What a Dumb Accountant Learned About Branding

It’s 4:45 AM. I’m sitting here, not far from my gate, inside the restricted boarding area of the Winnipeg airport, where there happens to be a Starbucks.

The airport is quiet, the Starbucks even more so. I’m lounging in a comfortable corner, and there’s Dylan—a more obscure, less recognizable version of Dylan—coming over the loudspeakers.

The music at Starbucks is always soft, usually tender—a catalyst for quiet reflection. For some reason, the white noise in the background only adds to, never diminishes from, the mood. I can hear the subtle bustle of the servers brewing a cappuccino, they’re talking, softly to each other, and to their customers. The whole thing makes for a pleasant experience. A curious one too, because today’s visit makes me realize that this is why I come to Starbucks. Not for the coffee. Not really. More so for the atmosphere, essentially for the mood, and especially for the music.

And even if it is, for me, about that wonderful background music, the funny thing is, as a music lover, most of the time, Starbucks is playing stuff I don’t know. I seldom recognize the artists; I rarely clue in to the music that’s playing. And I don’t want to know either. It’s as though the enigmatic nature of the music just adds to the magic of the experience. There are times, you know, when one should simply not pursue the ingredients of a perfect moment.

Starbucks, wherever I happen to be, and especially early in the morning, is a place I seek out—a relaxing place. A place that invokes memories of, well, other Starbucks. Like the one on King Street West, in Toronto; a location tailor-made for Flipboarding and people-watching, on a really rainy, really early, quiet morning.

That’s why I go to Starbucks. It’s a known entity. The environment is comfortable, the coffee consistent, and the staff helpful and pleasant.

Then it hits me. That word, that awkward word, the one that I, a clueless accountant, could never truly understand. That word that sounds oh-so-trendy, and so impossibly clichéd. That word that all the consultants and marketers use. That marketing term they called “branding”.

Is my Starbucks experience a result of branding ? Setting expectations, establishing a predictable, consistent message. Creating a mood. Is that what branding is all about?

It’s about Identity, isn’t it? Corporate identity. One that’s authentic and meaningful. That’s what it is, isn’t it?

Then I shake my head. Why didn’t they just use that word—Identity? Everyone, even dumb accountants like me, understands that word.

And then I shrug. I lean back a little more, and listen to the music at the Starbucks inside this quiet Winnipeg airport. And I go back to Flipboard. Sometimes, some things are better left un-pursued.

Shareholder Woes

So you just incorporated your business? Congratulations!

As you might already know, there are a number of advantages to incorporating a business (and if you’d like to know more about those advantages, click this blog post for a brief explanation).

If, prior to incorporating, you were operating a proprietorship  (just a fancy name for an unincorporated business) you might remember that any personal cash you withdrew (or advanced) to your business was treated as a draw or a contribution, and that those funds really had no impact on your bottom line.

With a proprietorship, your business income is effectively included on your personal tax return and, provided you’re paying tax on that income, CRA generally won’t kick up a fuss as to the amount you’re withdrawing from your business.

Knowing how a proprietorship works, the temptation, for many recently-incorporated business owners (let’s call them shareholders), is to continue to withdraw (or contribute funds) through their corporation’s bank account, to continue to ignore the actual balance of the draws and contributions, and to record every “in and out” in a Shareholder Loan account. In other words, shareholders will often lend money to their corporation—crediting that Shareholder Loan account—and when they themselves need cash,  they’ll just “borrow” it from the corporation—this time debiting that Shareholder Loan account.

And that’s where things can get ugly.

Unbeknownst to most shareholders, unlike a proprietorship, CRA views an individual and a corporation as two distinct and separate taxpayers. And as such, CRA takes a very different, very narrow, perspective on what a shareholder can and cannot do via a Shareholder Loan account. Though CRA’s rules can be somewhat arcane, here are some important principles to keep in mind.

