Nicola Wealth CEO John Nicola provides an introduction to dental professionals on investment strategies that go beyond stocks and bonds, demonstrating the integrated possibilities of true wealth management.

2. Market Outlook 2019
Financial Goals
Asset Allocation Behavioural Finance
ReturnsThe Big Picture
Disruptive technologies

3. • Licensed as IC Across Canada
• Manage $6.1-Billion ( 2200 families )
• Focus – Private Wealth Management of
Families, Foundations and Trusts
• Integrated Financial advice for professionals,
executives and business owners
• 18 Professional asset managers
• 38 Advisors with CFPs
• 190 total staff

4. Second Step Third Step
First Step
• What rate of return have you earned after fees for the last 1,3 5 and
10 years?
• Is your compensation the most tax effective it could be?
• What tax rates are you paying on non registered assets?
• What is the tax liability in your estate?
• What income is being generated annually by your current portfolio?
What percentage is that of your retirement income needs?
• What is the most tax efficient way to build investment capital?
• How will you best monetize the equity in your practice ?
What To Do

5. What’s on Your Bucket List?
Family Legacy
Recreational Property Travel
Avocations
Philanthropy

6. What impacts the plan?
Returns after fees
and inflation
Size of the estate you
Want to create
How much do you want
to give away and when?
Gifts to Children and Grandkids
Now, later, or never?
Lifestyle
Create a plan before selling or investing

7. What else impacts the plan?
Tax reform –impact
on compensation and
investment s
Asset Allocation
Future ReturnsThe Big Picture
Your Behaviour

8. How are you doing ?????
Source: Nicola Wealth Sample Client

9. Net Worth Retirement and
Estate projections

10. How Much Can I Spend?
Assumptions:
• $5 Million investable assets after business/practice sale
• 15% average tax rate on retirement income
• Returns between 2% and 5% after inflation and fees
• Preserve capital after inflation

11. Impact of Returns on Spending
$0
$50,000
$100,000
$150,000
$200,000
$250,000
After Tax income
$110,000
$153,000
$200,000
$240,000
2%
3%
4%
5%
3% more return =125% more
spendable income

12. Capital Required to Earn $200,000 After-
tax Income
$0
$5,000,000
$10,000,000
$15,000,000
$10,300,000
$7,000,000
$5,300,000
$4,300,000
2
%
3% more return = $6M less capital
required (58%)
Assumptions
• $200,000/year after tax
• 15% average Tax rate
• Preserve capital after
inflation

13. Achieve these outcomes and there is
more capital for the Bucket List
Achieve Your Bucket List

15. Where is America?

16. Three Themes
Demographics
Shale Oil
U.S. Isolationism

17. Demographics are destiny?

18. Baby Bust
We need immigration

19. Senior Moments

20. Demographics

21. Demographics
It’s
windy
today.
No,iit’s
Thursday.
So am I,
let’s get a
beer.

22. More
Saving
Less
Spending
Peak
Spending
Age 50
Is this deflationary?

24. +60% gas production
-65% oil imports
Will the U.S. need any foreign energy?

25. 60% drop in 4 years ( average =$35/barrel)
It is now
about
technology

28. Transportation as a Service (TaaS)
• By 2030, 95% of all Passenger Miles will be
by Automated Electric Vehicles (AEVs)
• This will add about $5600 per family in
discretionary spending (10% of income or
$1 trillion)
• There will be minimal production of
Internal Combustion Engines (ICEs) or
individual ownership of cars.
• IO cars will be 40% of the fleet, but 5% of
passenger miles
• AEVs will have a lifetime mileage capacity
between 500,000 and 1 million miles

29. Transportation as a Service (TaaS)
• TaaS will be 4 to 10 times cheaper than
traditional owner driving
• Pre-TaaS companies (Uber and Lyft) drove
500,000 passengers per day in NYC in 2016
• By 2030 passenger cars in the US will drop
from 237 million to 44 million
• 70% fewer cars manufactured annually
• 50% more passenger miles in total at a cost
of $400 billion vs. $1.5 trillion today

30. Transportation as a Service (TaaS)
• Oil demand would drop to 70 million BPD
from what is predicted by the IEA at 110 million
BPD
• Price of oil could drop to $25 and make 50% or
more of North American Oil uncommercial but
still leave us energy independent
• Keystone and Dakota Access Pipeline would be
stranded
• Energy requirements would drop by 80% and
emissions by 90%
• Huge impact on oil industry, autos/trucks, auto
insurance
• Big geopolitical outcomes (impact on Canada?)

