A Message from our CEO...
It's time for a holiday bedtime story...
Suppose that every day, ten people go out for beer after work and the bill for all ten comes to $100. If they paid their bill the way we pay our taxes, it would go something like this...
- The first four (the poorest) would pay nothing
- The fifth would pay $1
- The sixth would pay $3
- The seventh would pay $7
- The eighth would pay $12
- The ninth would pay $18
- The tenth (the richest) would pay $59
So, that's what they decided to do.
The ten people drank in the bar every day and seemed quite happy with the arrangement, until one day, the owner threw them a curve ball.
"Since you are all such good customers," he said, "I'm going to reduce the cost of your daily beer by $20". Drinks for the ten people would now cost just $80.
The group still wanted to pay their bill the way we pay our taxes. So the first four people were unaffected. They would still drink for free. But what about the other six? How could they divide the $20 windfall so that everyone would get their fair share?
The bar owner suggested that it would be fair to reduce each person's bill by a percentage proportionate to how poor they were,
to follow the principle of the tax system they had been using
; i.e. the poorer they were, their bill was reduced by a greater amount. He proceeded to work out the amounts and suggested that each should now pay like this:
- The fifth person, like the first four, now paid nothing (100% saving).
- The sixth now paid $2 instead of $3 (33% saving).
- The seventh now paid $5 instead of $7 (28% saving).
- The eighth now paid $9 instead of $12 (25% saving).
- The ninth now paid $14 instead of $18 (22% saving).
- The tenth now paid $49 instead of $59 (16% saving).
Each of the six was better off than before, and the first four continued to drink for free. But once outside the bar, they began to compare their savings.
"I only got a dollar out of the $20 saving," declared the sixth person. He pointed to the tenth man and said,"But he got $10!"
"Yeah, that's right," exclaimed the fifth person. "I only saved a dollar, too. It's unfair that he got ten times more benefit than me!"
"That's true!" shouted the seventh person. "Why should he get $10 back, when I got only $2? The wealthy get all the breaks!"
"Wait a minute!" yelled the first four men in unison. "We didn't get anything at all. This new tax system exploits the poor!"
The nine people surrounded the tenth and beat him up.
The next night, the tenth man didn't show up for drinks, so the nine others sat down and had their beers without him. But when it came time to pay the bill, they discovered something important. They didn't have enough money between all of them for even half of the bill!
And that's how our tax system works. The people who already pay the highest taxes will naturally get the most benefit from a tax reduction. Tax them too much, attack them for being wealthy, and they just may not show up anymore. In fact, they might start drinking overseas, where the atmosphere is somewhat friendlier.
During this holiday season, please make somebody's day a little brighter than it was the day before and buy them a beer.
One quick note...despite the lack of snow, the calendar tells us that Christmas is approaching, so here is a quick listing of the office holiday hours:
- December 24: 8:30am - Noon
- December 25: Office Closed
- December 28: Office Closed (Statutory Holiday)
- December 29-30: 8:30am - 4:00pm
- December 31: 8:30am - Noon
- January 1: Office Closed
Happy Holidays from our family to yours.
Best of the season,
~Scott
P.S. Do you know someone whose financial life keeps getting more complex?
Introducing me to these people is more important now than ever before. The financial landscape will look a lot different in the next 2-5 years, and those close to retirement and those who are business owners are going to be affected the most.
We are focusing our efforts on making sure our information reaches them to provide valuable insight and advice.
My latest book, "
How To Choose and Work with a Financial Planner You Can Trust" is available now. You can share it with anyone you introduce us to - FREE!
Simply have them click on this private link:
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Having Little Financial Knowledge is a Dangerous Thing
When it comes to financial planning, knowing too little is a dangerous thing. As a financial planner, the main part of my job is to educate my clients on things that they may not know-or things that they may not know they don't know. In today's blog post, I'm going to tell you why it is important to work with a professional-someone who has a lot of financial knowledge...
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Be a Fly on Our Wall
Staying informed about the latest information and strategies is a challenge. Fortunately, when you have a Top Guns Network™, as we do, the process is a lot easier.
We regularly communicate with members of our Top Guns Network™ to stay up-to-date on what's important in their areas of expertise. When we do this, we record our call so you can be a "fly on the wall" and listen in.
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The Business Owner's Toolbox
Financial planning for business owners and entrepreneurs is, to put it quite simply,
different.
Don't let anyone tell you otherwise.
That's why we devote this section to our recent articles that are specifically targeted to this important market segment and provide valuable insight to help you succeed.
RECENT BUSINESS OWNER ARTICLES:
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Learn from Our Free Radio Show
Scott covers financial planning topics relevant to Canadians who are motivated by creating a bigger future for themselves and their loved ones.
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Financial planning is a lifelong pursuit. It starts with an in-depth understanding of your current issues and concerns, and a clear understanding of your needs and goals. There then needs to be a process in place for monitoring your progress towards those goals to ensure they are attained.
At IRONSHIELD Financial Planning, our
CFP professionals are continually working to make those goals a reality for each and every one of our clients. We're dedicated to helping you make smart, educated and well-thought-out financial decisions throughout all the various stages of your life.
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The CFP professionals at IRONSHIELD Financial Planning® are continually working to make financial goals a reality for each and every one of our clients. We're dedicated to helping you make smart, educated and well-thought out financial decisions throughout all stages of your life.
The foregoing is for general information purposes only and is the opinion of the writer. This information is not intended to provide specific personalized advice including, without limitation, investment, financial, legal, accounting or tax advice. However, please call Scott Plaskett, CFP of IRONSHIELD Financial Planning® to discuss your particular circumstances.
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IRONSHIELD Financial Planning®
310-701 Evans Avenue
Etobicoke, ON
M9C 1A3
416-626-6515
info@ironshield.ca
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