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Date
Titre
Durée
14 Jan 2020
Introducing Financial Planning For Canadian Business Owners
00:00:39
Business owners live complex lives. You have traded the stability of working for someone else, for the uncertainty of controlling our own destiny. Whether you are starting your own business, scaling it, or planning your exit, you face challenges that the average person never has to face. Ensuring that you make the most of your business means not just being the best at what you do, but figuring out all the other complexities that come with it, and that will mean finding people that will help give you the right advice.
The Financial Planning for Business Owners Podcast is here to help guide you regardless of the stage of your business. Each week we interview experts from various fields to help you become aware of what good advice looks like. From setting up your corporate structure to selling your business we tackle both the technical and personal considerations impacting all of your decisions. We can’t make you better at what you do, but we can help you benefit the most from the fruits of your labours.
Incorporation & Corporate Structure Planning with Ted Maduri | E001
00:36:05
Summary:
In the first episode of Financial Planning for Canadian Business Owners, Jason Pereira, award-winning financial planner, university lecturer, writer, and host of the podcast Fintech Impact, welcomes Ted Maduri, Partner at the law firm DLA Piper, to talk about how to establish a strong business structure from the start, challenges people may face along the way, and more.
Episode Highlights:
● 01:53: – From a legal standpoint, the easiest way to start a business is through a sole proprietorship or a general partnership if you have a business partner.
● 02:50: – Registering as a business allows you to have a brand and a name, allows you to enter into contracts and then sue on the basis of those contracts, and allows you to deduct business expenses.
● 03:50: – You are not locked into a business structure forever; you can begin as a sole proprietorship and become a corporation later when the time is right.
● 05:40: – In either of these options, taxes are still done individually, on the personal level.
● 06:00: – The plus to a corporation is that it exists in perpetuity and offers limited liability, so if someone sues they are suing the company, and not you as an individual.
● 07:43: – A business doesn’t have to start thinking about HSD or GSD until they are worth $30,000.
● 08:40: – As a corporation you are able to take advantage of Canada’s small business tax rates.
● 12:20: – The simplest way to tell whether it’s the right time to add complexities to your business structure is that you can afford it.
● 14:10: – It’s better to put together an abbreviated shareholder agreement that’s more like a term sheet than it is to move forward with nothing just because it’s too costly or laborious to establish one.
● 16:04: – Ted strongly advises against combining your real estate investments with your operating company because it complicates your ability to later sell your business.
● 19:02: – Ted points out that it’s often more appropriate to have separate legal entities for each of multiple locations of a business or different divisions of a business.
● 20:42: – Ted suggests a family trust so that the business owner can remain the sole trustee and then make family members beneficiaries of that trust.
● 24:55: – Another benefit to proper corporate structure planning is tax deferral.
● 26:22: – The ideal way to set up your corporate structure is to best position it for eventual sale.
● 26:40: – You have to have a corporate structure in place for 24 months before you qualify for a tax exemption.
● 30:15: – The same record-keeping and best practices that Ted recommends for the eventual successful sale of a business are also helpful for raising funding to grow your business.
● 33:16: – You should adjust your team if you outgrow it or it’s no longer a good fit.
3 Key Points
1. There are pros and cons to choosing both a sole proprietorship/general partnership or a corporation, as well as to establishing a corporation at the beginning of your business or later in its growth.
2. It’s crucial to create some form of a shareholder agreement as soon as there is more
than one shareholder in the business.
3. Ideally, establish your business structure with the long-term view of its eventual sale.
Tweetable Quotes:
● “Anytime you do have more than one shareholder, you should have a shareholder agreement... I sometimes describe it as a prenuptial agreement for business owners.” –Ted Maduri
● “I think what sometimes people forget about is once you put shares into someone’s hands, they own those shares.” –Ted Maduri
Resources Mentioned:
● Website – Jason Pereira’s Website
● Facebook – Jason Pereira’s Facebook
● LinkedIn – Jason Pereira’s LinkedIn
● DLA Piper – https://www.dlapiper.com/en/canada/people/m/maduri-ted/
In the 2nd episode of Financial Planning for Canadian Business Owners, Jason Pereira, award-winning financial planner, university lecturer, writer, and host of the podcast Fintech Impact, welcomes Dr. Tom Deans, estate and family succession planning expert and author of NY Times Bestseller Every Family’s Business, to talk about how to handle exit planning with your business, especially when family succession is involved.
Episode Highlights:
● 01:29: – Tom shares his background and how he ended up working in his family’s business.
● 03:20: – Only 20% of business owners sell their business.
● 03:40: – Tom’s fundamental idea is that you shouldn’t gift your business to your children, but sell it to them at full market value.
● 06:00: – It’s impractical and damaging to teach your kids to expect that the only way they’ll have control over their finances and relationship to the family business is to wait for their parents to die.
● 08:40: – Every time Tom hears a story of family business drama across industries and around the world, he has heard it before; these are universal patterns.
● 10:09: – Gifting voting shares to the next generation makes it difficult for them to innovate inside the business; because they didn’t pay for it, they don’t feel they have the authentic permission to change or alter it but instead preserve it.
● 11:45: – Shift your perspective from preserving the business itself to preserving wealth.
● 13:15: – Very successful dynastic families like the Rockefellers taught their children about risk taking, the successes and failures, and to love business broadly instead of loving their family’s specific business.
● 16:15: – Question 1: What does our family business look like in 5 years?
● 18:12: – Question 2: Are you interested in selling your stock? If yes, to whom?
● 19:43: – Because people are living longer, succession planning is just getting delayed.
● 22:06: – Question 3: Are you interested in buying stock and acquiring control, yes or no?
● 22:42: – Question 4: Do you understand and agree that in order to maximize shareholder value, this business can be sold to a third party at any time?
● 25:30: – People think their business is their legacy, but people don’t even know the name of who founded Coca-Cola.
● 26:36: – Question 5: I agree that within 60 days I will put in place special compensation for my child/key employee in the event that the business is sold in the next 5 years.
● 28:42: – Question 6: As a fundamental principle, I understand that from time to time, people receive unsolicited offers from a third party to acquire the business. These offers will be considered and accepted at the discretion of the controlling shareholder.
● 29:47: – Question 7: In preparation for the annual update of this blueprint, I will arrange for an updated valuation of the business and calculate whether there is an appropriate amount of insurance in place. I will furnish evidence that this has been done, and the estate taxes will not impair the ability of this corporation to function after my death.
● 32:00: – When a business fails after children inherit it, we all rush to judgment and blame the next generation, when really it was the responsibility of the business owner to establish a transition plan.
● 35:27: – Question 8: What are at least three items in each of the following four categories that could affect the health of your business for the next five years? Strengths, Weaknesses, Opportunities, and Threats.
● 36:26: – Question 9: To secure our future prosperity together, should we either A) continue to run the business and invest more money into our company, or B) practically pursue the sale of our company?
● 38:22: – Question 10: Within 60 days of completing this blueprint, you will complete a salary and bonus compensation review.
● 38:35: – Many business owners will complete a salary review for everyone but their children, and they’re just as often underpaid and exploited as they are overpaid.
● 40:30: – Question 11: I agree to conduct an annual performance review.
● 40:48: – Even your children need performance reviews in order to feel ownership over the business.
● 41:25: – Question 12: Within 60 days of completing this blueprint, I will present an up to date job description to all family members/key employees working in the business that clearly describes their duties and responsibilities.
● 43:10: – When selling a business, the buyer often wants things like organizational charts and job descriptions, and the only way you’ll get top dollar on the sale of your business is if you have those things ready.
● 43:43: – In business, you really make your money on your way out, not along the way.
3 Key Points
1. Not everyone wants to take over their family’s business, so these questions are
designed to make sure you have both a willing seller and a willing buyer.
2. The responsibility for a smooth, successful transition is on the business owner, not their
children.
3. Treating your children like fully valued employees is crucial for their long-term
involvement and dedication to the company.
Tweetable Quotes:
● “What happens is the previous generation designs, quite unwittingly, the business to fail in the hands of the next generation. It’s not their desire, but gifting the voting shares makes it very difficult for the next generation to innovate inside the business.” –Tom Deans
● “The next gen, when they have their own ideas, and many of those visions for the five years are in contrast with the controlling shareholder, the parent, that’s not a problem, that’s an opportunity.” –Tom Deans
● “Starting from a pool of thousands of resumes, you’re telling me in a family business, from a pool of two kids, the statistical likelihood that you’re gonna find the best CEO for that business?” –Tom Deans
Fundamentals of Corporate Taxation with Kim Moody | E003
00:28:45
Summary:
In this episode of Financial Planning for Canadian Business Owners, Jason Pereira, award-winning financial planner, university lecturer, writer, and host interviews Kim Moody, Director of Canadian Tax Advisory Services at Moodys Gartner Tax Law in the Calgary area. Kim Moody talks about the expertise that Moody Gartner offers, the general percentages of taxation that businesses face, the differences in paying dividends and salaries, the Kiddie Tax rule, and what to know before paying family members.
Episode Highlights:
● 01:07: – Kim Moody explains Moodys Gartner and what they do.
● 02:05: – How are corporations taxed in Canada?
● 03:47: – What is the tax benefit of not taking money out personally against the business?
● 05:09: – Kim talks about the limit of $50,000 in passive income.
● 08:38: – Why is the belief that paying dividends is better than paying income a fallacy?
● 12:00: – Corporations are giving up their CPT contributions if they are paying out dividends and giving up the ability to earn RST.
● 13:26: – What does it take to pay a salary or dividend to a family member?
● 15:37: – How have the rules changed for paying dividends to family members?
● 20:15: – Kim Moody talks about the Kiddie Tax rule.
● 22:13: – The average business owner makes less than $70,000 a year to take care of their families and generally work more than a 40-hour work week.
● 26:06: – It is not about being careful what you wish for, it is about what is best for the country.
3 Key Points
1. Moodys Gartner has a very strong Canada-United States bench handling
anything in the cross borner private client space, with offices in Toronto, Edmonton, Calgary,
2. Corporations are taxes on active business income, generated in Canada, then the first $500,000 is subject to a preferential rate which varies by province but is typically 10%. Anything over that is taxed at the general rate between 25-27%.
3. There is a limit of $50,000 in passive income that a small business can make before it starts to potentially suffer because they will pull back on the ability to use the lower tax rate.
Tweetable Quotes:
● “Moodys Gartner is a tax law firm. We also have a companion accounting firm, Moody's Private Client and we service private clients, high net worth and ultra high net worth private clients at a tax specialist level.” – Kim Moody
● “Maximize the referral by not taking those funds out so that ultimately you maximize and use the time value of money so when you ultimately do take the money out and pay another level of personal tax, you are dealing with more” – Kim Moody
● “Would you pay an arm’s length person the same amount of money for the same services? If the answer is yes, then more than likely that salary that you are paying to the family member is reasonable, then all is well.” – Kim Moody
An Introduction to Employee Benefits with Keith Foot | E005
01:04:55
Summary:
In this episode of Financial Planning for Canadian Business Owners, Jason Pereira, award-winning financial planner, university lecturer, writer, and host interviews Keith Foot, CEO of Ralph Moss Insurance. Jason Pereira and Keith Foot discuss employee benefit plans, the different components of the plans, and tips on how you can contain cost.
Episode Highlights:
● 01:00: – Keith Foot introduces himself and what he does.
● 01:41: – What are the reasons for group employee benefits?
● 03:53: – What is the cost of setting up a group employee benefit?
● 04:58: – What kinds of ‘target loss ratios’ can companies be looking at?
● 12:04: – People need more than what is offered through a group insurance plan.
● 15:22: – How does accidental death and dismemberment insurance work?
● 19:48: – Who is paying for these employee benefits?
● 23:27: – How does dental insurance factor into group employee benefits?
● 31:28: – What is involved in extended insurance plans and reimbursements?
● 37:02: – Keith Foot’s company audits the claims of their clients every year.
● 41:41: – There is a period of stability required before traveling with travel insurance.
● 44:48: – What can employee assistance programs, spending accounts and wellness accounts look like?
● 53:15: – What is the benefit versus cost for vision care?
● 57:36: – There are fewer and fewer stop-less providers that are willing to ensure a stand-alone self-insured plan.
● 1:00:53: – So many employers don’t know the cost of their employee insurance benefits.
3 Key Points
1. Keith Foot is seeing group employee benefits as averaging about 10% of payroll. In real dollars to an employee it comes to about $3000-$4000 per year for a benefit program with life, accidental death and dismemberment, some form of disability, some health and some dental. 2. Dependent life benefits are adjunct plans to the employee benefits that are
usually around $5000 for a child and $10,000 for a spouse.
3. The various tiers of dental insurance are basic dental for x-rays and
cleanings, level two that covers fillings and levels three and four which are crowns and bridges.
Tweetable Quotes:
● “Any dollar that the employers pays out in benefits, is a total write-off to the company and the employee gets the benefit tax-free, with the exception of life insurance where there is a tax on the premium.” – Keith Foot
● “Our job as a consultant is to allow the insurance company to make money, because if they don’t make money, we don't have anyone to ensure our clients or to ensure our companies. – Keith Foot
● “The thing with group life insurance to remember is it is not portable. When an employee leaves, if he has $100,000 of coverage and he leaves the company, it is gone.” – Keith Foot
Insurance Planning for Business with Zachary Goldman | E007
00:46:14
Summary:
In this episode of Financial Planning for Canadian Business Owners, Jason Pereira, award-winning financial planner, university lecturer, writer, and host interviews Zak Goldman, Managing Partner of Sterling Park Financial Group in Toronto, Canada. Sterling Park is one of the more better-known high-end insurance operations in Canada. Zak and Jason discuss why business owners need to consider insurance and the key benefits of it.
Episode Highlights:
● 01:25: – Zak Goldman introduces himself and what he does.
● 07:20: – Zak talks about some of the frustrations with the insurance Industry.
● 09:44: – Sterling Park has seven people in their office which isn’t usual for an insurance firm.
● 11:23: – Insurance will be a tool to do financial planning.
● 14:26: – The vast majority of investment advisors are giving incorrect advice.
● 15:24: – Why does insurance work?
● 16:58: – Large tax bills often can’t be paid because the liquidity isn’t available.
● 19:07: – What are some of the basic use cases for insurance for business owners?
● 19:52: – The most common and easiest use of insurance is for a partnership.
● 23:33: – Why is insurance and tax planning so important for when you die?
● 27:30: – Insurance in a corporation is not to be used for an insured retirement plan.
● 32:18: – Make sure whoever is doing your financial planning are doing comparisons.
● 35:00: – Provide value to your client.
● 38:26: – Insurance policies can be tax shelters while you are alive.
● 41:08: – Corporate capital grows tax-free and at death gets paid out tax-free.
● 43:30: – At Sterling Park, you can’t take the corporate asset and get a personal loan against it.
3 Key Points
1. The average insurance advisor in Canada is $37,000-$49,000 in gross income that they have to run their business out of.
2. Insurance is a payment that happens on a periodic basis that leads to a much larger payment later on that is tax-free.
3. Zak Goldman says that Insurance is benefitting two groups: widows and orphans.
Tweetable Quotes:
● “If we can open people’s eyes to insurance and not that cheesy, salesy way, but actually a factual number-based analysis. That’s why we do it and I think that’s why we have success in doing it.” – Zak Goldman
● “This industry doesn’t hold itself up to the standards that it should. People do not have the expertise, the backgrounds, the letters behind their name.” – Zak Goldman
● “Tax and mortality. Those are two things that make insurance work.” – Zak Goldman
Mentorship And Grooming The Next Generation With Peter Merrick | E006
00:46:59
Summary:
In this episode of Financial Planning for Canadian Business Owners, Jason Pereira, award-winning financial planner, university lecturer, writer, and host interviews Peter Merrick, Financial Expert that has been in the industry a very long time and is the author of the book The King of Main Street. His book discusses business owners at different stages of life and the value of mentorship between them. Peter Merrick talks about life beyond working on and at your own business.
Episode Highlights:
● 01:09 – Peter Merrick has been in the financial service industry since 1991.
● 01:48 – Peter discusses his book The King of Main Street and why it is important to business owners.
● 03:45 – What was the catalyst for writing this book?
● 14:40 – Jason and Peter discuss the increasing retirement age and the life expectancy age increasing.
● 16:53 – What are the best practices for moving into retirement age?
● 19:29 – Why is divorce with retired couples increasing?
● 25:00 – Why shouldn’t you have kids if you want to be super wealthy?
● 27:33 – Usually after three generations a family’s inherited money is gone.
● 32:04: – How should you address the second half of your life’s story?
● 39:45: – Jason talks about advanced life planning.
● 41:19: – We need much more mentorship in our society.
● 45:14: – Focus on your legacy and address what you are doing to make that happen.
3 Key Points
1. Peter Merrick has written three textbooks and 800 published articles.
2. A true mentor is aware of recognizing the person that needs help and to know what we know, and they can see beyond their physical existence and cares about the future. 3. By 2030 it is being predicted that there will be 1.5 billion people over the age of 65.
Tweetable Quotes:
● “I don’t call it The King of Bay Street or The King of Wall Street. It is the average person. It is the millionaire next door. The person who has an idea, gets the capital, organizes it and makes it happen.” – Peter Merrick
● “There is a saying, the difference between the eater and the eaten is time.” – Peter Merrick
● “There is no ransom you can pay to God. So, it is really about the relationships you have and what you have given.” – Peter Merrick
Resources Mentioned:
● Facebook – Jason Pereira’s
● LinkedIn – Jason Pereira’s
● FintechImpact.co – Website
● jasonpereira.ca – Website
● Linkedin – Peter Merrick’s
● Thekingofmainstreet.com–The King of Main St. book
In the 4th episode of Financial Planning for Canadian Business Owners, Jason Pereira, award-winning financial planner, university lecturer, writer, and host of the podcast Fintech Impact, welcomes Greg Markell of Ridge Canada, a cyber security insurance firm. They discuss the origins of cyber insurance, how to protect yourself and your business from breaches, and more.
Episode Highlights:
● 01:06: – Ridge Canada is a wholesale underwriting shop that focuses on cyber and privacy liability insurance.
● 01:36: – Cyber security is quite new, but it can cover measures to avoid liability for breaches or to solve the problem, and can cover the liability itself in the event that you’re sued.
● 06:04: – One of the biggest issues right now is understanding cyber connectivity across the country.
● 06:47: – We’re about halfway up the learning curve for brokers being able to communicate to end clients what their policies can do and how to use it.
● 08:02: – A Canadian census by Stats Canada of small businesses in the country actually asked for the purchasing rates of cyber insurance and it was only 7% as of 2017.
● 10:58: – Canada is the first country to have federal notification legislation mandating that companies notify their customers when there’s been a privacy breach.
● 15:26: – 40-50% of the applicants they see are indicating some form of loss, mostly from ransomware.
● 18:42: – You don’t need to be an obvious target to be hit with ransomware.
● 22:20: – Awareness is key to avoiding cybersecurity threats, including employee training.
● 26:45: – Two-factor authentication and password strength are crucial, and you can use technology like LastPass and other password managers to make it easy.
● 28:46: – There are multiple versions of two-factor authentication, including built-in authentication in Office365.
● 30:03: – Authentication where you are texted a code is the weakest form; even Jack Dorsey’s Twitter account was hacked by duping his phone’s SIM card.
● 34:30: – The strongest option is a physical USB key.
● 44:32: – Greg’s number one tip is to have a disaster recovery plan that includes getting hit by ransomware.
3 Key Points
1. Every business that has ever collected payment information from customers is at risk of
a cyber security and privacy breach.
2. Ransomware or malware are as big a threat as standard data breaches.
3. Never think you’re immune or not at risk of being hit with ransomware or a breach.
Tweetable Quotes:
● “The bottom line is if you take any form of client data and that data ever touches anything but a piece of paper, and that piece of paper isn’t shredded, you’re at some form of cybersecurity risk.” –Jason Pereira
● “I think there’s a lot of strength to the cloud, it’s how you manage things within the cloud. Always always always, if you’re using cloud-based technology, two-factor authentication, it’s a must.” –Greg Markell
● “Make sure you have that instant response plan in a robust manner and so you’ve identified the lawyer that you're going to call who’s an expert in these types of scenarios because your general lawyer is not going to know how to get Bitcoin.” –Greg Markell
In this episode of Financial Planning for Canadian Business Owners, Jason Pereira, award-winning financial planner, university lecturer, writer, and host interviews Trevor Parry, President of TRP Strategy Group and Tax and Estate Expert. Trevor Parry discusses the ins and outs of post-mortem planning to prepare for what happens to the investments in your holding company after you pass away.
Episode Highlights:
● 00:47 – Jason Pereira introduces Trevor Parry.
● 01:35 – Trevor Parry describes who he is and what he does.
● 02:16 – They talk about what happens to investments when the owner of a holdings company passes away.
● 06:22 – What is a loss carry-back and pipeline transactions?
● 09:28 – How could a corporation essentially be double taxed?
● 13:44 – Capital dividends have no relevance in a pipeline.
● 16:24 – What is a spousal role and redeem?
● 18:31 – How can you reduce the cost of insurance through leverage?
● 22:38 – They aren’t going to get rid of capital dividend credits.
● 23:50 – Post mortem planning can be made understandable but not simple.
● 25:01 – United States rules regarding permanent life insurance are very different from Canada’s.
3 Key Points
1. Deemed dividends will be taxed as an ineligible dividend, a non-eligible dividend, or a little of both.
2. Post-mortem planning options include loss carry backs, share redemptions, pipeline transactions, and also a mixture that involves life insurance.
3. What is your gut sense of risk?
Tweetable Quotes:
● “I am the self-described tax mercenary. So, I am a lawyer by training, collecting a few tax degrees over the past few years and I have a religious devotion to helping entrepreneurs prudently and safely save money.” – Trevor Parry
● “Corporations are legal persons. They survive you. So, though the value of your shares now has been counted in your terminal return, assuming no roll-over, you still have to do with, or your estate has to do with that corporation.” – Trevor Parry
● “Canada, without a doubt, has the positive rules and regulations in the G7 when it comes to permanent life insurance.” – Trevor Parry
Credit Ratings and Alternative Lending with Cato Pastol | E011
00:44:07
Summary:
In this episode of Financial Planning for Canadian Business Owners, Jason Pereira, award-winning financial planner, university lecturer, writer, and host interviews Cato Pastoll, CEO at Lending Loop, an alternative lender to small businesses. Cato Pastoll talks about personal and business credit ratings as well as his work at Lending Loop.
Episode Highlights:
● 00:39 – Jason Pereira introduces Cato Pastoll.
● 01:00 – Cato Pastoll describes who he is and what he does.
● 01:50 – What are personal credit scores, how do you get them, and what impacts them?
● 05:50 – What is a healthy credit utilization amount?
● 08:48 – Payday loans can hurt your credit more than loan-term bank loans.
● 09:38 – What are the differences between a soft hit and a hard hit to your credit score?
● 11:31 – The length of your borrowing history also affects your credit score?
● 13:18 – What advice does Cato have for people to maintain a good credit score?
● 15:53 – Check for errors on your credit report.
● 16:30 – Have accounts and credit cards with different banks and lenders.
● 18:23 – What goes into a corporate credit score and how does it differ from personal credit scores?
● 21:20 – What is firmographic data?
● 22:32 – Businesses that have liens against them represent risk to lenders.
● 26:15 – Collections and judgements do come into play on corporate credit scores.
● 28:43 – Lending Loop is the first of its kind in Canada.
● 31:22 – Lending Loop helps businesses establish credit and sources of financing.
● 32:27 – How do they onboard people and provide them with information on quotes?
● 34:50 – Lending Loop is handling loans from anywhere between $5000-$500,000.
● 35:14 – Their interest rates range from 5.9%-26.5%.
● 36:33 – How much can lenders offer a business and what is the process?
1. The 5 factors that impact your personal credit score are payment history,
utilization amount, credit history, inquiries, and the length of your borrowing history.
2. Set up pre-scheduled credit card payments to prevent being late.
3. Keep credit utilization under 35%.
Tweetable Quotes:
● “Lending Loop is an online marketplace lending platform. What we do is connect small businesses that are looking for an affordable source of financing with investors that want to lend money to their businesses.” – Cato Pastoll
● “Being diligent with your payments, it’s not just going to help your credit score, it is actually going to help when lenders or other people look at your credit report. Is this someone who is reliable?” – Cato Pastoll
● “A lot of business owners when they get started will either borrow against their personal home equity or they will borrow on personal credit cards, and that actually doesn’t necessarily benefit their business credit.” – Cato Pastoll
Resources Mentioned:
● Facebook – Jason Pereira’s Facebook
● LinkedIn – Jason Pereira’s LinkedIn
● FintechImpact.co – Website for Fintech Impact
● jasonpereira.ca – Website
● Linkedin – Cato Pastoll’s Linkedin
● lendingloop.ca – Website for Lending Loop
● getloop.ca – Free Personal and Business Credit Scores from LendingLoop
Canada’s COVID-19 Economic Response Plan with Guy Anderson | E010
00:36:55
Summary:
In this episode of Financial Planning for Canadian Business Owners, Jason Pereira, award-winning financial planner, university lecturer, writer, talks with Guy Anderson, Full-Licensed Investment and Financial Planner with Aligned Capital about Canada’s response plan to the COVID-19 coronavirus pandemic.
Episode Highlights:
● 01:24 – Guy Anderson introduces himself and what he does
● 01:50 – They go over the first category of benefits for businesses: avoiding layoffs and rehiring employees.
● 05:05 – What is involved in the ‘extending the workshare program’?
● 06:09 – The temporary changes to the Canada Summer Jobs Program
● 07:04 – Reduced and Deferred Payments refers to income taxes and sales remittances.
● 07:34 – Jason Pereira explains the Business Credit Availability Program and the Canada Emergency Business Account.
● 09:58 – Many business owners don’t qualify for some subsidy programs because pay themselves in dividends.
● 10:34 – The Launching an Insured Mortgage Purchase Program is up to $150 billion dollars.
● 11:46 – The Bank of Canada is creating some liquidity in the housing market.
● 13:55 – The Office of the Superintendent of Financial Institutions has lowered the domestic stability buffer by a point and a quarter.
● 16:27 – Jason goes over the tax deferrals for the self-employed and industries that were hit hard by the coronavirus pandemic.
● 18:22 – Industries that have been set back by COVID-19 include airports, agriculture, food distribution, job placement and recruiting, and the film Industry.
● 19:39 – The government has planned support for individuals and families, including the increase to the Canada Child Benefit.
● 22:32 – Jason and Guy discuss mortgage support.
● 24:50 – The Indigenous Community Support Fund is of $305 million.
● 26:40 – What is the Reaching Home Initiative, and the support for living shelters?
● 28:13 – What types of support is being provided for mental health and for seniors?
● 33:07 – What programs are assisting students and recent graduates?
● 34:38 – Every province in Canada has their own support nuances.
● 35:38 – Kind.Wealth.ca has organized pro-bono initiative of independent financial planners who are offering their services for free to people in need.
● 36:38 – Cato
3 Key Points
1. The government will cover up to 75% of wages for up to 12 weeks, up to a threshold of up to around $58,000.
2. The Canadian government has extended the tax filing deadline and the tax payment deadlines can be deferred until August 31st.
3. The Bank of Canada has dropped interest rates to about 25 basis points.
Tweetable Quotes:
● “The amounts that they are covering, the 15%, that seems fair because for the period that they are talking about. Most businesses probably didn’t see the drop off right away. So, 15% seems fair.” – Guy Anderson
● “Anyone that hires a student under the Canada Summer Jobs Program will basically receive 100% of the minimum wage in the province they are in, covered. So, I got to tell you, I’m very much looking forward to hiring an army of students.” – Jason Pereira
● (Canada Emergency Business Account) “It is a line of credit of $40,000 for basically an interest-free line of credit. This one is very interesting. It is interest-free for the first year.” – Jason Pereira
In this episode of Financial Planning for Canadian Business Owners, Jason Pereira, award-winning financial planner, university lecturer, writer, talks with Stephanie Choo, Partner and Head of Investments at Portag3 Ventures. Portag3 Ventures is a venture capital firm that specifically invests within the fintech financial technology space. Stephanie Choo explains what venture capitalists are, how to approach them, what they are looking for, and how to know if you are someone who should be taking on venture capital.
Episode Highlights:
● 01:14 – Stephanie Choo describes what Portag3 Ventures does.
● 03:03 – What is a venture capital firm?
● 05:38 – What would make a business not be a good fit for a VC?
● 09:31 – Portag3 Ventures are looking for 10x returns or more on their investment.
● 11:18 – Stephanie talks about the automated pizza business play.
● 13:05 – What are VCs typically looking for in businesses to show them to convince them to invest?
● 18:42 – Stephanie explains what they want to see in a business’ team and their innovation.
● 23:38 – Be able to prove what is proprietary, protected, or defensible about your product or service.
● 25:30 – When a VC is ready to invest, what is a term sheet, and what goes into that?
● 28:12 – What are other misconceptions about venture capital firms that businesses should be aware of?
3 Key Points
1. Venture capital firms are sources of capital for certain early stage businesses that are very high growth that are generally technology orientated and scalable, typically with a venture portfolio approach.
2. Venture capital may not be for you if you are a cash-generating cash-flowing business that is not particularly scalable and not growing by 100% or more a year that doesn’t have an exit
strategy and isn’t planning to return capital in about 10 years.
3. Most venture funds look at the strength of a company’s team, why now is the right time for this business, and what problem does the business solve.
Tweetable Quotes:
● “Portag3 is a global fintech-specific venture fund. We invest across seed Series A and Series B. But, we’re really looking for companies in the fintech space that are going to transform the future of financial services.” – Stephanie Choo
● “We typically invest at the stage where companies have what is called ‘early market fit,’ which means they have early traction. They’ve got customers. They’ve got some revenue.” – Stephanie Choo
● “They are investing on what is called the ‘power law basis,’ which is a very small number of your portfolio will end up generating 90% or plus returns for you.” – Stephanie Choo
In this episode of Financial Planning for Canadian Business Owners, Jason Pereira, award-winning financial planner, university lecturer, writer, talks with Lee Fernandes, Senior Wealth Consultant at Cidel. Cidel is a company that helps high-wealth Canadians establish structures and planning to help them meet their needs. Lee Fernandes discusses one of Cidel’s core offerings, trust services. This episode provides a general education on what trusts are, how they can be used, common use cases, and why they are beneficial to people.
Episode Highlights:
● 01:12 – Lee Fernandes describes what Cidel is and does.
● 01:53 – What is a trust?
● 03:28 – Jason Pereira provides a simple example of an irrevocable trust.
● 04:20 – They discuss the perception of trusts being scandalous.
● 06:31 – Lee discusses asset protection trusts.
● 09:09 – What questions do Lee’s clients often have?
● 11:51 – Lee clarifies the trustees’ and settlers’ duties.
● 18:17 – How many trustees should you have?
● 22:11 – What is a graduated real estate (GRE)?
● 25:22 – What are the advantages and disadvantages of inheriting?
● 30:53 – Henson Trust is only available to beneficiaries that have disabled needs.
● 33:33 – What are spousal trusts, alter ego Trusts, and foundations?
● 40:00 – Individuals try to set up a private foundation after the beginning August, it’s not going to happen that year.
● 43:58 – Trusts are very useful tools that can be very dynamic.
