The Money Scope Podcast (Benjamin Felix & Dr. Mark Soth)

Today’s show features our first case conference supplemental episode. We’ve built several cases, complete with figures, to expand upon our primary episode's discussions on debt, saving, and investing. These scenarios reflect common queries and challenges we frequently encounter from our audience. While we hope you can draw parallels to your own circumstances from these cases, it's crucial to understand that this isn't personalized advice. We aren't offering specific recommendations. However, our goal is for you to find elements in these cases that resonate and assist you in navigating your own financial journey, whether independently or with a consultant. Our first case study is one that many people will be able to relate to. We focus on a recent graduate, with a substantial amount of debt, with no investments or savings, and break down how they should go about navigating their financial wealth journey. Tuning in you’ll hear a breakdown of the numbers for this case study, how to build competence and a financial plan, how your tolerance for debt will influence your financial decisions, plus a whole lot more. Join us for our first in-depth case study as a supplement to our main episode!

(0:00:17) Introducing our first case conference supplemental episode. 

(0:00:50) An overview of our first case study concerning a recent graduate with a lot of debt. 

(0:02:13) How to go about building competence and a plan in this scenario. 

(0:05:05) A breakdown of the case numbers after earning some revenue. 

(0:08:25) The next steps to take after shrinking debt and stabilizing cash flow when you start feeling the pressure to invest. 

(0:11:09) The mid-career mortgage dilemma and advice on how to manage it. 

(0:17:01) Guidance on taking advantage of the ability to get money out of your corporation tax efficiently. 

(0:20:50) The psychological effect of debt and the importance of taking this into consideration. 

(0:21:36) How your individual perspective should impact your financial planning decisions and the financial advisor you partner with.

Links From Today’s Episode:

Benjamin Felix — https://www.pwlcapital.com/author/benjamin-felix/ 

Benjamin on X — https://twitter.com/benjaminwfelix

Benjamin on LinkedIn — https://www.linkedin.com/in/benjaminwfelix/

Dr. Mark Soth (The Loonie Doctor) — https://www.looniedoctor.ca/

Dr. Mark on X — https://twitter.com/LoonieDoctor

Money Scope Episode 5 — https://moneyscope.ca/2024/01/12/episode-5-debt-saving-investing/

Rational Reminder Episode 226: Colonel Chris Hadfield — https://rationalreminder.ca/podcast/226

Medical Student Debt Repayment in Early Practice — https://www.looniedoctor.ca/2022/12/30/medical-student-debt-repayment-2/

Today’s episode comes to you live from the 22nd Institute for Advanced Financial (IAFP) Planning Conference in Gatineau, Quebec, recorded in front of an audience of professional financial planners. For this special episode, we cover key planning issues for incorporated business owners and walk through the lifecycle of a business owner or professional who eventually chooses to incorporate. We discuss crucial financial decisions they face along the way, particularly as corporate assets begin to grow, and wrap up with a Q&A covering topics like tax brackets, salary offsets, and more. Our conversation also tackles common misconceptions and explains strategies for income smoothing, tax deferral, and managing 'corporate bloat.' With today’s conference theme inspired by Star Wars, expect plenty of niche references along the way!

Key Points From This Episode:

(0:00:17) Introducing the topics that will be covered in today’s special live episode at the 22nd Institute for Advanced Financial Planning Conference in Gatineau, Quebec. 

(0:03:57) Guidelines and benefits of becoming incorporated, including income smoothing. 

(0:06:49) Advice for navigating taxes when becoming incorporated. 

(0:08:42) Common misconceptions that people have regarding getting incorporated. 

(0:13:53) How to capitalize on the benefits of tax deferral in a corporation. 

(0:16:24) Key insights on tax integration and eligible dividends. 

(0:20:07) Achieving optimal compensation and how it solves the problem of “corporate bloat.” 

(0:25:08) Ways to treat and prevent corporate bloat. 

(0:28:47) The math behind Mark and Ben’s optimal compensation algorithms. 

(0:32:08) Advantages of planning over products for solving optimal compensation. 

(0:35:10) Audience questions and answers, from tax brackets to Star Wars. 

Links From Today’s Episode:

Institute for Advanced Financial Planning Conference — https://iafpsymposium.ca/
Salary and Dividend Optimizer Calculator — https://www.looniedoctor.ca/ccpc-income-disperser/
‘Dividends To Maximize Your Corporate & Personal Cash Flow’ — https://www.looniedoctor.ca/2023/06/30/pay-dividends-corporation/#algorithm

Dr. Mark Soth (The Loonie Doctor) — https://www.looniedoctor.ca/

Dr. Mark on X — https://x.com/LoonieDoctor

Benjamin Felix — https://www.pwlcapital.com/author/benjamin-felix/ 

Benjamin on X — https://x.com/benjaminwfelix

Benjamin on LinkedIn — https://www.linkedin.com/in/benjaminwfelix/

In this episode, we delve into the intricacies of human happiness and regret by exploring the complex relationship between our pursuit of happiness and the decisions we make along the way. We unpack the essence of a ‘good life’, the different forms of happiness, and how to keep a balance between them. Discover why the pursuit of material wealth might not lead to lasting happiness and learn how to navigate the regrets that can shape your life. Explore the ‘hedonic treadmill’ and the ‘elephant and rider’ analogy to understand why we often chase short-term pleasures over long-term fulfillment. Gain valuable insights from Mark’s ICU experiences that shed light on the importance of relationships, seizing opportunities, and living an ethical life. Join us on this enlightening journey as we set the stage for your pursuit of a richer life — one that rises above mere wealth and embraces the profound essence of happiness and fulfillment. Tune in now!

Key Points From This Episode:

(0:02:13) Defining the ‘good life’ and takeaways from Ben’s research on the topic. 

(0:06:39) The different forms of happiness and how to measure it. 

(0:08:33) Ben explains the various factors that contribute to well-being. 

(0:10:51) Mastering a balance between the different facets and forms of happiness. 

(0:13:25) Understanding the biology of happiness and hedonic adaptation. 

(0:19:46) Achieving long-term happiness and overcoming the hedonic treadmill. 

(0:25:58) Discover the role of regret in determining well-being and happiness. 

(0:31:45) Insights into the main regrets that impact a person’s happiness. 

Links From Today’s Episode:

Benjamin Felix — https://www.pwlcapital.com/author/benjamin-felix/ 

Benjamin on X — https://twitter.com/benjaminwfelix

Benjamin on LinkedIn — https://www.linkedin.com/in/benjaminwfelix/

Dr. Mark Soth (The Loonie Doctor) — https://www.looniedoctor.ca/

Dr. Mark on X — https://twitter.com/LoonieDoctor

PWL Capital - https://www.pwlcapital.com/

‘Finding and Funding a Good Life’ — https://www.pwlcapital.com/finding-and-funding-a-good-life/

The Happiness Hypothesis — https://www.amazon.com/Happiness-Hypothesis-Finding-Modern-Ancient/dp/0465028020

Rational Reminder Podcast: Episode 246 — https://rationalreminder.ca/podcast/246

The Power of Regret — https://www.amazon.ca/gp/product/B097XNT4RT/ 

‘Regrets of the Typical American: Findings from a Nationally Representative Sample’ — https://journals.sagepub.com/doi/abs/10.1177/1948550611401756

Have you ever found yourself caught up in the pursuit of material possessions, believing they will bring you happiness? Or perhaps you've been lured into working excessively, thinking that the more you earn, the happier you'll be? In this conversation, we expand on the concepts covered in the previous episode and dive deep into money-happiness traps and how they lead to unexpected consequences, like mounting debt, burnout, and even strained relationships. We discuss the power of social comparison and how it can affect our financial decisions and overall well-being, and unpack seminal research to help you understand the complex relationship between money and happiness. We also explore the balance between work and personal life, aligning spending with your core values, and thought-provoking questions to reflect on your financial journey and happiness goals. Join us as we navigate the complex relationship between money and happiness and uncover the path to reaching your financial goals!

Key Points From This Episode:

(0:01:06) Temptations that distract people from their financial goals. 

(0:03:48) The two sides of the money-happiness trap: spending and earning bait. 

(0:08:11) Why more money doesn't always lead to more happiness. 

(0:16:18) Insights into the social comparison trap and its impact on well-being. 

(0:20:29) Key takeaways and actionable steps for achieving your financial goals. 

