A financial plan is a road map to achieving your financial goals.

We all have financial goals. It could be for a vacation, purchasing a home, children’s education, or retirement.

A financial plan looks at where you are at present and what you want to achieve in the future. It looks at net worth, cash flow, insurance planning, estate planning, retirement planning, and taxes.

A financial plan gets you in touch with reality, helps you to become realistic, looks at opportunities and risks, and gives you peace of mind.

Scott Schofield of Nesbitt Burns talks about reasons to have a financial plan and a disciplined savings strategy. Having this does not make you feel guilty.

Scott tell my global audience a little about you?

I am an investment advisor in London, Ontario, for approximately 150 families and business owners. I am a Chartered Investment Manager (CIM®) and have 20 years of experience in the asset management industry. Before joining BMO Nesbitt Burns, I consulted with financial advisors in my role as Senior Vice President with Mackenzie Investments and Dynamic Funds and hold a BA in Economics from Dalhousie University.

When not analyzing numbers, I enjoy many outdoor activities including kayaking and stand-up paddleboarding. My favorite activity is skiing with my wife and our two daughters that are 8 and 10 years old.

You have been around the financial services industry for a long time. What are some of the things you have learned? 

Being in the financial services industry has taught me a number of things over the years. However, one thing that stands out is that investors have a tendency to forget about ‘risk’ in their portfolios when the markets are good. It is always good to re-valuate your portfolio to ensure your portfolios are aligned with your objectives. If you are asking yourself, what are my objectives? you should seek advice from a licensed professional immediately.

Besides saving 10 percent, paying off your debts, living within your means what other advice can you give to my audience?

Great question, I would have to say seek out advice. Many Canadians feel like they do not have a high enough net worth to seek the advice of a professional. This is not the case. The value of having a financial advisor is undeniable.

Why is it important to save for retirement and what are some of the tools? 

There will come a day when you stop receiving a paycheque and need to replace that with an income from your portfolio. Saving in tax-deferred plans such as Registered Retirement Savings Plan’s (RRSP’s) and Tax-Free Saving Account’s (TFSA’s) are great ways to help reduce and manage the level of tax you will pay in retirement.

To become successful in saving, we have to make some sacrifices and have a financial plan. Do I always have to have the latest TV, cell phone, latest car? 

Some people really like to have the latest and greatest. I do! You should treat yourself from time to time. Having a financial plan and a disciplined saving strategy can potentially take the guilt out of treating yourself because you will know if you can or cannot afford these things.

Talk to me about TFSA and RESP? 

Both are great tools for investors.

The Tax-Free Savings Account (TFSA) began in 2009 and is a great way for Canadians to set aside money tax-free throughout their lifetime. A TFSA does not apply taxes on any contributions, dividends, capital gains, or interest earned, and can be withdrawn tax-free. This savings account is available to individuals aged 18 and older and can be used for any purpose.

An RESP is a great way to save for your child’s or grandchild’s post-secondary education. Parents, grandparents, and friends can contribute money any time to an RESP – up to a lifetime total of $50,000 per child. These contributions are not tax-deductible, but any investment income that’s earned within the plan isn’t taxed until it’s withdrawn.

The federal government will match 20% of the first $2,500 you contribute each year. That is $500 each year. When your children or grandchildren are eligible to start receiving the money to pay for tuition, books, computers, residence, meal plans, transportation and more, they pay the tax—generally at a much lower rate than you would have paid.

If my viewers want to become a client of yours, what are you looking for in a client? 

The bottom line is we want to work with clients that are engaged in their financial well-being.

Working towards financial goals is best done by a collaboration between our clients and our team.

It does take some investment of time in the early stages to get to know our client so we can properly propose personalized solutions and a financial plan that finds a balance between their goals and their risk tolerance. From there we implement the plan and monitor it year-round.

How important is it to have a financial plan, a road map of where you are going, goals, estate plan, and a will? 

I cannot stress enough how important a financial plan is to our client’s financial well-being.

It is a personalized blueprint or roadmap to meeting and exceeding financial goals.

A plan is adjusted over time as life events and unexpected things happen in our clients’ lives.

It also is a tremendous aid in helping to minimize tax during and after our clients’ lives.

How important is food to you and let us know some of your favorite restaurants in London?

What can I say I love food! I always like to be the first of my friends to try new restaurants and enjoy traveling and trying new to me restaurants along the way.

In London, I tend to frequent two of my favorites often.

The Church Key Bistro-Pub is a British traditional gastropub specializing in traditional food done with a gourmet flair. They use seasonal and locally sourced ingredients whenever possible. If you go there you have to try their Ale & Onion Soup with the Smoked Salmon Sammy.

The Bungalow – Neighbourhood Hub, is a great neighborhood ‘local’ in a residential area. The restaurant’s style and cuisine are designed for casual and convivial enjoyment. They have an extensive craft beer selection and a build your own burger option that they claim results in over 3000 different possible combinations. When not tinkering with my burger recipe of choice, my go-to is the Fish Tacos with the Habanero Potato Cheddar Bacon Soup.

How do you balance faith food family and finance in the 21st century? 

Finding a balance is sometimes tough with a busy practice and family. Making and taking the time to shut off devices and being in the moment with my family is very important to me. The best conversations are with my girls walking the dog after dinner or the quiet time when riding the chair lift when skiing the family.

