#MaRSBP

Start Up Your Financial Future

Zoe Adrian, BASc, CIM Investment Advisor (416) 359-6383 Zoe.adrian@nbpcd.com

Agenda

•  Where Will You Be? •  Protecting your personal finances •  Tax Efficiency •  Risk and Reward •  Retirement and Succession Planning •  Managing Corporate Assets •  Plan for the Unexpected

Where will you be at 65?

Pick 200, 40-year-olds today. Where will they be at age 65?

Men Women

•  Wealthy 1 1 •  Financially Secure 8 2 •  Must continue to work 14 11 •  No longer alive 24 4 •  Require financial assistance 53 82

Who do you want to be?

Protecting Your Personal Finances

•  Keep business separate from personal finances

•  Credit Cards •  Incorporate •  Consider creditor-proof investing options

 eg. Seg funds  Your RRSP may be  A pension plans is

Have a Personal Plan

•  Business owners don’t have time to think about personal financial plan, but they do worry about it.

•  Near Term Goals   Pay down debt in 5 years   Buy house in 3 years   Save for child’s education by 2020   Build up emergency fund by 2013

•  Long Term Goals   Freedom to do the things you want to do   Retirement in 2030

•  Delegate!

Your Comprehensive Wealth

Savings Strategy

•  What percentage of your income do you currently save?

 Rule of Thumb - At least 10% of net income  Gold Star – Maximize your RRSP and TFSA

contributions

Tax Efficiency Registered savings

  TFSA (Tax-Free Savings Account)

  RRSP/RRIF

  RESP’s

Non-Registered Savings

  Investment Accounts

  Universal/whole Life Insurance

Paying Yourself Tax Efficiently

Total Income by Age

DividendsDividendsDividendsDividendsDividendsDividendsDividendsDividendsDividendsDividendsDividendsDividendsDividendsDividendsDividendsDividendsDividendsDividendsDividendsDividendsDividendsDividends

T4 Income

DividendsDividendsDividendsDividendsDividendsDividendsDividendsDividendsDividendsDividends

$-

$20,000

$40,000

$60,000

$80,000

$100,000

$120,000

$140,000

Dividends T4 Income Retirement: Age 65

Incorporate Business: Age 35

Initiate Pension Plan: Age 45

TFSA

RRSP IPP

Risk and Reward

What is your investing strategy?

•  Tailor your investment risk to suit overall

risk •  Risk vs reward – expectations •  Historical return of stocks/bonds/cash

Asset Allocation

With Increased Risk Comes The Potential For Increased Return

-80%

-60%

-40%

-20%

0%

20%

40%

60%

80%

100%

120%

140%

0.2

0.7

1.2

1.7

2.2

85% 48 months

81% 43 months

-17% 6 months

63% 32 months

82% 40 months

-26% 17 months

-15% 8 months -25%

13 months -35% 11 months -39%

12 months

288% 81 months 253%

61 months

-25% 4 months

44% 25

months

-20% 10 months

203% 90 months

-28% 4 months

109% 24 months

-38% 13 months

16% 6

months

-21% 6 months

168% 68 months

-43% 9 months

59% 34 months

320 240

160

80

0

-30

56 60 65 70 75 80 85 90 95 00 05 11

S&P/TSX Composite Index to December 2011

Market Volatility Bull & Bear Facts* Average gain in bull market: +121% Average length of bull market: 46 months Average loss in bear market: -28% Average length of bear market: 9 months * Based on data since 1956. See page 2 for more details.

% C

hang

e (lo

g sc

ale)

Source: Mackenzie Investments (Datastream: month-end data points as at December 31, 2011; total return, local currency)

Succession Planning

•  This is a significant part of your planning •  When to harvest value from your company?

 What are the trigger points? •  Who is going to buy it?

 Partner, children, key employee, another company?

•  Be proactive! •  Discuss with your advisory group – accountant,

lawyer, investment advisor etc.

Retirement

•  When to retire? •  What will fund retirement?

 OAS, CPP, RRSP, Sale of company… •  How much will you need? •  What if you can’t sell the company?

•  Importance of Planning •  Discuss with your advisory group – accountant,

lawyer, investment advisor etc.

Managing Corporate Assets

•  Corporate Cash

 Need to keep liquid and secure  1 million+ consider active cash management to get

some return  Remember – Banks are proprietary. Ie. No incentive to

give you the best rate.

Plan for the Unexpected

•  What happens to your business if something happens to you? Or worse, something happens to your partner?

•  Insurance – Life – Disability – Key Employee – Buy-sell agreements

Summary

1. Protect Yourself 2. Be proactive 3. Delegate 4. Use the right tools at the right stage of your business to be tax efficient

Questions?

BMO Nesbitt Burns Inc. and BMO Nesbitt Burns Ltée provide this commentary to clients for informational purposes only. The information contained herein is based on sources that we believe to be reliable, but is not guaranteed by us, may be incomplete or may change without notice. The comments included in this document are general in nature, and professional advice regarding an individual’s particular position should be obtained. BMO Nesbitt Burns Inc. and BMO Nesbitt Burns Ltée are indirect subsidiaries of Bank of Montreal and Member-Canadian Investor Protection Fund. “BMO (M-bar Roundel symbol)” is a registered trademark of Bank of Montreal, used under licence. “Nesbitt Burns” is a registered trademark of BMO Nesbitt Burns Corporation Limited, used under licence.® “BMO (M-bar roundel symbol)” is a registered trade-mark of Bank of Montreal, used under licence. ® “Nesbitt Burns” is a registered trade-mark of BMO Nesbitt Burns Corporation Limited, used under licence. BMO Nesbitt Burns Inc. and BMO Nesbitt Burns Ltée are indirect subsidiaries of Bank of Montreal. The comments included in this publication are not intended to be a definitive analysis of tax law or trust and estate law. The comments contained herein are general in nature and professional advice regarding an individual’s particular tax position should be obtained in respect of any person’s specific circumstances. All insurance products and advice are offered through BMO Nesbitt Burns Financial Services Inc. by licensed life insurance agents, and, in Quebec, by financial security advisors. If you are already a client of BMO Nesbitt Burns, please contact your Investment Advisor for more information. The comments included in the publication are not intended to be a definitive analysis of tax law: The comments contained herein are general in nature and professional advice regarding an individual’s particular tax position should be obtained in respect of any person’s specific circumstances.

Disclaimers