3 Key Points
1. The three certainties that a trust needs to meet is the certainty of intent,
certainty of subject matter (what), and the certainty of object (for who).
2. Trusts come down to wealth protection and control versus taxation.
3. Trusts now pay the highest marginal tax rate in Canada.
Tweetable Quotes:
● “Cidel is a Canadian-based global financial services company. We are a private bank, so we deal with private clients, both globally and domestic, and the objective is really to work with families to preserve wealth.” – Lee Fernandes
● “If you are setting up a structure, and the true intent of that trust is to asset protect, then look at a different jurisdiction. An asset protection trust doesn’t cross any tax lines. It is tax-neutral.” – Lee Fernandes
● “‘What is it that I need to have to qualify for a trust?’ And it isn’t really about net worth. It is around, what do you need to have the trust for? Let’s have a more meaningful discussion around the use of a trust.” – Lee Fernandes
Business Mortgage Lending with Sheldon Brow | E014
00:24:30
In this episode of Financial Planning for Canadian Business Owners, Jason Pereira, award-winning financial planner, university lecturer, writer, talks with Sheldon Brow, Independent Mortgage Broker. Sheldon Brow talks about how mortgage lending and debt in general work differently for business owners than they do for the average consumer. He also provides guidance and tips on how to make your life easier as a business owner when you need to apply for debt.
Episode Highlights:
● 01:12 – Sheldon Brow describes what he does in his career.
● 02:44 – Why do business owners have such a hard time getting mortgages?
● 05:53 – Why are independent mortgage brokers such a beneficial option?
● 04:20 – What does the approach to applying for debt look like?
● 10:12 – The vast amount of financial training is unfortunately focused on sales.
● 11:20 – What are his best practices to make access to credit easier for business owner clients?
● 14:17 – Sheldon talks about various types of business loans that people commonly need to take out.
● 21:25 – For business lending, it is really helpful to have big, extensive contracts with big companies, reliable cash flow, assets, and invoices that you have coming in.
3 Key Points
1. Among the plethora of business mortgage lending, some of the variables
include not just credit scores, but also debt-service coverage ratio.
2. Seek a long-term relationship with your broker with an ecosystem of financial
experts, not just a transactional situation.
3. The better you know your client, the better you can advise.
Tweetable Quotes:
● “I broker mortgages. I am able to shop across more than 30 different lenders and many, many different types of products for both personal and business lending.” – Sheldon Brow
● (Business lending) “A lot of people think you just need a good credit score, and that is a huge misconception.” – Sheldon Brow
● “Why brokers are better in every level of finance, in my opinion, is because they’re not just giving the kind of tunnel vision of what is appropriate at that bank.” – Sheldon Brow
Creditor Protection & Insolvency with Scott Terrio | E015
00:34:27
In this episode of Financial Planning for Canadian Business Owners, Jason Pereira, award-winning financial planner, university lecturer, writer, talks with Scott Terrio, Manager of Consumer Insolvency at Hoyes Michalos. Hoyes Michalos is a Toronto-based license and insolvency trustee. Scott Terrio talks about what insolvency means, what the options are, and how business owners can protect their assets in the event of insolvency.
Episode Highlights:
● 01:15 – Scott Terrio explains the work that he does.
● 02:55 – What is the process and options for when people get into debt issues?
● 04:18 – What are consumer proposals?
● 06:50 – How are consumer proposals different from bankruptcies to the consumer?
● 10:30 – Business debt is quite different from consumer debt.
● 13:33 – Can a spouse become liable for their other spouse’s debt?
● 14:57 – How much back and forth typically happens with consumer proposals?
● 17:07 – What is normally the timeline differences between consumer proposals and bankruptcy?
● 19:36 – What if someone goes through a consumer proposal and gets in financial trouble again?
● 21:08 – What are the misconceptions about bankruptcy in Canada?
● 24:25 – Which types of assets do creditors not have access to?
● 27:37 – Consumer debt usually costs you more over time.
● 28:38 – What do RESPs, TFSAs, RDSPs look like in a credit situation?
● 30:23 – Which bankruptcy programs are relevant to this COVID-19 moment?
3 Key Points
1. Hoyes Michalos is a Toronto-based license and insolvency trustee firm with 25 offices across Ontario, Canada and did about 5800 files last year.
2. Consumer proposals are for individuals, not a business, with $250,000 in unsecured debt or less, and are making an agreement to pay a percentage of your debt.
3. About 70% of consumer proposals go through as offered and about 99.9% co ahead with a counter-offer.
Tweetable Quotes:
● “Sooner is always better when you are talking about debt. Most small business owners, once they’ve gotten into a little bit of trouble, whether it is tax debt or supplier debt or bank debt, they keep digging.” – Scott Terrio
● “What a proposal actually is, is you are making a legal settlement with all of your unsecured creditors as a group, through a trustee, through the courts.” – Scott Terrio
● “You file a bankruptcy, you get an R9 rating for 6 years after your bankruptcy discharge. So, that is either 9 months or 21. The R9 isn’t as bad as people think, because I’ve had all kinds of people get mortgages.” – Scott Terrio
Tax Implications for Americans Living In Canada with Terry Ritchie | E016
00:50:27
In this episode of Financial Planning for Canadian Business Owners, Jason Pereira, award-winning financial planner, university lecturer, writer, talks with Terry Richie, Partner and Vice President at Cardinal Point Wealth Management. Cardinal Point is a firm that specializes in dealing with U.S./Canadian cross-border issues. Terry Ritchie discusses tricks and traps that Canadian business owners are exposed to when they are also United States tax residents.
Episode Highlights:
● 01:02 – Terry Ritchie describes what he does in his career.
● 02:44 – What are U.S. residents for income tax purposes?
● 05:57 – COVID-19 is affecting ‘snowbirds’ from a tax prospective who can’t travel.
● 08:42 – You could have zero assets in the U.S. and a U.S. resident living in Canada. But you still have to file your taxes in the United States.
● 10:10 – Terry Ritchie addresses gift taxes
● 12:05 – What are the potential penalties for not filing income taxes?
● 17:38 – If you have interest in Canadian company, what IRS forms need to be filed?
● 19:22 – What were some of the tax changes when Trump became president?
● 21:05 – Terry shares the come advice for American clients setting up a business in Canada.
● 22:29 – What are the differences in homeowner taxes in the US and Canada?
● 26:26 – Which business industries does it make sense to get incorporated?
● 28:27 – What are your filing requirements for a corporation?
● 30:20 – What is one of the big detriments to being an American taxpayer when you are a Canadian business owner?
● 34:32 – Terry discusses the reasons why it is important to become compliant.
● 41:50 – How will passports be affected by tax debt?
● 42:52 – What is the difference between having a green card or when you are actually considered a citizen?
3 Key Points
1. There are 9 million Americans that live outside of the United States and just below 1 million Americans that live in Canada.
2. U.S. residents for income tax purposes are citizens of the U.S. that were born there, those that hold green cards, traditional ‘snowbirds’ who consistently spend generally at least 4 months in the United States for 3 years in a row.
3. Income that you leave in a foreign entity is taxed at the highest margin rate for U.S. tax purposes.
Tweetable Quotes:
● “‘We’re not just book smart, we live it.’ So, I live in Phoenix and Calgary. We have offices in California, Florida, Phoenix, Toronto, and Calgary. All my kids are dual citizens. I’m married to a U.S. citizen.” – Terry Ritchie
● “In the U.S., generally more than 90% of the companies in the U.S. are all flow-throughs, tax corporations, S-Corps, LLCs.” – Terry Ritchie
● “Sometimes, when you make them aware of the way that we tax in the US on the Canadian side, it sometimes it makes sense to just be a sole prop, and just file a good old C-2125 and a scheduled C.” – Terry Ritchie
Resources Mentioned:
● Facebook – Jason Pereira’s Facebook
● LinkedIn – Jason Pereira’s LinkedIn
● FintechImpact.co – Website for Fintech Impact
● jasonpereira.ca – Website
● Linkedin – Terry Ritchie’s Linkedin
● Terry@cardinalpointwealth.com – Email Terry Ritchie
● Linkedin – Terry Ritchie’s Linkedin
● cardinalpointwealth.com – Website for Cardinal Point Wealth Management
CFIB And Why You Should Join With Ryan Mallough | E017
00:32:30
In this episode of Financial Planning for Canadian Business Owners, Jason Pereira, award-winning financial planner, university lecturer, writer, talks with Ryan Mallough, Director of Provincial Affairs for Ontario at the Canadian Federation of Independent Business. CFIB is the largest advocacy group for small business owners in Canada. Ryan Mallough talks about what CFIB does and why small business owners should consider becoming members.
Episode Highlights:
● 01:13 – Ryan Mallough explains what CFIB does.
● 04:33 – What have been some of CFIB’s big wins in the past?
● 11:09 – Aside from COVID-19, what are some of CFIB’s other big advocacy issues currently?
● 13:21 – They talk about how construction can infringe on businesses.
● 17:30 – How have they lobbied for businesses affected by COVID-19?
● 21:28 – What has been the feedback on commercial real estate subsidies?
● 26:44 – What else does CFIB offer it’s members?
● 29:16 – What does it cost to join CFIB?
3 Key Points
1. CFIB is informed by their 110,000 members’ opinions through regular surveys and mandate questions.
2. Right now in Canada, it is easier and more lucrative from a tax perspective to sell to a third party than it is to sell to a family member.
3. CFIB has been pushing for all Canadian governments across the country to start building in construction mitigation programs, including financial compensation for businesses that are disrupted by huge construction projects.
Tweetable Quotes:
● “The Canadian Federation of Independent Business has been around for 49 years now and we represent the big voice for small businesses. We operate across the country. We have offices in all 10 provinces.” – Ryan Mallough
● “We advocate for things that small businesses are looking for. So, things like reduced small business or corporate tax rates, changes to employment standards law, cutting red tape and regulations, permit signage, that sort of thing.” – Ryan Mallough
● “How can we help the business owners succeed? How can we make their lives easier when it comes to dealing with the government, while at the same time ensuring that the government understands the realities of running a small business?” – Ryan Mallough
Resources Mentioned:
● Facebook – Jason Pereira’s Facebook
● LinkedIn – Jason Pereira’s LinkedIn
● FintechImpact.co – Website for Fintech Impact
● jasonpereira.ca – Website
● Linkedin – Ryan Mallough’s Linkedin
● CFIB.ca – Website for Canadian Federation of Independent Business
HR Tips and Best Practices with Kevin Kliman | E018
00:40:58
In this episode of Financial Planning for Canadian Business Owners, Jason Pereira, award-winning financial planner, university lecturer, writer, talks with Kevin Kliman, Co-Founder and Co-CEO of Humi. Humi is an online platform for managing basically everything that has to do with people in your business. Kevin Kliman talks about HR advice, strategies, and pitfalls to avoid for human resources in its relationship to financial planning.
Episode Highlights:
● 01:32 – Kevin Kliman explains what Humi is and the work he does with them.
● 03:24 – What does hiring people and turnover cost people aside from their salaries?
● 11:09 – What are some best practices around onboarding that really work effectively and have an impact?
● 13:21 – Kevin talks about the consequences of not having paperwork taken care of properly.
● 15:14 – What should employees be doing to address onboarding concerns?
● 17:22 – Kevin discusses firing people, dismissal and the risks surrounding that.
● 21:29 – When it comes to payroll, remove all the friction.
● 25:34 – What are some best practices for onboarding and maintenance of the plans in
general?
● 38:41 – Trust is earned.
● 39:17 – Kevin Kliman shares his final thoughts
3 Key Points
1. When hiring, make sure you are filtering for company culture fit, use recruiting
to signal to them what your expectations are, and be authentic.
2. Build an emotional bond between new employees and the rest of the team.
3. The Employment Standards Act (ESA) is the bare minimum for companies as
to how they have to treat employees.
Tweetable Quotes:
● “Humi is a cloud-based employee system of record for Canadian businesses with 5 to 500 people. It’s kind of a fancy way of saying that we combine payroll, HR, health benefits into a single simple system, cloud-based system that can be accessed from any device.” – Kevin Kliman
● (Humi) “We are really replacing paper contracts, Excel spreadsheets, all the multiple siloed systems that people use to manage the people side of their business.” – Kevin Kliman
● (Humi) “The company is four and a half years old. There are now over 1000 companies that are on Humi and they employ over 30,000 people.” – Kevin Kliman
In this episode of Financial Planning for Canadian Business Owners, Jason Pereira, award-winning financial planner, university lecturer, writer, talks with Jonah Mayles, Partner, Tax and Estate Planning at Sterling Park Financial. Jonah Mayles shares his wisdom derived in the field of tax law as well as insurance, and the often overlooked topic of insurance tracking shares in reference to estate planning.
Episode Highlights:
● 01:16 – Jonah Mayles explains what he does for a living.
● 02:14 – What is the concept of insurance tracking shares?
● 03:11 – What are the benefits of insurance tracking shares?
● 11:00 – How does the tax implication math happen upon death?
● 13:10 – Can beneficiary children buy shares directly from the estate?
● 14:07 – They discuss how taxes will be affected by COVID-19.
● 15:00 – What does the CRA speak to in reference to insurance tracking shares?
● 16:32 – Has Jonah seen financial arrangements where clients have borrowed from the policy as well?
● 19:17 – Jonah Mayles shares various use cases that solve several customer dynamics.
● 22:36 – The two types of lawyers that will always be busy: family lawyers and estate litigators.
3 Key Points
1. The cash surrender value of the policy contributes to the value of the fair market value of your shares.
2. We are headed towards the biggest wealth transfer in history with the Baby Boomer generation dying off.
3. Insurance is not only great for the client, but the government also gets to receive their money way faster.
Tweetable Quotes:
● “What I do at Sterling Park, my partners are all insurance guys, been in insurance their entire careers, whereas what I do is the tax and estate planning that goes into the insurance plans that we implement for our clients.” – Jonah Mayles
● “Insurance tracking shares is essentially a class of tracking shares that is created for a corporation that is going to acquire a whole life insurance policy.” – Jonah Mayles
● (Insurance tracking shares) “What it does is it tracks the value of either the cash surrender value of the policy or the death benefit, or both.” – Jonah Mayles
Resources Mentioned:
● Facebook – Jason Pereira’s Facebook
● LinkedIn – Jason Pereira’s LinkedIn
● FintechImpact.co – Website for Fintech Impact
● jasonpereira.ca – Website
● Linkedin – Jonah Mayles
● SterlingParkGrp.com – Website for Sterling Park Financial Group
In this episode of Financial Planning for Canadian Business Owners, Jason Pereira, award-winning financial planner, university lecturer, writer, talks with Melanie Russell, President of Kalex Valuations. Melanie Russell, is a business evaluator who does so to meet the needs of businesses for a range of issues like MNA and family law issues.
Episode Highlights:
● 01:16 – Melanie Russell, explains what he does for a living.
● 03:18 – What does the process of valuation look like?
● 04:56 – What types of metrics does she use to come up with a number?
● 07:00 – Valuation is ultimately a finance-driven study.
● 10:07 – How is valuation looked at differently by different roles that people play?
● 12:13 – What are some of the key factors that add to high valuations?
● 15:00 – How much education or push-back does she get when dealing with valuations?
● 16:32 – How does she go about normalizing expenses back into the cash flow?
● 19:26 – How much does sweat equity create push back during the valuation process?
● 23:36 – Melanie Russell discusses tax planning and estate freezes.
3 Key Points
1. Cash flow is generally what drives investors.
2. Liquidity is one the biggest difference between private company valuations and public company valuations.
3. Currently, the trend appears to be more capital-based sophisticated purchases versus just strategic ones.
Tweetable Quotes:
● “I am by background a legacy CA, CPA that specializes in the area of valuations.” – Melanie Russell
● “Valuations are business assets that are used for various purposes, whether it’s trying to sell as business, whether it is trying to transition to the next generation or to employees, whether it is a dispute.” – Melanie Russell
● “My value add is telling business owners or asset owners what someone might pay based on logical, rational thinking.” – Melanie Russell
Resources Mentioned:
● Facebook – Jason Pereira’s Facebook
● LinkedIn – Jason Pereira’s LinkedIn
● FintechImpact.co – Website for Fintech Impact
● jasonpereira.ca – Website
● Linkedin – Melanie Russell
● Kalexvaluations.com – Website for Kalex Valuations
Outsourcing Financial Operations of Your Business with Josh Zweig | E021
00:36:27
In this episode of Financial Planning for Canadian Business Owners, Jason Pereira, award-winning financial planner, university lecturer, writer, talks with Josh Zweig, CEO and Partner at LiveCA. Josh Zweig talks about the benefits of outsourcing various financial functions and work to a professional accounting firm that can do it on your behalf, supporting ongoing engagement with your clients.
Episode Highlights:
● 01:10 – Josh Zweig explains what LiveCA does.
● 01:33 – Where is LiveCA’s physical location?
● 02:56 – How does their business model enable clients with their offerings?
● 05:05 – What is the best practice for efficiency?
● 09:07 – How often does LiveCA reengineer a client’s system?
● 12:13 – What is the first thing someone should contemplate when looking to potential outsource?
● 18:05 – Set up your system to scale.
● 21:09 – How does the pay-per-use business model change the relationship with consumers?
● 25:05 – Ask customers about their personal lives to be able to advise them better for needs that they may have never thought of.
● 26:53 – What should you look for in an outsource firm?
● 30:55 – How has LIveCA been able to help businesses during COVID-19?
3 Key Points
1. LiveCA has an account’s payable team, a payroll team, a bookkeeping team, and all of those teams work with their tech teams and their client service teams.
2. Outsourcing should serve as being a fraction of a full-time person.
3. LiveCA takes into account how fast a business is growing and they lay processes that are adaptable to even when that business hires more people.
Tweetable Quotes:
● “LiveCA is Canada’s largest online CPA firm and what we do is a combination of the tax and accounting that you would expect a typical CPA to do and we combine that with a knowledge of technology and financial workflow.” – Josh Zweig
● “Scoping is basically us going, can we help you? If so, here is what help looks like and finally, here is how much it costs.” – Josh Zweig
● “I would look at the outsourcing process as two-fold. One is, how are you doing the process? And two, who is doing it?” – Josh Zweig
Business Owner Health & Human Performance with Dr. Randy Knipping | E022
00:44:18
In this episode of Financial Planning for Canadian Business Owners, Jason Pereira, award-winning financial planner, university lecturer, writer, talks with Dr. Randy Knipping, Medical Director of the Deerfields Clinic. The Deerfields Clinic is an integrated medicine clinic that focuses on human longevity and performance. Dr. Randy Knipping talks about health challenges facing business owners and how integrated medicine can help fix those issues and get ahead of challenges in their health.
Episode Highlights:
● 01:16 – Dr. Randy Knipping explains his medical background.
● 06:24 – What does he see different in his business owner patients than others?
● 08:55 – How does he calculate their biological age against their birthdate age?
● 14:52 – What is the negative impact on a business owner's relationships and their business when their health is out of whack?
● 18:00 – How does integrative medicine course-correct health problems?
● 23:00 – What kind of feedback has he received once people adopt the approach?
● 26:05 – What are some best practices that people can implement to build resilience?
● 36:15 – Having 10 minutes of meditation daily for 8 weeks shows changes in the brain that can be seen by an MRI scan.
● 39:53 – Deerfields.ca offers an initial complimentary virtual needs assessment with Dr. Randy Knipping.
3 Key Points
1. Stay on top of your health by measuring it on a regular basis instead of waiting until something goes wrong.
2. Dr. Randy Knipping uses biomarkers to measure your physical and mental functional capacity and then track it on a quarterly basis to see if the patient is reaching their goals.
3. Resilience is the ability to have and maintain a calm, clear, and stable state of mind in spite of what is going on outside of your mind.
Tweetable Quotes:
● “Most people who have chronic disease or worse, you can identify factors 5, 10, 15, 20, 30 years before they get sick.” – Dr. Randy Knipping
● “Typical clients that I’m seeing coming into my clinic are 40, 50, 60-years-old . They’ve made their $10-$15-$20 or more millions of dollars. But they are 5, 10, 15, 20 years older biologically than their birthdate.” – Dr. Randy Knipping
● “The future health of the couch potato is clearly going to be much worse than the amateur athlete.” – Dr. Randy Knipping
Family Law & Business Owners with Heather Hansen | E023
00:49:06
In this episode of Financial Planning for Canadian Business Owners, Jason Pereira, award-winning financial planner, university lecturer, and writer, talks with Heather L. Hansen, Lawyer and Partner at Martha McCarthy & Company. Heather L. Hansen talks about family law and its impact on business owners, the legal ramifications of marriage and separation, and the myths to be aware of surrounding both of those instances.
Episode Highlights:
● 01:05 – Heather L. Hansen explains her background in family law.
● 03:42 – What are the tensions between family law and contract law?
● 06:11 – How does a divorice from a business owner differ from a regular conventional employee?
● 16:08 – What happens when some of that income from the business may not be fully reported?
● 22:27 – Get clear accounting on what your assets are
● 25:30 – Why is the family home different in family law?
● 30:38 – You can enter into a domestic contract that is not in contemplation or during a marriage.
● 37:31 – Heather L. Hansen’s ‘marriage contract mantra’ is to keep them as simple as possible and to do as little as possible in the contract.
● 41:37 – Heather L. Hansen discusses the class of excluded assets under the family law act.
3 Key Points
1. Value doesn’t equal fair market value and value doesn’t necessarily equal
some prior indicator of value.
2. In family law, division of property turns to the value of the business and the
obligation to equalize it.
3. In family law, child support and spousal support are based on income.
Tweetable Quotes:
● “I am a family lawyer. I practice in Ontario. I’m a certified specialist in family law and what that means is that it occupies the totality of my practice. I’ve been practicing for just over 12 years now.” – Heather L. Hansen
● “One of the areas that I’ve developed a specialty in is the intersection of family law and business, and how partially business owners are impacted during a separation process.” – Heather L. Hansen
● “People should consult often and early with family lawyers, particularly within their corporate life, and there are things that we can do. There are strategies and there are approaches we can do. But it is limited.” – Heather L. Hansen
Resources Mentioned:
● Facebook – Jason Pereira’s Facebook
● LinkedIn – Jason Pereira’s LinkedIn
● FintechImpact.co – Website for Fintech Impact
● jasonpereira.ca – Website
● Linkedin – Heather L. Hansen’s Linkedin
● mccarthyco.ca – Website for Martha McCarthy & Company
Finding Purpose with Money at Later Stages with Peter Merrick | E024
00:52:33
In this episode of Financial Planning for Canadian Business Owners, Jason Pereira, award-winning financial planner, university lecturer, and writer, talks with Peter Merrick, Financial Expert and the author of the book The King of Main Street. Peter talks about finding purpose through philanthropy, the ways people can give back, dynastic wealth trends, and overcoming charity fatigue.
Episode Highlights:
● 01:20 – Peter Merrick explains philanthropy.
● 03:14 – What awakens people to the desire to give back?
● 06:11 – How much is the will to give driven by people feeling they have way too much?
● 12:47 – Andrew Carnegie talked about giving wealth after you are dead.
● 15:10 – Generations are now living longer beyond 65.
● 19:40 – What causes charitable fatigue to set in?
● 25:38 – What causes some advisors to not advise their clients about philanthropy?
● 37:31 – Revisit the client every year and adjust what is important to them.
● 39:44 – Advisors don’t find philanthropists, they find them.
● 41:20 – Peter Merrick shares a personal story about his father’s desire to give.
● 42:50 – Time is your most valuable asset.
● 47:30 – Peter Merrick says that you should read The Gospel of Wealth by Andrew Carnegie and Maimonides’ Eight Levels of Charity.
● 50:40 – Jason Pereira tells a story of an oil man who gave more than half of his wealth and JK Rowling’s charity.
3 Key Points
1. The first generation tends to earn wealth. The second generation witnessed part of the journey towards that wealth and maintains it. The third generation tends to spend it all and has to go back to work.
2. Andrew Carnegie talked about giving in three ways: giving to your family, giving after you are dead, and giving to causes that are important to you through your time and money.
3. Around age 55 is when people tend to plan their exit strategy and philanthropy starts to mean more.
Tweetable Quotes:
● “People that have means also want to give, and the way they want to give is with purpose. Purpose is finding something they care about, something that has touched them in their life and they want to make a difference.” – Peter Merrick
● “There is no such thing as charity. They call it justice, meaning, if you’ve done well on this planet, you have benefitted from the society and the people who’ve come before you, and also the society as you live, and it is your responsibility to give back.” – Peter Merrick
● “If you can give back, you can act quicker than let’s say a government or a committee. This is something that a lot of people as baby boomers retire, who are the richest generation that has ever lived on the planet. They have the ability to make a difference.” – Peter Merrick
Resources Mentioned:
● Facebook – Jason Pereira’s Facebook
● LinkedIn – Jason Pereira’s LinkedIn
● FintechImpact.co – Website for Fintech Impact
● jasonpereira.ca – Website
● Linkedin – Peter Merrick
● Thekingofmainstreet.com – The King of Main Street book
Royalty Financing For Online Business with Andrew D'Souza | E025
00:38:45
In this episode of Financial Planning for Canadian Business Owners, Jason Pereira, award-winning financial planner, university lecturer, and writer, talks with Andrew D'Souza, Co-Founder and CEO of Clearbanc. Clearbanc is an online lender to businesses that helps them gain access to capital through royalty models that serve as alternatives to lending and venture capital. Clearbanc’s business model of lending isn’t one of debt or equity, but specifically one of royalties, which is important in an emerging market for lending options.
Episode Highlights:
● 01:24 – Andrew D'Souza explains Clearbanc.
● 02:29 – How did Clearbanc get started?
● 05:57 – How much of his time has been spent in just fund-rasing alone?
● 08:52 – What does the lending experience look like?
● 11:39 – Their goal is to fund businesses with less bias.
● 14:56 – What do their offers generally look like?
● 14:58 – Which niches seem to be some of the best fits for Clearbanc?
● 15:42 – Which verticals seem to typically meet Clearbanc’s needs?
● 18:35 – How much do they look at the founders themselves before making a decision?
● 24:02 – How does Clearbanc get their message out there?
● 26:04 – What is expansion looking like for Clearbanc?
● 27:40 – How have their risk models that they have built been holding up?
● 30:49 – How much repeat business are they seeing?
● 32:58 – What would he change in his business or industry?
● 34:47 – What have been the biggest challenges he has faced?
● 36:15 – What keeps him excited each day about his work?
3 Key Points
1. Clearbanc helps fund businesses for their online growth by getting a fixed portion of the revenue in return until Clearbanc gets their initial revenue back plus a fixed percentage between 6%-12%.
2. Over 2500 businesses have been globally and Clearbanc has provided over a $1 billion in funding to businesses.
3. Fundraising is typically a three month process that can be 20% of your time.
Tweetable Quotes:
● “We can fund a business to continue to accelerate their online growth.” – Andrew D'Souza
● “Equity capital is designed for high variability, a lot of uncertainty in both the upside and the timing of that upside, and that is why you want an equity partner.” – Andrew D'Souza
● “If you’ve de-risked your business and if you understand your sales and marketing and your inventory terms or your customer break-even points, and your return, equity is a very, very expensive way to fuel that growth.” – Andrew D'Souza
Planning and Investing for Business Owners with Guy Anderson | E026
00:27:13
In this episode of Financial Planning for Canadian Business Owners, Jason Pereira, award-winning financial planner, university lecturer, and writer, switches roles for this episode. Instead of conducting the interview he gets interviewed by his colleague Guy Anderson, Full-Licensed Investment and Financial Planner with Aligned Capital. They go over some of the fundamentals of investing within your corporate structure.
Episode Highlights:
● 01:14 – What should business owners know before they start investing?
● 03:48 – Passive business tax rates start at 50% for interest and half of that is for capital gains.
● 04:37 – What does it take in order to sell your small business corporation?
● 09:00 – What is the formula for investment returns that is taxable?
● 13:59 – What is the status of corporations and income splitting?
● 14:56 – What are the limits for interest income?
● 18:58 – Jason Pereira explains the tax rates for investment returns?
● 22:25 – What types of advantages does insurance offer?
● 25:25 – Get the right team behind you to keep your accounting solidified.
3 Key Points
1. Only people can qualify for tax saving exemptions, not businesses.
2. Tax rates within a company on the owner's earnings could be between 10%-12%.
3. You are allowed to earn up to $50,000 in investment returns within your corporate structure a year at the normal 50% tax rate.
Tweetable Quotes:
● “One of the key reasons people incorporate is to have creditor protection, protect your assets from creditors, assuming you haven’t signed a personal guarantee.” – Jason Pereira
● “Seek advice on re-organizing your corporation and make sure that it is optimized for protecting assets and for the capital gains exemption.” – Jason Pereira
● “By leaving money in your pirate struction, you actually have more money to invest than if you took it out personally.” – Jason Pereira
In the 27th episode of Financial Planning for Canadian Business Owners, Jason Pereira, award-winning financial planner, university lecturer, writer, and host of the podcast Fintech Impact, welcomes Chad Davis of LiveCA, an all-remote accounting firm. They discuss the phases of workflow development LiveCA has used to get where they are, tips for transitioning to and improving remote work, and more.
Episode Highlights:
● LiveCA is an accounting firm that has always had a remote team.
● The CPA code of conduct stipulates that they had to have a physical office, so they worked with a lawyer to use their address for the firm and to work with CPA Canada to change that requirement.
● When they started, they had no idea how to manage remote work and had no established project management platform or workflows.
● One of their guiding philosophies was that they didn’t consider the cost of an app to enable their remote work, they simply tried anything they thought would work.
● They eventually needed to establish frameworks and processes so that the tools they were using were maintained and stayed useful.
● People are the weak link in cybersecurity, so educating people on company security measures is a big part of employee onboarding, and everybody uses LastPass.
● Your biggest signals when your team is remote is happiness of your employees and happiness of your customers.
● It’s okay to change systems and processes when you realize they’re no longer working.
● Having everything documented is crucial for remote work so anyone who needs information can access it.
● The next phase of development for LiveCA was understanding how to function using asynchronous communication, which can be a difficult transition when you’re used to everyone working at the same time and being in the same meetings.
● Messaging people on Slack constantly can actually be detrimental to their workflow by splitting focus.
● Ultimately, people want to be able to have control over their own lives.
● You have to decide who has decision-making power about pricing, quality and scope of work, etc.
● Training teams has a huge positive effect on a company versus individual training.
● If you think you know how your employees feel, you should still ask them.
● If your company stays rigid and does not evolve, you are doing a disservice to your clients.
● LiveCA works with clients who have about $1 million, or a year’s worth of cash to work with, because it’s those companies who take their finances seriously and want the service that LiveCA provides.
● Building a good corporate culture starts with hiring and onboarding.
3 Key Points
1. The cost of failure to try software and online apps is extremely minimal.
2. Remote work does require technology, but it’s more about corporate culture.
3. Asking your employees and customers for feedback with an open mind to find problems
before they get too big.
Tweetable Quotes:
● “Part of trying things was meeting customers that were also wanting to try things with their accounting firm.” –Chad Davis
● “The way you approach security is deeply rooted in the way you approach your own life & your own securities. So for us, we're well aware of phishing & trends, we try to keep up on news & we read a lot. Just being aware stops you from clicking on weird links.” –Chad Davis
In this episode of Financial Planning for Canadian Business Owners, Jason Pereira, award-winning financial planner, university lecturer, and writer, interviews Rachel Blumenfeld, a financial advisor in the Estates and Trust group at Aird & Berlis, about estate planning for business owners!
