if you do, need to structure it as if it is, say, a person that you’re entering into a business with. These are some of the options he has.

Yeah, and I would say, John, the idea of a contract, you can call it a contract. You can call it an agreement. You can call it an understanding. You don’t have to make it sound as though it’s like you’re coming in to do business here. what I would recommend for the person who’s approaching family or approaching friends is make sure that everything in there is actually designed to protect the other person.

as well. Like if you think about it, you’re not going in there and we’re not signing a contract so that the other person has more increased liability in this deal. You’re actually going in there to be 100 % clear on the expectations you’ve set on yourself. At you know if X, Y or Z happens right like if this happens, here’s what I’m going to do in order to make it right. Or here’s what will happen if blank right so.

There’s things that I think can be really, really helpful. Something that we’ve traditionally done with say our joint venture partners, which sometimes are people we’ve met before, so they’re acquaintances, maybe not friends, but they’re people that we know and we wanna make sure we don’t want them to ever have like a bad taste if something doesn’t go well, because things happen. And something that we’ve tend to put in is we say, listen, whatever you bring in money-wise from the deal, we typically don’t require them to bring any more money.

over a five year term. And that’s something that provides a lot of comfort because the problem is if something does go wrong and if it goes wrong, like only a couple months into it, it’s like one of those things that it’s like, well, sure, like anything can happen. It’s technically not your fault as the managing partner. But if you can ahead of time, sort of plan for that, that if anything goes wrong, it’s like, I’m going to be the one to manage this. We’re still going to

book keep it and it’s still the responsibility at the end for the other partner to only take the profit that’s owing to them net of any of those expenses. But this just puts them in a spot where it’s like it could be a little bit more clean, smooth sailing. So it’s not going to feel like shoot, like had I known it was going to cost me so much more out of my pocket every month or every six months or whatever it is, maybe I wouldn’t have done this deal, right? So just being really clear on what you’re going to do if things don’t go well.

because that way you can actually have that conversation and then there’s no surprises. And then typically you will have a solid, you know, working relationship with those families or friends.

All right, what was his next steps after unpacking some of these options?

So I think next steps were exactly that, was to decide if there was even an appetite for his family, and it sounds like parents in particular, to potentially engage in this sort of thing. You want to be cautious. You want to think it through enough that you have an idea of what you could do. But really, you don’t want to spend too much time going down a rabbit hole until you even, you know,

get the sense of what does that appetite look like and sound like? And it sounds like they’re going to start with family and go, you know what? If, let’s say, the parents have a significant amount of assets that they were planning to pass down, down the road anyway, it might feel like a low risk opportunity for the parents. And the parents may or may not choose to engage there. They might just be like, you know what? It just makes me stressed, and I don’t want to do it. And then if that’s a no-go,

then he could actually start looking to some of these communities like you had mentioned, John, is like reaching out and going, listen, there’s a lot of other first time investors out there and you probably all have unique skills that you can bring together. So I think that’s the big one there. And then in the interim, I said, if there’s any way that you could up the amount that you’re saving in that opportunity bucket,

I think it would be a great idea to do so, right? So trying to find a way to take that 300 bi-weekly and up that to go, if I could get in a habit, and it doesn’t have to be doubling, but let’s say I double it to $600 bi-weekly, about $1,200 per month, you can quickly see the multiplier effect and go, I’ve now got over $10,000.

of money that I’ve saved. And it’s not only going to help me get to a place where I might have my own down payment before too long, but it also means that I can live on less money. And after we buy the property, we keep saving that $1,200 instead of $600 a month. And now you go, well, if I do this and I just continue to do it, I’m also building up a large capital expenditures account as well, which may put them in a place before too long where they could go

into a deal by themselves. Because let’s be honest, finding a good deal sometimes can take some time anyway. So let’s get ourselves positioned so that when I’m ready to get that deal, when I’m ready to close, all of a sudden it’s like, wow, that extra fund that I had been growing is actually a whole lot bigger than it would have been otherwise.

Good tip. Good tip for sure. All right, let’s unpack Randy’s kind of financial health report here for his financial wealth system. So what we’re doing here is we’ve got four stages, four phases, four zones that we look at when we talk with, say, clients or clients or just calls like this with Randy where we were just kind of coaching him through some decision making.

I’m just going to highlight the stages. Then what we’re going to do is we’re going to kind of go back through each of the stages and kind of say, you know, where Randy was just doing some good and maybe where some gaps were and what some suggestions could be for him. So basically, stage one is designing your vision for freedom, like your financial vision. Is it really important? And we’re going to unpack what that is. Stage two is establishing your corporate wealth reservoir. So this is like your

your opportunity bucket, your emergency fund, but it’s like this reservoir that it can allow you to do and be flexible as an extremely important component of any healthy financial wealth system. Sometimes it says access to capital, like where do you have access to say buckets you can dip your fingers into? Stage three is optimizing your wealth plan. So this is like looking at structure, this is looking at, you know,

the specific nuances of different investment asset classes or say maybe specific tax structures that you could be making use of or even just different say products that allow you to do things that you may not be able to do with other products and the structure that goes along with that. So we talk about a lot of those things in this podcast specifically. So if you listen for a while, you’ve gained some tips around stage three which is optimizing your wealth plan with structure.