31. 39% Saudi Arabia
15% Russia
1% US
5% Canada
Oil Dependency
Cheaper oil
Who needs oil?
10M+ Barrels/Day

32. • When will this occur?
• Winners/Losers?
• Impact on related
products and services?
• Impact on portfolio
mix?

33. Renewable Energy

35. Renewable Energy
3x US And
Growing

36. 36
Solar Power
More potential close to people

37. What Will Get in the Way?
This needs this

38. Who Sells Oil?
36Countries+100,000 BPD
136 Countries net oil imports

39. Oil or Batteries?

40. Peak Oil demand 2031-2036
Fossil Fuels=77% energy

41. When Will Oil Peak?
• Rate of economic growth
• Adoption of Evs
• Battery prices
• Natural Gas substitution
Estimates run from earliest 2023 to
After 2040.
Peak Oil demand has already occurred
in the developed world

42. Marketing Trump

43. The Polarizing of Politics

45. Anywheres vs. Somewheres

46. 90% higher
40% lower
The 1%

47. Fair Trade?
Huge US tax cuts lead Americans to buy more imported goods

48. Observations
• Demographics matters and in this case
the US wins
• Shale oil is a game changer
• Globalization is under pressure
• The US is more independent then
perhaps any other single country
• Russia is aging and in decline
• The Euro shows how hard it is to have
a monetary union without a fiscal one
• Populism could be here for a while

49. Where are markets going?

50. Many Happy Returns (1870-2015)

51. Asset Class Returns 1870-2015 (NBER)
4.6%
6.1%
11.1% 10.8%
3.3%
8.9%
10.7%
22.8%
T-Bills Bonds Real Estate Equities
Nominal Return Volatility
Same Return
Liquidity and
behaviour

52. Many Happy Returns?
Can a 4% real rate of return be achieved without
significant increase in risk?

53. Cape Shiller 10-Year PE (peaks)
1929
1936
1966
2000
2008
2018
Higher than 1929

54. 0.2%
-0.8%
-2.2%
-0.9%
2.3%
-0.3%
4.0%
1929 1937 1966 2000 2008 Average Goal
No real return
for five years
5 Year 60/40 Balanced
After Inflation and Fees After CAPE Peak
Source: Morningstar

55. The American Position

56. Why?
• Increased regulation and
compliance
• Mergers and Acquisitions
• PE and VC firms reduce
need for public listings
• Can raise new capital
privately

57. What is Real Estate?
Real
Latin – Realis
(actual, existing, true)
(relating to things)
Estate
Latin – Stare
(to be, exist)
(status or standing –
a measure of wealth)

58. What is Real Estate?

59. Investment >$100Tr.
Source: Savills 2017

60. Multi Family
20%
Commercial
11%
Farm/Timber
11%
Public Equities
23%
Securitised Debt
33%
Gold
2%
42%
Global Investable Assets
Why would this
be 60-75% of an
Investment Portfolio?
Source: Savills 2017

61. 75% stocks
No real estate

62. 21st Century Investing
0%
5%
10%
15%
S&P 500 TSX IPD Real
estate
3.7% 3.5% 3.4%
5.7% 6.1%
9.9%
Price Total
$0
$1,000,000
$2,000,000
$3,000,000
$4,000,000
$5,000,000
$6,000,000
S&P 500 TSX IPD Real
estate
$2,890,000
$3,050,000
$5,900,000

63. Cash flow from $1,000,000 invested in Jan/ 2000
( Dividends reinvested )
$50000
2000
$11,200
2018 2000
$12,800
$85,000
2018
$253,000
$78,000
2000 2018

