No, you didn’t win the lottery. No, you’re not inheriting money. We’re talking about a tax-efficient portfolio! A tax-efficient portfolio has always benefited investors such as you. Most incorporated professionals and business owners have never had a tax-efficient portfolio. This has cost many investors hundreds of thousands of dollars over the last 10 years or so. The federal budget of 2018 makes having a tax efficient portfolio more important than ever. Simply, the investment income in your holding company now affects the tax rate on the income in your operating company.
Let’s consider an investor with a four-million-dollar portfolio. This investor would like to retain $250,000 of their active business income. They’d like that amount each year in their holding company. They’d use this money to eventually fund their retirement.
For the investor above, it would take about eight years until the tax-efficient portfolio was $1,000,000 larger than a typical investment portfolio of stocks, bonds, and mutual funds. The benefits of a tax-efficient portfolio continue into retirement. During retirement, income investments with attractive taxation in the corporation will be selected. This makes sure that every dollar you access during retirement is tax-advantaged or tax free. Whether your investments are currently producing $50,000 of passive income, you can still benefit from having a tax efficient portfolio. Why pay unnecessary tax on your investment growth?
Every investor situation is different. The first step was reading this Article. The next step is for you to learn more about our teams investment process for incorporated professionals and business owners. Contact our team today to arrange an introduction.
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