  • While a shareholder can “borrow” money from their corporation, it’s crucial to know that CRA has specific rules that address not only time-limits, but also the allowable purpose of those shareholder loans. And there have been countless instances of shareholders, unaware of CRA’s regulations, finding themselves on the receiving end of very severe (and very expensive) penalties.
  • Because CRA views a shareholder and a corporation as two distinct taxpayers, any amount a shareholder regularly receives from her corporation should usually, in one way or other, be treated as taxable income by the shareholder.
  • The balance, not to mention the series of transactions that contribute to the balance, of the Shareholder Loan account cannot be left unattended and ignored.
  • If a shareholder inadvertently expenses personal amounts in her corporation’s books and, if CRA—via an audit—discovers the error, CRA might, regardless of the Shareholder Loan balance, impose tax on both the shareholder and the corporation.

Though there are exceptions to the rules mentioned above, those exceptions, (like the rules themselves) are somewhat complicated. As such, whether you are now (or about to become) incorporated, we strongly recommend that you get in touch with us so that we can discuss CRA’s rules regarding Shareholder Loans.

Sunny Days; Sunny Ways

My friend, Carmin, he’s pretty good with a camera. The man, I tell you, has one helluva eye.

Given that we’ve known each other since the days of dinky toys and jet ice cream bars, we have, over the years, embarked on a number of pursuits. Some worthwhile; others perhaps of the foolhardy kind.

Long story short, we decided to, once again, collaborate on a trial project. The goal being to put words and images together.

Here’s our first attempt. Thought I’d share it with you.


I can’t remember who it was, Maria maybe, that raised the question.

We were here, mere steps from Parliament Hill, surrounded by a sea of humanity, a never-ending crowd—young, old and in between—almost everyone dressed in red, or white, almost all of them expectant, celebrating, waiting for the Canada Day festivities to begin. And Maria poses the question.

“What makes us Canadian?”

Actually it wasn’t Maria asking the question. She was just relaying it. Explaining how that very question was asked of her by a puzzled European, one who couldn’t quite understand the mix and makeup of Canada, and of Canadians.

“How are you a Canadian?” This man from Italy asked her, “What national trait defines you?”

And we stood there, listening. And we shrugged. Then we offered the stereotypical reply, the one that pointedly maps out who are by explaining who we’re not. “We’re not like Americans are,” Someone suggested.

Yes that much is true, we’re not like them. We don’t broadcast our nationality, we don’t wear it on our sleeve (except maybe during Olympics hockey). No, no, we’re quieter than our neighbours to the south, more subdued. And yeah, yeah, we’re polite. And contrite. Painfully so. Like that time, visiting a friend, and I absentmindedly walk into his coffee table, bashing my shin. And my friend says, “Oh, sorry!” Sure, because it’s his fault I wasn’t paying attention. It’s his fault the coffee table was in my way, just a few inches from his sofa.

But you know what? Whatever we are, whatever it is that defines us, we are all of us out here, in Ottawa, in the tens of thousands; all of us out here, celebrating Canada’s 149th birthday.

The noon hour approaches and the crowd builds, more and more of us—more and more of these ill-understood and ill-defined Canadians—making our way to Parliament Hill, and then standing patiently, joking, chatting. And waiting.

Taking it all in, I’m reminded of something. Star Trek. The USS Enterprise and its crew. Romulans and Vulcans and Humans (of course). They all look so different, they all sound so different. And they all pull together, work together, in order to… well, you know how it goes. You know what it is that Captain Kirk (played by a Canadian) says at the start of every episode.

PM Trudeau

A buzz builds, a cheer goes up, flags wave more enthusiastically. Our fresh-faced PM, Trudeau fils, has arrived. He’s a people person this Trudeau. He’s got the common touch. Watching the large monitors, I can see it. People lean forward, hoping to get a glimpse, they hold out their hands, hoping to shake his. People adore him, this Justin Trudeau. And they love Sophie, his self-made and elegant wife.


I glance at the crowd. It’s a feel-good moment. All these people, of all stripes, lined as far as I can see, stretching east and west along Wellington Street, spreading south all the way down la Rue Metcalfe.