64. 21st Century Investing
0
5
10
15
20
S&P 500 TSX IPD Real
estate
16 15
42 2.5
1
Price volatility Income volatility

65. Is this the right model?
Was it the right model?
Annual returns since January 2000 after inflation
1.8% 2.2%
1.9%
Asset Allocation

66. Asset Allocation for HNW Investors Globally

67. How Pensions Are Investing

68. Most investors close to
100%

69. Our Asset Allocation
CDN/US
CDN /
Foreign
(Private &
Public)
Bonds
Mortgages
Private Debt
Hedge Funds
Precious Metals
Real Estate
24%
Equity
36%
Fixed
Income
35%
Alternative
5%

70. 9.0%
8.1%
10-year Annual Returns to 2018
Better returns with less than half the volatility
17.2%
-2.0%
50.0%
-42.0%
Best year Worst year
Actual real estate transactions
Per IPD data 2005-2018
TSX REIT index less fees
2005-2018

71. Cash Flow is King
Capital Growth
-12% to +12%
Income return 5% to 8.5%
2/3rds of total
Return is incom
( Rents)

72. -2.1%
-0.1%
-1.1%
4.0%
5.1%
3.1%
4.1% 4.0%
2000 2008 Average Goal
60/40 vs. Core Net of Inflation and Fees
5 Years After CAPE Peak
Nicola Wealth Core Composite: 1yr: 3.04% 3yr: 6.34% 5yr: 6.40% 10yr: 7.50% Since Inception 6.89% 60/40 Source: Morningstar

73. Where has the low
hanging fruit gone?
Getting harder
all the time2%< historical
Still expensive
How low can they go?

74. Where has the low
hanging fruit gone?
Private debt (mortgages
and corporate lending)2%< historical
Still expensive
How low can they go?
Asset allocation
Covered writing
Value investing
Dividend growth
Build to own
Value add
Modest leverage

75. Market Cycles
Markets more expensive
Lower probability for above
average future returns
Markets less expensive

76. Market Timing
Should you try and time this?
No
Should you focus on your tactics ?
Yes
Asset Allocation
Rebalancing
Defensive Cash flow assets

77. 3.17% +74%
14%
Less

78. The S&P 500 ® Dividend
Aristocrats ® Index, constructed
and maintained by S&P Dow
Jones Indices LLC, targets
companies that are currently
members of the S&P 500 ® ,
have increased dividend
payments each year for at least
25 years, and meet certain
market capitalization and
liquidity requirements.
2.3%/yr.
75% more -
24years

79. Active vs.Passive Investing

80. How Do ETFs Compare Over 10 Years?
10% 10%
22%
10%
0%
20%
40%
60%
80%
100%
Canadian equities Canadian Bonds S&P 500 MSCI
ETF
1st and 2nd quartile over ten years

81. Passive vs. Active“ . . . the most active stock pickers have been able to
add value to their investors, beating the
benchmark indices by about 1.26% per year after all
fees and expenses . . . . Closet indexers
have essentially just matched their benchmark index
performance before fees, which has
produced consistent underperformance after fees.
Economically, this means that there are some
inefficiencies in the market that can be exploited by
active stock selection.”
Shrinking from 60% to 20% in 30 years

82. Active vs. Passive Investing
What is an Active Manager?
• 2007 Yale Study (Updated 2013 FAJ)
• Cremers and Petajisto
• Focused positions (example Oakmark
Select with 20 positions)
• Not always within the benchmark
• Different trading strategies and not
market weighted

83. Rising Interest Rates
The impact on returns

84. 2.7% 2.75%
2.57%
1.93%
1.74%
0.18%
0.91%
-0.22%
0.62%
-0.10%
-0.5%
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
Then 12/13 Now
AMERICA
Then 12/13 Now
GERMANY
Then 12/13 Now
SWITZERLAND
Then 12/13 Now
JAPAN
Then 12/13 Now
CANADA
When are they going to rise?
10-Year Bond Yields 2013 vs. 2019
10 years
from
now
97 SF

85. Inverted yield Curves
10 year bond rates less 2 yr.
Recession
??????
Current spread
is 21 bps.
Recession
Recession
Recession

86. 2%/yr.

