Blog

Financial experts reveal the advice that they personally make sure to track their spend in their own lives.  There are many ways to achieve this.  Here are their top six:

1. Have one main investment account and another for short- to mid-term needs

Most people who have at least one long-term [investment] account should consider opening another account for mid-term goals. Mid-term goals might involve buying a house or paying for a child’s education.

Match your portfolio spending to the specific goals and time horizon.

2. Don’t be too restrictive with your budget

Trying to change your spending habits too quickly can result in burnout.  Make room for expenses that matter to you. If an activity with a friend is a priority, keep this in your budget. Find other ways to cut down on spending; like canceling unused subscriptions.

3. Automate saving money

You should automate everything you can about saving so that you don’t have to make a conscious decision to do it.   Money in a checking account can be tempting and easy to spend.  Make regular transfers to a high-yield accounts that can help you save for an emergency.

If applicable, automatically transfer your money to a retirement account. If you work for a company that offers a shared RRSP plan, it’s ideal to sign up for the full employer match. Not taking advantage is like leaving hundred-dollar bills on the ground.

4. Spend more to save more

Focus on quality and spend more if it means it will last.  For big-ticket items take advantage of sales events and/or buying seasonal items at the end of the season. Participate in free loyalty programs and search for online coupons before making a purchase.

5. Look out for the small purchases on your credit card statements

When reviewing your credit card statements, it’s easy to just focus on the bigger charges. But it’s key to also review the smaller line items.

These purchases are easy to overlook. Check your statements monthly, and if you see something you don’t recognize (even a few-dollar charge), report it to your credit card company immediately.

 6. “One-size-fits-all” approaches doesn’t work

Personal finances should be based on your values.  Once you understand that other people’s priorities are not the same as yours, you will be able to make the most sense of the right savings methodology for you.

The question becomes: What is important to you may differ from your neighbours and friends.

Bottom Line

There are a lot of rules of thumb out there when it comes to money, but don’t feel pressure to follow them all.  The best thing you can build into your personal financial plan is the flexibility to make changes as needed.

Planning the management of your estate after you pass away requires careful consideration and preparation.  There is much more to the process than deciding who gets the fine china, and your grandmother’s silverware!

Well executed estate planning leaves little room for dispute when it comes to distributing monetary and physical assets, but also re-establishes adherence to wishes regarding charities, bursaries and trusts.

What you need to know

It is imperative that any will include the sound advice of a lawyer specializing in this area.  We may want to rely on those we have trusted in the past, but if your lawyer isn’t listed as a specialist, rely on them for a recommendation to a trusted colleague with the appropriate experience.

Inexperienced attorneys may not provide the appropriate after-tax guidance, or the proper advice to select an executor, both of which could make your legacy desires difficult, or even impossible to fulfill.

If you have some special needs, like the following, experience becomes even more important.

Charitable Trusts

Setting up a charitable trust allows the trustee to decide where their money is going and how they will be remembered.

Establishing your legacy may include making a contribution to an area of your community that was significant in your life. Areas may include sports, the arts, the hospital, the zoo, or your alma mater.

You may ask yourself:

• What causes are important to me?
• How will my money (and this charity) further benefit society?

Your Last Will and Testament

Drawing up a will is an important resource regardless of the life-stage, amount of assets, likelihood of death, or number of heirs.  If you own anything of value that you would like to pass on to another, it is always better to decide yourself, versus running the risk of having an outsider make decisions on your behalf.

It is also important to note that your will is a living, breathing document, which means you can’t just set it and forget it.

Updating your will every few years to reflect your changing financial and familial situations allows you to remain in control of your assets and determine how they will be distributed. The conditions that could cause you to re-set your will are:

• Getting married, or divorced
• Becoming a widow(er) – This is an often-overlooked event since the strain of loss distracts the surviving spouse, and, unfortunately, elderly couples often pass away quickly after one another.
• Birth of a child or children
• Marriage or divorce of an adult child
• Birth of grandchildren
• Passing away of siblings

Often the beneficiaries of investment accounts, especially “registered” accounts like RRSPs and RRIFs should be specifically named in the Will and with the custodian of the accounts.

Let’s review the basics.

To begin this process, you must first determine your net worth. To do so use this equation:

Total Assets – Total Liabilities = Total Net Worth

Assets include land, buildings, and things that you own outright.

