Get started on your Estate Planning

Get started on your Estate Planning

 

By Henley Financial and Wealth Management

As we journey through the various stages of life, we spend considerable time building relationships and accumulating assets. Passing on a legacy to family and friends and avoiding unnecessary taxes and administrative delays takes good planning. Your estate plan is as individual as you are, and taking the time to complete your arrangements now will give you control over how you provide for those closest to you.

We would like to send you a free booklet on Estate Planning including a step by step checklist.  Please contact us at info@henleyfinancial.ca for your copy.

Estate planning

Estate planning is about life – in the present and in the future. Most importantly, estate planning is about the life of your family and loved ones – and the peace of mind you get from helping to preserve their financial security. By its very nature, estate planning is a difficult subject to discuss – even more so to plan for because it forces us to come to terms with our own mortality. Yet it’s something you need to talk about openly with your loved ones today because you can’t do so after you’re gone – or after they’re gone.

Each person will approach estate planning differently, with personal motivations and expectations. No estate plan will be exactly like another. Estate planning should be reflection of your personal priorities and choices.

Estate planning is generally guided by three rational motivations

  1. Provide adequately for family members and/or other loved ones
  2. Ensure that your estate is distributed in the timeliest manner possible after your death
  3. Minimize taxes – during your lifetime and, equally important, for the beneficiaries of your estate

…and three emotional motivations

  1. Gain comfort from knowing your loved ones are well looked after
  2. Feel secure knowing that settling your affairs will not add more stress to those grieving for you
  3. Rest assured that your estate will be distributed the way you wish

Why you need an estate plan and the Benefits of estate planning

  • Distributes your assets as you intended; provides funds to cover funeral expenses, as well as immediate and/or long-term family living costs
  • Keeps more of your money in the hands of your heirs
  • Minimizes income tax and probate fees (no probate fees in Quebec); designates charitable gifts; declares your personal care preferences, including terminal medical treatment and organ donation intentions
  • Provides for the tax advantages of income splitting
  • Ensures business continuity for business owners
  • Identifies the people chosen to carry out your last wishes and care for your children

Taking action now 

Too often, advisors and estate planning professionals hear, “I wish I’d known about this sooner” from distressed family members. Whatever your status – male, female, married, widowed, divorced, single, young, old, middle class or wealthy – everyone can benefit from estate planning. Unfortunately, too few people follow this advice. Planning your estate and communicating your wishes as appropriate can protect your estate and, as importantly, allow your heirs the opportunity to prepare themselves for their changed circumstances. The “do nothing” option is not in the best interests of your family, your business or other relationships. As the world we live in becomes increasingly characterized by legal action and government intervention, estate planning is something everyone should do.

Creating your estate plan – step by step 

Step 1: Consult and retain appropriate professionals. The complexity of your situation will determine the assistance you will require from professionals to create your estate plan. Your team should include an advisor, lawyer and tax planner

Step 2: Draw up a household balance sheet. A household balance sheet is a summary of your financial situation that ultimately determines your overall net worth. Your net worth is the value of your assets (what you own) minus your liabilities (what you owe). If you don’t already have one, work with your advisor to develop your household balance sheet.

Step 3: Understand your life insurance needs. It’s important to work with your advisor or insurance expert to match your long-term financial objectives with your insurance needs.

Step 4: Draw up your Will.

Contact us at Henley Financial and Wealth Management  if you would like us to provide you with a Will Kit.

Step 5: Establish power of attorney for property. At some point in the future you may be unable to make your own financial or personal care decisions. But you can prearrange for someone to make these decisions according to your wishes by having a lawyer draft a separate power of attorney for property and personal care.

Step 6: Establish power of personal care. Medical and lifestyle decisions must often be made quickly when someone is seriously ill; hence, one or more family members are often granted this power of attorney to make decisions for you.

