Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Another financial milestone
Old 04-10-2008, 01:10 PM   #1
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Jul 2006
Posts: 11,020
Another financial milestone

My professional corporation is now worth over $600K. This represents six years of tax advantaged savings for ER. Obviously I am not as far ahead as I had hoped to be given that the 1 year return was -7%. However, this is a growth portfolio for the long term and its 5 year return has been 8%. I do not expect to start withdrawing from it till at least 10 years into ER. One of my goals is to get this portfolio to $1m before retiring. If I continue my current work pattern and there is no prolonged bear, that should be possible within 5 years.
__________________

__________________
Meadbh is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 04-10-2008, 01:15 PM   #2
Moderator Emeritus
Rich_by_the_Bay's Avatar
 
Join Date: Feb 2006
Location: San Francisco
Posts: 8,827
Good work, Meadbh. It's always motivating to see the numbers rise.
__________________

__________________
Rich
San Francisco Area
ESR'd March 2010. FIRE'd January 2011.

As if you didn't know..If the above message contains medical content, it's NOT intended as advice, and may not be accurate, applicable or sufficient. Don't rely on it for any purpose. Consult your own doctor for all medical advice.
Rich_by_the_Bay is offline   Reply With Quote
Old 04-10-2008, 01:40 PM   #3
Thinks s/he gets paid by the post
DblDoc's Avatar
 
Join Date: Aug 2007
Posts: 1,224
Meadbh - I'm curious. What is your "professional corporation" and how does it work as a retirement vehicle. I have a sister who is in FP in BC and it may be usefull for her to know.

Thanks

Oh and congrats!

DD
__________________
DblDoc is offline   Reply With Quote
Old 04-10-2008, 01:41 PM   #4
Moderator Emeritus
Bestwifeever's Avatar
 
Join Date: Sep 2007
Posts: 16,375
Sweet--that is an awesome chunk of change. Congratulations!
__________________
Bestwifeever is offline   Reply With Quote
Old 04-10-2008, 02:06 PM   #5
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Jul 2006
Posts: 11,020
Quote:
Originally Posted by DblDoc View Post
Meadbh - I'm curious. What is your "professional corporation" and how does it work as a retirement vehicle. I have a sister who is in FP in BC and it may be usefull for her to know.

Thanks

Oh and congrats!

DD
Your sister should DEFINITELY consider incorporation of her practice. Incorporation has been legal in BC for years and years.

Basically, it enables the MD who can LBYM to save clinical earnings in a tax advantaged way within the medical corporation (which is a separate entity and has its own licence to practice).

https://www.cpsbc.ca/cps/physician_r...incorporations

There are also opportunities for the corporation to employ family members for support functions such as bookkeeping, thereby reducing the family tax bill. And you can set up a personal health plan, which means that noninsured health expenses of corporate employees (including the MD) can be expensed to the corporation. The downsides are (1) if the MD isn't saving money, there is no financial benefit; (2) the MD is still professionally liable; (3) there are some administration costs.

Tons of information on the MD Management website:

MD Financial Solutions

To quote:

The advantages and disadvantages of an incorporated medical practice

Incorporating your medical practice generally allows you to take advantage of the federal small business deduction on up to $400,000 of active business income earned in the corporation. Depending on the small business rate in your province and your personal marginal tax rate, retaining income in your professional corporation and deferring personal tax at a shareholder level could allow you to defer up to 30% of tax. As a result, your professional corporation may have a greater ability to save or to repay business debt.
Additionally, in all provinces except Alberta, certain non-physician family members can be shareholders of your professional corporation. Paying dividends to adult family members in a lower marginal tax bracket than you could reduce your family’s overall tax payable.
However, incorporation involves setup and ongoing administration and compliance costs. In addition, the benefits of incorporation may be limited for certain medical practice arrangements. If you think incorporation might be for you, you’ll want to discuss the feasibility and costs with your tax and legal advisors before proceeding.
__________________
Meadbh is offline   Reply With Quote
Old 04-10-2008, 02:09 PM   #6
Thinks s/he gets paid by the post
DblDoc's Avatar
 
Join Date: Aug 2007
Posts: 1,224
Thanks Meadbh. I'll make sure she is aware. She hasn't been much of a LBYM type but now with retirement not in the distant future she may be thinking about it more.

DD
__________________
DblDoc is offline   Reply With Quote
Old 04-10-2008, 02:11 PM   #7
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Jul 2006
Posts: 11,020
Quote:
Originally Posted by DblDoc View Post
Thanks Meadbh. I'll make sure she is aware. She hasn't been much of a LBYM type but now with retirement not in the distant future she may be thinking about it more.

DD
Well, BC does stand for "Bring Cash"!
__________________
Meadbh is offline   Reply With Quote
Old 04-10-2008, 02:41 PM   #8
Full time employment: Posting here.
Darryl's Avatar
 
Join Date: Mar 2007
Posts: 577
Nice job! Keep it rolling and wrap it up in under 5
__________________
I highjacked a rainbow and crashed into a pot of gold - Bon Jovi
Darryl is offline   Reply With Quote
Old 04-10-2008, 10:34 PM   #9
Dryer sheet aficionado
 
Join Date: Apr 2008
Posts: 29
Congratulations!
t9
__________________
torres9 is offline   Reply With Quote
Old 04-10-2008, 10:51 PM   #10
Recycles dryer sheets
ikubak's Avatar
 
Join Date: Dec 2007
Posts: 392
Quote:
Originally Posted by Rich_in_Tampa View Post
Good work, Meadbh. It's always motivating to see the numbers rise.

It is motivating to see the numbers rise. However, it has been five or six months since I have experienced that. I just keep buying and it is keeping me within throwing distance of my high hit in October 07. Stay the course! Maybe we should add, Keep her afloat too!
__________________
Retire date Jan. 10, 2018
ikubak is offline   Reply With Quote
Old 04-11-2008, 09:33 AM   #11
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
kcowan's Avatar
 
Join Date: Jul 2006
Location: Pacific latitude 20/49
Posts: 5,741
Send a message via Skype™ to kcowan
Congratulations. you are getting there by LBYM and thinking future.

When we retired in 2002, we could not afford to stay retired and buy a place in PV. Through judicious investing and tax avoidance, we were able to buy by Jan 2007. We actually bought in Nov 2007.

Isn't it great when a plan comes together?
__________________

__________________
For the fun of it...Keith
kcowan is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
New milestone for us Callie FIRE and Money 26 10-10-2007 08:28 AM
$ Milestone citrine Young Dreamers 34 09-12-2007 12:26 PM
New milestone Andre1969 FIRE and Money 9 07-05-2007 07:17 PM
new milestone for us simple girl FIRE and Money 14 04-12-2007 02:02 PM
Milestone? MRGALT2U Other topics 14 06-05-2005 03:09 PM

 

 
All times are GMT -6. The time now is 04:32 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.