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Strategy Four: Proactively Manage the Rest of Your Financial Life
This is an important chapter because it is a blind spot for most families and investors. I’ll keep it short and to the point.
Pay for a Comprehensive Financial Plan and Stick to It
We live in a do it yourself world but your financial life is not the place to learn as you go. To optimize the plethora of choices available to you, find a fee-only planner and have him or her create a comprehensive financial plan for you. It should cost between $2,500 and $5,000 (up to $10,000 for a truly complex situation). If you stick to the plan, you’ll have your money back in short order. This chapter outlines the most common financial mistakes families make, but there are many. Having a fee-only planner who can create a comprehensive plan, and then help you to stick to that plan, will be the best investment you will ever make. Your plan should be reviewed yearly, but if you have a simple plan and are sticking to it you may need to only update every three years.
Create and Stick to a Family Budget
Your budget should be part of your comprehensive plan, but if not, be sure to create one for
yourself and then work together as a team to live within your means. Don’t start your budget with your big expenses like house and car. Look first at what you have to save and invest to reach your Ideal Life in the timeframe you have chosen and then “back into” how much lifestyle you can afford. That may mean downsizing now to ensure that you can live your Ideal Life forever, free from financial stress. You cannot enjoy life, family and friends if you are constantly stressed about money.
Proactively Reduce Taxes
Taxes can take a HUGE CHUNK out of your income. Proactively (but legally) minimizing your taxes each year can save you thousands or tens of thousands of dollars. Saving just $1,000 per
year could mean an extra $79,000 over 30 years. Ten thousand dollars per year in tax savings
could mean nearly one million dollars! You must make every effort to legally reduce your taxes.
Proactively Optimize Insurance
Insurance is a tricky devil. If you don’t have enough, the wrong loss could wipe you out. If you have too much, it acts like taxes or high fees, reducing the cash you have available to reach your financial goals. Just like taxes, insurance can cause swings of tens of thousands to millions in your net worth. We know it is boring and difficult to understand. Insurance companies count on making it dense to keep you from trying to understand it. You must review your insurance every year and optimize both the type of insurance you carry and the amounts.
Mortgages
For most people, the single largest investment they ever make is in their house. If you have a mortgage, small changes in interest rates or the structure of your mortgage can mean paying off your mortgage years earlier and paying tens of thousands less in interest costs. You should have your mortgage reviewed by a professional at least annually.
Autos
Cars, for most people are fun to drive and say a lot about who we are. Some people believe that“you are what you drive.” Realize that Sam Walton, founder of Walmart who was the richest man in the world when he died, drove an old pickup truck. Cars and their financing can eat up huge chunks of income and are usually not tax deductible. Insurance also can be much higher for some cars than others. Getting help from a financial professional may sound silly, but over your career, you could save tens of thousands or even hundreds of thousands by managing your automobiles properly.
Wills, Trusts and Estates
This is the most difficult discussion for us to get clients to engage in, yet it holds more pitfalls than almost any other investment topic.
A small misstep here could easily cost you or your family millions. The time to structure these legal issues in your favor is RIGHT NOW, not when you are old or dead. A car accident or a sudden illness could mean that it’s too late to create the right structures. Do it NOW and check it annually!
Divorce
We hate to even bring it up but a divorce could be disastrous to your financial future. You must proactively plan for various scenarios before you find yourself in the wrong emotional state to be making those decisions.
Inheritances
Windfalls like inheritances can make your dreams come true. Knowing how to handle them
properly and structuring them proactively can save or make you tens of thousands or millions. Don’t wait to discuss the right way to structure them and manage them.
Business Interests
If you are a business owner or rental property owner, how you handle the structures and transitions can make or break your financial future. Get professional help from the experts NOW. Don’t wait until you think you are ready to retire. There are many strategies that can accelerate your success now.
THIS STUFF MATTERS!!!!
I know you are busy. I know you are probably married with kids and would rather spend time with your family than managing all of this. That is why we manage all of it for our clients. But don’t just think you can stick some money in a Vanguard account and be set for life. You must proactively manage your financial life if you want to become truly wealthy and live your Ideal Life. Please don’t ignore it.
You might be asking yourself, “Where do I find the right Financial Consultant near me who charges a flat fee and will treat me fairly?” “Where can I find an advisor who can create an Integrated Aligned Overarching Strategy?” or “Where can I find an advisor who will only invest my money in proven passive investments? We suggest that you interview several. You’ll quickly learn that there are very few who are fiduciaries, believe in passive investing and have a process to create an Integrated Aligned Overarching Strategy. When you do find the right advisor, you’ll be able to relax in the knowledge that you are in the right hands and that your financial future is secure. Feel free to reach out to me with your questions. I’m committed to investor education.
Dean Kendall is a Financial Organizer in Calgary, handling all of the financial affairs for a select group of clients who value unbiased quality advice for one simple flat fee.
His book - Stop Paying Hidden Investment Fees! Click here for more information https://www.ideallifeexperience.com/Stop-Paying-Hidden-Investment-Fees
Newest book - Becoming The Champion of Your Dreams: How to Set and Achieve Your Most Important Goals Click here for more information. https://www.ideallifeexperience.com/Becoming-the-Champion-of-Your-Dreams
In addition, Dean is a 3X Canadian National # 1 Amateur, a 5X Canadian National #1 Professional BMX rider, downhill mountain biker and an avid snowboarder. He is an expert at winning. Let him show you how to win the money game. You can reach Dean at dean@ideal-life-experience.ca or Phone 403-543 -7226
© Copyright 2008 – 2022 by Dean Kendall. All rights reserved. 403-543-7226 dean@ideal-life-experience.ca