Step 7: Minimize taxes and administration fees. Your estate may encounter certain obligations for income tax and probate taxes on your death, which may reduce the proceeds intended for the beneficiaries of your estate. If any part of your estate must go through probate to validate the Will before transferring ownership of assets, the entire estate value may be subject to probate taxes.

Step 8: Keep track of accounts and important information. One of the most difficult roles for an executor and family members is gathering the information required to settle the estate. Eliminate this concern by centralizing all household information from birth certificates, passports and other legal documents, to bank accounts and insurance policy numbers, to phone company and hydro account details. Once you have documented your important information, store a copy in a safe place and let someone close to you know where it is.

Step 9: Let someone know.  After you have gone through all the steps of developing an estate plan, the final piece of the puzzle is communication. It’s really important to communicate your plans to a family member or close friend whom you can trust, and who is capable of working with your advisor to execute your estate plan. There’s nothing more disturbing than for someone to have to deal with incomplete information or requests. As such, not only is it important to share your plans with someone, but it can also be very helpful to document your plans to help eliminate any potential misunderstandings. As difficult as it may be, making sure that those affected by your plans know what is expected of them and where critical information is kept is essential to the smooth execution of your estate plan.

Step 10: Review and update regularly. Review and, if necessary, update all information at least once a year. By updating your estate plan, you’ll get a snap shot of where you are on an annual basis.

 

 

 

 

 

 

 

 

 

Why should I buy life insurance?

Why should I buy life insurance?

If this is a question you have been asking consider the following:

Life insurance can offer peace of mind, creating a payout that would cover your debts and or your family members financially in the event of you should die.

Would my death create a financial crisis for anyone?

Life insurance is an important consideration for anyone concerned about how their death might financially impact loved ones. Once you have a significant other, you should have life insurance coverage in place. If you have significant financial obligations such as a mortgage, car loan, and credit debt. Your surviving dependant can use life insurance to ensure that the debt is covered.

Parents benefit greatly from having life insurance so that if they die while their children are still dependents, the children are left with funds to live off, pay off debts, and post-secondary education financial needs. Life insurance can be used to ensure that all debt is covered and a post-secondary education can still be obtained without financial burden placed on your children.

The amount of coverage that is needed is determined by using either a Present Needs, or Future Needs process.

What does Present Needs mean?

The present needs process is a way of determining the appropriate amount of life insurance coverage an individual should purchase. This approach is based on the creation of a budget of expenses that will be incurred upon death, including funeral expenses, estate settlement costs, and replacement of a portion of future income to sustain the spouse or dependants.

What does Future Needs mean?

The future needs process contrasts with the present needs as the future needs process calculates the amount of life insurance a family will need. Based on the financial loss the family would incur if the insured person were to pass away today. The future needs usually take into account factors such as the insured individual’s age, gender, planned retirement age, occupation, annual wage, and employment benefits, as well as the personal and financial information of the spouse and any dependent children.

When calculating any expenses, it is best to overestimate all needs a little. For instance, consider any outstanding debts and obligations that should be covered, such as a mortgage or car payments. Also recognize that the need for income replacement may gradually decline as children living at home move away.

What is Term Insurance?

Term insurance is pure insurance protection that pays a predetermined sum if the insured dies during a specified period of time. On the death of the insured person, term insurance pays the face value of the policy to the named beneficiary. All premiums paid are used to cover the cost of insurance protection.

The term may be 10, or 20 years. But unless it’s renewed, the insurance coverage ends when the term of the policy expires. Since this is temporary insurance coverage, it is the least expensive type to acquire.

Here are the main characteristics of term insurance:

  • Temporary insurance protection
  • Low cost
  • No cash value
  • Usually renewable
  • Sometimes convertible to permanent life insurance

 

Term insurance pays a set amount if the insured passes away during a specific time period, and is considered to be “temporary” insurance, while permanent life insurance guarantees insurance for life, provided the premiums continue to be paid on time.

What is Permanent Life Insurance?

