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Lifetime Capital Gains Exemption – Rules

Lifetime Capital Gains Exemption – Rules

This post by Shaun Hope first appeared on the CPA4IT Blog on July 23rd, 2019

As the owner of an active business corporation, you’ve probably heard about the lifetime capital gains exemption that can apply to the sale of qualifying private company shares. If you and your family members can claim this exemption when you sell the shares of your business, you could each realize substantial tax savings, providing that the shares you’re selling meet certain requirements.

Every individual is entitled to a lifetime “capital gains exemption” on qualifying small business shares (and farm and fishing property). This exemption, which is indexed for inflation annually, is limited to a lifetime amount of $848,252 for 2018 (and $866,912 for 2019). It’s important to note that you don’t have to claim the exemption all at once – you can carry forward any unused amount to use in the future.

To qualify for the exemption, three tests must be met at the time of disposition.

  • Small business corporation (SBC) test: All, or substantially all, of the company’s assets must be used in an active business carried on primarily in Canada. “All or substantially all” is generally considered to mean at least 90%, using fair market value. Only the company’s assets are considered in the criteria; debt and other liabilities have no impact. Assets not listed on the balance sheet are also included, such as goodwill and internally generated patents. The reference to “primarily in Canada” generally means at least 50%.
  • Holding period test: The disposed share must have been owned by the shareholder or a related person throughout the 24-month period prior to the disposition. This is an attempt to limit the CGE to longer-term investments rather than rewarding quick flips.
  • Basic asset test: Throughout the 24 months prior to the disposition, the corporation had to have been a Canadian-controlled private corporation and more than 50% of the company’s assets had to have been used in an active business carried on primarily in Canada.

For example:

You sell shares of a small business corporation in 2019 and make a $900,000 profit (also called capital gains). Without the LCGE, you would have to pay taxes on half of this amount, i.e., $450,000. However, seeing as the LCGE allows you to subtract $866,912 from your profits in 2019, you only pay taxes on ($900,000 – $866,912) x 50% = $16,544 rather than on $450,000.

Watch out for these pitfalls

  • The alternative minimum tax (AMT) can cause an unexpected tax liability in the year CGE is claimed. Generally, this can occur when a taxpayer crystallizes in a year of otherwise low income. While AMT is refundable, a refund is generated only when AMT is less than the regular tax calculation in the subsequent seven years.
  • A balance in a taxpayer’s cumulative net investment loss (CNIL) account can restrict access to the CGE. As the name implies, this is a cumulative calculation that considers all of an individual’s investment income and investment expenses incurred after 1987. If the calculation results in a net loss, the CNIL could impact a CGE claim.
  • An allowable business investment loss (ABIL) could impact a CGE claim. If an ABIL is realized in the year, whether or not it is claimed on the tax return, it is used in the CGE calculation.

If you are considering selling the shares in your active business corporation, please contact us to discuss what steps you should take to ensure that you benefit fully from the Lifetime Capital Gains Exemption.

Top iOS Mobile App Developments Trends for 2020

iPhone
Photo by Koby Kelsey on Unsplash

From the dawn of its creation, the iOS mobile development platform has provided versatile and powerful options for creating stunning apps. One of the reasons for its permanent thriving is the continuous state of flux that encompasses all the latest trends in mobile app development. New iPhones are out on the market each year, including improved hardware that sets the base for innovative mobile app development, year by year. To avoid lagging behind, mobile app development companies must stay on track with the new advancements and find their place in the platform, too. If you are interested in keeping abreast of the latest mobile design trends, here are a few pointers to focus on as we are moving into the year ahead.

UI Design Trends

Each iOS app development project starts with the basic goal to improve user satisfaction, which inherently makes new progress all about UI or the user interface. The user interface must not only improve in appearance but also provide a new level of satisfaction with feature simplicity and information delivery. This is not so simple as Apple puts iPhones and iPads under the microscope each year to perk up the hardware.

A key trend of feature mobile app development on the iOS platform is leaving this focus on aesthetically pleasing apps behind. That doesn’t mean that iOS apps will no longer be beautiful but it does mean that the ease of access to information and the simplicity of use take the number one place. Therefore, iOS apps must be made from scratch or revamped to help users complete tasks in the shortest possible time.

While we are touching upon aesthetics, the blurred borders of new iPhone screens play a major role in future iOS mobile app development. Designers need to find ways to create apps that work well on older phones with prominent edges and on new seamless iPhone models.

laptop
Photo by Daniel Korpai on Unsplash

iOS Animations and Graphics

Animations are an excellent way to attract users and keep their attention in the flow as they navigate through the app features. Animations enable sleek functionality – an aspect of user experience that users are primarily looking for.

How web browser tabs, for instance, look and shift on a smartphone, as well as other aspects that soften the lines between visual appeal and functionality, are important for keeping users pleased with the product.

