The basics of a solid financial plan

What does a financial advisor do and how do they help you achieve your richness, your financial freedom? According to a study households with a financial planner have 290%, which is almost 4 times, more assets than households that don't work with a financial planner. By helping you create a financial plan that works for your exclusive situation a financial planner can get you on the road to success. This plan must be a living document as situations change, buying a house, having a baby, getting a raise, losing your job, becoming seriously ill. It must work in the good times and the rough times. That’s why I work using a pyramid platform. Starting at the bottom and making sure that your financial foundation is strong allows you to then grow from there without the worry that it can all come toppling down if something goes wrong. This is all accomplished by setting out a budget and understanding where your money goes. Here is what I mean.

As you see here the base is your protection. It starts with having the proper insurance in place so that no matter what happens to you or your dependents your financial situation stays strong.

From there you start to reduce your debt and create an emergency fund. There is good debt and bad debt and that is a discussion for another blog. There are also good ways to have an emergency fund and not so good ways to have an emergency fund. Also a topic for another blog.

Having a Will is important as it allows you to decide where your assets go if you pass away. Same with a power of attorney as it allows you to decide who is going to take care of you and your world if something happens and you can no longer make your own decisions.

Once you have a solid financial foundation then it is time to start planning how you are going to grow your wealth. This starts with investing in the most tax efficient way possible. This includes using investment vehicles such as TFSA’s and RRSP’s. Once you have built up enough wealth you can then look at owning a home. Next is the continuation of building your wealth through other vehicles such as RESP’s if you want to help your children out with school and other investment vehicles. With all of these vehicles financial advisors help you figure out what is the best way to pay off your mortgage, or invest with TFSA's, RRSP's and all the rest as they are not all created equal.

As mentioned before if you do not have a solid base and start investing before taking care of the first level and something happens where you need a substantial sum of money because of a death, critical illness or disability your investments won’t last long enough and you will need to do something to change your lifestyle.

From there you can start looking at potentially more risky investments as you will have enough money that if it goes wrong it won’t put your lifestyle at significant risk. This can include a real estate portfolio, purchasing businesses, buying gold, art etc.

To make sure that you are getting the advice that will get you almost 4 times more assets in 15 years give me a call to sit down to discuss your personal situation and your options to grow your wealth.

Dennis Carson 306-227-0599 or

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