COMMERCE 1E03 Chapter Notes - Chapter Appendix: Social Insurance Number, Income Statement, Term Life Insurance
3 May 2018
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1E03: Appendix D
6 Steps to Controlling Your Assets
• Financial Literacy: having the knowledge, skills & confidence to make responsible
financial decisions
1. Take a financial assets inventory
• A balance sheet and income statement needs to be created to take inventory
(ya’ll know how that works)
• Consider how much money is necessary to complete your goals
2. Keep track of all your expenses
3. Prepare a budget
4. Pay off your debts
5. Start a savings plan
6. Borrow only to buy assets that increase in value or generate income
Building your Financial Base
1. Tax Free Savings Accounts (TFSA)
TFSA: An investment option into which Canadian residents 18 years or older who have a valid
social insurance number can contribute up to $5500 annually: Amount is tax free, even when
withdrawn
• The types of investments that will be permitted in TFSA are cash, mutual funds,
securities listed on a designed stock exchange, term deposits, bonds and certain shares
of small business corporations
• To replace withdraw funds, you must wait until the next calendar year
2. Real Estate
• Purchasing real estate in hopes of increasing your personal assets good asset
when applying for a business loan
• Benefits
o Place you can live in and call your own
o Once purchased, the payments are relatively fixed
o An income rises, mortgage payments get easier to pay
3. The Stock Market
• Other places to save our money (other than property)
• Considered one of the best investments
• Buy when the stock market is low
• Sell when the stock market is high
Contrarian approach: Buying stock when everyone else is selling or vice versa
find more resources at oneclass.com
find more resources at oneclass.com
Document Summary
1e03: appendix d: financial literacy: having the knowledge, skills & confidence to make responsible financial decisions, take a financial assets inventory. Building your financial base: tax free savings accounts (tfsa) Contrarian approach: buying stock when everyone else is selling or vice versa: andex chart summarizes the performance of some key indices such as the s&p / Protecting your base: buying insurance: planning for the unexpected sickness, injury or death. Term insurance: pure insurance protection for a given number of years. Whole life insurance: life insurance that combines pure insurance and savings. This is a good option for those who have trouble saving money: variable life insurance. Variable life insurance: a form of whole life insurance that invests the cash value of the policy in stocks or other high-yielding securities. Annuity: a contract to make regular payments to a person for life or a fixed period. Fixed annuity investments that pay the policyholder a specific interest rate.