Permanent life insurance provides life time insurance protection (does not expire). Most permanent policies offer a savings or investment component combined with the insurance coverage. This component, in turn, causes premiums to be higher than those of term insurance. This savings portion of the policy allows the policy owner to build cash value within the policy which can be borrowed or distributed at some time in the future.

Here are the main characteristics of permanent life insurance:

  • Permanent insurance protection
  • More expensive to own
  • Builds cash value
  • Loans are permitted against the policy
  • Favorable tax treatment of policy earnings
  • Level premiums

The two most common are whole life and universal life. Whole life insurance provides lifetime protection—for which you pay a predetermined premium. Cash values usually have a minimum guaranteed rate of interest, the death benefit continues to grow allowing the cash value within the policy to grow tax exempt in the future.

Universal life insurance separates the investment and the death benefit portions. The investment choices available usually include some type of equity investments, which may make your cash value accumulate quicker but at the same time you are now more vulnerable against the markets in which you invest (because as the market fluctuate the value of cash fluctuates which is volatile risk). Over time, you can usually change your premiums and death benefits to suit your current budget.

Age, health, and whether or not the person seeking life insurance smokes all factor into the price of a policy.

 

 

 

 

 

Market volatility does not mean the sky is falling

Market volatility does not mean the sky is falling

Rudyard Kipling’s famous poem “If” starts with “If you can keep your head when all about you are losing theirs…” That is good advice for all of us, but especially investors.

The Covid19 pandemic has mixed health concerns with financial concerns. Unprecedented market drops, continued volatility, stimulus packages, layoffs and the fear of recession or depression is weighing on most people’s minds. The human and health toll is substantial and not one that anyone can, or should, dismiss lightly.

From an investment perspective, redemption activity is picking up pace and will likely continue. Globally, equity funds saw record outflows of $43 billion in the first 2 weeks of March 2020, according to the Financial Times. Flight from equities is typical in these situations. However, investors fleeing investment-grade corporate debt and sovereign bond funds underscores the fear-inducing sell-off in the market. According to market data provided by EPFR Global, mutual funds and ETFs that invest in bonds had $109 billion in outflows for the week ending Wednesday, March 18th. This rush towards cash has exacerbated already volatile markets – and there is no indication that this will change any time soon.

 

When Q1 statements arrive at investor homes in a few weeks, there will be a rush by many to redeem some or all of their investments. Before investors decide to do so, they should keep a few things in mind:

  1. The sky is not falling: investment legend Peter Lynch once observed that most investors sit in excess cash or redeem investments because they fear a doomsday scenario. Lynch argued that the end of the world has been predicted for thousands of years and that the sun has still risen every morning. He also argued that in a doomsday scenario, people will be focused on food and shelter. So, whether you hold stocks or cash is not likely to matter. His advice? Act like the sun will rise tomorrow and invest accordingly.
  2. People will still buy stuff: when we get to the other side of the Covid19 crisis – and we will – people will still need food, clothing, shelter, services, etc. As Warren Buffett said in 2012, “Our country’s businesses will continue to efficiently deliver goods and services wanted by our citizens.” He also said “In the future, the U.S. population will move more goods, consume more food, and require more living space than it does now. People will forever exchange what they produce for what others produce.” So, businesses will continue to exist, continue to produce, continue to employ, and continue to reward investors.
  3. Market corrections are natural: in Europe and North America, prescribed burning has been used for over a hundred years to rid a forest of dead leaves, tree limbs, and other debris. This can help prevent a much more destructive wildfire. It also enables the hardier trees to receive more nutrients, water, and sunlight so that they may thrive. Joseph Schumpeter, the Austrian economist, coined the term “creative destruction” whereby more nimble, innovative practices displace more complacent ones. After the longest bull market in history, there was bound to be a market correction – of course, it is deeper and faster than anyone anticipated. A dispassionate investor would view the current economic turmoil as shaking out some of the less nimble public companies, reducing over-valuations and directing capital and resources to the best-positioned businesses.
  4. Don’t try and time the market: even the most successful professional investors don’t believe in their ability to time the market. Peter Lynch said “When stocks are attractive, you buy them. Sure, they can go lower. I’ve bought stocks at $12 that went to $2, but then they later went to $30. You just don’t know when you can find the bottom.”
  5. Don’t forget your long-term goals: most stock market investors originally invested with a time horizon of 5, 10 or more years. Most would have known that stock markets can and will correct, and sometimes violently, and so they should have invested only those monies that they did not need in the short-term. When the rebound comes, it will come quickly and those who are out of the market, and miss it, will have to dramatically revise their long-term goals.

