Happy multiethnic family sitting on sofa laughing together.

A Life Well Planned - Episode 3: Brewing Prosperity

Raymond James Life Well Planned

In this latest episode of "A Life Well Planned," we rejoin Megan and Josh as their coffee business, Rose Coffee Company, continues to thrive and expand in the bustling city of Vancouver. The year is now 2012, and their journey takes an exciting turn as they consider new avenues for growth, including expanding their coffee empire internationally. With guidance from their trusted Raymond James financial advisor, Andy, they explore financing options, real estate investments, and even delve into their children's education savings. As they navigate the complexities of entrepreneurship and financial planning, listeners are in for a rollercoaster ride of dreams, challenges, and aspirations. Join us on this episode of "A Life Well Planned" to discover how Megan and Josh chart their course towards a prosperous future, one coffee cup at a time. Tune in on your favourite podcast platform for expert financial advice and inspiring family stories.

Listen to A Life Well Lived on Apple Podcasts  Listen to A Live Well Lived on Spotify



Opening music --

Narrator: Looking to pass down some of your hard earned wealth? Just beginning to invest and looking to provide the best life possible for you and your family but don’t know where to start? Are you looking to create a road map to your retirement? Then you’re in the right place. Welcome to “A Life Well Planned,” the Raymond James podcast that follows a family just like yours as they plan out a smart and savvy financial path to a prosperous future.

Music Transition --

Narrator: Last time we checked in with Megan and Josh, they had taken an unexpected inheritance and used it to help start a family, open a small coffee business, and invest for their retirement. The year is now 2012. Their business has sprung from one coffee shop on a quiet corner to four stores throughout Vancouver, and they’re ready now to expand their business by roasting and selling their own beans. Their dreams don’t stop there. Megan and Josh want to expand their business internationally and open their first store south of the border in Seattle. Let’s see what they’re up to now...

Static of channels changing.

Newscaster: Crowds were out today to celebrate the Diamond Jubilee of Elizabeth II, marking her accession as Queen of Canada --

Narrator 2: The Parti Quebecois won a minority government in the Quebec general election, with the Quebec Liberal Party coming in a close second.

Newscaster 3: Vita, Manitoba is recovering today from a wildfire which swept the area, destroying at least four homes and one bridge.

Newscaster 4: The US presidential election has been decided, with President Barack Obama winning decisively over his opponent, former Massachusetts Governor Mitt Romney.

Music Transition --

INT. Josh and Megan’s Home

The frantic sounds of a young family getting ready in the morning.

Megan: Charlotte! Put that ball down, you need to put your shoes on right now! Josh, can you pack the lunches please?

Josh: Yeah. What do they normally get?

Megan: You know, lunch stuff.

Josh: So roasted duck, caviar --

A phone rings.

Megan: Hi, Julia. No, really? (to Josh) The new roaster’s down again.

Josh: Are you serious? At Davie Village?

Megan: Yaletown.

Josh groans. One of the kids mimics.

Megan: (in phone) We’ll be there once we drop the kids off at school, just hang on.

Josh: What did that guy say? The equipment would run “smooth as butter.” This is not butter this is more like. Peanut butter. Crunchy peanut butter that breaks constantly.

Megan: Will you take them? I’ll just go right there.

Josh: Yeah. Rory, those are not shoes! Shoes, please! Do you ever wonder why we got into this business in the first place?

Megan: Don’t make me have to remind you of your dreams of a thousand flavinoids.

Josh: That was before I realized how expensive flavinoids are.

Megan: I think we really need to go to the next level.

Josh: How many more levels are there? We have four stores, roast our own beans.

Megan: Don’t forget voted best coffee in Time Out Vancouver three years running. See? We’re blowing up so fast. What, what’s wrong?

Josh: Nothing. Remember when I was trying to convince you to open a little shop on some dusty old corner. Just a quaint little shop. No fuss. Biscuits and scones.

Megan: We’ve never had scones. We do have 28 employees who need to be paid, however. Roasting our own beans is expensive.

Josh: These beans! These beans are gonna kill me!

Megan: And then we can really push out into the states like we’ve talked about. The loan from Women's Enterprise Center has been fantastic to satisfy what we need today but we need something more if we’re really trying to expand.

Josh: Seattle?

Megan: Sure, then Portland, who knows.

Josh: That would require a lot of travel.

