Great forum - I've been watching from the sidelines but this is my first actual post
I think this has been discussed is some form or other in the last few years but I still don't have a clear answer:
About me - I'm a professional with:
A CCPC: currently about 70k in it - growing at about 2000-4000 a month. I started the CCPC about 8 months ago.
TFSA: maxed out 52,000
RRSP: about 160k
Personal non-registered accounts: somewhat large amount which I'd have to calculate.
I'm really ashamed to say that I'm almost completely sitting in cash having been stuck in 'analysis paralysis' for quite some time.
However, I'm ready to take the plunge and go with a couch-potato style portfolio, having read quite a bit around it and believing very strongly in passive index investing.
So, the question really is how to organize the ETFs. For argument sake, lets assume a 60:40 stock/bond mix and perhaps assume I go with ZAG, VCN and XAW.
I'm very open to other ETFs and portfolios with more than 3 funds or even with some amounts in other types of investments if necessary. I'm ok with using TD e-series as well, since I use TD anyway and the extra MERs might be worth the increased simplicity of purchases.
How do I decide which tax-efficient investments should go into the CCPC and which into my personal taxable account? Which into RRSP/TFSA? I’m assuming it would make sense to avoid duplication of funds in different accounts but I think this may be impossible with the CCPC holding more and more retained earnings over the years. Obviously there are also issues with keeping track of ACB, when/how much to take out of the corp and re-invest personally, potential for flow-through dividends from the corp, capital dividend account etc...
To complicate things further I have a fair amount of USD in both the CCPC and personal non-reg accounts. Also, when it comes time to rebalance, things may get messy having both personal and corporate non-registered accounts.
I'd like to keep things as simple as possible though and would like to buy shares of the ETFs quarterly or maybe monthly as I earn more income in the CCPC. I can adjust my salary as needed, if necessary. Currently I am still paying a salary to myself and am generating contribution room in my RRSP yearly. Eventually, my CCPC retained earnings will exceed my RRSP and TFSA and also my personal non-registered accounts.
Some options:
1. Make a passive (couch potato) index portfolio and somehow put the tax efficient stuff into my personal non-reg accounts and CCPC account in combination. Maxing out the RRSP/TFSA for the tax inefficient stuff as much as possible. I think I will be unable to avoid some duplication of funds. Not even sure how to structure this.
2. Make a passive index portfolio in my personal accounts, putting as much of the tax inefficient stuff into the RRSP/TFSA. Not using the CCPC for index investing AT ALL, and just investing Corporate funds in something that will generate capital gains or flow through Canadian dividends.
3. Do (2) above, above but plop something else more appropriate for a CCPC's passive income stream (although I don't know what this other investment would be exactly)
4. Just hire a professional to really figure out the best way to do all this, make the monthly purchases, keep track of ACBs, rebalance and figure out how much and when to take out of the corporation. This last option was highly recommended to me by a very popular Canadian passive index investment guru who's blog I read often although I'm having trouble believing I can't do this myself I'm not even sure who would be best for this (my accountant is great with tax planning with the corporation, but I doubt he'll help me make my quarterly fund purchases and rebalance). A robo-advisor?? A full-service wealth management company who believes in index investing and charges 1% of my holdings?
Any thoughts? Other options to make this simple? Concrete examples of how to structure my regular purchases?
Thanks!
I think this has been discussed is some form or other in the last few years but I still don't have a clear answer:
About me - I'm a professional with:
A CCPC: currently about 70k in it - growing at about 2000-4000 a month. I started the CCPC about 8 months ago.
TFSA: maxed out 52,000
RRSP: about 160k
Personal non-registered accounts: somewhat large amount which I'd have to calculate.
I'm really ashamed to say that I'm almost completely sitting in cash having been stuck in 'analysis paralysis' for quite some time.
However, I'm ready to take the plunge and go with a couch-potato style portfolio, having read quite a bit around it and believing very strongly in passive index investing.
So, the question really is how to organize the ETFs. For argument sake, lets assume a 60:40 stock/bond mix and perhaps assume I go with ZAG, VCN and XAW.
I'm very open to other ETFs and portfolios with more than 3 funds or even with some amounts in other types of investments if necessary. I'm ok with using TD e-series as well, since I use TD anyway and the extra MERs might be worth the increased simplicity of purchases.
How do I decide which tax-efficient investments should go into the CCPC and which into my personal taxable account? Which into RRSP/TFSA? I’m assuming it would make sense to avoid duplication of funds in different accounts but I think this may be impossible with the CCPC holding more and more retained earnings over the years. Obviously there are also issues with keeping track of ACB, when/how much to take out of the corp and re-invest personally, potential for flow-through dividends from the corp, capital dividend account etc...
To complicate things further I have a fair amount of USD in both the CCPC and personal non-reg accounts. Also, when it comes time to rebalance, things may get messy having both personal and corporate non-registered accounts.
I'd like to keep things as simple as possible though and would like to buy shares of the ETFs quarterly or maybe monthly as I earn more income in the CCPC. I can adjust my salary as needed, if necessary. Currently I am still paying a salary to myself and am generating contribution room in my RRSP yearly. Eventually, my CCPC retained earnings will exceed my RRSP and TFSA and also my personal non-registered accounts.
Some options:
1. Make a passive (couch potato) index portfolio and somehow put the tax efficient stuff into my personal non-reg accounts and CCPC account in combination. Maxing out the RRSP/TFSA for the tax inefficient stuff as much as possible. I think I will be unable to avoid some duplication of funds. Not even sure how to structure this.
2. Make a passive index portfolio in my personal accounts, putting as much of the tax inefficient stuff into the RRSP/TFSA. Not using the CCPC for index investing AT ALL, and just investing Corporate funds in something that will generate capital gains or flow through Canadian dividends.
3. Do (2) above, above but plop something else more appropriate for a CCPC's passive income stream (although I don't know what this other investment would be exactly)
4. Just hire a professional to really figure out the best way to do all this, make the monthly purchases, keep track of ACBs, rebalance and figure out how much and when to take out of the corporation. This last option was highly recommended to me by a very popular Canadian passive index investment guru who's blog I read often although I'm having trouble believing I can't do this myself I'm not even sure who would be best for this (my accountant is great with tax planning with the corporation, but I doubt he'll help me make my quarterly fund purchases and rebalance). A robo-advisor?? A full-service wealth management company who believes in index investing and charges 1% of my holdings?
Any thoughts? Other options to make this simple? Concrete examples of how to structure my regular purchases?
Thanks!