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As a dentist, you know the importance of protecting your assets for the future. As a personal Financial Planner, I know that your assets extend beyond just teeth, What's more , as a dentist myself, I know the unique needs that dentists have when managing investments and building wealth for the future.
- Investment strategies
- Retirement planning
- Will and estate planning
- Insurance needs ananlysis
- Tax planning to minimize present and future taxes
My specialty is in the area of personal and professional integrated tax planning and the developement of long term investment strategies. So you can plan for your future with greater confidence, and with a range of options made to suit your current and future demands.
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I live in Delta and am married with two teenage daughters. Financially I was able to retire from practice at age 49. I have kept my licence and occasionally will do a locum as time permits.
As well as personal financial planning I also advise on practice financial management. Basically this means helping a dentist gain better understanding of how his/her practice is operating based on the financial performance. Armed with this information changes can be made if desired to increase efficiency. productivity, or reduce expenses. Sometimes this is an integral part of helping a dentist achieve long term financial goals.
I have made numerous presentations to study clubs around many parts of BC (Lower Mainland, Okanagan, Vancouver Island). I presented at the Atlantic Provinces Dental Convention in July, 2000. I have written articles for the BC CDS "Bulletin" and the ADSBC "Connections". I have also been a contributor to the CDA "Communique".
"Is it more tax-wise to pay myself a salary or dividends?" This is a frequently asked question.
I always advised my clients that it made no difference. It was six of one and a half dozen of another. Due to "integration" of the tax system, the after tax (A/T) effect (Corp.+ personal tax) was the same. This was the case when BC's small corp. tax rate was 23%.
The small corp. tax rate in BC has been lowered to 18.24%. This means that it is an advantage to take dividends rather than salary. Let's look at an example of a dentist who pays himself a salary of $100,000 a year, assuming no other sources of income:
Receiving dividends rather than salary in this scenario results in a tax saving of $4,878, a very significant amount.
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Step 1: Clarify present situation
Clarify the client's present situation by collecting and assessing all relevant financial data such as lists of assets and liabilities, tax returns, records of securities transactions, insurance policies,will, pension plans, etc.
Step 2: Identify goals
Help the client identify both financial and personal goals and objectives. These may include providing for children's education, buying a recreationl property, getting out of debt, maintain current lifestyle and provide for retirement etc.
Step 3: Identify problems
Identify problems that create problems to achieving goals. Problem areas can include improper insurance, or high tax burden. Cash flow may be inadequate or current investments may not be performing adequately. Problem areas must be identified before solutions can be found
Step 4: Written recomendations
Written recomendations and alternative solutions are provided. The length of the recomendations will vary with the complexity of the client's situation. They are always structured to meet the clients needs. Ivestment recommendatios are based on risk management, which dictates the proper balance of cash, debt and equity. Emphasis is put on strategy and systems rather than purchasing certain investment products.
Step 5: Action plan
A specific plan of action is outlined. A financial plan is only helpful if the recommendations are put into action. Assistance is provided to assist in either executing the recommendations or coordinating their execution with other knowledgeable professionals.
Step 6: Periodic review
A periodic review is done and necessary revisions made to assure the goals are achieved. This should be done at least once a year to account for life changes and current economic conditions.
MONTHLY PLANNING TIP
Income Source
Salary
Dividends
Personal Tax
$39,014
$15,896
Corp Tax
$0
$18,240
Total Tax
$39,014
$34,136
CPP contributions can only be made on salary. If you want to maximaize your CPP then you would need a minimum salary of around $36,000. There are no source deductions on dividends but you would be required to make personal quarterly installments.
There is no doubt that retaining 81.76% of profit in Opco maximizes the time-value of your money. However, there are other considerations. My gerneral recommendation is to take as much of your personal income as possible in dividends.
If your want to discuss how this applies to your personal situation, please contact me to discuss it.
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FEES
I am a fee-for-service financial planner. I am not selling products such as insurance or mutual funds. This allows me to be completely objective and presents no conflict of interest. I am working for my clients and no one else.
I charge $95 per hour. The average initial comprehensive plan usually takes 20 to 25 hours, including presentation and discussion. Annual or semi-annual follow-ups are billed acording to time spent and may involve 1 to 3 hours.
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1133 Shaman Cr
Delta, BC
V4M 2L6
Phone: (604) 943-2691
Fax: (604) 943-2668
Email: beaton@lightspeed.bc.ca
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