(0:23:17) Self-reflection on values, purchases, regrets, identity, and life purpose. 

Links From Today’s Episode:

Benjamin Felix — https://www.pwlcapital.com/author/benjamin-felix/ 

Benjamin on X — https://twitter.com/benjaminwfelix

Benjamin on LinkedIn — https://www.linkedin.com/in/benjaminwfelix/

PWL Capital - https://www.pwlcapital.com/

Dr. Mark Soth (The Loonie Doctor) — https://www.looniedoctor.ca/

Dr. Mark on X — https://twitter.com/LoonieDoctor

Money Scope - https://moneyscope.ca/

’High income improves evaluation of life but not emotional well-being’ — https://pubmed.ncbi.nlm.nih.gov/20823223/

‘World Happiness Report 2018’ — https://s3.amazonaws.com/happiness-report/2018/WHR_web.pdf

‘Experienced well-being rises with income, even above $75,000 per year’ — https://wpa.wharton.upenn.edu/wp-content/uploads/2021/01/Experienced-Well-Being-Rises-with-Income-January-2021.pdf

Understanding the implications of the 2024 Federal Budget and its proposed changes to capital gains taxation is crucial for individuals and corporations alike. In today’s episode, we take a deep dive into the Canadian federal budget for 2024 and its impact on capital gains taxation. In our conversation, we discuss the technical details of capital gains taxation and its historical context and offer practical advice for navigating the proposed changes in the 2024 federal budget. We discuss the increase in the capital gains inclusion rate and how these changes will affect individual investors and corporations. Discover the mechanics of capital gains tax in Canada, essential tax planning strategies, the importance of diversified tax exposure, and the concept of capital gains harvesting. Gain insights into the impact of the changes on the retirement plans of incorporated business owners and professionals, the role of optimal compensation in realizing capital gains, and approaches for navigating the proposed changes. Join us as we delve into the complexity of tax planning for incorporated business owners and the importance of long-term projections, personalized advice, and strategic decision-making for realizing a capital gain. Tune in now!

Key Points From This Episode:

(0:00:00) Overview of the changes and their relevance for Canadian investors. 

(0:07:59) How capital gains tax works in Canada and its impact on taxable income. 

(0:13:34) Reasons for the variation of capital gains inclusion rates. 

(0:18:18) The differences in tax treatment for individuals versus corporations. 

(0:22:41) Capital gains in a CCPC, how it works, and the role of a shareholder. 

(0:29:36) Implications of the changes on Alternative Minimum Tax (AMT) in Canada. 

(0:37:58) Learn about the ‘breakeven horizon’ and essential capital gain considerations. 

(0:46:35) Capital gain harvesting and how optimal compensation ties into it. 

(0:58:17) Explore the trade-offs of realizing a large capital gain and tax-reducing strategies. 

(1:12:30) Hear case studies that illustrate the application of various tax-reducing strategies. 

(1:29:56) Impact of capital gains inclusion rates on retirement planning for CCPCs. 

(1:37:36) Final takeaways and tax planning recommendations. 

Links From Today’s Episode:

Meet with PWL Capital: https://calendly.com/d/3vm-t2j-h3p

Dr. Mark Soth (The Loonie Doctor) — https://www.looniedoctor.ca/

Dr. Mark on X — https://x.com/LoonieDoctor

Benjamin Felix — https://www.pwlcapital.com/author/benjamin-felix/ 

Benjamin on X — https://x.com/benjaminwfelix

Benjamin on LinkedIn — https://www.linkedin.com/in/benjaminwfelix/

Episode 10 & 11: Case Conference — https://moneyscope.ca/2024/04/12/ep-10-11-case-conference-corporate-investing-puzzle-pieces/

Episode 13: Optimal Compensation from a CCPC — https://moneyscope.ca/2024/04/26/episode-13-optimal-compensation-from-a-ccpc/

Rational Reminder: Episode 304 — https://rationalreminder.ca/podcast/304

The Loonie Doctor Calculators — https://www.looniedoctor.ca/canadian-financial-calculators/#tax

Realize or Defer Capital Gains Calculator — https://research-tools.pwlcapital.com/research/realize-gain

Conquest Planning — https://conquestplanning.com

Today’s episode is a colonoMoneyScope as we dig deep into the basics of investment strategy. But we’ve already laid the foundation (in previous episodes) and the hard work is done, and we are now moving onto a necessary procedure for the preventive care of your investment portfolio. It’s important to understand why we invest and why it matters in our lives, why fear and risk are not necessarily bad things, the differences between investing and gambling, and the inherently speculative nature of investments. After that, you’ll learn about financial assets, the ins and outs of stocks and bonds, the efficient market hypothesis, and the two risk types that you need to understand before investing. We also discuss diversification, passive investing and active investing, the two key investment vehicles, and everything you need to know about investment costs. With the wealth of information that we cover in this episode, and with far less discomfort than the standard colonoscopy, we deem this colonoMoneyScope operation a resounding success!

Key Points From This Episode:

(0:03:35) Why we invest; why it’s important. 

(0:07:16) Addressing fear and risk: a prevalent theme throughout the episode. 

(0:08:40) Investing versus gambling, and why it’s important to know the difference. 

(0:12:59) Why people still choose to gamble even with the high loss probability. 

(0:15:18) How all investments are speculative by nature, but some more so than others. 

(0:21:35) Everything you need to know about financial assets. 

(0:31:09) The ins and outs of stocks and bonds. 

(0:38:26) Understanding the efficient-market hypothesis. 

(0:46:18) The two risks that matter for investing, and how diversification fits in. 

(0:50:35) A brief recap of everything we’ve covered so far. 

(0:51:21) Passive investing versus active investing, and how to pick the right fund manager. 

(1:02:58) Two crucial investment vehicles: mutual funds and exchange-traded funds (ETFs). 

(1:06:08) Taking a closer look at investment costs. 

(1:14:15) Our post-colonoMoneyScope briefing. 

Links From Today’s Episode:

https://moneyscope.ca/2024/01/26/episode-6-key-investing-concepts/

Benjamin Felix — https://www.pwlcapital.com/author/benjamin-felix/ 

Benjamin on X — https://twitter.com/benjaminwfelix

Benjamin on LinkedIn — https://www.linkedin.com/in/benjaminwfelix/

PWL Capital — https://www.pwlcapital.com/ 

Dr. Mark Soth (The Loonie Doctor) — https://www.looniedoctor.ca/

Dr. Mark on X — https://twitter.com/LoonieDoctor

Angus Reid Institute | Retirement in Canada — https://angusreid.org/wp-content/uploads/2015/06/2015.05.15-Retirement.pdf 

‘Individual differences in susceptibility to financial bullshit’ — https://www.sciencedirect.com/science/article/pii/S2214635022000193  

Meir Statman on LinkedIn — https://www.linkedin.com/in/meir-statman-17967b/ 

‘Episode 258: Prof. Meir Statman: Financial Decisions for Normal People’ — https://rationalreminder.ca/podcast/258   

2022 Management Report of Fund Performance — https://www.blackrock.com/ca/investors/en/literature/annual-mrfp/mrfp-xus-en-ca.pdf

In this special episode of the Money Scope Podcast, we take a break from their regular content to reflect on the journey so far and engage with our audience. As we pause to catch our breath halfway through the planned core curriculum, we discuss the evolution of the podcast, share listener feedback, and offer insights into what lies ahead. We outline topics covered in the initial episodes, ranging from goal setting to investment basics, and highlight the upcoming shift towards more Canadian-focused content. We express gratitude for the enthusiastic response from our audience and discuss the impact the podcast has had on listeners' financial decision-making and life trajectories. We also share excerpts from listener reviews, address mixed opinions on certain aspects of the podcast, unpack the value of research-backed insights tailored to Canadian professionals, and much more. To uncover the future of the podcast and find out how you can help shape it, tune in now!

