Update to Business to Wealth


It’s Myles from Business to Wealth.  I will be discussing many topics here, but the main one is – How do I get my Business to Support Me – Instead of Me Supporting It?

It is possible, and we will discuss the steps it takes to transition your business to support your lifestyle.

I have been a business insider for years, in that I own my own business, and more importantly, have helped and created a business plan for many of the top business owners in my city.

I will cover many topics like the different savings plans available, how much money it takes to retire, business transition strategies (you need to start now for them to work), personal insurance and business insurance to protect you and your family while you are building your assets.

The first post will be on Tax Free Savings Accounts (TFSA).  I am really excited about the possibilities of Canadians being able to save money in high growth accounts, and never paying a penny of tax – ever.  At first these plans where great, but limited.  But now – if you have not started yet, you can contribute over $50,000.  You and your spouse can have $100,000 growing tax free forever.  How great is that?  With growth these TFSAs can cover much of your retirement lifestyle.

I generally recommend TFSAs before RRSPs, although every situation needs to be looked at on its merits.  It is true that you get an initial tax break with registered retirement savings plans, but the tax bite at the end by revenue Canada can ruin your plans.  With tax free savings plans you will never remember that you didn’t get a small deduction at the beginning, when you are making big tax free withdrawals twenty years later.

This was really brought home to me lately when a single father client died of a heart attack with young adult children.  He had $600,000 in his RRSP, and before that money can be distributed, Revenue Canada will swoop in and take about $250,000, leaving just over $300,000 for his children.  How does that sound?

So one of our first Business to Wealth strategy is to pay yourself first – and put that money into a high growth TFSA!

Talk to you soon.



Investment Insights

I have been reviewing the financial news, speaking to investment manager and economists, and reviewing the performance of the funds I represent to make sure they are delivering the type of performance expected of them. Here is how I see things shaping up, and strategies that need to be used for 2017.
Economic Forecast
As has been the case during most of my career the markets continue to climb a “wall of worry.”  We can look back at 2016 as a pretty good year for Canada and the US and many other markets.  But 2016 did not start out that way with sharp market sell-offs of up to 15%.  Investors who stayed invested ultimately made back those losses and made profits.  But investing is never straight forward and there are always worries of what can go wrong.  Over time the best defense to these gyrations has always been a thoughtful well diversified professionally managed portfolio which takes into account an investor’s unique circumstances and tolerance for risk.
United States
Trump.  The current big worry on many people’s mind.  The markets have initially welcomed the election of what they see as a business friendly president who is anxious to improve conditions for business to prosper in the United States.  He promises to bring in major tax reforms which will be business friendly and to spend large amounts of money on upgrading infrastructure.  His major focus is to create jobs in the United States, and he is willing to take jobs away from other countries to do that.  He wants to open trade agreements like Nafta to re-negotiation.
The problem is that President Trump is volatile and makes decisions rashly.  He seems as likely to strike out to protect his ego and impress his followers, as to make decisions that benefit the United States.   On top of this he and his family have huge potential conflicts of interest between their business empire, and running the United States, that Trump has shown little willingness to correct.  This puts further doubt as to the legitimacy of every decision he makes.  The chances of him making a serious mistake seems high.  This brings confusion and volatility to the markets.  Trump can change the value of a corporation with one tweet.  Time will tell if he is an asset or liability to the markets, and the fund managers will be watching him closely and making adjustments accordingly.
Changing Technology is eliminating many jobs.
President Trump has indicated that he believes many of the jobs that have been lost in the United States have moved to other countries who are using unfair trade practices.  There could be some truth to this, but probably most of the jobs have been lost to permanent changes in technology.  This will be an interesting trend to watch going forward, from the perspective of the markets, and also for the impact on society.  It is predicted that there will be huge job loss over the next 10 years because of technology.  Many job classes such as truck and cab drivers may disappear because of automation.  If a new factory is built, but relies on robots and automation, it will not bring back many jobs.
United States is still a good place to invest with the highest expected return.
The United States is in fairly good shape economically.  Housing prices continue to improve in most areas, interest rates are low, and any increases in interest rates would show confidence in the economy.  Unemployment is at historically low levels, business earnings are strong, and manufacturing is increasing.  On the other hand government debt levels are very high, any interest rate increases will make servicing the debt much more difficult, and stock valuations are already high.  We are also late in the current economic cycle that started after the crash of 2008.
Canada’s economic performance will continue to be closely tied to the performance of the United States, as they are by far our largest trading partner.  We are also their largest trading partner, and so changes to Nafta could hurt Canada, but also easily hurt the US.  Interest rates are being kept low to accommodate economic growth, but the manufacturing sector in Canada has so far not helped us much as was hoped.  Oil prices have recovered from their lows over the last two years and are getting closer to the break even point whicy would make oil sands production profitable.  There is no certainty that oil prices will continue to rise as there is still an issue with huge worldwide oversupply.  Also manufacturing continues to become more efficient and more electric cars are going to reduce the demand for oil.
Europe and emerging markets.
Equities in some European regions are attractively valued, but overall there are a numbers of threats to corporate earnings, including persistently low growth and inflation and stubbornly high unemployment.  In addition, growing political uncertainty and doubt about the future of the euro all heighten risk, leading me to be underweight international equities.
I am also underweight emerging markets as broad pockets of stress are evident due to high debt levels and slowing growth, and a strengthening U.S. dollar may increase risk.
Based on the above outlook, I would have the following assessments, while still keeping a well-diversified portfolio.
Our current Strategy based on the above analysis.
• Stronger emphasis on U.S. equities and cash
• Regular or neutral emphasis on Canadian equities
• Reduced emphasis on international, Europe, emerging market equities and bonds.
• Underweight the Canadian dollar as the US dollar likely continues to rise.
As always, please let me know if you have any questions or comments.

