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Name, age: Julian, 36
Annual income: Draws $42,500 salary plus occasional dividends from $350,000 earned by professional corporation, $6,000 from part-ownership in rental property, $1,703 from Canada Child Benefit
Debt: $415,000 mortgage
Savings: $11,000 in savings account, $290,000 in tax-free savings account (TFSA), $750,000 in professional corporation, $199,000 in registered retirement savings plan (RRSP), $9,000 in RESP (registered education savings plan)
What he does: Lawyer
Where he lives: Small city in Ontario
Top financial concern: “Knowing if we are in a good spot [financially] or not. There are so many variables and we aren’t sure where life will lead.”
Julian works as an associate at a law firm but is paid as an independent contractor into his professional corporation.
His corporation then pays him a salary that is a fraction of what he brings in, as well as occasional dividends if he needs additional money at the time. The business invests what it doesn’t need for expenses, which allows Julian to save significantly on income tax.
“I researched it all and set it up,” says Julian, who comes from an entrepreneurial family. “I had to advocate for myself because [my employers] hadn’t done this with an associate before.”
Julian says knowing the benefits of incorporating helps him serve his legal clients, and has helped him bond with his dad, who is also interested in finance.
“I caught on and realized you can make all these little moves and decisions that can pay off quite well,” says Julian, who is 36 and married with a one-year-old child.
His wife is also a lawyer and makes about $150,000 when she is working. She is currently at the tail end of her maternity leave. Their child has recently started daycare, which is a new expense but one the family does not struggle to cover.
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In addition to his legal corporation, Julian is also part of separate corporations that hold rental properties in which he has invested. One is a minority interest in a multi-unit residential building that generates $500 a month for Julian.
“We finally paid down the financing after about 10 years of ownership and it has started to produce some income,” he says.
He also owns a 10-unit commercial building through a corporation with two other people. Profit from the building stays in the corporation, used for paying down debt and making improvements.
He says being a commercial landlord can be easier than renting out residential property – “they’re more sophisticated tenants” – but it doesn’t eliminate problems altogether.
“One new tenant that moved in claimed to be operating a business and the first night I caught them on the cameras in robes and shirtless,” he says. “They were living in the office space.”
These days he’s dealing with someone repeatedly defacing the women’s washroom, and trying to find a new cleaner who is willing to clean up the mess.
“There’s no such thing as passive income,” he says.
Julian and his family used to live in a “tiny” two-bedroom, one-bathroom house they bought for $240,000, but after the “real-estate market got really hot,” they were able to sell it for $650,000, he says. Their new place has three bedrooms and 3.5 bathrooms, and cost $730,000.
“The timing really worked out,” he says.
His typical monthly expenses:
Investments and savings: $27,099
$583 to TFSA. “Annual contribution on Jan. 1 each year.”
$26,308 retained by professional corporation. “Pays for dividends, life insurance, medical expenses through Health and Welfare Trust, bookkeeper and investments.”
$208 to RESP.
Servicing debt: $2,460
$2,460 to mortgage. “$615 per week.”
Household and transportation: $2,425
$285 to property insurance
$505 to property tax
$450 to utilities
$500 to home maintenance. “Small renos and updates.”
$180 on gasoline
$250 on car insurance
$50 on car repairs. “We have low-maintenance used cars.”
$120 on cellphone
$85 on internet
Food and drink: $1,300
$450 on groceries. “Mostly Food Basics, Costco and lots of meal prep.”
$750 at restaurants.
$100 on alcohol. “Beer, wine, sometimes cocktails.”
Miscellaneous: $6,462
$500 on entertainment. “Comedy shows, spas.”
$30 on Spotify
$500 on clothing. “Mostly online purchases.”
$30 on alterations
$250 on hobbies. “Golf two times a week and poker once per month.”
$80 on golf accessories. “Balls, tees, gloves.”
$25 on gym membership
$500 on dog. “Vet food and care.”
$450 on child care
$500 on other child-specific expenses. “Diapers, wipes, toys, clothes.”
$60 on haircuts. “Barber twice per month.
$150 on cosmetics. “Wife is interested in unique cosmetic items.”
$300 on personal services. “Wife has purchased equipment to do manicures, pedicures, red light mask, micro-needle.”
$40 on dentist. “80 per cent coverage through employer.”
$150 on glasses. “My wife has contact lenses and I usually get a pair of glasses or sunglasses per year.”
$30 on prescription
$1,667 on vacations. “At least four times per year.”
$500 on donations.
$83 on gifts
$200 on house cleaner. “Two times a month.”
$417 on accountant
Some details may be changed to protect the privacy of the person profiled. We want to thank them for sharing their story. Are you a millennial who would like to participate in a paycheque profile? Send us an e-mail.