Key Points From This Episode:

• Introduction and outline of the theme for today’s episode. (0:00:17)

• Feedback, platform features, and engagement from listeners. (0:02:20)

• The Money Scope Podcast versus Rational Reminder. (0:06:45)

• Ben responds to feedback regarding his view on dividend investing. (0:07:40)

• Mark shares his view on dividends and factor-weighted ETFs. (0:09:30)

• Feedback on the podcast's theme, style, and approach. (0:11:59)

• Review of the mixed feedback received about the show. (0:14:59)

• Get a sneak peek of upcoming episodes. (0:17:30)

Links From Today’s Episode:

The Money Scope Podcast — https://moneyscope.ca/

The Money Scope Podcast on YouTube — https://www.youtube.com/@moneyscopepod

The Money Scope Podcast on Apple Podcasts — https://podcasts.apple.com/ca/podcast/the-money-scope-podcast/id1721425088

The Money Scope Podcast Email — info@moneyscope.ca

Rational Reminder Community — https://community.rationalreminder.ca/

Dr. Mark Soth (The Loonie Doctor) — https://www.looniedoctor.ca/

Dr. Mark on X — https://twitter.com/LoonieDoctor

Benjamin Felix — https://www.pwlcapital.com/author/benjamin-felix/ 

Benjamin on X — https://twitter.com/benjaminwfelix

Benjamin on LinkedIn — https://www.linkedin.com/in/benjaminwfelix/

Today’s Case Conference accompanies an episode in which we provide a detailed breakdown of the registered account types available to Canadian investors and how to utilize them. Despite their numerous potential advantages, however, there are still many people who avoid them, primarily because optimizing these can seem too complicated and overwhelming. Our hope is that today’s episode will provide you with the confidence and knowledge you need to feel empowered to take the next steps in your investment journey. Tuning in, you’ll hear several case studies that address common concerns, like how to avoid having a Retirement Savings Plan (RRSP) that’s too big and how to navigate your RRSP and tax-free savings account (TFSA) as a high-income earner. We also get into Registered Education Savings Plans (RESPs), why group RESPs can be so predatory, how to plan your exit from a group RESP if you’re already in one, and more. For relatable examples of how to use these accounts, plus the many benefits of diversifying them, listen in today!

Key Points From This Episode:

(0:00:58) Our first case study concerning a technology company employee with restricted share limits (RSUs) as part of their expected compensation. 

(0:02:02) Relevance for high-income earners and how to make decisions about RRSPs and TFSAs. 

(0:05:35) A case study on two physicians with a young child who want to shift their investment plan from a group RESP to an individual RESP. 

(0:06:59) The complexity of group RESPs, why they’re predatory, and how to plan your exit. 

(0:12:56) Case study three: common fears of a too-big RRSP, especially for those who are incorporated. 

(0:15:54) How to optimally use your RRSP or Registered Retirement Income Fund (RRIF) when it comes to tax deferral, tax sheltering, and taking dividends out of your corporation. 

(0:17:45) Controlling the income from a corporation, paying yourself dividends, and how to ensure you aren’t penalizing yourself. 

(0:19:09) Rational Reminder Episode 70 and key takeaways on how to avoid a too-big RRSP. 

(0:21:10) A rundown of the many benefits of diversifying your accounts. 

Links From Today’s Episode:

Money Scope Episode 8 — https://moneyscope.ca/episode-8-canadian-investment-accounts

Rational Reminder: Episode 70 — https://rationalreminder.ca/podcast/70

Dr. Mark Soth (The Loonie Doctor) — https://www.looniedoctor.ca/

Dr. Mark on X — https://twitter.com/LoonieDoctor

Benjamin Felix — https://www.pwlcapital.com/author/benjamin-felix/ 

Benjamin on X — https://twitter.com/benjaminwfelix

Benjamin on LinkedIn — https://www.linkedin.com/in/benjaminwfelix/

Today, we bring you another live episode, this time from the Annual Canadian Physician Financial Wellness Conference. We answer a series of compelling audience questions — drawing on information from past episodes — that meaningfully impact both sides of the client-advisor relationships. To kick things off, we break down the best time to incorporate, the downsides of incorporating too early, getting money out of your corporation tax efficiently, and common misconceptions around tax efficiency. Next, we discuss the changes in capital gains tax and if it still makes sense to incorporate despite the increase, whether you should pay debt or invest as you juggle all your different priorities, and when to take dividends versus salary. We also get into the topic of corporate bloat and how to address it through measures like smoothing out consumption, why you need to know your notional account balances, insights on dividend-paying ETFs, and advice for alternative investments, including real estate. To close, we discuss how you can determine when you’ve reached financial independence and how a professional financial planner can help you make that call, along with a few final audience questions. Join us to hear the full scope of today’s conversation on navigating the ins and outs of getting incorporated, tax efficiency, and much more!

Key Points From This Episode:

(0:00:31) An update on Money Scope and the tools we’ve been developing. 

(0:03:32) Our first audience question: when should you incorporate? 

(0:05:59) Getting money out of your corporation to pay off credit tax-efficiently. 

(0:08:01) Common misconceptions around tax efficiency and tax deferrals. 

(0:13:19) Unpacking if it’s still better to incorporate after the capital gains tax increase. 

(0:16:03) A breakdown of whether you should pay off your debt or invest. 

(0:20:19) The conditions under which you should take dividends versus salary. 

(0:23:12) Insights on corporate bloat and methods for addressing it. 

(0:32:14) How to come up with an optimal compensation strategy. 

(0:36:50) What you need to ask your advisor or accountant about: notional account balances. 

(0:39:01) Exploring whether there’s a role for dividend-paying ETFs during long-term investing within a corporate investment account. 

(0:45:29) Reasonable alternatives to investing, other than ETFs, particularly when you reach the passive income limit. 

(0:53:32) How you can tell when you’ve reached financial independence. 

(0:59:08) Ways to approach optimal charitable giving throughout your life. 

(01:01:02) The role of a family trust as a way for inheritance planning within a medical corporation. 

Links From Today’s Episode:

Salary and Dividend Optimizer Calculator — https://www.looniedoctor.ca/ccpc-income-disperser/

Dr. Mark Soth (The Loonie Doctor) — https://www.looniedoctor.ca/

Dr. Mark on X — https://x.com/LoonieDoctor

Benjamin Felix — https://www.pwlcapital.com/author/benjamin-felix/ 

Benjamin on X — https://x.com/benjaminwfelix

Benjamin on LinkedIn — https://www.linkedin.com/in/benjaminwfelix/

Our relationship with money changes throughout our lives. While this journey will vary between individuals, there are broad trends that will apply to many of us. In today’s we investigate how to navigate debt, savings, and investing at different stages of our lives and break down how these mechanisms can help you move your economic value through time. From an economic perspective, it makes sense to use debt early in life.

But taking on debt can be a scary prospect, and it’s important to take into account the emotional weight of debt and how it can negatively impact subjective well-being. Tuning in you’ll hear valuable tips on how to approach debt in a constructive way, the distinctions between good and bad debt, and how to ensure financial resilience and cash flow security. We discuss the various approaches one can take to saving and investments and their relationship to risk, before providing a breakdown of the various account types one should consider.

Our conversation also unpacks the concept of time horizons, how to balance inflation risks and investment risks, and how taxes factor in when assessing debt. We want to help you build a solid financial platform to launch from. Tune in as we discuss how debt, saving and investing can help you move your lifetime economic value through time and learn how this can empower you to live the life you want, both now and in the future!

Key Points From This Episode:

(0:01:03) How we typically progress through debt, saving, and investing in our lives. 

(0:05:54) The drawbacks and benefits of using mental accounting. 

(0:06:49) Financial wealth over one's life cycle and how it can differ between individuals. 

(0:08:45) The distinction between good and bad debt, psychologically and economically. 

(0:10:32) Practical tips for how to think about debt and spending constructively. 

(0:16:07) The importance of dealing with the emotional weight of debt. 

(0:21:33) How to ensure financial resilience and cash flow security, different sources of liquidity, and the risks of relying on lines of credit. 

(0:28:26) The psychological considerations you should take into account with debt and the benefit of having funds designated for certain purposes. 

(0:31:23) An overview of the relationship between savings, investments, and risk. 

(0:35:48) What it means to put your money into savings and a breakdown of the different account types to consider. 

(0:42:11) Our recommendations regarding concerns about CDIC coverage and limits. 

(0:47:04) Matching the financial instrument and financial product that you use with the account type. 

(0:50:30) The concept of time horizons and how to balance inflation risks and investment risks. 

(0:54:10) A rundown of how taxes factor in when assessing debt. 

(0:59:41) Dealing with the psychological stress of seeing your investment value fluctuate and why most people find a compromise between repaying debt and investing.