Yes, the Covid19 crisis is a new crisis – but Canadians, the Canadian economy and Canadian portfolios have experienced and survived world wars, depressions, and pandemics before. There is little reason to believe that this time will be any different. Investors would do well to keep that in mind.

The uncertainty of self isolation… leads to dealing with uncertainty!

The uncertainty of self isolation… leads to dealing with uncertainty!

The most unsettling thing about this time in our lives is not the prospect of self-isolation or social distancing. We seem to be fine with doing what we have to do to win this race for humanity. I’m sure people are happy to wash their hands a skill that was honed in youth ingrained by our parents who knew there would be a time in life we would need this basic skill set in life to survive.

What’s unsettling about this whole crisis, is not knowing when this will end or the uncertainty of time. It would seem many are fine with an infinite time line because that’s how it has to be.

Normally we would just to trust in the experts. Although in this case every day you can read an expert’s article that is opposite of what was published yesterday because this is an unknown.

We have absolutely no way of telling which experts are right. Many have provided different information because there are so many theories or timelines regarding this virus. Because of this our testing protocol may be different by region, province and even countries. The reporting remains a mystery as to or even if it has been reported correctly. We can have no opinion on this because this has been decided for us. There are conflicting numbers, results and treatments. There is also a lack of trust in some that are giving the orders. That in itself, for us, is deeply unnerving. We have always had an opinion regarding politics, sports, music, restaurants, and just about everything in life as this is our freedom. How do we know who’s right and who’s wrong, that’s the part that feels not just weird, but unsettling? The freedom to think for ourselves seems to have been put on hold at least for now. This comfort has abruptly been taken away as we struggle to find factual ways to inform ourselves.

That aside only thing I am sure about: Is that many can work from home and they will be fine, this will become the new normal.  The front-line workers who are there to provide for those in need will be exhausted when this is over.  Unfortunately, they will have to carry on providing this essential service to many that are and have been sick but not from Covid-19. There will be no break for them this will not end with a month or two of self-isolation or so we hope.  Deemed essential businesses will continue to forge ahead… But those owners and employees who cannot work because of circumstances beyond their control are the ones we should worry about.  There is no prospect or timeline to return to work. How will they survive this economic downturn and be able to carry on business as usual? It’s easy to say stay home flatten the curve, but even if these businesses made rent or the mortgage payment this month. What happens next month or the month after?  We as a society cannot flood the market after business returns to normal as most will have their own financial issues to sort through. With no timeline in site the future of these businesses looks dim and jobs will be lost creating a secondary strain moving forward. Unfortunately, for every action taken there will be a consequence and that is the unsettling part.

Keep calm, but don’t carry on

The Spanish flu of 1918-20 – which infected a third of the global population, and, if estimates are correct, killed more people than the two world wars combined. It was of course a different disease, and a different time. But there are many lessons to draw from what happened. For example: “Keep calm and carry on” isn’t always good advice. Hence the reason we have stopped life as we know it. Now we understand panic is dangerous and on the other hand, complacency is also dangerous.

