Financial Planning

You are currently browsing the archive for the Financial Planning category.

Does buying life insurance decrease your risk of death?

May 8, 2009 in Financial Planning, Insurance, risk management | 2 comments

risk-530211480_7f7f18875c_b

There’s a discussion going on at the Canadian Money Forum about the cornerstones of good financial planning, and the topic of life insurance has come up.

One contributor suggested the purchase of life insurance may increase your risk of death, because there are now financial gains to be made. Another community member responded that the purchase of insurance, by itself, will not increase the chance of your death.

It seems obvious that the chance of dying is not influenced by buying life insurance. Right?

Except it might be.

There are a couple of interesting phenomena from the world of medical science known as the healthy user bias and the compliance effect – both of which provide surprising evidence about what keeps us alive and healthy, paying life insurance premiums instead of collecting the payout.

What am I talking about?

Read the rest of this entry »

Tags: , , , ,

Lingerie series, Part 4: getting what you deserve

May 7, 2009 in Financial Planning, Investing, Uncategorized | No comments

lingerie-2-frilly

Here’s the last principle in our series on how your finances are like your lingerie. BIG HINT: it’s the most important one! Read on for the goods.

Principle 4: You deserve a personalized fit.

You really do. Maybe you picked out that first “grown-up” bra on your own, peeked over your shoulder in the fitting room, decided it was a “good enough” fit, then plunked it down on the counter and paid. But every woman I have ever known who has been through the professional bra-fitting experience comes out a changed woman. Their clothes fit better. They stand up straighter. Their…assets are optimized.

How well your investments fit your life and how well they perform for you deserves at least the same level of care and attention as the fit and feel of your bra. And here is secret number four: getting that fit right can make a whole heckuva difference in how well you are set up to handle what life throws at you.

If you aren’t confident about how to judge how well your investments fit, consider working with someone who knows - someone who can cast a professional eye over your assets, help you understand your options, and suggest alternatives to empower you in achieving your own individual goals.

In future posts, we will explore how to find and work with a financial advisor, how various kinds of investments work, and more. But for now, pull up a chair, grab your glass of wine, and breathe: you’ve got four new secrets to share.

A version of this article was originally published at The Best Kept Secret: Toronto’s Resource for Women 40+.

Tags: , , ,

More from the lingerie series: Tip - Your portfolio probably doesn’t fit

May 4, 2009 in Financial Planning | No comments

glove-lingerie2

Follow along as we consider how your finances…are like your lingerie.

We already explored how your finances, like your lingerie, are intimate. But how else are they similar? Here’s principle two for understanding how these two elements of your life fit together (or not!):

Principle 2: You probably have a portfolio that doesn’t fit.

You likely know by now that most of us are wearing the wrong bra size. Oprah did a whole hour on this!

Here’s the comparison with money, gleaned from my work as an advisor: most people have investments that are a poor match for their circumstances. To the extent that they have a “financial plan,” Read the rest of this entry »

Tags: , , , , ,

“Redefine Retirement” - and conquer your fears of becoming a bag lady

April 26, 2009 in Financial Planning, Investing, Retirement Planning, Savings, Thrift | 1 comment


You probably already know that the shelf at your local bookstore has a whole section on retirement, and most of the books have titles like “The Retirement Time Bomb” and “Smart Women Finish Rich“.

Those titles are meant to be motivational, but they might only motivate you to avert your eyes when you walk past that section of the bookstore, thinking if you aren’t among the “smart women” who “finish rich,” you will…get blown up by a Retirement Time Bomb?

Read the rest of this entry »

Hey babe, what’s your number? The Big Secret of retirement planning

April 26, 2009 in Families, Financial Planning, Home Economics, Investing, Retirement Planning, Savings, Thrift, Uncategorized | 3 comments

whats-your-number-300pxwhats-your-numberThis is the question that has been floating around me, in the air, over the last few months. People ask me this question, they tell me they lie awake contemplating it, and they want to know if I know the answer: how much money do they need to save for retirement?

What is the exact number of dollars they need to have socked away in retirement savings accounts to fund a post-work life that works?

A life that includes some luxuries, some long-hoped-for travel or the freedom to immerse themselves in a favourite hobby, while ensuring the kids (if there are kids) are fed and educated and Read the rest of this entry »

Why I am an index investor

April 23, 2009 in Financial Planning, Investing | 2 comments

chart-up-indexinvesting
New US data released earlier this week shows that index investing beat actively-managed mutual funds for every market sector studied over the past five years - and the results are similar for the previous five-year period, too.

“The belief that bear markets strongly favour active investing is a myth,” says Srikant Dash, global head of research and design at Standard & Poor’s, in the latest Standard & Poor’s “Index versus Active” report.

Do I think this style of investing is right for everyone? Maybe not. (But I’m not everyone!) Am I giving up alpha? Probably.

But here’s the main reason I invest this way: it beats most of the readily-available alternatives, most of the time. And the reality is that I only have a limited amount of time to spend thinking about investing.

I’d way rather research recipes and contemplate my garden than track stocks or pay an advisor to pick mutual funds for me. For me, and arguably for most people like me, passive investing using index funds is the most appropriate solution.

But the whole mutual funds industry is pretty much set up to provide anything but index funds, meaning that most index investors are DIYers. I’ll be coming back to the theme of index investing, including lots of info on DIY investing, as the days roll by. Stay tuned!

Whose interest is your financial planner working in?

April 9, 2009 in Financial Planning, Investing, Retirement Planning | 2 comments

And how do you know?

This morning’s Globe and Mail included an article providing advice on whether to consolidate your RRSP holdings if you have more than one.

I was one of the experts interviewed for the piece, and my contributions focused on what I think are among the most important factors for ensuring long-term investing success: Read the rest of this entry »

Tags: , , ,

A Snapshot of Canadian Family Finances

April 7, 2009 in Families, Financial Planning | No comments

The Vanier Institute of the Family, a national, non-partisan research and advocacy organization dedicated to promoting the well-being of Canadian families, has published a research report on the financial health of Canada’s families each year for the past ten years.

Readers of The Wealthy Baker may be unlikely to see their families reflected in the 2008 report’s findings, which are drawn from up-to-date census and other data, and reflect national averages, not any one individual family. Nonetheless, I thought it might be interesting to provide a “snapshot” of family financial health across Canada. Where does your family fit?

Read the rest of this entry »

Tags: , , , , ,