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Me and My Money

Building with real estate and stocks Add to ...


Moe McIlwain, 32

Occupation: Realtor

The portfolio

Real estate and stocks

The investor

Moe McIlwain knows real estate. He buys and sells residential properties for a profit. He also knows the value of diversification and is building a position in stocks through an investment fund.

Investing in real estate

Mr. McIlwain likes income properties for their cash flow (surplus of rental income over expenses) and the capital gains earned from selling them. True, half of the capital gain is taxed. However, equity can be taken out without tax by remortgaging (and the owner keeps receiving the cash flow). He also likes real estate because of tax savings on payments toward mortgage and maintenance. Moreover, losses can be deducted from income. “And if you incur a loss on renovations that improve the property, the loss will pay off in the refinance or sale of the property.”

Investing in stocks

Mr. McIlwain’s investment fund has a heavy weighting in Canadian banks and natural resources. Bank stocks provide stability and dividend income while the resource stocks should offer capital gains whenever the global economy picks up.

Investing on autopilot

The investment fund allows him to set up a schedule of pre-authorized transfers from his bank account, without commissions being charged. By automating the process, he is more likely to stick with it.

No RRSPs, thank you

RRSPs are not for him. Taxes saved on contributions must be paid back – sometimes at higher tax rates – when contributions and profits are withdrawn. Besides, there is a temptation to use the tax savings to fund a better lifestyle. He uses the fund in his TFSA; no tax deductions for contributions, no taxes on withdrawals and gains accumulate tax-free.

Worst move

“What seemed to be the best investment ended up as the worst. I bought a fourplex at 20-per-cent below market value but it ended up being a money pit. Luckily, I … sold for a slight profit, but it was a four-year headache.”


“Get educated – read books, listen to CDs, and talk with investors before investing.”

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