What Is A Financial Plan?
Sometimes in order to understand what something is, it helps to define what it’s not.
A Financial Plan is not a Budget, Mutual Funds, Stocks, Pension, RRSP TFSA or Life Insurance. Those things can form part of a plan, but they are not a plan on their own.
A Financial Plan is a living document that grows and evolves with you as your needs change. Like a road map, it answers the questions; “Where are we now?” “Where do we want to go?” and “How are we going to get there?”
Every goal worth achieving deserves a plan. Financial goals are no different. Everyone with a goal, needs a plan.
Canadians with a Financial Plan are 60% more likely to say they are prepared for emergencies and 73% are more likely to feel that their families will be taken care of after they have gone.
So, Who Needs a financial plan? You do!
Every Financial Plan starts with the same three basic questions.
Do You Have Any Debt?
This includes, Credit Cards, Vehicle Loans, Student Loans, Lines of Credit and Mortgages.
If I could show you a way to reduce the interest paid on all your debts, free up cash flow and be debt free years sooner, would that be a conversation worth having?
There are many ways to tackle debt. You could simply sell some unproductive assets, borrow against your life insurance, launch a debt snowball, refinance your mortgage or apply for a home equity loan.
The key is to do something. Every dollar of principle paid on a debt attracting 18% interest is $1.18 in extra investable cash. No other action you can take has a more immediate impact on the bottom line than debt repayment.
Do You Have A Plan to Protect and Grow Your Assets?
Protecting your assets is just as important as growing them, if not more.
If I could show you a way to protect your assets from market volatility and other unexpected losses without sacrificing growth would that be a conversation worth having?
Just about anyone can help you save for retirement. A Financial Plan is more than just a retirement savings plan and putting a few bucks into an RRSP at the bank isn’t going to cut it.
Once you’ve tackled your debts growing assets is the easy part. Placing money in an RRSP, TFSA or other investment vehicle and earning a decent return can be done in many ways. Most people take the easy route and put money in the simplest program they can find at their bank, credit union or with the company pension plan. But a good Financial Plan answers the question: “What happens if I die too soon, live too long or my plans get interrupted?”
The effective use of Life, Disability and Critical Illness insurance, along with certain principle protected investment funds are an often-overlooked part of Financial Planning no matter your stage of life.
Where Do You Want Your Money To Go After You Die?
There are three things you can do with your money after you die. You can give it to family or close friends, give it charity or give it to the government.
While there is no legal way to eliminate taxes completely most people would like to reduce them as much as possible. If I could show you a way to significantly reduce the taxes owing on your estate and increase the amount of money available for the people and causes you care about without effecting your lifestyle now would that be a conversation worth having?
Certain types of investments are treated differently when it comes to the distribution of your estate. It is possible to pay proceeds directly to named individuals without the need for a costly (and often lengthy) probate process and offset taxes due through the effective use of Segregated Funds and qualified Life Insurance.
Charitable bequests can also be a very efficient way of reducing taxes.
You’ve no doubt paid enough tax while you were living, why pay more after you’ve passed away?