3D graphics may be more demanding on behalf of the mobile app development team, but rewarding nevertheless because they provide an extra level of dynamism in transferring information to users, reducing the need for physical prototypes and boosting the visual aspect of products. It is important not to overdo 3D graphics as they can slow down loading times.

Gesture-based Navigation

One of the key trends for 2020 is the placement of navigation elements on your end product. A major design principle of navigation in past mobile app development trends was to place as many buttons in the navigation bar so that users have greater visibility of what is available. As the number of functionalities is growing, this approach doesn’t work anymore because the visual appeal gets lost among all those buttons.

Designers are now focusing on a more hidden, intuitive button design, placing the maximum number of buttons on the home screen without distorting aesthetics. Functionalities are still there but are enmeshed in the gesture-based navigation. Features compressed in this way will improve the user interaction with the app and ultimately boost engagement rates – it makes more sense to create iOS products that support a few key features than making it all about endless app possibilities which will impede the smooth use of the home screen.

If you align these iOS app development trends with the design process of past products in order to update them or use them while creating new ones, clients will ultimately reap benefits that haven’t been so important while ago but are essential as we move forward.

About the Author: Michael Kelley

With a background in journalism, Michael’s passion lies in educating audiences in the realm of tech. He is especially intrigued by the world of app development and all associated facets including Android, iOS, blockchain, andd App technology. Michael has spent the last few years working with app agencies to elevate their content strategy and expand his knowledge even further as app development technologies advance. When he’s not typing away at his computer, you can find Michael traveling the globe or taste-testing pizzas in search of the ultimate pie.

The Digital Workplace – How It’s Changing the IT Job Market

Guest Post by Gil Artmoore

The Digital Workplace - How It's Changing the IT Job Market

It’s no secret to anyone who has lived through the last several decades that technology has radically changed just about every aspect of our lives.   Try to imagine living without smartphones, Facebook, and Google in today’s world. It’s revolutionized our professional lives as well.

Digitization has also had a significant effect on the IT (Information Technology) job market. IT workers have had to continually adjust to an ever-shifting set of demands that also offer tremendous new opportunities to those who want them.  Far from the classic figure of the coal miner put on the street when the world evolved past a need for their services, IT is an industry that almost always replaces older functions with opportunities for growth.

Let’s look at some of the ways the digitization of the workplace has changed the way we work, how it has affected the job market for IT professionals, and what kinds of opportunities it will bring to IT professionals in the future.

How Automation Changed The IT Job Market

The early part of this century saw a dramatic shift from jobs that required no expertise with digital systems to ones where people couldn’t get by without those skills.  Everything moved toward jobs that require knowledge with digital systems, and as you might expect, this became a huge boon for IT professionals who manage the systems everyone needed to start using.

The next revolution came years later, when a drive for increased efficiency demanded systems that required less manual touchpoints.  This wasn’t always an easy transition for IT professionals, and while it did create a skills gap for some years, the workforce has largely adapted and is ready to move with the digital workplace into the 21st century.

The New Opportunities Automation Has Created

Automation and the digital workplace have had a substantial effect on the IT job market, and while that initially looked like a net negative that would eliminate jobs, it instead transformed and relocated them.  One of the most visible ways this manifested itself was in the rise of cloud computing.

Cloud computing is an arrangement where, instead of owning, operating, and maintaining servers and other infrastructure equipment internally, companies now have the ability to pay outside vendors like Amazon Web Services or Microsoft Azure to host those services on their servers.

This did initially lead to the elimination of many IT jobs for system administrators who were there to maintain and administer in-house servers and network equipment, but the flip side is that the cloud vendors needed to hire people to maintain those systems once they were in charge of them.   Literally their entire business revolved around running servers for their customers, and they needed someone to manage the physical hardware.  As a result, system administrators went from being support staff at law firms, financial services companies, or wherever they worked, to driving revenue at a company whose entire business was being one big IT department.

Another major net positive the change in the IT job market brought to IT professionals was that remote work became not only feasible, but commonplace.  Given that cloud computing commonly operates on distributed systems (meaning the same data and functions are duplicated across and run from systems often separated by hundreds or thousands of miles), there’s no single data center to manage like most companies had in years gone by.  Without needing to be physically present to manage the systems, many administrators have gotten a greater work/life balance in this new arrangement.

Finally, IT work has become more collaborative and made employees who may not be in close proximity to each other a lot more equal than they used to be.  Many companies have traditionally had IT employees at corporate HQ, and local IT teams at other offices who often felt like they were on the outside looking in when it came to having their voices heard or being considered for opportunities.  The nature of cloud computing mitigates that dynamic to a great degree, and provides a more level playing field for IT staff no matter where they’re located.

Conclusion

The advent of the digital workplace has not only not led to the prosperity of the IT labor force, but has even eliminated many of the difficulties and frustrations associated with IT work in years gone by.  Many companies have begun enjoying the benefits of using modern technology to build internal structure, and IT professionals will continue to enjoy the benefits of a more focused IT career for many years to come.