Episode Highlights:
● 0:45 – Rachel Blumenfeld introduces Aird Berlis and her role at the company?
● 1:59 – What usually gets the estate–planning conversation started?
● 3:12 – Rachel discusses the documents that are involved with the estate–planning process.
● 6:44 – What kinds of assets have to be probated?
● 8:05 – What falls outside of the things that have to be probated?
● 10:25 – What is a Bare Trust and how can it help?
● 13:40 – Rachel lists the reasons that one would want the probate.
● 14:41 – How do things change when an American citizen is involved in a Canadian estate?
● 17:57 – What are the complications when an American that lives in the US is named as an executor?
● 20:46 – What is an estate freeze and how does it benefit business owners?
● 23:41 – Rachel breaks down the tax issues pertaining to estate freezes.
● 24:32 – Rachel gives general advice to business owners when they begin to plan their estate.
3 Key Points
1. Financial advisors suggest having 2 wills prepared to avoid both the costs from probated assets and the time that it takes to go through probation.
2. Joint accounts are a common major issue in estate litigations, all to save the probate rate of 1.5%. The problem is, most people don’t actually know the math.
3. There are a plethora of changes to the estate–planning process when an American citizen is involved, with different complications depending on their role, where they live, and if they are living or deceased.
Tweetable Quotes:
● “Estate planning is all about making sure what you have goes where you want it to with as little pain and taxation as possible.” – Jason Pereira
● “If a single asset on a will has to be probated, the entire will has to be probated.” – Jason Pereira
● “What you end up with is the parents end up owning the current value...a trust for the kids holds the future growth, and you’ve pushed out that tax bill on that future growth to the next generation.” – Rachel Blumenfeld
● “There’s no worse way to destroy the family dynamics after you’re gone than to leave the messy estate behind.” – Jason Pereira
Bringing Purpose & Meaning To Your Investments with David O'Leary | E028
00:54:32
In this episode of Financial Planning for Canadian Business Owners, Jason Pereira, award-winning financial planner, university lecturer, and writer, interviews David O’Leary, Founder & Principal of Kind Wealth, a financial planning firm that also helps focus on clients finding purpose in their investing through investing in causes and initiatives that are meaningful to them.
Episode Highlights:
● 00:58 – What is David O’Leary’s career background?
● 02:19 – What is the focus of Kind Wealth?
● 04:37 – David O’Leary explains socially responsible investing.
● 07:00 – How easy is it to match your values with what is out there in the marketplace?
● 14:22 – How many people come to Kind Wealth looking for socially responsible investing?
● 18:15 – What does the term ‘green wash’ mean?
● 23:33 – What is thematic investing and impact investing?
● 36:00 – Do you have to sacrifice financial return to make a positive impact?
● 44:50 – It is hard to outsource your beliefs.
● 28:27 – When it comes to most of King Wealth’s clients, the fee differential is not discouraging them.
● 48:30 – How should clients get started with their financial advisors as far as ESG?
3 Key Points
1. ESG stands for Environmental Social and Governance describes people in the business of evaluating investments and looks at the financial factors that will impact that security.
2. 80% are mildly or interested in socially responsible investing.
3. SHARE is a Canadian non-profit that stands for Shareholder Association for Research and Education, works primarily with institutional investors to help them practice good shareholder activism.
Tweetable Quotes:
● “I consider myself a reformed free market capitalist. We’re from the same generation. I kind of was born and raised and cut my teeth in an industry where we are taught that maximizing shareholder value is the sole and only goal of a business.” – David O’Leary
● “Kind Wealth, we focus on helping people take control of their money so that they can live life on their own terms.” – David O’Leary
● “Your portfolio will not be perfect. There will be some aspect of it that you will not be happy with.” – David O’Leary
In this episode of Financial Planning for Canadian Business Owners, Jason Pereira, award-winning financial planner, university lecturer, and writer, interviews his colleague Guy Anderson, Full-Licensed Investment and Financial Planner with Aligned Capital, on the topic of planning for disabilities for business owners, including how they can plan for their family members/employees/themselves that have disabilities,
Episode Highlights:
● 01:48: – What is somebody entitled to in Canada when they are disabled?
● 02:19 – What does WSIB do for business owners and employees?
● 04:37 – What else is there besides WSIB?
● 07:00 – How does the disability tax credit at the federal level work?
● 08:50 – If you can’t afford the insurance on whatever it is that you are looking to cover, you can’t afford what you are looking to cover.
● 13:12 – They dig back deeper into the disability tax credit and what it gets you.
● 17:35 – How do people qualify for the Canada Pension Plan Disability?
● 19:42 – What are the estate planning considerations with people with disabilities?
● 24:42 – If business owners take dividends instead of income, how does that effect the other benefits they are entitled to?
3 Key Points
1. If you are starting a business go to the Workplace Safety Insurance Board website to register with WSIB within 10 days if it is required in your industry.
2. WSIB is generally for industries that have a high rate of injuries and illnesses to take a lot of the risk off of the business owners.
3. Every Canadian province has their own disability plan, which aren’t that hard to qualify for, generally speaking,
Tweetable Quotes:
● “A lot of business owners would probably be fully aware they may have to register with the WSIB, so the Workplace Safety Insurance Board.” – Guy Anderson
● (WSIB) “It takes a lot of the risk off of the business owners themselves, because if someone is injured on the job, the employee first files, I believe it
is a Form 6 or a Form 8, and WSIB takes care of the disability claim.” – Guy Anderson
● “Roughly about a third of Canadians would have a disability, and the disability doesn’t have to be physical. It can be mental.” – Guy Anderson
In this episode of Financial Planning for Canadian Business Owners, Jason Pereira, award-winning financial planner, university lecturer, and writer, interviews Brian Laundry, Planning & Insurance Expert for Advisors and Accountants, and Founder of BrianLaundry.ca. Brian Laundry is a well-known insurance expert in Canada who discusses business owners and disability planning, and what they can do to protect themselves in case of disability.
Episode Highlights:
● 00:57: – Brian Laundry describes the kind of work he does.
● 02:44 – What does disability insurance do?
● 06:14 – You almost position insurance as a hedge fund on their net-worth development.
● 07:00 – How does critical loss insurance work?
● 12:18 – What is the ‘option preference model?’
● 16:13 – Brian and Jason dig deeper in a discussion on disability insurance.
● 22:14 – What is the difference between own occupation insurance and regular occupation insurance?
● 31:49 – Acknowledge that any one of us can become disabled and out of work.
● 35:00 – What are some of the numbers related to critical illness insurance?
● 36:08 – We need coverage to protect our families.
● 37:42 – What are the odds of experiencing a critical illness event?
3 Key Points
1. About 1 out of 3 Canadians will see a period of disability during their lives, even in white collar jobs it is 1 out of 4.
2. Critical illness insurance pays a lump sum, similar to life insurance. You pick a term, a duration of cost, an amount of coverage, and an amount is paid to the owner tax-free for whatever purpose they submit.
3. The biggest conditions for critical illness insurance are cancer, heart attack, and stroke.
Tweetable Quotes:
● “For the past 7 years I’ve owned my own business and where I focus as an insurance-only expert. I work with accounting firms, other investment advisors, financial advisors, and I essentially stay in my lane. I focus on more strategic planning..” – Brian Laundry
● “Long-term disability insurance essentially protects your ability to earn an income .” – Brian Laundry
● “When you look at the group benefits booklets. What we’ve got to find out is if the employer is paying the premiums or not. Because when the employer is paying it, it is often taxable.” – Brian Laundry
Resources Mentioned:
● Facebook – Jason Pereira’s Facebook
● LinkedIn – Jason Pereira’s LinkedIn
● FintechImpact.co – Website for Fintech Impact
● jasonpereira.ca – Website
● Linkedin – Brian Laundry
● brianlaundry.ca – Website for Brian Laundry Insurance Solutions
In this episode of Financial Planning for Canadian Business Owners, Jason Pereira, award-winning financial planner, university lecturer, and writer, interviews Mark Halpern, CEO of WEALTHinsurance.com. Mark Halpern is a well-known insurance advisor in Canada that has differentiated himself by focusing heavily on philanthropy. Mark talks about how business owners can enable their philanthropy through the use of insurance and other tactics.
Episode Highlights:
● 01:05 – Mark Halpern describes the kind of work he does.
● 02:25 – Where do conversations typically go when people come to Mark Halpern about wanting to engage in philanthropy?
● 11:11 – What are some of the opportunities that come from philanthropy?
● 14:15 – What are the tax shelters that are left in Canada?
● 22:00 – Spend. Save. Give. What are you going to do with your money?
● 26:13 – What can people do to maximize the value of a life insurance policy?
● 31:38 – Mark Halpern describes the various kinds of people that like to give.
● 35:11 – You can’t just be a product peddler. You have to be a problem solver.
3 Key Points
1. Mark Halpern has almost 30 years in professional practice. He is a certified financial planner, a trust and an estate practitioner, and also a master financial advisor on philanthropy.
2. Financial planning around philanthropy involves making sure the client isn’t
going to run out of money, crystalizing what their tax bill is going to be now and during life expectancy,
3. With COVID-19, people are much more aware of their mortality and are inspired to do something more significant with their money in a charitable fashion.
Tweetable Quotes:
● “I do estate planning, and that is really looking at things from 30,000 feet up, making sure that people’s financial architecture matches up with their financial furniture and that it changes over time.” – Mark Halpern
● “Tax minimization strategies using tax exemption products that most people don’t know much about. We provide that educational wisdom.” – Mark Halpern
● “Philanthropy, helping people create legacies and also help them convert taxes into charitable donations, and we do this with business owners and entrepreneurs and corporate professionals. We have some sports athletes as well.” – Mark Halpern
Resources Mentioned:
● Facebook – Jason Pereira’s Facebook
● LinkedIn – Jason Pereira’s LinkedIn
● FintechImpact.co – Website for Fintech Impact
● jasonpereira.ca – Website
● Linkedin – Mark Halpern’s Linkedin
● wealthinsurance.com – Website for WEALTHinsurance.com
In this episode of Financial Planning for Canadian Business Owners, Jason Pereira, award-winning financial planner, university lecturer, and writer, interviews Tracey Bissett,Chief Financial FItness Trainer at Bissett Financial Fitness. Tracey Bissett is a cash-flow and financial management coach who helps people better understand, analyze, and manage their cash flows, and in particular business owners.
Episode Highlights:
● 01:07 – Tracey Bissett describes the kind of work he does.
● 02:00 – What are some of the more conventional challenges for business owners starting out in terms of cash-flow?
● 04:07 – What tools and learning lessons can business owners use to educate themselves on how to do better with cash-flow?
● 10:38 – Are there any books or resources that Tracey recommends?
● 13:30 – What does she think about the model in the book Profit First?
● 15:31 – She discusses payment cycles and collection cycles.
● 22:40 – Business bank accounts aren’t personal bank accounts.
● 24:10 – How does Tracey Bissett work in collaboration with financial advisors?
● 26:51 – What are the key things to do to stay on top of the cash-flow of your business?
● 36:08 – We
● 37:42 – What are the odds of experiencing a critical illness event?
3 Key Points
1. Common situations with entrepreneurs with cash-flow challenges include: not paying attention to where their money is going, not thinking about the way money comes in and out.
2. Talk to other business owners about their pain points and challenges and be careful when borrowing money from family and friends because it could fail and it could be hard to predict when you can pay it back.
3. Check your mindset and overcome scarcity feelings and figure out what you can concretely do.
Tweetable Quotes:
● “I used to be a banker for many years in commercial lending and risk management and helping entrepreneurs get access to financing and making
those lending decisions. When I started my own business, I took all the pieces that I like to do.” – Tracey Bissett
● “Money comes in. Money goes out, and the timing that it happens is that cash-flow cycle.” – Tracey Bissett
● “Unfortunately, as I have seen many times in my career, you can actually book a lot of sales. But if you only get paid after you make the sale, you can go out of business in as quick as 90 days.” – Tracey Bissett
Resources Mentioned:
● Facebook – Jason Pereira’s Facebook
● LinkedIn – Jason Pereira’s LinkedIn
● FintechImpact.co – Website for Fintech Impact
● jasonpereira.ca – Website
● Linkedin – Tracey Bissett’s Linkedin
● bissettfinancialfitness.com – Website for Bissett Financial Fitness
● Profit First – Book; Profit First by Mike Michalowicz
Being Ready To Sell Your Business with Dave Sinclair | E033
00:40:07
In this episode of Financial Planning for Canadian Business Owners, Jason Pereira, award-winning financial planner, university lecturer, and writer, interviews Dave Sinclair, a transition coach that helps individuals and business owners overcome the stress and anxiety that come with a major life shift.
Episode Highlights:
● 1:40 – Dave shares his backstory and why he does what he does.
● 9:31 – What happens in the lives of business owners when they know it’s time to get help?
● 11:55 – Dave discusses the two questions that business owners need to ask themselves.
● 12:52 – Are people in crisis or heading to a crisis when they reach out to Dave?
● 15:38 – How does Dave work with people who are currently going through a crisis?
● 20:15 – How does the PERMA Model of Happiness play into Dave’s coaching?
● 27:20 – Are there commonalities amongst the people that are successful/unsuccessful in Dave’s program?
● 31:26 – Dave discusses how mindset affects someone’s transition preparedness.
● 35:00 – What is the strength that individuals have that allows them to let go?
● 36:20 – Dave discusses his upcoming book, Numb?, and what he is trying to accomplish.
3 Key Points
1. Dave decided to rebuild his life when he was 40-years-old and found that he was completely lost. In his search for meaning, he found that many business owners experience the same struggle.
2. Those that are moving onto the next stage of their lives outside of the business must decide what is important to them and then break that ideal life into a day-to-day journey.
3. People who embrace a growth mindset, as opposed to a fixed mindset, possess the open-minded characteristics that it takes to achieve their ideal lives outside of their businesses.
Tweetable Quotes:
● “If you’re running a business, when’s the best time to plant a tree? 10 years ago. When’s the second-best time? Now.” - Dave Sinclair
● ”It’s the best-kept secret there is, especially for business owners. You don’t know what you don’t know.” - Dave Sinclair
● “What legacy do you want to leave? Do you want to leave a legacy of chaos for your family or do you want to leave a legacy where the business can continue?” - Dave Sinclair
● “It’s like so many things in life. We will ignore it until absolutely the last moment when we absolutely have to pay attention to it and now it’s too late.” - Jason Pereira
● “To answer the question, which clients do I find have a better chance of creating this life outside the business? It’s the ones that are willing to really open it up, open up to the question, do the deep inner work that’s going to be required to build that identity.” - Dave Sinclair
In this episode of Financial Planning for Canadian Business Owners, Jason Pereira, award-winning financial planner, university lecturer, and writer, interviews Brian McClennon, CEO of Link Investment Management. Brian and Jason discuss the plethora of digital investment options that Link provides to employers for their employees.
Episode Highlights:
● 1:00 – Brain McClennon introduces Link and what services it provides.
● 1:55 – What is the motivation for employers to set up one of the financial plans that Link provides?
● 3:10 – Brian talks about what is involved with the Group RSP and how Link implements this plan.
● 7:25 – What are the obligations that an employer has to the Group RSP plan?
● 12:37 – Employers need to make sure plans are suitable for employees at different stages in their careers and lives.
● 15:40 – How are Contribution Pension Plans different from Group RSP in terms of employer obligation?
● 19:32 – People make the mistake of treating retirement funds like bank accounts.
● 20:40 – What is a Multi-Employer DC plan and how does it work?
● 22:54 – Brian breaks down Group Tax-Free Savings Accounts.
● 24:00 – Differed-Profit sharing plan has similarities to the DC Plan and the Group RSP.
● 25:35 – How do Employee-Share Purchase plans work and how does Link facilitate them?
● 27:44 – Brian explains Health Spending Accounts (HSA).
3 Key Points
1. Link provides a variety of digital financial plans that employers implement for the benefit of their employees.
2. Link offers 57 different Group RSP portfolios and emphasizes that employers assign portfolios based on suitability for employees rather than letting the employees choose for themselves.
3. Multi-Employer DC pension plans lock people in to help them avoid making the mistake of treating it as a bank account when it is really a retirement fund.
Tweetable Quotes:
● “I’m of the opinion that the entire group space is a bit of a mess. There are obligations that an employer has that oftentimes aren’t paid enough attention to and that potentially introduces liability.” – Jason Pereira
● “The suitability of the investments for the employees are really important.” – Brian McClennon
● “One thing that Link has done that is unique is we are both the administrator of and the sponsor of a Multi-Empoyer DC pension plan.” – Brian McClennon
● “When you can’t touch it, you can’t touch it. It just has to be there until retirement, right?” – Jason Pereira
● “Through the platform, we’ve driven efficiencies to scale this and roll this out and administer it on an ongoing basis, very effectively.” – Brain McClennon
In this episode of Financial Planning for Canadian Business Owners, Jason Pereira, award-winning financial planner, university lecturer, and writer, interviews Dr. Moira Somers, a renowned psychologist in the financial services community, about the challenges that come with giving and accepting advice!
Episode Highlights:
1:17 – Dr. Moira Somers introduces herself and her profession.
2:00 – What is Dr. Somers’ professional specialty?
4:00 – How did Dr. Somers start advising those in the financial services industry?
8:58 – Why is it so hard for humans to take preventative action?
14:18 – Dr. Somers talks about how different payment methods affect the different centers in our brains.
16:00 – What are the commonalities that will hold us back compared to the ones that will lead to success?
21:35 – Dr. Somers talks about the need to wear multiple hats to be successful in business.
25:00 – Jason and Dr. Somers discuss the human reluctance to pay attention to the important metrics.
32:37 – What are the first fundamental steps that people can take to start this conversation with business owners?
37:00 – Dr. Somers talks about her ability to create a psychologically-safe advising space.
3 Key Points
Advice givers tend to judge those that they are advising, even blaming them for their problems, causing advisees to default to the easy thing.
Paying with credit, as compared to cash, actually removes the pain of losing the value that comes with giving up money.
In order to intervene before the problem becomes too bad, people need feedback or assessment.
Tweetable Quotes:
“We all know what we have to do to be healthy...but this is a fundamental issue or concern of the human condition.” – Jason Pereira
“Unfortunately, the hardest advice to take is also preventative advice.” – Dr. Moira Somers
“It’s not only that we’re going to get better in spite of setbacks, it’s that the setbacks themselves will fuel us and make them stronger. That’s what it is to be anti-fragile.” – Dr. Moira Somers
“There are definitely periods of mandatory imbalance or inevitable imbalance in a business life...I don’t know that you can start out perfectly balanced.” – Dr. Moira Somers
“Always make a point of figuring out what is motivating a person to engage in this...what is fueling them through this...and lastly, have you worked with them to identify what’s getting in the way?” – Dr. Moira Somers
Donating Before You Exit with Jennifer Couldrey| E036
00:32:20
In this episode of Financial Planning for Canadian Business Owners, Jason Pereira, award-winning financial planner, university lecturer, and writer, interviews Jennifer Couldrey, the Executive Director of The Upside Foundation of Canada, an organization that enables equity donations by Canadian founders looking to make a difference!
Episode Highlights:
1:20 – Jennifer Couldrey introduces Upside Foundation.
2:14 – How did Jennifer get into this business and how did Upside Foundation get its start?
3:52 – Jennifer breaks down The Upside model.
5:56 – Why are these Canadian founders interested in donating equity?
8:05 – Jason and Jennifer talk about how Upside Foundation thrives in the long-game.
9:07 – What does a typical deal look like and what factors play into these parameters?
10:59 – Where are the donations being directed?
13:01 – Is this a one-time donation or a continuously-managed fund?
14:59 – Jason and Jennifer discuss how people view different charities.
21:12 – What is the feedback that Upside Foundation is receiving both before and after their clients’ exit events?
25:57 – If Jennifer could change one thing in her industry, what would it be?
29:12 – What has been the biggest challenge of getting Upside Foundation to where it is today?
30:25 – What motivates Jennifer to get up every day and push forward with Upside Foundation’s mission?
3 Key Points
Canadian founders use Upside Foundation as a way to make a palpable impact in their communities.
Companies are presented with the option of donating via stock options or personal proceeds to the cause of their choice.
90% of charitable donations are donated to elite donations such as universities, hospitals, and larger organizations that decide where the money should be allocated.
Tweetable Quotes:
“It’s a way of embedding this charitable impact into your business from day one.” – Jennifer Couldrey
“Part of the reason we have the flexibility to give through stock options or to give through personal proceeds is just to make that decision really easy for people.” – Jennifer Couldrey
“Having the ability to course correct is a valuable luxury that I think that is afforded through having these endowments paying out small amounts over large amounts.” – Jason Pereira
“When people think about charity, they usually think about helping the poor...but if you actually look at where charitable dollars go, 90% of charitable dollars are going to help elite institutions.” – Jennifer Couldrey
“When you have something, it’s hard to give it up. The bigger that number is, the harder it is to cut that check.” – Jason Pereira
In this episode of Financial Planning for Canadian Business Owners, Jason Pereira, award-winning financial planner, university lecturer, and writer, interviews Ajani Charles, a mental health advocate that is here to discuss the benefits of mindfulness on life and individual wellness!
Episode Highlights:
1:20 – Ajani Charles introduces himself and his profession.
2:34 – What is Ajani’s definition of mindfulness?
3:08 – How has mindfulness helped Ajani along his life path?
5:10 – What mechanisms and toolsets help cultivate mindfulness?
8:47 – Jason talks about how he discovered meditation.
11:00 – How is limiting judgment at the moment beneficial?
13:30 – Jason and Ajani discuss the ability of meditation to increase one’s capacity to do more.
19:36 – Ajani discusses how people enter careers without knowing their motivations.
20:50 – How is the brain structure affected by mindfulness?
23:02 – What should people do to get started with mindfulness?
25:49 – Ajani talks about Operation Prefrontal Cortex.
31:02 Ajani dives into multiple mindfulness-promoting organizations that he works with now and in the past.
3 Key Points
Before he started practicing mindfulness in 2014, Ajani felt unfulfilled about his relationships and was unhappy about his path.
There exists a lot of self-judgment in those that are driven to perform highly, taking away from their present-moment awareness. Mindfulness can help them with that.
Mindfulness and meditation can help bring to light things from our subconscious that are not usually available to us, such as motivations, suppressed feelings, etc.
Tweetable Quotes:
“Mindfulness is a non-judgmental present-moment awareness.” – Ajani Charles
“At the end of the day, we are all constantly our own ever-extending and ever-ongoing projects, right?” – Jason Pereira
“Flow states are states of present-moment awareness that are cultivated through activities that are no so challenging that they paralyze on with anxiety but not so easy that they induce boredom.” – Ajani Charles
“Our judgments of others are usually our judgments of ourselves expressed outwards.” – Ajani Charles
In this episode of Financial Planning for Canadian Business Owners, Jason Pereira, award-winning financial planner, university lecturer, and writer, interviews Jen Jacobs, an expert in long-term care insurance, about why long-term care insurance is important for business owners in particular.
Episode Highlights:
1:04 - Jen Jacobs introduces herself and her profession in long-term care.
3:54 - What triggers a long-term care event?
6:24 - Jenn compares long-term care to the other living benefits insurances (critical illness, disability).
8:04 - Jason and Jen break down the impact of net worth into the need for different kinds of insurance.
8:58 - Why is long-term care so drastically undersold?
12:36 - How does the cost differ for long-term care for those at different stages of life?
15:32 - Jason and Jen dive into the growing scenarios where people need to be looked after for long periods of time.
16:33 - Jason tells the story of the first modern-government pension in Germany.
18:43 - Is Jen’s viewpoint that people aren’t looking at living-benefit insurance early enough?
23:46 - Jason breaks down the factors that have caused people to buy long-term care from him.
26:00 - Jason and Jen give the takeaway message from all of this.
3 Key Points
Long-term care insurance is only sold by a tiny portion of insurance agents in Canada, making it the most undersold type of insurance in the country.
Canada has a fixation on fixed-premium insurance, compared to most other countries that have more variable-premium insurance.
In today’s world, people live for so much time after their retirement compared to 100 years ago.
Tweetable Quotes:
“I always thought it was the neatest idea that you could spend a little bit to be protected.” - Jen Jacobs
“Activities of daily living is your ability to get on on your own...When somebody needs help with 2 activities, the claim is triggered.” - Jen Jacobs
“Many advisors haven’t brought it into their business and if they don’t mention it, nobody’s going to know about it.” - Jen Jacobs
“More often than not, this is thought about as a later-career stage type of coverage.” - Jason Pereira
“No one wants to insure a house on fire.” - Jason Pereira
The Basics of Estate Planning with Jason Pereira | E039
00:21:36
In this episode of Financial Planning for Canadian Business Owners, Jason Pereira, award-winning financial planner, university lecturer, and writer, is interviewed by Guy Anderson in the first episode of his series on estate planning for business owners!
Episode Highlights:
1:25 – What is estate planning from a broad perspective?
2:19 – What are the different parts of estate planning?
4:57 – Jason breaks down what happens for those who don’t have their estate affairs sorted out.
6:32 – How long does it take to get someone else’s estate in order?
8:28 – Jason explains how your assets are organized and how that affects your estate.
10:42 – Why do people open up joint accounts?
12:06 – Where does the Will come in during this process?
14:11 – Jason dives into the succession plans of business owners.
15:18 – Who is in charge of what in regards to the will?
15:56 – Jason explains the 2 parts of power–of–attorney.
19:31 – Jason previews the rest of the Estate Planning for Business Owners series.
3 Key Points
After you die, your money can go to your beneficiaries, the government, and charitable organizations.
You do have a choice with your estate plan. You can plan one for yourself or leave it up to the government to figure it out for you. Only one is under your control.
The 3 scenarios that have to be addressed in the will are what happens if one spouse dies, both spouses die with children left behind, and the entire family dies.
Tweetable Quotes:
“Estate planning is the process of organizing everything that matters to you...and figuring out what you want your legacy to be.” – Jason Pereira
“It’s not just about where everything goes in the administration. It’s about, what is the outcome on the people and places you leave behind?” – Jason Pereira
“The last thing I want my family to have when I die is resentment.” – Jason Pereira
“The will establishes the rules for the estate.” – Jason Pereira
“There is a separate branch of the criminal code for theft under power–of–attorney and it is more punitive than normal theft.” – Jason Pereira
Avoiding Estate Planning Disasters, with Harris Jones | E041
00:32:46
In this episode of Financial Planning for Canadian Business Owners, Jason Pereira, award-winning financial planner, university lecturer, and writer, interviews Harris Jones, a well-known estate planner, about how to avoid estate-planning disasters!
Episode Highlights:
● 1:00 – Harris Jones introduces himself and his work history.
● 3:17 – What are the most common estate-planning mistakes that cost people money?
● 5:45 – Jason and Harris discuss the misconceptions that people have about their estates and life in general.
● 8:47 – Jason and Harris break down the emotional overlay of death.
● 12:06 – Harris talks about estate planning with the wealth range in which he works.
● 12:53 – Jason and Harris talk about the conversations that have to happen to avoid financial damage.
● 17:15 – Harris discusses the financial ramifications of a messy estate that crossed multiple borders.
● 20:00 – Jason and Harris emphasize the importance of knowing tax rules to “play the game properly.”
● 23:06 – Harris breaks down why lawyers, advisors, and anyone else involved need to work together.
● 25:52 – With constantly shifting tax laws, Jason and Harris believe great estate planning is always adaptable.
3 Key Points
1. Financial planners need to focus less on making money off the sale and more on the needs of their clients. Ironically, doing right by your client will bring in the money.
2. The emotional effects of death can fog up people’s ability to think clearly about what direction to go in. It’s times like these where financial advisors can help.
3. Never listen to an advisor that says they can get rid of your estate taxes. Estate-planning products do not take away taxes, but they can help find a way to cover those taxes.
Tweetable Quotes:
● “Let’s not worry about ramping up and making a bigger sale or making an inappropriate sale. Let’s do what’s right for the client.” – Harris Jones
● “It’s a heck of a lot easier to accept what is being told to you by your parents before they die...versus opening up an envelope and reading a bunch of papers that you can barely understand.” – Jason Pereira
● “All of the plans that you make, they won’t turn out that way...If you don’t make plans, they won’t turn out at all.” – Harris Jones
● “It’s not so much a game. It’s just that there are rules and the rules are available for everybody and they work.” – Harris Jones
Defining Your Legacy with Christine Brunsden | E042
00:31:51
In this episode of Financial Planning for Canadian Business Owners, Jason Pereira, award-winning financial planner, university lecturer, and writer, interviews Christine Brunsden from Trusted Legacy. Christine helps her clients plan out more than just their finances, but how they want to be remembered!
3:15 – Why do people put off their legacy and estate planning?
4:23 – Jason and Christine emphasize the importance of knowing what you are planning for.
7:17 – How does Christine start the legacy conversation with her clients?
10:00 – Christine shares her method for introducing philanthropic giving.
13:10 – What comes next when a client decides that they don’t want the government to get their money?
15:12 – What are Jason’s motivations for helping his clients?
17:40 – Christine defines what she really does for her clients.
19:44 – Jason discusses the ongoing pursuit of value for financial advisors.
21:17 – Christine dives into the underutilization of programs such as Alter Ego and Joint Partner Trust in Ontario.
25:27 – Jason and Christine discuss the benefits of setting a will for the beneficiaries.
28:22 – Christine is a huge proponent of a Letter of Wishes.
3 Key Points
A lack of education on legacy and estate planning plays a large part in why people put those processes off.
Jason’s mission as a financial planner is to help his clients get to the best versions of their lives. Many in the industry are fixers in this way.
In Ontario, there is an underutilization of programs that provide legacy security such as Alter Ego and Joint Partner Trust.
Tweetable Quotes:
“I always felt like there was something missing when I was in the banking world and I wanted to go deeper with people...there’s something more I could do.” – Christine Brunsden
“If you can actually articulate what your legacy mission statement is, you probably show up every day and live it more intentionally.” – Christine Brunsden
“I just define my career as about helping people live the fullest version of their lives. That is, to me, the purest version of financial planning.” – Jason Pereira
“I try to educate along the way as well so that I actually teach them the reasoning behind things so that they feel comfort.” – Christine Brunsden
“Be intentional about your planning...Make sure that it does fit your situation and that it is going to protect you and those that you care about.” – Christine Brunsden
Real Estate For Business Owners with Riccardo Di Donato | E043
00:30:44
In this episode of Financial Planning for Canadian Business Owners, Jason Pereira, award-winning financial planner, university lecturer, and writer, interviews Rick Di Donato, the Director of Development for Red Berry Restaurants, a massive multi-brand restaurant franchisee located in Canada!
Episode Highlights:
1:02 – Rick Di Donato introduces himself and Red Berry Restaurants.
2:36 – What are the things business owners need to look out for when negotiating their first lease?
4:32 – How is commercial leasing different than leasing an apartment or home?
6:49 – Rick discusses the most ridiculous clauses that he has seen on contracts from landlords.
11:00 – How should leasehold improvements play into the rent negotiations?
13:43 – Jason and Rick discuss how COVID has shown business owners the true colors of their landlords.
15:12 – Rick dives into business owners that pay for a ‘turnkey’ property.