Links From Today’s Episode: 
Rational Reminder Episode 141: Hal Hershfield — https://rationalreminder.ca/podcast/141
Rational Reminder Episode 256: Prof. Hal Hershfield — https://rationalreminder.ca/podcast/256

Dr. Mark Soth (The Loonie Doctor) — https://www.looniedoctor.ca/

Dr. Mark on X — https://twitter.com/LoonieDoctor

Benjamin Felix — https://www.pwlcapital.com/author/benjamin-felix/ 

Benjamin on X — https://twitter.com/benjaminwfelix

Benjamin on LinkedIn — https://www.linkedin.com/in/benjaminwfelix/

We make countless decisions every day, from choosing what we’ll have for breakfast to determining whether we have the time to take a break from our busy schedule and go for a walk. Not all decisions require the same amount of effort. And while the big decisions certainly deserve our time and attention, it can be easy to overlook how the small decisions we make every day accumulate and influence our quality of life. In today’s episode, we continue our exploration of how to master your wealth and well-being by offering a collection of concrete strategies for planning your life and your finances. Tuning in you’ll learn about the small but significant steps you can take to improve both your financial health and your mental health, and how they accumulate to give you greater happiness and improve your quality of life. We unpack popular financial advice, like why you should invest in experiences rather than stuff — and the one exception to this rule — along with more complex ideas, like why spending time in nature is so beneficial for us, and how you can reach a flow state in more areas of your life. Be sure to tune in as we break down our good life principles and help you navigate the many small decisions that can amount to a much greater quality of life!

Key Points From This Episode:

(0:01:39) Good life principles and actionable strategies for planning your life and finances: how deliberate, small decisions accumulate and influence your quality of life. 

(0:03:40) Why you should choose experiences over stuff — unless it facilitates experiences. 

(0:09:11) Tips on maximizing your time and avoiding distractions with the ‘times left’ exercise and how to pay attention to detail when forecasting future happiness. 

(0:17:31) The value of reflecting on what you’re grateful for and learning to be more mindful of small, everyday joys. 

(0:19:02) Prioritizing time over money and what prevents people from doing this. 

(0:21:35) The rule of adaptation and why spending time in nature is so beneficial for us. 

(0:23:54) What you can do to improve the way you commute. 

(0:26:36) Limits we have on our time and bundling good habits to be more time efficient. 

(0:30:27) Finding flow states in your life, your work and at home; how this improves resilience, satisfaction, and happiness. 

(0:37:20) The importance of relationships and engaging in prosocial behaviours. 

(0:38:56) Decision policies: what they are, how to set them, and why they’re so helpful. 

(0:41:03) How knowing your values can help you in your decision-making. 

(0:42:03) Using regret to your advantage, and how to ‘satisfice’ on small decisions rather than trying to maximize them. 

(0:47:10) Goal setting, and the satisfaction we get from pursuing goals. 

(0:48:50) A quick recap of key principles discussed today. 

Links From Today’s Episode:

Benjamin Felix — https://www.pwlcapital.com/author/benjamin-felix/ 

Benjamin on X — https://twitter.com/benjaminwfelix

Benjamin on LinkedIn — https://www.linkedin.com/in/benjaminwfelix/

PWL Capital - https://www.pwlcapital.com/

Dr. Mark Soth (The Loonie Doctor) — https://www.looniedoctor.ca/

Dr. Mark on X — https://twitter.com/LoonieDoctor

Money Scope - https://moneyscope.ca/

Give Yourself a Nudge: Helping Smart People Make Smarter Personal and Business Decisions — https://www.amazon.com/Give-Yourself-Nudge-Personal-Decisions/dp/1108715621

Episode 238: Ralph Keeney — https://rationalreminder.ca/podcast/238

Episode 226: Colonel Chris Hadfield — https://rationalreminder.ca/podcast/226

Episode 222: Cassie Holmes — https://rationalreminder.ca/podcast/222

Happier Hour: How to Beat Distraction, Expand Your Time, and Focus on What Matters Most — https://www.cassiemholmes.com/happierhour

Accountants and financial advisors offer excellent professional support, but it’s also important to keep yourself informed and understand key tax implications when it comes to managing your corporate account. In today’s episode, we take a closer look at the type of information you should arm yourself with to help you optimize your tax planning and manage your corporate investments efficiently. Tuning in, you’ll learn why personal investing can often be surprisingly tax-efficient, why the biggest challenge is moving money out of the corporation into your personal accounts in a tax-efficient way, and why the best way to achieve this is with a CDA. We break down key aspects of tax drag and tax deferral in corporate investments and what you need to know about tax planning for a corporate account. Our conversation also covers how to use ETFs and corporate class funds for tax deferral within a corporation, why spending and giving are important financial skills that you should practice, how to be a good steward of your wealth, plus a whole lot more. For all the important details on tax planning and how to manage your corporate investments, be sure to tune in for this informative conversation!

Key Points From This Episode:

(0:01:27) Managing investments with accountants and financial advisors, keeping yourself informed, and the missteps Ben has seen when onboarding new clients.

(0:04:21) The major buying power that CDAs represent.

(0:05:34) Taxes, investing, and prioritizing a diversified executable investment strategy that suits your goals and risk tolerance.

(0:07:43) An overview of tax drag with corporate investing.

(0:12:41) The active-passive income limit problem and how to avoid it.

(0:14:25) A rundown of corporate tax deferral on investments. 

(0:19:42) Relevant details on tax planning for a corporate account. 

(0:24:31) Navigating more complex products and strategies, like insurance.

(0:34:09) How to use ETFs and corporate class funds for tax deferral within a corporation.

(0:41:19) Asset allocation, location, managing risk, and a reminder to be careful that the downsides don’t exceed your tax savings.

(0:44:08) Advice for avoiding inefficiencies in corporate investing when you have a high income and don’t spend much personally.

(0:46:10) Why spending and giving are important financial skills and why you should prioritize being a good steward of your wealth.

Links From Today’s Episode:

Dr. Mark Soth (The Loonie Doctor) — https://www.looniedoctor.ca/

Dr. Mark on X — https://twitter.com/LoonieDoctor

Benjamin Felix — https://www.pwlcapital.com/author/benjamin-felix/ 

Benjamin on X — https://twitter.com/benjaminwfelix

Benjamin on LinkedIn — https://www.linkedin.com/in/benjaminwfelix/

HXS ETF vs Conventional S&P 500 ETFs in a Corporation

HXDM ETF For International Exposure in a Corporate Account

HXCN vs ZCN Tax Efficiency in a Private Corporation

Corporate Class Bond ETF (HBB) in a Private Corporation

Today’s Case Conference episode is a supplement to Episodes 10 and 11 and uses several case studies to examine key subjects such as corporate bloat, tax-efficient retirement planning for high-income earners, the importance of diversifying your asset allocation, and more. For our first case, we take a step-by-step look at the decision to retain earnings in your corporation, and examine why you need to consider using some of that money for things like your personal RRSP and TFSA accounts. Our second case includes a number of examples. Using multiple simulations, we unpack how you could potentially sabotage the benefits of a corporation by letting its passive assets get too big. To wrap things up, we discuss another common temptation: the urge to transform your corporation into a tax-efficient, eligible dividend-generating powerhouse. We cover a lot in today’s episode, so be sure to tune in for a deep dive on everything from addressing corporate bloat to diversifying asset allocation!

Key Points From This Episode:

(0:02:16) Our first case study concerning corporations, RRSPs, and TFSAs.

(0:08:32) When to use a TFSA and why it will depend on your unique circumstances.

(0:11:30) Our second case study on corporate bloat and optimal compensation for tax efficiency. 

(0:16:38) Simulations of different combinations of earning and spending using Mark’s optimal corporate compensation algorithm. 

(0:19:50) Breaking down tax-efficient retirement planning for high-income earners. 

(0:29:06) An example detailing a high earner and their spending, passive income limits, corporate bloat, and tax implications. 

(0:35:12) Why it’s so important to be able to measure progress towards your financial goals. 

(0:38:12) Strategies for dealing with corporate bloat, tax optimization, and more. 

(0:41:41) Our third case study where we examine what happens when you’re overly focused on Canadian dividends and capital gains. 

(0:43:43) Why it’s so important to diversify your asset allocation. 

(0:50:51) Negotiating fees and how this could be affected by upcoming regulations in 2024. 

