I just got off the phone with a wealth advisor who made $600,000 last year.

@davidrdinardo

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The video provides high-value, actionable financial advice tailored to a specific audience (Canadians), which encourages saving and sharing for future reference.

Summary

The creator discusses the high tax burden on high-income earners in Canada and suggests that young people should consider career paths that are resistant to AI and allow for incorporation to lower their tax liability. He uses a hypothetical example of a wealth advisor to illustrate the difference in taxation between T4 income and corporate income.

Structure

1Introduction of a high-income earner's tax situation
2Discussion of the demotivating nature of high marginal tax rates
3Recommendation to consider AI-proof careers
4Recommendation to consider incorporation for tax efficiency
5Conclusion summarizing the two key pieces of advice

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On-screen text

600k T4 Income = Paid 294k to CRA

Transcript

Original caption

When picking your career…1) Check out if AI will replace that job 2) Make sure you can incorporate Save this video #cra #taxes #new #incorporate #canada

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I just got off the phone with a wealth advisor who made $600,000 last year. He just showed me his T4 slip and he was taxed at $294,000, almost 50%. It got me thinking about young people and the next steps for them. Not only do you have to look when you go into education or whatever your career is, is AI going to replace this? But you also have to look, especially in Canada, that can you incorporate or are you going to be taxed at the full amount if you're a T4 slip? And what that means is every dollar this individual makes, he'll be taxed at 50%. So if he goes up to $1 million next year, add another $400,000 of income, which is great. I'm not discounting the fact that he's making a lot of money, but if he puts in that extra effort to make $400,000 more and he's taxed at 50%, so $200,000 goes to the government, the psychology around it being demotivating to increase your salary or go out and put yourself out there even more, you start getting to a comfort zone. So what I recommend every young individual or someone starting out who has that drive and that ambitious to not only look up where AI is going, but also look to see which industries you can incorporate in. Because that million dollars in T4 slip, that's taxed at 50%. If you're incorporated, it'd be taxed at 12%. So that million dollars, you can be taxed at a lot less. Now it is variable. If you hit over $500,000, it changes to 26%. But let's just keep simple math. If you make 500,000, you're tax at 12%, which is a lot less than if that money is received on your T4 slip. So my lesson here is look at two things when you're starting out. AI and if you can incorporate in Canada. Those are the two big things that I would teach my son going into school right now to be like, is it defensible against AI and are there upsides where if you make an extra dollar, you're not taxed at 50%.