The Three Question Fact Find (Part One)


Part 1 of 3 (For Families)

I work in two very distinct markets.  The Family market and the Business Owner market.

Both have some similarities and many challenges that are unique to their specific situations.  And because most business owners also have families there can be a significant overlap.  However, I have found that both markets primary concerns can be boiled down to three questions each.  Over the next few weeks I would like to expand upon those questions with a series of posts.  First up, the family market.

Question One – Do you have any debt?

 

I’ve gotten a little bit of flack over the years from other financial advisors for being so up front and in your face about debt.  Some of my colleagues have tried to tell me that it is not a financial planner’s job to worry about our client’s debts and if a someone comes to us laden with debt, they aren’t going to be a good prospect for our services.  I couldn’t disagree more.

Regardless of where you are now, at one time or another throughout our lives, just about all of us have carried debt.  From credit cards, student loans, vehicles and of course mortgages, debt is how the middle class drives the economy.  Without debt most people would never achieve higher education, home ownership or even be able to get to work everyday.  The danger comes when we forget what debt is.  It’s a hedge against our future earning power that if we aren’t careful becomes an anchor holding us back from achieving our goals.  The person in debt is saying that they are willing to sacrifice their freedom in the future, for comfort today.  And that is just bad planning.

In my opinion there are three kinds of debt.  Good Debt, Bad Debt, and Really Bad Debt.

Good debt is debt on anything that is going to increase in value faster than the interest rate charged to carry it.  Mortgages, home equity lines of credit, and some (not all) student loans could be considered good debt.  But no matter how good the debt, there is still no excuse to ignore it and forget that debt is still debt and eventually must be repaid with interest.  Understanding the terms of your mortgage and looking for ways to reduce the amount of interest paid is a great place to start when it comes to financial planning.  So is understanding what happens when a wage earner dies before the debt is repaid.

A reduction in the interest rate of just 0.01% on a $500,000 mortgage could result in a savings of $500 per year.  On a 20-year amortization schedule, that’s $10,000!  Even good debt, can be made better with a little planning.

Bad Debt is debt on anything that loses value or grows more slowly than the interest rate charged.  Car loans, and large purchases made using credit cards tend be bad debt.  If you own your home, or at least have some equity in it, we can usually refinance your mortgage and include some of these bad debts.  If we can exchange a credit card debt of $10,000 at 18% for a home equity line of credit at 4.95% we’ve just traded $1800 in interest for $495 and saved you $1305 per year.  Without equity in your home your options are limited but there are still lots of ways to trade bad debt for better debt, liquidate some unproductive assets or simply make some better lifestyle choices to pay things off faster.  Remember, every dollar paid toward a bad debt means more money later in investable cash.  Cashflow will be the key to the rest of the questions we’ll be looking at later.

Really Bad Debt is debt on anything that is consumed and used up before the statements arrive in the mail.  Financing your lifestyle, or just living day to day on credit cards for things like groceries and gas for your car without the ability to pay it off before interest charges kick in is a recipe for disaster.  Quite frankly, if you can’t afford to pay cash to live your life you need to make some drastic changes.  There is nothing worse than paying interest on a meal you ate two months ago.

When you are in this situation chances are you don’t have much equity in your home, if you own one at all, and you don’t have a lot of other assets to work with.  Your only chance to start living your best life is to perform what we call plastic surgery, cut up the cards and live on cash for a while.  It’s scary, I know but the key here is to stop the hemorrhaging and to do that you need to feel the tangibility of real paper money leaving your possession.  It’s too easy to forget that money is a physical thing when all you see are numbers on a screen linked to a plastic card in your wallet.  Once you start to feel money again it’s easier to equate that $3.00 latte to 6 times the cost of a K-Cup or half the cost of a package of ground beef.

The key, regardless of whether you have Good Debt, Bad Debt, or Really Bad Debt is to do something.  No other action you can take will have a more immediate and lasting impact on your bottom line than debt repayment.

Stay tuned for question two – Do You Have a Plan to Sustainably Grow Your Assets?

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

Take Action


A brief introduction to my new marketing message.