Links From Today’s Episode:

Meet with PWL Capital — https://calendly.com/d/3vm-t2j-h3p

Dr. Mark Soth (The Loonie Doctor) — https://www.looniedoctor.ca/

Dr. Mark on X — https://twitter.com/LoonieDoctor

Benjamin Felix — https://www.pwlcapital.com/author/benjamin-felix/ 

Benjamin on X — https://twitter.com/benjaminwfelix

Benjamin on LinkedIn — https://www.linkedin.com/in/benjaminwfelix/

Whether you’re self-employed or you own a small business, there are many nuances to how you can pay yourself from your business. Our episode today hones in on how we pay ourselves personally from a corporation (along with other key employees, including spouses) and the many intricacies you need to understand when making decisions about this process. While today’s episode may be our most complex and ambitious one to date, we hope it will serve as a useful resource for helping you get the most out of your business. Tuning in, you’ll learn about the benefits and drawbacks of paying yourself with a salary versus dividends, how to optimize your meetings with accountants and financial planners, and much more. We get into key topics such as employee insurance (EI) in different contexts, the benefits of the Canada Pension Plan (CPP), why you need to put together an income smoothing plan, and how to use shareholder loans without consequential missteps. The final portion of our show is dedicated to income splitting, the best ways to go about it, and how to make sure you adhere to Canadian Revenue Agency (CRA) requirements. Today’s episode covers a lot of ground and serves as a useful reference for listeners to return to. Join us today for this expansive conversation and arm yourself with the knowledge you need to get the most out of your corporation!

Key Points From This Episode:

(0:02:42) Important disclaimers and exceptions concerning today’s topics.

(0:05:37) Common questions on taxation of active business income, personal income, the nuances of tax integration, business expenses, exemptions, and deductibles.

(0:19:32) A breakdown of how net active income is taxed, what to do with retained earnings, and navigating the dividend gross-up system. 

(0:28:57) Planning for retirement, asset allocation, and determining your time horizon. 

(0:34:44) An overview of General Rate Income Pool (GRIP) as a notional account for tax tracking purposes and an example of how GRIP works with active income. 

(0:38:03) Looking at tax rates and tax integration as you move through different tax brackets and how rules vary between various jurisdictions in Canada. 

(0:56:02) Unpacking what you need to know when it comes to paying yourself a salary and paying employees (including spouses).

(01:01:08) Employee Insurance (EI) in different contexts, the distinctions between arm’s length and non-arm’s length employees, and navigating Canada Pension Plan (CPP) payments. 

(01:05:18) The many benefits of the Canada Pension Plan (CPP), and why the reservations people have due to it being government-mandated is not unhelpful in this instance. 

(01:08:20) Key insights on the Canada employment tax credit when considering the salary versus dividend debate, and how salaries can create other financial planning benefits.

(01:16:38) Putting together an income smoothing plan, how to keep yourself in a lower tax bracket over your lifetime, and how to work with a financial planner.

(01:25:17) A Breakdown of shareholder loans, how they work, the tax risks involved, and the best ways to use them.

(01:27:32) Other ways to get money out of your corporation efficiently, like with your capital dividend account (CDA), and optimal ways to use your CDA.

(01:34:25) The concept of income splitting, its benefits, the best strategies for going about this, and how to adhere to Canadian Revenue Agency (CRA) requirements.

(01:45:17) A recap of what we covered today and what we have coming up next time.

Links From Today’s Episode:

CRA Interpret Bulletins - https://www.canada.ca/en/revenue-agency/services/forms-publications/current-income-tax-interpretation-bulletins.html

Dr. Mark Soth’s Calculators — https://www.looniedoctor.ca/canadian-financial-calculators/

Dr. Mark Soth (The Loonie Doctor) — https://www.looniedoctor.ca/

Dr. Mark on X — https://twitter.com/LoonieDoctor

Benjamin Felix — https://www.pwlcapital.com/author/benjamin-felix/ 

Benjamin on X — https://twitter.com/benjaminwfelix

Benjamin on LinkedIn — https://www.linkedin.com/in/benjaminwfelix/

In this episode, we dive deep into the world of financial independence, values, and effective goal setting. Drawing from a wealth of knowledge and research, we guide listeners through a structured approach to identify their most meaningful financial goals. From the importance of enjoying the journey to setting measurable targets, we provide invaluable insights into achieving long-term financial success. Discover why financial independence is not just an end goal but a means to greater personal freedom. Learn how to articulate your core values and understand why they are the compass guiding your financial decisions. Explore a staged approach to goal setting, complete with exercises to help you identify and prioritize your goals effectively. Unearth the power of automation and why it's a game-changer in achieving your financial targets. Delve into the inevitable world of goal conflicts and gain practical strategies for resolving them while staying true to your values. Plus, uncover the science behind motivation, why enjoyable means are crucial, and the art of setting goals that are both optimistic and actionable. Don't miss this captivating episode that will empower you to take control of your financial future, align your goals with your values, and enjoy the journey along the way. Tune in now!

Key Points From This Episode:

(0:01:17) Unpacking the concept of financial independence and how to achieve it. 

(0:06:36) Common approaches to assessing your level of financial independence. 

(0:09:55) Discover useful resources to accurately calculate financial independence. 

(0:12:09) Insights into sequence risk, Registered Retirement Savings Plan, and tax liabilities. 

(0:15:38) The exponential growth bias and how it relates to safe withdrawal rates. 

(0:18:09) Mark shares how applying the FIRE concept has worked in his life. 

(0:23:27) Essential advice for financial independence goal-setting and decision-making. 

(0:27:16) Actionable steps and self-reflection questions for evaluating your core values. 

(0:30:55) What to do after establishing your values: goal-setting and planning. 

(0:36:42) The hurdles of financial planning and preparing for the unexpected. 

(0:41:36) Learn how goal-setting can help you along the path to the ‘good life.’ 

(0:43:00) Explore setting measurable targets for goals. 

(0:49:19) Balancing multiple goals and overcoming goal conflicts. 

(0:52:40) A summary of key takeaways from this episode. 

Links From Today’s Episode:

Benjamin Felix — https://www.pwlcapital.com/author/benjamin-felix/ 

Benjamin on X — https://twitter.com/benjaminwfelix

Benjamin on LinkedIn — https://www.linkedin.com/in/benjaminwfelix/

PWL Capital - https://www.pwlcapital.com/

Dr. Mark Soth (The Loonie Doctor) — https://www.looniedoctor.ca/

Dr. Mark on X — https://twitter.com/LoonieDoctor

Money Scope - https://moneyscope.ca/

Ralph Keeney — https://ralphkeeney.com/

Give Yourself a Nudge — https://www.amazon.com/Give-Yourself-Nudge-Personal-Decisions/dp/1108715621

Goals Survey Summary — https://www.pwlcapital.com/resources/goals-survey-summary/

Rational Reminder Podcast: Episode 188 — https://rationalreminder.ca/podcast/188

Rational Reminder Podcast: Episode 223 — https://rationalreminder.ca/podcast/223

Rational Reminder Podcast: Episode 226 — https://rationalreminder.ca/podcast/226

In this episode, we dive deep into the world of income tax and demystify the often intimidating realm of investment taxation. Join us as we break down various forms of investment returns, from interest and dividends to capital gains and more. Discover the impact of tax integration on Canadian dividends and learn how foreign dividends can add a layer of complexity to the process. Explore the critical concept of attribution rules and understand how they influence who pays the tax bill on investment income. We delve into strategies like prescribed rate loan planning and second-generation income planning to optimize your investments over the long term. Gain essential insights into tax-loss harvesting and how to navigate superficial loss rules effectively. Plus, hear valuable tips on asset location to maximize your returns while minimizing tax implications. To gain a deeper understanding of investment taxes and enhance your financial knowledge, tune in now!

Key Points From This Episode:

(0:02:27) Overview of the reasons to consider a taxable investment account. 

(0:05:10) Mark and Ben explain the basics of taxes and investing. 

(0:09:27) The different types of investment income and how they're taxed. 

(0:12:49) Explore the problems associated with tax integration. 

(0:14:28) Insights into the myth of dividend investing. 

(0:19:36) Unpack the complexity surrounding foreign taxes and dividends. 

(0:23:41) Net rental income and capital gains (realized and unrealized) are explained. 