87. o 60 Professionals
o Over $6-Billion invested
o Started 1969
Who Manages Private Equity

88. 16.6%
18.8%
7.8%
9.8%
13.9%
17.1%
14.2%
21.3%
3 years 5 years 10 years 20 years
S&P500 Northleaf PE Global Program
Bull Market
Long-Term Difference
Northleaf PE Returns vs. S&P 500
Returns to June 30, 2014. Northleaf returns gross of Northleaf fees.

89. Issues
• Illiquid asset class
• Hard to diversify
• Significant minimum
investment
• Higher fees on committed
capital
• Due diligence on managers
• Fund of funds likely best
option

90. A Genius Bromance
Daniel Kahneman
• Introvert
• Holocaust Survivor
• Psychologist
• Taught at UBC
• Nobel Prize 2002 in
Economics
Amos Tversky
• Extrovert
• Israeli Sabra
• Psychologist
• Taught at Stanford
• Died before Nobel prize

91. Loss Avoidance
Win
85%
Lose
15%Guaranteed Win Majority
Guaranteed Loss
Win
15%Lose
85%Majority

92. Seven Habits of Highly
Ineffective Investors

93. We’re in the
Gifted Program
80% Think they are in the top 50%
Over-Optimism

94. What if everyone is above average ?
2006 Survey of 300 Fund managers -76% said they were
Above average – the other 24% said they were average .
100% were average or better ???????

95. Gambling with House Money
Can we up the
minimum bet?
Investors increase their
aggressiveness when they win first.

96. Increase risk when
market rises
Reduce risk when
market drops
Gambling with House Money
Can we up the
minimum bet?

97. The Emotional Investor

98. Minsky Moment
The longer things grow or remain stable
The greater the
Fall will be in the
Minsky Moment

99. 3-5% annual loss of return
The Impact of Emotion in Investing

100. Emotional Investing
5.8%
1.8%
Fund Investor
Vanguard Value Fund
10-year return (01/2017) Name Fund Investor
Vanguard Growth
Stock
Index
8.1% 5.3%
Vanguard
Small Cap
Value Index
7.5% 4.2%
Vanguard
Small Cap Growth
index
8.1% 7.2%
http://www.theglobeandmail.com/globe-investor/investment-
ideas/strategy-lab/index-investing/how-factor-based-
investors-take-bigger-risks/article34179810/
-2.8%
-0.9%
-3.2%

101. Behavioural Finance
Can you sell when you are
winning and buy when you
are losing ?

102. Managing Assets More Efficiently
Alternative Strategies,
15.0%
High Yield Bonds, 7.3%
Preferred Shares, 4.5%
Canadian equitries ,
17.0%
Real Estate, 20.0%
Mortgages, 11.0%
Bonds, 9.0%
Foreign Bonds, 5.4%
Cash, 4.0%
Foreign Equities, 12.1%
4.6%
Re-Balance
-2.3%
2.3% for 2018
(Morningstar Neutral
Balanced =-4.7%)

103. Spock or Homer ????

104. • Know thyself ( avoid overconfidence )
• Embrace Uncertainty( Minsky Moments )
• Play the Odds ( Avoid Loss Aversion)
• Diversification in asset classes but focus within them
• Accept pain ( necessary path for growth )
Behaving Well

105. Higher Taxes
Actual and Possible
Results 2016
• 4% higher marginal tax over $200,000
• Overall tax on first $200,000 lower
• Reduced TFSAs to $5500
• No Income splitting of salaries
• Stock options fully taxed over $100,000 per
year (may have different rules for CCPCs)
• Change of tax rates for professional
corporations and ability to income split?
• 4% higher corporate tax on passive income

106. Tax Reform 2017
Actual and Possible
Results 2016
• 4% higher marginal tax over $200,000
• Overall tax on first $200,000 lower
• Reduced TFSAs to $5500
• No Income splitting of salaries
• Stock options fully taxed over $100,000 per
year (may have different rules for CCPCs)
• Change of tax rates for professional
corporations and ability to income split?
• 4% higher corporate tax on passive income
Resurrected
and improved