Hi gang.  I just wanted to take a few minutes to write a quick note about my new marketing message.

In actual fact I‘ve been communicating this message to my clients for about a year now and just finally wrote it down in the form of a flyer that I leave behind with all of my meetings.  The message is direct and leaves the perspective client with no doubt about I expect from them. 

During all my meetings I stress the importance of taking action.  It is all fine and good to plan but planning is useless without action. 

Take Action Today That Your Future Self Will Thank You For

And what actions do I expect you to take?  It’s all laid out in the flyer I leave behind.  The flyer asks three questions:

  1. Do you have any debt?
    1. 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?
  2. Do you have a plan to protect and grow your assets?
    1. 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?
  3. Where do you want your money to go after you die?
    1. 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?

Financial planning and growing wealth is simple (not easy).  It involves reducing and eventually eliminating debt, building and protecting wealth and leaving a legacy.  With a few simple changes to your lifestyle and thinking today you can make a significant impact on your life moving forward and well into the future, but you must take action.  The longer you wait, the harder it becomes and the fewer options you have available to you. 

So there you have it, my straight forward, no bullshit marketing message: 

Take Action Today That Your Future Self Will Thank You For

Check out the links to the flyer above and get in touch to start taking action for your future self…

Top 4 Reasons Why CashFlow Management is The New Gold Standard in Financial Planning


When was the last time your Financial Planner or Banker asked you anything about your cash flow plan or personal budget?

Nearly 80% of Canadians surveyed have said that managing day to day cash flow is their top financial concern yet less than 5% of financial service professionals are equipped to help in any way.   Independent Financial Planners make most of their money advising semi-wealthy and wealthy individuals on long term investment strategies and tax effective income planning for retirement.  And Banks?  They are primarily in the business of lending money, not helping you save it.

The sad fact is that middle class individuals and average Joes just don’t have a large enough asset base to get the attention of most commission based Financial Planners, while the banks make more profit lending money than they do advising you on how to save.

For most people the fastest way to build wealth is to get control of your debt.  Independent Financial Planners tend not be interested in your debt because they have access to very few products that can help you.  Banks tend to be too quick to lend even more money in order to keep you beholden to them longer.  Both have a built-in conflict of interest which keeps them looking at just one side of your balance sheet and prevents average people from making any significant progress.  A true Financial Plan needs to take into consideration both sides of the balance sheet to really help.

Here are the top 4 Reasons Why CashFlow Management is the new gold standard in Financial Planning.

1 – Get More Life From Your Money – When banks lend you money they calculate a number called your Total Debt Service Ratio, (TDSR).  If your income verses the amount of money you spend just to service your debt is less than 35% most banks won’t hesitate to lend you more.  What they are essentially saying is that you don’t need up to 35% of your income to live on.  What if you had that extra 35% in your pocket?  How much more “life” could you afford?

2 – Find Money to Fund Your Dreams – How many times have you stifled your dreams because you thought you didn’t have the cash?  Getting control of your cashflow is step one in finding that needed money and starting to save for your future dreams.  Maybe you want to buy that dream home, start a business or take a trip around the world.  What’s stopping you is likely nothing more than a poorly managed cashflow plan.

3 – Stop “Money Leaks” on Stuff That Doesn’t Matter – When you take a close look at your cashflow you will almost always find places to trim without even noticing a change in your lifestyle.  How many of those premium cable channels do you really watch?  Is your car insured for more than it’s worth?  And be honest, when was the last time you went to the gym?  Plugging these money leaks could account for as much as a 10-15% gain on your bottom line.

4 – Finally Telling Your Money What To Do, Not Just Wondering What it’s Done – Once you’ve stopped the money leaks, reorganized your debt and started to save for the future, life can get really fun!  Now you have money left over and you get to decide what to do with it.

 

I am a Financial Security Advisor and CashFlow Specialist.  I will work with you to help you reorganize your debt and increase your savings.  I work both sides of the balance sheet and raise the bottom line.  Most of my clients are on track to be debt free seven years sooner while saving tens of thousands of dollars in inefficient interest payments and leaked money.

Get in touch today for a free CashFlow Analysis and Personal Financial Plan.