(0:31:05) A deep dive into a vital aspect of tax: attribution rules. 

(0:45:54) Leverage investing in a taxable account instead of a registered account. 

(0:49:04) Comparison of individual with joint investment accounts. 

(0:54:14) Common tax pitfalls to avoid and useful tax-reducing strategies. 

(0:59:42) Tax loss harvesting to reduce tax and the associated risks. 

(1:08:58) Closing comments and key takeaways. 

Links From Today’s Episode:

Dr. Mark Soth (The Loonie Doctor) — https://www.looniedoctor.ca/

Dr. Mark on X — https://twitter.com/LoonieDoctor

Benjamin Felix — https://www.pwlcapital.com/author/benjamin-felix/ 

Benjamin on X — https://twitter.com/benjaminwfelix

Benjamin on LinkedIn — https://www.linkedin.com/in/benjaminwfelix/

In this episode, we follow the stories of two distinct investors facing unique challenges. First, meet a plastic surgeon in the high-flying tech-driven world of 1997. With a high-risk tolerance and a flourishing practice, this surgeon believes they can conquer the market. However, as the dot-com bubble looms, they must navigate the fine line between risk and reward, teaching us vital lessons about diversification, leverage, and the challenges of the market. Next, explore the journey of a savvy business owner who sold their company at just the right time, amassing substantial cash. Cautious due to past stock market losses, this investor seeks to protect their newfound wealth. We discuss the delicate balance of risk tolerance, financial independence, and how to construct a portfolio that aligns with individual objectives. Throughout these stories, listeners will gain insights into asset allocation, the psychology of risk, and the importance of rebalancing during market turbulence. To discover principles that will help you make informed investment decisions and steer your financial future toward success, tune in today!

Key Points From This Episode:

(0:01:21) Case study one: a plastic surgeon with high-risk tolerance and a successful practice. 

(0:02:12) Why they should diversify investments and avoid excessive amounts of risk. 

(0:05:10) How human bias plays into decision-making in our first case study. 

(0:07:31) An essential lesson from our first case: know your risk tolerance. 

(0:11:28) Case study two: an entrepreneur who sold their business and has a significant amount of cash on hand. 

(0:12:13) How they should structure their portfolio to safeguard their financial health. 

(0:15:55) Benefits of rebalancing and why it is vital, even during a volatile market. 

(0:17:59) Closing comments and key takeaways. 

Links From Today’s Episode:

https://moneyscope.ca/2024/02/16/ep-7-case-conference-big-decisions-with-real-money/

Benjamin Felix — https://www.pwlcapital.com/author/benjamin-felix/ 

Benjamin on X — https://twitter.com/benjaminwfelix

Benjamin on LinkedIn — https://www.linkedin.com/in/benjaminwfelix/

Dr. Mark Soth (The Loonie Doctor) — https://www.looniedoctor.ca/

Dr. Mark on X — https://twitter.com/LoonieDoctor

After our detailed examination of the basics of investment strategy, we are now delving into some common case studies that you may encounter on your investing journey. Our studies take us through the looming recession and why it should not be a major concern for investors, the economic activity of America’s response to a recession, and deciding on how much, with whom, and when you should invest your money. We also critically assess what you need to be aware of before seeking a lower-cost investment model, how to save while making donations, value versus growth, and what Ben and Mark have to say about a particular hot investment idea. 

Key Points From This Episode:

(0:00:49) Why the looming recession has many people worried about investing. 

(0:01:45) How a recession affects market prices, and why this isn’t a major concern.  

(0:02:58) America’s economic behaviours in and around a recession. 

(0:07:13)Talking through a rationally optimal approach and an emotionally optimal approach. 

(0:09:08) Whether to invest it all at once or gradually enter the market. 

(0:11:05) Everything you need to consider if you’re looking for a lower-cost model. 

(0:23:28) Capital gains and other tax implications to note when altering a retirement portfolio. 

(0:28:52) A quick look at a smarter way of making charitable donations. 

(0:30:06) Debunking the hot investment idea. 

(0:34:09) Value versus growth. 

Links From Today’s Episode:

https://moneyscope.ca/2024/02/02/ep-6-case-conference-this-investment-is-hot-or-not/

Benjamin Felix — https://www.pwlcapital.com/author/benjamin-felix/ 

Benjamin on X — https://twitter.com/benjaminwfelix

Benjamin on LinkedIn — https://www.linkedin.com/in/benjaminwfelix/

PWL Capital — https://www.pwlcapital.com/ 

Dr. Mark Soth (The Loonie Doctor) — https://www.looniedoctor.ca/

Dr. Mark on X — https://twitter.com/LoonieDoctor

In today’s episode, we delve into the complex topic of investing in Canadian corporations, something that will be deeply relevant to many of our listeners. Given the intricate interplay of investments and taxes within this context, it's crucial for corporate and business owners to grasp the fundamentals. We start off by unpacking key details of what defines a corporation, the intricacies of taxation for Canadian companies, and the nuances of passive income. Our conversation then goes on to cover tax integration, how to navigate its advantages and disadvantages, and what you can do to ensure that you avoid a large tax bump. We also break down the distinction between notional and real accounts, how they are used, tax deferrals, capital gains, and how to implement good insurance and estate planning. Today’s episode covers a lot and makes for excellent reference material. Tune in today for a comprehensive breakdown of everything you need to know when it comes to investing in Canadian corporations!

Key Points From This Episode:

(0:01:01) Investing in Canadian corporations and why it’s such a complex subject.

(0:03:44) Understanding exactly what a corporation is and what a corporation isn’t.

(0:06:06) The main reasons for a separate operating company and a holding company. 

(0:08:08) Navigating liability and investment properties as a physician. 

(0:11:42) Taxation of active and passive investment income inside of a Canadian Controlled Private Corporation (CCPC). 

(0:16:06) What is considered passive income and the nuances within that. 

(0:20:50) Tax integration, advantages and disadvantages, and how to avoid a big tax bump. 

(0:23:43) Fears around the passive income limit, and why these concerns are overblown.

(0:26:23) Taxation of corporate investments and why tax is a secondary consideration. 

(0:27:16) A breakdown of notional and real accounts and how they are used. 

(0:33:42) Eligible and non-eligible dividends and dividend tax. 

(0:43:49) Understanding unfavourable tax integration with foreign dividend income. 

(0:49:04) Tax deferral, capital gains, and the most valuable notional account. 

(0:54:09) How to implement good insurance and estate planning. 

(0:58:48) A review of today’s content and what we’ll be discussing next time. 

Links From Today’s Episode:

Dr. Mark Soth (The Loonie Doctor) — https://www.looniedoctor.ca/

Dr. Mark on X — https://twitter.com/LoonieDoctor

Benjamin Felix — https://www.pwlcapital.com/author/benjamin-felix/ 

Benjamin on X — https://twitter.com/benjaminwfelix

Benjamin on LinkedIn — https://www.linkedin.com/in/benjaminwfelix/

Picture your investment portfolio as a carefully crafted puzzle and asset allocation as the key to solving it. It not only helps you navigate the treacherous waters of risk but fine-tunes your investments to harmonize perfectly with your financial dreams. In this episode, we take a deep dive into the art and science of portfolio management. Discover the intricacies of portfolio planning, execution, and maintenance as we dissect this critical aspect of wealth management. We unpack asset allocation with a focus on the stocks-to-bonds ratio, a crucial decision that balances the quest for maximum returns with the need for stability. We uncover the dangers of volatility and behavioural risks and explore strategies to safeguard your financial health. Tuning in, you’ll hear how assessing your risk tolerance and automating tasks can lead to a well-crafted portfolio (and why we suggest using a portfolio manager). We also guide you through the maze of asset allocation options and the vital steps for effective portfolio maintenance. Whether you're a seasoned investor or just beginning your financial journey, this episode will equip you with the knowledge you need to navigate the complexities of portfolio management with confidence, so be sure to tune in for expert insights, practical strategies, and actionable advice that will empower you to make informed decisions about your financial health!

Key Points From This Episode:

(0:03:55) Portfolio planning basics, an overview of risk, and the goal of asset allocation. 

(0:08:07) Unpacking the concept of ‘optimal portfolios’ and why it is not achievable. 

(0:14:13) Essential asset allocation aspects, the role of human capital, and strategies to manage risk. 

