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Small Business Investing with Financial Planner Mitesh Patel

 

Money. Like it or not, we all need it to live and thrive in this world. Understanding the investments available to you, how markets work and the ins and outs of taxes is uber important so that you can grow your wealth and build stability--but it can also be super intimidating.

 

Mitesh Patel is an investment planner and financial advisor for RBC Dominion Securities. He’s been working with small business owners for more than a decade, helping build their financial well-being and plan for the future.

 

We sat down with him to get his insights on small business tax and investing strategies. Here is our conversation:

 

Kick us off with some good news from your industry.

Over the last couple years, regulators have increased requirements for transparency of fees, performance, and advice provided to clients. This has been an immense benefit to the consumer, allowing them to make more informed decisions with their investments.  

 

How is investing in a corporation different than investing personally?

Investment income is taxed differently than active business income under a corporation. It is more favourable to have investments inside the corporation that pay eligible dividends or generate capital gains, over investments that may generate interest income, or foreign dividends.

 

What role does a holding company play in a small business owner’s investment strategy?

There are several benefits to using a holding company for small business owners. It allows you to remove excess funds from the active business allowing for creditor protection, or “purification” of the company shares, prior to selling the business. There may also be tax benefits such as income splitting, or deferral of personal tax. These are only a few of the many benefits that may apply, depending on each individual’s circumstances.

 

What’s the best tax strategy you’ve seen from a client?

The best tax strategy is a well laid financial plan. The process of constructing a financial plan will allow you to uncover the best opportunities for tax strategies, based on your own unique financial situation.

 

When it comes to a self-employed person applying for a mortgage, what is better: dividends or wages?

Most institutions accept either option. Some lenders even have specific programs designed for self-employed individuals that look beyond declared income from the personal tax return. For example, individuals who are incorporated that may not draw all earnings out of the corporation for tax planning reasons.

 

Leave us with one tip or bit of advice.

It takes more than just a well-constructed investment portfolio to successfully reach your financial goals. It is equally important to have a plan that addresses other aspects of wealth planning. For example, tax planning, wills and estate, and risk management.

 

Thank you Mitesh! If you have more questions for Mitesh about investing or how to work with him, you can reach him 403.829.5466 or mitesh.patel@rbc.com.

 

 

More on MiteshMitesh Patel RBC Dominion Securities


Mitesh has been providing trustworthy guidance to his client’s financial future for over 10 years. Through this time, he has built meaningful relationships which in turn have supported the growth of his business.

Graduating from the Southern Alberta Institute of Technology (SAIT) in 2005 with a diploma in business administration, Mitesh started his career at a large Canadian financial institution. Through the desire to help others realize the potential of their financial well-being, Mitesh focused his efforts on building a skill set in investments and financial planning.  Prior to joining RBC Dominion Securities in 2016, Mitesh was a Financial Planner with RBC Royal Bank, where he gained a wealth of knowledge and experience in investments and financial planning. Mitesh is also an accredited Personal Financial Planner (PFP).

Mitesh believes that it takes more than a well-managed investment portfolio to successfully achieve your financial goals. It is just as important to have a personalized financial plan that covers areas such as tax, wills and estate, and risk management. Mitesh works closely with a full range of industry-leading specialists at RBC Wealth Management, who can be leveraged to ensure your best interests are looked after.

Mitesh lives in Okotoks with his wife, Eva, and their two daughters, Lacey and Halle. He enjoys watching football, camping with his family and hiking in the Canadian Rockies and is also an avid cook. You can often find him in his kitchen or on his patio cooking up a new recipe or concocting one of his own. Mitesh is a proud supporter of the Foothills Country Hospice and the High River Hospital Foundation.

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