WHAT IS FINANCIAL SUCCESS?

WHAT IS FINANCIAL SUCCESS?

We find ourselves in a position to reset some goals that may have slipped during a year of ups and downs. 2021, is a time to think about the things that went right last year and the opportunity to change the things that did not go so well. Some things that happened were out of our control but there are always some habits and activities that can help make a difference towards improvement. In some ways you have a chance to start over and do things differently. Think about how you can hone in on your own mental health, a healthy lifestyle, personal fitness, and your personal finances. While we are not personal trainers or health councillors, we can give you some tips to help you get financially fit. Please enjoy our thoughts below.

What financial success?

In personal finance, there are too many pieces of financial planning like net worth, investment assets, income, life insurance, estate planning, tax planning, income, budgeting, and banking that make it difficult to find an easy answer to financial success.

You can invoke change in your financial success but it requires a change in habits and lifestyle!

Have you heard of the acronym KISS (of course you have but we have modified it a little to suit our needs) see below… 

  1. KNOWLEDGE – Seek out professionals that are specific to your needs that can help you with a starting point and help to design an end goal. You need a plan and someone to lead you down that path to the success you seek.
  2. INTENT – There must be a need to change from your present plan if that plan is not working.
  3. SIMPLIFY – If your plan is too complicated, you will never succeed in reaching your own financial success.
  4. SUCCESS –It’s important to understand your plan and its goal. For example, if you want to reduce your debt, you have to come up with a realistic amount you can afford on a monthly basis and a realistic time frame for completion. If you try to do too much, it will not happen. We live in a busy world and the best way to make sure things get done is to plan for success and make that a priority. 

Make some financial changes this year

Here are some practical ideas for improving your finances and tips to help you find financial success.

1. CALCULATE YOUR NET WORTH

In order to asses your future progress of wealth accumulation, you will need to know your net worth. The calculation is this simple, take all the assets you own and subtract the debts you owe. If the answer is a negative one, then the first thing you will need to do is reevaluate your lifestyle.

As simple as this sounds very few people actually take the time to calculate their net worth. We should be aware of our net worth. We live in a society where we have become okay with increased indebtedness, material things and living for now have become more important than that of our own financial future. The lesson here is not that we have to do without and stop living in the moment but we must decide what is important as our future gets closer as every day passes. Your time is now, calculating your net worth will help make the changes necessary to create a positive financial future!

2. PAYING DOWN DEBTS

Now the holiday season is over, many of us may have accumulated a little holiday debt, and especially the high-interest credit card kind of debt. There are three rules for paying down your debt. First, pay off the highest interest debt first like credit cards. Second, continue to pay off the big-ticket items like Cars, Vacations, Lines of Credit, and Third think before you spend – Maybe this should be First! Do you really need what your buying? Debt will crush your net worth.

3. LIFE INSURANCE

One area of personal finance that is often overlooked is the area of life insurance. There are three basic reasons why you need life insurance. The first is to ensure your debts like mortgages, lines of credit, and cars will be paid off if you are gone. This way if something happens to you, your loved ones will not have the burden of debt payments. The another reason for insurance is for income replacement. If you were to unexpectedly die, would your family continue to need your income? If so, put life insurance in place to create future income. This is the area most overlooked for proper insurance coverage. Finally, insurance can be used to cover expenses like funeral costs, education, emergency fund, and taxes. Make sure you have the right amount of insurance coverage in place to protect your loved ones and their future.

4. FORCED SAVINGS PLAN

RRSPs are a great way to save for the future while also decreasing the amount of tax you will pay for your previous year’s income to the government. The unfortunate part of this equation is that 85% of those that file taxes have unused RRSP room. The reason for this is, we as a society are paying way too much to service our own debt. Just imagine if you could some how remove your debt with a solid plan, but continue to pay the same money out monthly that you are presently paying to service that debt into your future instead. would that change your financial landscape in the future? RRSPs are not the only place to save money besides the immediate tax deferred benefits, you can also look at TFSA’s – Tax Free Savings Account can be either a compliment or an alternative to your RRSP savings. Pay yourself first by maximizing your RRSPs/TFSA and your net worth will increase drastically.

5. ESTATE PLANNING

The most basic aspect of an estate plan is the Will the most underrated aspect of financial planning. The Will ensures that your assets will be distributed according to your wishes. Proper Will Planning will help you to minimize taxes and ensure that you maximize the assets that can be distributed to your benefactors. Make sure you have a Will and that your Will gets updated regularly.