The fear for us right now is not knowing when the end is in sight. We realize there will be an end because we are taking the right steps to ensure the outcome trying to save lives and stop this virus in its tracks.  The uncertainty is more of a time line… Will it be 20 more days, 30 days, 60 days or 90 days? Because all of these time lines have different consequences to each and every individual moving forward regardless of his and her circumstances.  What would your economic situation look like if this continued till June? Some have the means to survive till then others do not.

What choices do we have? We have lost that freedom for now, at least some of us have because we abide by the rules. We know that this will end, but will we change moving forward or chase the dream again… Only time will tell.

I guess the one good thing to come out of this is the return of the family unit as the core of our existence. We have returned again to our roots ingrained by our parents – family first! Something we may as a society been too busy for in the past or took for granted.  Let’s hope that we don’t turn our backs on the family unit again. On the other hand, some children have been expelled from homeschooling already so yes, an adjustment period is required. The future is in our hands (literally… wash our hands!) we have a choice it would be unsettling to know that we have come this far to not win!

I guess the ending is simple we must stay the course even though we have no defined time line in sight. As unsettling as this may be to some, we must Stay Calm Relax and this too shall pass.

Writing this just seemed to make things more acceptable because like many I’m sure, I have not trained for a race of this distance. The finish line seems too far to complete but I shall not let the team down and will find a way to finish.

 

How to look through the panic of our markets.

How to look through the panic of our markets.

By Winston L. Cook, President Henley Financial and Wealth Management

March 23, 2020

As you know, stock markets around the world have experienced unprecedented volatility, primarily because of the COVID-19 pandemic, PANIC, and what we may learn in the future “market manipulation”. In these crazy times, we thought it might be helpful to offer some information and insights in an effort to address the implications it has on your investments.

Over the past couple of weeks, the value of most investments has fallen considerably. There are lots of opinions out there on why this is happening but it’s not something anyone could control or predict accurately. When it comes to investing, it’s really important to make sure our decisions are logical more than emotional so rather than trying to figure out what’s driving other people’s decisions, it’s much simpler to focus on asking what makes the best sense for you. From our perspective, there are 3 general courses of action to consider:

It’s not easy to watch your investments drop in value. For some people their instinct will be to run to safety but be careful before you move forward with this course of action for the following reasons:

  1. A lot of the damage is done already. If you trust the logic that successful investing is all about “BUY LOW, SELL HIGH” then selling low after a big drop of 20%, 30%, or more doesn’t make logical sense.
  2. You could miss out when the market starts to go back up. If you move all of your money into a ‘safer’ place, you will miss the opportunity to recover in a low-interest environment. In the past, we have seen lots of people miss the opportunity with no chance to participate in the recovery.
  3. Successful market timing is really difficult. We’ve always said the decision to sell at the top is extremely difficult to time. The decision to buy back in at the bottom is also extremely difficult to time. The ability to time both the sell decision and the buy decision properly is near impossible. You may instinctively want to move to safety for a period of time but the next challenge is to decide when to get back in.

Remember that you only make or lose money at the point where you sell your investments. If the market drop is causing you stress and stopping you from sleeping at night then it might make sense to cut your losses and either shift to something less aggressive or get out of the markets altogether. However, before you make the decision to sell, you might want to consider the next strategy.

Could this be the buying opportunity of a lifetime?

Although this strategy is not for the faint of heart, some will look at the downturn in the markets as an opportunity to buy. We want to be clear that we’re not trying to downplay the significance of the COVID-19 virus or minimize the experience that people are currently dealing with but, when you look back at other major downturns in the stock markets (in 2008 for example) you can see how events like these could create opportunity from an investment perspective.

For those of you who’ve been in one of our information sessions, you’ll have heard us say that times like these are when investments go on sale. If big-screen TVs go on sale 20% to 50% off, people line up for hours to get a chance at getting those deals.

