“A dream written down with a date becomes a goal. A goal broken down into steps becomes a plan. A plan backed by action makes your dreams come true.” – Greg Reid
When global events and times of economic uncertainty bring feelings of panic, stress and worry, having a financial plan can bring the peace of mind you are looking for.
The reliability of a financial plan is only as accurate as the information that is used to create it. It is important to start by taking inventory. Create a simple net worth statement by listing what you own versus what you owe. Taking note of spending patterns can also be powerful. You may not be interested in building a budget, but it is important to know where your money is going and the type of cash flow that is required to fuel your lifestyle. Once you are able to paint an initial picture, you can start to identify some red flags such a lack of emergency funding, too much credit card debt, or a growing line of credit.
This raw data can now be used to start building your financial plan. Working with a professional to develop a comprehensive financial plan can address all aspects of your financial affairs, including cash and debt management, education planning, tax and investment strategy, risk management, as well as estate and legacy planning.
A proper plan should provide an overview of your financial picture and how you are tracking to your short-term and long-term goals. It can also help answer some of the following questions:
• Can I retire when I want and maintain my desired lifestyle?
• Can my portfolio sustain a market downturn?
• How can I ensure that I don’t outlive my money?
• Is my investment mix appropriate for my risk tolerance?
• What is my capacity for risk?
• How can I protect the value of my estate?
• How can I minimize the taxes I pay each year?
• If something were to happen to me unexpectedly, would my family be taken care of?
A comprehensive financial plan alongside a customized investment portfolio can be a powerful combination. It can help ensure that you leave no stone unturned related to your financial situation and potential strategies to enhance your wealth.
For more information on the benefits of comprehensive wealth management and the importance of financial planning, contact Elizabeth de Groot of RBC Dominion Securities at elizabeth. firstname.lastname@example.org or 705-444-4742 or visit her website at www.edegroot.ca
This article is supplied by Elizabeth de Groot, CFP, FCSI, CIWM, FMA, Vice-President, Investment & Wealth Advisor with RBC Dominion Securities Inc. Member–Canadian Investor Protection Fund. This information is not intended as nor does it constitute tax or legal advice. Readers should consult their own lawyer, accountant or other professional advisor when planning to implement a strategy.