16:42 – There are a few important concepts to focus on when negotiating a commercial lease.
18:49 – Rick talks about the worst situation he has seen with a Continuous Operating Covenant.
20:11 – What are the best practices when a renter needs utility upgrades?
21:48 – Rick dives into the unique clauses that need to be included when signing a lease in a plaza.
26:32 – What should business owners be aware of when purchasing a property?
3 Key Points
It’s vital for business owners to have a lawyer present whenever reviewing a commercial leasing contract in order to avoid getting undercut by hidden clauses.
For renters who are putting in all the capital for leasehold improvements, negotiations should be made to soften up the rent.
Business owners should always avoid a Continuous Operating Covenant because if they are gone for any unforeseen reason, the landlord can reclaim the premises.
Tweetable Quotes:
“I think one of the things that may lull people into a false sense of security is the misunderstanding around leases in general.” – Jason Pereira
“A lease is essentially a marriage contract...It sets the rules out for how you’re going to live your life together as landlord and tenant.” – Riccardo Di Donato
“If you can make a verbal agreement with someone, they should have no issue putting it in writing.” – Riccardo Di Donato
“When you’ve outfitted a location for a certain type of business, it becomes immediately more appealing to anyone looking to get into that kind of business.” – Jason Pereira
“It’s about doing the homework upfront knowing what you need and making sure that it’s inserted into the lease so that your landlord agrees to it.” – Riccardo Di Donato
In this episode of Financial Planning for Canadian Business Owners, Jason Pereira, award-winning financial planner, university lecturer, and writer, interviews Mike Brcic, Founder and Chief Explorer at Way Finders, a company that hosts entrepreneurs in some of the most amazing places around the world!
Episode Highlights:
0:57 – Mike Brcic introduces himself and Way Finders.
2:09 – How did Mike get started in this business?
4:11 – Mike goes deep into badass monks.
5:15 – What does the Way Finders process look like for entrepreneurs?
8:00 – Jason and Mike talk about tracking efficiencies while scaling a business.
9:56 – How does Mike help entrepreneurs re-engineer their businesses?
12:52 – Jason and Mike discuss the importance of not just throwing jobs you dislike to an assistant.
17:40 – Mike breaks down the accountability aspect of his system.
19:20 – How long does Mike typically work with his clients?
21:40 – What kind of feedback does Mike get from his clients?
25:24 – Jason and Mike discuss getting mentally ready for retirement.
27:00 – Mike shares some tools available that can help business owners with their process management.
3 Key Points
Way Finders focuses on creating a community of entrepreneurs who are like-minded in that they are looking for new ways to create successful businesses.
Mike helps entrepreneurs re-engineer their businesses by offloading those tasks that drain their energy to a person or service that maximizes efficiency.
Having a tried and true processes in place helps business owners use their time more efficiently while making sure the business can run smoothly
Tweetable Quotes:
“If you set a very clear vision and some very clear guidelines and principles, that does a lot of the work for you.” – Mike Brcic
“The reality is...as you grow and scale, you have to reinvent the company over and over and over again.” – Jason Pereira
“If the business model is broken, throwing more gasoline onto a dumpster fire is not going to put out the fire.” – Mike Brcic
“Without a properly defined process that cuts to the heart of what you want to do, you’re just passing crap onto other people.” – Jason Pereira
In this episode of Financial Planning for Canadian Business Owners, Jason Pereira, award-winning financial planner, university lecturer, and writer, interviews John Vuong, Founder and Owner of Local SEO Search. John specializes in helping small businesses increase their revenue by increasing their digital visibility!
Episode Highlights:
1:06 – John Vuong introduces Local SEO Search.
2:00 – What does everyone need to know about increasing traffic to their website?
6:30 – How does a stale website affect user optimization?
8:27 – Jason discusses common misconceptions surround SEO.
9:06 – What is the next step after the production of great content?
10:00 – John and Jason break down the importance of having visibility across the internet.
13:00 – Jason and John discuss the need for visibility in different stages of business.
14:15 – John dives into amplification and what that means for your website.
16:31 – What are some of the methods that John focuses on for amplification?
19:00 – What kind of results are clients seeing and how does John measure those metrics?
20:47 – John discusses the SEO no-nos and the punishments that are handed out when you break the rules.
23:54 – John explains their new Impact Initiative to help small and medium-sized business owners.
3 Key Points
Local SEO Search helps small and medium business owners increase their visibility online with the use of search engine optimization.
Creating good content is all about answering the questions that your ideal customers are searching for.
Press releases, link placement, and guest posts are the methods that John uses for website amplification.
Tweetable Quotes:
“It starts off with having a good business but then it transitions into having a good website so that people understand what makes you different.” – John Vuong
“When you start producing good, well–researched, in-depth answers to your customers’ queries, it’s going to allow you to be known as someone that knows your stuff.” – John Vuong
“In today’s day and age, I feel a lot of the people that are looking at growing and increasing visibility and expanding need that digital presence.” – John Vuong
“What we really focus on is helping the small and medium-sized business owners because they’ve been really impacted heavily during this pandemic.” – John Vuong
Planning For The Family Farm with Dane ZoBell | E046
00:38:36
In this episode of Financial Planning for Canadian Business Owners, Jason Pereira, award-winning financial planner, university lecturer, and writer, interviews Dane ZoBell, Partner of Felesky Flynn, where he specializes in farm sales and estate planning!
Episode Highlights:
1:16 – Dane ZoBell introduces himself and what he does.
1:55 – Dane discusses how farms differ from other assets.
3:32 – How does estate planning for farms differ compared to other businesses?
5:30 – Dane breaks down the benefits of the Income Tax Act, specifically in regard to farm properties.
7:45 – Jason and Dane discuss the Capital Gains Deduction for qualified farm property.
13:53 – How much of Dane’s planning is around estate freezes and multiplication of that exemption?
16:41 – Dane explains the Intergenerational Rollover provision laid out in the Income Tax Act.
20:54 – When does it make sense to use the Intergenerational Rollover provision instead of the Capital Gains Deduction?
26:03 – What does the sale of a family farm look like for the next generation?
28:10 – Jason and Dane discuss the rules for farmers and younger generations when it comes to estate/sale planning.
32:00 – What are the biggest challenges that Dane faces with farm planning?
36:40 – Dane recaps what’s important to know when it comes to farm planning.
3 Key Points
Land that is owned personally, partnerships interest, and shares of a qualified farm corporation could all qualify for the Capital Gains Deduction.
A big issue that faces farmers right now is that the value of the land has surpassed the shelter provided by the Capital Gains Deduction by a long shot.
Generations that inherit property as a gift are not allowed to take advantage of the Capital Gains deduction until they have owned the property for at least 3 years.
Tweetable Quotes:
“Not many other things get passed along over centuries...We might be talking about the 1st generation on a farm or we might be talking about the 6th generation on a farm.” – Jason Pereira
“The problem these days, with the price of farmland having gone up substantially...the capital gain often will be greater than the capital gains deduction that we have.” – Dane ZoBell
“If you’re transferring the land down to a subsequent generation, the objective is always to try to bump up the cost–base of that land.” – Dane ZoBell
“No one likes paying taxes. Let’s be honest...You’re going to do it through gritted teeth.” – Jason Pereira
“When it comes down to land owned personally, the general rule is once qualified always qualified for the Capital Gains Deduction.” – Dane ZoBell
The Difference Between Good & Bad Advice with Harold Geller | E047
00:46:14
In this episode of Financial Planning for Canadian Business Owners, Jason Pereira, award-winning financial planner, university lecturer, and writer, interviews Harold Gellar, a well-known lawyer that represents clients when their financial advisors lead them astray!
Episode Highlights:
1:10 - What does Harold see as the value of financial planners?
3:09 - How should an individual consumer know when they are with the wrong financial advisor?
5:30 - Harold discusses the value of financial planning exercises.
7:17 - Jason and Harold talk about the lack of knowledge surrounding what financial planning is for consumers.
12:00 - What information should financial advisors be presenting to their clients?
14:58 - Are there any other red flags that people should be looking out for?
17:45 - Harold breaks down what diversification really looks like.
22:40 - Jason and Harold discuss the book, Are You a Stock or a Bond?
25:53 - Does tax-law harvesting count as a red flag?
26:59 - When do the actions of the financial advisor turn into recourse for the consumer?
34:51 - What should consumers be looking out for when choosing an advisor?
40:00 - Jason and Harold discuss behavior that loses business for financial advisors.
3 Key Points
An initial red flag that individual consumers need to look out for is how their financial advisor communicates with them in the language they use and how they discuss risk.
Too many financial planners focus on throwing as much information as they can at their clients when they should be focusing on communicating complex ideas in plain language.
Clients that have seen a major loss should get a second opinion from a different financial advisor before moving to legal action.
Tweetable Quotes:
“The best financial planners are as important to our community as the best doctors, the best lawyers, and other professionals.” - Harold Gellar
“If you have a solid financial plan, then there will be planning for downturns which are going to occur on a typical basis.” - Harold Gellar
“Do you really want to have a lot of money in your company’s stock...when all of your ability to earn income is tied to this same company?” - Jason Pereira
“I don’t need to gamble more. I’ll gamble where I think I control outcomes or at least control factors related to the income.” - Harold Gellar
Developing Online Networks with Gil Petersil | E048
00:35:46
In this episode of Financial Planning for Canadian Business Owners, Jason Pereira, award-winning financial planner, university lecturer, and writer, interviews Gil Petersil, a serial entrepreneur, public speaker, coach, and expert in editing and altering online and offline networks to make massive impacts on lives and businesses!
Episode Highlights:
1:19 – Gil Petersil introduces himself and what he does for a living.
2:26 – How did Gil get into this line of business?
5:24 – What is involved for clients who wish to work with Gil?
8:50 – Gil explains how he understands people using the network around them.
11:38 – Jason and Gil discuss the need to transform your network over time.
17:30 – Gil explains how inexperienced most people are with building networks around them.
18:58 – Jason and Gil talk about COVID has affected the network building abilities of different companies.
22:39 – What can financial planners do to fix their plateauing networks?
24:40 – Gil and Jason explain why all knowledge should be given away for free.
29:15 – Jason and Gil discuss how painful effective networking can be.
31:05 – What would Gil change in his industry as a whole?
32:11 – Gil explains the biggest challenge that he has faced getting to where he is today.
32:58 – What excites Gil the most about what he is working on today?
3 Key Points
Through sharing and micro-learning sessions, Gil helps business leaders to innovate and adjust the strategy of the business by changing the way that they interact with their internal and external networks.
It’s important to consistently evaluate your environment and network as your life and business change. Transformation is the only way to grow in a healthy manner.
While advisors should charge those who want to spend time with them, knowledge should be given away for free. By providing value to those around you, value will always come back your way.
Tweetable Quotes:
“I think that realizing that being a great student and needing to be a wonderful teacher for the world in the theme of human networking came to me with all these successful failures in business.” – Gil Petersil
“I don’t know how to be a full–time parent and full–time business owner...I want to be great at both and if you want to be great at both, you need to be ready to ask for help.” – Gil Petersil
“One way of doing it is to help people think differently, which is what a consultant can do...It always comes down to understanding the network around you.” – Gil Petersil
“When you learn to connect and disconnect consciously in your network, incredible results come out in any size of life or business.” – Gil Petersil
“Knowledge should be free...If someone wants to spend time with you, then you should be charging for that.” – Gil Petersil
Global Financial Planning with Ashley Murphy | E049
00:30:54
In this episode of Financial Planning for Canadian Business Owners, Jason Pereira, award-winning financial planner, university lecturer, and writer, interviews Ashley Murphy, Founder of the Global Financial Planning Institute. Ashley is here to talk about the challenges of financial planning across borders!
Episode Highlights:
1:15 – Ashley Murphy introduces himself and the GFPI.
2:26 – How did Ashley get into this space?
7:04 – Jason and Ashley break down the concept of working with 2 different playbooks in international financial planning.
11:22 – Jason discusses the US’s citizen-based tax regulations.
12:44 – Where are the biggest areas that international citizens feel the most agony?
15:30 – Jason and Ashley contemplate the probability of global tax regulation.
17:50 – Ashley explains the low propensity for the average citizen to do their own financial planning.
21:40 – Jason and Ashley discuss how lax the financial planning community is about cross–border financial planning.
25:07 – What is Ashley’s advice for anyone researching multi-jurisdictional financial planning advice?
3 Key Points
As a tri–citizen, born in Australia and raised in the UK by an American mother before moving to the US, Ashley understands more than most the difficulties of international financial planning.
When US citizens are dealing with cross–border issues, regulations and laws are interpreted differently in other countries which forces them to operate under 2 playbooks.
Unlike almost every other country in the world, the US taxes people based on citizenship rather than residency. So, even if you move to another country, you have to file with the IRS.
Tweetable Quotes:
“This is not merely some small belt-mounted toolkit of practices or issues that one can simply apply when dealing with an international cross–border plan. It’s a whole different specialty altogether.” – Ashley Murphy
“When you’re dealing with cross–border issues, especially when you’re a US citizen, you’re dealing with 2 different playbooks.” – Jason Pereira
“As advisors, all we can do is recommend that our clients fully follow the law...then we come up against a culture of ignorance, naivety, and non–compliance.” – Ashley Murphy
“The problem is the advisors have an economic incentive to work with whoever they can and fluff their way through it.” – Ashley Murphy
Financial Literacy For The Next Generation with Preet Banerjee | E050
00:34:26
In this episode of Financial Planning for Canadian Business Owners, Jason Pereira, award–winning financial planner, university lecturer, and writer, interviews Preet Banerjee, a Canadian financial guru who coaches the children of the affluent on how to deal with their money!
Episode Highlights:
1:49 – Preet Banerjee introduces himself and what he does.
3:29 – What is the common motivation of the families that reach out to Preet for his financial workshop?
5:25 – Jason and Preet discuss the wide range of characteristics amongst the children of the wealthy.
6:28 – Preet breaks down what his workshops look like from the inside.
10:35 – Jason and Preet discuss intergenerational family wealth.
13:41 – How does Preet teach individual families to determine their best course of action?
17:27 – Is there a difference in children’s ability to understand financial concepts based on when the family made their money?
19:54 – What information is and isn’t sticking with Preet’s students?
22:46 – Jason and Preet discuss the importance of financial advisors providing service to the next generation.
24:03 – What are the key areas that Preet focuses on in his classes?
25:39 – Preet and Jason discuss Hollywood’s influence on the tensions that surround money.
28:50 – What are the first pieces of advice that Preet gives to his students?
3 Key Points
Preet holds workshops for the children of Canada’s wealthy, aging from 18–24, in which he teaches them the basics of financial literacy, the emotional aspects of their situation, and how to think about money.
The Shirtsleeves to Shirtsleeves in 3 Generations dilemma says that one generation amasses the wealth, the next one wastes it, and the final generation has nothing. Also, it’s more of a warning than a truth.
Many of the preconceptions and tensions surrounding the wealthy come from pop culture, such as pressure to spend money on certain things and how to accept partners into the family.
Tweetable Quotes:
“Family lawyers and estate lawyers have the best and most tragic stories because they get involved into all the craziness and crazy family dynamics.” – Jason Pereira
“A lot of people who came up with nothing want their kids never to suffer that...they realize that the reason they are successful was the struggle.” – Jason Pereira
“To say that there’s any one path that works for everyone is naive...A much more gauged process is required to figure out what these individual families need.” – Preet Banerjee
“There is a certain expectation being in certain circles how much you spend on things. So, we talk about how they feel about those competing tensions.” – Preet Banerjee
In this episode of Financial Planning for Canadian Business Owners, Jason Pereira, award–winning financial planner, university lecturer, and writer, interviews Denise Fernandes, Executive Director of Planned Giving for Diabetes Canada. Denise works with donors in life and assists them in planning gifts in their will!
Episode Highlights:
1:16 – Denise Fernandes introduces herself and her profession.
1:59 – What typically drives donors to get more involved?
3:26 – From Denise’s end, what does the donor process look like?
4:35 – What other types of donations has Denise helped structure in the past?
5:25 – Jason and Denise break down flow-through shares.
8:34 – Has Denise seen a lot of people make the charity the beneficiary of their RSP?
11:02 – What other tricks does Denise have up her sleeve?
13:02 – How many conversations is Denise having around giving in the estate?
14:58 – Jason and Denise talk about working with a lawyer vs. working with a planner in advance.
16:35 – How does Denise keep the donors involved in the charity after the donation has been set?
17:50 – Jason and Denise discuss a desire to leave a legacy.
22:31 – What are the first steps when working with Denise?
3 Key Points
Denise is not a financial advisor, but she does work in coordination with the financial advisors of her donors to plan gifts in both life and in their wills.
Ontario has the lowest credit rate for charitable donations in all of Canada, meaning that many people don’t get the full tax deduction that they might have thought.
Charities really start to get involved with the estate planning process when donors want something very specific involving their donation.
Tweetable Quotes:
“This all comes down to donating things in kind versus in cash...If you donate in kind, you don’t get the tax bill but you get the tax credit.” – Jason Pereira
“There is no escaping the taxman. Unfortunately, there is escaping the charitable request, which is not cool.” – Jason Pereira
“If you want something specific at a charity, if you want something named, if it’s a scholarship at a university, if it’s an endowment somewhere, that’s where the charity really needs to be involved.” – Denise Fernandes
“People often criticize millennials for wanting to feel purpose in their job, yet, meanwhile, here we are talking about how we can help boomers feel purpose in their death.” – Jason Pereira
End of Life Planning with Dr. Daren Heyland | E052
00:23:24
In this episode of Financial Planning for Canadian Business Owners, Jason Pereira, award–winning financial planner, university lecturer, and writer, interviews Dr. Daren Heyland, a former critical care doctor who now assists people in appointing a decision-maker and planning ahead in the case of serious illness!
Episode Highlights:
1:07 – Dr. Daren Heyland introduces himself and his profession.
2:18 – Jason and Dr. Heyland discuss the stress of making life or death decisions.
3:36 – What are both the industry and the layperson doing wrong?
6:51 – How have Dr. Heyland and his colleagues taken action to make change?
9:10 – What is Dr. Heyland educating his patients about through his Plan Well Guide process?
12:25 – Dr. Heyland discusses how oftentimes, the personal directive of the power of attorney becomes an afterthought.
15:00 – Has Dr. Heyland ever received a Dear Doctor letter?
16:22 – What is the level of resistance to this conversation that Dr. Heyland faces?
19:10 – Dr. Heyland expands on the toolkits that are available on Plan Well Guide.
21:10 – Jason emphasizes the downside to not taking action on time.
3 Key Points
Dr. Daren and Jason believe that the estate planning process is a great time to plan ahead and appoint decision-makers, should the time come, in order to avoid the stress of being named the decision–maker in a stressful moment.
Through his online platform, Plan Well Guide, Dr. Heyland helps his clients determine their authentic values and preferred treatment processes.
More emphasis needs to be placed on naming the power of attorney as well as making everyone involved aware of what the game plan is if the estate owner is to die.
Tweetable Quotes:
“When you’re already stressed because you’ve got a loved one lying there in a bed, critically ill, and we add stress to the experience by making them a substitute decision-maker.” – Dr. Daren Heyland
“Let’s educate them to capacitate their substitute decision-maker with values and preferences that will be expressed in a way that is helpful to me as a critical care doctor.” – Dr. Daren Heyland
“Unfortunately, a lot of people and a lot of doctors go about that process of talking about values in a very loose irreproducible way.” – Dr. Daren Heyland
“It’s a much more acceptable and understandable concept to plan for serious illness than to plan for death.” – Dr. Daren Heyland
Being An Effective Executor with Melissa Best | E053
00:28:06
In this episode of Financial Planning for Canadian Business Owners, Jason Pereira, award-winning financial planner, university lecturer, and writer, interviews Melissa Best, Founder of QuickEstate, a software that saves families time when organizing their estate. Melissa is here to discuss what it takes to be an effective executor, should the situation arise.
Episode Highlights:
1:11 – Melissa Best introduces herself and her company.
2:07 – What are the obligations of an executor?
3:54 – Jason discusses the serious nature of being an executor.
5:35 – Melissa expands on the liabilities, legal implications, and compensation for executors.
7:20 – Jason and Melissa talk about the importance of dividing up duties rather than dollars.
10:20 – Melissa explains how her company has been working with financial advisors all over the country.
13:46 – How can executors effectively execute the estate?
15:55 – Melissa and Jason discuss the aspects surrounding certain assets that make them so difficult to deal with.
19:15 – How do the problems with family friction and litigation arise?
21:00 – Melissa explains why, sometimes, lawyers and advisors drag things out.
22:50 – Jason discusses where the drafting of the wills goes wrong.
3 Key Points
First and foremost, an executor is responsible to conclude all of the deceased’s affairs, including financial assets, real estate, benefit programs, personal use assets, and service provider accounts.
Many executors start at a position of disadvantage on account of not being educated of the responsibilities of being an executor nor even being informed that they are an executor.
The family cottage tends to be one of the most difficult assets to deal with because of the taxes surrounding it and who gets to own it.
Tweetable Quotes:
“It’s a huge responsibility. It takes a lot of time and it takes an awful lot of organizational skills, and recognition that this is a serious fiduciary responsibility.” – Melissa Best
“One of the biggest problems for executors is they don’t even know they’ve been named...That is not an uncommon situation to start out on as an executor.” – Melissa Best
“The will only tells the executor who gets what. It doesn’t give you an ounce of capability in terms of dealing with all the various assets.” – Melissa Best
“Basically, at the end of the day, it comes down to get organized, get help, and communicate, really.” – Jason Pereira
Accelerating Growth With Government Support With Mark Patterson | E054
00:27:35
In this episode of Financial Planning for Canadian Business Owners, Jason Pereira, award–winning financial planner, university lecturer, and writer, interviews Mark Patterson, Executive Director of Magnet. Magnet is a social innovation platform out of Ryerson University that helps small businesses navigate talent markets and find support to reach their goals!
Episode Highlights:
0:56 – Mark Patterson introduces Magnet.
2:46 – What observations inspired the creation of Magnet?
6:36 – Jason discusses the reality of government programs.
7:22 – How long has Magnet been helping small businesses?
9:11 – Mark dives into the talent piece of building a business.
11:36 – What are the options available for export businesses?
13:50 – How many programs is Magnet currently compiling?
16:50 – Mark and Jason discuss the removal of barriers to resources that are already available.
20:06 – Are there any large–scale examples of companies that have exploded with Magnet’s help?
21:40 – Mark discusses the importance of finding support programs during the pandemic.
22:27 – What does Magnet’s onboarding process look like for clients?
3 Key Points
Magnet recognizes the difficulties of building a business and helps connect businesses with talent and support to break through the barriers of small–business growth.
While government programs to assist small businesses are available and plentiful, the application process can be very daunting and time–consuming.
Larger and medium–sized businesses have internal departments that are focused on capitalizing on the programs.
Tweetable Quotes:
“The government has many many many programs...the challenge was actually small businesses navigating those.” – Mark Patterson
“At the end of the day, we all win if our small businesses are able to succeed and we can remove some of these barriers that they face to grow.” – Mark Patterson
“It’s necessarily putting more money into the system, we need to remove the barriers that make it hard for small business to access what’s already available.” – Mark Patterson
In this episode of Financial Planning for Canadian Business Owners, Jason Pereira, award–winning financial planner, university lecturer, and writer, interviews Paul Martin, President and COO at KRG Insure. As an expert in Property and Casualty insurance, Paul is here to explain what most of us don’t know about the insurance game!
Episode Highlights:
1:15 – Paul Martin introduces himself and what he does.
2:21 – What are the things that new businesses have to be aware of to protect themselves?
3:47 – Is it common for insurance agents to have cookie–cutter solutions?
5:23 – Jason and Paul break down the sizeable losses as a result of settlements today.
7:40 – Paul and Jason discuss the increasing levels of cyber claims and cybersecurity attacks.
10:30 – Are corporations without directors and officers breaking the law?
11:43 – How does the insurance world differ when someone is in a knowledge–based company?
13:51 – What is the risk to those who don’t disclose a home office or using a car for business?
16:00 – Are insurance companies accepting the risk of drivers using their vehicle more or less?
18:54 – What special insurance is needed for high–value items at home?
21:08 – Paul breaks down crime insurance and what that covers.
3 Key Points
Liability settlements have skyrocketed in today’s world and even businesses that are doing everything right are at risk of a lawsuit.
Up to 45% of businesses have been the victim of a cybersecurity attack, resulting in an all–time high of cyber insurance claims.
Insurance companies have adjusted well to COVID and how that has forced many people to work from home and adopt side hustles that involve their vehicles.
Tweetable Quotes:
“The first thing is to find a broker who has the knowledge in order to represent your business to the insurance industry.” – Paul Martin
“To a man with a hammer, everything is a nail.” – Jason Pereira
“It’s funny to think about how many things can go wrong at any given business even if you are conducting things properly.” – Jason Pereira
“If you’ve got a $3-million car, I think you can probably have two guys with guns.” – Paul Martin
In this episode of Financial Planning for Canadian Business Owners, Jason Pereira, award–winning financial planner, university lecturer, and writer, interviews Chad Willardson, President and Founder of Pacific Capital and best–selling author of Stress–Free Money. Chad is here to talk about how childhood perception of money can affect your money mindset for the rest of your life and how to get around those perceptions!
Episode Highlights:
0:59 – Chad Willardson introduces himself and his profession.
2:25 – How does Chad start the conversation about early–life money perceptions?
3:40 – Jason and Chad break down the psychological barriers of spending money.
6:17 – What prohibitory mindsets around money does Chad usually run into?
10:09 – Jason and Chad discuss the negative effects of having a scarcity mindset.
11:11 – What successful discussions has Chad had to help his clients move away from a scarcity mindset?
12:15 – Jason and Chad break down the failures of education systems around the world.
13:18 – Are there commonalities amongst the people that Chad can’t get through to?
15:49 – How often does Chad see prohibitory money mindsets passed down to kids?
19:33 – Chad shares the key lessons from his upcoming book, Smart Not Spoiled.
21:54 – What would Chad tell those who are looking to move past a scarcity mindset?
3 Key Points
Money perceptions that are passed on from parent to child determine the mindset that people have for their entire lives.
Chad often sees a misconception of risk where people are either extremely aggressive and risky or are so scared of taking any risk that they can’t move their money out of the bank.
By demonstrating what people can do based on their current financial situation, Chad helps his clients move away from a scarcity mindset.
Tweetable Quotes:
“If a muscle gets flexed long enough, it’s going to cramp and actually it’s harder to loosen up because of that.” – Jason Pereira
“There’s a real lack of understanding of the randomness of the world in general.” – Jason Pereira
“It’s a tragedy to me that kids graduate high school knowing how to dissect a frog or knowing all the inner parts of a cell but having no clue about personal finance.” – Chad Willardson
“You need to actually trust the process and trust the plan and the strategy that you’ve got. That should weigh more than the fear or the scarcity emotions that you’re feeling because that’s going to hold you back from success.” – Chad Willardson
The Problem With Personal Real Estate Corporations with Vic Gasparitsch | E057
00:26:58
In this episode of Financial Planning for Canadian Business Owners, Jason Pereira, award–winning financial planner, university lecturer, and writer, interviews Vic Gasparitsch, a real estate lawyer who is raising the flag with the tax status surrounding the new Ontario Professional Real Estate Corporation!
Episode Highlights:
1:07 – Vic Gasparitsch introduces himself and his profession.
2:27 – What is a professional real estate corporation?
5:48 – Is there any previous precedence for these PRECs?
8:16 – Where does a T4A come into this situation?
9:56 – Can officers split the income between the corporation and themselves?
11:22 – Jason and Vic explain why splitting income is a problem.
15:35 – How many of these PRECs have been set up?
16:40 – Jason and Vic discuss the rude awakening that is awaiting agents who have set up a PREC.
17:37 – Who else has agreed with Vic on the subject of PRECs?
18:40 – Why would the government pass something like this?
20:58 – Who gives a damn about tax fairness to realtors?
23:35 – Jason and Vic discuss the options for realtors who have set up a PREC.
3 Key Points
A professional real estate corporation can do anything it wants besides taking part in the real estate industry.
PRECs allow agents to split the income between the corporation and themselves, which is a problem with the Lone Wolf accounting system that most agents use.
All an agent has to do to set up a PREC is notify the Real Estate Council of Ontario that they have created a PREC and provide the address of service.
Tweetable Quotes:
“If anything, corporations are designed to separate shareholders from the corporation for liability purposes.” – Jason Pereira
“It’s an attempt to divert what would be personal income...to a corporate entity which is a Canadian–controlled private corporation and entitled to small-business deduction.” – Vic Gasparitsch
“The brokerage firm is going to have to agree to switch the flip from PREC to personal payment for a period of time and then maybe back, and that’s suboptimal in so many ways.” – Jason Pereira
Changing the Business Owners Relationship With Their Lawyers with Romesh Hettiarachchi | E058
00:34:49
In this episode of Financial Planning for Canadian Business Owners, Jason Pereira, award-winning financial planner, university lecturer, and writer, interviews Romesh Hettiarachchi, Commercial Lawyer at B&I Legal Counsel for small to medium size businesses in the Greater Toronto Area. Today’s discussion addresses the various ways that Romesh charges and interacts with his clients, and how that change in compensation has led to very positive outcomes for his client relationships.
Episode Highlights:
● 01:07 – Romesh Hettiarachchi describes the kind of work he does.
● 02:31 – How has Romesh addressed the concerns of clients afraid of
lawyers costing too much business lawyers are often incentivised
to take longer.
● 03:55 – What are the four schools of thought on how to use a lawyer?
● 06:57 – Jason shares a story about a wealthy individual that used the
managerial approach of hiring a lawyer.
● 07:32 – Build a team as a foundation for your enterprise.
● 10:15 – How has delegation and resources entered into his practice?
● 14:13 – Lawyers, and service providers in general, are hired to solve
problems, minimize risk, manage process.
● 16:27 – Why are many lawyers afraid of change?
● 20:00 – What are the five issues that lawyers generally face?
● 21:26 – Why isn’t there a program for lawyers that want to challenge the
status quo?
● 23:30 – The only way to fight margin compression is through efficiency.
● 24:04 – There is a cost of risk with people.
● 27:19 – Unconscious incompetence is a value proposition to help clients
via building stronger relationships with them.
● 30:00 – Watching clients succeed and win is truly rewarding.
● 32:00 – Clients want their problems solved for a price that they can pay.
3 Key Points
1. Four stages of using a lawyer: to fix problems as they arise, to manage what you don’t know, to minimize risk, and to be a strategic advisor.
2. Building a team involves the art of delegating tasks not just to people, but also to technology to provide value to clients.
3. The five issues that lawyers in general face are: increased competition, clients that want more value for less money, trying to outcompete technology, keeping a work/life balance, and mental health and loneliness.
Tweetable Quotes:
● “Clients really want more out of their lawyer than simply drafting contracts.” – Romesh Hettiarachchi
● “When I see the value of a lawyer to a client. It is really three-fold. One, we are either solving problems, minimizing risk, and lastly, we manage the process. Very good lawyers will do all three of them.” – Romesh Hettiarachchi
● “In my experience, and from everything that I have read, and from the people that I have been around, the most successful people are the people that are able to build teams that work together for everyone’s success.” – Romesh Hettiarachchi
The Seven Stages Of Planning with Kam Chari | E060
00:27:54
In this episode of Financial Planning for Canadian Business Owners, Jason Pereira, award-winning financial planner, university lecturer, and writer, interviews Kam Chari. He has 40 years of experience in major insurance companies.
