FINANCIAL ADVICE Investing for incorporated business owners By Richard Yasinski Special to The Canadian Design and Construction Report Incorporated business owners have a number of ways to invest either personally or in their corporations. A busi- ness owners’ investment strategy must be mindful of the tax structure and situation of the owners. When it comes to investing, business owners must understand more than most about how income is taxed. My grandfather used to say: “It’s not how much you make, it’s how much you keep.” But he was referring to the days he’d take the cash from his pay envelope to the pub and what he left with after a few pints and games of cards. This saying is more appropriate than he knew for any business owner planning an investment strategy. 8 – May-June 2016 — The Canadian Design and Construction Report The first step in developing an investment strategy is understanding the types of income that can be earned and how each is taxed. Admittedly this is a little complex but for anyone building a portfolio this is the basic information we must understand or we’ll be doomed to earning less on our hard earned investment dollars. So here goes and stay with me: There are four types of “income” we can earn and an incorporated business owner could earn all of them. • First there is income that is 100 per cent taxable – typi- cally from employment and interest earned from sav- ings accounts or interest earning investments. • Second there are dividends which are taxed at a lower rate than salary or interest and vary based on whether they are eligible (usually from public corporations); in-