Tax Planning for High Income Earners in Ontario

August 12, 2014

With the re-election of the Ontario Liberals, the spring budget has been introduced and we can expect the governing party to begin implementation.  This article points out a few areas where taxation will be higher and a few strategies to help:

Ontario Budget – Tax Planning Article

About every ten years, we have the biggest crisis in fifty years.

—Paul Volcker

Rethink What Money Can Buy

In their 2010 consumer sentiment report, the Boston Consulting Group (BCG) concluded, “Recession anxiety has triggered a clear shift back to basics in what consumers say they value most.” The BCG researchers found, for example, that home and family, stability and calm, saving, and the environment have all increased in importance while luxury and status are becoming less and less of a priority.

For many individuals, this change in focus will not only lead to wiser financial decisions, but to greater and longer lasting happiness as well. The truth is money can buy happiness, if we spend it on the right things. 

There is now a growing body of research that has identified what types of purchases give us the biggest bang for our buck.  Based on mounting empirical evidence, Dr. Sonya Lyubomirski, a leading happiness researcher, describes the types of expenditures most likely to increase life satisfaction:

  1.   Activities that will help us to grow as individuals, strengthen our connection with others, and/or contribute to the well-being of our communities.
  2.   Experiences that will provide lasting memories (such as a rock climbing expedition, a wine tasting tour with friends, or a destination family reunion) rather than material possessions.
  3. Many small pleasures (such as regular massages, a weekly delivery of fresh flowers, or frequent lunches with your best friend) rather than on one big-ticket item like a new car or super-sized flat-screen TV.
  4.   Purchases that represent something that you have worked very hard to earn or to achieve will make the item or experience seem all the more valuable and rewarding.  In addition, scholars have found that anticipation increases happiness.

More importantly, Lyubomirski reminds us that happiness is a choice. She writes, “We can choose to become never-satisfied janitors of our possessions, or we can use our money in ways that improve our worlds and, as a bonus, supply us with genuine and lasting well-being.”

Sources: “But Will it Make You Happy?” by Stephanie Rosenbloom, New York Times; A New World Order of Consumption, Boston Consulting Group; and “Can Money Buy Happiness” by Sonya Lyubomirski, Scientific American.

 Reprinted by permission of Money Quotient, NP

Quote of the Month – Aug. 2014

“The pundits who warn of imminent resource depletion routinely discount the fact that we are wringing more and more value out of the energy that we consume. In 1970, American consumers drove about 1.1 trillion miles, and domestic airliners flew some 2 billion miles. That same year, U.S. oil consumption was 14.7 million barrels per day. Forty years later, in 2010, Americans drove nearly 2.9 trillion miles, and domestic airlines flew 5.9 billion miles. That year, the United States consumed an average of 19.1 million barrels of oil per day. Thus, over a period of four decades, Americans nearly tripled the number of miles they drove, and domestic airlines nearly tripled the number of miles flown; yet domestic oil consumption increased by just 30 percent over that time period.”  

 —Robert Bryce, from his book Smaller Faster Lighter Denser Cheaper