Jason talks to Branden Warwick, research associate at PWL Capital. Branden has recently composed a study on optimal compensation savings and consumption for business owners of private corporations. Branden has recently composed a study on optimal compensation savings and consumption for business owners of private corporations. Branden's study was a deep dive at a lot of things that started by looking specifically at compensation, structures, and methodologies and had several interesting findings.

Episode Highlights:

• 01:38: Branden shares how he switched his field and how he joined PWL Capital where he was tasked to answer complex problems that the firm is having. 
• 02:29: As per Branden the problem faced by business owners ultimately boils down to problems typically composed in 3 different fields. 
• 07:16: Branden defines the problem while he does all the research, he explains to people everything which is foundational.
• 08:56: Jason and Branden talk about the different approaches to income as a starting point.
• 09:33: Capital dividends get passed tax-free from the corporation to the individual, and there is also RDTA of accounts, which is basically a tax refund.
• 11:17: If you are taking a dividend or taking their dynamic type of income, that sort of income doesn't attract CPP contributions or RSP room. There is a tradeoff there that people need to be aware of.
• 16:57: When you are over $50,000 of passive income or aggregate adjusted investment income is the actual term for it. But think of it as a return that you've earned.
• 22:31: When you start thinking through the lens of real dollars, we notice that account value is staying constant in nominal terms. But when we look through the real lens, we see that it's decreasing.
• 37:21: With the IP being indexed to a prescribed growth rate, Branden analyzed two different asset allocation profiles.
• 40:05: If you are primarily an equity investor, you are generating more capital gains, which is more CDA credit, which is tax free. 

3 Key Points:

1. Branden explains how he is trying to solve the key issues around compensation and retirement savings because dividends versus income are one thing versus notional account-type distributions.
2. Branden shares how the net personal cash is higher in the transition zone than it is with either the small business rate or the general corporate.
3. The longer the CDA sits in there, or the longer those tax refunds sit in those notional accounts, the lower the purchasing power becomes over time.

Tweetable Quotes:

• "For me being relatively new to the world of finance was not a trivial task, because especially with things like IP's, you can't just Google that that information is not readily available." - Branden
• "We had to the other challenge, the other side of the coin was we have to make this analysis computationally efficient enough that this is feasible and we're actually able to do those 7,000,000 financial planning studies." – Branden
• "For those folks that want to maximize consumption, we found that the IP with the maximum salary was the best route." – Branden
• "The lower return than the pension also resulted in a lower return within the core, but also less efficient dynamic income." - Jason

Resources Mentioned:

• Facebook – Jason Pereira's Facebook
• LinkedIn – Jason Pereira's LinkedIn
• Website – Branden Warwick

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