107. The rest of the story

108. n
25% swing in 100 years
10 developed countries
either less upwardly mobile
or less equal in income than
us or both
Rising since the 70’s

109. Who are the 1%
Who are the 1%?
• 135,000 Households
• Average income $500,000+( based on $458,000 for 2013)
• Entry level $260,000 ( $225,000 in 2013)
• Investable Net worth about $4Million
• Currently pay 20% of all personal income tax in Canada
• Equal to 11% of all businesses in Canada and 5% of self-
employed
• Assuming 2/3rds of the 1% are professionals or
business owners then about 7% of all incorporated
entities are owned by the 1%

110. What Else is in the Rest of the story?

111. The Dentist and The Civil Servant
• Bob graduates with
B Comm. and joins
civil service age 25
• Entry level salary is
$40,000/year
• Gets MBA at age 30
• Moves up the ranks
to ADM by age 50
• Retires age 60 with
salary of $200,000
per year
• Indexed pension at
age 60 is
$133,000/year
• Cheryl finishes dental
school at age 27
• Starts as associate with
student debt of $175,000
• Buys practice with loan of
$400,000 at age 32
• Practice grosses $900,000
per year
• Overhead is 65%
• Starts taking salary to
maximize RRSP’s
• Is able to leave $50,000
per year in Dentco to
save for retirement and
future maternity leaves
and payoff student debt.

112. What Else Do We Need to Know?
• Bob’s pension is fully guaranteed . No investment risk .
• To fund Bob’s pension at 4% real rate of return is takes 50%+ of career
income . If Bob’s option is RRSP or DC pension his maximum
contribution employer / employee is 18% of his salary or 36% of what
his pension will be .
• The tax rate on this additional saving is 0% when earned and 0% when
accumulating
• Medcos tax rate is 12% when earned and 50% when accumulating .
• Cheryl funds 100% of savings for retirement and accepts risk on returns
• Expected RRSP balance for Cheryl age 60 is $1.4M . Value of Dentco
savings $1.3M. Practice is worth $600,000 Total $3.5M or 100% of the
value of Bob’s pension.
• Cheryl has to fund 100% of sick pay, holiday pay, maternity leave , health
benefits .
• When Bob retires he lowers his tax by splitting pension income with his
spouse before age 65.

113. Trust Fund Buddies

114. Tax Reform 2017
What’s Being Plucked?
• Income splitting of dividends from private corporations
• Increase tax on passive corporate income that could reach 71% when paid
out as dividends
• Pipeline planning that converts dividends to capital gains is prevented
How is the Goose Doing Now?
• Income splitting allowed over age 65 with a spouse
• Otherwise no, unless labour or financial contribution
• Passive rules stay the same except reduction in SBD if passive income over
$50,000/year; more expensive to recover RDTOH in some cases
• Integrated tax on passive income can be as high as 59% in Ontario

115. Tax Reform 2018
Before Tax Reform
• Dividend compensation if SBD
• Income split using dividends and trust
• Accumulate passive assets in CCPC
and recover RDTOH when dividends
paid
• SBD not impacted by passive assets
After Tax Reform
• Salary or Dividend situation
dependent
• Over 65 on with spouse otherwise
labour or capital
• CCPC still better but try and
minimize taxable passive income
• Start losing SBD at $50,000 of
passive income. 100% gone at
$150,000. Does it make much
difference?