Megan: Yeah, we can handle it.

Josh: With the kids?

Megan: Oh. Well my parents can take them, and we won’t always need to both be out of town. The shops run themselves now for the most part.

Josh: It might be nice to get out of here a little bit... Watch out Seattle, here we come. Get out of the way Starbucks! Rose Coffee Company’s on your tail!

Megan: You really just bounce between existential despair and wild-eyed optimism really fast, huh?

Josh: Yes. Let’s give our friend Andy a call.

Megan: Good idea.

Josh: (to kids) Does everyone have their shoes on? Beautiful, that’s what we like to see. Now all the little tigers in the car!

Sound of kids making tiger sounds.

INT. Andy’s Office

Andy: Donna, hold all my calls! The CEOs of Rose Coffee Company are here!

Megan: Wow, the royal treatment.

Andy: A Diamond Jubilee for the queen. Hey, look I’ve even got my official Rose Coffee mug here.

Josh: Very impressive.

Megan: How’s things with the Tree Planter Foundation?

Andy: Great! We just planted 200 trees throughout British Columbia, and we’re raising funds right now for a trip to South America.

Megan: That’s amazing!

Andy: Thanks, yeah, we’re really excited about it. And the kids are really into it, so it’s a fun family thing, too. We’re actually planning a big camping trip soon.

Megan: I wish we could get away more.

Andy: Well, you guys work hard. I have a feeling you’ll be able to go anywhere you want soon enough, though. So enough about me, what brings you in?

Josh: I think we need more money.

Andy: Getting right to it, alright.

Megan: I guess our main question is, what should we be looking at? Is it better to go with debt financing or should we consider some other kind of equity financing? Maybe if we’re able to do something with family and friends, they become shareholders.

Josh: Since Megan is 50% owner we’ve been able to qualify for those great Women’s Enterprise Center loans.

Megan: And their career coaching has been wonderful.

Andy: Yes, they’re a great organization.

Megan: And the bank has been great to work with too, they really rolled out the red carpet for us in terms of support. We’ve been able to live off of the business the past few years.

Josh: But we’re really thinking it’s time for an expansion.

Andy: How’s the bean roasting going?

Josh: Well, ups and downs. That’s partially where why we’re here.

Megan: Between the packaging, distribution, the taxes...

Andy: They’ll really kill you, huh?

Josh: Tell me about it.

Megan: But the upkeep and staffing for that side of the business is expensive. So definitely financing to comfortably grow that and especially if we break into the US.

Josh: It all sounds hard and confusing. Is it hard and confusing?

Andy: Not necessarily. Expanding a business comes with its pros and cons, like anything. You could do a cash infusion with your own investments and invest in the company yourselves. You could also go to a private equity group. And like you mentioned you could also do debt financing, you have ten years of great credit history.

Josh: Which is better?

Andy: Well, it depends.

Josh: I knew you were going to say that.

Andy: If you do equity financing, you’re giving up control of the company, if you do debt financing, you could get more lines of credit at preferential rates.

Megan: I’m not sure we would want to give up control of the company just yet. What about infusing our own cash like you mentioned?

Andy: Well that would have a ripple effect on your personal net worth. You’ll be taking money out of the cycle it’s in. Like we’ve said, money at seven percent doubles in ten years, money at 10% in seven years doubles.

Josh: If we went the debt financing route, interest rates are really low right now, right?

Andy: They are, the banks are practically giving away money.

Josh: Well, that sounds nice.

Andy: If you want to expand across the border, what’s really important will be reviewing the cost and return of capital. And I know some great corporate lawyers who can help you navigate this.

Josh: Oh we already have a guy.

Megan: Are you talking about Marv?

Josh: Yeah, Marv is great.

Megan: He met Marv at a bar.

Josh: So, just because you meet someone in a bar means they can’t be a good corporate lawyer?

Andy: I’m just going to jump in here, to be honest, I think I would advise against expanding across the border, at least for now. If you really want to have greater US exposure, we can do that by buying you investment stocks and bonds that are in the US. We don’t necessarily need to physically be there.

Megan: Really?

Andy: Now as I’ve always said, your view of success is my view of success. And if that means having an international coffee brand then that’s what it is. However, seeing you’re in a period of expansion at home, everyone is still recovering from the Great Recession, it might be more prudent to really grow things here before making a move. The stuff we were just talking about is really only scratching the surface when it comes to going into the US. I know you guys can do anything because I’ve seen you do it, but it would be a time consuming and costly endeavor.

