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  • Category: Wealth & Happiness

    Talking turkey about money and values

    For many families, the Thanksgiving holiday is a wonderful time for creating and cultivating traditions. Stories are told – and retold (as I’m often accused), memories are created and, intentionally or unintentionally, a set of values gets handed down like the family silverware.

    Part of our job as wealth managers is to help families make conscious choices that will shape their relationship with money over multi-generations. The arrival of Thanksgiving weekend inspired us to revisit a whitepaper we had written in 2012 with input from Dr. Julie A. Morton, of Conscious Legacy Coaching, entitled: Net worth. Self worth. What values will you pass on? A practical guide to conscious choices that will shape your family’s relationship with money. Click this link to download the booklet or watch the video.

    Something to talk about over turkey dinner?

    The top 10 things our children should know about money

    Many of my clients have adult children graduating from university and starting a new career. For many it’s the first time they have had to manage finances and plan for the longer term. Now is the time to establish good habits and attitudes that will last a lifetime. Here is my list of the top 10 things I advise young adults to do if they want to build a healthy and successful relationship with money:

    1. Write down your values and goals. You may draw some blanks at first, but these should be your guiding principles. Then work hard to make them happen.
    2. Earn all you can, save all you can and give what you can.
    3. Avoid credit cards until you have a full time job to pay off balances in full each month.
    4. Pay off student loans, credit cards and any other debt on which the interest is not tax deductible.
    5. Contribute to an RRSP early and often. You can’t beat the value of tax deferred compounding.
    6. If you’ve maxed out RRSPs, contribute to a TFSA and invest what you can. If you save and invest your money, you can’t spend it.
    7. If you need a car, buy a used one. It’s a depreciating asset that won’t help you build wealth.
    8. In everything you buy, buy quality, not brand.
    9. Don’t buy a house or condo until you can really afford it.
    10. Be ambitious and courageous; there is no such thing as failure; it’s just experience.


    Adult Children Returning to the Nest

    Many of our clients are justifiably concerned for the future welfare of their children. Some are torn between letting children find their own way and accepting that it is, and will likely continue to be, tougher for our kids than we had it. Finding a job, affording to buy a home, uncertainty surrounding government services, caring for an aging demographic and responsibility for an enormous debt burden for which they did not incur, are steep hurdles we did not have to overcome.

    One issue facing boomers today is adult children moving back into the family home, indefinitely. So what are some of the issues and practical steps to make sure this family reunion doesn’t turn out to be a like All in the Family (aka Archie Bunker and family)? [read more >>]

    What women want from their financial advisors

    As an independent professional woman, I’ve always bristled at the suggestion that there is somehow a difference in how I approach the management of my assets simply because of my gender.

    But having just come back from a Women Advisors’ Forum in the U.S. this week, I have to say there is a lot of research to suggest women do have different expectations than men – and these are not being very well met by the financial industry.

    [read more >>]

    Do you feel wealthy?

    “Am I wealthy?”

    It’s a question we are often asked by clients.

    Given that many of them live modest lifestyles, a lot of them don’t feel wealthy.

    A study by Fidelity Investments found that 42% of American millionaires do not feel wealthy. The investable asset level at which they said they would feel wealthy?: $7.5 million.

    Ironically, of the 58% who said they do feel wealthy, $1.75 million of investable assets was the amount at which they reported feeling wealthy.

    So who is ‘wealthy’ in Canada?

    This month’s issue of Report on Business magazine published a summary of Canada’s highest income earners: The top 1% — 246,000 Canadians – earn a minimum of $169,300 per year; the average income for this group is just over $400,000.

    The top 0.1% make an average of $1.49 million and a rarefied 0.01% of Canadians get by on $3.83 million a year.

    Still, these people are what Thomas J. Stanley, author of the Millionaire Next Door would call ‘Income Statement Affluent’; income being an imperfect predictor of net worth.

    According to Investor Economics, a research firm specializing in financial services, there are an estimated 562,000 households in Canada having more than $1 million in investable assets and 19,000 households with $10 million or more.  According to Report on Business magazine, there are 24 billionaires in Canada.

    Perhaps wealth, like age, is just a number; it’s more about how you feel.

    Do you feel wealthy? How much would you need to feel wealthy? What would happen if you decided to feel wealthy even if your actual net worth doesn’t yet meet your definition of wealthy?

    Surviving spouse, it’s okay to spend the money

    i-4f279cd55166c4a25cf589da81b705e5-shutterstock_67336159_Adjust.jpgI recently had the experience of counselling a long-time client who, despite a very secure financial position, was overcome with anxiety about money. What became clear to both of us after a lengthy and at times emotional discussion was that her anxiety was not about money at all. Rather it was about her obligations to her children, as the sole beneficiary of her late husband’s estate.

    It’s a scenario we see frequently: a surviving spouse, usually the wife (life expectancies between men and women being what they are) of a sole or principal income provider, with more than sufficient capital to sustain her lifestyle is anxious and unsettled. Through discussion, we come to understand that the uneasiness is related to guilt over spending money that is perceived to be earmarked for heirs.

    [read more >>]

    We’ve failed our kids; shame on us.

    i-f9782bd5619bb998b627da19be7e186f-cute coach purse.bmp

    The holidays were a wonderful time to spend with family and catch up on the latest news from my adult children. Unfortunately, part of this news included hearing disturbing stories of young adults either in entry level jobs or even unemployed buying things they cannot afford. One unemployed grad student has blown through a $20,000 student loan in four months. This equates to a $90,000 pre-tax income earner just living within his/her means. With due respect to high end brands, the prodigious spending of many young adults lead me to conclude many just don’t understand the value of a dollar.

    [read more >>]