About the Author

Gil Artmoore has spent the past decade working in various roles in IT departments for many businesses both small and large. Recently, Gil started writing out the things he has learned, experienced, and witnessed in the small business and tech world during his career. He is eager to share his insights with the rest of the world.

Top 5 Tech Trends That You Should Follow in 2020

This guest post is provided by Anastasia Stefanuk at Mobilunity

Changes in the technology trends are very disruptive as well as very rapid in recent decades, especially in the field of IT and communication. The impact of technology changes in information and computer technology ICT has put the employment of a large number of employees on stake. Numerous recruitment process outsourcing models emerged to replace traditional employment. Automation of industrial processes powered by the ICT has almost revolutionized the employment landscape globally.

According to the latest research, more than 47% of the global employees are facing the risk of losing employment due to the technological factor affecting business in all kinds of industries worldwide. Let’s explore the major tech trends in business in 2020 that can disrupt the existing way of doing business in the world.

Importance of Technology Trends

Circuit board pattern and puzzle

Technology trends are very crucial for all kinds of businesses in the world nowadays owing to the widespread influence of ICT and other technological factors in modern businesses and industries. Almost half of the world employment is at stake due to the pervasive influence of automation processes. The expected number of industrial robots to be deployed in the industries across the globe in 2019 is about 2.6 million units. These robots improve work efficiency and industrial productivity significantly. According to the Statista predictions, the total size of the robotic process automation RPA is expected to cross $4.9 billion by 2020.

There are many other technology trends such super-speed communication networks, smart vehicles, home automation, virtual reality, wearable devices, and centralization and integration of businesses processes will impact all types of industries, businesses, and lifestyles of this world. In short, change is a big technology factor in the business of the present world.

Top 5 Tech Trends in Business in 2020

If we look at the global ecosystem of the industries and business across the world, we will come to know that technology trends are continuously changing. But, it is very important to note that the major disruptive changes in any field of technology are powered by the ICT advancements. The other technology changes are also heavily influenced by the changes in ICT technologies. So, ICT is the technology trendsetter in the present global world. Let’s have a look at the top 5 technology trends in business in 2020.

Trend #1 AI Powered Development

Artificial intelligence is not a new thing in the world of technology, but the maturity of the technology is ripened nowadays in all forms of business and industries. The software development powered by artificial intelligence AI and machine learning has opened up new dimensions for communication automation, entertainment, digital marketing, healthcare, defense, and other fields of businesses. The use of chatbots is one of the examples of AI enabled software development. Virtual reality and augmented reality (VR/AR) are the major components of AI enabled development that is getting stronger roots in modern businesses across the globe. According to the latest research, more than 80% of the routine repetitive tasks in documents, record management, HR processes, bookings, CRM, and other processes can be automated through the next generation software programs powered by the AI and machine learning technologies.

Trend #2 Internet of Things (IoT)

Internet of things commonly referred to as IoT technology is a new tech trend for a few years now. It will also remain a top technology trend in 2020. According to the Energias Market Research forecast, the total size of the IoT market is expected to reach $6.5 trillion by 2024 from just $1.2 trillion in 2017. The global market size of the internet of things is projected to grow at over 26.6% CAGR between 2018 and 2024.

This technology is not only growing in the home automation but also in all fields of businesses and day to day life. With the help of IoT technology powered by the high-speed internet and modern trends of communication, you can automate processes in your car, at home, at the garage, at the office, at public places, at government offices, and even everywhere you just name it. Internet of things is an integrated technology based on sensors and integrated communication technology. The sensors sense different parameters and communication technologies help to send signals to alert the human or automated process to take action remotely or automatically.

Trend #3 Blockchain Technology

Blockchain technology is emerging as one of the most powerful and secure software technologies for managing numerous software-based processes in all major industries of the world. The origination of this technology is associated with the Bitcoin cryptocurrency, which is a type of virtual currency without any intermediary authority to regulate. This technology is a chain of blocks of information that are distributed across computer networks in the world. It is also known as distributed information ledger.

According to the TMR forecast report cited in the Global News Wire says the total market size of blockchain technology is expected to reach $20 billion by 2024 with a gigantic growth of 58.9% between 2016 and 2024. There are many governments in the world are considering this technology to use in the most secure and mission-critical government systems like finance, defense, voting, and utility systems. The introduction of cryptocurrencies in different countries is also becoming a big option for many governments in the world.

Trend #4 5G Communication Technology

5G communication technology is going to become a big technology trend in 2020. It has already hit the ground in many countries of the world. According to the Future Marketing Insight projections for 5G technology, the market size of 5G is expected to cross $248.46 billion by 2028 from just $608 million in 2018. The growth of this technology is estimated at about 82.4% CAGR during 2018 and 2028. It will be one of the top technology trends in 2020 across the world. The impact of this technology will be high on different industries, businesses, and lifestyles.