It’s also a great idea to review your beneficiary designations on your RRSPs, TFSAs, and Life Insurance policies periodically to make sure they are up to date with your life circumstances. Avoid future Probate payment wherever you can.

6. LIVING BENEFITS

Living benefits insurance refers to insurance that protects against the risk that may occur while you are still living. Disability insurance protects you in case you get disabled and can no longer work. Another living benefit insurance is Critical Illness. Which was designed to help if diagnosed with cancer, heart attacks, strokes, and other major illnesses. Which in today’s society are on the rise and therefore the need for critical illness insurance increases. If you do not have critical illness insurance, be sure to look into some coverage. It may not be cheap but your chances of collecting are better than you dying first.

7. BANKING

High-interest banking. There are two key benefits to high-interest banking. First, you start earning a much higher interest rate than your conventional bank account. Secondly, most high-interest bank accounts have no fees. If you are not earning interest in your bank account and have monthly fees, be sure to learn about alternatives. We lose money willingly and unknowingly – losing money willingly is defined as credit debt, mortgages, lines of credit, we know this when we sign on. Losing money unknowingly is not educating yourself about things that could make you money. A penny earned is a penny saved – our parents loved that expression.

8. EMERGENCY FUND

We all know the importance of having an emergency fund.  If anything 2020 was a wake up call regardless of having savings on hand for that rainy day.  An emergency fund is liquidity, money that is easily accessible when needed.  There is lots of debate over how much you should keep in an emergency fund – truthfully no such amount could have been put away for 2020. But how much will depend on your ability to save for that unforeseen circumstance. Something saved is better than nothing!

9. FINDING BALANCE

It sounds so basic because it is. The formula is so simple – spend less than you make. With financial institutions so readily willing to give out credit cards and lines of credit, it is so easy for all of us to spend more than we earn. The problem is that spending eventually catches up with us to the point where we have too much debt. No matter who you are and how much debt you may or may not have, budgeting is an essential part of life. Take the time to track your expenses for at least three months and you’ll have a pretty good idea of where your money is being spent.

Coming up with a financial goal is one thing but sticking with it and making it happen is another. The results of financial goals depend on the habits and routines you use daily. We are all creatures of habit. In order for your financial goal to work, you need to become diciplined in your daily routine. These saving habits need to become second nature. The reason most financial goals do not work is simply that we fail to follow a plan. In order to follow your new plan, you need to understand the process. 

Where do you start?

Keep It Simple for Success – you need to set goals and stay focused on those goals! There’s something to be said about Keeping It Simple for Success!

  1. Change your lifestyle – To be successful, you must make everlasting changes and the only way you can do that is to change your habits. If it takes 21 days to change a habit, then how long does it take to change a lifestyle. In my opinion it’s a want not a need for change to happen, you must want to change in order to create change.
  2. Do more – The best ideas in the world are the ones that are put to work. You are better to do something and fail then to do nothing at all. You have to want to do more to create the change that is necessary for your financial future.
  3.  Take ownership – It’s much easier to blame other people or circumstances, but if you hold yourself accountable, the future is yours and yours alone! Stop making excuses, stop whining, stop blaming. Focus on the things that help you stay accountable for your own financial future. 
  4. Stick with the plan –The key is to have a plan in place. Once you have the plan, then you need to keep on track until it becomes a habit. Whatever that time frame is, the bottom line is changing your habits requires continuous effort, and significant discipline.
  5. Find Support – Most things we accomplish in life, we accomplish with the help of others. If you want to get ahead financially, it often helps to have someone with knowledge in that field that supports you. Some say knowledge is power but at the end of the day, it’s up to you if you want less debt, more money, more wealth or whatever your financial goal you desire. Find an advisor that can help you put together the plan that best suits your needs.

Life is unfair on many levels… Protect yourself and your family!

Life is unfair on many levels… Protect yourself and your family!

We are often told by many people we interview, “We don’t need Insurance”, “We are healthy”, and “We live a healthy lifestyle”. “I’m not buying what you’re selling”. I respect that many of them are healthy and live healthy lifestyles, unfortunatly 100% of our population will die at some point in time.

Very often we have no reply because you can’t get someone to buy into the reason they need  protection if they don’t want it to begin with. We have a plethora of lifetime stories that explain the reason there is a need for the products we sell. Again we are met with… “Yeah, but it will not happen to me”.

What do we do?  How do we prepare someone who is invincible?

