How We Create Wealth

Tax – For households whose income is in excess of $200,000 annually, effective tax planning could mean a savings of between 17% and 50% of tax payable. On $200,000 that means $13,500 to $40,000 in annual tax savings. 

Investments – For a $1,000,000 portfolio, effective management can mean between 0.5% and 1% increased annual return compared to the averages. Over a 20 year period that translates into about $130,000 to $260,000 of increased wealth. 

Insurance – Inadequate insurance whether it is life, disability, critical illness, long-term care, home or auto can mean financial ruin. The economic cost to a family could be in the millions, not to mention the opportunity cost, as higher education for children may not be an option. 

Group Benefits – By analyzing your benefits to take maximum advantage of flex benefits options, group RRSP matching programs, stock purchase plans or stock option programs. 

Government Programs – Making sure to qualify for the maximum benefit for things like EI maternity/paternity benefits, OAS payments, or CPP disability and death benefits. These benefits could amount to as much as $70,000 over time. 

Estate Planning – Making sure you have the correct provisions in your will can save time and money. Arranging trusts within the Will can mean annual tax savings of $8,000 to $18,000 per beneficiary. 

Pensions – Knowing all of the options available with a defined benefit pension, can increase your over-all benefit by up to 30%. 

Real Estate – Knowing what to expect in a real estate investment, whether it is for your principal residence or a rental can mean the difference of investing for a profit and investing for a loss. As an example if you were to buy a $300,000 rental property you could end up losing up to $60,000 if you bought at a peak and held it for 10 to 12 years. 

Mortgages and Loans – Knowing the appropriate amount of debt to have is another area that can lead to either financial loss or financial gain. Having too much debt relative to your income can lead to personal bankruptcy. Having the right amount of debt can help to increase your wealth over time by 20-40%. So, for someone with a net worth of $500,000 that can mean an additional $100,000 to $200,000 of wealth. 

Economics – Being aware of the general economic environment allows you to make better financial decisions that are hard to quantify.