Posted on: April 16th, 2018 by Kevin Lavigne




The road to financial freedom, wealth, and prosperity requires an accurate map that will let you plot a journey, monitor progress, and change direction if  you venture off  course. To help you get there, here are ten ideas for developing a sound financial plan with your financial professional.

  1. Know where you stand–complete a net worth statement listing assets and liabilities.
  2. Define your financial goals based on personal needs and wants.
  3. Know how much money you need now, five and ten years from now, and in retirement–including inflation and taxes. Consider increasing your net income by reducing or deferring taxes.
  4. Increase discretionary savings by decreasing your expenses.
  5. Know your monthly cash flow needs and separate that from major annual expenses such as trips, cars, home renovations, etc.
  6. Expand your knowledge of financial issues and economics–check out the library.
  7. Reduce or defer income taxes wherever possible. Review your tax plans and make sure your financial advisor has a copy of  your tax return.
  8. Develop a sound plan for your estate including wills, powers of attorney, and life insurance–lower monthly life insurance costs can save you money.
  9. Adjust plans and goals as your circumstances change and review your written plans at least once a year to track your progress.



Use the services of professionals (accountant, financial advisor, lawyer). These professionals usually pride themselves on keeping their clients up to date when taxes, investments, and laws change. If  you are not retired now, how much do you need to retire? We all want to retire someday. Some may be wishing it was sooner than later. Here are some ideas to help you. First, retire to an income, not an age. How much income do you need to live on? Think in terms of  monthly income. Once you have an idea of  how much you need to live on per month, think of  a large emergency or slush fund to spend in early retirement. For example, this money can be spent on large items, outside your monthly budget, such as extended vacations, home renovations, or vehicles.

Second, plan for where the money will come from. Factor in when pensions will kick in (for example; company pension(s), Canada Pension, and old age pensions). You can usually find this with your notice from the Canada Pension Plan statement mailed to you or you can request a copy to be mailed to you: Service Canada. Then add up all of  your investments, such as stocks, bonds, GICs, mutual funds, and RRSPs. Take the total amount and expect income to generate from 4% to 6% annually; however, this depends on your risk tolerance, time horizon, and how long you want the money to last. Take an average of  5%, for example, of  $200,000, which will generate additional income of  $10,000 per year or $833 per month. Finally, look at real estate and businesses. Do you plan to sell off  real estate and downsize or generate income from rental real estate? Do you plan to sell any businesses or generate income from them? Now that you have all the sources of  capital, ask yourself  what percentage of  capital you would like to have at the age of  85. Do you want 100% of  your money, 50% of  your money, or do you want it all spent by then? This will help determine your time horizon as well as your estate wishes. Remember to retire to an income and lifestyle, not an age.

Please contact Reid & Associates Financial Solutions to see how our process will benefit you. 250.860.6464

Comments are closed.