And stage four is talking about legacy and estate strategy. A lot of times we don’t think about legacy and estate strategy when we get into it, but the folks who are thinking about that in advance or thinking about that as they work through their financial plan, they’re going to be better off down the road because of the foresight of that part. So again, stage four is legacy and estate strategy. Stage three is optimizing your wealth plan. Stage two is establishing your corporate or your

financial wealth reservoir, corporate for your business side, just personal on your self side, like Randy is a personal situation here. And stage one is just designing your vision for freedom. Kyle, let’s talk about stage one. What was Randy doing well with vision?

It was clear, so some strengths here, it’s clear that transitioning into real estate investing was on the mind, right? So we saw that in where the money in the tax-free savings account was, the savings account which wasn’t in the tax-free, that is building up. He’s also got this nice home equity line of credit that’s available. Once that mortgage comes up for renewal, it sounds like there’s actually some more equity in the home based on just how prices have gone.

potentially just around the corner, I believe it was like 18 months out that he’ll be able to do some refinancing. The one gap here would just be getting a little more detailed. And this is something that I think is part of the next big step. it’s, you we’re only highlighting it because I think it’s the next step that he needs, which is getting detailed about what specifically he’s aiming to do and the timeline for that goal, right? So we did talk about on the call, some different properties,

One that was a little bit, we’ll call it more affordable in terms of price point. Another one that was more expensive. So really starting to line in is like, what’s my strategy gonna be here? Am I gonna partner with family? Am I gonna partner with, you know, maybe another new investor and try to do something like this? But what does that look like and sound like? And then making sure that we’re clear on how is this gonna impact positively, negatively, or otherwise our desired lifestyle outcomes.

So overall, I’d call that a B, you know? And there’s easy, easy improvements that can be had just by focusing in on that one gap.

Yeah, and I’d like to see him, like you’re saying, little more detailed. Like I’d like to see him going like, well, why, why, like not necessarily why real estate, but I think like, well, a lot of us do is go like, I know some of these asset classes that I want to get into, but then what is the purpose? Is the purpose of that to like learn something new or do you have a financial goal in mind? And I think this is where we try to strive for folks to like establish what is that financial trajectory look like for the next?

20 years, 30 years, like where’s retirement for you? Like, have you thought about that? Like, how does this play into the strategy to get there? Like, what do those numbers look like? Like, for us, we get very detailed on that mapping to go like, what does it look like right now with assets? Where do I wanna retire and how much am I going to need for that retirement or what do I want my lifestyle to look like at that time? Am I working, am I not working? And then how much liquid assets do I need at that time so that I can start

being in the withdrawal stage, or the funding my lifestyle stage. And therefore, let’s reverse engineer the difference between our assets now and our assets then and go, well, what does that mean? What does that mean now? And it’s like, is this real estate venture, this step actually getting me closer to that goal? Is it there, or is there actually a better step to get closer to that goal? If I follow this line and go, this real estate’s gonna turn into the next one and the next one and the next one, will I get there?

Right. And I think that’s really important. And I think most of us just don’t do that. And I think most of us don’t have that clear, like, I’m going to work in my pension. I’m going to work in this. I’m going to work in that. And I hit that number by this date. Then that can give you a lot of relief. And it can also give you a lot of like, I am making the right move on this thing because it’s so clear in my mind where we are going to get to. So I think I’d like to see that for like B, like you get an A if you’re doing that.

I love it. And you know what? You highlight something that’s so important. We should probably be more explicit about it every time we chat about specifically real estate. But the same is true when we weekly add to our RRSP or tax savings or any other investment account is going, like, what’s that going to do for me? And real estate is a lot of work too. So you have to also think about, how much time and effort am I putting in? And is it worth it? Am I going to get that result? And if I’m just sort of hoping and praying, it’s like, hopefully it’ll all work out.

And I’ll be honest, I think that’s where I started was like, I think it’s gonna work out. Like it all seems logical to me, but I didn’t have it on paper. I didn’t have numbers to sort of suggest like by 10 years, 15, 20 years from now, here’s where this should take us. So I love that. Next one is stage two. It’s establishing a corporate wealth reservoir. Now, in this case, no corporation yet. So of course, impossible to have a corporate wealth reservoir. However,

He is establishing a wealth reservoir for getting started here. Okay. So there is, you know, thought around utilizing investment loans, in order to help fund this, which is great. So that is part of that wealth reservoir. And I would argue that the gaps here and these ones don’t necessarily have to be solved. Now is thinking about whether or not that first property is going to be best to be owned personally.

or whether we want to look at a corporate structure. So we’re not going to get into the nuances here today. But this one here, we’re going to give a grade of C for now, just because really, I think we’re early in the process. But over time, we’re going to have to decide. And I’m going to argue that if you are going to partner with family or if you are going to partner with somebody else, probably good to go with the corporate route so that we can use shares as a nice, easy way for ownership, to be clear.