Episode Highlights:
01.21 – Kam introduces his profile. He talks about his experience in Financial and Tax Planning.
02:41 – Kam talks about his book Seven Stages Of Planning. He utilized the time during COVID and jotted down his thoughts.
05:32 – He took Shakespeare's book The Seven Ages Of Man as a base and wrote the book. To make the reading enjoyable, he incorporated a similar though process.
06:00 – The first stage is basically about parents who will have to act on behalf of their children. He talks about the apparent education saving plan but apart from what other financial planning parents can do?
06:50 – He talks about the attribution rule, which means the person who gifted the money will have to pay the tax.
07:35 – He adds parents must think about life insurance. It is a saving vehicle.
08:07 – He also stresses that it helps to have a critical illness plan. His book has all the details.
08:52 – Jason agrees with the attribution plan and cash-rich insurance policy. He can have a ton of money in insurance and then later transfer it to his child. This policy helps in financial planning.
09:56 – Jason points The Second Stage is more for the GenX people – the teenagers
11:15 – Kam explains the benefits of financial planning from such an early stage.
13:17 – Jason points out that the next stage is for the 30+ crowd. He inquired, "What are the key areas they should look for?"
14:02 – Kam shares, "It will be much safer to buy Personal Life Insurance to protect the mortgage insurance. This is one of the techniques that is suggested in the book."
15:00 – Jason shares Stage 5, and 6 covers a wide range of 45 to 74 years old.
16:55 – Kam stresses that planning is essential, younger people should start planning for retirement.
17:5 – When it comes to Stage 7, Kam emphasis Lot of planning has to be done when it comes to retirement.
23:45 – Jason appreciates several discussions on planning stages but not much on products. It is good that Kam's book addresses that.
24:40 – Kam agrees and says that holistic planning is crucial.
3 Key Points:
Jason and Kam discuss the importance of insurance plans, cash-rich policies, and retirement plans, basically helping people become financially secure.
Some of the book's plans do not necessarily mean that it is valid for that particular age group. One can apply in multiple stages.
Kam talks about "When to take Canada pension plan and old age security?"
Tweetable Quotes:
"Wills and power of attorney is essential to update it and make sure it goes to the right hand." - Kam Chari
"The earlier the planning for retirement start, the better it is" - Kam Chari
"There are different life stages where different things are coming to play." - Jason Pereira
The 2021 Federal Budget with Guest Host, Guy Anderson | E059
00:20:57
In this episode, host Jason Pereira discusses the Federal Budget with Guy Anderson. He is a portfolio manager mainly focused on financial planning.
Episode Highlights:
01.37: Jason shares that they have the first budget in two years from this government.
02.14: Guy agrees with Jason introduction on the Federal Budget. He says that it was indeed huge, it is $101 billion in new funding initiative.
04.10: Jason points out with introduction of child care program, we can expect an expansion in the workforce and also in the number of work hours.
05.45: Jason talks about numerous programs that were going to expire in June. They have now been extended. Canada Recovery Caregiving Benefit, Rent Subsidy and Wage Subsidy for Businesses are some of the benefits that were extended.
06.51: Jason talks about the $450 million VC funding pool being put together for the next 5 years. Number of start-ups leading by women or people of colour being funded by the VC is extremely low in number.
08.10: They discusses the cut in tax for businesses that are working on reducing emission.
9.28: Jason shares his views on minimum wage increase. He thinks that this is not a huge headline unlike in the US.
10.40: Guy points towards the other side of the it i.e.; increase in hiring programs.
11.24: They discuss what the budget means to life science and how that affects business owners.
12.00: Guy is a little surprised on the bump-up in the senior security amount.
15.42: Jason sees a big boost in the re-sale market of luxury cars.
17.22: Guy talks about the vacant home tax. Jason discusses how property tax in this country is low as compared to others.
3 Key Points:
Jason and Guy discusses the cost benefit of the budget, also talks about the national day care and early child care program.
They talk about what the budget means by COVID relief?
Jason says “There is not much to talk about tax as the government played a bit safe on that front.” He breakdown the tax breakages and also talks about the new taxes.
Tweetable Quotes:
“The fact that money is now being allocated to women and people of colour to empower them is a great idea.” - Jason Pereira
“Due to COVID, small business have been really hurt.” - Guy Anderson
“Enjoy the spending bonanza budget, next one will probably be not so friendly. - Jason Pereira
In this episode host, Jason Pereira talks with Susan O’Brien Founder and Author of Net Worth Thinking. They especially talk about decisions and discussions surrounding money with smaller kids.
Episode Highlights:
01.35: Susan O’Brien talks about “How she guides families through deep, meaningful conversations.”
01.57: Susan has seen that people want to be independent and want to take care of their families, especially children and grandchildren.
04.00: Susan talks about the importance of educating children about money, like “What is money?” “Where it comes from?”
04.49: As parents or grandparents, we wait too long to discuss money matters with our kids.
06.25: The one thing that Susan found in their consumer society is that kids as young as three are a bit stubborn, and they keep demanding things from their parents. This is something that should be talked about in families.
07.32: If you do a quick search in Amazon, there are great fun books about teaching kids the importance of money.
08.48: Jason talks about the concept of scarcity and rejuvenation of wealth.
09.26: In order to save money, it is about to develop a feeling of abundance.
11.30: Jason enquires as our kid gets older, how does the money talk evolve?
13.56: Personally, Susan found it challenging to implement money-saving tactics daily, but some parents were successful.
14.22: Jason shares a trick that he uses with his son; whatever amount he saves, Jason gives some interest on that. He also shares how one can encourage their kids to share money in charitable causes.
15.01: For Susan the sharing part starts without the money. Taking care of each other is important.
17.47: Jason and Susan talk about what happens when a kid hits a teen or pre-teen.
19.51: Susan shares the importance of keeping conversation non-confrontational.
20.46: Kids, when they grow up, are the same person just entrenched in their habits; you are the same as a parent; you need to be consistent about handling them.
20.53: Jason shifts the topic to when a child reaches late teen level; when they go to universities.
23.20: Susan points out the biggest issue with young people-it is the credit card.
25.29: Jason points out that there are many people who don’t want their kids to suffer as they did. Jason is concerned that it may have an adverse effect and not teach the required respect.
28.10: Susan points out there are so many important things one can teach their kid by not paying their cell phone bills.
29.16: Jason says, “You can’t re-raise your kids, so it is important to plant the tree of value when they are young.”
30.14: It is crucial to think about your legacy? What do you want to achieve? How much money is too much for your kids? How much will hurt them instead help them?
3 Key Points:
Jason and Susan discuss about the youngest age when coaching a child about money should start.
Susan shares instances and tricks from her own experience about “How to encourage your child to save money?”
Kids nowadays are smart, and it’s important to teach them about the world around them and about the needs of other people as well as themselves.
Tweetable Quotes:
“It is important to think that how do I teach my kids to be good stewards of money?” - Susan O’Brien
“Teachable moments come about in everyday life.” - Susan O’Brien
“It takes action to have money, and it also puts a limit to it.” - Jason Pereira
“You need to make money and save it; you got to be careful about spending it.” - Susan O’Brien
“Starting with the end, prepares you to focus on what’s really important for you.” - Susan O’Brien
In this episode, host Jason Pereira talks about a non-financial planning related topic. Today’s episode is targeted towards Corporate Wellness. Anna Spivak is invited to discuss on the stress faced by business owners and how to overcome it.
Episode Highlights:
01.22: Anna talks about her individual coaching experience. She is actively working with companies to promote overall corporate wellness.
03.05: Jason agrees to the points shared by Anna, shares few key statistics, and adds that when it comes to stress, it is not just corporate but a lot many factors from everyday life adds to it.
04.11: When dealing with corporates, Anna first likes to dig in and identify their culture, process, likes, and dislikes.
04.20: She stresses the importance of making people realize their problems, which they often consider normal.
05.13: Companies often don’t keep proper track of employee Absenteeism or Medical Issues, which affects their profits.
06.59: Jason enquires, “What are the key pieces that she delivers frequently?”
7.13: Anna talks about different approaches to dealing with companies based on the number of employees they have.
08.38: Anna talks about the benefits of group programs. She finds it beneficial because it is more like building a community. It boosts morale at the workplace.
11.00: Jason and Anna discuss the “How Covid19 has impacted the workplace” “How is Anna helping people in such a situation?”
13.15: Since Covid is all over the place, Anna stresses that it is essential to find a solution for working online.
15.33: Anna talks about the long-term toll on businesses. A lot of people don’t have the habit of sharing, but it is extremely important.
17.15: Jason reveals an interesting statistic that “62% of business owners feel depressed at least once a week.”
19.00: Anna and Jason discuss about structuring a balanced life and the importance of that.
22.49: Jason talks about divorce rates which were 50% in the US. This percentage for business owner is much greater. Like due to the stress and increased work hours. He asks Anna, “How she coaches people out of it?”
23.40: Anna shares her victory cases. She encourages people to break the walls of fear, and there are so many incredible wins on the other side of it.
27.34: Jason enquires if she has seen any difference between genders regarding wellness in the workplace.
3 Key Points:
For Anna, it all starts with an honest conversation, “What is it that they need”. All individuals are different, so she provides a customized solution based Wellness Programs.
Absenteeism, Medical Issues, Turnover Rates, Burnout Rates, Not Getting Along are some of the common factors that affect an employee’s mental health and adversely affect the company’s profits.
Jason points out 78% of business owners report a form of burnout that percentage increases. He enquires, “How do you deal with such a situation?” “What is the long-term toll of that?”
Tweetable Quotes:
“Corporate wellness has become a lot more important than before, especially due to the pandemic.” - Anna Spivak
“There is no one cookie-cutter solution for all business, different people have different problems.” - Anna Spivak
“It is important to voice out thoughts that you are going through and not keep it to yourself?” - Anna Spivak
“You can’t leave your business at the door, it is a part of you.” - Jason Pereira
“If you don’t take care of your health, it does not matter what number you crunch.” - Jason Pereira
In this episode of Financial Planning for Canadian Business Owners, the host, Jason Pereira (Award-winning Financial Planner and Entrepreneur) talks to Paul Nazareth (Vice President of Education Development for The Canadian Association of Gift Planners) about charity and financial planning for business owners. He also shares his thoughts about tax benefits.
Episode Highlights:
01:55: Tax system of Canada benefits the average person way more than the traditional wealth and the American system.
02:58: There is one political exception and the other one is for charitable donations.
03:31: You do get a really high amount of what you donated as your reduction in your taxes.
04:43: Financials Advisors are asking their clients to give tax receipts at the year end.
08:55: Jason asks, is it primarily advisors? Is it Lawyers or Accountants? How to go about doing this?
09:59: A lot of business owners are very strategic; they're problem solvers by nature.
12:13: You're eliminating the capital gains that are owed on securities.
15:24: Paul says that their mission is to create a better world through strategic gift planning and they are really trying to help everybody bring that strategy to what they do.
17:07: The weird thing about this pandemic is that it's really challenged people on their values and meaning.
19:44: What's the mix, you know, what are the issues? Around food security, gender production, women escaping violence, or on economic health.
20:38: You're seeing the tax bill and you're finding ways to minimize it.
21:32: A lot of organizations are reporting it differently.
22:08: People really want to understand how Charity operates? What are you doing with that money? Are you effective?
30:34: We're going to set up a cadre of local restaurants. We're going to serve workers.
32:02: This is illegal; you can't say it's a donation. You're not giving a tax receipt.
32:39: Jason asks Paul – “Where can people reach you?”
Key Points:
If you really want to make an impact on one thing that really matters to you, let’s have the conversation.
There's an inherent incentive for advisors who basically don't have their clients give away money.
Unless we take an active position, try to educate ourselves and reinvent our processes, we're not going to be able to really speak to client's needs.
Tweetable Quotes:
“Canada has the single greatest charitable tax credit system in the entire world.” - Paul Nazareth
“So, when you donate something or when you have somebody qualifies for tax credit, a lot of people think that is money they don’t pay in taxes that is not quite right.” - Paul Nazareth
“Most people give when they’re asked that’s the danger of fundraising” - Paul Nazareth
“I mean, it's just, where do you want to part with money is all they hear as opposed to what matters to you?” - Paul Nazareth
“I love to work with business owners on these things because they come at problems in a different way.” - Paul Nazareth
“I'm always excited when people meet each other in the middle and say, how can we work together to solve these problems?” - Jason Pereira
In this episode host, Jason Pereira, talks with Justin Abrams who is a partner with Kraft Berger LLP. Justin is a tax expert, and he is here to talk about the implication of expatriates.
Episode Highlights:
1.10: Justin says he is a tax partner at Kraft Berger LLP in Toronto, advising and managing clients.
2.38: Jason asks Justin, “From your standpoint what is the first thing people need to consider when leaving the country?”
2.40: Justin says that leaving a country depends on what asset you own from a tax point of view.
2.54: Canada has a regime that if you owned property when you were a resident, the value accrued should be taxed in Canada. If you were to leave Canada, it has a worldwide taxation system.
5.22: Justin talks about the unique tax system that Canada has.
6.00: When you leave Canada, everything you own is subject to tax except Canadian Real Property. The reason is non-resident is subject to tax when they sell their property.
08.26: One of the interesting things to note is that if you are moving to the United States, one thing that the immigrant can do is sell their property in RSP and then buy it back.
10.35: Justin throws light in tax exemption for people who stay and owns property in Canada for less than 5 years.
11.17: Jason says, “If you are an individual, then implications aren’t harsh in Canada.”
14.34: Jason and Justin talk about “What happens to business owners when they decide to leave Canada?”
15.47: If it is a Canada Corporation, nothing happens to the corporation, it remains. Even though you are a resident of United States or Spain. When a non-resident wants to take out the company, there is going to be gains in the underlying value in the corporation.
19.52: Justin shares detailed classifications of Canadian Tax Systems and Rates.
20.27: Jason inquires, “What are the steps involved in mitigation?”
21.20: Justin gives valuable insights on Capital Dividend Account. As part of the mitigation strategy, he also suggests reducing your company’s value before selling it out.
24.26: Justin gives real-life examples about how to best save tax.
28.04: Jason talks about the triple tax situation that one might fall into.
28.14: Jason is curious to know “What happens when people decide to come back to Canada?”
29.01: “If you are planning to come back to Canada, you can un-wind or defer to pay tax.”, says Justin. If you are planning to come back, pledge some valuable asset before leaving.
31.38: Justin talks about unwinding the departure tax.
32.45: Justin says when you leave, Canada any gains in the property would have been subject to tax in Canada.
35.44: Jason talks about the importance of planning your exit from Canada properly.
37.54: When you leave Canada, make sure the country where you are moving to gives you a cost base.
3 Key Points:
Jason and Justin talk about the serious tax implications when one decides to leave Canada.
If you are a business owner or shareholder and you decide to leave the country. Canada would want the Accrued Value.
Jason shares the key takeaway from this episode. If you are leaving the country, you may or may not have tax implications. But if you have substantial wealth, then you will have to pay tax when leaving the country.
Tweetable Quotes:
“When you leave Canada, everything you own is subject to tax except Canadian Real Property.”- Justin Abrams
“You can pledge private company shares if those are the shares that gave rise to the tax.” - Justin Abrams
“If we leave the country, we will have to pay 27% tax.” - Justin Abrams
“If you are coming back to Canada, you can make it a cashless endeavor.” - Justin Abrams
“Taxable Canadian property is taxable if you are a non-resident or not.” - Justin Abrams
Boomers Retire with David Field and Alexandra Macqueen | E065
00:39:47
In this episode host, Jason Pereira talks with authors of the book 5th edition of the Boomers Retire - David Field and Alexandra Macqueen.
Episode Highlights:
1.16: Alexandra says she is a Certified Financial Planner since 2006. Earlier she worked as a financial advisor with an insurance license.
1.20: In 2008, Alexandra took a step back and realized what she like about finance is writing about finance. This feeling motivated her to start a job at a small fintech startup, where she co-authored her first book.
2.40: David says he is a Certified Financial Planner as well, and this is his second carrier earlier. Prior to this, he was a book and magazine editor. He is an advisor for financial planners and owns his firm papyrus planner.
3.58: Jason talks about the challenges that people of this generation face; the challenges are different from previous ones. Jason inquires, “How time has changed?”
4.30: Alexandra says Society is getting older. Present challenges throughout as a society require long-term care and providing care for people as we age. But as an individual, there are specific challenges that are unrelated to societal challenges.
5.57: Funding retirement is increasingly complex. Business owners never really had defined ownership pension. Retirement is a DIY proposition, explains Alexandra. Nobody has a partner in that, you have to do it yourself.
8.09: David throws some light on the changing pension schemes, and now with the increasing number of women in the workforce that is upped the number of people participating in pension plans.
9.28: Jason is curious to know about the degree to which the Canadian government is going to support a citizen’s retirement?
11.13: Jason shares the rough figures, if someone decides to retire at the age of 65 i.e., ~$20,000/year, and for couple it is roughly $40,000/year.
13.56: Jason and Alexandra talk about the importance of making the right decision when it comes to withdrawing the lump-sum pension amount.
14.00: The total amount might appear to be lucrative, but withdrawing it completely has its downside like massive tax implications.
16.41: Jason asks, “What are the big pitfalls and common problems that occur in defined constitutional pension plans?”
18.42: Jason inquires, “What happens when someone has retired, what are the biggest concerns that they have?” “What is the biggest risk that they face?”
20.32: Alexandra explains how people can intelligently invest their retirement money and play safe.
23.32: Jason says a lot of conversation around retirement is based around income maximization.
25.11: David says people spend their lifetime accumulating money, they take risk and very often they take financial advice.
30.08: Alexandra and David talk about reverse mortgages.
30.23: Jason says the pressing issue for the present generation is that taxes are going to creep-up on properties.
32.31: Jason asks in terms of the advice that “If we give boomers, what are the most important thing they should be contemplating at?”
32.58: Alexandra advises to think thoroughly about retirement. Figure out how much you will need to live on and where you would want to live. Don’t rely on other people’s assumptions. David hates shortcuts in this industry.
3 Key Points:
Alexandra explains how as per the OECD Data, Canada always ranks higher as compared to US and other European country’s data?
Jason, David, and Alexandra share interesting insights on “How Financial Advisors can play a vital role in helping their clients navigate into and through retirement?”
Listeners learn about the importance of financial planning and the risk involved around investing money.
Tweetable Quotes:
“Retirement is more diffused” - Alexandra Macqueen
“Federal politicians’ lose election if they suggest changing the age when people can access their old age pension from 65 to 67”- Alexandra Macqueen
“The government is not going to pay for your cruises, it is going to pay for your food and shelter.” - Jason Pereira
“Averages means nothing to people.” - David Field
“Plan and live your retirement based on what you want to do and not on tax efficiency of your decisions.” - David Field
Maximizing Enterprise Value with David Prowse | E066
00:24:46
In this episode host, Jason Pereira talks with David Prowse of Velorum Business Advisory. Today Jason and David are going to talk about “How to make the most of your business valuation.”
Episode Highlights:
1.15: David says that his business is centered around an exit planning business that does a little bit of valuation and corporate financing.
1.34: David is a Canadian CPA, most of his early career days revolved around general CA works. Later in 2015, he got involved with corporate finance and valuation works.
04.00: David shares examples of Personal, Business, and Financial Readiness.
5.15: In-order to plan an exit for a business, it is important to figure out the valuation, says David. Most people overestimate the value of their business so figuring out the potential valuation is extremely important.
06.18: David talks about the tools and diagnostic techniques they use to determine the value of a business.
07.05: Jason talks about personal readiness and the importance of planning about it.
08.00: Jason is curious to know from David that “How does he convince or prepare his clients for personal readiness?”
08.54: David talks about the approach that he takes for exit planning and implementation.
12.09: Business valuation and readiness is all tied-in, says David
13.07: David stresses the importance of holistic exit planning. He says it is crucial to have a proper plan for Personal Readiness, Business Readiness, and Financial Readiness.
15.59: David shares how a value driven assessment can help business owners know the actual value of their businesses. The evaluation also allows business owners to understand what they can do to improve their business performance.
17.17: Once the business assessment is done, it is essential to prioritize and figure out ways to improve the business performance.
17.36: As per David, prioritization of business improvement depends on the owner’s preferences.
19.52: When it comes to business readiness, one key factor that one should evaluate is - “Is the owner actively involved in the business?”; the second aspect to that is – “Is there documentation of those processes?”
20.32: From an organization perspective, it is essential to figure out “To what degree does the top-down communication and bottom-up communication works?”
22.58: “If you really want to grow your business, getting a strong understanding of the metrics is very important”, says David
3 Key Points:
David talks about the importance of introducing holistic business plans for business owners.
David and Jason talk about the importance of Financial Readiness and what is its significance?
Jason and David talk about the qualitative and quantitative aspects of what people need to do in order to sell a business.
Tweetable Quotes:
“Most people overestimate the value of their business so figuring out the potential valuation is extremely important.” - David Prowse
“If you don’t have a financial planner, go find one; if you do have a planner, then discuss and have a retirement plan in place.” - David Prowse
“Prioritization of business improvement depends on the owner’s preferences.” - David Prowse
“If you are not measuring your business matrices, then you are really not accomplishing too much of anything.” - David Prowse
In today's episode Jason and Kim are going to talk on a topic that has been in the news recently the Bill C-208. It is a private member's bill that amends the Income Tax Act (Canada) (ITA) in an attempt to alleviate the financial disadvantage that typically arises for taxpayers who sell their business, family farm or fishing corporation to their children or grandchildren, as compared to selling to an arm's length third party. This disadvantage is caused by certain tax rules, specifically an anti-avoidance rule in section 84.1 of the ITA. Despite Bill C-208's best efforts to "fix" this problem, the language used in the legislation does not appear to work as intended. It raises many concerns that will likely need to be addressed by the government through further amendments to the legislation. Kim is here to talk about what the heck this thing is and how it affects business owners in general.
Episode Highlights:
01.14 Kim talks about Bill C-208 that has been in the news recently. He explains what it is, what it is trying to fix, and how this has gotten so twisted?
01.40 Kim: In 1985, the Government of Canada introduced the capital gains deduction, and most business owners know the capital gains deduction. It started off with $500,000 if you own shares of a qualified small business corporation, which generally means active business, not a lot of passive assets, or qualified farm property, and you disposed of that, then you would be able to claim the 1st $500,000 of gains tax-free so, that first came in 1985. Back then government was smart enough and introduced some anti surplus tripping rules around capital gain deductions.
02.25 Kim says that to understand surplus tripping, you first need to understand the only way you can remove after-tax corporate retained earnings or what we call surplus? So, it's after-tax surplus in a corporation and remove it to its shareholders. What is the only way by definition?
03.31 Jason says he is a big believer in Charlie Munger's saying – "Show me the incentive, and I'll show you the outcome." He says, "If I could find a way to be creative and find a way to have money recharacterized as a capital gain instead of a dividend, and then by nature, I am going to find a way to do it."
05.50 Kim affirms the government who has been concerned about surplus stripping they have always been concerned about that because capital gains were not taxable in Canada until 1972. So, prior to that, capital gains were without tax.
06.30: Kim asks in 1985 when they introduced the capital gains deduction. They introduced the anti-surplus stripping rule to prevent the withdrawal of surplus in conjunction with the capital gains deduction, and how did they do that?
09.00 Kim says in 2017, during the private corporation tax battle, the government introduced these anti surplus stripping rules. Do they finally had enough? The courts have been sympathetic to surplus tripping over the year because there's no provision that outright prohibited. There are anti-avoidance abuse rules like 84 sub two and the journal entry orders rule that the government can invoke, but they've never been really that successful in recharacterizing a capital gain as surplus as a dividend.
09.52 Jason reiterates it wasn't such a scattered piece of legislation across the city in this country's history, at least when it comes to tax that's refer.
10.38 Kim says fast forward to August, September and there the government was just getting beaten up hard and finally the press somewhat understood the issues and so they're becoming a little more sympathetic rather than just saying, "Hey, this is great and buying into the government line, and so they abandoned in October of 2017 these crazy circle stripping proposals."
12.30 Kim recalls somewhere around 2013 a private member's bill was introduced to try and solve the above-mentioned issue, but it was quickly shut down and killed like most private members' bill.
14.40 Kim explains the governing for 18 or 19 liberals that studied this issue and voted against party lines finally have enough because this issue has been around for a long time and so knowing full well that it got passed or that it's imperfectly. They thought we are going to squeeze the department of finance into a corner here and force them to deal with this issue. So, today we have the legislation in place.
16.10: Jason agrees that they have now set a new precedent that a bill can reach low assent. If it does not specifically state the date at which it starts, the President can kick it down the road as smart as far as they want.
16.30: Kim clarifies that the interpretation Act specifically deals with this, and it's quite clear that if there's no effective date or coming into force provision, it is effective law on the date that it receives oral assent.
17.52: Kim says in an unprecedented news release that came out on 19th July from the Department of Finance, they clarified that it is actually Krista Freeland, so the Minister of Finance, who confirmed that Bill C208 is effective law.
19.40: Kim points out that if it is any government that comes out and recognizes that this piece of legislation that has passed is imperfect and allows for abuse; because let's be serious, should surplus that is removed from a corporation be taxed as a capital gain? In my opinion, generally, No.
20.03: Should surplus remove from a corporation be taxed as a capital gain? Kim generally thinks the answers should be consistent with accounting 101, which is No. It should be taxed as a dividend. There are exceptions to that general rule, and so he blames the government for being concerned about abuse and surplus surfing.
22.40: Kim is not sympathetic to the government. He says that the Department of Finance has other priorities, and COVID certainly shifted a lot of those priorities. They have had 36 years to deal with this issue. Instead, they decided to play politics with it and go on a listening tour instead of actually having the bureaucrats, you know, roll their sleeves up and come up with some solutions.
24.00: Kim inquires How many clients do you deal with on a year-to-year basis that are transferring their business to the next generation? He further says, "Certainly some, but as a great is it one month, two months, three months, 10 months? I would say it's probably on average for me, and I have been doing this a long time, maybe once a year."
3 Key Points:
Bill C-208 was granted Royal Assent on Tuesday, 29th June. It amended the Income Tax Act (ITA) to provide tax relief to families who wish to transfer shares of small businesses or family farms and fishing corporations to their children.
Kim explains how the private member's bill, which is now passed into law as Bill C208, is imperfect and is very poorly drafted. There is no legitimate or illegitimate test for intergenerational transfer.
Jason says Canadians like to believe and assume that their government does not purposely pass crappy legislation. This is something he has encountered multiple times.
Tweetable Quotes:
"If a non-arms link corporation decides to buy your shares using money that is within their holding companies, the same kind of surplus, same kind of tax rate and then buys your shares it does qualify for the capital gains exemption." - Jason
In the abandonment, they promised to fix the intergenerational transfer issue, and that was good. – Kim
"You are indifferent to how you take money." – Jason
"We have a flat piece of legislation, there are opportunists, who will try to take advantage of it. We know that this is going to get corrected because they've been eyeing this thing for a while and now, they have created a created a demon they got to slay." - Jason
In today’s episode, Jason and Guest Parham Nasseri is going to discuss a bit different subject. They are going to talk about the implementation of something known as client-focused reforms. This is one of the biggest series of regulatory changes to happen in the investment industry in Canadian history. While the average consumer may not really have an understanding for what’s going to happen or know what was going to change for them. These reforms will change the way your advisor has to operate and actually interact with you.
Episode Highlights:
1.44: Parham Nasseri worked for a company called investorcom, this company is around since 1992. Fundamentally their RMO in the market is to help wealth advisors comply with regulations.
02.00: Jason asks Parham, “Tell us about the client-focused reforms; what is this and where did it come from and what’s to try to accomplish?”
03.10: “Western world modern sort of economies that have a Securities Act and awaited sort of capital markets from around the world they have been trying to increase their attention on reforms that improves investor protection,” says Parham.
04.00: Parham suggests, let’s move forward from just the plain disclosure model and ensure and mandate specific regulations that required investment advisors and wealth management firms to act in their client’s best interest.
04.45: Talking about the imperfections, Parham says regulators aren’t trying to clean up every single run that’s going on in the industry; but what they are trying to do is raise the bar and say - how can we ensure or mandate that the advisor has to act in their clients’ best interests?
07.35: As per Parham, there will always be challenges in the industry and the consumer advocates or investor advocates, and that world is never going to be 100% perfect.
08.21: Parham explains before you make a recommendation for a client, not only does it have to be suitable, but it also actually has to be in their best interest and are qualified in a principled manner.
09.30: Jason says,” The entire industry is based on client trust; it is 100%; without trust, the entire financial history doesn’t exist.”
10:20: In the industry, there’s a delineation between what is truly a financial professional who’s out there trying to act in your best interest, quote-unquote, traditionary versus someone who’s out there just Selling products, says Parham.
12.05: Parham says, post-December of 2021, there is going to be an added level of pressure on firms to act in a more align manner to their clients.
14.00: Jason says, “Risk tolerance according to academia is your ability or your personality around risk. How much are you willing to tolerate risk? But that’s a kind of a personality trait, typically measured by psychometric profiling questionnaires, which most industry uses absolute garbage questionnaires developed by their marketing department and don’t even aren’t even truly calculated properly. But there’s a number of really good and another expanding number of third-party tools that are tested rigorously in academia.”
14.31: Jason inquires, “Without a financial plan testing for someone’s ability to absorb the loss, how is it possible to measure capacity?”
15.20: Jason says, “What is it called wages and our risk profile? How often is that going to be expected to be updated under other new CFCF rules?”
17.00: Jason says, “You all are going to get your financial advisor calling you and saying, hey, tell me what has changed? Tell me what is going on. Tell me about your total assets to liabilities. You’re going to feel like that’s a little bit. The infringement of your privacy or why is this person asking me this again and again, but again the intention behind the regulation is for the financial advisor who is giving you investment recommendations for them to truly know, how your circumstances have changed?”
19.00: Parham recommends, “As a consumer, you should expect your client advisor to be bugging you more for this information on a regular basis. If they’re not and they’re just leaving, you know there is nothing being updated. They’re not living up to their recommended requirements.”
20.10: Parham says, “KYP stands for knowing your product as per the new obligations a firm that you’re dealing with the financial institution working with has some process in place. The individual financial professional has to do some additional diligence around the products that they are making that they are recommending for you in your portfolio. Fundamentally, think about this KYP piece as this gatekeeper function. Under the days where a financial advisor can recommend the product to a client to an investor without the firm knowing what the heck that product is all about, how that product change is that product is in my client’s best interest.”
22.09: Jason says, “The second I read the reform I thought to myself, well, this is going to lead several institutions to basically block anything but proprietary products.”
25.44: Parham and Jason discuss of digitization of processes. They also give detailed insight on the gatekeeping process.
30.07: Parham affirms,” Regulators are now going to firms and saying show me your process for considering a reasonable range of alternatives.”
32.40: Parham says suitability is fundamentally a matching exercise. If your investments are at high risk, then register for it. It is like Lego pieces coming together.
35.39: Jason reiterates, “The reality is where is the thought process methodology? How often should you be able to get all those answers? And frankly, I would encourage any advisor listening to this to get ahead of this and document that for yourself in the next couple of months.”
