Commandment 9: Build A Plan

This is the ninth of a ten part series where we look at Haven’s Ten Commandments, a short list of investing fundamentals we like to teach to our clients. It’s nothing too fancy, but a good foundation we believe everyone should understand. 

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Hopefully by this point you understand the true depth and power of investing. We’ve talked about different investment options, different variables and strategies, and how investing should be unique to each person. Having a financial plan is the best way to know if you’re on track for your goals and to eliminate all of the noise. 

By noise I mean: “am I saving enough for retirement?”, “what will my retirement look like?”, “what if the markets have a down year?”, “how is Trump/Tradewars/AI going to affect my wealth?” and all of the other things people worry about when dealing with money. Any of these questions could be important, and are all things I think people should know and be confident in. But the truth is most Canadian’s don’t know, and are essentially ‘investing blind’. They are putting away money, but not sure if it’s enough, or what it will actually do for them in the long term. But having clarity about your investments isn’t a luxury. 

He who has a “why” can bear any “how” - Friedrich Nietzsche

Having a goal that excites you (a “why”, a “reason”) always makes the short term work and sacrifice more meaningful — and more of a priority. When trying to complete a task without a goal it’s difficult to stay focused — it’s easy to get sidetracked or procrastinate. When working from home, it’s easy to step away from my work, wander around the house, or eventually find myself outside taking pictures of bees. 

In an attempt to counter this eventual lack of focus, the night before or the morning of I like to restate my “Why” — and put together a checklist of what I want to accomplish that day, what my priorities are. I also like to schedule breaks throughout my day, usually this is in the form of taking a walk - I tend to work at home, then walk to the library and work, walk back home or a coffee shop to work. By breaking up my day with walks, I find myself able to refocus on what I want to get done — I am more productive that way than trying to struggle through the day. 

The same thing is true for finances. How hard is it to just save money without a specific goal for it? Very. How hard is it to save money for a goal without a plan, milestones or some way to see if you’re on track? Also, very hard. When it comes to long term financial success, having a vision for the future that excites you is paramount.

Having a good financial plan should not only allow you to reach your goals (a downpayment, a satisfactory retirement, etc.) on track and on time, but it’ll help reduce stress that comes with money and saving, it’ll allow you to be able to spend knowing you can because you’re saving first, it will allow you to live your life more comfortably and confidently without sacrificing for your future. Most of the things Canadian’s worry about when it comes to their retirement, are honestly easily answered by having a good financial plan. 

Having a good financial plan in place also allows you to best save for your goals. An RRSP is a great way to save for retirement, but so is a TFSA. An RRSP can be used to save towards the purchase of your first home, but what if you’re looking to buy your second home, or it’s in a short timeframe? How much CPP and OAS can you expect to receive, and should you delay or advance those incomes? How much do I need to invest now so that my investments provide an adequate income later?

Throughout everyone’s lives they are going to develop a multitude of financial goals, and the best way to achieve those goals is often dependant on the person's own unique situation. It shouldn’t be a simple ‘one size fits all’ solution.

There will always be competing priorities. There will always be reasons to put off financial planning. But you shouldn’t. A financial plan can quickly answer questions and concerns you have and make sure you’re saving the correct amounts in the most tax efficient way that makes sense for the short and long term. 

At Haven, we want our clients to know as much as they want to about their investments and how we are working hard for them. Like most things, we find that if people know and understand a concept they are more interested and engaged in it. That’s why we believe that taking the time to educate, teach and help our clients benefits everyone involved. You have enough to worry about, your investments shouldn’t be one of them. 

We don’t believe paying a fee to have access to ‘our portfolios’ is enough value, so we go above and beyond the norm to ensure our clients are in their best position possible and the necessary communication is in place to help stay the course.

If you have any questions about financial planning, investing in general or learning about how Haven can help you, please don’t hesitate to contact us.

Derek Condon 
Financial Advisor

Josh Olfert