Never Too Late To Start
Peter Katevatis - Sep 08, 2016
Too often I hear defeatist comments like, “I totally missed it, it’s too late now!” or “I should have bought years ago!” or “I give up, prices are never coming down!” These comments can be attributed to Vancouver real estate, but I am referring to
Too often I hear defeatist comments like, “I totally missed it, it’s too late now!” or “I should have bought years ago!” or “I give up, prices are never coming down!”
These comments can be attributed to Vancouver real estate, but I am referring to building a financial plan. A financial plan outlines your current situation and identifies the goals you wish to attain in the future. Regardless of your current financial status, it’s never too late to start.
The first step is creating a snapshot of your current financial picture. List all of your assets (chequing account, investments, RRSP, TFSA, home, vehicle, etc…) and all of your liabilities (credit card, mortgage, car loan, etc…) so you have everything on paper. For those accountant types I call this your Personal Balance Sheet.
Next comes the hard part, what do you want to do when you grow up? I find it very interesting how much people struggle with simple questions like, “If money was not an issue, what would you do every day?” We spend so much time working to get to the point where we don’t have to work - what will you do when that time comes? We all have passions and desires and a financial plan can help you attain them.
Before the plan is constructed there is more “fluffy stuff” to do. You must prioritize your objectives. Sometimes you can’t encompass all the goals in a plan or sometimes two goals counterbalance each other. The most common conflict comes with these two goals:
- Capital Preservation
- High Rate of Return
Everyone wants capital preservation since we don’t want to lose money. However, investors also aim for a high rate of return. One thing we are constantly balancing is attaining the highest return within a risk level clients are comfortable with. Having your plan on paper can help when you look back at successes and failures to see where your risk level was too high or too low. Finding that ‘magical’ suitable investment is a constant process of discovery.
If you are interested in putting a plan together, follow this link to get started online or send me a note for a pdf version you can print and do offline.
Correction: There is one time that is too late to start planning… after you pass away. Start before that.