We live in a time when we can capture information about anything we want… Google has become our go to encyclopedia! Do you remember when we had to write an essay without a computer?  Yes! I am dating myself but encyclopedia Britannica and the library were my research tools. The information found in those pages could be trusted as it was researched and documented with footnotes.  Information today can be found with one click on a computer, the world wide web of research made easy by  Google, Bing, and Yahoo. The problem that we face is some of this information can be contradicted by a single opinion or biases without any documentation. Although it seems research has been made easier it somehow has become more difficult to find the answer.

So how do we get valuable information out to the masses to help them understand the value of what we are saying?

Well, I don’t have that answer, but hopefully, you will find value in the rest of this article as it relates to your Financial Security for the future.

I value experience and knowledge when it comes to a conversation. A good friend of mine who has been in the financial industry for over 30 years sat me down one day and said, “Have you heard about the three kinds of money”?  Umm, Debt, Credit, and Cash?  I replied with a big grin; “Not quite the answer I was looking for, let me explain this concept to you”.  He proceeded to draw a diagram on a napkin because like many others I am a visual learner.

The learning curve…

Below you will find a circle which we will refer to as your circle of wealth, within that circle you have three kinds of money. Lifestyle, Transferred, and Accumulation.

AAEAAQAAAAAAAAavAAAAJDIzOGFiYzk0LWY1ZDYtNDhhZC04MjRkLTQ5YTE0OGYzYzQ0YgLifestyle: In its simplistic form are the things that we can afford to do and have while we enjoy the merits of living for today and days to come.

Accumulation: Is the process of collecting assets, through purchase or by obtaining them, an activity of collecting for a particular purpose in the future.

Transferred: This is money that is being directed away from your Lifestyle and Accumulation of funds that will not help you lead life the way you want in the future.

So now that you understand the three kinds of money above:

Which would you least want to change moving forward?

If you said Lifestyle you would be correct. No one wants to change the way they live  on a daily basis. So we cannot take away from your Life Style.

Which would you want change the most?

If you said Accumulation you would be correct. We want this to be the biggest piece of the circle moving forward because our accumulation will help us keep the Lifestyle to which we have become accustomed to in the future.

So by default that leaves us with Transferred, we want this to be the smallest piece of the circle in our future because this is money that we are losing unknowingly or unwillingly.

Does all this make sense?

Well, then I have three Questions for you?

1. If we could change the accumulation value in your circle would you be interested?

2. If we could change the amount of money being lost unknowingly or unwillingly would you be interested?

3. If we could do all that with a very minimal change to your lifestyle would you be interested?

The answer to the three questions above, YES! of course you would be interested!

Let me show you how we can make one simple change that will increase your Accumulated Money and decrease your Transferred money.

Example:  Romeo and Juliet buy a house worth $560,000, they put 10% down as a down payment. When they sign the papers at the bank they are told they must buy Mortgage Insurance and Critical Illness Insurance as security on their mortgage.


House $560,000

Mortgage $2.9% @ Bank X

Down payment $56,000

Monthly Mortgage Payment: $2,359

Insurance needs: $504,000 each for Life Insurance, and $250,000 each for Critical Illness coverage.

Life insurance  $504,000  = $112.00/month

Critical Illness $250,000  = $295.00/month

Total Monthly payment increased to $2,766/month.

If Romeo and Juliet had bought the same Life Insurance and Critical Illness coverage from an independent Financial Advisor, which will be underwritten at the time of sale and would also be fully portable.

Their monthly premium would be as follows…

Life Insurance $504,000  = $52/month

Critical Illness $250,000 = $201/month

Therefore, they would have saved $154/month or $1,848/year of unwillingly spent money which they could put towards their own Accumulated money.

Coincidently if they put that Transferred money back into their Accumulated money  and it earns them 5% per annum compounded over the next 25 years. Which is the length of their amortization on the mortgage they would have an extra $100,000 saved in their accumulated fund.

This is only one of the many ways to stop spending money unknowingly or unwillingly.

Contact me @ Henley Financial and Wealth Management  to learn more about how to increase your Accumulated money and your Lifestyle money, while decreasing your Transferred Money which you are doing so unknowingly or unwillingly.

You may also contact us at the following  Info@henleyfinancial.ca





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