Hey… Can I Ask You A Question? – (Vlog)


Continuing on my blog post from September 20, “Three Key Questions Every Financial Planning Should Be Asking”.   I’ve started to put together a series of marketing videos that ask and answer some of the most common questions that I receive or use in my practice.  The questions that I will be exploring here are designed to help you, my potential clients, get a clear picture of what I can do for them and move the conversation forward.

The series is called “Hey.. Can I Ask You A Question?” And will follow an animated whiteboard format to ask the question, walk through a few potential scenarios and end with a call to action for the viewers to reach out for more information.

The first video is live on my YouTube Channel now.  You can check it out here…  and be sure to click on the bell icon in the top right corner to be automatically notified as I create more videos.

Three Key Questions Every Financial Planner Should Be Asking


I’ve been working on a new question key for customer interviews.  In my work as a Financial Advisor I am committed to speaking to all my clients at least twice per year.  I call everyone on their birthday because, well, who doesn’t like to be remembered on their birthday?  But I also call everyone on their policy anniversary.

This anniversary call is the perfect opportunity to review the client’s needs and the structure of their relationship with me.  It’s also the time when I probe for a bit more information and look for additional opportunities for us to work together.

After we’ve gone through their account and verified that all the information we have is correct I will generally pause and then ask if I can ask them a few more questions.  There are three key questions that I will ask and depending on their answers it will direct me to certain products and service offerings that we can further explore.

1 – Do you have any outstanding debts or a mortgage?

If no, then I congratulate them on being in the minority.  The average Canadian is carrying $22,000 in personal debt, not including mortgages, and over 60% are set to entire retirement while still making long term debt payments.  After I’ve patted them on the back in this made and manner them feel good about themselves I move on to the next question.

If yes, I ask them if they like paying interest and if there was a way that I could help them pay less interest and be debt free years sooner would that worth a more detailed conversation.  I offer a unique approach to cashflow management which helps people identify areas of improvement and find extra money for debt repayment and savings.  Once I have them signed up for my Behavioral CashFlow Management program we can move on until then I stay on this point.  The fastest way to build wealth is to get control of your debts so until you get serious about your debts there isn’t much else I can do for you.

2 – Do you have a plan for building wealth?

If yes, then I congratulate them again on being proactive and taking steps toward financial freedom.  At this point I might ask them if they have a projected retirement date and if they know how much money they will be able to take out of their savings in retirement.  If not there is an opportunity to review their current plan through the Behavioral CashFlow Management program and help answer that question.  Often times through that process they discover they have less than they think and with a few minor adjustments they can end up with significantly more.

If no, then we talk about why not.  Usually the answer is that they don’t think they have any extra money to set aside right now so there’s no point.  This is the perfect opportunity to help people see the value of a Behavioural CashFlow Management plan.  A properly executed plan helps people see exactly how much money they have and where it’s going on a weekly basis.  With a few minor changes it’s shocking how much money we can find to help fund savings and other financial goals.

3 – Do you expect to die with money?

This is the silver bullet.  No matter what the answer is, there is a reason for us to continue talking.

If no, we go back to question two and fix the plan.  If yes, then I ask one last killer question; do you like paying tax?

There is no inheritance tax in Canada but all assets regardless of their type and source are subject to what the lawyers and accountants refer to as a deemed disposition upon death.  What that means is that all your assets are deemed to have been disposed of for cash one minute before you die.  The resulting income must then be declared on your final tax return for the year.  There are some exceptions, like your primary residence, but for the most part if you have $1 million in investments that cost you $200,000 to purchase back when you were working your estate must declare $800,000 in income for the year in which you die.  Depending on the province in which you live the potential income tax bill on your estate could exceed 55%.

With just a few tweaks while you are still living you can move assets into tax sheltered vehicles such as Cash Valued Life Insurance or Segregated Funds and significantly reduce the taxes payable on your final estate.  In fact, if you do it early enough and are in good health you may be able to reduce the effective income tax all the way to $0.00 and increase the value of your estate well beyond what it would be worth otherwise.

