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Should You Tap Investments to Cover Emergency Costs Right Now?

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The global pandemic has impacted almost everyone’s finances. Even if you and your spouse have remained employed through the duration of the lockdown, investments have been affected by the earlier stock market crash. If your income has been affected as well, you might be struggling to keep up with costs and meet debt obligations.

When you’re facing major obligations, but you have savings, the question becomes: should you tap into investments to cover emergency expenses due to the pandemic? The short answer: if you can avoid it, no.

 

Financial Advice During Coronavirus

There are other supports and relief measures in place that can help you meet expenses and debt obligations due to the unprecedented nature of the COVID-19 pandemic. There are professionals such as certified Credit Counsellors from non-profit credit counselling agencies who can offer free financial advice if you’re struggling.

Non-profit credit counselling agencies like Credit Canada have been providing free phone consultations allowing people to get essential financial advice while maintaining physical distancing and they can also offer debt consolidation services. Debt doesn’t stop even in a pandemic, and acting earlier is always a better idea. If you’re looking for debt help, Credit Canada offers support during the pandemic.

What Are Creditors Doing About the Crisis?

With so many people experiencing lost income – and with no end in sight – some creditors have proven flexible. Banks have offered mortgage deferrals for those affected by COVID-19 and cut interest rates  on credit card loans.

Credit Counsellors from      non-profit credit counselling agencies      can keep you up-to-date on what creditors are offering and how you can talk to them about getting that help. There is help out there, you just have to find out what it is and how to qualify.

 

Why You Should Find Relief Before Tapping Investments

#1 You Lose When You Sell Low

The markets still haven’t recovered from their highs earlier in the year and it is likely still in recovery mode. One of the biggest mistakes you can make is selling investments after a crash, because you miss out on the crucial recovery that restores value to your portfolio.

#2 You Fall Behind

By drawing on retirement savings like an RRSP to pay down debt or cover expenses, you risk not having enough when you want to retire. It can be tough to catch up on retirement savings, and you miss out on a lot of growth by cashing out.

Using emergency savings is another issue. That money isn’t earning as much (or anything) in interest. It can be a smart decision to pay off debt with those funds if you have them.

 

#3 There Are Other Ways Out of Debt

Finally, there are other ways out of debt that don’t involve cashing out investments. You could access options like a debt consolidation loan or Debt Consolidation Program. Through these mechanisms you can reduce interest rates on unsecured loans and debts. That means lower monthly payments and a faster path out of debt.

There are other forms of debt relief that can help you through this crisis. Find out what your options are before using last resorts.

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Benefits of investing in a Registered Education Savings Plan RESPs

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A registered education savings plan (RESP) is widely known for the benefits it provides and its versatility in being able to use it whenever the need crops up. However, there are many other benefits of investing in these accounts that can help you in getting returns in the long run. Let us have a look at the most prominent benefits of investing in RESPs.

Investing in the registered education saving plan is a safe way to save funds for the said purpose. Let us consider why you should invest in RESPs.

Aided by the government – The federal government, through the Canada Education Savings Grant, adds 20% per dollar to your savings, with an annual limit of $ 500. The maximum limit for a lifetime is $ 7,200 per child. In the case of families with a lower income, choosing to invest in such funds can be a great deal. Henceforth, anyone eligible as per the rules and regulations can apply for it.

Taxable in the hands of the beneficiary –

When the beneficiary/child enrols for any post-secondary education program, they are eligible to get access to payments (also known as – educational assistance payments) from their funds. These payments are composed of a specific investment income and government grants.

Also, the tax on these assistance payments remains taxable on the hands of the person registered as the beneficiary. It is a strong possibility that the students do not have their income and are likely to fail to pay tax on such payments. However, the RESP withdrawal transactions are kept charge free. Learn more about taxes and RESPs here.

