Worried about debts? Do you know when or even if you can retire?
Most Canadians do not feel secure financially because they look for security in all the wrong places. The conventional wisdom is to focus on paying off debts & buying “safe” investments, while not knowing if either of these strategies will pay off in the long run.
Let’s say you were going on vacation but you hadn’t planned or booked anything. You were just going to get in the car and start driving. How would you feel about your vacation? The key to a successful vacation is having a plan to get you where you want to go.
Your financial future is like your vacation. Having a financial plan is the key to achieving peace of mind about your money. What is a financial plan?
A financial plan should show where you are today, detail all your goals and define achievable steps to get there. The largest part is your retirement plan, showing how you spend your money today, where you would like to spend it after you retire, how much of a nest egg you will need to produce that income, and what you need to do to get there.
Why bother with a financial plan? When you have a plan, you do everything differently. The long term perspective changes everything. It helps you identify and stick with the right investments, set priorities and achieve all your goals.
A plan also helps you identify strategies that may be implemented to fund your retirement. One example is the Smith Manoeuvre. It is a strategy that uses your home equity to invest for your retirement, leaving more of your income to live now. It also converts your mortgage over time to a tax deductible credit line.
Still sounds scary? Probably, because this is different from what you’ve heard before. That’s why you need a financial planner. A planner will sort through all the financial mumbo-jumbo, listen to your concerns and desires, strategize and offer advice on achieving them and put it in writing so you have the roadmap. That’s their area of expertise.
You can achieve peace of mind with your money by developing a financial plan.