This is a guest post by Robert, who lives in Calgary and worked as a financial adviser before retiring at age 35. He is married, has three kids and has returned to school with the goal of eventually living and working overseas.
“In this world, nothing can be said to be certain except death and taxes.” Benjamin Franklin, 1789.
In some ways, not much has changed since 1789. Death and taxes are still certainties. What has changed drastically is how long we live and how much taxes we pay. In 1789, the average life expectancy was around 40 years. It seems that taxes, which were collected as tarrifs and imports duties, were between 5% and 8% (although people might pay both). At the same time as our life expectancy has extended, our tax bills have expanded.
Do what you can to stay healthy. I’ve heard from a number of people that health is more important than wealth. When they’ve fallen ill, they’ve found that they aren’t in a position to enjoy any amount of money until they’re well again. Most people know how to stay relatively healthy, so I won’t belabour the point. Eat well. Exercise regularly. Avoid unhealthy environments. Take precautions such as wearing seat belts or bike helmets.
Minimize taxes. There are a number of ways to minimize the amount of tax you pay. What I’m suggesting is to use legal means to avoid tax where you have a choice. Don’t cheat on your taxes. Cheating is likely to cost more in the long run, and it’s wrong. The most obvious ways to minimize taxes are contributing to an RRSP, saving inside a TFSA and making donations to charity or political parties. It’s also possible to minimize the amount of GST you pay, by buying quantities that are exempt. I don’t have a full understanding, but ready-made, single serving foods usually have GST. Bulk amounts and ingredients usually don’t require GST. As an example, buy a tub of yogurt instead of six single-servings.
Death and taxes are unavoidable. By minimizing taxes and maximizing health, you can maximize your enjoyment of your wealth. Do you feel that health is higher priority than money? What do you do to stay healthy and minimize taxes?