Trend #5 Virtual Reality & Wearable Devices

Wearable devices powered by the virtual reality and augmented reality (AR/VR) software development is setting new trends in entertainment, gaming, and TV industries. The number of wearable devices shipped across the globe is increasing continuously. It is expected to grow the shipment of wearable devices in 2020 significantly. It will maintain its status of top tech trend in 2020.

Impact of Disruptive Tech Trends on Business Efficiency

The impact of disruptive technology trends on businesses is significantly big. As we know, the present day business market is so competitive and very fast-paced. The technology-oriented businesses are highly prone to the changes in the technology to even survive in the industry. The user experience is one of the most significant components of modern businesses. The customers have become so demanding and so aggressive that any little deficiency in the service or product can cost a business hugely.

The entire range of the above disruptive tech trends improves the speed, reliability, security, and productivity of the businesses. Creating a great user experience is the top objective that can be achieved by using modern technologies.

Final Takeaway

The landscape of technology is changing rapidly and consistently. Almost all tech trends are influenced by the ICT changes in the present day world. The top expected technology trends in 2020 may include blockchain, internet of things (IoT), AI-powered development, 5G technology, and wearable devices. The growth forecasts of all these technologies clearly declare them to remain as top tech trends in 2020.

Ensure You’re Working on a Secure Device… But Don’t Spend Time Securing It

The following guest post was provided by NPC

IT and professional contractors are the definitive mobile professional.  Moving between jobs that can be anywhere from a few days to a few years, mobility, adaptability and professionalism are essential to their success. They’ve been mastering the “gig economy” long before it was topical. Many contractors make exceptional money, better sometimes than their permanent-staff counterparts. The difference between the winners and losers may not be the luck of the draw on the positions they land, but how they organize and present themselves. Running an efficient and secure one-person office is critical to being able to focus on the work opportunity, and to maximize revenue generating hours.

But as solo entrepreneurs, how a contractor spends their time doing just that is important.  Like it is for any professional, time is money. It’s reasonably certain that someone who owns a car dealership no longer changes their own oil. Smart producers look carefully at their operational responsibilities and how they spend their time. They watch for opportunities to offload a task to someone that can do it faster-better-cheaper. Even though it may be a task they know how to do themselves, once the value of their skills overtakes the value of the task, they offload it.

As-a-Service models are related to and fast becoming as ubiquitous as Cloud Computing. They are great opportunities for professionals of all types to offload some of the time-consuming and low value work that is not only a bit of pain to keep up with, but takes away from either their revenue producing work, or, more importantly, precious personal and family time.

An example of this is NPC DataGuard’s secure managed computer offering. For a single monthly fee NPC will provide a professional with a top-of-line laptop, desktop or hybrid tablet, that is already sourced, configured, and secured with industry leading backup and security tools.  Giving the responsibility to someone else to provide a computer that is built, managed and monitored, always in warranty, with single-point-of-contact 24/7 support, can be a big time saver for the Contractor.

For those jobs that require the contractor to “BYOD”, being secure and protecting their business interests, and that of their clients, is essential. The level of security that can be achieved in these types of specialized models is exceptional. Fully encrypted and biometric access devices will impress those clients that require you to work on a secure device. As well, as an example, NPC DataGuard’s Pro product comes with $5M in privacy breach remediation insurance if an NPC ever failed to protect critical personal information you may work on for your client.

The impact on a contractor from a lost, stolen or compromised device while in a contract can be devastating.  What is your plan today for such an event? What’s your personal Business Continuity Plan?  A secure managed computer includes a full back-up completed each day into a secure data centre.  A lost, stolen or damaged device can be replaced with data restored, saving you countless hours doing it yourself and getting you back to work.

“As-a-Service” models offer products and services to ensure the contractor does not waste time on tasks that pay him or her less than what they can make, as well as levels of  technology performance that even an IT professional might find hard to achieve on their own.

Spending a lot of time buying, configuring and securing your own computer can now be a thing of the past. Key to driving top revenue is showing up professionally with military-grade security on a slick new computer and being able to focus on the opportunity at hand.

This guest post was submitted by our friends at NPC. Visit this page to learn more and to get a special offer for all of our readers.

10 Tips for Writing a Job-Winning Developer Resume

Recruiter Reviewing Job Applicant's ResumeWriting the perfect resume is not just time-consuming; it’s challenging. With a market that is bursting with talent, job posters can quickly receive hundreds of applications for the same project. Showcasing your skills in the best way possible is a practice in precision.

While there are different schools of thought on resume writing, web developers should be aware of a few critical factors. The best way to get an edge on the competition is with great style and well-presented information. Let’s take a look at what developers ought to do to craft a job-winning resume.

Formatting

As with any writing, utilizing good structure is important. Recruiters generally scan resumes to maximize their time during job searches. Therefore, using effective formatting can help get your resume to the top of the pile.

