All posts by Heather

Financial Goals, Financial Tips, Lifestyle

Practice Positive Thinking

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With practice, you can learn to take some typical financial concepts and see them as positive, rather than negative. For example, we are taught to set aside money for an “emergency” fund implying some sort of disaster could be looming around the corner. Instead, call it an “opportunity” fund and you can see that the same money could be used to take advantage of investment opportunities, “once in a lifetime” experiences or to support you through a rough time financially with more calm. You can also use the “opportunity fund” to take time to find new work if your existing employment ended, or to do repairs or renovations to your home if needed.

What other common situations are there like this example? How about “bad debt” replaced with the belief that the benefit of the purchase has already been realized? Is it “risk” or “opportunity,” “spending” or “investing in your lifestyle”? These might not resonate with your experience, but the idea is to become aware of the way you speak and to think more positively about common financial situations. There is more than one way to see everything.

Financial Tips

Everything is related to Income

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Every financial decision – whether to purchase, to invest, to borrow, to insure, to earn, or to not do these things needs to be made in relation to income. If you are going to make an investment, for example, what income will it generate – today or down the road? If you are making a purchase, how much income was required to pay for the item?

Why? Because you don’t live on cash in the account. You need a regular flow of money coming in to your home. This amount is a more relatable number as well. The larger accumulated amount of money is not a number we often talk about or think about in day-to-day activities.

Financial Tips

What is Important to you?

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Make all financial decisions based on what is important to you, not simply because you want to make more money. Why? What will more money mean? Why are you making that purchase or that investment? What will it mean to you in your life today and in the future?

Because: If you are not focused on what you truly want, then it’s too easy to make decisions that “feel good in the moment,” but aren’t really supporting your long-term vision. It’s too easy to make decisions because you have a sense that you “should” do something; or to make decisions because you feel guilty about what you have or have not done with your money in the past.

Financial Tips

Is This A Good Investment?

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You hear economic reports in the news.  You see investment advertisements.  You attend a seminar on how to increase your return or reduce your taxes.  Your friend tells you about a great opportunity.  Your financial advisor suggests you put your money into something as part of the planning they are doing with you.

You can trust your friend, your advisor or yourself, but do you have a strategy or system to evaluate the options you are presented?

Where do you start to decide if something is a good investment for you? Obviously, having professional assistance is important, but it’s not good for you or your advisor if your deciding criteria is simply ‘I trust you.’  It is also not good for anyone if your standard answer is ‘I only invest in xyz because that’s what I have always done’.

Without going back to full-time school to learn investment fundamentals, you can start with a few key questions:

1. What is my financial goal, short-term and long-term?

2. What type of investment is this: income, growth, combination, etc.?

3. What is the value of my overall investment assets?

4. What percentage of my overall investment assets does this investment represent?

5. If I invest, how and when would I get my money back?

If you start by considering the overall foundation of building an investment portfolio, the individual investment selections will be easier to fit into place because you will then have a basis for asking questions to help you decide what’s best for you.

Financial Tips

What’s Your Level of Risk?

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The biggest risk in the financial world is lack of knowledge. What is risky to some people is boring to others. And just because someone describes something as risky – or safe  for that matter – doesn’t mean you can take that at face value. Safe and risky are subjective terms that need personal evaluation based on goals, situation, timeframe, reference point, knowledge, experience, etc. A second mortgage investment or a covered call option might be the best strategy for someone’s portfolio and might be considered conservative safe investments given the right situations. However, what does the rest of the picture look like and what other influences need to be considered before making that sort of decision?

How do you know? Always start your questions with yourself. What do you know about the transaction? Why do you want it? What are your expectations? What is influencing your decision? What do you need to know? And, how and when will you get out?

Financial Tips

Almost half of Canadian homeowners aren’t confident they’ll retire debt-free… What about you?

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The Manulife Bank of Canada surveyed 2132 Canadian homeowners in all provinces between ages 30-59 with household income of more than $50,000 between September 10-20, 2013.

According to this survey (conducted by Research House), Most Canadian homeowners rank becoming debt-free a high priority, but only 51% are confident they’ll actually reach this goal.

It can be tough to juggle the financial responsibilities of owning a home and raising a family while at the same time, trying to keep debt under control and save for your retirement years.

If you’re not confident you’ll be debt-free by retirement, there’s good news.

There are simple, time-tested debt-management strategies available that could help you become debt-free sooner.

As an advisor, I understand that discussing debt may be uncomfortable, but it’s a conversation critical to your long-term financial health. I can help you learn more about debt-retirement strategies and show you how an objective, customized plan could set you on the path toward debt-freedom.

