Who Are You?
What is your appetite for risk?
Some people may find sky diving thrilling; others would rather keep their feet on the ground. The difference between these individuals is quite likely their attitude towards risk – how willing they are to jump out of an airplane for an unforgettable thrill.
It is much the same when it comes to investing. Your attitude with respect to the potential of losing money and your ability to absorb a financial loss can be very different.
Click here to read more about the importance of knowing your tolerance for risk in your investment portfolio. If you'd like to discuss anything in here in detail, feel free to give me a call.
The risk of outliving your savings
Canadians are living longer and longer. Most of us will likely see our 80th birthday and a growing number of us are expected to live to 100. And while many of us do plan to keep working well after turning 65 — or even indefinitely — the majority are looking forward to some form of retirement when we hit our 60s.
That means we need to ensure that the nest egg we accumulate over our working life lasts long enough to support us through 30 or even 40 years of retirement.
Click here to learn more about how to protect yourself against the risk of outliving your savings, or what we call 'longevity risk.'
The value of advice
In an effort to stay healthy, you make seeing your doctor a priority. Your doctor knows your medical history and, if there is a problem, can recommend a course of treatment. The same concept applies to your finances – regular checkups with an advisor can go a long way towards improving your financial health. Whether your goal is to reduce debt, buy a house, save for retirement or simply pay the bills, you don't have to go it alone.
Regardless of your stage of life or amount of wealth, you can benefit from the professional counsel and services of an advisor. In fact,71 per cent of advised households started working with an advisor when they had less than $50,000 in investable assets.1 Milestones such as buying a first home, starting a new job or having a child are all good opportunities to address new financial needs and begin working with an advisor.
Start with a consultation
An advisor starts by understanding your objectives and doing a thorough analysis of your complete financial situation. Next, he or she will work with you to put a strategy in place to help reach your goals. A comprehensive plan allows you to balance today's needs with your goals for the future, easily adapt to changes in circumstance and plan ahead for emergencies, as well as helping you be in control of your financial well-being.
An advisor may be able to help by doing some or all of the following:
- Creating a disciplined savings strategy including cash flow planning and debt management
- Designing and implementing a customized investment strategy
- Proposing tax reduction strategies
- Facilitating will and estate planning
- Reviewing and recommending insurance products, including life,disability and critical illness
- Providing access to a network of professional resources such as accounting and legal services
A prescription for long-term success. As you develop your plan, it's important to be realistic about your expectations. An advisor won't magically make your debt disappear or guarantee double-digit returns on your investments. He or she will, however,provide ongoing support and guidance so you can remain focused on your goals through the ups and downs life throws your way.The Value of Advice Report 2012 by the Investment Funds Institute of Canada found that households that receive financial advice are:
- 1.5 times more likely to stick to theirfinancial decisions
- More confident about theirfinancial future
- More than twice as likely to participate in Registered Retirement Savings Plans, Registered Education Savings Plans and Tax-Free Savings Accounts
As you can see, those who work with an advisor have a clear advantage –both in terms of increased financial benefits and level of confidence about their overall finances.
Regular checkups: Your financial well-being depends on them
Getting started early on with an advisor and scheduling routine reviews can provide a considerable financial advantage in the long run. Be sure to ask questions and get the information you need to feel a high level of trust and comfort. After all, the healthiest and most rewarding relationship is one that will benefit you not just today, but well into your future.
1 Claude Montmarquette and Nathalie Viennot-Briot, Econometric models on the value of advice of a financialadvisor, CIRANO, July 2012.