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How Will My Business Fund My Retirement Income?

Funding your retirement income from your business depends on a number of factors, so it takes a systematic approach to make it work.   I will cover some of the main points to consider to have a reliable retirement income.

The first question to answer is what is going to happen to your business in retirement?  Are you going to be involved in running it, either on a full or part time basis?  Do you want to maintain full or partial control of the business?  Are there key employees or family members that you want to run or buy the business?  How long will a full or partial sale of your business take?  What is the value of your business, can it currently generate a cash flow to meet your expectations?  For many business owners, most of their assets outside their home and possible vacation property are tied up in their business.

If you are planning to sell your business to a third party and move on, things should be fairly simple once the deal is done.  Congratulations if Microsoft made your business an offer you couldn’t refuse.  Then your only question is, “do I have enough money to retire on”, after the taxes and expenses are paid?   I will address how much money it takes to retire in another post.

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Business in Retirement

The idea of starting a business in retirement may be novel to some, but is gaining more popularity, and the average age of business owners starting a new business has been increasing because of retired people getting into the game.

The main reason to look at starting a business in retirement may be the extra income it can bring, but there are other important factors as well for starting a new business such as keeping up with your contacts, keeping up to date with computers and new technology, and having a meaningful and valuable activity to do during retirement.  Many of my clients feel the exhilaration of being on permanent vacation during the first year or so of  their retirement, but can become restless later on.

Types of Businesses to Start

A good business to start is one that uses the expertise you have already have from work, interests or hobbies.  This could include many areas such as contract and consulting work, photography or videography, creative writing, affiliate marketing, landscaping, maintenance and repair, bookkeeping, or whatever you are good at and think there is a market for.  Many of these business do not require a large investment in equipment, or you may already have the equipment you need from your work or hobbies.

How to Manage your Time

The greatest benefit of retirement for many people is time freedom.  Once you have won this freedom for yourself it is not something you are likely to give up.  It is therefore important to not let your new business overtake your free time, unless if it your choice.  Of course there will be times when your business will demand more of your time, like during the start-up.  You can help protect your time freedom by taking shorter term contracts, or configuring your work so you only do it during certain months of the year.

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Retirement Plans – The Video

How Much do I Need to Save for Retirement?




This is a Retirement Planning video that goes along with my complete article on Retirement Planing and How Much to Save for Retirement at  Business to Wealth is my blog to help Business Owners turn their enterprise into the lifestyle they are striving for, both before and after retirement.

Retirement Plans – How Much to Save for Retirement?

This article will look at your retirement plans in order to answer the question, how much to save for retirement? There are several different ways to calculate this number, and of course the value will vary from person to person depending on their circumstances. But, to give you a ballpark number, for most retirees if you have around $500,000 at age 65, and have a home paid for and no debt, you should be able to have a comfortable if modest retirement, and you will be much better off than the majority of other retired people. If you want an above average or deluxe retirement you will need more savings.

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4 Tips for Enjoying Your Retirement

Happy Retired CoupleSo you’ve finally done it. Congratulations! After years of hard work, and the proverbial blood, sweat, and tears, you’ve made it to retirement. The only problem is, after decades of getting up dutifully and going to work, you all of a sudden have no frame of reference for how to spend your days. From a regimented schedule to suddenly an open-ended year of nothing, retirement can seem daunting with uncertainty.

But assuming you’ve done the leg work, and saved up money for your retirement life, you’ve got an amazing couple of decades ahead of you, and a great time to enjoy retirement, life, family, and all the things you missed along the way.

In fact, if you’re out of ideas, there are a few things you can do and ways you can enjoy your retirement that are cheap, easy, fun, and will leave you with plenty to do when it comes to life and a new lifestyle.


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