Flexibility in transfer –  RESPs can be a great alternative; then, you need to do the funds from your registered education savings plan to your registered retirement savings plan (RRSP).  As per the rules, you’re allowed to transfer $50,000 from your RESP funds to your retirement savings plan. Hence, the amount is freely transferable.

Easy setup – Easy access and set up is another great benefit of investing in the registered education savings plan. Almost anyone can set up an individual account for their child. The funds can grow faster when additional contributions come from friends and other family members when the contributions make the funds sustain for long.

Longevity – There are chances that the beneficiary may choose to defer their education plans once they pass high school. Since the funds in RESPs are accessible for a period of 36 years, they can utilize the funds whenever they feel like giving it a start. However, it is always advisable to go through the rules to ensure that there are no specific restrictions on this.

How do RESPs work?

RESP is an account that enables you to initiate investing for your child’s post-secondary education. In each case, the government contributions are subject to taxation only if they are withdrawn or paid for the beneficiary. As long as the recipient takes enrollment in any academic program, the fund is for the beneficiary.

The fund is to aid expenses for part-time or full-time studies in any academic program. It can be for trade, school, college or university. However, this payment entirely depends upon the RESP contribution made by the account holder into the RESP account. Also, the required contributions should be regularly made into a Registered Education Savings Plan to gain government grants.

It is important to note that as long as there is an appropriate confirmation of admission or enrollment in an educational program, the accumulated funds are for his purpose. Also, you can support the miscellaneous expenses for the education of the beneficiary using this fund. Hence, most certainly, almost anyone can open an RESP account for a child, naming them as the beneficiary.

Government Grants and RESPs

 

Since it is a government-aided fund, there are various benefits of it. However, there are several downsides to an RESP that should be known to anyone who intends to open an account in it. For example, if the child decides not to attend the college or university, the government will gets back its funds. However, the account holder can keep the funds belonging to his share, or any money made out of it.

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Brazil asks investment firms to adopt protected Amazon areas – Yahoo Canada Finance

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Brazil asks investment firms to adopt protected Amazon areas

RIO DE JANEIRO — Brazil’s government on Thursday proposed that global asset-managers adopt protected areas in the Amazon rainforest in order to curb illegal deforestation ahead of the season farmers traditionally use fire to clear land and brush.

Vice-President Hamilton Mourão, who heads the government’s council on the Amazon region, held a video call with representatives of investment firms and said he hopes for financial support from them to support environmental protection projects. Last month, mainly European investment firms sent a letter expressing concern over rising deforestation and demanded forceful action against illegal activities in the Amazon. The 34 firms that have now signed onto the initiative have a total $4.6 trillion in assets under management.

“The Adopt a Park program will permit each of these national and foreign companies to choose one of the 132 conservation units in the Amazon and start financially supporting them, for monitoring, prevention and recovery,” environment minister Ricardo Salles said in a press conference in Brasilia after the virtual meeting. The funding, for example, could pay for security to prevent people from entering the areas.

President Jair Bolsonaro took office in 2019 with pledges to unlock the riches of the vast Amazon and has repeatedly opposed large territories being reserved for Indigenous peoples. His government faced international criticism last year when deforestation in the Amazon reached it worst level in 11 years. As a result, some members of European legislatures have said they would vote against ratification of a free-trade deal between the European Union and the Mercosur customs union that includes Brazil, which was signed in June 2019 after two decades of negotiation.

Deforestation in the Amazon increased 22% in the first five months of this year compared to the same period of 2019, the government agency that monitors the rainforest reported June 6. Data for the full month of June has yet to be released.

In the video call on Thursday, investors told Brazilian authorities they are monitoring deforestation rates, the prevention of forest fires and enforcement of Brazil’s forest code, among other issues important for their assessments, according to a statement from Storebrand, one of the financial institutions at the meeting.