The post Reasons To Have a Financial Plan and a Disciplined Saving Strategy appeared first on Four Columns of a Balanced Life.

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.

The post John Knox: Personal Wealth Advisor appeared first on Four Columns of a Balanced Life.

Welcome to my new series on Life Insurance For Women. In the introduction, I mentioned the reasons why women need insurance and how it empowers you.

I am going to interview Chad Viminitz from GoLife insurance   https://golife.ca/fourcolumns on the following ten topics:

1. Women are being overcharged, a lot, for mortgage insurance – what you need to know!
2. Why women talk themselves out of the life insurance they want/need?
3. How to prepare for the baby- 3 pieces to financial protection (will, mat leave savings, life insurance).
4. Is underwriting for women different?

In the fourth interview, we focus on how is underwriting for women different. It is important that women need to know about being approved for life insurance.

What is underwriting?

Underwriting is the process of assessing the degree of “risk” relating to the person applying for life insurance. Basically, underwriting answers the question:  “Are you expected to have a standard life expectancy?” Underwriting is a process that benefits individuals applying for life insurance because it results in more individuals getting coverage and premiums for life insurance being less. For example, I have a heart condition and because underwriters can get more information about health conditions today, the odds of being approved have increased.

Why is underwriting a good thing?

Underwriting is a positive part of the application process as it has resulted in life insurance becoming more affordable (ie. lower term life insurance premiums) and with more individuals being approved and getting coverage, even if there are health concerns. It can be intimidating to share one’s medical history or vitals and wait to be “assessed” but it is an important part of the application process that does not need to be feared. Having underwriting completed upfront, at the start of the application process also gives you confidence that your coverage is actually in place. Creditor insurance (ie. mortgage insurance) for example completes their underwriting post-claim – meaning after the person is dead – at the wrong time. Underwriting that is done at the beginning results in the best life insurance coverage.

Is it harder for women to get approved for life insurance?

There is no difference between the underwriting requirement for a woman or a man. Of course, men and women may have different medical issues but life insurance pricing reflects the different risks. Women typically pay less for life insurance because they have better mortality rates, ie. they live longer.

What if I have a health issue? Can I still get life insurance?

Yes! Don’t let a medical issue stop you from applying for life insurance, the worst they can say is “no”. I have a heart condition and applied 3 or 4 times before I was eventually approved. Over time underwriting may take a different view on a certain health issue, especially as technology, drugs and treatments evolve. An example is individuals who are HIV-positive can now get life insurance, that wasn’t always the case. Life insurance companies are in the business of getting people coverage, know people and expect that medical treatments and conditions are part of a normal life, they just want to know the details before approving the policy.

Can women get coverage while they are pregnant?

Yes, even though the body is going through a significant change – you can apply for life insurance while pregnant. Pregnancy can have complications that can impact one’s application, blood pressure, and gestational diabetes being two examples. If possible, it’s recommended to apply while in your first or second trimester. Getting coverage before baby arrives provides confidence that your family is protected from day one of becoming a mom.

What is involved in getting approved?

Most life insurance applications need a combination of three elements:

1. Tele-interview – answering your questions about your medical history
2. Nurses’ visit – blood and urine samples are usually required for applications over $500,00 of coverage
3. Doctor’s report – These reports are sometimes requested to clarify or gain a better understanding of one’s medical information. It is not an indication of being declined or paying higher premiums. Greater clarity an underwriter has about an applicant’s medical condition, the better chance for an application to be approved.

The requirements specific to you will depend on your age and the amount of life insurance coverage you are applying for, ie. More coverage, more requirements.

What about No-Medical life insurance products?

Yes, there are life insurance products that are guarantee your approval. These policies come with limitations, restrictions and higher costs. Non-medical policies often cost 30-40% more, limit coverage between $25,000 to $350,000 and sometimes don’t pay a claim in the first couple of years. If you are considering a non-medical life insurance policy you should read the details of the policy. Answering a few questions and seeing a nurse will save you money and provide you with appropriate protection and good life insurance coverage.

What are the most common reasons people are declined for coverage?

It’s important to note that it is a small percentage of applications that are fully rejected. It does happen that an underwriter has to make the decision to decline an application. Some of the most common reasons are:

• Non-disclosure – the individual lied or was hiding information
• Ongoing medical investigation – the individual is scheduled for more tests or procedure
• Time frame – for example, a person may have had a heart attack, drug use or cancer but not enough time has elapsed from the date of the last episode
• Dangerous Driving and license suspension
• Illegal drug use

Being declined does not mean you cannot get coverage later if the reason for being declined changes or treatment improves – apply again!

Are insurance companies trying to charge the highest premium?

Not at all. Insurance companies are competing for clients and term life insurance premiums are at historic lows. Women should feel more confident applying for a personal life insurance policy compared to creditor insurance or mortgage insurance at the bank. Women are often charged 50% more for mortgage insurance at the bank. Women who apply for a personal policy usually qualify for “Preferred Underwriting”. Preferred underwriting means you may qualify for a 10% or 20% discount if you meet specific underwriting criteria, resulting in getting the best term life insurance rates possible.

Affiliate Disclaimer

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