And I brew about that European. Maybe he had it wrong. Maybe it’s our diversity, rather than our cultural uniformity, that marks us as Canadians. Maybe we’re just like the USS Enterprise. We all look different? We all sound different? Who cares? Different is good. Different is dramatic. Because… who wants to eat vanilla ice cream every day?

So, we make it work. We make the nation and the nation makes us. Sometimes the work comes easily. Sometimes not so much.

There’s more electricity in the air. Something’s happening. I glance left, then right. A finger points up, toward the sky. I’m surprised to see the finger is mine. Excitedly pointing at the smoke trails, heading toward us. The Snowbirds, coming in fast.


They swoop in from the east, nine of them, quietly, at first. They’re so close, how do they fly so bloody close? One plane looks different, out of proportion. Only when they’re overhead, no longer quiet, I see it’s a CF18. It’s so much larger, so much more menacing, than those sleek, almost-dainty Canadair jets used by the Snowbirds. And it’s chasing them down, right on their tail, like the venomous hornet that it is, imposing its presence on those little planes that are, (sing it) turning into butterflies above our nation.

With a loud roar, they disappear, off to our left. But we’re not fooled, we watch the skies. We know they’ll be back.

And so they are, soaring in overhead. The Hornet’s absent now–hunting other prey?–and the Snowbirds make a long lazy arc right in front of us. Glorious, oh so glorious.

Oh look! The Governor General is here! He arrives in style, in a horse-drawn carriage. And then an elder appears. He performs an Indigenous, spiritual ceremony—a smudging—that sees the PM and other invited dignitaries take part in a purifying, cleansing smoke bath. And my mind drifts back on that one time I was fortunate enough to experience the very same thing. A smudging is a truly touching ceremony.

And then a cannon fires, frightening the crowd. A salute! Twenty-one guns? I don’t know, but there were many. And then the anthem is sung. And once again the crowd roars. And, one more time, the Snowbirds swoop in. They arrive from over the Peace Tower this time, and then up, straight up, into the sky. And then they break off, each one falling away, backward, as though gravity told them, no more.



Then they hightail it out of there, screaming across the sky, disappearing for good.

Everyone’s thrilled. Everyone’s happy. Everyone, in their own way, is having a good time.

And that European’s question stays with me still. Look it, I finally decide, maybe there’s no need to define a Canadian. Maybe there’s no need to mandate what makes a Canadian a Canadian. Because, I decide, looking out at the throng on Parliament Hill, maybe it actually is—like so many, including Trudeau père, had always suggested—maybe it is a mosaic thing. Maybe there’s a piece of Canada inside each of us. And inside each of us, that piece is just a little bit different. Maybe we all interpret that piece differently, we all perceive it in our own unique way.


And when we come together, on a day like this, we all make our contribution, join our unique piece to everyone else’s. And together, in our own way, we make a nation.

Is that how it all works? Who knows? It’s good enough for me though.

And besides, it’s Canada Day, it’s sunny, and it’s hot.

“C’mon,” Someone suggests, “Let’s go get a beer.”

Pay Me Now, Or Pay Me (A Whole Bunch More) Later

CurrencyTo the casual observer, our friends over at the Canada Revenue Agency (CRA) sometimes make head-scratching policy decisions. Just one example of CRA’s puzzling policy deals with deadlines for small business corporations. Were one to look it up, one would discover that a small corporation has six months from fiscal year-end to file a corporate tax return. So you’d probably understand how a business owner would automatically put that year-end task on the back-burner. And you’d also excuse her or him for thinking that they’ve got CRA covered, as long as the tax return is filed within six months.

Imagine their surprise then when CRA’s assessment includes an interest charge. Why is there interest if the tax return is filed on time? Because there’s a second component to that “six-month” rule. An important clause that says; even though the return is due six months after year-end, the actual tax is payable within no more than three months. So, our fictitious business owner isn’t onside at all. Yes, the tax return was filed on time, but the tax payment was late. Hence the interest charge.

Yeah, I know head-scratching.

To make matters worse, if that same business owner owes more than $3,000 in income tax (or HST for that matter), then CRA further requires the corporation to estimate and remit, every three months, an amount owing for next year’s tax too. Those prepayments are called quarterly instalments and if the business owner forgets to pay up, and if there is tax due next year, then CRA will once again assess an interest charge.

