John Knox: Personal Wealth Advisor
John joined Brian Gribben Insurance Planning after spending 6 years as a mortgage agent providing customized mortgages based on the unique needs of his clients. John’s financial experience dates back several decades managing a national sales force.
In just 3 years in the business, John achieved the “Elite Member level of the President’s Club”. This level was awarded to only 15 out of 2,000 advisors across 5 provinces in Canada for their performance in 2017.
His core values throughout his career are based on honesty, integrity, and responsibility toward the people he serves. In his role, he helps people achieve their financial dreams through a well- structured and strategic financial plan.
I ask John questions on having a financial plan, estate planning, life insurance, having a will, household budget, his role, and some practical tips on how to manage our finances.
Why is having a financial plan important and what is your role in doing that?
Without a financial plan, it’s like flying an airplane, without radar or the instrument panel to give you direction and your destination. You can’t depend on hope to get the result and the outcome you expect. A financial plan must be strategic and will evolve as you go through the different stages of one’s life. A plan is fluid and will be able to respond to all life events without affecting your lifestyle. My role is to help people develop a sound strategic financial plan and guide them through it.
Let’s talk about estate planning. Why is it important?
Estate planning is important to ensure you have taken care of all your financial responsibilities that will be carried out when you are no longer in this world. It will ensure that whatever wealth you have accumulated over your lifetime, is distributed properly according to your will and with minimal tax implications. If not done properly the government will be dealing with the estate.
Why is having life insurance important?
Life insurance protects your family and the lifestyle your family has been accustomed to during your living years. Without it, you expose your family to either utilize the assets you have accumulated, or if limited assets are available, their lifestyle will dramatically change. It provides tax-free money to your family and/or beneficiaries upon your death.
There is however a big difference between term insurance and permanent insurance such as Whole Life or Universal Life. Both serve a purpose but permanent life creates a more favorable outcome late in life. Term insurance becomes so expensive later in life that most people can no longer afford it and they cancel it leaving all the deposits with the insurer. The other potential outcome is you might outlive the insurance and once you have reached 80, Term insurance is not available and again all your deposits, stay with the insurer.
What is your opinion on having a will?
Not really for me to comment, but you want to make sure you have one to ensure your assets are handled according to your wishes. It is part and parcel of your estate planning.
What is your view on having a monthly household budget?
Definitely a good option to understand where your money is being spent relative to the income you bring in. It helps you manage your expenses and allocate it according to your goals.
Give me three practical tips on how to manage our finances?
Manage your debt! If you have bad debt, work at making it a good debt, and if you have a good debt work at making it better. Always ensure you save 10 to 15% of your gross income annually. Ideally, plan to have an emergency fund in the event of a job loss, up to 6 months of income would be a good emergency fund. You should also protect your deposits in the different financial vehicles you might use. Disability Insurance, such as an income replacement, is a great idea. Critical Illness should also be considered. The waiver of premium in a life policy is a good idea to have and it is relatively inexpensive.
What is your role as a financial advisor with BGIP?
I’m a self-employed person who works with BGIP (Brian Gribben Insurance Planning) to provide clients with the best possible financial services through the development of a strategic financial plan. We use a very unique process to help clients increase their income in retirement and identify where they are letting money get away from them, unknowingly. There are about 24 of us in Canada that use this process.
If someone does not have any savings how should they start?
Putting money aside in a TFSA would be a great start. At the moment, if someone has never contributed to a TFSA they have $63,500 contribution room to invest. You can start as small as $50/week for example and continue to do this for 40 years at an annual interest rate of 5% would produce $329,783. The miracle of compounded interest can create significant wealth.
You talk a lot about keeping your money, walk me through this?
Basically, while you are working you want to make sure your money is well managed and used for the right things in life. Saving money is one thing, investing it is another. In many cases we save money but it is really not working for us now and for the future. Properly invested may mean the difference between a comfortable retirement versus a challenging retirement. Make sure you have a plan for your money and how it will help you and your family today and in the future.
I say to people once they retire, they will have a new job title; Asset Manager. You will have the responsibility to manage your assets in retirement as long as you have planned for it during your working years. In our life, we have a lot of information on the internet, books, magazines, etc. telling us to save money but very few talk about how to enjoy that money in retirement. Too many people are eager to pay off their mortgage and will make incremental payments to their financial institution, which a lender will be more than happy to receive. That money given to the lender in excess of what the lender is expecting is not working in your favor. Paying your house quickly doesn’t increase the value of your house. That money could have been used to enhance your financial wealth and ensure you get the benefits from it and not the lender. This is called “Lost Opportunity Cost”, meaning the extra money given to the lender could have generated interest for you.
Give me some advice on being a great husband, father, and managing household finances?
Your life should be built around these 4 principles: Faith, Family, Fitness, and Finance. In that specific order and when this is done accordingly you will have achieved some well-deserved Freedom. As a husband, my faith and trust in God are key. Without Him, life would be different for my wife and me and consequently our family. God has entrusted us with His money, and we need to be good stewards of that money. I always think of the parable of the Talents in Mathew 25. As a father and grandfather now, I need to make sure our kids and grandkids consider different factors before making a significant financial decision.