Yes, we get paid to sell a product that will ensure that your family is financialy secure. What we get paid is pennies on the dollar of what you can do for your families financial security in the future.  Yes, you may not need the products we sell at the time we ask you to purchase protection for yourself and your family, because you are indeed healthy. But should an unfortunate event happen when you are not ready or prepared for it you will have protection. The security of knowing you are covered has to be worth something moving forward.

Here is an unfortunate story of one of the healthy ones, if you told me after the 2012 Olympics this great athlete would pass away within the next four years I would have said you were crazy.

How is this possible?   She was one of the healthiest athletes in the world within her sport. It is unfortunate that I am profiling an athlete in this attempt to show that life threatening Illness does not pick and choose its partner.

Below is an excerpt of a healthy, strong, and very competitive athlete who has recently passed away at a very young age and is survived by a young family. This is a story that unfortunately helps us dipict the need for the protection we provide.

My symapthies go out to her family. Life is unfair on so many levels.

Olympic silver medallist, has died of cancer, aged 33. Tributes have flowed in from around the world, her rowing career was cut short when the mother of two was diagnosed with cervical cancer three years ago.

The three-time Olympian, began rowing while at her high school in Perth. Her talent for rowing was quickly discovered and as a 17-years-old she made the junior national team, where she went on to finish second in the junior women’s four. Two years later she made her first senior national team competing at the World Rowing Cup in the women’s four. The crew then went to the under-23 championships and won gold. She followed it up with a win in 2003 in the under-23 women’s double sculls…

…She competed again in the eight at the Beijing 2008 Olympic Games. She then took a year off from competitive rowing to have her daughter…

…In 2012 Olympic Games she won a Sliver medal in the women’s pair…

… A year later she had her second child and soon after the birth she was diagnosed with cancer. She continued to be involved in rowing, but in February 2014 she stepped away from the sport to concentrate on her health.

The world of rowing will always remember her with love and respect.

Her legacey will live on but unfortunately life can be taken from us at any time.

There is always a need to protect yourself and your family. You have the ability to make a difference, please look at the big picture when deciding your families future.

Financial Security  is what we do and do well, let us help @Henley Financial and Wealth Management. 

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

A living Benefit: Critical Illness Insurance; Do I need It?

A living Benefit: Critical Illness Insurance; Do I need It?

 

  1. Do I need it?
  2. Isn’t it expensive?
  3. Is it too complex and confusing?
  4. What about the underwriting?

Let’s examine each of these four questions.

 1. Do you actually feel no need for this product?

Research tells us 77% Canadians are concerned with lifestyle and health costs if they became critically ill.  A further 84% were concerned with the government’s ability to fund the current healthcare system.  Those concerns are not unfounded.  A survey from 2014 found that 41% of retirees retired because of personal health.

Just like life insurance, critical illness coverage is likely suitable for people under age 65 (CI coverage is often cost-prohibitive after that age).  CI coverage can help anyone whose illness would cause financial liabilities (e.g., debt, bills) for a spouse or dependent.  Often, the money is used to replace lost income when disability coverage doesn’t pay out, which can happen if the insured’s condition is not severe enough to satisfy a doctor’s opinion of someone’s inability to work for a sustained period.  CI simply pays out upon diagnosis of specific illnesses.  Also, single people who don’t see a need life insurance could benefit from CI coverage as they could use the payout to replace lost income and pay for caregiving services.

2. Is critical illness expensive?

Every person who qualifies for CI insurance should own at least enough to cover a year of lifestyle expenses (salary).  This would give most people up to a year of expense coverage to allow them to make choices that focus on recovery from illness.  A 35-year-old Female non-smoker can buy $100,000 10 – year term  for around $35 per month.

There are various ways to set up your CI policy depending on what you want out of the product.  If you want the product to cover you short term while your family is young and you are concerned about the cost, the 10-year term coverage is a good option.  There are options that allow you to keep the coverage over a longer period, and there is even an option to return all of your premiums if you do not use coverage after a specified period of time.  When looking at this coverage it can be built to fit your needs and wants with regards to cost.

Cheap and expensive are relative terms.

What impact would $100,000 of protection have on your finances?  If you had to withdraw $100,000 from your RRSP, it could cost up to $150,000  before tax, depending on your marginal tax rate.  That $150,000 could have been worth $300,000 or more at retirement, depending on time and growth rates.  Remember that $35.00 a month for 10-year Critical Illness coverage could have change that equation in your favor.