3 Key Points:
Jason and Parham will talk about the implementation of one of the biggest regulatory changes that will happen in the investment industry in Canadian history.
Jason asks Parham to share his views on the major tentpoles to the client-focused reform.
Gatekeeping functions, KYP process are fundamentally good, and it is going to have a long-term benefit to clients, says Parham
Tweetable Quotes:
“There is always this one world that is ever-expanding in this universe, or one part of the financial industry is ever expanding in this universe – It is compliance.” – Jason
“The client-focused reforms specifically have to be implemented by the end of this year whoever is thinking about them.” - Parham
“I am a big believer that financial advisors and planners should have a fiduciary responsibility to their clients.” – Jason
“The majority of the industry is salespeople; they do not want to be called salespeople, and they want to have the auspice of being a professional.” – Jason
“Capacity is one’s ability to absorb risks.” – Jason
“Most financial professionals are going to have or should have a good idea of what time series ability and willingness to take the risk.” - Parham
“Suitability is fundamentally a matching exercise.” – Parham
In today’s episode, Jason is going to talk to Alexandra MacQueen. She is a well-known financial author and co-conspirator of many different projects. Today Jason and Alexandra are going to zero in on a core issue of retirement for any generation.
Episode Highlights:
1.19: For the last few years, Alexandra has focused on providing quality content; this is the new word that people use now.
1.30: Jason says, basically, the retirement income question or making sure that you do not run out of money when you are retired. This sounds like a simple premise, but frankly it has been called by Bill Sharp, Nobel Prize winner, that is the dirtiest problem in finance.
1.40: We are dealing with a problem that is nothing but variables except for one constant, and that constant is that you need wealth to consume, says Jason.
1.46: The variables are how long you live? what returns look like? what are you going to spend? and how does that expenditure vary? and then on top of that, what is the inflation? do we have to plan for it?
2.28: In the list of variables tax always think about planning for retirement and specifically longevity. The other issue with longevity is that it is what we call multiple; it multiplies all the other risks, says Alexandra.
3.31: Retirement is still a relatively new concept in western society. In the past most people worked until they were decrepit and died. And just to let further proof that, the first state-sponsored pension modern society was the Germans under Otto Von Bismarck, who basically set up pension date of 65 and was later move the 67. The pension was designed to basically pay you money when you were old so that there was no possible way that you could continue to contribute to society and continue to earn income.
4.20: Alexandra explains that when we talk about longevity, we actually lose a billion different number of billions? She says there are several different ways to measure it; there is life expectancy at birth. So, if somebody is born in 2021, they are expected to live well.
5.03 Alexandra says, “One of the things that you need to understand longevity is at what point are you measuring it?” She explains, If I look at life expectancy at age 65, you will notice it is five or six years longer.
7.03 Alexandra says we talk about life expectancy that is 50% probability but let us talk about how we are encouraged to use life expectancy?
08.17: Jason says we look at the impact of the decision if we are wrong. Do you want to die on your deathbed with more money in your account than you spent, or do you want to literally be worried about it prior to burning out on money?
11.35 Jason predicts, if you were not a smoker, your gains and mortality are minuscule. However, if you were a smoker, a large percentage of the population than yours were increased.
12.54: Alexandra says that the numbers in tables are actually quite different from what we call population life tables, which is the life expectancy for the entire population. This includes people in poor health. So, as a rule, people who seek out retirement planning advice are people anticipate living long lives and who are positioned to live long lives they have money they have asked for seeking out advice.
14.09: Jason talks about the various ways we can protect ourselves in longevity. So purely planning for that and preparing for that is important, but there are various tools we have to use for the planning.
14.25: Jason says that the downside to all these longevity gains has been that the timeline that we keep on planning keeps on getting longer and longer which basically means that - You need more and more capital to take care of it.
16.01 Alexandra suggests, “Your working career might only be 30 years. So just as a very basic math problem analysis - How am I saving and meeting my goals during my working life? How am I saving sufficiently to fund another 30 years? Doing nothing is actually fairly cheap compared to what we expect to do.
17.48: There are the old standbys of income annuity when you are transferring the risk to the insurance company in exchange for your one-way lump sum; they promised to repay you for as long as you’re alive.
21.24: The generic advice is delay because it is the cheap guaranteed lifetime source of income. It’s waiting for you when you turn it on, and that is amazing. It is just that it may not apply to the individual well.
24.54: The annuity is actually a solution through a better version. Because what we are talking about for the person align – “I should have taken CPP earlier, I would have had more to spend so they would have had more certainty of income.” That is what actually annuity provides.
27.15: Mortality credits is very simple; you put money in the pool. Alexandra says we can talk about it with PPP for example or any kind of longevity product that doesn’t provide a large debt. She says, If “I die even before taking a single payment. What happens to my money? Well, I only get $2500 out, and the remainder is left, and the sponsors or supporters then withdraw the money by other means through what is called mortality credits.”
30.45 Jason recollects about a product called Guaranteed Minimum Drop Benefit Fund. Those guarantees were so rich they caused some problems for insurance companies. And to this day, I still have clients who have a bunch of those are paying out very high guarantee rates.
32.22 Jason says from a business owner standpoint, and this is very convoluted by the fact that we start throwing in holding companies and other structures into place. Then the tax implications of these products or the number of different ways we can hold these things increase substantially, so there’s a lot of different options there.
34.34: As per Jason, longevity planning is problematic. There are a lot of variables. There is a ton of decisions.
3 Key Points:
If your returns are substandard, but your life is short, then there is a chance that inflation is high. But if you only live a few years in retirement, inflation doesn’t have the chance to eat away at your retirement income or your savings.
During the COVID pandemic, we have seen many newspaper articles about how average life expectancy has decreased. The layman understands what is meant when we say average life expectancy decreases because COVID is called period life expectancy. If the conditions that prevail now in this period continue, then life expectancy will be impacted.
Now Canada Pension Plan (CPP) doesn’t actually formally use mortality credits. That is a kind of insurance. But the underline concept is contributions go in, and not everybody will make it to average longevity, so those who die early their premiums are then spread among the remaining people in the pool, which is what we call mortality process.
Tweetable Quotes:
“Retirement is still a relatively new concept in Western Society.”- Jason
“Life expectancy increases as you age.” - Alexandra
“To say that the changes to mortality are going to stay our state permanent presumes that nothing changes now.” - Jason
“The average information is absolutely useful in informing our decisions, but we all still look at the distribution and where you fall on that on the spectrum of various factors that affect you.” - Jason
“Now the stakes are so much higher when the numbers that big, which is why a lot of people may make the wrong choice when it comes to pension commutations.” - Jason
On this episode of Financial Planning For Canadian Business Owners, Jason Pereira talks to Chris Sabat - General Counsel McMillan Estate Planning. Today Chris is going to talk about a deeper dive into statement freezes. We have covered a freeze in the past, but specifically today, we are going to go over a little bit more around the thinking and the mechanics of how you execute an estate freeze and why?
Episode Highlights:
1.16 Chris is a lawyer working with a team of lawyers, accountants, financial planners, and state planners at Macmillan Estate Planning Company in Calgary. Primarily McMillan serves entrepreneurial families throughout Western Canada.
1.58 Chris says it is not a situation where they find themselves going into their account and having a discussion that needs some advice taking that advice and trying to interpret that invoice for their lawyer. That is what kind of unique from my perspective about McMillan is that all those experts bring brought under one roof. So as per Chris, it really helps to facilitate a positive result in relation to something like an estate freeze.
2.44 Jason says we all in our own industries get caught up in jargon and our level of what we consider based on proficiency or base understanding, but that’s not what the average person thinks. Sometimes it is easy for us to get carried away, and sometimes it translates into something that is very simple and powerful.
3.05: According to Chris, Estate freeze is sort of a revenue Canada taxation of your state. What you’re doing is you’re freezing the tax liability. That will be imposed upon your passing and transferring that value deferring that taxation into the hands of your children or successive generations. In a nutshell if we want to stop the increased taxation of your estate while still providing you with access to that value, should you happen to need it.
4.45: Chris says that the revenue Canada recognizes with things like the succession of a business, one of the challenges is the tax building comes about on passing. This can be a way to help transfer between two successful successions within a family.
5.35: In most cases, the conversation on estate freezes typically gets started, probably by the accountant or the advisor, and then the lawyers get roped into it. Jason asks Chris to talk to about the first steps or requirements they brought to the table in this estate freezer.
5.55 Chris explains that the estate freezes can be used in relation to a wide variety of assets. It can even be used for things like publicly traded securities or investment accounts. So, it is not necessarily just restricted to the use of the transfer of shares or the freezing of the value of a corporation or qualified small business.
6.48 Chris says as a first step, we must have a value. Whether it is an investment account that is the subject of the freeze, whether it is a real estate portfolio that contains primarily passive assets, or whether or not it’s an active company qualified small business corporation. We need to have some sort of valuation.
8.35: As per Chris, entrepreneurial families don’t want to give up control. They always want to have some control over the business and its future going forward.
10.23: There are a couple of provisions in the tax code of section 85 which allow us to roll over assets. There are others like 51, which allows us to exchange, but these are all recognizing the tax code is being non-taxable events, they are basically tax-deferred events.
10.56 Jason asks Chris, “You mentioned two options you had, either held by the next generation or held by a family trust. Could you talk about the positives and negatives of both those strategies?”
11.05 Chris highlights the huge negative around the transfer or the direct transfer. It is like having the children as individuals subscribed to the grocers, a huge downside of that is that the children actually own shares. If the children own shares, that means Mom and Dad can’t be in control.
13.14: Another huge advantage with the family trust from my perspective, especially for your qualified small business corporation, is the ability to multiply your lifetime capital gains exemption or the lifetime capital gains exemption that applies for the business, says Chris.
15.29 Jason says, let’s talk about what happens when you establish the estate freeze, and for whatever reason, you wanted to send your kids or whatever it might be, and you want to undo the estate freezes. So, what’s involved with something like that?
16.02 Chris: One reason that the unwinding of the estate freeze comes about is because the vast majority of trusts have a 21-year deemed disposition, so we do the estate freeze. We have given the growth value to the family trust 21 years in the future. Revenue Canada in essence, gives you one of two options. You can pay the taxes on the capital gains; the family trust can pay the taxes or roll their shares out to one or more beneficiaries. So, it is not uncommon in families to see a freeze done maybe at least a couple of times during their lifetime.
17.48: At the end of the day, what you are doing is you are transferring the shares to one or more of the beneficiaries, and it is a relatively simple exercise, says Chris
19.06 Jason request Chris to explain the concept of a wasting freeze.
20.05: Chris explains no one has a continual ongoing valuation of their business, so once you have got that fixed value, you quite conveniently redeemed and then wither away those capital gains. Typically, what we are doing is we are stopping future capital gains and getting rid of some of the historical capital gains that have been built up in the estate.
21.09: Talking about section 208, Jason inquires how does the misery, that is, the complications of that section of the act, impact? How is it to be approached at this point?
21.27: Chris explains bill C208 is the law. It is not finalized. Revenue Canada has made it clear, or the Department of Finance has made it clear that they are going to propose amendments to Bill C208. What Chris likes about Bill C208 is that, in a sense, there is maybe a recognition that business succession planning is a long-term exercise.
24.40 As per Chris’s observation about an estate freeze, especially when they utilize things like family trusts, is that unfortunately. They are often looked at as an accounting exercise. They looked at it from the perspective of how do we minimize tax? At the end of the day, we have got a business valuation. We have got a share swap. The question is that professionals assisting you understand all of the potential complications that can come about in these types of scenarios.
27.10: Jason says estate freeze is simply an accounting strategy. This is not a taxation exercise at its core this is a financial planning exercise. This is a family dynamics exercise. This is an entrepreneurial succession planning exercise.
3 Key Points:
The one thing unique about McMillan is that all professionals need to be involved in accountants, lawyers, experts, and things like business, succession, etc. So, all of those individuals have been brought under one roof. From Chris’s perspective, the advantage of that is that it is not the sort of situation where maybe a client identifies, and we hear something about the concept of an estate freeze and how that might be advantageous.
The kind of first level of an estate freezes it is about limiting capital gains on passing and then where it really becomes powerful. We can really create value, or at least minimize the taxation that is going to be imposed upon events like the sale of a business.
The problem historically around succession planning was that there was a penalty if you happen to sell your shares to your children. It was treated as a dividend. With Bill C208, ultimately, what we are going to be able to do is facilitate transactions where there is actually an intergenerational transfer of the company shares, and you will be able to utilize that lifetime capital gains exemption. So, it does work in conjunction with an estate freeze.
Tweetable Quotes:
“In a nutshell, the bottom line about Estate Freeze is we are stopping the growth in one person’s name and passing it on to another generation’s name.” - Jason Pereira
“Family trust is often the preferred method.” - Chris
“In cases where the freeze happens, and there’s an amount, especially in excess of the capital gains exemption amount, a lot of clients who speak, they plan on taking a given an income from the company for the rest of their lives.” - Jason Pereira
“We know the Department of Finance is going to come in, and they are going to fiddle with the bill, and of course, their concern is surplus stripping. They don’t want abuses of the Income Tax Act in order to allow people to extract value at a non-dividend tax rate at the capital gains rate.” – Chris
“Bill C 208 once cleaned up it still stays true to the actual spirit of what you trying to do, would actually maybe eliminate for that would allow that deemed dividend on a wasting freeze to become a capital gain.” – Jason
“When it comes to things like business succession when it comes to controlling issues when it ensures that at the end of the day other than just saving tax, the estate freeze meets the goals and objectives of the family.” – Chris
On this episode of Financial Planning For Canadian Business Owners, Jason Pereira talks to Matthew Inglis. He is the founder of Creditor Insurance Watchdogs, which is division of Mobile Advisors. Matthew specializes in educating people and providing tools for people to get better rates and better coverage on their various forms of creditor insurance.
Episode Highlights:
01.38: Matthew is a life and health insurance advisor. He has been in the industry for a long period of time that just has bones to pick with specific industries. He finds the best way to express myself through Insurtech Technology.
01.53: Matthew explains - creditor insurance - in a nutshell, is a product that is offered by financial institutions to make sure that your loans are taken care of and paid off in the event of a death. It is typically sold through all types of different financial lenders and institutions within Canada.
03.20: Depending on what financial institution or mortgage broker or mortgage organization you are borrowing from you will run into products like creditor life, creditor critical illness and creditor disability insurance.
05.27: Most Canadians don't know when they are purchasing greater insurance products when rates are blended. This means that male and female blended smoker nonsmoker translates into is that non-smoking female who is paying the same mortgage as a male who smokes in packet day.
06.11: Matthew says that creditor disability insurance is blended so male female smoker, non-smoker it is blended but what is even worse is that all of all clauses are blended as well.
6.43 Jason explains that a female accountant that's in office all day is going to be paying the same to protect her mortgage payment from disability as a guy that is swinging a pipe wrench with a smoking as well standing on the rig floor as a roughneck.
7.42 Jason points out that, when you go and apply for an insurance policy through a licensed insurance agent, you basically have to go through the underwriting process that can mean medical questions.
9.09: Matthew says underwriting is black and white. If you get it right, it's good, but it's not about whether or not we get it right in front of professionals that help me get it right now and the seriousness of the simplified questions that these people are answered.
10.38: Referring to the strengths and weaknesses to the contractual insurance strengths and weaknesses so it could be 99% of the consumers out there are going to make a switch based on saving money, not contractual obligations.
11.42: Matthew says some mortgage creditor products are portable, most aren't. You switch your mortgage and upon time of application for your creditor insurance on your first mortgage you were insurable, but you aren't moving forward as you switch mortgage carriers.
12.25: Jason talks about the bottom line of paying less. If anybody decides to move their financial situations because they are getting a better deal, he is back to square one.
15.35: The first opportunity that a Canadian consumer has to learn anything about life, critical illness, or disability insurance is being taught to them by a banker who knows nothing about it, says Matthew
16.01 The real big problem is that people will often go to their banker, mortgage broker, automotive dealership, whatever, and be offered life and health insurance products prior to a Canadian consumer actually understanding what the process is.
18.14: A person needs to take into consideration the traditional criticalness insurance side, carriers are constantly evolving their definitions so that they are more competitive and more attractive, says Mathew.
21.55 Matthew explains how Canadian consumers, all they know is their credit or insurance. They know absolutely nothing about traditional life and health insurance space. Because their bankers and lenders, which doesn't make any sense at all about, says Matthew
22.52 Matthew points out about the rule of thumb - the more your debt, the older you are, the more you're going to be spending on creditor insurance problems.
24.04 Matt suggests identifying the primary product and then when you have identified the primary product that you want to replace your client, go start digging up the secondary stuff so likelihood of them having primary or creditor insurance on a primary loan is going to be a skill off.
25.24: Matthew suggests, when we are comparing traditional disability creditor disability insurance were actually using a product that takes all class into consideration, which means your disability insurance is priced on the risk of your occupation.
26.45 Matthew says that the creditor critical illness insurance only covers three illnesses and at age 55 it would be increasing in price every year.
27.45: The policy along time of claim pays you, not the bank. You can determine how much or how little of that goes to paying off said loan based on the factors of your life, says Jason.
3 Key Points:
In today’s episode Matthew is going to explain the concept of creditor insurance, where the flaws and gaps are in the current normal credit insurance people get daily basis is and how to do something better and actually protect yourself with a high degree of certainty.
CUMIS creditor insurance certificate states that if you have not made your critical illness claim given in a specific number of days from the date of your critical illness, they could literally say it right there contractually declined, says Matthew.
Jason inquires, how does disability differ from a typical disability policy we get from an advisor or even the group insurance policy plan?”
Tweetable Quotes:
“Underwriting is black and white. If you get it right, it is good” - Matthew Inglis
“If you're clean, healthy, you've never had a problem you check those underwriting question boxes and you got no problem whatsoever, but these are very loosely open to interpretation.” – Jason
“The big things other than beating up the price are those portability, declining balance and conversion option.” - Matthew Inglis
“There comes a point in time in everyone's life where it is no longer about renting insurance and protecting debt. it is about buying insurance and protecting its stated legacy.” - Matthew Inglis
In today’s episode Jason Pereira talks to his friend and colleague John DeGoey. Together they are going to discuss “What to look for when hiring financial advisor? John is a well-known pundit in the industry and author of several books, specifically - The Professional Financial Advisor.
Episode Highlights:
00.56: John has been an advisor for 28 years. He has written a couple of books and articles. He is a proponent of professional, transparent financial advice in a way that is consumer centric.
1.46: Jason asks, “Consumers looking to hire an advisor, what should be their first steps? What they should be doing and how that can go in and out.“
2.01: John says, the first thing that consumers should think about hiring an advisor is what your expectations are from that advisor and find an advisor who works in your snack bracket with the specialization that might respond to whatever specific concerns you have.
3.18: Many people tell you that they deal with business owners or executives or people with money. Jason recommends you go further and ask questions about specific services that are tailored to those people. Ask the advisors to prove it by telling you what you do for me that is different than others.
3.44: John says, you can't ask questions if you don't know what questions you should be asking.
4.19: Jason always recommends, “Don't just take your friend's word for it because your friend could be happy with someone terrible.”
4.52: John says, if the advisor is only giving product recommendations without thinking about strategy or fit or planning and specifically if those recommendations are being made without doing anything to really determine what your circumstances are in the first place, then people might assume, well, this is a person who is just fresh out of university and starting out and needs to do some work with budgeting.
6.39: The conversation or the desire for advice is driven typically by the perceived need around a product or solution.
7.26: Many people when the penny drops, and they realize they need something. They rush out to find someone to help them deal with that one thing they have determined they need help with.
9.27: John suggests, “Look for a person who when start asking you questions, asked to follow up questions first derivative questions that the next question is not on their pre-existing list of questions to ask but close directly out of the answer that you gave and because you said something that triggered something in their mind, they then went back to you and said so tell me more about this to make sure that they are understanding the situation and determining whether or not you might need more help with that thing.”
10.18: Jason inquires, “Can you speak to the kind of credentials individuals should be looking for when they go and seek advice?”
10.23: John says, “The first thing that I would say is you might want to look at licensure. About 85 or 90% of the people who give advice are not licensed to sell individual stocks and bonds. They only have a mutual fund license and or a mutual fund insurance license.”
11.59: Everyone has to be fiduciary, but if you are working with a portfolio manager, all portfolio managers are also fiduciary by virtue of being a portfolio manager are also fiduciary and that's one thing that provides comfort to many people.
12.49: Jason asks, “When it comes time to ask what is all costs? Where are the red flags? Or what should people expect?”
15.02: John says Industry has not been consumer friendly because there are certain lobby groups within the industry. The total cost for the client is the sum of the product, the advice and those additional transaction charges in custody fees.
16.32: If an advisor is telling you verbally and they don't have like a fee schedule spelled out in front of you then it's another issue here that a lot of people don't think about it.
17.11: Jason points out that, “You can't be assured that you are getting as good a deal as everybody else that this person is dealing with and that's something if you don't have someone who's got a clearly defined fee schedule that they can lay out in front of you, you are a danger to that.”
20.15: The saying that we all have heard that price is what you pay value is what you get, says John
21.22: If you are getting good advice and paying for it and but you are also using expensive products and paying for that and those products are not adding value, then the sum total of the value add or subtract is going to be convoluted because it will take more than one factor into it.
23.33: We don't know how good a job we can do for someone until we actually start doing the plan and that's the reality of the real estate industry, says Jason.
26.25: John says, a lot of implementation revolves around trade-offs, because there is only one course of action and that is fine. But almost always you have to decide about whether we will travel less or work longer, but we don't retire early and still travel as much as we wanted to.
29.49: As per Jason another red flag that comes up quite often is the telling – “You need to do something with your investments before they even understand you.”
30.53: Jason says, it is really easy to score a bullseye when you paint the circle around the arrow wherever it landed. But the reality is that short of being able to prove they would do that, those comparisons are nonsense, and no one should ever take him to credibility with them.
33.09: There is a book that came out about two months ago called noise. The concept of noise is one of the main concepts something called decision hygiene, which is basically being clear, inconsistent and purposeful in your decision making.
33.25: If you are going to interview multiple candidates for the job of being your advisor, it might be worthwhile to at the outset at the beginning of the process before you interview any of them. Think deeply about what you hope to accomplish, think about the questions that you heard us talk about, write them down, and make sure that you asked all the candidates you are interviewing the same questions so that you can compare them.
36.15: If the client wants a comprehensive service and all you care about is investing their money in mutual funds, that is a relationship doomed to failure.
3 Key Points:
Find an advisor who will step back and encourage you to do a holistic assessment of your actual needs so that the response you're given can be as fulsome as necessary.
There are multiple levels of fees, and if the advisor is not clear about the multiple levels of fees, then there is a concern. What you should ask is a breakdown in writing. This should not be a surprise if the advisor doesn't have an answer ready for you and in writing right there because it's a basic question.
If you have a question about, what kind of return should I expect? You should speak to multiple advisors. In most instances it's a reverse indicator, and the advisor who sets the expectation the lowest is likely the most credible.
Tweetable Quotes:
“Don't presume and don't work with advisors that are quick to person.” - John
“If the client wants to negotiate, that would be a red flag for the advisor, because the client wants someone who is less than professional and more sales.” – John
“The media is largely beating up on fees because cost is a simple story to tell people that gets people enraged and gets clicks. Media, in general, is a terrible job of explaining to people the value of money in this industry.” - Jason
“The competency of a planner is very difficult to gauge in advance, and that requires a lot of conversation and questioning as well that people may not be ready for.” – Jason
“Somewhere in the spending or the goals there is a malleable goal that is not important, and that thing can be shifted around for the sacrifice of everything else.”
“Having a purposeful process is a good way of imposing discipline on your decision-making.” - John
In today’s episode, Jason Pereira talks to Ellen Swan. She is a Barrister and Solicitor at Caravel Law. Ellen has a specialization in HR Law, and Jason brought her on the show to talk about best practices when bringing on, maintaining, and firing your staff and even addressing what to do during Covid with some of these more interesting cases for dealing with.
Episode Highlights:
1.01: Ellen supports employers with HR issues in the workplace that range from onboarding, management of the relationship, including disability issues, leaves of absence, performance management, compensation issues. She also helps when things go wrong, and the relationship ends for various kinds of reasons.
1.46: Ellen answers when someone is looking to hire someone. What are the best practices from HR law standpoint when it comes to onboarding them?
1.53: When hiring an employee, the most important thing is to have a well-drafted employment agreement that the employee sees and signs before starting work. That can be a template that you get reviewed periodically by your lawyer. Still, it should be something that is initially drafted by a lawyer who practices in employment law, not just your general commercial lawyer.
2.48: Ellen says more than 50% of her practice is dealing with terminations where the employment agreement is non-existent, poorly drafted, out of date. The law has evolved, and the employee has not signed a new agreement with every promotion or every change in salary that is considered for the agreement, and those things are constantly evolving.
3.15: The big issue with an employment agreement is that it doesn’t have to be in writing under the law, so you will have an employment contract with someone you employ, even if you never present them with an agreement in writing.
4.08: People are typically surprised by termination clauses, so how specifically they have to be drafted to be compliant with the law with respect to minimum entitlements, not contracting out of the minimum entitlements, as well as what the law fills in when the clause is not drafted effectively.
4.32: The bulk of litigation that relates to employment contracts comes up for essentially, one reason there is someone who has been let go who has not been worth making an investment in to manage performance.
7.46 Ellen says lawyers draft agreements to bring people together, keeping in mind that at the end is when everything becomes important that we’ve written down.
8.14: In hiring, you are making sure those terms and conditions and the clauses, and then the general schedule contract is done by somebody knows what they’re doing, but specifically the biggest area looking after what happens when this relationship ends, so it is your work employment prenup for lack of better term on, says Jason.
8.51: You want to know, just like any consumer, you’re a consumer of services, and so you want to know as an employer what you are getting for your money. But you can be accused of using information for inappropriate purposes if you get too much information, says Ellen.
9.10: Ellen affirms, information with respect to medical issues, disabilities, alcoholism, which is the disability, marital status, family status all those kinds of things that is why you get that sense out there in the marketplace that there are certain questions you can’t ask in an interview.
10.06: At the end of the day, humans have a right to our own privacy in medical situations, and we have a right not to be discriminated against for it, says Jason.
12.16: There is absolutely no point in creating a sense of security that should not exist. Ellen avoids using words like, not a good fit because not a good fit creates a sense of otherness in people who already have a sense of otherness.
13.30: Ellen suggests, if you have a well drafted employment agreement probationary period matters less from an actual liability perspective because you will have limited their persons entitlements on termination in such a way that you are comfortable exit in them at any time.
15.26 Ellen explains there are two lenses applied to consider whether someone is an employee or contractor, one under employment legislation and one with the CRA.
15.50 Ellen says, if you think of a pure contractor relationship, you engage a third party to build an app for you, and if that third party it can be an individual, or it can be like an app producing mega-company that has 100 developers working for it.
18.35: You always have the possibility of an audit from the Ministry of Labor under a Conservative Government in the middle of a pandemic that is not really what they are focusing on right now in terms of where they are spending their enforcement dollars, but back when the Liberals were in power and before the pandemic hit, it was very big economy focus and that legislation and those kinds of enforcement measures were around.
21.23: People get scared when there is a huge surprise, and that is when you end up with the union organizing drives or workplace sort of uprisings that you may not want or just people that aren’t really happy, and you have a talent retention problem, says Jason.
22.50: If you are not going to go down the performance management route, then don’t say performance reasons at the time of termination because you are just going to make somebody mad that they didn’t get a chance to meet your expectations.
28.03: If you purported to temporarily lay someone off in accordance with the temporary layoff provisions of the Employment Standards Act and you did not have the Employment Employees agreement to do so, whether in an employment agreement or at the time of layoff, then that was constructed dismissal outlaw, and that meant that you had effectively terminated the person even though you’re ported to keep them on layoff, and they were entitled to wrongful dismissal damages.
28.28: During COVID, the government changed the rules with respect to temporary layoff and said essentially, if you can’t work because of COVID, whether it is because of your own exposure, needing to quarantine, or because of a loss of business, then it became infectious disease leave.
34.52: Ellen answers what vaccine mandate means? Does that mean you are saying you will lose your job if you don’t get vaccinated because it is probably not just cause, which means you are paying out this termination package?
3 Key Points:
Jason brought Ellen on this show specifically to tackle best practices and policies from an HR standpoint. They both will look at it through the lifecycle of an employee.
Ellen talks about the “Probationary Period” what that is and what that cannot be?
One thing that has come up quite often in Jason’s practice with some people is basically dealing with employees versus contractors. When can someone or a candidate consider a contractor? and when is there an employee-employer relationship there that the employer needs to recognize contractually otherwise, they could be in trouble?
Tweetable Quotes:
“The law of employment agreements is one of the most heavily litigated areas of contract law.” – Ellen
“The law typically protects the ones that considered weaker of the two in any endeavor.” – Jason
“You can make your probationary period as long as you want. The only caveat is that you cannot let someone go without notice or pay in lieu of notice if the probationary period extends.” - Ellen
Crypto Currency Taxation with Fabio Campanella | E074
00:37:03
In today’s episode, Jason is going to talk to Fabio Campanella of the Campanella group. Fabio is a taxation and state planner and is associated with the Capital Group, a professional corporation registered with CPA Ontario.
Episode Highlights:
1.10: Fabio is going to talk about what the realities are when it comes to cryptocurrency transactions.
2.08: Fabio says this is a new asset class, and in essence, it relies on something called blockchain technology, which is a network. It is a network of computers that double-checks each other’s work to ensure that everybody who says they have this currency has it and a transaction has occurred.
3.16: Taxable residents of Canada are taxable on their worldwide income. That means any money that you make anywhere in the world or any transaction that can be measured in Fiat currency and Canadian dollars is potentially a taxable transaction.
4.41: Jason says, the crypto currency that is accepted in the most places are a Bitcoin, which makes it the most relevant to the topic of taxation.
5.13 The next pure tax concept that we are looking at is the concept of business income versus capital gain, says Fabio.
5.20: You are left with two types of classification for income in Canada, and that would be a business type of income or also known as an adventure in the nature of trade, which is essentially taxed at 100% of your marginal tax rate.
6.47 Fabio recommends that if you open up the Income Tax Act, you are not going to find it when you look up Bitcoin. If you look up to cryptocurrency, you are not going to find it; we don’t have specific laws dealing with these types of asset classes yet.
7.10: Fabio explains what they are looking for in a business activity: you are carrying on an activity for commercial reasons. In a commercially viable way, you undertake clear businesslike activities in a businesslike manner that could include preparing business plans and acquiring capital assets or inventory.
8.32: Jason says CRA leaves it open to interpretation based on the actual fact pattern of what happened with the asset in the first place, and there is a couple of presidents around this.
9.14: The interpretation of whether something is a business, or an investment is something that is very commonplace in different places of the law, and it does befuddle some people, says Jason.
10.05: Fabio explains, you buy 100 shares of any Canadian bank stock in a taxable brokerage account. You collect the dividends in, and you reinvest them in a drip. You hold that stop for ten years. You never traded again, and then after 10 years you sell it. You are not a stockbroker. You are not in the securities industry. You are pretty likely to get a capital gains treatment.
11.04: The first thing that people need to understand when it comes to Bitcoin and other cryptocurrencies is that there is actually and putting aside, over counter derivatives.