By asking those three key questions, along with a bit of clarification along the way, I can almost always find a reason to continue talking to a client.  Everyone wants to increase their wealth, and nobody likes paying interest or tax.  By answering these three questions we can almost always find a way to save significant money and increase your savings.

So, tell me – should we continue talking?  Reach out in the comments or directly via email on my contact page.

Why I Write This Stuff


The following is a excerpt from the introduction to my first book – Meekonomics, How To Inherit The Earth and Live Life to the Fullest in God’s Economy. 

I’m not sure why, I think it might have something to do with the current political climate around the world, but there has been a recent up tick in interest in my writing.  So I’m going to start republishing portions of my work on a semi-regular basis here.  Questions and Comments are always welcome, and feel free to click the link above to purchase a copy of the book…

I realize that it is an act of sheer hubris to attempt to write a book called Meekonomics. The meek don’t write books do they? Especially Mennonite kids from Southern Ontario with no formal education in either economics or theology.

I grew up in a small town surrounded by family farms and working class individuals. When I graduated from High School I wanted to be a record producer so I spent 19 years in the music business. In my mid 30s I read two books that unlocked my love of economics and theology; The Shock Doctrine by Naomi Klein and Simply Christian by NT Wright.  

There followed nearly 8 years of prayer, research and reflection on two things that have driven me for almost as long as I can remember; God and Money.

Although I have always held a strong faith my relationship with money has been an extreme roller-coaster from the highest of highs to the lowest of lows. I’m an entrepreneur. I started my first business at the ripe old age of the age of 10, I had an opportunity to become a millionaire before my 26th birthday only to fall victim to an unscrupulous fraudster and ended up bankrupt at 33.

My drive to understand money and reconcile economics with my faith started to take root in the fall of 2005 not long after I first filed my bankruptcy proposal. What I soon realized is that reconciliation of the God and Money issue is not just a personal question, although personal finance is a big part of it, it’s really required on both a micro and macro-economic scale if our society is to survive.

Call it what you will; estate or retirement planning, investments, pension plans etc. It all comes down to the storing up of treasures on earth just as Jesus warned us not to do.

Do not store up for yourselves treasures on earth, where moth and rust destroy, and where thieves break in and steal. But store up for yourselves treasures in heaven, where moth and rust do not destroy, and where thieves do not break in and steal. For where your treasure is, there your heart will be also.

The eye is the lamp of the body. If your eyes are good, your whole body will be full of light. But if your eyes are bad, your whole body will be full of darkness. If then the light within you is darkness, how great is that darkness!

No one can serve two masters. Either he will hate the one and love the other, or he will be devoted to the one and despise the other. You cannot serve both God and Money. [Matthew 6:19-24]

What you will find in the pages that follow is a journal of sorts. After my bankruptcy I set out to learn all I could about how this whole God and Money thing works. Anyone who has ever gone through something like that knows how devastating it can be. I was wounded, I needed healing and so I used the study of God and Money as the start of my healing process.

As I studied I took notes, those notes became a blog and that blog became this book. Most authors will tell you that they write for a specific audience, my friend Tim Day, author of “God Enters Stage Left” told me he first started writing for his kids as a way to help explain his faith in case he passed away before he had a chance to teach them in person. If I’m being honest I write just for myself, it’s a way to frame my thinking so that I can move forward in life secure and grounded in what I know to be true.

I first published the blog as a way to share what I was learning with my closest friends and family around the world, I never dreamed anyone else would be interested in what I had to say but I soon had over 100 readers on-line encouraging me to go deeper and publish more. The idea for the book came out of that interaction with the on-line community.

Lauren C. Sheil is a serial entrepreneur who has been in business for over 25 years. His latest book “Meekoethics: What Happens When Life Gets Messy and the Rules Aren’t Enough” is available on Amazon.com.

He can be reached at themeekonomicsproject@gmail.com or by calling 613-295-4141.

 

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Cast Your Burdens


Life is heavier than the weight of all things – Rainer Maria Rilke

I’ve recently become aware of the sheer weight of life.