Liabilities encompass debts, mortgages, and anything that you owe.

Steps to Creating Your Last Will and Testament

1. Hire a lawyer— Be sure to choose a lawyer that you feel is skilled and experienced with Wills and Estates, trustworthy, honest, and that will hopefully be around longer than you. A lawyer will help you put your affairs in order and ensure you don’t miss anything important.
2. Name your trustee/executor— This person will make sure that the stipulations outlined in your will are met. So, choose someone you know and trust.
3. Decide how your assets will be divided — Planning for every scenario will alleviate additional stress on the part of your trustee/executor when having to make decisions about your personal assets.
4. Name your beneficiaries.
5. Determine if you are contributing to any charity or trust and describe said identity in the will.
6. Outline your end of life decisions in your living will ( also called Power of Attorney for Personal Care)
7. Update beneficiaries for all your life insurance policies and registered accounts, including pensions

A Living Will for End of Life Decisions

A Living Will is a legal document that a person uses to make known his or her wishes regarding life prolonging medical treatments.

A Living Will outlines your wishes for medical treatment if you are unable to speak or lie in a vegetative state. The document outlines which life prolonging treatments you want and do not want in regard to resuscitation.

Canadian law is changing on the matter of Right-to-Die, and a Living Will could include additional instructions that address overt action to end a life.

Estate Planning and Beyond

Determining how your life will be remembered in the event of your death is an important part of your legacy. Making the big decisions easier for your family by having them outlined in a comprehensive document can be one of the most important choices you ever make. You may determine establishing a charitable trust is the right choice for you or you may deem to divide the assets among family. The most important thing to remember is that it is your decision and will therefore be the right one.

Bottom Line

Planning the management of your estate after you’re gone is not an easy endeavor. Your financial advisor is an appropriate person to consult at the beginning and throughout the process.

If you’re retired, or soon to be, you’re likely a Canadian baby-boomer.  You are seeking more information about your retirement beyond merely finances, and advisors are uniquely positioned to provide you with additional retirement insight and planning.

Currently, Canadians aged 65 years old, can expect to live an additional 22 to 24 years, on average.  Not only are people living longer, they are leading more active retirements.  Achieving success in retirement no longer requires the bills to be paid, and to sit at home awaiting the arrival of the grim-reaper!

To gain access to the investable assets today, and manage them into retirement, advisors should examine their clients in a broader, more complete perspective.

What you need to know

The Bottom Line

Without planning that includes more elements than just finances, retirement and the years leading up to it can be anxiety laden.  The period that should be relatively carefree will be the opposite.

Financial planning is a critical element of all retirement plans, but an analysis that focuses solely on money will not prepare you for a successful retirement.  Additional items like those mentioned above must also be addressed.

By: Natalie Thornhill Pirro, Supervisor – Wealth & Client Experience

As an investor you will, no doubt, have a lot of questions for your advisor.  How much money do I need?  How do I get started?  What are the best investment strategies? What type of investment should I open?

When you meet with your advisor, they will ask you to provide information so that they can better understand your unique situation as well as your immediate and long-term financial needs.  With this information, they will be able to come up with “a plan”, recommend investments that are suitable for you, and answer all your questions.  Securities legislation and regulations require that each recommendation your advisor makes be suitable for you in relation to your investment objectives, risk tolerance and other personal circumstances.  This is referred to as the “Know-Your-Client” (KYC) Rule under securities law. This Rule requires your firm and advisor to collect the following information from you.  Your advisor may be restricted from opening your account if you do not provide this information.