Whereas if you are gonna end up doing this all on your own after you double your monthly payments to yourself and do all of these things that we had suggested as a possible next step, then all of a sudden it might sort of raise the question of, maybe I buy this first property personally just to keep personal money on the personal side of the corporate border. John, how about optimizing your wealth plan stage three? How’s he doing there?

Yeah, yeah. So stage three is thinking about your structures, your registered funds, your non-registered funds, any other structures that can help you establish and hit your goals in an optimized way. So this is very much optimization and thinking about the tools that you have access to. So he had consistent contributions to TFSAs, RSPs. He’s got a joint savings account that indicates a collaborative approach to what he’s trying to do.

you know, factoring in his like, know I can access the the HELOC in certain ways. And the fact that he’s thinking about the Smith maneuver, he’s trying to say optimize some of that, even though maybe he’s just borrowing in the meantime. But if you can say, get that get that going, then he can say be in a better place that way. Some of the gaps, though, I think where we are is, you know, sometimes like, I think what we’re doing is his current

investment contributions might not be sufficient to get some of those long-term goals, which means like if we have those long-term goals, are we making the right contributions in the right ways to get there? I think he could be doing a little bit better there. How about you?

Yeah, yeah, I think that’s really the the main gap is, you know, if we want to get serious about doing this, it’s like, you know, let’s get like real serious about what we’re going to put away in order to get there. Maybe we bump into that optional partner out there and maybe we don’t need to utilize all those funds. But again, real estate is one of those games. It’s not like the stock market where hey, sure, it goes up and down, but they’re never going to ask you for more money.

they’ll just say you have less. Whereas in real estate, guess what? You can, you know, they’re gonna ask you for more money along the way when things go wrong, or you get to give it all away by, you know, the bank or somebody coming in, taking it from you. the risk is high. You wanna make sure that if you’re serious about it, let’s make sure that we put away a significant amount. And, you know, again, it’s like putting your money where your mouth is. So we’re gonna give that one a B minus for now. But again, I feel like it’s easily… you know, something that can be addressed by simply restructuring what we’re doing monthly.

or bi-weekly. Yeah, and it’s natural here too. Like he’s early in this journey. And so it’s natural for say like you to, you know, not say be, have say a a strong understanding or a strong plan around stage two, three and four, you know, when you’re just starting out because you’re learning about those stages and you’re going, well, I putting everything into like this one move I’m making, but I do want to make map out like, what is my plan for my wealth reservoir? What is my plan?

from optimizing the structures I have. So stage four is about legacy and estate strategy. you know, having said just that, it’s, you know, we’re gonna say give him a C in legacy and estate strategy, more so because he’s just starting out, but making sure that he is aware that this is an important move. And the fact that he’s making, like, this is for all of us investors, but the fact that you are already making the investment into these areas, like,

He knows real estate is an essential component of where he’s trying to go. Automatically kind of brings them up from F, you know, like you’re already making some good moves here for legacy and estate because that is a great asset to carry forward into say, estate planning and passing, say, those assets on or using them for estate purposes.

And the piece here too that I think is a really nice opportunity for them to go in. So with Randy starts thinking about legacy in a state strategy a little bit. It’s also beyond them and maybe starting to broach the topic with the parents, right? So him and his spouse. And they have talked a little bit about this idea and going, OK, maybe it’s starting with the parents and saying, what do you want for your legacy?

You know, like, what do you want? That might actually help them solve some of these other problems as well. So talking about like, how do they see things happening? And it’s again, sometimes a hard conversation to sort of get into depending on, you know, the relationship you have with your parents. But the reality is, is like, by having the conversation, you might be able to help them solve their legacy challenge while also helping you start your legacy conversation as well. So.

Lots of room there and I think a lot of great next steps here for Randy. So friends, if you’re finding this conversation and this summary interesting, if you’re intrigued, I’m gonna encourage you to head over to our Pathways page over on canadianwealthsecrets.com forward slash pathways. And what we try to do there is we try to ask you some questions so that we can send you on your way with some.

next steps we we sort of give you a little bit of some of the strengths and some of the gaps as well as some next steps and of course you feel that you’re ready for a discovery call head on over to Canadian wealth secrets dot com forward slash discovery and you can hop on a call with us so that we can chat things through we so appreciate you and would really appreciate if you hit the subscribe like whatever comment button wherever you’re watching or listening to this. And of course, ratings and reviews help us to help more Canadians just like you.

Canadian Wealth Secrets is an informative podcast that digs into the intricacies of building a robust portfolio, maximizing dividend returns, the nuances of real estate investment, and the complexities of business finance, while offering expert advice on wealth management, navigating capital gains tax, and understanding the role of financial institutions in personal finance.

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