And what’s even more head-scratching for most business owners is that CRA won’t automatically send out a notice, or a reminder, that those instalments are due. In other words, the onus is on the business owner to verify, calculate and remit payments as required, and at the right time.

And, given that most business owners are much too busy thinking about other things; sales & marketing, product development, staffing, overhead and expenses (you know, the not-so-mundane stuff), it’s not uncommon to see an HST or income tax instalment go unpaid. Or sometimes get overpaid.

What this all mean is, in today’s increasingly complex world, business owners need more than a once-a-year-accountant. They need someone who will keep track of these things. Someone who will keep them onside, and on the right side of the tax and instalment game. In today’s world, business owners need an on-going relationship and a reliable service from a trusted advisor.

And we’ve got just such a service. One that we’re calling Concierge. And with our concierge offering, among all the other services it offers, it also makes sure that you pay CRA the right amount right now. Rather than a whole bunch more later.

Eggs and Baskets

Eggs and basketI was chatting with my young son, a millennial you see.
He’s telling me how different things are for people his age.
He’s saying; even though there’s no shortage of part-time work, that good jobs—real jobs—are hard to come by.  And those part-time gigs, most of them are menial, low paying positions.

It reminded me of a conference I attended, earlier this year. One of the themes dealt with something called, Millennials in the Workplace. It surprised me to learn that the number of self-employed millennials is, compared to previous generations, uncharacteristically high. I also learned that the reason so many millennials are self-employed is that there’s no other choice. In other words, the job market is bad, so bad that these kids have to carve out a living in some other way. Via-self employment.

But you know what?
In my mind, that’s not a bad thing.
And the reason it’s not a bad thing has to do with eggs and baskets.

When it comes to saving and investing—when it comes to money—who hasn’t heard that age-old maxim, “Don’t put all your eggs in one basket.”

Years ago, I had the brilliant, or so I thought, idea of investing in nothing but bank stocks. My rationale? Great dividend, stable client base, well-managed businesses… What on earth could be wrong with that strategy?
I remember bringing up my idea with a couple of high-powered advisors—one of them a well-known investment journalist.

I still remember one fellow’s (a stock analyst) harsh reply, “You’ll get killed.”
The other guy, the journalist, was somewhat kinder—more gentle.  Shaking his head, he said, “You need to diversify. You just don’t put all your eggs in one basket.”

History, by the way, has proven that those investment know-it-alls knew their stuff. It wouldn’t have been, to put it mildly, a brilliant move.

So yeah, keep your financial eggs in multiple baskets. Wise words. Words I heed to this day.

And yet, and yet. When it comes to careers, why do so many of us want one single job? Talk about eggs in one basket. If you have one employer, you have one source of income. If you lose that employment position, you have zero sources of income. You’re on your own. With no eggs; no basket.

Contrast that to someone—a consultant or a carpenter say—who has three, four, ten clients. One client disappears and, unpleasant as that might be, they’re at least not left standing there. Holding an empty basket. No eggs.

So maybe, just maybe, millennials, whether by fate or by design, are actually onto something. Maybe, with their multiple revenue streams, they’ll have at least one or two eggs. Maybe they can scramble them, boil them, fry them. And naybe, hopefully, they, at least, won’t go hungry.

Alive and Well

Invest Ottawa Logo

Thanks to the good folks at Invest Ottawa, who host my small business seminars, I am lucky enough to get a front row seat to this town’s entrepreneurial spirit.

What I mean is I deliver, roughly every quarter, two information sessions. One, called Cash Rules, illustrates the importance of proper capitalization and cash flow management. The other, named Cloud VS Desktop, discusses the various billing and accounting software tools available to today’s entrepreneur.

Just yesterday we delivered another round of these sessions. And from the people in attendance–people running brand-new businesses, people about to launch their businesses and people doing their due diligence, researching their planned businesses–the state of entrepreneurship is indeed a healthy one. It’s strong. It’s blossoming. And–to my eyes–that is an encouraging sign. We need entrepreneurship. We need dreamers and risk-takers and people who are willing to follow through on the What If’s.

