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How do you know if the way you are managing wealth inside your corporation is actually working?

In this episode of the Plain English Finance Podcast, Tré and Sierra discuss three warning signs that a corporation owner may not have a real financial plan: too much idle corporate cash, an advisor who is not discussing taxes, and no clear exit strategy for the business. The episode also includes a bonus red flag: using the exact same investments across your TFSA, RRSP, and corporate account without considering tax efficiency or asset location. 

For Canadian corporation owners, incorporated professionals and business owners, these issues can become expensive because mistakes compound quietly. A strategy that feels “fine” today can create tax, investment and planning problems years later when the money matters most. 

In this episode, we discuss:

•  Why corporate cash sitting in a chequing account may be a red flag 
•  How much operating cash a business may actually need 
•  Why excess corporate cash should have a defined purpose 
•  Why setting up the right accounts early can prevent years of delay 
•  Why not every advisor is a financial planner 
•  Why not every financial planner specializes in corporations 
•  Why tax planning matters when investing outside RRSPs and TFSAs 
•  Why business owners should understand their eventual exit strategy 
•  How selling shares, winding down a business, or retiring can create different tax issues 
•  Why the Lifetime Capital Gains Exemption and corporate structure can matter 
•  Why identical portfolios across TFSA, RRSP and corporate accounts may signal weak asset-location planning 
•  Why good intentions from an advisor do not guarantee good advice 

The main idea is simple: if your corporation is accumulating wealth, you need more than an investment account. You need a structure for deciding how much cash to keep in the business, what to invest, where to locate assets, and how today’s decisions affect your future exit, retirement, and taxes.

A corporation can be a powerful financial planning tool, but only if the plan is deliberate.

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