Maximize your net worth

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This presentation

Written and published by Investors Group as a general source of information only. It is not intended as a solicitation to buy or sell specific investments, nor is it intended to provide tax, legal or investment advice. Readers should seek advice on their specific circumstances from an Investors Group Consultant.

These strategies may involve loans for investing purposes and are based on the assumption that the interest costs are tax deductible for Federal income tax purposes. Borrowing to invest is a long-term investment strategy and may be more suitable for higher income individuals, may not be appropriate in all circumstances, and is not for everyone. Gains from positive fluctuations in the investment value will be magnified, but losses from negative fluctuations will also be magnified.

Banking products and services are distributed through Solutions BankingTM.Solutions Banking products and services are provided by National Bankof Canada.

TM Solut ions Banking is a trademark of Power Financial Corporation. Investors Group and design are trademarks owned by IGM Financial Inc. and licensed to its subsidiary corporations. National Bank of Canada is a licensed user of these trademarks.

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Home Equity Diversification Plan

Graduated wealth-building strategy

Unlocks real estate equity for investment growth

No impact to monthly cash flow

Creates opportunity to reduce taxes

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Regular Investing Provides Dollar Cost Averaging

Takes advantage of short-term market fluctuations

Invest small amounts on a regular schedule

Typically lowers the average purchasing cost of an investment

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How it works…

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Potential increase in Net Worth On a 25 year, $150,000 mortgage this strategy could increase

your after-tax net worth by more than $75,000*

*Assumptions - Assumes a simple annual interest rate of six per cent on the All-in-One sub-accounts and the alternative mortgage for the length of the strategy (note that the interest rate on an Investors Group Solutions Banking™ All-in-One Account is variable). The investment sub-account is used to purchase investments at the beginning of each month, starting in the second month. The annual tax deduction is applied to reduce the balance of the mortgage sub-account, which in turn increases the credit limit on the investment sub-account. The full amount of credit room is used for each contribution. Tax savings are calculated based on a marginal tax rate of 43.41 per cent. Investment account balances are used after the 25th year to pay out the All-in-One sub-accounts and deferred tax liabilities. Returns are projected assuming 0.5% from dividends, 0.5% from annual capital gains and 6.5% in deferred capital growth, for a total compounded return of 7.5 per cent. The value of the home at inception of the projections is $200,000 with a growth rate of 2% per year. The outstanding mortgage balance is $150,000. The rates of return used in the example are used only to illustrate the effects of the compound growth rate and is not intended to reflect future values or returns on investment.

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Manage Risk Through a Diversified Portfolio

Customized to meet specific needs

Maximize return based on risk tolerance

Off-sets market volatility

CONSERVATIVE

MODERATECONSERVATIVE

MODERATE

AGGRESSIVE

RISK

MODERATEAGGRESSIVE

RETURN

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Potential risks to leveraging

Gains and losses are amplified

Market fluctuations

Variable interest rate fluctuations

Liquidity and interest deductibility

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Potential benefits

Build wealth without impacting monthly cash flows

Tax-deductible interest

Dollar-cost averaging

Customized investment portfolio

Flexibility

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This strategy could fit your plan if…

You plan to invest for at least 10 years

You have a minimum of 20% equity in your home

You can tolerate variability in interest rates and portfolio values

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“Home equity diversif ication” © Investors Group Inc. 2012 C3492 (02/2012-W)