And so let me just take a moment to wish all those newly-minted entrepreneurs in attendance yesterday the best of luck in their ventures. It will be a challenge, I’m sure. But I’m equally sure it will be a wonderful learning experience, a ready and steady growth path and, best of all, one hell of a blast!

Oh and, if you’d like to learn more about my information sessions, just click here.


Tax Tips Made Fun



This is cool.

The folk over at Freshbooks just put up a page. One that helps small business owners get ready for tax time. Updated regularly, their webpage, amusingly called Tax Time Learnatorium, serves up practical advice on everything from finding a good accountant to making sure you’ve got all your stuff ready.

And, unlike most tax-advice sites, the Freshbooks website is anything but boring. There’s some kick-in-the-butt motivational pep-talk, there’s some get-your-act-in-gear music riffs; there’s a ton of stuff! All of it hip, fun and cool.

But what else would you expect from Freshbooks? It’s the company I like to call “the surfer dudes of accounting.”

So if you’re lolly-gagging around your tax return. Check out Tax Time Learnatorium. ‘Cause, you know, those surfer dudes can make anything seem like fun.


Big Tax

BigTaxEventI just got back. From something called The Big Tax Event. Sponsored by Intuit Canada, it was like a numerical Woodstock; three days of financial frolicking and a peaceful love of number-crunching.

I was there to train accountants and tax-preparers on Intuit’s ProFile tax software. That was on Day 1. But Day 2, though, well Day 2 saw me sitting in the crowd, learning from some very heavy-hitters. Advanced tax professionals talking about advanced tax stuff.

You’re probably shaking your head, wondering why anyone would enjoy something like that.

And if that’s what you’re thinking, well that’s okay. Like I mentioned elsewhere on this site, it’s all because you don’t have the T gene.  And T” stands for tax. Just about every accountant, you know, has the T gene.

If you’re an entrepreneur, or a manager, or if you’re self-employed in sales and marketing, then you don’t have the T gene. But you don’t need it–don’t need the T gene at all. Just make sure you’ve got someone on your team that does, and you’ll be fine. Because, if there’s one The Big Tax Event reinforced. it’s that tax is complicated. It’s tricky.

But there was other stuff happening at that Big Tax Event. Cool stuff, interesting stuff. All of it designed to making your professional life–at least from a numbers perspective–a little easier, a little less complicated, and a lot more efficient.

Stuff like QuickBooks Online–a cloud program that lets you do every day stuff, like send an invoice, from any web-enabled computer, or just about any mobile device. There were other cool folk there too. Like Receipt Bank and HubDoc. Think of them as your own personal automated financial assistants that take over that tedious task of data entry. These apps will track your costs, your business expenses, your receipts–all without you needing to lift a finger. Well, just about.

Method CRM was there too. Contact management; calendar sharing; relationship building. Keeping your customers happy. That’s the kind of stuff Method CRM does.

And I’m only describing the folk I stopped to talk to. Yeah, there were other software vendors there. And I’m sorry I didn’t have time to approach them all.

Why not?

Well, you know, there was a tax seminar happening and I just had to sit in on that. Because, T gene.

If Kirk needs one, you do too

Capt Kirk“Stardate: 1434.5.”  Not being a Trekkie,  and therefore not convinced beyond a reasonable doubt, I think that’s how every Star Trek episode began. With some rather primitive special effects. Primitive, that is, when compared to a modern day, CGI point of reference. And then there was Captain James T. Kirk’s voice-over providing context, “Captain’s log, stardate 1434.5. Our destination is Sigma Iota II.”

I always loved the exotic names those Star Trek writers pinned on their planets; Cerberus II; Altair IV; Sakura Prime. But I often wondered, “What the heck’s a stardate anyway?”

So I looked it up.

According to Wikipedia, stardates are completely arbitrary. They don’t have real significance. Other, that is, than to keep the viewer from sensing a pattern, establishing an actual date, and then announcing, “There’s no way a tricorder’s going to be invented by then!” Hence the random sequencing of stardates.

