Dylan and Taylor began their journey with us in their early 40s. Residing in downtown Toronto with their two young children, Dylan had made a name for himself as a serial entrepreneur in the tech sector, having successfully sold two startups he co-founded. Taylor, on the other hand, ran a thriving virtual psychotherapy practice.
After the acquisition of his most recent company, Dylan continued to work full-time for them, anticipating the end of his lock-up period the following year. Meanwhile, he was contemplating a startup in the clean energy sector.
Dylan’s compensation for his last company came in a mix of stock and USD cash. This was set to be his most lucrative year, and he sought strategies to optimize his impending tax liabilities.
Taylor’s business was flourishing. Years of dedication had allowed her to establish a robust team and efficient processes, enabling her to reduce her working hours and spend more quality time with her family.
Neither Dylan nor Taylor had inherited wealth. Dylan’s parents were frugal, saving diligently throughout their lives and often reprimanding their children for unnecessary expenditures. In contrast, Dylan adopted a more liberal spending approach. Taylor’s financial perspective was shaped by her father’s departure when she was 10, recalling her mother’s financial challenges while raising her and her siblings. Despite their current affluence, Taylor often grappled with concerns about financial security.
While Dylan and Taylor had an investment advisor from a prominent bank whom they personally liked, they suspected they were paying excessive fees. Their desire to pursue socially responsible investments deepened their concerns, as their advisor seemed ill-equipped to guide them.
Our Role in Their Story
Both Dylan and Taylor shared a mutual desire to create lasting memories with their children, extended family, and close friends. However, Taylor felt torn between enjoying their wealth and ensuring a secure future for their children.
Our collaboration began with a session on money mindset with our Financial Therapist. This deep dive helped them understand the roots of their financial beliefs and behaviours. Taylor recognized how her childhood financial instability, following her father’s departure, had instilled a deep-seated fear of spending. She saw money as a safety net, but no amount seemed to alleviate her concerns.
Through these exercises, Dylan realized that his spending habits, which contrasted starkly with his parents’ frugality, inadvertently exacerbated Taylor’s financial anxieties. This revelation was transformative, and we equipped them with tools to nurture a healthier relationship with money.
Our next focus was the impending tax implications from the stocks and cash Dylan was set to receive from his recent company acquisition. With the end of his lock-up period approaching, our objective was to minimize the tax impact.
The couple had a trusted accountant who had overseen their corporate and personal taxes for years. After an introduction, we collaborated with the accountant to comprehensively understand Dylan and Taylor’s tax situation. We also shared insights into their broader financial goals and proposed tax strategies.
We connected him with a currency broker because Dylan’s payout was in US currency. This expert advised on the optimal timing and method to convert the US funds to Canadian dollars, securing a rate significantly better than what banks offered. On their initial exchange of USD $400k, the broker’s strategy saved them $6,000 compared to the bank’s quote.
We then assessed Dylan and Taylor’s investment portfolio. We confirmed that they were paying nearly 1.75% (over $20,000) annually in fees, with their investments primarily in Canadian dividend-paying stocks and bonds. We facilitated their transition to a new investment manager specializing in socially responsible investing, who charged substantially lower fees.
After detailed financial projections and strategy formulation, we demonstrated to Dylan and Taylor that they had ample resources to sustain their lifestyle, even post-retirement. They could afford regular travels, cover their kids’ education, provide for a home down payment, make generous charitable donations, and leave a substantial inheritance for their children.
The insights from our financial projections, combined with the money mindset exercises, brought Taylor immense relief. She felt more at ease, allowing herself to spend a bit more without any accompanying guilt.
