By Ogilvie Daugherty Business Profit Solutions

Note: For previous volumes visit The Earnings Beacon Archives.

The Earnings Beacon, brought to you by our team at Ogilvie Daugherty Business Profit Solutions. We hope the two articles herein provoke thought and action!

We get down to the fundamentals in this edition of The Earnings Beacon. Peter Lehman, a consummate sales professional, puts forth a fundamental and timeless formula that will increase your business’s revenues. Steve Southern then helps you hold on to more of the increased profits that your business will generate.

Profit for profit’s sake is much like treading water. Nothing really happens until that profit moves from your company into your own pocket, safely.

So read on, grow your revenues, grow your profits, and grow your own personal wealth. And most importantly, through all of those activities, grow yourself and your freedom.

If have questions about any of the topics covered herein, or if you want to ensure you achieve your dreams and enjoy the freedom to actively pursue them, please contact Steve Southern directly at 519-588-5251 or


Table of Contents

  • Article – A Tax-Sheltered Holding Company: The Optimum Solution for Most Business Owners
  • Article – The Key to Sales: Solve Problems Your Customers Care About
  • Expanding the Mind – Quote
  • Your Complimentary, No-Obligation Evaluation
  • About Ogilvie Daugherty Business Profit Solutions
  • The Value Realization ProcessTM
  • Connect With Us


A Tax-Sheltered Holding Company: The Optimum Solution for Most Business Owners
By Steve Southern, B.Math., M.B.A., Client Outreach, Ogilvie Daugherty Business Profit Solutions, and President, Potenze

We at Ogilvie Daugherty Business Profit Solutions (ODBPS) talk a lot about tax-sheltered holding companies. It continues to amaze us that most business owners have never considered this powerful financial structure. For most successful business owners a tax-sheltered holding company forms the foundation of their ideal wealth-accumulation strategy. Indeed, such holding companies are, we believe, the only tax-sheltered option available to business owners. And yet they remain largely unknown and misunderstood.

Most entrepreneurs continue to save for retirement inside a fully taxable structure such as a Registered Retirement Savings Plan (RRSP) or an Individual Pension Plan (IPP). These structures offer many benefits including tax deferment. And yes, tax deferment is powerful. But tax deferment and tax sheltering are two very different beasts.

RRSPs and IPPs defer income tax until at latest age 71. At that milestone, as a birthday present, the Canada Revenue Agency (CRA) will evaluate your RRSP or IPP and issue a schedule of minimum annual withdrawals. Your RRSP or IPP will be converted to a Registered Retirement Income Fund (RRIF) or Life Income Fund (LIF) respectively, and you will be told the minimum amount that you must withdraw from your RRIF/LIF each year from age 71 onwards. The minimum amounts are non-negotiable (e.g. at age 71, 7.38 percent must be withdrawn). The amounts must be withdrawn each year regardless of your other income, your income needs, etc.

And all withdrawals from your RRIF/LIF will be subject to income tax. If you have accumulated any significant wealth in your RRSP or IPP – which is then converted to a RRIF/LIF – your minimum annual withdrawals from your RRIF/LIF, as dictated by CRA, will land you in the top income tax bracket.

Just shy of half of your RRIF/LIF will flow to CRA in the form of income tax.

Alternatively, you could consider a tax-sheltered holding company and grow your retirement, estate and legacy wealth sheltered from income tax.

A tax-sheltered holding company is simply a standard holding company with one additional inclusion. The holding company includes a permanent life insurance contract. The life insured will generally be one of the owners of the holding company, although other scenarios do come up.

The insurance contract consists of two distinct structures. The first, and most obvious, is the life insurance. There is a cost to the life insurance and there is also a death benefit. The other structure within the insurance contract is the investment account. The investment account is debited monthly to fund the cost of the insurance.

But here’s the rub; the investment account is sheltered from income tax. This investment account offers, we believe, the most strategic tax-sheltered wealth accumulation structure available to successful business owners.

If you continue to look at the insurance contract as an expense item, used simply to pass money on to your estate and heirs to possibly cover outstanding capital gains taxes upon your death, then you will not see the elegance of this tax planning strategy.

If, on the other hand, you can see the insurance contract as having an investment structure/tool, you will be well-positioned to consider this approach.

Your operating company will pay income tax and then dividend profits up into your holding company. A portion of that dividend that is designated for long-term wealth accumulation (for retirement, estate and legacy) can then be invested in the investment account inside the insurance account. Neither dividend tax nor income tax is paid during this journey. Every dollar that left your operating company (after the income tax paid there) has arrived intact inside the investment account within the insurance contract.

In this environment, inside the investment account within the insurance contract, your investments grow tax-sheltered.

Now you may be wondering how you would access these funds if and when desired. The answer is leverage. Assuming you have worked with an expert to establish these structures, you can establish a line of credit against the insurance contract and access this credit as needed. Of note, drawing down from a line of credit is a non-taxable event. There are details here that go beyond the scope of this article, but again, a highly-skilled professional can assist with these details.

So if you decide to access funds inside the insurance contract to expand your operating company, you draw down the line of credit and lend the money to your company. You would do the same thing to buy another operating company.

During retirement, you live off of the line of credit, which is again fully backed by your ever growing, tax-sheltered holdings inside the insurance contract.

