If you fail to plan, you plan to fail.

September 15, 2017 | Dian Chaaban


We all know what a financial plan is but surprisingly not everyone has one. Do you?


Having a financial plan gives you a realistic glimpse into the future – it can give you the permission to spend more or retire earlier than you think … or it can give you a reality check suggesting that you need to save more or work longer than you planned – all depending on what you’re doing to enhance your wealth today, how much you expect to spend in the future (and then throw in about several dozen other variables that may impact the numbers, such as inflation, pensions, large lifestyle expenses, inheritances, market corrections, etc).


Most of us have an ‘idea’ about whether our situation is good or not but brushing it off with the attitude that ‘everything will work out’ or ‘I’ll get my act together later’ isn’t going to get you there any faster. Even if you think you’re on track, it’s a valuable process to go through (and maintain) to keep pace with your life. And while no one is claiming to have a crystal ball, if you had the option to take a peek at what your future financial picture is likely going to look like with the ability to make changes today, wouldn’t you want to take a look?


This week, the 2016 census data was released by Statistics Canada on Wednesday and there was plenty of good news to plan around, “Canadians earned more in 2015 than they did in the previous 10 years, and fewer young children were living in low-income households. The numbers also indicate most Canadian households are saving for their retirement, more couples are contributing equally to their earnings, and the rate of inequality has been largely flat over the last decade….The median household income in Canada rose 10.8% between 2005 and 2015, to $70,336 from $63,457, measured in 2015 dollars — representing a slightly higher rate of increase than between 1995 and 2005, when median incomes were up 9.2%” Read more here.


But there was also some bad news‘seniors were behind the growth in the share of Canadians living in low income households, largely due to the aging population (increasing to 14.5% from 12%)’ – and acknowledging our advancements in health care, we will all be living longer than ever before so planning to ‘kick the bucket’ at 90 doesn’t work anymore – making the notion of outliving your money a real thing if your plan is aiming for 90. And if its overwhelmingly obvious that you are leaving a large estate behind (like the majority of our clients tend to), if you could be planning today to make your intergenerational / philanthropic legacy plan more efficient (i.e. giving more to those you love than to the CRA) then wouldn’t that be nice?


Financial planning is also how we determine your portfolio’s customized benchmark – frankly – who cares what the 'market’ is doing day to day – if your plan suggests that we need to earn 8% every year to make your goals a reality, then that’s your benchmark. Not an index.


And performance isn’t the only thing your plan should include – it integrates knowledge and planning around your estate plan, insurance & risk management, tax planning, retirement planning, financial management and legal aspects.


Defined by the Financial Planning Standards Council, Financial planning is a process that sets you on a course toward achievement of your personal goals, needs and priorities through the proper management of your financial affairs. To you that means showing you a plan that makes you feel on track with your financial and retirement plans, an improved ability to save, confidence that you can deal with financial challenges and the go-ahead to indulge in your discretionary spending goals so that you can enjoy life while you’re around to live it to the fullest.


With so much going on and information coming at us from every angle, it's sometimes hard to keep your finger on the pulse of what's happening. In an effort to keep you in-the-know and provide you with some conversation nuggets for the weekend, I've compiled the following hit list to fill your conversation pipeline.


Now you are in-the-know with Word on the Street.


Enjoy the sunny weekend,

Dian Chaaban
Investment & Wealth Advisor