If you’d like to discuss your debt-management plan further, give me a call or send me an email at: hjohns@assante.com or 613-332-5244

Financial Tips

Do You Have an Income Surplus or Deficit?

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Budgeting, retirement planning and business planning all require you to project what your current and future cash flow requirements will be. It’s interesting how often people say they have a business plan, yet they have no financial projections to support the marketing efforts they have planned. It’s equally as perplexing to hear the comments people make when discussing how much their lifestyle will cost them after they leave work. The idea of projecting a budget seems almost impossible so they choose to focus on how much money they can accumulate instead. And on a day-to-day, month-by-month basis, creating a cash flow projection is a completely foreign concept to so many people, yet, it’s an absolutely critical tool for making just about every financial decision.

How? Regardless of whether you are making a projection for business, day-to-day life or retirement, simply start by listing the income you know you will be receiving each month for the timeframe you are projecting. Then, list the expenses you know you will have for that same period. Next, subtract the expenses to get either a surplus or deficit. If you have a surplus, then you can decide where to allocate that money. If you have a deficit, then you have to decide where you will come up with the shortfall. When you have done this for the month, carry on to the next month with the surplus or deficit accumulating from month-to-month.

Obviously, at some point, you will have to turn a deficit into a surplus. By projecting cash flow in this way, you now know how much of a deficit you’ll have given certain planned expenses and you’ll also be able to see what the return on your investment will be when you add income generating activities to your projections.

Financial Tips

Starting to Invest

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How do you know where to start with investing? Well, besides having the proper foundation, and time and space and support, it is important to begin to develop your own strategies. You can learn from others – emulate them, study them, adapt them but, because we are all different and all have different interests, reference points, and access to different information at different times, one of the first ways to begin to develop your own personal investment strategy is to do an evaluation of your interests. Do some research and start to notice what companies, what aspects of companies, what type of investments, and how the information is presented to you that makes you take notice.

When do you start this process? Now. Even if you don’t have an investment portfolio and you don’t have money to invest, you can read the newspaper and watch the business news. You can pay attention to trends, to activities of stores or businesses that you know about and are interested in. Start to cultivate a financial interest in the things you are already interested in. Write down headlines, types of businesses and company names that seem to be of interest to you. Then start asking questions about potential investment opportunities or moneymaking ideas.

Financial Tips

Focus on the Reward

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If you have a lump sum of money that you will be using to supplement your lifestyle, be aware going into that arrangement and plan for the withdrawals. For example, have a set amount of money transferred to a spending account each month, rather than simply accessing the savings money whenever necessary. When you withdraw funds from a savings account for whatever purpose, even money you have diligently saved for something specific, you can have the uncomfortable feeling of watching your money diminish, which can too easily create feelings of scarcity, fear, and/or lack. The solution is to plan for the withdrawal and to focus on the plan or the reward, not the savings value.
How? If you are funding your lifestyle from a lump sum of money such as in retirement or a temporary leave of absence from work, you still need to know your monthly expense requirements and manage monthly cash flow like you do with regular income. This means a percentage of the money that you have transferred from your pool of savings is allocated to saving and giving. This way you maintain some structure and the reduction of capital is part of an overall plan.

Financial Tips

Pay Yourself First

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Pay yourself first. “Ya, ya. I’ve heard this a thousand times,” you’re saying. “But, I have expenses. I have bills. The money comes in and it’s already allocated, and then some…”

How do you implement a “pay yourself first” strategy when you’ve already established your lifestyle without it? You just do, that’s how – with a little bit of strategic planning mixed in. As soon as you receive your next amount of money from any source, get it deposited into your checking account. Then, immediately transfer 10% of the proceeds to your savings account. This will be an account you set up at the bank for emergencies or opportunities, but not for specific purposes like saving for a vacation. In the same transaction, withdraw the amount of cash you need for the expenses and giving components of your financial plans. Then, leave the rest to pay your bills with, “Ya, but…” – I know. You said all the money was already allocated for other expenses. That’s okay. You are going to be keeping good records and balancing your checkbook. You will know exactly how much money you need for your bills, and if you get to the end of the month (or pay period) and find you’re short, “Wow!! Look at how well I’ve managed my finances. I have some money in my savings account to help out.”

“What if you need all the money in your savings account?” That’s okay. You are keeping good records so you might find that for the first few months you need to transfer 100% of the money from your savings account to your checking account but eventually, you will find that you might only need to transfer 50% of the money, and one day, you will look at the balance in the savings account and be amazed to find that it’s a sizable amount of money. How do you pay yourself first? You just do!! And keep doing, and keep doing, and keep doing for always and always!!