116. $-
$10,000
$20,000
$30,000
$40,000
$50,000
$60,000 $50,000
$25,000
$60,000
$30,000
$50,000
$7,500 $10,000 $12,500
Passive Tax Analysis
125% of New
Passive income
If Passive income rises from $50,000 to $150,00 or and increase of
$100,000 then Corporate taxes will increase by $125,000

117. Tax Reform 2018
Observations and general guidelines
• Can make sense to now maximize CPP depending on assumptions
and incremental benefits
• Blend of salary and dividends may be ideal
• GRIP is salary to maximize RRSP/IPP .
• Likely better to not try and recover RDTOH and wait until lower
income years or no active business income ( means current income
would be all T4)
• Look for guidance on maximum salaries for spouses

118. Individual
Pension Plans

119. New IPP Age 60: Maximum Income & Past Service
ContributionsNew IPP in 2018 – 60-Year Old
$ 400000
$ 750,000
2017 Terminal Funding
Total funding available
40,0002017 Current Service Contribution
$ 310,000Employer Past Service Contribution
(490,000)Transfer From Employee’s RRSP
$ 800,000Value of Pension (1991 – 2017)

120. IPP vs. RRSP: Terminal Funding at 60
$26,000 $40,000
$310,000
$400,000
$750,000
RRSP IPP current IPP past serviceTerminal funding IPP total
Total funding
$750,000

121. IPP yes or no?
• When income received it can be split with
spouse .
• Future earnings to age 71 can be tax
deferred .
• Contributions tax deductible ?
• Offset high rate tax on passive income
after retirement ???
• Amortize funding over 10 years if
required.
• Trigger pregnant gains in the year IPP
funding occurs?
• Generally better than RRSP’s after age 50
• Shelter proceeds from asset sale
Issues
• Limited to RRSP eligible
assets
• Fully taxable in estate on
second death( insured
version is an option)
• Restricted Liquidity

122. Tax Reform 2018
What about CCPC’s with $10M plus in investable assets
• Likely lose 100% of SBD
• If they have active business income at 27% could be best ot isolate
all passive income into holdco
• Transfer as many expenses to holdco as possible ( salaries???, IPP
funding , interest expense ( especially leveraged life insurance ) ,
donations
• Residual taxable income at 50.7% less RDTOH at 30.7% but taxed as
ineligible dividend
• Use annual CDA to fund income to trusts or to income split with
spouse if under age 65

123. Tax Reform 2018
How RDTOH would work in GRIP environment
Taxable Passive Income $100,000
Tax Payable corporately $50,700
RDTOH $30,700
Dividend required to recover RDTOH $80,800
Personal Tax @43.7% ( was 31.7%) $35,300
Net Corporate tax $20,000
Total tax $55,300
Personal tax on $100,000 Bonus $49,400 ($5900 less)

124. Tax Reform 2018
Impact of waiting until after age 65 or when no active business income
Assumptions:
RDTOH has been accumulating annually and is now at $380,000
Couple age 65 and no other income
Spending needs are $200,000 annually after tax
Dividends paid from CCPC to each $125,000
Tax Payable $24,000
RDTOH recovered $47,500
Net Tax paid -$23,500
Average tax rate on dividend income 19%
RDTOH fully recovered within four years

125. Cdn Equities
25%
Foreign
Equities
15%
Real Estate
35%
Life Insurance
10%
Pref. Shares
5%
Private Equity
5%
Alternatives
5%
Asset Allocation for Taxable Private Corporation

126. Historical Tax Analysis
11.5%
9.7%10.1%
5.0% 4.6% 5.4% 5.9%
9.3%
Annual Returns
53.0%
41.0%
17.0%
0.0%
75.0%
20.0%
5.0%
30.0%
% Taxable
15.2% Tax)

127. Asset Allocation for Registered Plans and Foundations
Interest Bearing
Tax deferred in
registered accts.

129. A tale of two Taxpayers
Expected Return 6% Expected Return 7.5%
• $2.2M portfolio in
private company
• Qualifies for SBD
What is overall tax and
tax rate going forward ?

130. $0
$40,000
$80,000
$120,000
$160,000
$200,000
$170,000
$50,000
$23,500
$0 $0
$23,500
$0
$40,000
$80,000
$120,000
$160,000
$140,000
$72,000
$34,200
$110,000
$16,500
$50,700
21% more return 54% less tax
13.8%
36.2%

132. Planning Factors
• Corporate assets
• Age
• Business Income
• Spending needs
Planning needs to be customized and will change over time.