But you know what?  There’s something else interesting about Captain Kirk’s voice-over. Something that each one of us can learn from.

And that is, Captain Kirk keeps a log. Imagine that! Somewhere out there, sometime in the 23rd century, there’s a captain of a sophisticated and advanced space vessel dutifully jotting down a travel log. Which, kind of, raises the question. Does Kirk actually have a log book? One made of paper and cardboard? And does he use an old-fashioned pencil too, to post his entries? Or is the log more of a futuristic, automated type of gizmo. With accelerometers and geo-fences, and God knows what else, that monitors and records every little degree of movement? You know, like an iPhone?

But never mind all that.

Because the point (and yes, it is taking me a long time to get to it) is that even Federation captains keep a log. And the bigger, more important point is that you should too. Especially, that is, if you’re claiming any sort of vehicle expense on your tax return.

Yes, I know. You’ve heard it all before. And no matter how often someone tells you about the importance of a vehicle log, it remains something you simply haven’t gotten around to. Sort of like going to gym. Or cleaning out the rain gutters.

There are, though, huge benefits to keeping a vehicle log. Monetary ones. For example, with a vehicle log, you’ll be sure to maximize the car expenses you can write off on your tax return. And with a log, you minimize the risk of having the tax folk (your silent partner that I mentioned in a prior post) disallow some, or all, of your vehicle expenses. So yeah, a vehicle log’s pretty important. Even if it is, at the same time, mundane and pedantic.

But hey, if you’re one of those Trekkie or techie types, I’ve got good news!

There are all kinds of high-tech solutions for tracking your mileage. Just download an app to your mobile device and let technology take care of it all for you. If you’re on an iPhone, check out these solutions. If, on the other hand, you’re an Androidite, then take a look at these..

So there you go. Now you can be the Captain Kirk of your business. Just do me a favour, deep-six the voice-over. And that weird stardate thing too.

Retirement. From someone who knows

HammockLast summer, at a BBQ, me and this retired fellow–let’s call him Tom–we stood chatting. Talk turned to investments, to the stock market and, finally, to retirement. When I pondered if retirement was as expensive as the so-called experts warned, Tom sort of chuckled. We talked some more, until I asked him if he’d jot down some common-sense, real-life thoughts about his experience.

Here’s Tom’s take on retirement…


Knowing nothing of business or finance, my only tools for life or retirement were common sense and discipline. Paying $2 for an item that could be bought for $1 was wasteful but, when I reviewed my earliest spending habits, I found I was doing just that more often than I cared to admit. A little discipline improved that dramatically. “A dollar saved was worth much more than a dollar earned”.

My first instinct on receiving my first pay was, understandably, to go out, celebrate and spend. But then, I considered what costs had to be met before the next pay. I opened a bank account. The rise of its balance was slow and erratic. Banking charges of $200 – $300 annually were eating away its progress. Once I learned that banks would forego those charges if I maintained a minimum balance of about $2000, that became my first financial goal. It was a 10% to 15%/yr return on investment and “savings were the road to life’s goodies”, retirement was just a vague concept of a distant future.

Later, I got a credit card and treated it like accident insurance, something you want in case of emergency but hope never to need. I used it sparingly for things I was sure to pay off within the month, just to keep it active. I knew I’d be working for the bank otherwise, paying 20%/yr. or more on it. It wasn’t long before I wanted a car but resisted the urge to buy a new, exotic, or showy one. The most common car on the road would be most familiar to mechanics and their parts would be most readily available. I borrowed the money from the bank because it would cost less than my account would save once my first goal was met. A car is not an investment, it’s an expense. The best investment is a house, which I bought years later. It saved rent and its value increased. I do the maintenance and most of the repairs on both, being more willing to use my hands than my wallet. Services, even then, were consuming an increasing portion of incomes.

After seven years work, I got a job with a major corporation that had a defined benefit pension plan in which the company matched a portion of my contributions. It was invested for growth as a hedge against inflation, which historically averages, say 3%/yr. Supporting a young family at the time, I didn’t take full advantage of that opportunity until much later.   

