The Road to Retirement for Entrepreneurs

As investment professionals, we often meet with incredible entrepreneurs who have not completed comprehensive planning for their lives . . .during and after the time their entrepreneurial activities cease.

It is very easy to become consumed by day-to-day business management. Some people are very good at managing their business but can’t seem to get their personal house in order.

The best place to start is to build a team of professionals to review and organize your financial and legal affairs . . . a tax accountant, an investment professional, a lawyer and a BC Notary, and an independent fee-based financial planner to act as the quarterback for all your wealth management activities:

  • How do you want your retirement to look?
  • When will it begin?
  • What do you want to do?
  • Where do you wish to live?

Your answers will help reveal how much money you will require in a given year.

Your financial planner will review your current daily spending requirements to determine the cash available to allocate to future savings or the increase in income needed to begin to allocate savings.

It is easy to convince yourself that your savings plan will begin in the near future. “I just need to make it through this XYZ crisis and then I will save”. . . but time flies! A proper retirement plan now will address how much you need to save and the rate of return required on the savings to achieve your retirement goals.

With a savings strategy in place, review how best to get the money working for you. The key here is to establish a relationship with an investment professional who understands your goals and objectives and your willingness and ability to take risk. He or she will design an investment strategy to meet your long-term goal of retirement and strive for the rate of return required to meet your needs and minimize the risks of your investment portfolio imploding along the way.

Today investors have many options . . . from a low fee, low touch Roboadvisor platform, to working with a mutual fund advisor, to electing to work directly with an investment professional who has discretion over your investment portfolio with the fiduciary duty as a counselor to work in your best interests.

In all cases, it is best to find the platform that creates the highest amount of trust and alignment of interests with your team, all at a reasonable cost.

Our clients in their working years often ask, “Should I borrow to invest?” and “Should I pay down debt or use my extra funds to save?”

It depends on the rate of return earned on investing the cash you borrowed or could have used to repay debt . . . compared to the cost of borrowing. If the spread between the two makes sense—you earn more than it cost you to borrow—on an after-tax, after-fee basis, it may be worth investing with borrowed money or looking at focusing on slow debt-reduction.

A investment professional can assist with those calculations. Any strategy should be reviewed at least annually because borrowing rates change and returns earned on the funds invested require regular assessment.

Debt is also deeply psychological. Many people cannot handle owing money and would rather take the “guaranteed” return of zero debt over holding debt and accumulating savings.

The earlier personal planning begins in the cycle of your entrepreneurial activities, the higher your chance for success when success is measured in reaching your retirement goals—being able to retire!—and feeling content along that road. 


Jessie Bobinski is a CFA Charterholder​ and a Portfolio Manager with Dixon Mitchell Investment Counsel, providing investment counsel services to individuals and families.

Posted in Personal Planning