The Three Question Fact Find (Part Two)


Part 2 of 3 (For Families)

Continuing where we left off the other day.  The second question for the family market starts to focus in on your hopes and dreams for the future while still living your best life now.  Before we go any further though you might want to review where we came from and read the first post in this series.  Question One – Do you have any debt and watch the video on the same topic here.  Da L-Dawg Show – Episode 5 – Do you have any debt?

Now, let’s move on.

Question Two – Do you have a plan to sustainably protect and grow your assets?

I believe it was Charles Schwab who said that the only thing that matters to investors is yield.  While yield (or percentage growth) is important the key concept in my question for families isn’t how fast we grow your assets, it’s how we sustain that growth over the long haul through market cycles and the overall eb and flow of life.  Growing assets is easy, protecting them from market volatility and personal setbacks takes discipline, planning and a little grace.

Just about anyone can help you save for retirement.  Banks, Credit Unions and Investment Advisors can all provide you with investment vehicles designed to help you grow your assets but a financial plan is more that just an investment plan and making a mad rush to beat the RRSP income tax deadline every February isn’t sustainable.  A good financial plan answers two additional questions; “How much is enough?” and “What happens if I die too soon, live too long or my plans get interrupted?”

Answering the how much question is the easy part.  By looking at your current lifestyle, discussing your goals, and taking into consideration your life expectancy we can make a reasonable assessment of how much money you’re going to need, when, and for how long.  At that point it’s just a matter of reverse engineering where you are now, versus where you need to get to and determining how much money to set aside, for how long and at what yield.

Presto!  You now have an investment plan.  But that is still not a complete financial plan.

The tricky part comes in answering the second question.  If you die too soon your family could be put in a difficult situation, forced to make drastic changes just to survive.  The loss of your income due to death, disability or other economic pressures could present challenges keeping debts paid, funding children’s education or just keeping the lights turned on.  Not to mention the very real possibility of our medical system figuring out ways to keep you alive longer than your money can reasonably last.  This is were old school investment planning, the how much and now long discussion, meets insurance planning and becomes a full-fledged financial plan.  The effective use of life, disability and critical illness insurance, along with certain principle protected investment funds are an often-overlooked part of the planning process no matter your stage of life.

So, do you have a plan to sustainably protect and grow your assets?

Stay tuned for question three – Where do you want your money to go after you die?

For more information or help with your financial plan contact:  lauren.sheil@f55f.com or simply leave a comment below.

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