Consider organizing the information in your resume in this order:

  • Professional Career Summary
  • Skills
  • Work Experience
  • Projects
  • Software/technology programs
  • Education
  • Certifications

Today’s recruiters tend to prioritize good experience above all else. Your education and certifications still have value, but they don’t need to appear first on your resume.

Personal  information

Traditional resume formats included too much personal information. Clients don’t need to know your weight, height or eye color. While adding some personal data is necessary, it should only be the bare minimum.

Your name, title, email, phone number, and website are all you need to write on your resume. Although some are against it, feel free to include a photo of yourself. Depending on where your client is based, they might even expect to see your headshot in the top corner.

Professional Summary

Chances are if you are searching for a job, you have a LinkedIn profile. LinkedIn has made it the norm for job seekers to present themselves with a professional summary. These summaries allow you to quickly highlight your soft and technical skills as a web developer.

In summary, you provide recruiters an overview of your career. Thus, be sure to include how many years you’ve been in the field. Also, write about any tech programs you’ve completed in that time. If you were in charge of training or managing other employees add that, too.

Keywords

Using the right keywords isn’t just for top-notch SEO; it works for your resume, as well. Pay attention to the terminology clients use to describe a project. If you use the same terminology as them, you’ll have a higher chance of being selected.

Plenty of businesses use automated systems to sift through resumes and keywords are vital to their algorithm. Unfortunately, if your word choice doesn’t match with a prospective client’s criteria, your resume may be wholly passed over. Ensure that you get a foot in the door by fine-tuning the keywords in your resume.

Experience

The experience you include on your resume is a primary deciding factor for your candidacy. Remember to remove any irrelevant experience. Furthermore, remove any experience from over ten years ago.

Hiring managers want to see what explicitly makes you perfect for the position they are looking to fill. Write a short paragraph about what your main contributions were to previous positions. Also, highlight previous experience that directly connects with the project you are currently applying for.

Spotlight Projects

While experience is essential,  projects can also help prove your worthiness as a candidate. Especially, if you are entry level and don’t have much experience, yet. Whether it’s an internship or a freelance project, adding it to resume helps you stand out.

First of all, they show your dedication and drive. Second, they illustrate any unique skills you may have acquired. If your projects are online, include a link!

Education

Although your education has to be on your resume, it’s not as crucial as your experience or projects. One line descriptions will suffice. However, you can certainly include extra information if you feel it will be particularly interesting for the position.

Education must be in reverse chronological order. Additionally, ensure that you list any special programs, boot camps or courses you completed. Certifications can go here, as well.

Technical Skills

When arranging your technical skills, be sure to eliminate any that are outmoded. No one will be impressed if you say you know how to use Windows 95. Show that you are keeping up with the latest software and programs in this section.

Connect your knowledge to your experience and elaborate on how you used your technical skills in the real world. Recruiters will appreciate concrete examples. Also, label your skills with a proficiency level, but avoid saying you’re a beginner.

Interpersonal Skills

Although web developers’ primary skills should be technical, interpersonal skills are important, too! Clients will appreciate a programmer who is a people person. Show your interpersonal abilities by utilizing specific language.

Strive to include active verbs like delivered, organized or elevated. Showcase your sensitivity to time and your ability to work well with deadlines. Moreover, go into detail about any leadership roles such as training or leading projects.

Tailor Your Resume

It might seem like a no-brainer, but it’s essential that you adjust your resume for each job posting. Even though the jobs may be similar, you need to optimize keywords and reorganize every time. The relevance of your resume depends on it.

Furthermore, keeping your resume as up-to-date as possible is never a bad thing. After all, technology is continually evolving. Tailoring your resume for each job is an excellent opportunity to check that your information matches your current skills.

Conclusion

Once you’ve perfected all of your content, take care to adjust your presentation. Opt for a spacious set-up instead of cramming information in. Don’t get too caught up in whether your resume fits into a single page.

Instead, please pay attention to your content and ensure its scannable. A colorful and creative presentation can be eye-catching; however, don’t go overboard trying to impress. Do your best to incorporate these ten tips, and you’ll be on your way towards your next web dev position.

Kristin SavageKristin Savage is interested in writing and planning to publish her own book in the nearest future. Also, she has been a reviewer at Pick Writers for a few years and is known for her thorough approach to accurately assess newcomer translation services. You can find her on Facebook.

How to Achieve Financial Freedom Through Passive Income

This post by Jose Michaca was originally published on the CPA4IT Blog on January 17, 2019     

How to Achieve Financial Freedom Through Passive IncomeImagine what your life would be like if you knew that all of your living expenses were covered. That you could roll out of bed, do nothing, and still have all of your basic needs met. That instead of living paycheck to paycheck, you could do the work you want to do rather than the work you have to do. This is financial freedom, and it can be achieved through passive income.

Now, the common misconception is that financial freedom is synonymous with retirement. It’s not. Regardless of age, when you generate enough passive income from your investments to cover all of your living expenses, you have financial freedom. Once your living costs are covered, employment becomes optional, and you’re free to focus on the things you’re truly passionate about.