In hindsight, many of us would agree that buying more investments in 2008 after the world financial crisis caused markets to go down 50% would have been a great thing. Similarly, buying more investments back in 2001 after the tech bust would have paid off down the road. While our industry likes to remind us that “past performance is never an indicator of future performance”, years from now, we suspect many of us will look back and see that this recent downturn in 2020 was the best investment opportunity in our present day lifetime.

If you have a group rrsp or pension plan through work, the good news is contributions continue to happen every month. This is known as Dollar Cost Averaging and, over time, it tends to create higher investment returns than if you were to make just one contribution per year. This is because making multiple investment purchases over the year helps you buy more when the markets are low. Right now, with every new contribution you make, you’re essentially getting a far better bang for your buck than you were in February simply because lower investment values mean you can buy more investment units with each contribution.

Here are a few market statistics to think about:

      • Markets typically rebound within 12 months after big drops.
      • Markets have gone down 20 of the past 80 years. In 18 of those 20 years, the markets rebounded with positive returns in the following calendar year.
      • The average return that followed a negative year was 14.6%, We know it can be tough to invest more (or more aggressively) when the markets are falling so, if you’re not so panicked that you need to sell but still nervous of investing more, there’s one more strategy to consider.

Stay the course…

Most of the financial industry will preach the buy and hold strategy. There are many reasons why but most people will believe that markets will eventually recover. The key word here is ‘eventually’. Often the reason that people are fearful is that we just don’t know how long the recovery will take. While it’s easy to let doom and gloom take over our decision-making process, it’s important to take a logical rather than an emotional approach to decision making.  So, let’s look at some additional realities of the stock market:

      • Markets go up more often than they go down. Over the past 90 years, markets have gone up 74% of the time and down 26% of the time.
      • Markets have lost more than 20% only 4.5% of the time.
      • Markets rarely experience back to back negative years. It’s only happened twice in the past 75 years the bottom line is that markets go up and down. As much as we hope markets will stay positive all the time, the risk of a correction is always there.

Every correction or bear market is a test of patience.  It’s not easy but a necessary reality of the markets.  From the beginning of time the stock markets have steadily increased and will continue to do so in the future, there will always be a down turn, correction or crisis to recover from along the way. What you must understand is that this unprecedented sell off has been created more by panic and fear than smart economic metrics.

We realize that the position of many is not being able to invest more at this time and that is understandable given the circumstance surrounding our present situation. Having faith in the future of our world, it’s population and our inevitable economic return is what we all want. We will survive this and we will return stronger than ever as a population because it’s human nature to survive and conquer the elements placed before us.

Please be well and stay the course we will get through this together.

Welcome to Mortgage Insurance – Protect yourself not the lender!

Welcome to Mortgage Insurance – Protect yourself not the lender!

Your home is one of the most important purchases you’ll make and protecting it is crucial. Mortgage protection plans offered by your lender are policies that insure your mortgage against the death of the title holder and pays the outstanding balance to the lender to cover the lenders potential loss. When you need protection and security after a death, the lender seem more concerned about their bottom line than your families well-being.

The problem with the lenders (bank, credit union) plans is that you, the homeowner, do not own the actual Insurance Policy. Mortgage insurance from your lender is held by the lender and only paid out to lender, and not to your family, which leaves loved ones with little to no income replacement and no financial security.

An Individual Life Insurance Policy can be up to 40% less than the lenders offerings (depending on age and health) because the lender are the go between to the insurance company. The increased cost is added to the price of the insurance to cover the non licensed brokers fees. So not only is it costly to insure through the lender the actual coverage is not benefiting those who matter most. Individual mortgage insurance keeps your home in your family’s hands and protects the families interests, because your family deserves Financial Security upon death – not your lender. For a comparison of Individual plans versus lender plans and understanding the value of individual mortgage insurance policies versus your lender’s policies, means looking at what each policy can offer you. Please see the table below to see why a lender’s mortgage insurance plan doesn’t offer the freedom and security of insuring yourself individually.