“We are evaluating, and having a dialogue with the government is a way to try to minimize the risk of divesting,” Jeanett Bergan, head of responsible investments for Norway’s largest pension fund, KLP, said by phone from Norway. “We hope the dialogue can bring forward positive results and progress, we won’t see the same as last year with all the forest fires, and maybe see positive results coming out of this after awhile. It’s a positive first step and we need to continue the dialogue and hopefully we’ll all see some results on the ground.”

Bergan added that KLP’s participation in any Brazilian program would require more details and information.

KLP has about $53 million invested in 58 Brazilian companies. It has already divested from Brazilian meatpacker JBS, mining giant Vale and power company Eletrobras for reason related to either corruption, the environment or human rights.

Brazil already receives money from wealthy nations, namely Germany and Norway, to fight deforestation in the Amazon rainforest. Norway alone has donated $1.2 billion to Brazil’s Amazon Fund since its creation in 2008. However, both European nations suspended contributions last year, citing continued deforestation and questioning whether the government wants to stop it.

Foreign affairs minister Ernesto Araújo said the government is trying to improve the nation’s image as a responsible environmental steward. Brazil’s government announced Thursday that it has started conversations with Germany and Norway to restart co-operation to protect the Amazon.

The government’s understanding, Mourão said, is that the two main donors to the Amazon Fund want to see deforestation dropping before resuming contributions.

“We will gradually corner those who commit crimes so that deforestation is reduced to an acceptable amount,” he said.

Marcelo De Sousa And David Biller, The Associated Press

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Former Oil Execs To Launch New Hydrogen Investment Fund – OilPrice.com

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Former Oil Execs To Launch New Hydrogen Investment Fund | OilPrice.com

Charles Kennedy

Charles is a writer for Oilprice.com

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    Hydrogen

    A former Shell executive and a veteran fund manager and former Exxon figure are launching a hydrogen-focused investment fund to great fanfare as governments the world over shift strategy to this clean fuel source that until now hasn’t managed to break the investment barrier. 

    Times change, though–and a global pandemic is helping. 

    Former Shell executive JJ Traynor and former Artemis fund manager and Exxon employee Richard Hulf plan to launch HydrogenOne Capital sometime this year. The aim of the first-of-its-kind fund is to create a team dedicated to turning abruptly growing interest in hydrogen into investment dollars, Traynor told Reuters

    Hydrogen has multiple uses, including as a feedstock, a fuel, an energy carrier, or an energy storage solution. It also has multiple applications across industry, transport, power, and buildings sectors, according to a European Commission report

    What makes it hugely important for Europe’s 2050 climate neutrality goal is the fact that it does not emit CO2 and does not pollute the air. 

    Despite all of this, for four decades, hydrogen power has been languishing on the market due to a line-up of technical issues and high-cost hurdles. While battery power has soared thanks primarily to Tesla EVs, hydrogen-powered fuel cell EVs haven’t made much progress.  

    In the midst of the COVID-19 pandemic, however, new energy tech is hurtling forward faster than anyone expected, and hydrogen is emerging into the mainstream rather suddenly, with experts saying it has finally reached that point where its path to becoming a globally traded energy source is visible.  Related: Russia Eyes Another Massive Gas Pipeline To China

    A host of countries are now committing billions of dollars to clean hydrogen to combat climate change. 

    The new fund is just the latest in a series of moves towards hydrogen lately. 

    Germany, which has recently committed to invest €9B (about $10.2B) in hydrogen technology over the next two decades, and oil, automotive, and other companies are joining the ranks of those who are proactively investing in hydrogen technologies

    Earlier this week, the European Commission opened a $1.1-billion call for the funding of large-scale renewables projects, including clean hydrogen. 

    “The EU will invest Eur1 billion in promising, market-ready projects such as clean hydrogen or other low-carbon solutions for energy-intensive industries like steel, cement and chemicals,” S&P Global cited EC Executive Vice-President Frans Timmermans as saying. 

    By Charles Kennedy for Oilprice.com

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