12.28: From a mining perspective, Fabio doesn’t think any individuals nowadays are truly mining Bitcoin.
13.11: You are providing a service and maintenance of the Ledger in exchange for a possible windfall, which essentially, Jason means it is not guaranteed but nevertheless it is a business, there is no way to make money on unless from some business.
14.23: Fabio says there are a lot of incentives available here like tax incentives, and these are indirect. It is because you want to classify this business income.
15.32: Fabio suggests, if you are going to accept Bitcoin in a transaction, no matter how anonymous the transaction is, it really doesn’t matter if you are going to accept Bitcoin if you are going to accept seashells, if you are going to accept diamonds, what is happening here is the CRA will go to in essence, the barter rules.
17.25: Bitcoin transaction is the same as any other transaction. The issue is because it is not recognized as an actual currency; it is recognized as almost as a commodity under the eyes of tax at the moment.
19.04: If you’re doing something shady, or you are trying to extort people, or you are trying to do a CRA scam that is the currency of choice, says Jason.
19.30: From a speculative standpoint, personal tax liability on Bitcoin is incurred when cryptocurrencies are either sold and realized as currency or exchanged for another cryptocurrency.
23.50: The more knowledge or expertise you have and security for crypto in those sectors, the more the CRA will lean towards business income.
26.19: The more we use financing the more it looks like a business income rather than long-term speculation.
27.15: Fabio says that we don’t necessarily need to be taking Google ads and paid acts in advertising. But you are advertising to the public that you are doing this, and you are looking for other people possibly to put money in order to finance your trades.
28.06: Jason says there are other examples of digital currencies around the world that have worked, not necessarily Bitcoin.
31.44: Fabio recommends going through the checklist, and then you have to make the determination along with competent somebody. You know you’re primarily it’s going to be an accountant if it’s a huge transaction, it could be attacked, specialist accounting or tax specialist lawyer, but that is the methodology that this CRA is going to utilize. And that is what people who trade in big points utilize as well.
32.57: The thing about Bitcoin is there is an immutable Ledger showing every transaction.
3 Key Points:
Fabio explains how the CRA looks at your transactions regarding business income or capital gains?
Fabio talks about the buying and selling of cryptocurrency from an investment or speculative standpoint.
At any given second, you can really get a quote in Canadian dollars on Bitcoin. Fabio explains if somebody pays me for my service in Bitcoin or buys a product from you. In Bitcoin, that transaction will simply be measured in the equivalent Canadian dollars.
Tweetable Quotes:
“Business losses are 100% deductible at the margin, whereas capital losses are only half deductible, but only against capital gains.” – Fabio
“We established that if you want to have a game, you are going to want it as the capital game.” – Fabio
“Everybody knows page stocks, and that fact pattern can switch over to Bitcoin. It can switch over to anything real, estate, anything really, but that’s just the basics.” – Fabio
Theoretically, when you mine in cryptocurrency when you mine Bitcoin, you have this supercomputer, and it is verifying crazy mathematical transact problems, and you are rewarded for doing this work.” - Fabio
Corporate Financial Planning & Analysis with Tom Seegmiller | E075
00:27:01
In today’s episode, Jason is going to talk to Tom Seegmiller; he is the VP of Financial Planning Analysis for Vena Solution. Most companies tend to have a centralized finance function which means finance rules up within the finance organization as opposed to sitting within the business with business owners or think of general managers or functional owners.
Episode Highlights:
01.06: Tom acts as a financial business partner or planner for the companies that he has worked for.
01.54: When Jason talks about corporate financial planning, he is basically talking about how the corporation fits into your life and the monetization of it, how the cash flows come out of it, and essentially how it impacts your personal life.
03.31 Jason says the programs that basically came up around the country and around the world that were there to support business very much required a lot of data, information, and calculation.
04.05: Tom explains, what happened in COVID is, many businesses that were likely coasting along or operating just fine pre-pandemic ended up in survival mode.
04.41: Tom has typically focused on creating forecasts or budgets within the organization to try to lay out how and when things are going to happen in this budget or forecast that we ultimately create is really just a financial articulation of a whole series of operational items that we aim to truly understand and then translate into financial results.
06.20: Jason says you start up a business typically to do something not to do accounting and planning strategy. To be successful, you really have to master or at least get the right people to master and listen to their advice.
06.52: COVID 19 gave people an opportunity to actually exit the pandemic in a much, much stronger place as an organization. Tom suggests improving operational mechanisms if people choose to do so, and we have talked a little bit about this in advance, but great opportunity to ultimately drive Businesses forward, should you continue to operate in an enhanced fashion.
07.50 While talking about owner-managed business Tom says, “Through writing down your plans and focusing on understanding the operations, not just yourself, but driving it into your organization you do naturally build a bit of succession plan.”
09.12: Tom focuses on understanding what people do, and he takes a genuine interest in understanding their business. What makes some tech what they are excited about? Risks and opportunities? What sort of challenges they faced in the past where they could use extra help and support?
09.35: Early conversations are usually predicated around truly understanding the operations of the business from them.
10.55 Jason remarks in a job company own you, but owning a business, you own the company, and if you are gone, the company continues on, and that is something that most people have a hard time getting too.
12.30: Tom says you can’t give exactly what somebody is looking for, but you have to make sure there are still some wins in it for them so that they want to come back to the table the next time you look to engage.
13.14: Tom says data is a unique concept because there tend to be many issues with it.
14.52: Nobody would come to me if they needed surgery, go to a surgeon. You have other professionals who deal in data every day and can help you distill it into a consumable fashion, says Tom.
15.01: Talking about the resignation letter Tom inquires - how do you distill back what the impact is on different levels of attrition within the business? Is it going to ultimately cost you more because salaries are higher in the market due to inflation compared to your current headcount? What do you do to try to retain those folks? Could you run a strategy in which you pay more in order to reduce attrition and ultimately not end up going down a path of paying more or higher market-based salaries? It can take different forms depending on the need or the outing you’re undertaking with the business.
18.01: People love excel, live and die by it, and then it is a source software in the market.
19.07: Jason says no matter how many times spreadsheets are engineered and protected all but a couple of single cells that are highlighted, people still find ways to do things with those cells.
19.43: If it is structured and engineered properly, the feedback you should be receiving is that business owners own their own budget.
21.07: When you think about any business that has that kind of structure in place, talk about designing the absolute worst incentive system imaginable, says Jason.
22.41 Tom: Sometimes the world changes, sometimes there is a need to adapt and change, but the whole spirit is we should be running a business that’s firing on all cylinders, not stuck to some plan that happens to be 9,10 twelve months old. That was built at a time before we had the information we have today.
23.01: The intent is to be constantly agile, change and adapt as appropriate, make sure your business is driving in the right direction, and align with your stated strategy.
3 Key Points:
Jason asks Tom to talk about the importance of how COVID-19 basically brought financial planning to life for many people and why it’s just so important not to put this off.
When you think about the operational perspective, the obstacles within the corporation are finite resources, so cash is a finite resource.
In the next couple of years, we’re going to see all kinds of software that plugs into your accounting software and other packages. This gives you this giant data framework that’s user-friendly and hopefully no more difficult to use than social media.
Tweetable Quotes:
“Personal finances mean anything having to do with the city, corporate reorganizations, tax policy, distributions.” – Jason
“It is an old saying about never letting an opportunity or crisis go away.” – Jason
“An organization really is only valuable, shouldn’t operate as an organization, and part of that means it’s not contingent on just one person.” – Tom
“When you go through budgeting cycle, everybody wants more than it is available.”- Tom
Jason talks to Kyley Paul; a business coach and CEO of coaching with Kyley. In today’s show, they are specifically going to talk about vision planning for business owners and what that means.
Episode Highlights:
01.40: Jason inquires, “What is this abstract concept vision planning in actuality?”
01.50: Kyley has been in business for seven years, building and scaling her businesses from scratch. And on a huge journey of personal and professional development, in line with that, and really go deep into that, she has invested a ton of time. She has read probably closer to 400 books in the last 7 years.
03.14 Kyley: Vision planning is deciding what it is that you really want in the three domains of life like health, wealth, and love.
04.56: Chaos is a really great word to describe what happens in the home a lot of the time, says Kylie.
08.29 Kyley suggests visualizing the life you want and planning out what you want to do.
11.20: Asks yourself, “What is most important to you, why you are doing, what you are doing? What areas of your life demonstrate and show that these are important to you and why you are doing them are the top driving forces in life?
14.34: Jason asks, sometimes people have deeper medical issues. How do they tackle those issues?
17.00: Kyley can certainly shift things in a productive direction to even give them an awareness of where they are and then help someone think about what they want to look like in the future.
20.01: Jason asks, “Talk to me about how you help people center in on what’s important for them in the aspect of love?”
25.07: It is so fun to take things off my own list and do experiences with the kids and get to see their experience with it and let them enjoy and flourish and choose goals for themselves and us to execute on them, says Kyley.
3 Key Points:
Kyley’s company coaching with Kyley is built around vision planning. She has been extremely effective in organization and planning and how that drives her ahead, and it allows her to accomplish her goals and drive forward.
The number one cause of divorce in my practice is emptiness syndrome. When somebody’s identity is wrapped around the need to support someone else, and then that need disappears because of their certain level of maturity, says Jason.
The more activities you have around your driving forces, the more productive you are going to be, the better you will feel about yourself, more confident you are going to be all this stuff because it’s in line with what is most important to you.
Tweetable Quotes:
“You take care of yourself, and it’s funny that you say that.” – Kyley
“Your thoughts will be directly related to your actions, and actions are directly related to your results.” - Kyley
“The reality is that we get used to a certain lifestyle, and it’s nice to think and dream about.” - Jason
Digital Assets On Death with Betsy Ehrenberg | E077
00:33:04
Jason talks to Betsy Ehrenberg, the CEO and founder of Legacy Concierge. Legacy Concierge is a service that helps people deal with digital assets after death. This is a newer problem in state planning, but one that cannot be underestimated.
Episode Highlights:
01.00: Betsy talks about how she enjoys talking about how people protect their assets and explain what digital assets are because they are all over the place, and most people are unaware of them.
03.08: The implication of having your digital footprints all-out means that someone can easily impersonate you, and they do it all the time.
04.43: Betsy says that there are other thefts that happen when people are not aware of their digital assets.
06.33: As a Google user and as in Facebook user we have to sort of work our way into their applications to figure out where we actually put the email address and name of the person who can access our account, says Betsy.
10.06 Betsy says that due to Covid, over 700,000 people have died, and many of them were on LinkedIn.
12.40: There is a disconnect between customer service, the fiduciary, and the family and a major poor part of what our company does is an advocate for the family and when we have winds as we did with Apple with Google and with Facebook, says Betsy.
13.35: Betsy says it took Facebook 15 months to release five years’ worth of data of a decedent and deliver it on a flash drive to the family.
14.43: Betsy points out that apple assigns a person who they are paying over $100,000 a year to talk to the fiduciary to physically look at documents.
19.42: Jason asks Betsy, “Talk to me about what your service does to solve the problem for people.”
24.21: The minute we start a process of locking accounts we have to use the procedures and follow through with them as they were as of date of death, not as they are today, says Betsy.
25.00: Betsy explains, we first of all convince companies that this is a problem for them, not for us. They are wasting time and money and they are being cruel. They cannot have people in charge of this process. They must have what is called an API, an interface.
3 Key Points:
The digital footprint includes data and documents on your phone on your tablet, under laptop, in your desk, computer and many other computers that are controlled by others. Betsy raises very important concerns, who has access to your digital footprint?
As a person is approaching 70, they should start to create an inventory of what’s important.
API interface the companies like legacy concierge, it notifies companies through a piece of software and that piece of software goes into their legacy applications and marks the file is frozen or deleted or transfers the assets from an existing account to another and then report back to us, explains Betsy.
Tweetable Quotes
“When people are grieving, they want to remember the decedent in positive terms.”- Betsy Ehrenberg
“Impersonating is against the law, federal law and state law” - Betsy Ehrenberg
“In digital asset, Bitcoin is its challenge if you don’t have both the wallet ID and the private key.” – Jason.
Jason speaks with David Pullara, a marketing instructor and brand-building expert who's worked with companies like Starbucks, Coca-Cola, and Google.
David Pullara is a senior business leader with over 20 years of diverse experience in marketing strategy, brand management, and product innovation. He's spent 12 years of his career to date working with four world-renowned, consumer-centric, Fortune 500 organizations: Starbucks, Yum! Brands (Pizza Hut), Coca-Cola, and Google. David is recognized as a Chartered Marketer by the Canadian Marketing Association (CMA). He serves as an advisor to two technology start-ups (LeapGrad and Spiffy), an Advisory Council member for the American Marketing Association's Toronto Chapter, and a member of the CMA’s Customer Experience Council. David is currently focused on consulting, advising, teaching and facilitating, speaking, and writing through his work as Principal of dp Ventures. He also serves as a part-time marketing instructor for the SchulichSchool of Business at York University.
Jason talks to Robb Engen, the Fee-only Financial Planner and Blogger at Boomer and Echo. Robb is a well-known voice in the Canadian financial blogosphere, and he has run a blog for 11 years and is one of the recognized voices in Canadian online finance.
Episode Highlights:
01.35: Robb has run the Boomer and Eco personal finance blog since 2010. About six years ago, he started a fee-only financial planning service to help regular people approach big-burning financial stages of their lives.
02.48: Jason asks Robb, as per experience as a DIY advocate, what are the common person triggers for someone with a simple situation for the need to seek out advice in the first place?
05.00: According to Robb, there is a bit of inherent bias in the type of people seeking him out because not many people know about fee-only or later fee-for-service financial planning.
07.03: Robb talks about passive investing. He set up his couch potato portfolio seven years ago before these new kinds of solutions came on board, and being aware of the other products on the DIY spectrum is important.
09.07: As per Jason, there is a marketing lesson for any advisor out there, and there is also a marketing lesson for any clients seeking advice and finding someone who speaks an advisor’s language in marketing.
19.43: Putting your message out transparently is important, says Robb.
23.00: People lose clients because you didn’t engage the spouse, the spouse that was engaged died, or the other person felt they are not heard, and it is a challenge, says Jason.
25.50: Advisors should be transparent about what they are going to be doing with your money so that you can now move on to the other important factors, says Robb.
27.33: Fee-only planning is not something you can scale because every situation is different, says Robb.
35.35” Robb suggests that at some point in your life, a little voice in your head will go, “Am I doing the right thing?” If that little voice is telling you that maybe it is time to reach out and get the conversation started with an advisor and see where that can add some value for you.
3 Key Points:
The larger sums of money could come in a couple of different scenarios. One is someone taking the commuted value of their pension when they leave their work workplace, and another one, like an inheritance or maybe you sold the rental property or your primary residence.
Robb answers, what happens if old males don’t have the mental capacity or expire before their partner does? They don’t want their spouse to go and walk into the big bank and hand over investments or portfolios of stocks to the mutual fund portfolio.
In the validator model, people do the right things. They want a second set of eyes just to walk them through and make sure there are no holes to poke through the plan.
Tweetable Quotes
“Many advisors struggle in explaining their value to clients, and it may be because those aren’t the clients you should be having, and maybe that service doesn’t match up with them.” – Jason
“Refining who my client is is really important as well.” – Robb
“Based on US research, 60 to 100 is the range for a number of engagements on a planning level that you can maintain in the course of a year.” – Jason
Today, Islamic finance and the challenges it brings to people who follow that faith, particularly business owners, and how those restrictions around Islamic finances can be adapted to many of our current financial structures that are not supportive of it. But there are options, and to discuss that, we have Mohamad Sawwaf, co-founder of a company called Manzil.
Episode Highlights:
02.00: Islamic finance is finance before interest, and that is the difference in terms of what we see today. Islamic finance’s main principle is that money has no value, says Sawwaf.
04.25: Jason says that as a Muslim, you can’t borrow, and that is incredibly restrictive from a business owner’s standpoint. He asks, about the other means for accessing capital to buy homes or even start your own business?
12.21: Mohammad says that they are starting to see a real growth spurt in the Islamic Fintech space regarding innovative solutions, especially in the digital area that allows financial transactions to be much more simplified and accessible.
13.32: When you consider diversifying your investments as a Muslim investor, especially when it comes to the fixed income market, Islamic bonds are available, and they are called Sukuk, says Sawwaf.
15.37: Jason asks what does that look like if any Muslim in Canada, looking for a new business or building a manufacturing plant and wants to do things in a Halala method?
22.51: Today’s people are renting and avoiding homeownership because they want to sleep at night peacefully, knowing that their financial affairs are in order from an Islamic perspective, says Sawwaf
26.24: Federally, all meat out of New Zealand and Australia are halal because they export more than they consume and export to neighboring countries like Malaysia, Indonesia, and Singapore that require, says Sawwaf.
29.08: When you are trying to diversify an economy, and if you want to stick with primary industries, you have to create some specialties, says Sawwaf.
31.24: As per Sawwaf, nothing stops us from creating product industries except the capital required to bring it out into the open. There is no shortage of demand for anything.
3 Key Points:
Sawwaf says that for inventory financing, as long as there is the element of shared risk in a moment and the asset-backed or asset-based transaction principle is fulfilled, we are good to go.
The bigger issue is the infrastructure. It just hasn’t gained mass adoption around the world the way it needs to supplant or replace the needs of the Islamic community, and traditional banking would otherwise provide if they could do it, says Jason.
When you look at Census Canada, you see that Muslims have the lowest participation rates of homeownership and capital markets. It is not because of our balance sheet. It is because of a lack of power and rights, says Sawwaf.
Tweetable Quotes
“Multiple mechanisms allow you to do larger types of transactions, like buying a car or home, all happening under the pretense of Islamic finance.” - Mohamad
“The halal meat industry is a $2 billion industry in Canada that the FDA of Canada entirely regulates.” - Mohamad
Tax Audits & How They Are Changing with Anna Malazhavaya | E081
00:31:25
Today’s guest is Anna Malazhavaya, a tax lawyer and Advotax Law Professional Corp founder. Anna is an expert in dealing with problems involving audits. Jason and Anna are going to talk about what it means to go through an audit and what the reality of it is.
Episode Highlights:
· You don’t need to be doing something wrong to be selected for an audit or free audit to go up really bad.
· The CRA has upped their game in the last three or four years. They got a lot of money for it, and we see that money working.
· Typically, in the first step for audit, you will get a brown envelope that nobody likes to receive in their mailbox, and it will identify what they are looking for.
· Audits start with an auditor’s letter introducing him or herself as telling a taxpayer that they are being audited. This is the period we’re looking at, and these are the questions we will have for you.
· Many software and resources are available for managing your financial information. Using those, the more prepared you are and the easier it is for you to survive the audit.
· Communication is key, and auditors have a lot of power. We get to dispute their decision later, but it’s going to cost you a lot of time and money, and it’s not fun to do.
· If you did something wrong, you’re accountable. But auditors not going to be a big brother on every transaction we ever have because that’s not how they’re supposed to operate.
· At the end of the day, it’s meant to catch the bad guys, but at the expense of our privacy and expenses, CRA always has an opportunity to start a fishing expedition for every audit they do.
· Explanatory notes to the new rules say that we have broadened the scope to provide the new realities with the digital world.
· Auditors used to interview neighbors before in their defense, but the neighbors had the right to say no, we are not interested, and we’re not talking to you.
3 Key Points:
1. Computers don’t know that you are a good and honest person. Computers may pick you up for an audit, and you will be caught, and you will have to go through the not very pleasant exercise together with people who did something wrong.
2. Jason and Anna discuss that are the best practices for surviving an audit, and what other pieces of advice she would give to the listeners.
3. Auditors get to inspect personal documents or documents of any other person if they relate to a targeted person or his tax liability.
Tweetable Quotes
· “It’s funny the level of disdain and contempt some people have for the nation’s tax authority and thinking that they are not very smart people.” - Jason
· “There are chances that you may not need to provide everything they ask for, which can help you in the future.” - Anna
· “I think the audit in the future will be more effective, faster, and more accurate, but it’s going to be invasive.” – Anna
On today’s episode, Jason Pereira will be reviewing the federal budget for 2022, and the reason is that when it came out a couple of days ago, there was a lot to go through. There are 17 key personal, and corporate points that he thinks are worth accounting for.
Episode Highlights:
The first big change is the addition of the tax-free first home savings account. This new account will help Canadians over 18 who have not owned a home in the current or last four calendar years.
You can also move money from an RRSP to a first home savings account, but you cannot combine this with the existing RRPS first-time home buyer’s plan.
If you are buying your first home, you were entitled to a tax credit previously that is now increasing, so it used to be 5000, and now it is doubling to 10,000, giving you a total tax credit maximum value of $1500.
Home accessibility credit has been doubled. It used to be 10,000, but now, it’s 20,000, and this helps pay for renovations and alterations such as wheelchair ramps, walk-in bathtubs, chairlifts, or anything to help you get around the house if you physically need to.
There is a change in the alternative minimum tax credit. They haven’t announced what it is, but they have started setting the stage for taxing Canadians with the highest income. And to support this, they released a chart that showed that 28% of people earning 400,000 were paying less than 15% in taxes.
Previously if you sold an assignment to someone else, GST would typically not apply, but now it does, and in addition to that, it’s not capital gains. It’s fully taxable income.
There are many changes in corporate taxes, and the most impacted is the small business tax deduction. As a result, Canada’s first half-million in active business income is taxed at the lower small business rate, and then anything interactors taxed at the general rate.
There are specific credits now available for those who are using carbon capture utilization in storage.
Critical mining exploration tax credit is basically targeting shares that flow through exploration expenses down into your personal tax rate.
3 Key Points:
In the new residential property flipping tax, if you hold a home by home as your principal residence and live in it for less than 12 months before selling it, the principal residence exemption does not apply and qualifies as full income.
Surrogacy is becoming more of a need in Canada. If you are using a surrogate, you will now be able to cover and claim those expenses under the medical tax revenue in Canada.
In the intergenerational shares transfers process, they are extending the consultation process to figure out how to fix this and hope to have a report by June 17th.
Tweetable Quotes
“There is a system in Canada called the alternative minimum tax, which is there to test and prevent people from gaming the system too well.” - Jason
“They are going to increase the capital tax from 10 to 15 million, and it will phase it out now over until it is 50 million.” - Jason
“One of the things that got popular since the small business tax measures of a couple of years ago was what is known as non CCPC planning.” - Jason
Financial Statements Basics: Part 1, with Jason Pereira | E083
00:18:42
Jason Pereira reviews financial statements, how to read them properly, & what different terminologies mean. There are all kinds of rules about how depreciation impacts different types of business, and it’s also known as capital cost allowance in Canada.Today, Jason will discuss income statements, balance sheets, cash flow statements, and ratios.
Episode Highlights:
01.26: The balance sheet is a document that summarizes everything you own and owe and where the equity came from in the company.
01.52: Current assets are liquid assets meant to have a turnover period of less than a year. All assets on balance sheets start with the current assets.
03.20: Fixed assets are the things that are physical products or physical assets. We can have long-term investments in fixed assets things.
04.10: Equipment, vehicles, land, and buildings show up as the net number, which is the cost of acquisition minus the depreciation.
08.38: Retained earnings are not a number you can draw out of the business unless the assets exist.
09.42: Subtracting current assets from current liabilities gives you the net working capital. Net working capital is the amount of money you have invested in the business to keep it going.
10.53: The income statement tells you how profitable your business was for the year, and this is where all your sales transactions get summarized.
12:51: Subtracting the cost of goods sold or services rendered from the gross revenue gives you what is known as the net revenue or net after your direct expenses.
13.10 Fixed expenses are not directly tied to one thing, but it’s paying for the general apparatus of the build of the business to enable you to allow for incremental sales.
15.06 Interest is a funding cost based on your capital allocation strategy, and taxes are solely based on your net profit.
17.23: Working capital is current assets minus current liabilities, and that is an investment in a firm because you have to have that money in the company. Reducing your need for networking capital increases the amount you can pull out of the business or reinvest in the business.
3 Key Points:
Capitalizing on the purchase will reduce the amount that is going to get deducted, it will be reduced to a set amount per year based on one of a couple of schedules.
EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) allows you to compare business operations in terms of essentially what their top line is and how much they can convert to their bottom line.
Reducing your need for networking capital, increases the amount you can pull out of the business or reinvest in the business.
Tweetable Quotes:-
A cash flow is like water. It’s the life of the business, too much cash flow will make you drown, and too little will make you die first.
Anything that gets spent on the business directly not attributable to unit sales is a general fixed overhead expense.
Just because you spend the cash doesn’t mean it’s an expense for tax purposes and is a good thing or bad thing that’s debatable.
Financial Statements Basics: Part 2, with Jason Pereira | E084
00:20:37
Today is the second part of the continuation of a series that Jason is doing on understanding financial statements and some of the data. Today, Jason will move on to a couple of other less common reports and is going to look for the cash flow statement; this is not required for tax purposes, but every accounting software should be able to produce one of these.
Episode Highlights:
01:25 A cash flow statement gives you an understanding of what happened to your company’s cash and how you got from the starting position at the beginning of the year to the end position at the end of the year.
01:39 There are three different categories or changes within the business that will impact your cash.
02:28 The first area that the cash flow statement looks at is operating cash flow. It is simply a change in your income statement and balance sheet that came from operations.
03:43 If your accounts payable went down, it means you have converted more of your accounts payable to cash. Therefore, you increase your cash and vice versa.
04:04 Jason: Any expenses that count payable are positive to your net cash and any reduction is negative, leading to the change in current liability.
07:11 If you issue any new debt, that new debt increases the cash on hand that you pay off in long-term debt and the reduction results in a lower amount of cash.
09:31 Cash is important because it is the lifeblood of a business. You can be totally profitable with cash being the lifeblood, but you can have negative cash flow.
15:01 You have to be careful with your inventory because if you carry too much, it’s just money waiting to be converted that could be in your pocket, and if you carry too little, you could lose it on sales.
16.49 The current liability, like loan payments, you don’t have much control over things. But, again, this is not an area that you are going to be able to reduce because if you have a loan, and you typically have scheduled payments.
18:28 COVID has taught us that you need to access the cash when everything goes wrong, but there’s a difference between having cash in the bank and accessing the capital.
19.06 If you don’t maintain enough working capital when you sell the business, it will impact your valuation. Working capital is an asset of the business. Too much of it, you can clear that out. Too little of it, you need to invest.
3 Key Points:
Cash flow from investing activities reflects any investments you made in your business, specifically your business’s fixed asset component or balance sheet.
Investment in general matters because that investment can either be used for working capital or other business needs, or personal consumption of the business owners.
If you could increase the duration of your pay and turn your short-term liabilities into long-term liabilities, you would reduce the need for working capital.
Tweetable Quotes:
“When you total up all aspects of cash flow, the difference should equal the change in value in your cash balance over the year.” – Jason
“Having a healthy amount of working capital is vital because you need to keep your business afloat, and there are ways you can optimize around this.” - Jason
“If we can reduce your pay, current assets, and inventory, you can reduce the need for working capital.” – Jason
Financial Statements Basics: Part 3, with Jason Pereira | E085
00:23:07
Today is the third part of a series that Jason is doing on understanding financial statements. Today, is about accounting ratios. Accounting ratios are used to analyze your business in several different ways. First, it’s helpful to track the performance of your business in multiple different facets, from its solvency to its profitability to its efficiency. It also is a valuable tool if you can combine comparing the help of your business with another business.
Episode Highlights:
1.58: Liquidity ratios measure how effectively the company can repay both short- and long-term obligations. The most important ones tend to focus on current long-term liabilities.
3.22: When you sell a product from inventory, you sell out a profit that is not reflected on the balance sheet.
4.23: The cash ratio carves all current assets except for cash and cash equivalents compared and devised by current liabilities.
5.45: The leverage ratios measure the amount of capital that comes in the form of debt. It’s basically how much leverage you are employing in the business relative to some other important metrics.
8.28: The debt service coverage ratio looks at your operating income, but it looks like your total debt service, not just the interest but also the principal payments.
11.45: Accounts receivable turnover measures how effective you are at collecting your receivables. The bigger the credit sales number and the smaller the average means that you have a very effective means of collecting money as fast as possible.
15.00: The EBT margin tells us how much our profit margins were before taxation, which is the metric for how your business will deal.
15.48: The net income divided by shareholder’s equity is the return on equity ratio. It is valuable because this tells you what your actual ROI is on the investment made in the business and not given.
17.46: The book value per share ratio takes the shareholder’s equity minus preferred equity. This may not apply to private businesses, but in public, it does.
19.24: The earnings per share ratio is truly a metric of how much of the business’s profitability belongs to each shareholder. You take the net earnings or net income and divide that by total shares.
3 Key Points:
Instead of looking at current liabilities from the lens of your current assets, the operating cash flow ratio looks at operations. It takes your operating cash flow and the cash generated from operations.
The interest coverage ratio measures your interest obligations on all your debt, like your operating income divided by your interest expenses. The interest coverage ratio is an important one in the short run.
The gross margin is your gross profit divided by your net sales. Gross profit margin is looking at the direct cost of unit sale like the cost of goods sold, cost of services rendered, whatever that related specifically to that sale.
Tweetable Quotes:
“The current ratio looks at current assets and divides them by current liabilities. It tells you that you have enough cash and convertible assets in cash.” - Jason
“The debt-equity ratio is taken from your total liabilities and divided by your shareholder’s equity. This is a metric of how you finance your business essentially.” - Jason
“In many cases, businesses can rely upon lines of credit that do not require anything much more than interest payments at least every month.” - Jason
Financial Statements Basics: Part 4, with Jason Pereira | E086
00:18:45
Today's the 4th part of a series on understanding financial statements. Today, Jason focuses on cash management and working capital because cash is your lifeblood of a business.
Episode Highlights:
03:16: Profits are priority, not the leftovers. You have to have your expenses controlled such that you hit your target profit because all too often most businesses look at profits. They wonder why it doesn't grow, it doesn't grow because you are now focusing on growing the revenue and shrinking the expenses relative to that.
04:09: Jason suggests you should be pulling money into four other accounts that are earmarked for money that is not actually yours. What are those four counts? The first is profit. It is your money down the road. But what they are saying is whether it's once a month or twice a month. Whenever you get paid, you get to move over whatever percentage of profit you're trying to make into that.
05:43: Something is broken with your revenue model, something is broken with your operating with your expenses, but your product, you are going to hit the target profit. You have to make that work. This is a methodology that is also investing called reverse budgeting. You are taking all the savings and investing. In this case the profit off the table. We're also taking it off the fixed expenses.
07:31: Jason gives his insights on how much cash needs to be invested in the business in order to make sure you can operate? How do we answer that question? How do we move, modify working capital? Start off with the current assets, consider what's there, Cash is the goal. So short term investments in deposit accounts, financial savings accounts, money market funds, whatever else it is in order to basically help you meet those needs, that's ordered a little bit of interest. That's fine inventory.
11:08: Your current portion of your long-term debt and interest payable, is the money that is due in the next 12 months. You can work to minimize that by reducing. You can't work to minimize that by potentially refinancing. If you can stretch out the loans that you were taking out, you can basically reduce that which reduces your need for cash, and you need cash investment.
3 Key Points:
Jason explains what basic accounting tells you. It tells you that your revenue minus your expenses equal your profit.
Working capital or net working capital is the difference between your current assets and your current liabilities list, it's a measure of the company's quality and operational efficiency as well.