It sounds pretty ideal; however, building enough passive income to realize this goal requires careful planning. As a small business accounting and tax accounting firm, CPA4IT regularly helps clients to determine their “financial freedom number” and then set a clear path forward. Here’s how we do this.

OUR PROCESS

Identify how much passive income you require

Financial freedom means having your base monthly expenses covered, which means you need to know what those expenses are. So, the first step is to make a list of all of your necessary financial commitments—rent/mortgages, utility payments, internet and phone expenses, insurance premiums, car payments, health expenses, school expenses, childcare expenses, basic food, clothing, entertainment, travel expenses, and so forth.

The amount of passive income a person needs will vary. A younger person who may be putting a child through school will have higher monthly expenses than an older individual whose children have left home. For the purposes of this article, let’s say you break down those costs and determine that you can live off $6,000 a month.

Determine your financial freedom number

Now that we know what your expenses are, it’s time to figure out how much money you need to save and invest in order to make $6,000 per month in dividends. To start, we look at your personal balance sheet to determine where you are now, financially. Do you have a house? RRSPs? A TFSA? Unregistered investments? Assets?

Once we determine what your current equity is, the next thing to figure out is how much total equity you need. So, if we take your monthly expenses of $6,000 and assume a 5% dividend, you would need a $1,444,000 principle to generate that amount. We then subtract your current equity from that amount to give you your financial freedom number. Let’s say you’ve currently got $700,000. Your financial freedom number is $744,000. Once you hit that target, you’ll be able to sustain your lifestyle through passive income.

Now that we know how much you need to put away, the next step is to establish a game plan for how exactly you’re going to do that.

Apply the Financial Freedom Pyramid of Power

The Pyramid of Power is most commonly applied to business strategy and goal-setting. However, at CPA4IT we’ve developed another version—the Financial Freedom Pyramid of Power. The Pyramid breaks down into four simple steps that we use to help you achieve financial freedom through passive income. Let’s take a look at these steps and their related strategies in more detail.

Invest it—start earning passive income.

Protect it—insure yourself and your assets.

STEP 1: MAKE IT

Maximize your earnings by …

Evaluating your income.

Obviously, a big part of building equity relates to your income. If you’re an employee, what is your base pay rate and are there additional skills or trainings you could get that would earn you a higher hourly rate or salary? If you’re a business owner, what are your short-term and long-term plans for business growth? How will that impact your income over the next 3-5 years?

Let’s say you’ve built up your net worth but it’s just not enough. Perhaps you had a rough time in the market and worry that you no longer have enough money to retire, or perhaps you started saving late and worry that you won’t be able to hit the amount of equity you need in order to achieve financial freedom.

Then the question becomes, how can you generate more money with what you’ve currently got? Can your current assets generate more income? Are there expenses that could be cut? If not, we usually may get out clients to work on developing a full traditional Pyramid of Power to help us explore options.

STEP 2: SAVE IT

Maximize your savings by …

Evaluating your spending habits.

As stated earlier in this article, it’s important to understand where your money is going. In fact, one of the very first things we do with our small business accounting clients is evaluate spending. Whether you’re working with an accountant or not, it’s a useful exercise. Ask yourself, where is your money going right now? Is there anything that can be cut out? Are there non-essential expenses that are ultimately less important to you than your financial well-being? If yes, cut those costs, and save instead.

Banking every raise you get.

Usually when people make more, they spend more. Unfortunately, this is not the best saving strategy. The best strategy is to stick to your existing budget and divert that raise directly to savings. Of course, there will be times when unavoidable new expenses arise; however, as an overall strategy banking your raises can really help to boost the amount of money you have available for investment. This strategy is particularly useful for millennials who may already be accustomed to living on a budget and could divert raises to paying down student debts more quickly.

Setting aside $0.30 of every dollar you earn.

As a base minimum, you should be diverting $0.10 of every dollar you earn towards savings. But there are other considerations. Namely, taxes. Taxes are deducted automatically for company employees, but if you’re a business owner, entrepreneur, or self-employed individual, you should be setting aside at least $0.30 on every dollar to cover your GST and taxes owing. You’ll likely use $0.20-0.25 of that to pay your taxes. Once you’ve settled up with the CRA, anything left over can be pushed to your savings. If you can manage the other $0.10 on top of that $0.30, even better.

Paying off bad debt.

If you have debt, your first instinct may be to pay that off before you begin saving. Sometimes this is a sound strategy, sometimes not. There’s a difference between good debt and bad debt. Good debts are low interest debts, like lines of credit and mortgages. Bad debts are high interest debts like credit cards. Debts to the CRA, such as amounts owing on your GST and payroll / source deduction taxes or personal income taxes, also fall into the not-so-good category. It’s wise to discuss your current debts with your small business accountant to ensure that debt repayment is adequately accounted for in your saving strategy.

Investing (slightly) less in your business.