Lastly, upon your death, or more specifically the death of the life insured, the death benefit (comprised of the insurance component, the deposits and the growth) flows mostly tax-free through the Capital Dividend Account (CDA) of your holding company to your estate, your heirs and your legacy. Again there are some details here, hence the word “mostly” in the previous sentence. Once again, ensure you deal with a very reputable and highly-skilled financial planner that has implemented this same strategy for many previous clients.

This very simple illustration clearly does not constitute nor should it be considered investment or financial planning advice. I have skirted many details based upon both a desire for brevity and the relevance of said details. The details passed over do not materially affect the desired outcomes. Further, said details will come out as you work with your skilled financial planner to evaluate and ultimately establish this strategy and these structures.

The content of this article does not constitute legal, financial or commercial advice, or a recommendation of any services or products. You should consider obtaining independent advice before making any investment, financial or legal decision.

For more information please contact Steve Southern directly via 519-588-5251 or


The Key to Sales: Solve Problems Your Customers Care About
By Peter Lehman

You’re in sales. You’re driving to visit with a potential client. Before you get out of your car think about this. No matter how good your product or service is, your customer really doesn’t want to buy it. In fact, in business, people hate buying things. Why is that? It’s because business is all about profit and when you have to buy anything you’re spending money and not making as much profit.

But, your customers are spending money all the time on many different products or services and there is a reason. In truth, there are two reasons: the product or service they are buying will either make them money or it will save them money. They honestly don’t care about all of the bells and whistles if the features you have don’t offer the eventual end benefit of them having more money.

If you can’t honestly tell your potential customer how your product or service will either lower their cost of doing business (save them money) or get them more sales (make them money) you will have a serious challenge on your hands. It will take longer to get the order and chances are you won’t sell the order at the price it’s worth.

Next time you’re involved with a new project for an existing client or a prospective client, before you do anything else, ask yourself, “How will my solution make my client more competitive, more efficient, and/or better than their competition?” Then frame your entire presentation around solving those problems. You will find that people love to hear about things that make them better. Not only that, you will find that a customer that feels like he or she has made a smart decision, not just a low price decision, is a customer that will want to work with you again and again.

Peter Lehman has been in the B2B sales and business development environment for his entire working life. Currently Peter is a Sales & Business Development Specialist for Circumference, an Information and Communication Technology Services Management organization based in Waterloo Region. Please feel free to connect with Peter by email at


Expanding the Mind — Quote

“Trust is the foundation of every relationship. Never compromise your ability to build and maintain trust.”
Miles Austin


Your Complimentary, No-Obligation Evaluation

Virtually all private business owners today are losing money, massive amounts of their personal wealth. Their companies are highly successful, generating significant profits, and thus creating wealth for the owner. Unfortunately virtually all private business owners today are moving that wealth from their companies and into their personal holdings in a highly inefficient and risky manner.

That’s why we offer our complimentary, no-obligation evaluation. We’ll show you where you’re losing money, your personal wealth, and how to plug the leaks. This evaluation includes our high-level analysis, packaged into a document that we call your “Value Statement”.

As we prepare your Value Statement we look at everything, from your personal financial planning, investing and saving, and tax planning, through your corporate structures, corporate tax planning, holding companies, family trusts and related structures, and ultimately into your retirement, estate and legacy planning. Your Value Statement is yours to keep. There truly is no obligation.

If losing your wealth is no longer acceptable to you, contact us today for a complimentary, no-obligation evaluation.

For more information or to book your appointment please contact Steve Southern directly via 519-588-5251 or


About Ogilvie Daugherty Business Profit Solutions

Ogilvie Daugherty Business Profit Solutions, trusted since 1989, eliminates your worry, eliminates unnecessary investment losses and eliminates all needless tax erosion. We work with private business owners, alongside their existing accounting, legal and wealth management teams, to develop and implement a robust and comprehensive financial plan. We do so using our repeatable Value Realization ProcessTM.

  • Access the wealth building features of the corporate tax system
  • Optimal access to, and personal retention of, your profits
  • Protect your assets from tax erosion
  • Protect your wealth from creditors
  • Access growth and operating capital
  • Restructure your business
  • Retained earnings allocation
  • Structure the sale of business
  • Transition to the next generation
  • Integrated corporate finance along with personal financial, retirement, estate and legacy planning
  • Ensure your business builds your wealth


The Value Realization ProcessTM

The Value Realization Process™ is a comprehensive and exhaustive strategic planning process that employs best practices from corporate structuring, tax planning, financial advisory, retirement, estate and legacy planning. Effectively combining the best practices from each discipline collectively results in significant wealth enhancement.

In the world of advisory, true and lasting value creation does not come from individual effort, but rather from a team-based approach, from creative and trusting relationships. Ninety-four percent of business owners, the audience we serve, do not currently have the kind of cross-disciplinary road-map that results from this coordinated team effort.

We start with an initial check-up, much like a physician, to ensure each client understands the deep truth of his/her current circumstances. We then work with our client, and his/her existing advisors and specialists, to build those relationships and, together, develop tremendous value.


Connect With Us

Steve H. Southern, B.Math., M.B.A.
Client Outreach
Tel 519-588-5251

Brian Ogilvie, CFP, CLU, Ch.F.C.
Principal and Advisor
Tel 519-744-4083 x224

Ogilvie Daugherty Business Profit Solutions
70 Victoria Street North, Suite H
Kitchener, ON, Canada  N2H 5C2
Tel 519-744-4083
Tel 1-866-744-4083

“If you keep doing what you’ve always done, you’ll keep getting what you’ve always got.” -W. L. Bateman