3. Is CI too complex to understand?

The product which was originally designed by a doctor in South Africa to aid patients in paying for treatment upon diagnosis of a life-altering illness.  This idea is somehow deemed to be more complex than any other insurance product on the market.  I think it’s all about understanding why you need this coverage.

Let me ask you these two questions below:

Do you know someone that is close to you that is healthy?

What if they went to the doctor because they have not been feeling well for a little while. But it’s nothing that resonates as a major illness. Remember they live a healthy life and they are healthy.

After a brief consultation with the doctor, blood work and diagnostic tests are ordered. The results come back and the doctor office calls your healthy friend to set up an appointment. During this appointment, the doctor informs them that they now have a Life-Altering Illness.

But they were healthy… how is this possible?  A critical Illness does not pick or choose!

If they don’t have Critical Illness coverage how would they fund the treatment and recovery they will require?

All of a sudden this coverage does not seem very complicated to understand.  As we know life altering Illnesses can happen to anyone and has happened too often amongst our friends and families.

4. Is critical illness insurance hard to qualify for?

Anyone who has a family history of hereditary issues will have a tougher time qualifying.  That is not to say you will not qualify, there is a rating system in place to provide coverage if you are deemed high risk.  The majority of people who apply will qualify for standard offers if they are healthy.

You need to take a holistic, risk management approach and determine all risks so that illness protection and a life insurance plan work together.

The banks are the number one writers of this coverage for their Mortgages and Lines of Credit products.  What you need to know is it always cheaper when dealing directly with an insurance company.  Put the money back in your pocket!  A good Financial Planner will help you find money you have been spending unknowingly or unwillingly. This is just one example of you spending money unknowingly – find an advisor start saving now.

As always if you have any questions regarding Living Benefits Insurance, Financial Security or Financial Planning please contact us at Henley Financial and Wealth Management.

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

Do you really need 10 reasons?

healthcare-word-cloud-21826811

We live in a world that is filled with the uncertainty of what might happen. Life Insurance protects your loved ones in the event of your death. It can provide future income to your family if you were to passaway during your prime working years, and it may also be used to pay debt, such as a mortgage, final and emergency expenses.

Life Insurance is the most selfless act a person cando for their family, as the person that is insured will never benefit from the coverage.
Before obtaining Life Insurance here are some things to consider.

1. The Best Time is now:
The cost of Critical Illness insurance policies will never decline, the costs will only ever increase. So the best time to get Critical Illness Insurance is now.

2. Receive Cash Back:
In Canada there is a Critical Illness plan that enables you to receive a portion of your premiums to be returned after a specified time frame. Which means if a client doesn’t need to make a claim and feels they won’t, they can cancel the policy and receive repayment based on the percentage of premium paid, all the while having coverage just in case

3. Purchase while you are healthy:
Critical Illness coverage can only be purchased while you are healthy. Once an illness has been diagnosed you are not eligible to purchase it.

4. Tax free lump Payment:
When a claim is made with Personal Critical Illness coverage, it pays out a lump sum, tax free to the insured. The payment is in the amount that has been agreed upon when the policy is taken.

5. One less Worry:
Personal Critical Illness allows the insured to take the time that is necessary to recover without worry as to how the day to day expenses or additional medical services not paid by the provincial health plan. There isn’t a prearranged allocation for the payment, so all of the payout goes to the insured.

6. Additional coverage:
You can purchase Critical Illness coverage on a mortgage, however, these types of plans only cover three illnesses such as cancer, heart attack and stroke. Alternatively, Personal Critical Illness policies cover these three illnesses as well as 22 others; all of which we hear about almost daily.

7. Not included in most employers plans:
In most employee benefit group plans, Critical Illness is not always offered. In the rare instance that it is indicated on a group policy, it is often not near the recommended coverage amount.

8. Best Doctors:
Personal Critical Illness coverage allows you access to Best Doctors. Best Doctors is a group of the best Doctors worldwide that are experts in specific areas of medicine. Once a claimis made, your file is put before a panel of Doctors to review and determine whether the diagnosis is correct and the course of treatment is the best for the diagnosis.

9. Coverage for children:
Critical Illness can be purchased to insure people from newborns and up to the age of 65. Some carriers allow you to insure children for up to five illnesses, where as adults can be covered forup to 25 illnesses.

10: Peace of mind:
Critical Illness policies are underwritten at the time of the application process. Meaning that we will know if the client is covered up front and not left to chance at claim time.
What’s next?

Contact us… http://www.henleyfinancial.ca
info@henleyfinancial.ca