A financial strategy is essential for a secure future

When making a plan for anything in life, choosing a career, getting married, buying a car, we must spend hours going over lists as we determine priority and timing. We must have clarity as we develop our essential plan. In his famous book, Essentialism, Ewen McKeown suggests that while sorting out priorities, we must decide what not to do while we are working on what we must do, and that  “When we really have clarity of purpose, it leads to success”. (Ewen has the third-highest following on LinkedIn so he knows something about priorities)

A good financial strategy is multi-faceted. That is why it needs to be developed and governed by a credentialed financial advisor. In his latest best-seller, “The Total Money Makeover”, Dave Ramsey notes: “Build wealth. Invest and enjoy counsel from advisers with a proven track record. ‘Even the Lone Ranger had Tonto'”.

Here are some priorities to achieve financial security – priorities that one must organize well:

  1. Have emergency funds on hand Save at least $1,000 cash and aim to build this up to $5,000. This can come in handy for any emergency that comes as a surprise.
  2. Eliminate all your bad debts List your credit cards, smallest to the largest balances–then pay off these debts, from the smallest to the largest, regardless of interest or amounts, one at a time. Make minimum payments on the rest. This will encourage you as you see each card is paid off.
  3. Save for a home downpayment Save for a down payment or cash purchase of a home. If you have a home, aim to pay down the mortgage, especially now when interest rates are low.
  4. Pay yourself first Invest 15-20 percent of your before-tax income in retirement. Ramsey from his book The Total Money Makeover, notes “Only people who like dog food don’t save for retirement”.
  5. Save for your children’s college education. Your child can’t get much of a job these days without an education though it is not necessary if he or she creates a great business. However, not everyone is Bill Gates or Steve Jobs.

Source: The Total Money Makeover. Dave Ramsey | Essentialism, Ewen McKeown

Fund your Emergency Plan to care for loved ones

Emergencies happen when we least expect them.  Depending on the severity of the emergency, it can equate to a massive financial loss, including the expense of connecting with loved ones, travel expenses, and lodging expenses etc.


Emergencies often occur when families are not together. When the 911 incident occurred parents (the most financially able and responsible) thought about the safety of their kids at school or elderly parents across town.

During times like these, if phones don’t work, or some neighbourhoods aren’t accessible, what plans do your family members resort to? Having a plan, and previously discussing it with loved ones, will save time and real-time stress.

Know how to connect in case of an emergency  In a catastrophic emergency such as one that can occur during a hurricane, you’ll need a simple way to contact and/or meet one another if going home isn’t a possibility. Consider a safe place to meet like a community centre, library, or school.

The phone or mobile is usually the first method of connection. Establish a plan that includes contacts that can help your family communicate and find each other. Young school children, if they’re in class or day care will need to be picked-up. Know the emergency policies, and designate someone to pick them up. If your children are in university or living away from home, include them in your emergency plan. Teach them how they can identify themselves if they become separated from you and who to call, like 9-1-1 or your local emergency numbers, to get help.

Get updates from the radio, television or Internet  Listen to the radio or television for information from local authorities and follow their instructions. Call 911 if appropriate. They may advise of dangerous areas or evacuations. You may need to turn utilities off such as electricity, water or gas valves. Ensure that everyone also knows the location of your family emergency kit and fire extinguisher.

Everyone should know your home’s safe exits and best places to go. And remember your pets, who may not be allowed in shelters or hotels. Identify kennels or friends’ homes where they can go in an emergency.

Elderly family members and/or those with special needs should also be a part of your plan. List the medications and supplies they may need and have them ready to transport with your luggage, in the event of an evacuation. Know any information caregivers will require. If they live alone, ask a friend or neighbour to check in on them or help them evacuate.

Have your personal documents ready  In addition to your plan, documents will help you stay organized. Make copies of birth certificates, passports, wills, and insurance info. These documents, along with photos of your family members, should be kept at work, or other safe locations.

Having a plan is also part of being a responsible family leader and citizen. Local authorities will react swiftly, but they can’t reach everyone at once. Being prepared allows these responders to help those in urgent need first. So, do your part! Learn about the specific emergencies that can happen where you live.

How do you fund emergencies?  Make sure you have put aside enough money to respond to urgencies such as flying a family member (or the entire family) out of a location. You may need money for lodging, clothing and or food.

By reviewing what occurred in Japan when nuclear reactors were damaged, we are humbled to acknowledge our dependence on one another and need of financial independence to be able to act swiftly, or make expenditure when the need arises.

Source Excerpts: Environment Canada

Why is portfolio strategy important?


Portfolio strategy is a method used for investment planning. Here we look at some of the sub-categories within investment planning:

Having a strategy helps you to understand your tolerance for risk.

Each of us has a personal level of risk tolerance which indicates how much risk one is willing to take while investing in markets that always go up and down. Your advisor can help you establish your own unique governing guideline.

Understand your investment time frame.

You may want to save for your child’s education, your retirement, a vehicle, or a home down payment. Each of these projects can take a certain amount of time, which is a component you apply to your calculations and potential future value with tax considerations and/or registered government tax programs.

Re-evaluation and Re-balance your portfolio holdings.
You also may want to monitor, re-evaluate, and balance your portfolio. When you consider how your assets performed, you will also need to consider any market situations that may be occurring. Some assets may have returns that are greater than their benchmarks, others may not.

While rebalancing your portfolio, you can re-establish original asset allocations. When you are re-balancing assets be cautious of any tax consequences for selling  early, or buying and selling too often.

Develop your “Investment Plan”.

Once your investment plan is written down for reference, it will provide a road map to help you attain your investment goals while not getting you off track due to analysis paralysis, or the many distractions that may cause people to procrastinate. If you find that you just can’t get motivated but know time is slipping by, call us and we will be glad to work with you to develop a portfolio strategy, within your overall investment planning. Getting assistance from a professional advisor will ease the stress of thinking about investing and help free your mind to enjoy life?

Don’t become a Chameleon.

Beware of following the investment crowd or chasing last year’s stock or fund winners. Past performance is not an indicator of future gains while investing in securities, or equity funds that invest in stocks and/or bonds.