While insurance provides protection for what’s important, wise investments allow you to grow your assets to finance future goals. Money management strategies can help pave the way.

Some areas that deserve careful consideration:

• Saving – for emergencies, college funding, retirement, future goals
  
• Tax Planning
  
• Succession Planning
  
• Mortgages
  
• Financial Planning for Business Owners
  
• Business Succession Planning

Investing is a lifelong process. As a rule of thumb, the sooner you start, the better off you will be. However, it’s never too late to get started.

Developing good savings habits starts with establishing an emergency fund. Secondly, you should be contributing to an investment or savings account on a regular basis. Choose how much you want to set aside from every paycheck. Pay yourself first by setting up automatic, regular deposits to these accounts. This makes the process easy

Factors Affecting Your Investment Decisions

No matter which financial stage you are in, you will first need to understand what your tolerance for risk is. Then determine how long you have to invest before you will need to start drawing from those accounts. Will you have enough to meet your needs?

Income or Growth

Ask yourself: “What will be my financial needs in the future? What wants and needs do I want my money to fulfill?”

Knowing your investment goals will help you decide whether you would need an income producing portfolio or a portfolio that focuses on growth.

Risk Tolerance and Time

All investment decisions involve risk. Even deciding not to invest exposes you to inflation risk and the loss of purchasing power over time.

As an investor, you will need to strike a balance between your risk tolerance, your present and future needs and expected returns.

Time and diversification can help mitigate risk.

An investor with a longer time horizon for investing will (in theory) be able to tolerate a greater amount of risk as he/she has more time to regain or recover from short term losses. Not assuming enough risk can expose you to opportunity loss, leading to lower results.

An investor with a shorter time horizon might want to implement strategies with lower levels of risk.

Diversification can be obtained in different ways, whether it be a mix of stocks and bonds, choosing different asset classes, managed Vs index funds, tangible, intangible, correlated Vs uncorrelated, guaranteed products, etc. Diversifying your investments can help you pursue your goals with less risk.

*There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.

Investing Rules of Thumb

There is no single investment strategy that’s right for everyone. Each investor is exposed to their own circumstances, lifestyle, spending habits, goals and risk tolerance. Hence, the decisions made by each investor should be tailored to suit their own needs.

However, there are basic guidelines in investing that would apply to most investors;

• Emergency Fund is a must-have. An emergency fund should be in the form of cash, low risk, and be highly liquid. Your emergency fund gives you a buffer should you need money for an emergency so you don’t need to borrow or touch your investments.
  
• Investing helps to protect your savings from inflation. If you can tolerate some level of risk, having a portion of your portfolio invested can be a good way of building your wealth.
  
• When investing consider the hierarchy of investing;
      1. Free money – max your employer’s retirement plan match
      2. Tax Free money – ROTH IRA/401(k)
      3. Tax deferred money – retirement accounts, annuities, life insurance, other
      4. Taxable investments
  
• Review your portfolio regularly. Do this at least annually to have an understanding of how your portfolio is doing, how close are you to your goals and if there are any actions you should be taking to improve your results. Sit with your advisor and see what changes might be appropriate.

Investing For Various Life Stages

There are common life stages that most investors will experience. Here are some examples:

Your first full-time job:

• Add to or start your emergency fund
  
• Add to or start a savings fund for short and medium term goals
  
• Set up a retirement fund at work or start your own IRA, and make regular monthly contributions. It doesn’t matter initially how much, getting started is the key

You get a Pay Raise:

• Increase your savings and your retirement fund contribution annually. Even a 1% annual increase can make a significant difference long term
  
• Consider diversifying your investments

Getting married:

• Figure out your new investment allocations and contributions, while taking into consideration your new combined income and expenses. Getting on the same page with your finances early on can be the key to a healthy relationship and long term success. Sit down together with your advisor and start working on your plan.
  

