Investing can seem overwhelming, with numerous options and complex terminology. However, understanding the basics is key to building wealth. This guide provides an in-depth comparison of the attributes of the perfect investment of popular investment choices, highlighting their features and benefits to help you make informed decisions.

Let's Break it Down: Attributes of the Perfect Investment

Let's Break it Down: Attributes of the Perfect Investment

1. Potential High Rate of Return

  • Stock Market/Mutual Funds/ETFs: Yes, with risk
  • Real Estate: Yes
  • GIC/Bank Account: No
  • Specially Designed Tax-Exempt Insurance: Yes, no tax on growth and death

2. Consistent Rate of Return

  • GIC/Bank Account: Yes
  • Stock Market: No
  • Real Estate: No
  • GIC/Bank Account: Yes
  • Tax-Exempt Insurance: Yes

3. Compound Interest - 8th Wonder of the World - Einstein

  • Stock Market/Mutual Funds/ETFs: No – growth is not considered compound interest
  • Real Estate: No – growth is not considered compound interest
  • GIC/Bank Account: Yes
  • Tax-Exempt Insurance: Yes

4. High Risk-Adjusted Rate of Return

  • Stock Market: No
  • Real Estate: No
  • GIC/Bank Account: No
  • Tax-Exempt Insurance: Yes

Risk-Adjusted return analysis

5. Conservative, Safe

  • GIC/Bank Account: Yes
  • Stock Market: No
  • Real Estate: No
  • Tax-Exempt Insurance: Yes

6. Liquid

  • Stock Market/Mutual Funds/ETFs: Yes
  • Real Estate: No - less liquid and time-consuming to sell.
  • Stock Market: Yes
  • GIC/Bank Account: Bank accounts, yes. GICs, possibly no.
  • Tax-Exempt Insurance: Yes – very liquid

7. Guarantees

  • GIC/Bank Account: Yes, usually
  • Stock Market: No
  • Real Estate: No
  • Tax-Exempt Insurance: Yes

8. Tax-Free

  • TFSA (Tax-Free Savings Account): Yes
  • Stock Market: No
  • Real Estate: Yes, principal residence. No, rental real estate.
  • GIC/Bank Account: No
  • Tax-Exempt Insurance: Yes – tax-free growth and death benefit.

9. No Contribution Limits

  • GIC/Bank Account: No contribution limits
  • Stock Market: No contribution limits
  • Real Estate: No contribution limits subject to credit qualification
  • Tax-Exempt Insurance: No contribution limits

10. No Market Volatility - Control

  • GIC/Bank Account: Yes
  • Stock Market: No
  • Real Estate: No
  • Tax-Exempt Insurance: Yes

11.Yields Income & Capital Gain

  • Real Estate: Yes
  • Stock Market: Yes
  • GIC/Bank Account: Yes
  • Tax-Exempt Insurance: Yes

12. Preferred Creditor Protection

  • GIC/Bank Account: No
  • Stock Market: No
  • Real Estate: No
  • Tax-Exempt Insurance: Yes

13. Does Not Contribute to Inflation

  • Real Estate: No – borrowing contributes to inflation
  • Stock Market: No
  • GIC/Bank Account: Yes – contributes to inflation
  • Tax-Exempt Insurance: Yes – does not contribute to inflation

14. Easily Transferable

  • Stock Market/Mutual Funds/ETFs: No – usually long delays
  • Real Estate: No
  • GIC/Bank Account: Depends
  • Tax-Exempt Insurance: Yes

15. Easy to Manage

  • GIC/Bank Account: Yes. Requires minimal management effort.
  • Stock Market: No
  • Real Estate: No
  • Tax-Exempt Insurance: Yes

16. Low Fees

  • Stock Market: Yes and no - depends
  • Real Estate: No – selling fees
  • GIC/Bank Account: Yes
  • Tax-Exempt Insurance: Yes

17.No Hidden Fees or Penalties

  • Stock Market: Depends
  • Real Estate: No
  • GIC/Bank Account: No – may have market value adjustment fees, probate
  • Tax-Exempt Insurance: Yes/li>

18. Reputable (Legal)

  • Stock Market: Yes
  • Real Estate: Yes
  • GIC/Bank Account: Yes
  • Tax-Exempt Insurance: Yes

19. Private (Not of Public Knowledge)

  • Stock Market: No
  • Real Estate: No
  • GIC/Bank Account: No
  • Tax-Exempt Insurance: Yes

20. No Legal Fees

  • Stock Market: Yes
  • Real Estate: No
  • GIC/Bank Account: Yes
  • Tax-Exempt Insurance: Yes

Other Considerations

21. Lower Deposits Available in Later Years

  • Stock Market: Maybe
  • Real Estate: Maybe
  • GIC/Bank Account: Yes
  • Tax-Exempt Insurance: Yes

