23 Feb

‘Tax Free SAVINGS Accounts’, ‘Overdraft PROTECTION’ and other Mis-Leading Product Names!!


Posted by: Brian Marling

February 2012

“Tax Free SAVINGS Accounts”, “Overdraft PROTECTION”, and other Mis-Leading Product Names!!

This article is provided by Brian Marling, Accredited Mortgage Professional, of Neighbourhood DLC – Canada’s #1 Mortgage Team  905.372.7222

Have you ever wondered what happens when the general public is lead to believe that financial matters are too lofty and complicated for the masses to understand?  Or what happens when our school system teaches little, if anything, about personal financial management, the power of compound interest (especially when it’s working against you), how credit works, and other related things that we all have to deal with in life? I mean, just ask yourself…did you receive any practical training in these things?  I think I know your answer.  And here is the end result in my opinion – we are left to entrust these important matters into the hands of others who may or may not have our best interests at heart. 

As an example take the now familiar financial product known as the Tax Free Savings Account.  Would it interest you to know that when it was first being introduced it was presented as a Tax free Investment Account?  Hmmm, I wonder why?  Maybe because that’s exactly what it is  (i.e. an investment account and not a savings account.)  So then why call it a Savings Account?  I’m not exactly sure, but I know the big banks don’t mind since most people have been trained to think ‘bank’ when they hear the word ‘savings’.  However, did you realise that any Independent Financial Advisor can also open a TFSA for you and give you independent unbiased advise as to how to best utilize your TFSA? Also, because most have been lead to think of it as a ‘Savings’ Account, they fail to understand that it is probably the best ‘Investment’ vehicle opportunity to come along in a very long time.  Therefore, if you are thinking of it, or using it, as a Savings Account you are missing the boat.  So, what’s in a name you ask?!

Or how about the familiar banking product known as “Overdraft Protection”.  Wow, it sure sounds impressive.  Just wondering what or whom I am being protected from? Well, as it turns out, it seems they are protecting me from myself.  Sound confusing?  Let me explain.  First of all you must realise that this is tied to the above notion that financial matters are really too lofty for us and we couldn’t possibly understand them.  Having said that, let me try and explain.  Overdraft Protection is ‘sold’ to us in a ‘feel good/we’re here to help you’ kind of way.  It is essentially designed to ‘Protect’ you from yourself when you write checks on your account or have automatic payments come out of your account AND there isn’t enough money in the account to cover the payments.  ARE YOU KIDDING ME! ?? I am old enough to remember a time when that was called fraud and you could possibly go to jail….and now we have a Product for such things!!  Is this just a friendly way for your banking institution to help you.  Hardly. Check your statement to see the fees being charged and the interest being charged in order to ‘Protect” you.  God forbid we teach people proper financial management and an even basic understanding of fiscal literacy.   But why would we when we can simply create products to encourage bad behaviour and profit from it??

Once again, it seems to me, that it really boils down to a couple of simple concepts when it comes to our personal financial well being.  First and most important, and this is not rocket surgery (new phrase I like that combines Rocket Science & Brain Surgery for an even more profound emphasis) : you cannot spend more than you bring in.  Duh, tell me something I don’t know.  Well, clearly there are millions of Canadians who live like they don’t know, as we are seeing record highs in consumer debt.  Secondly, if you need help, don’t be afraid to ask.  We would love to help you in any way we can, including pointing you in the right direction if we don’t have the answers you need.

Because of the current debt crisis in so many lives right now I am pleased to announce what The Brian Marling Mortgage Team is doing to help Canadians now. Firstly, Neighbourhood Dominion Lending Centres is proud to announce the launch of EnRICHed Academy’s “Smart Start For Financial Genius”! This program has been designed to educate young adults (13-23) and their families on the fundamentals that build wealth in an entertaining, funny and entirely interactive way! No program like this currently exists, and the need and demand across North America is at an all-time high! Please call me if you are interested in hosting a seminar or would just like more information.

Secondly, our Financial Coaching Program is really taking off. All coaching is lead by our Certified Professional Coach and owner of Life Catalyst Coaching,Deborah Marling. Deborah can be reached through our office and would be pleased to set up an introductory appointment to discuss your needs and current situation. Deborah is helping many to get out of the debt race and turn their futures around. Here is what just one graduating couple had to say,

“Hi Deb I Hope all is well.  I just wanted to let you know how grateful Carl and I are for all the help you gave us.  You gave us the tools to look at our finances and get ourselves above water. Since attending your sessions it has been possible for us to obtain and do the things we want.  In the past we never had a savings account, our accounts were always into the negative.  If something happened and we needed money we were in trouble.  Let me tell you since our session’s things have happened in our family and we were able to help without using a credit card, without going into the overdraft.  Thank goodness we had your training.  From the time we started our sessions we have never been in our overdraft, we have 4 saving accounts which are growing, and our bills are paid on time. When you talk about financial freedom we see that we are on the way.  However we could not have done this without you.  I just want to say thank you for all the support and the belief you had in both Carl and I. Thanks Again Lisa M.”

Since Neighbourhood DLC is Canada’s Largest Mortgage Team, we can offer you the absolute best products, service, advice & pricing. Call me today,Brian Marling 905-372-7222 for a personal, private and free consultation.

Here at Neighbourhood not only do we provide Award Winning Service, and the best selection of mortgage products in the country, but we also offer our Free Financial Fitness Seminars and have added Personal Financial Coaching for those who truly desire a change but would like some assistance along the way. If you don’t change something, then don’t expect different results.  As always you can call us anytime to discuss how we may be able to help you.

SPECIAL NOTE:  We are now located in our own building and would love for you to drop by and say ‘hello’.  Come see us at The Neighbourhood Professional Centre 9 James Street East in Cobourg – right off ofDivision Street.