FAQ

Frequently Asked Questions about Investment Opportunities

Q: I thought people that were not Financial Advisors or Certified Financial Planners couldn't talk about investments. Is this true?

A: You're correct that only certified or licensed Financial Advisors or Financial Planners may recommend certain investments, such as stocks, government bonds or mutual funds. They must have passed the Canadian Securities Course and they must belong to an association (usually a registered brokerage) that governs which securities may be offered. However, there are Limited Market or Exempt Market offerings that un-licensed investment brokers may offer via Offering Memorandum, providing investors are Eligible or Accredited. As well, in some instances we may make clients aware of Joint Venture opportunities, which also do not require Canadian securities licensing. At Share the Wealth, we make no recommendations on the suitability of any opportunity for an individual.
 
 
Q: What due diligence do you do on the opportunities you participate in?

A: At Share the Wealth, we thoroughly investigate the companies, their leaders and their track history. We also carefully check into the merits of each project, including location, economic fundamentals, the business plan, exit strategy(ies), risk factors and projected returns. We personally interview and get to know the company leaders and staff, review the financial statements (if available), read, clarify and verify all information contained in the Offering Memorandum (if applicable), conduct reference checks, get third party opinions from qualified professionals, and check if the company has had prior issues with securities regulatory bodies. This process often takes several months, as the opportunities must also exhibit consistency and longevity before we invest. We do not recommend investments; we recommend that interested parties investigate certain opportunities for themselves.

Q: Do you receive a commission if I decide to invest with a company you have told me about?

A: Yes we do. The commission is paid to us directly from the company's operating budget, not from the investor. Unlike mutual funds and stocks where the investor can be charged an up-front fee, a back-end fee, or a management fee (or a combination of these), these opportunities do not affect the investment amount. For example: If $10,000 is invested in a real estate syndication project, one is issued $10,000 worth of bonds.

Q: Are there any other fees associated with any of these opportunities?

A: Sometimes, yes. If one transfers RRSP funds into a new self directed RRSP account, an annual fee of $125.00 applies to keep the account open. This fee is charged by the trust company as their compensation for 'holding' the investment. As well, if one opens a self-directed TFSA, a $125.00 annual fee will apply. There may also be a one-time $75.00 bond registration fee.

Q: How do the returns compare with more traditional investment products I've seen advertised?

A: The returns have historically been above average, regardless of market conditions.

Q: What is the minimum amount I need before I can invest?

A: Some investments have minimums as low as $4000 and many are TFSA and/or RRSP eligible. Many are also RRSP and TFSA transferable (meaning that one can transfer money from an RRSP or TFSA held elsewhere).

Q: Are these investments guaranteed? Are they safe? How do I know?

A: There is no such thing as a guaranteed investment.  The word itself is legislated through the Bank Act and can only be used by chartered institutions in the provision of Guaranteed Investment Certificates (GICs).  The guarantee in this case refers to the principle and the interest rate being offered.  Ultimately, if a bank fails and the GIC investment is in excess of its Canadian Deposit Insurance Corporation (CDIC) insurable amount ($100,000), an investor could lose money.

We can show you how to compare the differences between private opportunities and what is available in the conventional market - such as mutual/segregated funds, stocks, bonds, treasury bills and GICs. There is risk inherent in all parts of life, and investing is no different. Ultimately, through developing your financial literacy and learning to compare the merits and drawbacks of different opportunities, you will be empowered to make the investment choices that best suit you. Again, we do not recommend investment suitability for any individual.

Q. My current financial advisor says this sounds risky. What should I do?

A: What any investor must first realise is that everyone has an opinion.  The question to ask is what is this person basing their opinion on?  Have they looked at any information or documentation surrounding the investment?  Do they have the experience to offer such an opinion?  As most Financial Advisors are either Mutual Fund or Securities (stocks & bonds) licensed, they are prevented by their associations from offering private opportunities as investment options.  In many cases they are unaware, or lack knowledge of, the virtues of these types of investments. In some cases their own interests may have them discourage clients from looking for opportunities elsewhere.

These are some of the reasons why it is so important to educate yourself financially, investigate opportunities yourself, and understand the bigger picture. More importantly, how does the risk compare to other investments you are already comfortable with?  After making objective comparisons, many people find it easier to make a decision.

Suggested Reading

Ongoing reading and putting ideas into practice is a necessary and enjoyable part of developing your financial literacy. As well, a positive attitude, solid values and disciplined organization are just as important to turn financial literacy into a financially independent lifestyle. See below for the books that have helped us on our journey when we started out, and continue to influence how we operate today.

Books:

"The Millionaire Women Next Door" by Thomas J. Stanley

"The Millionaire Next Door" by Thomas J. Stanley

"Rich Dad, Poor Dad" by Robert Kiyosaki

"Cashflow Quadrant" by Robert Kiyosaki

"The Smith Manoeuvre" by Fraser Smith

"Creating Wealth" Robert G. Allen

"How to get out of Debt, Stay out of Debt, and Live Prosperously" by Jerrold Mundis

"Turn your Debt into Wealth" John Cummuta (audiobook)

"Now, Discover your Strengths" by Marcus Buckingham

"The Seven Habits of Highly Effective People" Stephen Covey

"The Soul of Money" Lynne Twist

"365 Ways to Live Cheap!" by Trent Hamm

"Refuse to Choose!" Barbara Sher

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