• • Annual Income – Your approximate annual income from all sources.
  • Net Worth – An estimate of the value of your assets less your liabilities.
  • Investment Objectives – The specific characteristics of investment products and how they relate to the achievement of your investment goals.
  • Time Horizon – This is the period from now to when you will need to access a significant portion of the money you invest in the account.
  • Investment Knowledge – This is your understanding of investing, investment products, and their associated risks.
  • Risk Tolerance – This is your willingness to accept risk and your ability to withstand financial losses.
  • Full Legal Name and Date of Birth – This is required by the Proceeds of Crime (Anti-Money Laundering) and Terrorist. Financing Act. This legislation is designed to prevent the use of the financial system for hiding proceeds of criminal activity or financial terrorist activity.
  • Proof of Identity – This is required for certain accounts by Anti-Money Laundering legislation. To verify your identity, you may be asked to provide a driver’s license, citizenship card, passport, or birth certificate.
  • Residential Address and Contact Information – This is required by Anti-Money Laundering legislation. This information will allow your firm to contact you to provide investment advice or notify you of any changes with respect to your investments. This information is also required for account reporting.
  • Citizenship – This is required for tax reporting and may be used to determine if you are permitted to purchase certain types of securities.
  • Social Insurance Number – This is required for tax reporting.
  • Signature – This is required by Anti-Money Laundering legislation.
  • Employment Information – This is required by Anti-Money Laundering legislation to help your firm and advisor determine suitable investments for you.
  • Number of Dependents – This is required by regulation to help your firm and advisor determine suitable investments for you.
  • Politically Exposed Persons – This is required to meet requirements under Anti-Money Laundering legislation. Your firm will need to determine whether you or a member of your immediate family have ever held a position with a foreign government that qualifies any of you as a “Politically Exposed Person”. You can find more information on this requirement HERE.
  • Other Persons with Trading Authorization on the Account/Financial Interest in the Account – This is required by Anti-Money Laundering legislation. Your firm is required to maintain the names, dates of birth, employment information and the relationship of any individuals with trading authority or a financial interest in your account.
  • Source of Funds – This is required to meet requirements under Anti-Money Laundering legislation. (banking information will be required for Electronic Funds Transfers “EFT”)
  • Trusted Contact Person – (“TCP”). A TCP acts like an emergency contact for your account, although they cannot make financial decisions or account changes.

Important To Know

Your advisor is required to keep this information current. Depending on the type of account you have, your advisor may check in with you every one to three years to confirm your information remains accurate and update your KYC. As your circumstances may change over time, you should keep your advisor up to date on any changes to the information above, such as:

• Changes to marital status
• Relocation to another province or territory
• New job or job loss
• Long-term illness
• New debt financing
• Major increase or decrease in your financial resources (for example: due to inheritance)

In Conclusion

While this may seem like a lot of personal information, it allows your advisor to recommend investments suitable to your present circumstances and your financial goals.  Whenever you are scheduled to meet with your advisor, whether you are setting up a new investment or discussing current investments, you should always have your list of questions for the advisor; and be prepared to have a list of any, or all, of the above information.  If you use this Blog as a checklist, you will be ready-to-go!

Happy Investing!!!

While uncomfortable to think about, effectively planning ahead for when you are no longer here can save your loved ones a great deal of time, money, and emotional hardship.  Estate planning can be complicated, but there are some basic “must-do’s” that should be regularly updated and reviewed. Below is a simple checklist for making sure your estate plan is up to date.

What You Need to Know

Wills

• Have you created a will?
• Is it updated and current?
• Have you experienced any major life changes since the will was created? This could be a new marriage, divorce, child, death in the family, etc.

Wills should be created with the guidance of an estate lawyer to ensure that your final wishes are correctly documented and carried out. It is vital that a will be regularly updated as it acts as the foundation of your estate plan.

Beneficiaries

• Do all your registered investments have a named beneficiary? This includes RRSP, RDSP, RESP, TFSA, Pension Plans, and Segregated Funds.
• Do all your life insurance policies have a named beneficiary?
• Have you recently reviewed your beneficiaries? Has there been a major life changes such as a marriage or divorce that could warrant a change to your beneficiary appointment?

Beneficiary designations allow for assets to bypass probate (in most cases) and be passed directly to your beneficiary. This is a great money and time saver.

Dependents

• Do you have a family member that you wish to provide an income to after your death?
• Do you have family members that you wish to fund an education for after your death?
• Do you have any family members that have special psychological or physical needs that you would like to provide financial support for?
• Do you have a parent or other relative that you wish to ensure is taken care of financially if you die prematurely?

There are a variety of different financial and legal tools available to Canadians that can help them provide income or support for their dependents when they are gone. Keeping your dependents updated in your will is important as they may change throughout your lifetime.

Executors

• Have you named an Executor of your will?
• Is the Executor up to date? Have you named an alternate Executor in the event your first choice is unable to fulfill the position?
• Has your Executor been made aware of their appointment and been briefed on your final wishes?