Josh: It does sound like a lot of work.

Andy: How about this... Have you ever thought about buying the locations of your stores?

Megan: Not too much. Not yet at least.

Andy: This might be an appealing way to expand, because then if you sell the business at some point you’re still the landlords... Then if you’re in the Vancouver market, it’ll be even more important you balance your portfolio if you’re holding a good amount of money in physical real estate assets in your company. But anyway, what we want to think about is, does expanding the business mean more locations, or more profitability in the locations you already have? A brick and mortar strategy.

Megan: We hadn’t really thought of it that way.

Andy: There’s an intrinsic benefit in owning the real estate. We would set up a holding company so that those assets are separate from the coffee business.

Josh: It sounds like a good long term planning tactic.

Andy: Exactly. We’re at a bit of an inflection point now. Is the end goal expanding locations because that’s what you think you should do? Or is the goal more profitability, expanding the brand? Do you want to sell the business but still own part of the asset for the future and let that be your retirement plan?

Megan: That sounds appealing.

Josh: It does.

Andy: If you’re the landlord and the tenant we could actively have the proceeds from the operating company fund part of the real estate. You’re in control all the way.

Josh: The cost of rent is just going up and up.

Andy: It’s a defensive strategy too, because in the event you ever had to close a store you would still hold the real estate and could get another tenant.

Megan: That’s true.

Andy: All in all, it’s really impressive what you did with that $50,000 in the business in just a few years. You’ve really grown a great business.

Josh: Thank you, thank you.

Megan: I also wanted to check on the RESP.

Josh: Our oldest is eight, so you know, we’re close to university.

Andy: Hey you know my catch phrase, it’s never too early to invest --

Josh: For the future --

Andy: The future. Now for Charlotte, we’re thinking Ivy Leagues?

Megan: We sure hope so!

Andy: Well I’d recommend having one family RESP instead of more than one if you have another child. We never know if they’re going to go to the same schools and it helps us deploy the money however to fit their needs.

Megan: Yeah. Whenever we talk about this I think of my brother Dustin’s kids.

Josh: Oh boy.

Megan: My nieces are up to their eyeballs in student loan debt and my nephew is skipping university altogether. We just want to be safe.

Andy: Absolutely. When we set kids to come out of university, whenever that may be, we’d love to have them not have the burden of student loan debt. I didn’t have that, so while my friends were buying their first houses I was paying my student loan debt. I didn’t even get my first car until I was 30.

Megan: Yeah we were really lucky in that respect... A lot to think about, but I’m feeling good.

Josh: Me too.

Megan: I’m glad we talked about crossing the border with the stores.

Josh: We were ready to hop on a plane.

Andy: Again, I want what you want. This is an ocean liner, not a speed boat. I just want to help guide the ship in the right direction.

Josh: Aye Aye captain!

Andy: I’m going to get back to you next week with some more information. Oh also, recently I obtained my Chartered Investment Manager Certification, so I’ll be better able to transform and grow my own business. And I’ll keep you posted if that effects you.

Josh: That’ll be in a good way, right?

Andy: Absolutely. For both of us. It’s sort of a big deal in this line of work, so I’m very proud. It’s an evolving career, we’re always learning and I’ll have more access to more tools to benefit you in the long run.

Josh: Well that’s amazing, congrats!

Megan: Well, congratulations Andy! Well deserved. Can’t wait to see what you do with it.

Music Transition --

Narrator: Can Megan and Josh successfully grow their business while ensuring they have enough for their children’s education? How will the economic climate effect their goals? Will Rose Coffee survive the COVID-19 pandemic? Find out here, on the next episode of “A Life-Well Planned,” the Raymond James podcast that helps you and your family plan for a prosperous tomorrow.


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Disclaimer: This podcast is for informational purposes only. Statistics and factual data and other information are from sources Raymond James Ltd. believes to be reliable, but their accuracy cannot be guaranteed. Information is furnished on the basis and understanding that Raymond James Ltd. is to be under no liability whatsoever in respect thereof.

It is provided as a general source of information and should not be construed as an offer or solicitation for the sale or purchase of any product and should not be considered tax advice. Raymond James Ltd. advisors are not tax advisors and we recommend that clients seek independent advice from a professional advisor on tax-related matters.

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