Accounts receivable is the money that's owed to you. The shorter the payment terms on accounts receivable, the faster that money converted to cash, the longer the slower.
Tweetable Quotes:
"You should have your payroll account. Have a separate bank account just for payroll. You make sure you move the amount for payroll over there every month." - Jason
"You don't want a lot of good sitting around. You can make sales, but not so much that you are taking six months to sell it all if it's something small. If it's something big, you may not have a choice, but optimize inventory accounts receivable." – Jason
Financial Statements Basics: Part 5, with Jason Pereira | E087
00:20:01
Today's the 5th part of a series on understanding financial statements.
Episode Highlights:
01:10: Different provinces have different amounts. Today, on top of that, anywhere from zero to 4%, depending on what province. One will actually apply that zero percent rate up to 600,000, but for all intents and purposes, the half $1,000,000 mark represents a small business's income.
03:40: $500,000 is a business limit or exemption. So, for the first $500,000 you get to pay the lower rate, but if you have more than $50,000 investment income. They start taking back the amount they start, reducing the 500,000 at a rate of $5 for every $1 earned in passive income.
08:14: The first national account is the general rate income pool. You may realize that there are actually 2 different tax rates payable on dividends in Canada.
08:33: There are three depending on where they came from. The third one is that foreign dividends that are not considered eligible for dividend tax credits. So, they are basically taxed as income.
09:58: The general rate income pool is a calculation of the money that you pay tax on or the income that you pay tax on at the general rate. So, anything that wasn't the small business rate is the pool of money that you can distribute as an eligible dividend.
11:53: Any insurance proceeds from the death of an individual above and beyond the adjusted cost basis are considered a game. They flow into the CDA. Why does the CDA matter? Because the CDA is an amount that the individual can draw tax-free from the corporation.
19:05: RDTOH allows you to take money out at a tax preference because you've already paid some of the tax and get some tax refund.
21:19: Why does this number matter? This number matters if you have a corporate structure in place. If you have two corporations, one corporation owning another, and you want to transfer money between these corporations, you can transfer by way of intercorporate dividends.
3 Key Points:
In 2018, there is a tax change that happened that basically will change your tax rates corporately for passive income. Total passive income or what's known as aggregate investment income exceeds $50,000 and it will increase. You will pay an increase straight up until about $150,000, which will go back to normal.
Why would the government allow you to take money tax for you to be a corporation? Let's look at investment capital gains. Half of it is tax free, there is no real difference there. It's going to result in you paying the same tax that you would otherwise. So, if you take a capital gain and pay 100% of the proceeds out and you end up paying at most 26%, Insurance is different.
The purpose of RDTOH is to extract the corporation of the companies, the government, extracting more income from you corporately now than they would if you paid to yourself personally. If you pay it to yourself personally then they refund you the difference.
Tweetable Quotes:
"The eligible dividend is basically the dividend paid after tax income that paid the general rate that paid the higher the two. So, if I pay a higher rate corporately, I pay a lower rate personally, if I pay a lower rate corporately, I pay a higher rate personally." – Jason
"Insurance is different because the CDA is a mechanism for flowing out the gains tax-free to the shareholders." – Jason
Today, we have Shane Slater, Corporate Currency Specialist from FirmaFX. He talks about foreign exchanges, how it impacts business owners and how you can do better than just taking what the bank or your credit card will give you.
Episode Highlights:
1.15: Shane is a corporate currency specialist which means he helps SMEs who get exposed to international business and FX dealings on a regular daily business.
1.44: We are reducing the margins that the big banks are typically known for and providing services or advising when the rates may go in the company's favour and when there is an opportune time to do an exchange, says Shane.
4.09: The exchange which is in labor intensive and there is no material cost is quite excessive. You can get well under 1% depending on your volume and its better ease and convenience type situation, explains Shane.
4.26: The exchange rate is what it is, but if you are losing 3.5% on hundreds of thousands or millions of dollars each way from your profit that should be going to your pocket to reinvest in your business is not good.
5.33: On the minimum about $10,000 per transaction is a point where you are going to start saving 2 to $3 per transaction using a broker from FirmaFX, says Shane.
06.00: Shane talks about the challenge for business owners in international wire transfers and how he helps them with that.
10.12: The currency hedging is the idea to guarantee you price point for at least some of your exchange so that you have the peace of mind of knowing exactly what you're going to pay or exactly what you're going to receive.
15.24: Jason explains that you don't have to be able to calculate all the stuff in hedging transactions because in principle the contracts are very straightforward for people.
3 Key Points:
Shane talks about the costs associated to the consumer or the business owner when making a currency exchange.
Hedging is basically a process where you eliminate risks. Shane talks about what can be done to mitigate the risk of fluctuation of currency when you have business in one country, and you are delivering stuff in another country.
Hedging strategies change depending on every single client's position and need like what are your potential waters or what is your actual margins. If you're a tight margin business, Shane recommends hedging a good portion of your FX.
Tweetable Quotes:
"We are able to save companies not just money, but time also that they can then put back into their business and doing what they do best and help them grill in a multiple of ways." - Shane
"Some businesses consider hedging like gambling, but it's the exact opposite. But the general concept is you are exposing yourself to sometimes millions of dollars throughout years on a FX rate and they are budgeting this FX rate for your currency exchange." - Shane
Canada/US Cross-Border Planning Revisited with Terry Ritchie | E089
00:43:13
Today we have Terry Ritchie. He is Jason’s go-to guru on all things for American Canadian cross border, and also a friend. Terry is a vice president and partner at Cardinal Point Capital and Cardinal Point Wealth Management, a cross-border or ICPM firm specializing in the cross-border space.
Episode Highlights:
1.41: Terry’s responsibility as one of the private wealth managers is to work with typically private clients and individuals with cross-border issues.
4.29: In Canada, if you die and do not leave things to your spouse, you must pay all reliable due taxes. Whereas in the US, it's not the same.
5.08: In the US, most of the folks who in prior years would have been exposed to the significant estate tax are now off the rules because the tax exemptions have crept up over the years.
13.51: Whenever you are over the $60,000 threshold, that's your barometer in the US to determine whether you are filing a requirement. There may not be a state tax at the end of the day, but there may be a requirement to file, says Terry.
15.37: The closest counterpart to the tax-free savings account in Canada from the US perspective would be a Roth IRA.
16.13: If you do anything like an American in Canada, like setting up a bank account or tax-free saving account, additional compliance requirements must be dealt with on the US side, says Terry.
21.03: Framing taxes as a cost-benefit is a way to get around where the breaking point is or where the client wants to make the call for assets, says Jason.
26.43: If you are an American Canadian and you have got some property, and if there may be some tactics closure on the US side or you remotely cell it, it's good to keep track of any improvements and receipts when you did it.
32.09: We need to think from the IRS and CRA perspective that there is going to be withholding tax requirement that could come into play here when a Canadian ultimately sells their property, and that process can be very, very timely, says Terry.
3 Key Points:
If nothing changes on the gift and state rules and other tax rules that were put into play here, from the end of 2025 to the beginning of 2026, the estate and gift tax exemptions and income tax rates will go back to what they were ten years ago, says Terry.
Terry talks about the fact that Canadian citizens who never have been American could also find themselves on the subject of the US estate tax.
Some people decide to go to Florida, Arizona, or wherever and want to buy a place. Terry explains what should they be concerned about, and what are the best practices to do that?
Tweetable Quotes:
“Snowbirds or non-residents in the United States have a non-resident state tax imposed on them if they own certain kinds of defined as a US set of assets.” – Terry
“People don’t realize that assets are not just stock. It can also be Canadian-based mutual funds and ETFs that qualify as US assets.” – Jason
“Sometimes, it may make sense to hold assets on a joint base and then have transferred death deeds after that.” – Terry
On today’s episode of FPCBO we have brought back Cato Pastoll from Loop. This time he has got a new product that he is basically working with that solves a very simple problem - Opening of bank accounts for Canadian businesses in the US.
Episode Highlights:
1.19: Cato says that early this year, they launched Loop card which is a multi-currency card that allows users to spend in different currencies. Then more recently they launched the loop accounts product which allows users to open accounts in different currencies so a user can do business more seamlessly around the world.
5.48: If you get paid in the US dollars with bank account in Canada, bank will convert the money at that point, and they will often add markup as much as 3% on every dollar that you earn.
6.33: We do a digital onboarding process like many other Fintech products. We collect information on the company, fill online application forms, and have business names and address. We collect information on any directors of the business as well, explains Cato.
7.12: When you fill some information on the form, and we say you are approved and then once you are approved and once you have the ability to access an account with us you can then go and click on a button and get access to international account details all through platform, says Cato.
7.35: Loop card is a multi-currency card that allows you to spend money in different currencies, and one of those currencies is the US dollar.
8.10: We allow you collect your money in the US dollars that you can keep as US dollar revenue in USD and then you can use your loop cards to go and spend those US dollars for your expenses in USD, says Cato.
9.32: When people encounter the problem, they can go to go to your website, set up an account, get a card and deal with all their American currency build business needs on one end of the border and then bring it back over whatever is left over.
11.38: The four products we have are multicurrency accounts product, multicurrency card product, our payments product and then we also have capital product, says Cato.
3 Key Points:
In the pandemic companies were thinking to go into local bank branch to get them to open a US account but bank told them, we have a branch in the US however, to open up this account, you are going to need to drive to our nearest branch in the US, says Cato.
Cato talks about a multicurrency card. He explains how that works and how it ties into your account.
We call ourselves kind of a bundle banking platform and the reason we use that terminology is we kind of try to do everything in one place. We try to make all the different products and services that a company needs available to them through Loop, says Cato.
Tweetable Quotes:
“Canadian companies do not set up to get their domestic branches to basically be foreign branches of American banks.” – Jason
“We allow you to collect through US dollar revenue and if you need to make $50,000 wire payment, we can convert the money to RMB for you and allow you to wire that money to anywhere in the world.” - Cato
Jason Pereira talks to Jason Watt. He recently was part of the sale of his family business. Today they will discuss the tales of what it's like to sell a family business. They will also discuss the ups and downs and unexpected turns that may be included in that.
Episode Highlights:
1.06: Watt trains financial planners and he was never a financial planner previously. He was in the military till 2006 then he entered the family business.
1.58: Watt says that they had a pretty good transition as far as family businesses go and in 2018, he became CEO of family business. There was no friction back and forth about control from the elder generation to the younger generation or any of that kind of stuff.
4.33: The due diligence process must have alerted Jason Watt to issues and deficiencies that he had and that he needed to get cleaned up prior to any kind of sale, says Jason.
7.15: There was a very short meeting in January 2020 with local company Yardstick and Jason Watt talked price a little bit just to kind of get a feel for whether it would be enough money for them to consider a deal seriously and whether the price would be right for the buyer to make a deal work.
12.37: The working capital is important to business as any talent they have or any equipment they have acquired because it is also a part of the factory process.
15.36: Jason Watt talks about the negotiation of the deal. What is the methodology of price negotiation, its timeline and how that goes?
18.38: Jason Watt doesn't have a big product liability concern or anything like that and in fact there was a sort of pro buyer reason for the share sale because there are a bunch of regulatory approvals that go along with business.
20.10: Jason Watt shares after the negotiations stage, how long does it take to come to the final contract.
23.01: It took six and half months from negotiation to final conclusion and Jason Watt thinks that is a reasonable time frame. It should have closed a month earlier than that if they hadn't had that sort of shareholder reorg snag.
31.20: Jason Watt faced some complicated tax issues where his accountant helped him to resolve the issue.
32.59: The due diligence process is a two way as much as you should be, you know going through and providing a lot of information about your business, you should be learning about the business that's acquiring you, says Jason Watt.
3 Key Points:
If the parents are deeply entrenched within the business operation or the value relative to cash flow is not something that's going to work out over a reasonable amount of time then you do have to consider a third party, says Jason.
Working capital adjustment, shareholder loans and all similar things were things that Jason Watt wasn't as prepared to deal with because they were pretty good about sort of operational metrics.
Deal with specialist lawyers and people who have been there and understand the process well before.
Tweetable Quotes:
"When it came time to talk about their retirement meaningfully, we really had to look at a third-party acquirer." – Jason Watt
"You wouldn't sign the letter of intent if you are not seriously intending to proceed." - Jason Watt
"As long as you are earning income going forward at a reasonable level, you actually get that credit back." - Jason Pereira
Jason Pereira talks to Jeff Cullen, Owner & Lead Consultant at Basecamp4; a company that specializes in exit planning.
Episode Highlights:
1.05: Exit planning is an emergent specialization in management consulting. It is particularly being driven by the saying that time is running short for a lot of business owners.
1.54: The whole idea behind exit planning is to maximize value and basically get the most successful exit plan or exit from your business as possible, says Jeff.
3.42: Exit planning institutes have done tons of research on the numbers of companies that don't successfully exit, and it's a pretty shockingly high number.
6.11: You can't manage a 25-to-35-person company the same way that you can manage an 8-person company, and that is one of the first steps where owners may run into problems, says Jeff.
6.57: Jeff shares how he starts assessing business to understand where the holes are. What does his process look like to understand what's going on with that business?
7.11: The business assessment method that Jeff uses is a lot more holistic. They have three-legged tools which are basically the business, the financial plan for the individual and their family and then there is also the personal side.
10.04: The assessment is done in a way that everything is kind of transparent and there is a logical progression where most owners know how they are performing, says Jeff.
12.33: When you do exit, it's not a disaster. If any exit happens unexpectedly, the company can survive, says Jeff.
13.42: Jeff shares in terms of fixing gaps, how much resistance does he sees on an average to acceptance by business owners?
15.29: As the biggest business starts to run better, become more systematized and the owner moves into a more of a strategic leadership position frustration gets reduced, says Jeff.
19.32: If an owner doesn't have a financial planner or if the financial planner, they have is someone they have been using from their 20s and not working as desired Jeff would probably raise the idea of, we want to connect you with somebody who is a bit more sophisticated.
26.06: Jason advises everyone that do not deal with generous lawyers. Deal with specialist lawyers who do or handle the expert cases all the time.
3 Key Points:
Jeff explains how exit planning is for the most cases is no different than business planning.
Jeff talks about the gap analysis that he conducts and how he explains to business owners what it takes to go from the two to the 4X multiple and how they assess those gaps.
Jeff answers how many people in Canada take well to the fact they are telling their baby is not pretty if baby is business?
Tweetable Quotes:
"Everybody exits at some point. You can either do it vertically or horizontally, it's your call." – Jason
"Being in control, getting the outcome you want and not having to compromise significantly can be defined as a success." – Jeff
"There are any number of times where professionals will outgrow the advisors that they are dealing with, whether it be financial advisor or account boy." – Jason
Jason talks ESG (Environmental, Social, Governance) with Daniel Jacob, Founder of Changing Habits Solutions; a market leading ESG Consultancy that helps businesses incorporate ESG and sustainability strategies into their business model.
Episode Highlights:
0.57: Daniel says that they help companies integrate Environmental Social and Governance metrics into daily corporate operations and develop strategies to improve their ESG performance over time.
3.01: The "E" in ESG stands for Environmental and it takes into account how a company uses natural resources, like water for example, as well as the impacts of its operations on the environment and the communities it operates in.
10.44: Diversity, equity, and inclusion matrix are associated not only with the gender profile of the organization, but by category or by seniority within your organization, says Daniel.
13.07: Investors are increasingly looking to de-risk their portfolio and businesses developing more ESG practices typically means a better investment opportunity, says Daniel.
14.58: "For every risk there is an equal opportunity. If you take climate change as a risk perspective and start to assess, how can I reduce my emissions into carbon credit this is a potential revenue generating scheme"
22.01: There are over 1000 different metrics or issues under ESG combined. You want to make sure that you focus on the top ten or twenty on which you can have a material impact, says Daniel. Daniel talks about how you establish and use ESG metrics and how they are different from any other business key performance indicators that they may utilize.
3 Key Points:
There are over 1000 different metrics or issues under ESG combined. You want to make sure that you focus on the top ten or twenty on which you can have a material impact, says Daniel.
Daniel talks about how you establish and use ESG metrics and how they are different from any other business key performance indicators that they may utilize.
Daniel talks about the actual net reciprocal benefit of ESG. He shares what is the feedback cycle on this underlying business metrics that really matter to business owners which is profitability, costs and revenue?
Tweetable Quotes:
"If you are going to do something about sustainability in your own company, your suppliers need to get to the same level as you." – Daniel.
"We have been operating in a way that doesn't consider the environment. Sustainability includes our economy's long term ability to survive" – Daniel.
"As investors, we should be empowered with as much information as possible to make decisions for someone who might invest in." - Jason
Jason talks to Doug Runchey, owner & operator of DR Pensions Consulting; he's a foremost authority when it comes to understanding CPP.
Episode Highlights:
2.06: Doug started his consulting career 10 years ago on Canada pension and all the age security, but primarily Canada pension.
03.38: You pay for Canada Pension Plan if you have earnings from employment or self-employment. Those are the only two incomes that you can make in CPP contributions.
07.34: Talking about the CPP rates, Dough says that the benefits were going to go up from the 25% earnings replacement formula to a 33.33% earnings replacement formula. And that's what has resulted in the most recent increase basically being staged over five years. From 2019 through 2023 an increase of 1% for each of employer and employer, up from 4.95% to 5.95%.
13.10: If a person is working from the age of 18 to 22-23 in school, barely earning any money, and that is counting against his/her average, that's not great, says Jason.
17.07: If you are going to stop working and you would have drop out. You can end up with a better calculation of your average income by following few simple methods.
18.29: The first step in the process of the calculation is to bring all of your lifetime earnings up to a current year value. In the way that occurs is whatever year your benefits start, you take the average YMPE for the five years ending with the year that your benefits start, says Doug.
20.25: A pension is 50% higher if you wait five years. That is, government backed and guaranteed for life.
22.52: If you have worked five more years until 70, you can take those five years of maximum earnings, replace five years of zero or lower earnings and increase your average lifetime earnings significantly, says Doug.
31.27: The CPP retirement pension, as we say started at 65 or as early as 60 prior to that. If you become disabled while you are working, there is a disability benefit under CPP.
35.00: If you have got your own corporation and you have the choice to pay yourself a salary or pay yourself dividends, then if you pay yourself. Salary. You are paying the CPP contributions both as the employer and as the employee, so you are paying both halves of it out of the company somehow. But if you pay yourself dividends, you don't pay CPP contributions, then you don't have a pension at the end of it, says Doug.
3 Key Points:
Dough talks about the contribution rates in the Canadian Pension Plan, what are the contribution rates today and where are they scheduled to go?
Doug explains if you want to take your CPP earlier than age 65, there are a couple of things happening. First of all, your calculated CPP, meaning your 25% of your lifetime earnings are calculated at the time you take your benefits.
If you don't take your CPP and you keep working beyond age 65, you can use each year of earnings to replace one of your earlier years of lower earnings, explains Doug.
Tweetable Quotes:
"The contributions are the only incoming money to the fund except for the reinvestment of those contributions and that's all managed by us." - Doug
"Even if you are paying a fairly high tax rate on your CPP because you are still working. And you are the sources of income. Doesn't mean you still don't take it early." - Jason
Jason talks to Aaron Hector, a private wealth advisor for CWB wealth. He is here to talk about old age security.
Episode Highlights:
1.09: Aaron is a financial planner. He works with CWB wealth, and the majority of his time is spent serving private clients and helping them out with their retirement planning and taxes.
1.55: Aaron has been one of the few who spent time writing about old age security topic that is an overlooked benefit compared to the Canada Pension Plan.
2.12: Old age security pension is a government pension. You need to be at least 65 years old to begin to receive it and it's for those who have residency within Canada, either current residency or former residency, you need to have lived in Canada for at least ten years after you are 18 years old, says Aaron.
5.04: You get an extra .6 of a percent by choosing to postpone your starting point. If you start at age 66 instead of 65, you get an extra 7.2%, says Aaron.
7.37: For every dollar above your net income exceeds, government will take away 15 cents of your old age security. Technically it is a recovery tax and people refer to this as a clawback, says Aaron.
10.27: Aaron explains what are some of the ways that a family or couple or an individual can minimize their exposure to all these security paybacks?
12.13: For people who have their own corporations, especially for small businesses who don't have revenue over 500K, they are going to be paying dividends to themselves as a non-eligible dividend, says Aaron.
17.06: If you have got a lot of health issues prior to making the decisions, then it's kind of hard to make decision for OAS, says Jason.
18.13: For every year that you live, your life expectancy increases because you are part of the survivor pool.
19.42: Aaron talks about some of his better or favorite tricks or unique planning opportunities that are uncovered when it comes to deferring past 70.
20.26: The whole amount to the lump sum plus the ongoing monthly payments that you begin to receive after OAS is taxed in the year you get the money, says Aaron.
22.36: If you are at 71 and you forgot your OAS all the way through 70 and now you are going to apply retroactively, your one-year reach back is going to be at the age 70, says Aaron.
28.23: The government did increase the amount payable to people of age 75 and older by roughly $80 roughly per month from October 2022 and this was the first meaningful change to OAS payments amount in very long time.
3 Key Points:
Once your net income exceeds a certain threshold government begins to take away your old age security benefit and that threshold for the year 2022 has been set at $81,761 per person, says Aaron.
Clawback is something that grinds people because there is a disproportional amount of time relative to the amount of dollars that can be saved spent on planning around all day security.
If you think you are going to live to 75, don't postpone OAS, take it at 65 when it's on offer. If you think you're going to live to 90 you are probably wise to postpone it to 70.
Tweetable Quotes:
"You need to have at least 10 years in Canada to qualify, but 40 to get the regular payment." – Aaron
"Effective rates of tax are more important than marginal rates." - Aaron
"You also have a one-off strategy around how to structure your estate in some cases, speak about that." - Jason
Jason talks to David Barnett; a private transaction advisor. Today he is going to specifically talk about acquisitions, but not from the seller's point of view, but from the buyer's point of view.
Episode Highlights:
2.30: David says that he works with business owners who realize it might be faster and easier to grow through acquisition. Another pool of buyers are people who work someplace and don't like it and typically these people are sort of in the Middle age group where they have got mortgages and families and maybe children and they realize that if they want to pursue their entrepreneurial dream the risks of a startup may just be too great, but if they buy a business, they can become an entrepreneur without the risk of starting up.
06.04: In the world of acquiring businesses, we often hear about EBITDA earnings before interest, taxes, depreciation, and amortization. We hear about EBITDA multiples, and in the mid-market space people toss around ideas of what businesses are worth various multiples 4,5,6 times or what have you. In the world of main street businesses, we use a different level of cash flow is called SDE - Sellers Discretionary Earnings and it is the total amount of cash flow available to an owner manager who works full time in the business.
14.36: If you double the size of your business by buying an equally sized company in another city and you double your volume of purchasing, you might not increase sales, you might not increase margins, but you might be able to increase your leverage with suppliers.
18.46: When there is momentum in the transaction, when the buyer is eager and they want to make a deal, it benefits the seller to be ready to feed that desire with all the information they're looking for so that you can move quickly.
25.02: The reason someone is buying the business, the reason someone is going to be willing to pay some amount of money towards the goodwill that's been built into the business, is because they want to avoid the risk of a startup, says David.
31.02: When you go to do the due diligence on that business, what you do is you, you check the bank statements to make sure the deposits are all correct and then you go through the box of invoices from all the suppliers, and you add them all up and you compare it to your income statement. If it looks kind of closely then you can be reasonably certain that the financial statements are likely close, but they are never exactly correct.
3 Key Points:
David explains the details between EBITDA (Earnings Before Interest, Taxes, Depreciation, And Amortization) and SDE (Sellers Discretionary Earnings).
David talks about the factors that prompt a seller to sell their business.
David shares how a buyer has to be ready to be able to deal with the unknowns and a lot of the times those unknowns are managed through the structure of the deal.
Tweetable Quotes:
"Economics of buying a job is different than the economics of - hey I have got an enterprise already in place I am buying your client list right at you know will be preferred to as a strategic buyer." - Jason
"I have also had clients who have mailed out letters in more than two years later, people have picked up the phone and reached back out to them." - David
"A properly prepared buyer knows that there are always going to be these unknowns within the diligence." – David
In today's episode we have David Edey, CEA and financial advisor in Montreal. He is an author of a book called Executor Help. He is on the show to talk about what it is to be an executor and how an executor can have a successful execution of someone's will in both cases of if you are a business owner and if you are not.
Episode Highlights:
1.01: David is a certified Executive Advisor. He has been in the financial planning industry for over 35 years in Montreal. He is an author of a book, Executor Help - How to settle on a state - pick an executor and avoid family fights.
2.30: The executor is going to be the individual who's going to make sure that the person who has written will, their wishes that's written in the will is going to be carried out.
4.16: As per David you want to prepare your executors as much as possible, but you also have to have the conversations with them. You have to let them know what your wishes are, and you are going to make sure that you help them with a bunch of professionals around them.
6.10: When there is a death in the family or there is a death, people are traumatized, and you can be fumbling around looking for things when you are traumatized.
08.20: As per Jason, people's perception of what's fair can change over time and he finds that in the end of the life of a parent you never have an equitable split in terms of time supporting that parent amongst the kids.
10.24: People lose their minds and there's a sense of entitlement all of a sudden when it comes to an estate.
12.06: As an executor, you also have to understand that there is legal liability for you to make sure that the estate gets settled, make sure that the taxes are being taken care of, and also to keep yourself from being litigated by the beneficiaries.
13.35: Don't pay any beneficiaries until you've taken care of all of the debts and the taxes, because if it comes back that the estate owes money, try to get that money from the beneficiaries.
18.15: As a business owner, if you don't think about what is going to happen to the business in case something happens to you suddenly, you are leaving your family in chaos. You are leaving them disorganized.
20.32: As a business owner you need to have some sort of plan in terms of what would happen if something happened to you. You need to create an estate plan. You need to create a succession plan and update it regularly with lawyer and accountant.
3 Key Points:
David talks about the role and responsibilities of the executor and what needs to be done to make sure that this is a success.
David talks about preparation of the estate and how we basically set the stage for success.
It's very important to make sure you are working with an accountant that is professional because they can make sure that the taxes and debts are paid first before you start going out any of the cash.
Tweetable Quotes:
"99% of the individuals who are left to be an executor have absolutely no idea what to do or where to start." – David
"The reason for the book is to get people to make the moves, to have the will and also have the conversations with the executive." - David
"You really don't know about somebody until you have to share an inheritance with them." - David
"While the individual is still alive, I would suggest having a conversation with their executor, but also have the conversation with the beneficiaries or family members. And this is probably a touchy point for a lot of people because people don't want to have those uncomfortable conversations." - David
Experience Economy with Dennis Moseley-Williams | E098
00:34:37
On today's episode, Jason is going to talk to Dennis Moseley-Williams. He is a well-known speaker in the financial advisor circuit who talks specifically about how advisors should transform their business to be based on experiences that deliver true value and enlightenment and transformation to clients.
Episode Highlights:
1.47: Dennis and his partner Tom and own a small boutique firm and we work predominantly in the financial services industry, helping practices, financial planning practices, create more client value by innovating around customer experience and design and layout.
03.28: Most people in business confuse service with experience. Service is all about saving customers time and effort. Whereas experience is about creating engagement through surprise, emotion and at times even providing transformational value.
7.56: Dennis gives an example of his dry cleaner and how he has a flourishing business even though he has a tiny little shop. His customer service is good. He knows every person who goes in. He knows all his customer's name.
09.53: As per Dennis it is important to know who your client is. Slow time down, don't think efficiency, think memorable.
14.12: Every one of us that owns the business is living in the age of Amazon and anything anybody wants, including a hammer from the hardware store can be delivered to their house by 8:00 o'clock tomorrow morning. We as consumers are already spoiled rotten. We live in magic times, says Dennis.
17.19: Consider your client's journey from before they ever come to your business to entering your business to engaging with your business to the end of the engagement, the transaction and finally extending afterward when they are reflecting on their visit.
18.18: Ask yourself through time of your client journey. What do you do really, really well or well enough? And how could you do it a teeny tiny bit better?
22.02: Dennis shares different customer experiences and how different service provider can improve their processes.
24.38: Efficiency is the enemy of experience. As a business owner we always just do some basic math and calculate time and money. Efficiency is the enemy here because it results into crappy commodified experience.
3 Key Points:
Dennis shares some examples of some delightful engagements that he has seen on things that people wouldn't normally expect.
Dennis talks about the types of loyalty by fear and obligation as well as by connection and identity.
Dennis shares 3 important questions that you can ask yourself so as to make your client experience better.
Tweetable Quotes:
"The guy that owns the hardware store is trying to pick a totally generic business, believes that the smartest and best thing that they can do is make it easy to get in and get out with a hammer." - Dennis
"There are frameworks, there are frameworks that you can use for experience design."- Dennis.
"If you go to Disney land, you should be able to extract the principles of what they have done and apply it to what you have done 100%." – Dennis
"It doesn't matter what your business is. I could literally create revenue in it without having to spend any money just by having you change the way you look at time." -Dennis.
Jason Pereira talks to Grant Hicks, a known financial advisor coach who has been out there basically helping advisors build better practices. He is going to share more powerful and more effective means or strategies that he has seen advisors put in place for business owners that have really helped elevate their business practices.
Episode Highlights:
01:07: Grant has been in the industry for 33 years, he now focuses on practice management and all facets of practice management.
01:35: He is going to share a story of one of the advisors he has worked with and their mastermind group, how to build it, and how to manage it.
03:24: We are all business owners, at the end of the day, working on our businesses together.
04:30: Every business has different issues that they are working with.
07:35: Grant talks about processes and running effective processes and how do you map with the process.
09:53: The HR piece is fascinating, and it's invaluable there because you probably have multiple real time experiments going on, says Grant.
11:04: The more time you give something without a deadline, the less like it is going to get done, you give it a deadline and it gets done.
12:32: Grant explains how he works through the succession and transition issues.
15:11: Grant talks about various priority changes in any business.
15:47: Grant talks about the different success stories.
16:58: Everyone thinks their baby's pretty, especially when it comes time to put a price tag on it and get the entire endowment effect to play there. But reality is, it doesn't matter people are going to judge it for their own what they consider beautiful.
21:02: This is the long game where you are trying to find the ideal clients, and you are trying to find your ideal niche, which would be probably business owners that are selling their practice, and it's the long game where you are getting to help solve the problems.
22:30: Benchmarking is used for financial advisors, but we also use benchmarking for business owners and you could look at how benchmarking is used as a tool to help people guide them as well.
3 Key Points:
Jason and Grant talk about succession and transition
Grant shares what is a very common challenge for most business owners today in the economy.
Grant shares how mastermind group is contributing to bring together a bunch of people who have walked a bunch of different paths. It may or may not be relevant to what you are looking for, but can definitely help.
Tweetable Quotes:
"We are going to talk a bit about today is the growth aspect of growing your practice." - Grant
"I have a weekly poker match with a bunch of buddies from university, and they are at different executive positions, and you listen to the different changes in the work life during COVID, and the entire remote work thing saw a massive productivity spike." - Jason
"God knows the statistics on succession are not great. I remember, even in our industry, I have heard statistics in the US say the average successful session takes about seven years to nail down and get completely done, start to finish out the joke that failure Is a lot quicker than that." - Jason
"Some people are spending a ton of money on marketing and SEO and different Internet strategies." - Grant
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