133. The Ideal Tax Haven
Low Tax rates
Good health Care
Great weather
Good food and wine
Low Tax rates
Good health Care
Grim weather
Timbits and Icewine

134. Paying Less Tax On Cash Flow
$0
$20,000
$40,000
$60,000
$80,000
$100,000
$120,000
$140,000
$160,000
$180,000
$200,000
Non Taxable
Taxable
100%
10%
67%
70%
50% % Taxable

135. Income Split
$20,000
$130,000
Tax
Spendable
Individual Tax Position
13% Tax
$185,000
$115,000
Taxable
Non Taxable
How Much For The Taxman?

136. Tax Free Cash Flow or Credits
1. Prescribed annuities vs. Bonds
2. Dividends taxed at about 67% of
interest
3. Rental income partial tax deferment
4. Income split equally (trusts, RRIFs and
Hold Cos)
Nice tax haven
…eh?!
Why and How Does This Work?
13% Tax

138. The 4% Rule
50% success

139. A Couple’s Tale
Bob and Linda are both age 60 . In good health and
considering retirement . Here are the other facts
• Bob is a lawyer and Linda a dentist.
• They are both incorporated and have personal ,
registered and corporate portfolios of $2M each
• Bob’s portfolio is best represented by
Morningstar’s Balanced Index.
• Linda’s portfolio is invested with us in a Core
model
• They want to know the likely impact of
withdrawing 4% of their capital annually and
adjusting that to inflation.
• We recreate that model for them going from
January 2000 to December 2018

140. A Couple’s Tale
Results by December 31st /2018
• Both have taken out income of $1,827,245. Starting with $80,000 in
2000 and ending with $114,260 in 2018 .
• Bob’s capital has dropped to $1,711,000 ( about 85% of original capital )
• Linda’s capital is now $3,740,000 ( 187% of original capital and 120
more than Bob’s )

141. How does the 4% rule work

142. A Couple’s Tale
What happened?
• Bob’s indexed income greater than his overall
return
• 85% of Linda’s return from cash flow so less
volatility and no need to sell assets during
negative years such as 2008 .
• SWP have greater negative impact in losing years

143. Planning Options
Tax Efficient Asset Allocation
IPP vs. RRSP
Over Age 50
Prescribed Rate
Loans
Insurance With or
Without Leverage

144. Thank You

145. Past performance is not indicative of future results. All investments contain risk and may gain or lose value. Returns are net of fund expenses charged to date.
This is not a sales solicitation. This investment is generally intended for tax residents of Canada who are accredited investors. Some residency restrictions may
apply. All investments contain risk and may gain or lose value. Please read the relevant documentation for additional details and important disclosure
information, including terms of redemption and limited liquidity. Please speak to your Nicola Wealth advisor for advice based on your unique circumstances.
Nicola Wealth is registered as a Portfolio Manager, Exempt Market Dealer and Investment Fund Manager with the required provincial securities’ commissions.
Nicola Crosby is a subsidiary of Nicola Wealth Management.
*The Nicola Wealth Composite Returns represent the total returns of Cdn. dollar denominated accounts of all fee-paying portfolios with a Nicola Wealth
Composite mandate. The composite includes clients who are both fully discretionary and nondiscretionary. Historical net of fee composite performance returns
are calculated using individual realized time-weighted client returns net of fees and is presented before tax. The Nicola Wealth inclusion policy is based on
clients’ weights at calendar month end. The composite returns are asset-weighted based upon ending monthly market value. The Nicola Wealth Composite
mandate may change throughout time. Additional information regarding policies for calculating and reporting returns is available upon request. The composite
returns presented represent past performance and is not a reliable indicator of future results, which may vary. Nicola Composite Portfolio past performance is
not indicative of future results. Returns are net of fund expenses. Please refer to the Nicola Wealth Funds disclosure document for additional details and
important disclosure information. The Nicola Core Portfolio Fund Asset Mix takes into consideration only the primary asset class of the aggregated funds but
does not take into consideration the underlying fund’s holdings of other asset classes. For example, the Nicola Primary Mortgage Fund is allocated in its entirety