Entrepreneurs and small business owners work hard, often putting everything they make back into their business. But that’s putting all of your eggs in one basket. What happens if, in 20 years, the business doesn’t work out? Even entrepreneurs need a bit of a balance. Moreover, as a small business owner, you won’t have access to a large company or government pension. Instead of investing 100% of your profits back into your business, make it 75% and use the rest to build up your nestegg.

Worrying less about the mortgage.

Contrary to common belief, paying off your mortgage isn’t the best path to financial freedom, particularly when you’re self-employed since your mortgage is a deductible expense. By paying it down you’re losing that deduction. Sure, you’re paying off debt, but that debt is only costing you 3.5%. If you invested that money in the market instead, you could make more than that amount in dividends. Strategies like the Smith Maneuver can also be used to simultaneously build up your net worth while paying down your mortgage.

STEP 3: INVEST IT

Maximize your passive income by …

Starting to invest right away.

Now that you’re saving, you want to start earning passive income as soon as possible so that you can continue to increase your savings. Unfortunately, you usually need $200,000 or more before a financial advisor will be interested in working with you, which means that initially you may be reliant on your own knowledge.

There are plenty of resources out there. Start by looking for investments that provide at least a 5% dividend, ideally 7%, and have minimal management fees (if any). Your small business accountant can offer suggestions on how to manage investment accounts and can offer you a few pointers on what sort of investment options will be most accessible and manageable for you based on your current level of equity.

STEP 4: PROTECT IT

Maximize your long-term security by …

Protecting your investments.

What we’re talking about here is insurance, and the strategy is pretty straightforward—get some! The key types of insurance you should invest in include health insurance, life insurance, homeowner’s / rental insurance, disability insurance, and car insurance (if you own a vehicle). In terms of stocks and bonds, there’s no way to directly insure these assets, but you can make sure your portfolio is diversified and consult with a financial advisor to develop strategies for handling your investments in times of market turmoil.

If achieving financial freedom through passive income appeals to you, we’re here to help. Contact CPA4IT for a more information about how to arrange a consultation.

Motivation and Opportunity: Entrepreneurship, Career Change in Canada’s Female Workforce

Guest post by Gloria Martinez of womenled.org

Motivation and Opportunity: Entrepreneurship, Career Change in Canada’s Female WorkforceA recent study of Canadian workers by the recruitment agency Hays Canada has revealed that half of the working professional population are unhappy in their current jobs. And unhappiness among female workers appears to be at an all-time high — 54 percent of Canadian women fantasize about quitting their jobs with many claiming they want more money, while others put the blame on a bad culture fit.

For many Canadian women, happiness at work didn’t happen until they made a career change. Many chose to follow a private passion rather than fight their way along a difficult and frustrating career path to advancement in companies that showed little interest in cultivating and promoting in-house talent. The fact that Canadian women are starting businesses at a higher rate than women in any other G20 country is a positive and encouraging indication that many are seeking personal happiness through entrepreneurship.

Opportunity and pay

Many have gone out on their own having grown tired of too few opportunities to take advantage of their education and experience. Canada’s gender pay gap is one of the largest among industrialized countries, according to the Organisation for Economic Cooperation and Development. Pay inequity has led many Canadian women to seek better options in other fields, including finance, construction and civil engineering, and take advantage of hot new job markets, such as computer and information systems, medicine and human resources.

A new career

One of the most positive life changes you can make is deciding to turn a passion into a career and start enjoying the prospect of going to work every day. Former Toronto advertising exec Jane Canapini decided to start a travel blog after a memorable hiking trip to Greece and Italy. Andrea Raco left the insurance business to become a personal success coach. If that sounds appealing, decide on what happiness and success mean to you. It could lead to anything from starting a dog-walking service to designing commercial websites or writing online marketing content for a broad range of clients.

Emphasize personal strengths

Becoming an entrepreneur can mean embracing radical change, like working from home or working a second job while getting a new business idea off the ground. Phoebe Fung of Calgary gave up a career in the oil and gas industry to pursue her passion for wine to open Calgary’s first wine bar. Despite struggling to find financing, within a decade Fung’s Vin Room had opened three locations in the Western Canadian city. The appeal of doing what she loves was strong enough that Fung was willing to forego a salary in the first two years according to the details of the financing deal she was able to secure.

Refreshing your resume

For anyone wanting to sell their strengths and experience to a prospective employer or seek funding for a new venture, an updated, well-written and attention-grabbing cover letter and resume are essential. Remember that a good resume should strike a balance between brevity/concision and compelling information, while a solid cover letter will be written toward the industry to which you’re applying.

If your resume needs a good overhaul, check out online resume templates for appealing designs/layouts and color combinations. A potential employer in a different industry will want to see evidence of initiative, creative thinking and resourcefulness; in other words, evidence that you would make a good addition despite having come from a different field.