22. Instant Cash Available Without Further Asset Commitments or Guarantees

  • GIC/Bank Account: Yes/No
  • Stock Market: Yes
  • Real Estate: No
  • Tax-Exempt Insurance: Yes - withdrawal or borrow

23. Recapture Finance Costs

  • GIC/Bank Account: No
  • Stock Market: No
  • Real Estate: No
  • Tax-Exempt Insurance: Yes

Borrowing Comparison

Borrowing Comparison

24. Borrow Max Loan to Equity

  • Real Estate: 80%
  • Stock Market: 50%
  • GIC/Bank Account: 90 to 100%
  • Tax-Exempt Insurance: 90 to 100%

25. Borrow with No Credit Check - Does Not Appear on Credit Report

  • Stock Market: No – appear on credit report
  • Real Estate: No - appear on credit report
  • GIC/Bank Account: No - appear on credit report
  • Tax-Exempt Insurance: Yes – does not appear on credit report

26. Borrow - Guaranteed Preferred Rates for Interest When Borrowing

  • Stock Market: No
  • Real Estate: No
  • GIC/Bank Account: No
  • Tax-Exempt Insurance: Yes

27. Borrow - Privacy of Borrowed Funds Used

  • Stock Market: No
  • Real Estate: No
  • GIC/Bank Account: No
  • Tax-Exempt Insurance: Yes – not of public record

28. Borrow - Interest May Be Tax Deductible as per Normal Conditions

  • Real Estate: Yes – rental real estate
  • Stock Market: Yes – non-registered only
  • GIC: Yes – non-registered only
  • Tax-Exempt Insurance: Yes

29. Gains (if Any) Could Be Used to Owner's Advantage

  • Stock Market: Yes
  • Real Estate: Yes
  • GIC/Bank Account: Yes
  • Tax-Exempt Insurance: Yes

30. Borrow - Flexibility of Loan Payments (Including Totally Open Loan)

  • Stock Market: No
  • Real Estate: No
  • GIC/Bank Account: No
  • Tax-Exempt Insurance: Yes

31. Borrow - Credit Check Required

  • Real Estate: Yes
  • Stock Market: Yes
  • GIC/Bank Account: Yes
  • Tax-Exempt Insurance: No

32. Borrow - Acceptable Credit Score

  • Real Estate: Yes
  • Stock Market: Yes
  • GIC/Bank Account: Yes
  • Tax-Exempt Insurance: No

33. Borrow - Acceptable Proof of Income & Consistency

  • Real Estate: Yes
  • Stock Market: Yes
  • GIC/Bank Account: Yes
  • Tax-Exempt Insurance: No

34. Borrow - Acceptable Gross Debt Service Ratio

  • Real Estate: Yes
  • Stock Market: Yes
  • GIC/Bank Account: Yes
  • Tax-Exempt Insurance: No

35. Borrow - Acceptable Total Debt Service Ratio

  • Real Estate: Yes
  • Stock Market: Yes
  • GIC/Bank Account: Yes
  • Tax-Exempt Insurance: No

36. Borrow - Proof of Assets Required

  • Real Estate: Yes
  • Stock Market: Yes
  • GIC/Bank Account: Yes
  • Tax-Exempt Insurance: No

37. Borrow - Proof No Income Tax Owing Required

  • Real Estate: Yes
  • Stock Market: Yes
  • GIC/Bank Account: Depends
  • Tax-Exempt Insurance: No

38. Borrow - Proof No Property Taxes Owing Required

  • Real Estate: Yes
  • Stock Market: Yes
  • GIC/Bank Account: Yes
  • Tax-Exempt Insurance: No

39. Borrow - Flexible Loan Payments

  • Real Estate: No
  • Stock Market: No
  • GIC/Bank Account: No
  • Tax-Exempt Insurance: Yes

40. Borrow - Lien on Assets

  • Real Estate: Yes
  • Stock Market: Yes
  • GIC/Bank Account: Yes
  • Tax-Exempt Insurance: No

41. Borrow - Time to Cash in Hand from Application (Business Days)

  • Real Estate: 28+
  • Stock Market: 14-28
  • GIC/Bank Account: 14-28
  • Tax-Exempt Insurance: 1-3 days

Closing Thoughts

Each investment option offers unique advantages and challenges. Evaluating them based on your financial goals, risk tolerance, and time horizon is essential. Always consult a financial advisor for tailored advice.

Consider using tools like infographics to simplify these comparisons and make information more accessible to your audience.

We invite you to explore the exceptional services offered by DO FINANCIAL CANADA. Reach out for a personalized consultation to confidently navigate your financial challenges. With DO FINANCIAL's expert guidance, you can enhance your returns, optimize wealth, and achieve financial growth.