Contact Henley Financial & Wealth Management if you have any questions or need help insuring your home for your families financial security. We are happy to help save you money while creating a positive financial future.

If you are in need of a mortgage please contact  Bayfield Mortgage Professionals a trusted professional and mortgage broker.

Individual Plans Versus Your Lender

 Questions? Individual Insurance Policies Mortgage Loan Insurance from your Lender
Do I own my insurance policy? Yes No, The owner is your lender.
Who can be the beneficiary of the policy? Anyone you choose. Only the lender can receive the benefits from the policy.
When does coverage end? It depends on the term that YOU choose. Coverage ends when the mortgage is paid.
Do I have the same coverage for the life of the policy? Your coverage stays the same throughout the term of the policy. The coverage decreases relative to the value of the remaining loan.
What can your coverage be used for? Any purpose. The benefits are paid as a sum to your beneficiary to be used how they wish. The coverage may only be used to cover the balance on the loan.
Can I get lower rates if I’m a non-smoker/in excellent health? Yes. You usually pay as much as 50% less on your insurance premiums. No, premiums are determined under one rate system.
If I sell my home am I still protected? Yes. Since you are the owner of the policy. No, you will need to obtain a new policy.
Can I convert or renew my policy to change the terms or coverage? Some policies may be renewed or converted to another policy. No, you may not convert nor renew coverage. You may not transfer this coverage into a new policy.

 

 

Expect the Unexpected…

Expect the Unexpected…

If I told you to do what you love and love what you do and spend 99.9% of your time doing so you would understand that statement as it applies to your life. Some would call it the simple life. But I recommend that you commit 0.1% of your time to plan for the unexpected, especially as you move towards some big milestones like marriage, home ownership and kids. That is when term life insurance, a type of policy that covers you for a specific length of time, can really make sense.

Don’t hesitate to call or email us for your best options when thinking about your family’s financial security.

Henley Financial & Wealth Manangement  

 

Newlyweds with debt

You are marring the person of your dreams the person that you want to share your future with. But does your future include a term life insurance policy. Here is one reason why you might want to consider buying it now:

Debt.

Insurance is designed to protect you from unknown at death. Many young people start their marriages with a significant amount of debt. It could be a disastrous if only one spouse remained to cover the payments. Say you want to cover $100,000 in debt. You can get a term life insurance policy to cover it for pennies on dollar a year, which is most likely less than you spend on coffee for the year.

Another scenario where term life insurance makes sense is when there is a big disparity in income. Insuring the difference means that if the higher income person dies, the lower income person can support their current cost of living while they rebuild his or her life.

For a newly wed couple Life insurance is something you should have. Hopefully you never need to use the benefit. You can feel good knowing that if something catastrophic was to happen your spouse is covered.

Buying your first home together

There’s “married” living the dream travelling doing what you want when you want, with no obligations. And then there’s “married with a mortgage,more debt and kids.” It’s an exciting step, a new home a place you call your own. But it also presents new risk. If one of you were to die, how would the surviving spouse manage the mortgage payments? This is when and why you buy a mortgage insurance at the bank (or they tell you that you have to purchase insurance through them). The better option is to buy a term life policy from your advisor or an insurance company, for a few reasons.

First, Term life is less expensive than mortgage insurance. Second, The payout on death benefit with term life doesn’t change, but on mortgage insurance it declines as you pay down the principal. Third, Mortgage life insurance has no flexibility meaning there is a face value policy limit and it isn’t transferable, so the policy will be cancelled if you move or become terminally ill before your mortgage is renewed.

Getting married and starting a family

There are a few things you are going to need if you’re expecting a baby. A completed baby room with the right crib, dresser, and a car seat plus all the other must haves. Oh yes you will have all the latest things needed to insure that your child is well looked after. I know this might sound morbid but at the same time you’re anticipating a new life beginning, and this is important. If you die, you want to make sure that your dependents are covered. Term life is a good short-term solution for a new family. The question is, how much do you need? The payout should cover your mortgage and replace a loss of income. How much you will need depends on the conversation you and your financial advisor have when you discuss this section of your family’s financial security.

