Investing post mortgage?

Asset allocation, risk, diversification and rebalancing. Pros/cons of hiring a financial advisor.

Re: Investing post mortgage?

Postby StuBee » 07 Jan 2012 12:42

newguy wrote:
StuBee wrote:(I earn (self employed) more than 100K$ per year and my wife less than 15K$...).
Can't you have a professional corp and hire your wife or at least pay her dividends. I was under the impression most docs did something like that.

newguy

ps Just interested, not to take it thread too far OT.


For a variety of reasons, our family average tax rate is currently very close to the fixed corporate tax rate AND I would have to take out almost all of the income anyway AND any secondary income within the corp is more or less fully taxed anyway... I performed a full analysis of this about a year ago (I wasted about a month of my mental energy... but I had fun :lol: ) and concluded that, in my case it was not worthwhile. If my net (after professional expenses) was significantly higher, it would have made sense. As I have been approaching financial independence I have been reducing my workload in an opportunistic fashion such that for a doctor, I have significantly below average earnings...

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Re: Investing post mortgage?

Postby newguy » 07 Jan 2012 12:53

HardWorker wrote:The one down side I see, is that for the next period of mat leave, she'll earn less because her income was considerably less than normal, but that a price we both will gladly pay for the sake of the kids.

If it's more than 3 years you can take out the spousal rrsp money and the income will go to her. However, I suggest irish twins to get it over with and so they will have a playmate.

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Re: Investing post mortgage?

Postby StuBee » 07 Jan 2012 19:45

HardWorker wrote:So StuBee, are you in the same situation as I? Wife works only part time because of the kid(s)? Is it better that you're self employed? Control your hours to help at home more? For us having my wife stay at home is a very comforting thought, and the apparent tax advantage so far is a bonus. The one down side I see, is that for the next period of mat leave, she'll earn less because her income was considerably less than normal, but that a price we both will gladly pay for the sake of the kids.


Actually my wife (53) does not work having left the job force around 15 years ago (birth of 2nd child). Her current income (14K$ per year) is around 80% investment income and most of the investment income is in the form of dividends. The end result is that she has negative tax (and this reduces my annual tax bill by about 800$). She is the exceptional situation which I referred to when I mentioned "negative MTR" previously. The reason why she has this income is because, earlier on, we lived more off of my employment income and she invested more of her employment income...

Yes, I am self-employed. However, I have always been self-employed (MD) and it has both it's advantages and it's disadvantages. I don't think that I am able to answer that query. Though, yes I do have more control over my hours...

My wife voluntarily chose to stay at home (she wanted to) simply because she wanted to be a full-time mom and home-maker. I have always supported her in this decision and it agrees very well with my own values... She was a clinical psychologist so we did take a major revenue hit but, that was never an issue...

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