Today, women in Canada are heading financial technology companies, philanthropic organizations, fashion companies and boutique bakeries, while organizations like Women in Communications and Technology seek to encourage greater female participation in the digital industry. An increasingly tech-savvy and agile workforce is helping create new – and, in some cases, unforeseen – opportunities.

Essential Email Etiquette Advice for Job Seekers to Succeed

Guest Post by Freddie Tubs, Business Writer and Communication Manager at Ukwritings

Essential Email Etiquette Advice for Job Seekers to SucceedLooking for a job used to mean going out and handing out resumes, or maybe even making a few phone calls. But now almost all applying is done online, and a lot of businesses don’t even want you to walk in with your resume in hand. So, it’s important that you know a thing or two about how to properly email a potential employer. Here are seven email tips that will help you get hired.

Have a professional email address

This probably seems like common sense to most people, but it’s surprisingly common for people to send job seeker emails with an inappropriate email address. Don’t use an email with slang or really anything besides your first and last name. Soccer_fanatic95@hotmail.com is not a professional email address. It won’t matter how qualified you are, sending out emails with that address will never get you hired.

Send it to the right person

Do you know who you are applying to? Whenever possible, avoid addressing an email as “to whom it may concern.” Always try and find out who is the best person to send your message to. You have a much better chance doing this than just sending your email to a general company inbox. While you’re at it, send yourself a copy as well. By doing this you create a record of where you have already inquired and you won’t accidentally email the same company twice, that’s a big no-no.

Appropriate subject lines

Whenever you send out a job seeking email you need to include a subject line. Your subject line helps the recipient by letting them know what you are messaging them about. Not including a subject line, or a poorly chosen one, dramatically lowers the chance of your email being opened and read. Your email could even end up in a spam box. In your subject line write the position you are interested in, and you can include your name as well if you like. Companies receive a ton of email, so you need to give them a reason to open your email.

Write it like a business letter

Write your email formally, as if you were writing a business letter. That means no slang, no acronyms, and definitely no emoticons. Keep in mind that you are communicating with a person you would like to work for, not your friends and family. Begin your email with a polite salutation and close it with a signature. The only real difference between your email and a formal business letter is that you don’t need to include the recipient’s contact information in the upper left corner. In every other aspect it should be identical to a letter you would send in the mail.

Include a signature

As mentioned above, end your email with a signature. We’re not talking about the kind you would write on paper, but an email signature. Your signature will include your first and last name, your email address, your street address, and your LinkedIn profile. If you don’t already have a LinkedIn profile, then strongly consider setting one up. They are very useful for showing recruiters your skills.

Properly edit and format your email

Part of following proper email etiquette is taking the time to edit and format your email. As a job seeker, you don’t want to leave in any mistakes that could disqualify you.

Don’t forget the attachments

Don’t forget to attach any documents you have mentioned in your letter. If you forget and need to send a second email with the attachments, you will not make a good impression. These documents, such as resumes, are important because they give the employer a lot of information you don’t have time to discuss in your email.

Conclusion

The majority of applying for jobs now happens online. Your email skills and etiquette are very important because they are the first impression you make on an employer. Use these seven email tips that will help you get hired

About the Author

Freddie Tubbs is a business writer and a communication manager at Ukwritings. He regularly attends recruiting and communications events, and contributes columns to Boomessays and Essayroo blogs.

100+ Amazing Facts About Voice Search

Modern technology plays an integral part in our everyday lives. Through the years, many major technological breakthroughs have been made and one of them is certainly voice enabled technology, or as it is more commonly known – voice search.

It can be found in various portable devices such as smartphones and smart speakers. The most famous technology companies in the world have implemented voice search, and whether it is Google Assistant, Alexa, Bixby, or Siri, they all have the same goal – making life easier for the people using them. Because of this they’ve steadily been increasing in popularity, with infographic created by teams at seotribunal.com states that 1 in 5 adults use voice search on a regular basis.

Before we take a look at some interesting facts about voice search, let’s see how it actually works.

  1. First of all, voice search processes and transcribes the human speech into text.
  2. Next, it analyzes the text in order to detect questions and commands.
  3. After that, it connects to an external data source such as a search engine to find the relevant information.
  4. And finally, it translates that information into a digestible format and fulfills the user’s intent.

Modern voice search devices are often interactive which makes them capable to maintain a dialog with humans. The rapid growth that they are experiencing is only going to make them more and more sophisticated in the years to come.

Voice search can be used while driving, watching TV, working, and even when showering or using the bathroom. The main reasons why smartphone users worldwide use voice-enabled technology are presented in the following list.

  • Doing online searches – 60%
  • Finding information on a product in which they are interested in – 51%
  • Asking questions – 50%
  • Asking a fun question – 49%
  • Asking for directions – 42%
  • Making a call – 41%
  • Playing music – 41%
  • Asking for the weather forecast – 40%
  • Finding a local business – 34%
  • Looking for info on a local business – 34%

These facts, along with more than a hundred of others, are contained in the infographic below. Take a look at it to find out more fascinating facts about voice search technology.