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Not everyone has the soul of a bungee jumper. Most of us have kids to feed, mortgages to pay and retirement to think of.

When we create a full financial and tax plan for our clients, we do so while strongly considering their risk level. Often, our clients can be sorted into three major groups:

  • Employees who have a conservative approach to money and life and are generally looking to invest in stocks in their RRSP
  • Those who don’t want to quit their job but run a side hustle like building a small real estate portfolio
  • Entrepreneurs who are incorporated and are interested in reinvesting in their business and maximizing tax deferrals

Our firm advises all-risk levels, but we excel at the complex strategies. That’s because our partner Fabio Campanella is not just an accountant, but also a full-blown, licensed investment advisor — the full list of acronyms following his name is CPA, CA, CFP, CIM, so basically, he knows what he’s talking about. And our other partner, John Paul McDonald, is a whiz at the real estate schemes since he’s a fully licensed realtor. We want our clients to tap into our full spectrum of expertise since, well hey, we find this stuff really fun, and we don’t want to be just like other accounting firms.

Let’s go through each risk level and how we can help you:

Canadian tax-strategies for low-risk employees

We help our low-risk clients prepare their tax returns and make sure they’re maximizing all their tax and RRSP deductions. Once they maximize their registered accounts, we move on to investing in non-registered accounts and making sure the allocation is suitable (making sure US stocks are in RRSPs, interest income is in registered, leftover dividend-paying stocks are in non-registered, etc., just as a few examples). Usually, these investors focus on large-cap Canadian stocks, corporate bonds and other fairly traditional, safer holdings.

These clients are focused on savings and being comfortable, not getting loaded.

Canadian tax strategies for medium-risk side-hustler

Things get a bit more interesting with our clients that have a day job, but also have a side-hustle, usually a small real estate portfolio. These clients usually use leverage to increase their wealth and have maybe one to three properties. We help them keep organized and make sure they’re deferring as much taxes as possible like writing off capital depreciation on their properties, writing off mortgage interest income, maybe even paying a young family member to manage their properties. There’s a lot of cool tactics we can use to make sure more money stays in their pocket so they have the cash to continue building their portfolio.

Maybe these medium-risk investors also want to start investing in emerging markets or small-cap stocks, which are certainly on the riskier end but can provide growth that we’re not going to see in large-cap Canadian or American companies. We can counsel on all of those maneuvers.

Canadian Tax strategies for high-risk entrepreneurs

This is where the real hardcore strategies can happen and it’s very exciting for us to advise high-risk individuals and entrepreneurs because that’s where our full breadth of knowledge can come into play. As soon as someone is incorporated we instantly have more options to defer tax, such as buy a life insurance policy, invest within a holding company, apply for an SR&ED grant, just to name a few.

Which category do you think you fall into?

If you’re interested in hearing more or want to have us create a holistic financial plan for you, contact our office to get started today. You can reach us at info@cmllp.com or (289) 813-0097 ext. 101.