(0:20:41) Individualized job skills and their impact on asset allocation in the broader economy. 

(0:24:54) How social capital plays into asset allocation from an investment standpoint. 

(0:28:25) Risk expected return, correlation of assets in a portfolio, and the different types of risk that should be considered. 

(0:36:03) Using historical returns for forecasting expected returns and the nuanced ways that behaviour drives investment decisions. 

(1:04:04) Applying asset allocation principles to construct a diversified, market-efficient portfolio (plus some common pitfalls to avoid). 

(1:19:13) Trade-offs of a less volatile portfolio and a framework for risk tolerance calculation. 

(1:34:45) Fundamentals of good portfolio maintenance and how to protect your investments. 

(1:50:36) Navigating portfolio execution errors and the portfolio pyramid. 

(1:56:32) Closing comments and important takeaways from the episode. 

Links From Today’s Episode:

https://moneyscope.ca/2024/02/09/episode-7-portfolio-design-management/

Benjamin Felix — https://www.pwlcapital.com/author/benjamin-felix/ 

Benjamin on X — https://twitter.com/benjaminwfelix

Benjamin on LinkedIn — https://www.linkedin.com/in/benjaminwfelix/

Dr. Mark Soth (The Loonie Doctor) — https://www.looniedoctor.ca/

Dr. Mark on X — https://twitter.com/LoonieDoctor

Rational Reminder Podcast Episode 100: Professor Kenneth French — https://rationalreminder.ca/podcast/100

Rational Reminder Podcast Episode 224: Professor Scott Cederburg — https://rationalreminder.ca/podcast/224

Rational Reminder Podcast Episode 258: Professor Meir Statman — https://rationalreminder.ca/podcast/258

Rational Reminder Podcast Episode 260: Professor James Choi — https://rationalreminder.ca/podcast/260

Rational Reminder Podcast Episode 262: Professor Francisco Gomes — https://rationalreminder.ca/podcast/262

Rational Reminder Podcast Episode 263: A Tribute to Harry Markowitz — https://rationalreminder.ca/podcast/263

Morningstar | ‘Mind the Gap’ — https://www.morningstar.com/lp/mind-the-gap

‘Long-Horizon Losses in Stocks, Bonds, and Bills: Evidence from a Broad Sample of Developed Markets' — https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3964908 

Vanguard Investor Questionnaire — https://investor.vanguard.com/tools-calculators/investor-questionnaire

Welcome to the Money Scope Podcast, where finance meets relatability and evidence-based wisdom takes centre stage. Join your hosts, Mark Soth and Ben Felix, as they take you on a deep dive into the world of personal finance, specifically tailored for Canadian professionals and beyond. In this engaging series, Mark and Ben blend their expertise in the medical and financial fields to offer you a unique perspective on managing your money. Drawing inspiration from their experiences, they present complex financial topics in a way that's both personally relatable and easy to understand. This is not your average finance show. It's an educational journey that strives to connect financial knowledge with real-life applications. Whether you're a Canadian professional, an advanced investor, or someone just starting to explore the world of personal finance, The Money Scope Podcast is your go-to source for reliable, relatable, and evidence-based financial information! Join Mark and Ben as they embark on this educational journey, aiming to empower you to take control of your financial life and create a brighter future for yourself, your family, and your community.

Key Points From This Episode:

(0:00:00) Overview of the podcast and what to expect from this episode. 

(0:00:42) Introducing Mark and details about his professional experience. 

(0:03:26) His motivation for starting The Loonie Doctor blog. 

(0:09:16) Learn about Ben’s background and his pivot into the finance sector. 

(0:12:25) Dealing with biases and using an evidence-based approach to personal finance. 

(0:16:50) Ben shares his biases and perspective on DIY finance. 

(0:20:45) Disclosing potential conflicts of interest. 

(0:25:08) Reasons for starting the Money Scope Podcast. 

(0:30:16) The inspiration behind the name of the podcast. 

(0:33:02) An outline of the topic and themes to be covered on this podcast. 

(0:36:09) Our teaching approach and linking knowledge to application.

(0:40:25) Final words and closing comments. 

Links From Today’s Episode:

Benjamin Felix — https://www.pwlcapital.com/author/benjamin-felix/ 

Benjamin on X — https://twitter.com/benjaminwfelix

Benjamin on LinkedIn — https://www.linkedin.com/in/benjaminwfelix/

PWL Capital — https://www.pwlcapital.com/

Money Scope www.moneyscope.ca

Dr. Mark Soth (The Loonie Doctor) — https://www.looniedoctor.ca/

Dr. Mark on X — https://twitter.com/LoonieDoctor

Rational Reminder Podcast Episode 73 — https://rationalreminder.ca/podcast/73

When it comes to creating an optimal compensation strategy plan, there’s a lot to navigate. And while there may be a plethora of general rules floating around on the internet, each individual’s optimal strategy is ultimately going to be dependent on their unique situation. That is why we’re using today’s conversation to break down the findings of our mental model algorithm. Tuning in you’ll hear a detailed explanation of the five steps for creating an optimal compensation strategy plan, and how to apply them. Find out how to plan your consumption, account for mandatory income, clear out notional accounts, use salary to make up the difference, and utilize salary dollars that aren’t for spending. We also cover key areas, like Canada Child Benefit (CCB) clawbacks, incorporating income splitting when using your salary, and how to pay yourself a salary bonus to bring the corporate active income down. Join us today to learn how you can implement a dynamic salary and dividend strategy for optimal compensation, and much more. There’s a lot to unpack here, so get your note-taking devices ready, and let’s get started!

Key Points From This Episode:

(0:05:19) Optimizing integration: general rules and exceptions in different contexts.

(0:07:48) The first three steps in our mental model algorithm: planning consumption, accounting for mandatory income, and clearing out notional accounts.

(0:15:25) A quick warning on thinking about money in terms of inflation-adjustments, and why it’s important.

(0:16:11) How to use capital dividend accounts (CDAs) in different situations and why it’s generally the most useful notional account.

(0:28:03) An overview of Eligible Refundable Dividend Tax on Hand (ERDTOH), how to use it, its status as the second most useful notional account, and why it’s considered more useful than CDAs in certain cases.

(0:30:58) Important details on Non-eligible Refundable Dividend Tax on Hand (NRDTOH).

(0:32:42) Everything you need to know about the General Rate Income Pool (GRIP) in various contexts.

(0:41:01) Situations where it may make sense to pay extra dividends and key factors that impact personal tax rates.

(0:56:31) A breakdown of the Canada Child Benefit (CCB) clawback versus Notional Account Release, and key factors to consider.

(01:03:22) Factoring in RRSP contributions when paying yourself a salary and how to take advantage of them.

(01:08:39) How to incorporate income splitting using your salary depending on the situation.

(01:13:48) What to do with salary dollars that you won’t take for spending.

(01:18:46) Key insights, analysis, and caveats on bonusing down the SBD rate; how to pay yourself a salary bonus to bring the corporate active income down.

(01:30:19) Implementing a dynamic strategy of salary and dividends, how it might unfold over time, and examples of analysis that we’ve done.

(01:37:19) Our post-op debrief: a review of our mental model algorithm and creating an optimal compensation strategy plan to pay yourself from your corporation.

Links From Today’s Episode:

Meet with PWL Capital: https://calendly.com/d/3vm-t2j-h3p

Dr. Mark Soth (The Loonie Doctor) — https://www.looniedoctor.ca/

Dr. Mark on X — https://twitter.com/LoonieDoctor

Benjamin Felix — https://www.pwlcapital.com/author/benjamin-felix/ 

Benjamin on X — https://twitter.com/benjaminwfelix

Benjamin on LinkedIn — https://www.linkedin.com/in/benjaminwfelix/

Corporate to Personal Salary Dividend Optimizer — https://www.looniedoctor.ca/ccpc-income-disperser/

Business owners often have reservations about paying into the Canada Pension Plan (CPP). Many think they’re getting a bad deal by paying both the employer and the employee portion of the contribution, but can they do better by paying themselves dividends? In the last two episodes, we did an extensive review of how you can compensate yourself as a business owner through a private corporation. Today, we take a deeper look at two of the payroll expense aspects that often come up in discussions with financial planners: CPP and Employment Insurance (EI). If you are self-employed, there are a few things you need to consider, including your decision to pay yourself a salary or take dividends. We discuss that in this episode, as well as whether self-employed business owners are really getting the short end of the stick when it comes to CPP and EI contributions. Tuning in today, you’ll learn about some of the unique features of CPP, how it’s calculated, and the three major risks it offers protection against, plus we walk you through various models to illustrate the consequences of paying yourself dividends versus salary. We also delve into EI for self-employed business owners, the special benefits thereof, models that consider different amounts of income and consumption, and much more. For a comprehensive guide to CPP and EI for self-employed business owners, don’t miss this episode of Money Scope with Benjamin Felix and Dr. Mark Soth!

