Thursday, December 28, 2017

A Time for Reflection and Planning

Have you ever had a song’s lyrics, playing over and over again, stuck in your head?  During the holidays, I kept hearing these words to “So It is Christmas” so much so that I felt compelled to share its message with you.

“So this is Christmas and what have you done
Another year over, a new one just begun…”

“A very merry Christmas and a happy new year
Let's hope it's a good one without any fears…”

This time between Christmas and the New Year can be an excellent time for reflection, to think about what we have done, both good and bad.  Since Santa keeps a list of all the children who are naughty and nice, we could copy Santa’s practise by keeping a list to see if we are naughty or nice with our finances.  

How Much is Enough? Financial Planner Diane McCurdy

During the holidays, my brother-in-law toasted to a year of “having enough”. In all seriousness isn’t that all we need, “enough”?  Diane McCurdy, a CERTIFIED FINANCIAL PLANNER® professional, wrote the book, How Much is Enough, and created a list of twenty key strategies for making enough.  We could all take a lesson from her.

Here’s your assignment.  

Read through the list below.
Reflect on what you have done.
Plan to make enough.
And have a great 2018!  

Twenty Key Strategies for Making Enough

  1. If you know what you want, you can get it.
  2. It's never too late—or too early—to start financial planning.
  3. A little is better than nothing.
  4. Any interest you pay is money you can't spend on yourself.
  5. Clearing up debt is short-term pain for long-term gain.
  6. Make compound interest work for you, not against you.
  7. Pay yourself first: take at least 10% off the top to save and invest.
  8. Registered retirement plans put more money in your hands and registered education plans put more money in your children's hands.
  9. Revisit your wish list to refocus on what you're aiming for.
  10. If you didn't want something in the first place, it's not a deal no matter how cheap it is.
  11. Never hand over financial control—no one else cares about your future the way you do.
  12. Get rich slowly—put your money regularly into solid investments.
  13. Markets go up and down. Don't panic.
  14. Invest only in things you understand and feel comfortable with.
  15. If you miss an opportunity, there will always be others.
  16. Borrow only for things that appreciate in value (except for your first car).
  17. A financial advisor can make sure you're making the most from your money.
  18. By taking care of yourself, you're helping other people.
  19. Reward yourself in big and little ways for staying on track.
  20. Know where you are on the road to where you're going. 

Thursday, December 14, 2017

The Ultimate Checklist

If you have your vehicle serviced on a regular basis, you are generally given a Vehicle Inspection Report.  The report has three separate categories highlighted in distinct colours. When the vehicle’s systems and components are checked, the appropriate colour receives either a “thumbs-up” or “thumbs-down”.  

Checked and Okay at this time
May require future attention
Requires immediate attention

We would never drive a vehicle that was not road-worthy for two reasons.

          1. We might never reach any of our destinations because the vehicle would simply quit working.

          2. We could potentially be injured or killed if we chose to ignore any maintenance required to our tires and brakes.

Here’s the dilemma.

Without regular check-ups and the proper maintenance, our vehicles can create frustration and grief for us. So what happens when we don’t regularly review our financial goals and check our current financial status? How do we know whether our systems are running up to speed? In other words, how do we know whether we are efficiently meeting our financial goals?

Financial Planning Standards Council created a publication called “Get More Out of Life”.     To begin my client conversations, I refer to FPSC’s checklist to gain a better understanding of my clients’ feelings. 

Scrutinizing the nine questions below allows us to conduct an inspection test.  Each question can be assigned a distinct colour to determine whether everything is okay at this time or requires future or immediate attention. If you are far away from having many “Green” thumbs-up, you might consider a service package, a comprehensive financial plan, to gain peace of mind and confidence about achieving your life goals.    

Do you feel…

q    In control of your finances?
q    Prepared for a financial emergency?
q    That you have sufficient discretionary income to lead the life you want?
q    The people you care about would be financially looked after if something were to happen to you?
q    Able to retire in your desired lifestyle?
q    You will be able to pass along your wealth in a tax effective way?
q    There is enough money to pay for post-secondary education for your children?
q    Your goals and aspirations are achievable?
q    You have peace of mind?

Since we are in the Christmas season of creating lists, this list is worth putting in our stockings as we approach the New Year.  If we wish to begin the New Year on the right foot, then we could use some help identifying where we need help.  Reviewing our list is a great start.  

Merry Christmas!