An Executor is someone you appoint in your will that will be responsible for administering your estate. An Executor should be someone you trust and also someone who is capable of dealing with the potentially complex responsibilities involved with administering an estate.

Powers of Attorney

• Have you appointed a Power of Attorney for Property? This person will be able to help you with your finances and personal property in the event you are unable to do so yourself.
• Have you appointed a Power of Attorney for Personal Care (Health)?  This person will be responsible for making medical and personal care decisions for you if you become unable to act on your own.
• Are you POA’s aware of their appointment and willing/capable to perform the tasks that will be required of them?

Power of Attorney is a legal document that allows you to appoint someone to help you with your finances and personal care in the event that you feel unable to do so or become mentally incapable.

Financial Planning

• Have you spoken to your financial advisor about structuring your assets in the most tax efficient way to minimize estate taxes and probate fees?
• Have you set aside enough money to cover final expenses, estate taxes, probate fees, and funeral arrangements?
• If you own a business, have you worked with your professional team of advisors to develop a succession plan?
• Have you recently taken the time to calculate your final expenses and potential estate taxes?
• Have you addressed any permanent insurance needs you may have?
• Have you spoken to your advisor about your wishes to make a charitable donation before/after your death?

Your financial advisor will play a significant role in helping you prepare your estate. The above questions are only some of the issues that you may want to bring up to your financial advisor so that they can help you make your estate as efficient as possible.

Your Personal Financial Inventory

Prepare an Inventory of Assets and Liabilities

• Real Estate
• Investments
• Bank Accounts
• Annuities/Life Insurance
• Personal Property (Art, Jewelry etc.)
• Pensions
• Value of Any Businesses You Own and Their Structure
• Digital Assets

Make Sure You Indicate the Location of the Following

• Will and Power of Attorney
• Birth and Marriage Certificates
• Divorce/Separation Agreements
• Insurance Policies
• Deeds
• Safety Deposit Box
• Preplanned Funeral Arrangements
• Trust Documents
• Names and Contact of Personal Advisors (lawyers, accountants, financial planners)
• Executors, liquidators, and trustees

Far too often family members are left scrambling to find important documents and information. Your financial advisor and lawyer can help you collect the above information and organize it for your beneficiaries and executors.

The Bottom Line

Estate planning has a reputation for being complicated, but for most people all it takes is some thoughtful pre-planning. Working with a lawyer and financial professional will ensure all of your bases are covered and your final wishes are carried out. Estate plans should be reviewed and updated regularly.

Book an appointment with us – Click Here

It is always a good day to review your financial plan! Knowing what you have and haven’t accomplished is vital to reaching both your long and short-term goals. Below is a list of financial planning priorities that should be reviewed regularly.

What You Need to Know

Insurance

• Did you buy a new house?
• Did you have a baby or add to your family?
• Did you get married?
• Did you take on new debt?
• Did you get a new job or have a change in income?
• Did you experience a marriage breakdown or divorce?

Liabilities (new or changed)

• Mortgage
• Business Loan
• Student Loan
• Line of Credit
• Credit Card Debt
• Car Loan
• Any other liabilities?

Assets (new or changed)

• Art
• Jewelry
• Cash
• Real Estate
• Land
• Stocks
• Bond
• Life Insurance Policies

Short Term Goals (New or Changed)

• Save for a House
• Save for Vacation
• Pay off High Interest Debt
• Start Emergency Fund
• Major House Repair or Renovation

Long Term Goals

• Retirement Dates
• Education Savings
• Mortgage Elimination

Investments

• Adjusting Risk Tolerance
• Reviewing Asset Allocation
• Savings Strategies
• TFSA
• RRSP
• RESP
• RDSP
• Un-Registered Accounts

Accounting for Big Changes

• Did You Move?
• Did You Sell Major Assets?
• Did You Change Jobs?
• Did You Take on More Debt?
• Did Your Family Grow?
• Did You Lose a Loved One?
• Is There a Critical Illness in the Family?
• Did You Receive a Gift or Inheritance?
• Was Someone in Your Family Diagnosed with a Disability?

The Bottom Line

Your advisor is here to help you and guide you through each step of the financial planning process. The above list should be used as a starting point to address basic financial planning needs.

Book an Appointment with us today – CLICK HERE