Key Points From This Episode:

(0:00:20) Reasons that today’s topic on CPP and EI is so complex. 

(0:04:04) How CPP is calculated: an overview of what you pay and what you receive. 

(0:05:59) Whether or not business owners get a bad deal with CPP. 

(0:11:34) Viewing CPP as a tax and when paying dividends versus salary is favourable. 

(0:17:33) The unique features and benefits of CPP and the risk protection it offers. 

(0:25:15) Assessing the value creation and performance of a pension fund like CPP. 

(0:30:42) Crunching numbers to calculate a combined CPP benefit for a household. 

(0:33:52) Making the comparison between paying CPP and investing in a corporation. 

(0:37:23) Tax planning consequences of paying dividends to avoid paying into CPP. 

(0:41:16) Various models to illustrate many of the scenarios we covered in this episode.

(0:48:36) Why paying into CPP and dying early results in a bad financial outcome. 

(0:51:36) Comparing CPP with other corporate and personal investment options. 

(0:59:54) Key takeaways on CPP; a chance to buy into a truly inflation-indexed annuity. 

(1:01:48) An overview of employment insurance (EI) for self-employed individuals. 

(1:05:38) EI special benefits that self-employed business owners can access. 

(1:13:55) Insight into EI for incorporated versus non-incorporated business owners. 

(1:23:43) Our post-op debrief of today’s episode on CPP and EI! 

Links From Today’s Episode:

Dr. Mark Soth (The Loonie Doctor) — looniedoctor.ca

Dr. Mark on X — twitter.com/LoonieDoctor

Benjamin Felix — pwlcapital.com/author/benjamin-felix 

Benjamin on X — twitter.com/benjaminwfelix

Benjamin on LinkedIn — inkedin.com/in/benjaminwfelix

Aravind Sithamparapillai — ironwoodcanada.com/aravind-sithamparapillai

Sebastien Betermier — sbetermier.com

Papers Mentioned:

‘Five Examples of Direct Value Creation and Capture in the Pension Fund Industry’ – papers.ssrn.com/sol3/papers.cfm?abstract_id=4616266

The overarching theme of today’s conversation revolves around prudent financial decision-making, including tax-efficient investing, risk assessment, and leveraging home equity for investment purposes. This acts as supplementary material for the main episode, where we take a deep dive into the nuances of tax. Join us as we look at taxation and income through the lens of common scenarios that often lead people to make poor decisions with their investments. We uncover the importance of structuring investment portfolios with tax implications in mind and venture into the realm of corporate-class bond ETFs, assessing their potential benefits and complexities. You’ll gain insight into the free dividends fallacy and the benefits of high dividend yield stocks. We also unravel the strategy of leveraging home equity to defer tax and share our personal experiences and insights, along with essential criteria to determine your risk profile.  Tune in as we turn dollars into sense and pave the road to a prosperous financial future!

Key Points From This Episode:

(0:01:32) Optimizing investment portfolio structure without relying on dividends.

(0:03:33) Essential aspects of taxes on capital gains and dividends. 

(0:06:41) The risks of dividend-chasing strategies. 

(0:09:56) A case study comparing premium with discount bond tax efficiency. 

(0:12:26) Practical examples and steps for leveraging discount bonds effectively. 

(0:19:11) Income after tax between discount and premium bonds. 

(0:22:52) Using corporate class bond ETFs for tax deferral. 

(0:25:07) Another case study that demonstrates leveraging home equity to invest. 

(0:28:15) Risks and complexities of leverage investing. 

(0:33:32) The value of a clear plan and reasonable expectations regarding your risk profile. 

(0:36:31) Mark’s experience of leverage investing. 

(0:40:06) How he used leverage investing to reach his financial goals. 

(0:47:39) Final thoughts and key takeaways. 

Links From Today’s Episode:

Rational Reminder Podcast: Professor Samuel Hartzmark — https://rationalreminder.ca/podcast/273

BlackRock — https://www.blackrock.com/ca

Horizons ETFs — https://horizonsetfs.com/

Dr. Mark Soth (The Loonie Doctor) — https://www.looniedoctor.ca/

Dr. Mark on X — https://twitter.com/LoonieDoctor

Benjamin Felix — https://www.pwlcapital.com/author/benjamin-felix/ 

Benjamin on X — https://twitter.com/benjaminwfelix

Benjamin on LinkedIn — https://www.linkedin.com/in/benjaminwfelix/

One of the most complex things to navigate when it comes to your personal finances is your choice of accounts and how to use them in the best way possible. In today’s episode, we break down the types of accounts available to Canadian investors and how to optimize your use of each one. Tuning in, you’ll learn key factors you should consider, including how tax deferral can end up being neutral, beneficial, or harmful — depending on the difference between your current and future tax rate — along with actionable advice on how to navigate these kinds of variables and uncertainty. Starting off, the conversation covers the benefits and drawbacks of tax-free savings accounts (TFSAs) and why it’s one of the first accounts you should consider when investing. We then delve into a series of accounts and their characteristics, like Registered Retirement Savings Plans (RRSPs), Registered Retirement Income Funds (RRIFs), and Locked-in Retirement Accounts (LIRAs). Included is a breakdown of the newly legislated First Home Savings Account (FHSA) and how it combines features from both TFSAs and RRSPs to basically create a tax-elimination type of account. Every account has its own set of distinct rules, from contribution limits to withdrawal freedoms and flexibility. To ensure that you’re up to date on all the latest, tune in for this comprehensive breakdown of everything from TFSAs to RESPs!

Key Points From This Episode:

(0:03:21) A breakdown of registered and non-registered accounts. 

(0:08:59) The benefits and drawbacks of tax-free savings accounts (TFSAs) and why it’s one of the first accounts you should consider. 

(0:14:30) Being able to withdraw from your TFSA, why that makes it really flexible in terms of how it can be used, and how to avoid over-contribution. 

(0:18:48) The risks of speculating and trading in your TFSA and the perks later in life when growing a large TFSA slowly over time with more reliable returns. 

(0:25:41) Further nuances of investment taxation that you need to know about with TFSAs. 

(0:29:07) A breakdown of Registered Retirement Savings Plans (RRSPs), their main attributes, and what you need to know about contribution room and deduction limits. 

(0:33:47) Why tax deferral can be neutral, beneficial, or harmful, depending on the difference between your current and future tax rate. 

(0:36:45) Tax planning opportunities, comparing TFSAs with RRSPs, and key facts about spousal RRSPs and converting RRSPs to Registered Retirement Income Funds (RRIFs). 

(0:48:12) A rundown of Locked-in Retirement Accounts (LIRAs) and Life Income Funds (LIFs). 

(0:50:06) The advantages and disadvantages of the newly legislated First Home Savings Account (FHSA). 

(0:56:14) Everything you need to know about Registered Education Savings Plans (RESPs) and the Canadian Education Savings Grant (CESG). 

(01:09:54) How RESPs are similar to TFSAs from a tax perspective, and what happens when your child doesn’t pursue a post-secondary education. 

(01:15:50) High-level commentary on Registered Disability Savings Plans (RDSPs). 

(01:17:26) What high-income Canadians need to consider when it comes to taxes, asset allocation, and tax optimization. 

(01:23:19) A review of today’s content and what we’ll be discussing next time. 

Links From Today’s Episode:

https://moneyscope.ca/episode-8-canadian-investment-accounts

Dr. Mark Soth (The Loonie Doctor) — https://www.looniedoctor.ca/

Dr. Mark on X — https://twitter.com/LoonieDoctor

Benjamin Felix — https://www.pwlcapital.com/author/benjamin-felix/ 

Benjamin on X — https://twitter.com/benjaminwfelix

Benjamin on LinkedIn — https://www.linkedin.com/in/benjaminwfelix/