Retain vs Extract

The Success Trap is a habit: draw everything out each year because that is what feeling successful looks like. This simulator runs the same profit three ways — extract it all, retain it all, and the book’s recommended discipline of withdrawing only the need — then compounds each residue over your horizon.

Retention is not the end of the story: retained dollars face a second tax on eventual extraction, and invested passively they generate AAIIAAII — Adjusted Aggregate Investment Income
Most passive investment income earned across the corporate group in a year. Above $50,000, each extra dollar removes $5 of the small-business deduction limit. Full glossary →. The point of the comparison is the size of the head start — a head start the later chapters teach you to protect (portfolio design) and extract efficiently (CDACDA — Capital Dividend Account
A notional account tracking tax-free surpluses (the untaxed half of capital gains, life-insurance proceeds above ACB). Balances can be paid to shareholders completely tax-free via a T2054 election. Full glossary →, IPPIPP — Individual Pension Plan
A defined-benefit pension for one person, sponsored by the corporation. From about age 40, deductible room exceeds the RRSP limit and widens each year. T4 salary — not dividends — creates the room. Full glossary →, drawdown sequencing).