Resolutions

Jan 03, 2014 | Dian Chaaban


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Earlier this week, I overhead two young women contemplate taking the stairs to make up for all of the sugar they had indulged in over the holidays:

“Let’s take the stairs, I ate way too much this holiday”
“Ohh emm gee, you didn’t eat as much as I did! I’m going to the gym everyday this year”

A friend of mine mentioned yesterday that he loves looking forward to the “Christmas Binge” every year and it got me thinking about how it’s expected that we will eat and drink too much over the holidays with the anticipation of new year resolutions around the corner. Just one more butter tart and I’ll work it off in January... Case & point: if you are a regular gym-goer, take note of the influx of people at the gym during this month and the drastic drop-off by about mid February… it happens every year. It certainly isn’t as fun, picture this: not splurging during the holidays and not having anything to feel guilty about come January. Striving to just be moderately healthy year-round rather than spiking into health nut or binge mode every 3 months would likely have us looking and feeling better...

These random spikes remind me the market and while we can’t control the innate volatility of this creature, we can reduce the risk of market fluctuations through dollar-cost averaging - the technique of buying a fixed dollar amount of a particular investment on a regular schedule, regardless of the share price. Over time, more shares are purchased when prices are low, and fewer shares are bought when prices are high and eventually, the average cost per share of the security will become smaller and smaller. Dollar-cost averaging lessens the risk of investing a large amount in a single investment at the wrong time (like eating too much during the month of December) and puts you into the regime of a disciplined savings plan.

I acknowledge that going to the gym on a regular basis requires real effort each and every time, but putting money away for the future on a regular basis only requires effort once if you set up an automatic contribution plan – it’s as if you could lose two pounds every month by having someone else do the sweating for you…now that’s food for thought.

Instead of me telling you that you may or may not need to lose weight, I’ve compiled the following 10 resolutions to help improve your finances this year:

1. Simplify your financial life (6 tips)

2. Save taxes with family income-splitting strategies (4 tips)

3. Reduce risk and taxes by reviewing the asset mix in your investment portfolio (5 tips)

4. Use credit wisely

5. Protect your family’s financial future with adequate insurance (3 tips)

6. Ensure your wishes are followed with an up-to-date Will & POA (4 tips)

7. Ensure your wishes are followed with appropriate account structures and beneficiary designations

8. Help important charitable causes achieve better financial health

9. Get a Family Snapshot ® or financial plan prepared

10. Get educated about special strategies for high-net-worth families that you may now know about

My team and I can help you make - and keep - your 2014 financial resolutions. For access to the valuable tips related to each resolution, click here to download the full report.

Enjoy the weekend.

D.

Dian Chaaban

Investment & Wealth Advisor

Chaaban Wealth Management Group

416.842.4234