I’m not just talking about the mental “weightiness” of our lives or the existential weight of the decisions we make on a daily basis. I’m talking also about the basic physical weights and measures of the things we possess and the life that we carry with us wherever we go.

Some statistics:

  • The average North American home has tripled in size in the last 50 years while the number of people living in those homes, the average family size, has gotten smaller.

  • 1 in 4 of those homes doesn’t have enough room in their garage to park a car while 1 in 10 rents extra off-site storage.

  • Over the course of our lifetime we will spend a total of 153 days (or 3,672 hours) looking for misplaced items.

All of this “stuff” is quite literally weighing us down but that’s not all – Psychologists have identified a relatively new pathology known as decision fatigue.

Decision fatigue refers to the deteriorating quality of the decisions we make the more we make them. It is now understood to be one of the main causes of irrational decision making. Judges and other professional decision makers have been shown to make less favorable decisions later in the day than they do early in the day. If you want to win in court, try to make sure your case is on the docket in the morning.

Decision fatigue also leads to poor choices in our personal lives, such as how we spend our money and our time. There is also a paradox inherent in decision fatigue in that people who lack choice seem to want it more while at the same time find that making too many choices can be psychologically draining.

Lastly, research is beginning to show that the single biggest factor causing decision fatigue is not the importance or consequences of the decisions being made but their sheer volume. Deciding what to wear in the morning or what to eat for breakfast contributes just as much to our daily decision fatigue as determining the case of a plaintiff in a multimillion dollar civil complaint. A decision is a decision and fatigue is fatigue.

Ask anyone what they truly want out of life and the answer will more often than not boil down to some form of peace and happiness. Still more research is beginning to show that people who report being the most peaceful and happy with their lives also seem to be the ones who are forced to make the fewest decisions throughout the day. And the decisions they do make whether in their personal or professional lives tend to be of higher quality.

I was recently challenged by a friend and spiritual mentor to embrace some of the tenants of minimalism. At the same time I’ve been reading David Allen’s definitive work on time management and productivity “Getting Things Done”. Both seek to reduce stress and increase enjoyment and productivity by reducing the weight of things in our lives and streamlining decision making.

It seems counter intuitive but by reducing the number of choices we are faced with we actually open up our minds to new possibilities and new ideas and lighten the burden of some of the bigger and more consequential decisions we are faced with. Albert Einstein, one of the greatest thinkers of modern history was known to have 7 copies of the exact same set of clothing, one for each day of the week, and ate the exact same meal for breakfast and lunch every single day. That’s three fewer decisions he had to make than most other people which helped to open his mind for weightier things.

In my work as a financial advisor I see the other side of the coin every day. Lives built on a house of cards of debt, and stress. People are running faster and faster just to remain in one place. We have been sold a lie that the key to happiness is the acquisition of more. And that the truly happy and “together” people are also able to do more with their time. Carrying last year’s model smart-phone is considered a sign of poverty in some circles and simply stopping to relax with your family, without a program or agenda to follow, is somehow seen as sloth or a waste of precious time.

The truth is we need down time in order to maintain our sanity.  There is nothing wrong with staying in and doing nothing, just like there is nothing wrong with carrying and using a still functional smart-phone.

Minimalism and the type of streamlining decision making advocated by authors and consultants like Allen, are not a panacea for all that ails us. But they can be a first step in determining what truly matters, making better decisions and living a more peaceful and fulfilling life.

It’s time to lighten our lives, worry less and live more.

Lauren C. Sheil is a serial entrepreneur who has been in business for over 25 years. He has operated a small farm, a recording studio and a music manufacturing plant, and has written 3 books on Economics, Ethics and Spirituality.  He has presented his ideas to business owners and leaders from all over the world. His latest book “Meekoethics: What Happens When Life Gets Messy and the Rules Aren’t Enough” is available on Amazon.com.

Mr. Sheil is currently a Financial Security Advisor and Business Planning Specialist with one of Canada’s premier financial planning organizations.  He brings to his work a passion for people and a desire to teach everyone to live life to the fullest while Eliminating Debt, Building Wealth and Leaving a Legacy.  

He can be reached at themeekonomicsproject@gmail.com or by calling 613-295-4141.

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