We were spending about $5000/yr. at the grocery store. They, like most retailers, offer endless sales. If a non-perishable item bought monthly went on sale at 10% off, we bought six instead of one, which becomes a 20%/yr. return on investment, more than most investors make on the stock market. A freezer paid for itself in no time. The lessons, here, were that I should anticipate and buy in advance. Procrastinating to the last minute inevitably cost us more.

It seemed that personal finance and especially family finance required significant safety margins and flexibility. When (not if) something happened, my creditors wouldn’t be sympathetic nor would the government bail me out. Life’s risks had to be managed. Irrational fear would only drive me into the open arms of insurance companies willing to eat up my savings, which would otherwise increasingly become my insurance.

By the age of 50, down-sizing was creating havoc in the workplace; I was becoming less enthusiastic about my job and started to think more seriously about retirement. I started maxing out my allowable RRSP’s at the bank, first with GIC’s then Mutual funds. By 55, I jumped at a moderate but reasonable bridged retirement offer. My wife wanted to continue working to build her pension and we only had one daughter left at home, who was in her last year of college. I was able to put most of the termination package into RRSPs, but by leaving the company, I was then responsible for managing my pension, which until then I had mostly ignored. Fortunately, I had a friend who, not having a company pension, had started his own self-managed RRSP and showed me the ropes. I felt we could manage it.

The first year was tight with one daughter still in college. With my friend’s help, my improving understanding of finance started to pay off and, by 60, the Quebec Pension kicked in. I had signed up to the bank’s web service, which allowed me to follow my investments (or any other I may be interested in) on the market in almost real time. More importantly, it offered tools to analyze what the market was doing so I developed a more informed view of what’s going on.

Managed Mutual Funds had been costing me about 2% annually. If they earn the stock market’s historical average, say 8%, I would get 6%, which becomes 3% after inflation. Unmanaged ETF’s cost me about 0.5%, followed the open market on which they’re traded, and didn’t threaten penalties for early redemption. The difference between 3% and 4.5% net over time is tremendous. Active management can then yield another 1.5%, raising the net to 6%, double what unmonitored mutuals would. The combination of this and the termination package brought my RRSP’s back to where they should have been. Close monitoring and timely trading were the keys. In 2008 I lost 10% instead of 40% then, recovered much more in Canada’s quick recovery afterward. I’ve been lucky enough not to dip into my RRSP’s. In fact, since the advent of a retiree’s next best friend, TFSA’s, I’ve been able to max them out.

The effects of playing the market, like gambling, can be encouraging, even infectious, and you could go on to broader portfolios of stocks, buy on margin or become a day trader. That and more is possible and “potentially” more profitable but, the purpose was to maximize retirement savings not start another career. If finance interests you, occasional trading provides a light pastime, security monitoring of your investments and can provide extra income right through retirement. I watch the market and make a little while my wife watches the flyers and saves a little and everything works out nicely.

In retrospect, the cost of a child’s education or marriage should be provided for before retirement. Retirement shouldn’t be burdened with them, a mortgage, car payments or credit card debt. Credit costs money and is best suited to increasing incomes not diminishing incomes. And, retirement is best spent empty nested. That’s not something to lament over. Your children’s successful departure is your graduation as a parent. A 3 or 4-bedroom family home is not appropriate. It becomes too much work. Depending on your finances and interests a 2-bedroom single level bungalow or condo is more appropriate. If that’s a real-estate downgrade, it’ll provide a little more money for retirement. We had a 3-bedroom bungalow that I converted to two bedrooms, which we still find more than necessary. And, a comfortable car is more appropriate and cheaper than a family van or SUV.

Sipping on a half priced senior’s coffee, I can tell you that retirement living costs substantially less. It still amazes me how much was spent on clothes, gas, lunches and coffee going to work, never mind the unending stream of birthdays, weddings, babies and retirements that had to be celebrated there, or the ambushes for tickets and donations. I can’t say what the value or percentage of saving is. That would depend on your circumstances but, it’s consistently more than most think beforehand.