Here are more places where you can find money to free up to generate passive income for wealth accumulation:
Business Equity – If you are self employed or you have a corporation with assets, you can leverage the assets and borrow against them to invest, providing more cash flow for your business.
What if you have money in retained earnings but you want to invest personally and you no not want to take the money out because you are worried about tax? Paying dividends can be really useful in this situation.
RRSP’s – The good thing about an RRSP is that you obligate yourself to put money aside for retirement. The second benefit is that you are deferring tax to pay it later.
Most RRSP’s are invested in Mutual Funds and many people who have mutual funds are not happy about the returns. Most of the people invest in mutual funds blindly because they do not know what stocks or bonds the fund holds. We need retirement plans but they do not need to be registered with the government.
To free up money from an RRSP, you have to check first if the RRSP is locked or unlocked. If the RRSP is unlocked, you can use a melt down strategy minimizing the tax you pay to pull out your RRSP. This is done by withdrawing your RRSP in increments of $5,000 to keep your withholding tax to 10% and then having a proper tax plan to offset that extra income. It is also good to withdraw RRSP in lower income years.
Once you free up the money, you can put it to work and make it your slave! Making money our slave allows us to become wealth with purpose.
Remember that investments come and go. We need to continually be open to new investments and opportunities. Make sure to consult a professional for new investment opportunities.
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