 

The past does not predict the future…

The past does not predict the future…

After the last debate for the presidency of the United States of America, it’s hard to imagine that these are the best two candidates to lead a world power for at least the next four years. You would think with all the people in the political ring you would have someone who cares about our future generations and not about what happened 20 years ago and how that makes you unfit to lead. If having a skeleton in the closet means you will be called out when you run for office. Then you would never have a leader in the free world as we have all done something that would consider us unfit to lead a country.

Henley Financial and Wealth Management brings you this article with consideration of what might happen moving forward.

Predicting what will happen in the stock market is hard. Nope, scratch that. It’s pretty much impossible. But in light of the looming November vote, I took a look at what happened in the markets over the past few decades in relation to US presidential elections. However, before I get to that, I would like to emphasize that when it comes to markets, the past does not predict the future. And so I am not making any predictions here about what will happen on  November 9, 2016, the morning after.

What happens in the markets during the lame duck session between an election and the inauguration of the new president? The performance of the stock market between Election Day and Inauguration Day might be taken, in part, as a statement of investor confidence — or lack thereof — in the incoming administration.

The line of thinking is that Republicans are better for the markets because they tend to push for more pro-business policies, such as lower taxes and less regulation. However, the stock market has historically performed better under Democratic presidents. American presidents since 1945 show the average annual gain under the blues (Democrats) was 9.7%, while under the reds (Republicans)  was 6.7%.

The only two presidents who saw negative market returns during their tenure were Republicans: Richard Nixon, who was in office during the Arab oil embargo, and George W. Bush, who closed out his second term as the Financial Meltdown in 2008.

Taking it a step further, both poor and good stock performance in the year before or after an election had less to do with the president’s party and more to do with what was going on in the actual economy.

As for Obama, he took office the year after stocks lost nearly 40%. And notably, days before stocks touched their lowest in March of 2009, the president stated, “What you’re now seeing is profit and earnings ratios are starting to get to the point where buying stocks is a potentially good deal if you’ve got a long-term perspective”. Stocks are up by about 209% since he said that. Is it because Obama was a great president and his policies changed the world?

No the strong performance of the market from 2009, was not due to the election of President Obama and retention of a Democrat-controlled Congress in 2008. It resulted instead from a recovery in the economy after the Great Financial Crisis.

So what does this mean for November 8?

The result of that election is unlikely to have a major bearing on the performance of the US stock market.

The markets don’t like uncertainty, as the market sees it, Hillary Clinton is a known player whose policies are expected to be largely a continuation of the current administration.

Trump and his economic positions, however, are less predictable and do not always follow the party, he is for tax cuts and deregulation, but against free trade. Thus, he is perceived as more of a political risk in the market.

That sort of emotional response to a political shock is actually quite typical of investor and, more broadly, human behavior. Unexpected and potentially destabilizing political events tend to make traders and investors nervous, which then sometimes leads to volatility in financial markets. But as history has shown time and time again, these events generally do not have a sustained impact on markets.

Yes, investor sentiment in the immediate aftermath of the election can affect the market. And, yes, presidential policies affect the economy, which then, in turn, can affect the markets.

However, there are a bunch of other factors not wholly connected to presidential policies — such as oil-price shocks, productivity shocks, and things like China’s devaluation of its currency — that all influence what happens with the stock market. In any case, perhaps the most telling historical debate with respect to the relationship between presidents and the stock market (or lack thereof) is the following. Stocks saw their best gains under Republican Gerald Ford — but he wasn’t elected president, and he wasn’t even the original vice president on Richard Nixon’s ticket in 1972.

So whoever wins this circus act called the US presidential election of 2016, the markets will continue to perform based on solid economic performance until that performance is upended by a real economic event.

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

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