Having a successful business in Canada can sometimes be a double-edged sword. On one hand, revenues, incomes and retained capital are high or significant, but on the other hand, being able to access that capital can be challenging, especially from a tax perspective. While many business owners my decide to invest some of that excess capital into investments such as stocks, bonds, mutual funds or real estate, any growth or distributions are taxed fairly heavily and can even erode the small business deduction. The situation becomes even more complex when looking for a tax-efficient way to get the excess capital that’s retained in the corporation, into the hands of your estate

Starting a new business venture can be both exciting and nerve-racking at the same time. The hope and dreams of success, financial freedom and being your own boss is accompanied by big uncertainties and risks. To add to some of the anxiety, comes the facts: about half of all new businesses will not be around within the next 5, and only about one third will survive 10+ years. The situation often becomes more complex when there are multiple owners and the future success of a business is at risk if proper planning is not done. The unexpected ‘exit’ of a partner due to death, disability, illness or just simply that ‘it’s not working out’ can create a very difficult situation for the remaining business owner(s) and the business itself.

In today’s market, people often look at different ways to diversify their investment portfolio. Specifically, since the market crash in 2008, a lot of investors have been unsure or scared to get (back) in to the markets, and have been looking at alternatives. Real Estate investing has become more and more popular, especially over the last decade, and it doesn’t seem like that trend will slow down any time soon. When most people think about Real Estate investing, they will generally think ‘investment/rental properties’, and although that is a great investment, there are other options.

In a properly designed financial plan, one of the most important areas of discussion is that of “Protection”, by way of Insurance. However, for one reason or another (usually because people don’t like to talk about it or feel they don’t need it), that area of the financial plan often gets overlooked or isn’t designed properly. Protecting your and your family’s lifestyle and standard of living is a very critical component in planning both while you’re alive, and when you’ve passed on. The importance of insurance needs to be addressed and its components need to be understood.

In this post on Insurance Planning, we will focus on the second of the ‘Living Benefits’ - Disability Insurance protection. Continuing from the last post on Critical Illness, this post will illustrate the importance of protecting your ability to earn an income, through Disability Insurance. Disability Insurance is generally the most underserved and undersold part of the Insurance Industry, as a) many Advisors are not having the conversation with their clients and b) many clients don’t realize the importance of protecting their ability to earn an income. However, the numbers state that the probability of injury or disability before age 65 is much higher than getting critical illness or death before age 65.