Saving for your first house purchase:

• Check your credit and see if it needs improvement
  
• Consider the possible cost of your new home and what you will need to close on the property

When you become a parent:

• Check the need for additional insurance. Purchase life insurance if you haven’t yet done so
  
• Increase your cash reserves – 6 months’ worth of expenses as a rule of thumb
  
• Consider starting an education fund for your child

Changing Jobs/Career:

• Your asset allocation and investment strategy should be reviewed in order to accommodate a different benefits package, new salary and/or income scenario
  
• Rollover your retirement account to your new employers plan or to your own IRA
  

As you are nearing retirement:

• Meet with your financial advisor to see if you are on track. What is your retirement income plan?
  
• Review the asset allocation in your retirement fund – You might need to focus on asset preservation and future income vs growth

At retirement:

• Review your total potential income and make reallocation to your investments if needed in order to provide you with the income you need while at the same time keeping up with inflation

Points To Keep In Mind

1. Have an emergency fund or a cash reserve
   
2. A successful investment strategy requires developing disciplined saving habits
   
3. As you go through the different life stages, review your financial needs and investment goals periodically
   
4. Understand your personal risk tolerance. Learning how to invest accordingly and sticking to an investing strategy that you are confident of should be a goal
   
5. Having a longer time horizon allows you to tide through market downturns
   
6. Investing can help to protect you from inflation. There are many investing tools that an investor can choose from
   
7. Whenever your financial situation improves, increase the amount of your regular investment contributions
   
8. Create specific investment funds or bank accounts for different goals
   
9. Review your investments regularly with your advisor

No one likes taxes. But the advice of a financial planner can help with the selection of products and services that help ease the burden.

Charitable contributions, life insurance policies and investment products purchased through products like 401(k) Retirement plans or 529 College Savings Plans can all be useful tools in an effective tax strategy. It is important to design a tax plan that fits one’s personal needs.

Choose from a variety of products and services, such as:

• Income-splitting for spouses or common-law couples.
  
• Charitable donations, which benefits important not-for-profit work and allows donors to maximize tax credits.
  
• Life insurance and annuity products that build tax-advantaged capital for retirement.
  
• Investment products that provide for tax benefits, such as those purchased through 401(k) Retirement Plans or 529 Qualified Tuition Plans.
  

Contact us today to learn more about tax-planning products and services that are specifically tailored for your needs.

Preparing for succession after death is a difficult issue to discuss, but it is also an important part of any comprehensive financial plan.

A financial planner can help individuals and their loved ones approach succession planning in a constructive manner that ensures they avoid problems and are well cared for in the event of death. The process involves two main considerations: life insurance and preparing a will and trust.

Life insurance can ease the financial burden and provide resources for loved ones in the event of death. A lump-sum payment can be used for mortgage costs or to supplement lost income, paying estate taxes, or helping successors during a difficult period. Financial resources and stability can make it easier to cope with the loss of a loved one.

A written will and trust provides a means to guide loved ones through the succession process. By naming executors and providing instructions on the distribution of an estate, surviving loved ones avoid having to guess the wishes of the deceased. Rather than state law determining how assets are to be divided—a situation that can result in lengthy and costly court proceedings—a clear, carefully considered written will provides clear instructions to successors. A properly prepared trust can protect your assets from creditors, provide for a special needs child, or ensure that your will be done for generations to come. Save loved ones the stress of dealing with financial issues by planning for succession as soon as possible.

Contact us today to discuss succession planning in more detail.

Whether buying a home or investing in real estate, mortgages present a big decision that will have an impact on your financial plan. Contact us if you are considering taking out a mortgage to discuss how to do so in a way that best fits your situation.

Business owners face unique challenges—and opportunities—in terms of financial planning. It takes hard work and careful planning to develop ideas into a successful business: protect yourself from some of the common financial pitfalls that business owners face.

Some areas of concern:

• Employee benefits
  
• Buy-sell agreements
  
• Executive Bonus plans
  
• Capitalization
  
• Succession Planning
  
• Relocation
  
• Accounting, Legal, Professional services referred to the appropriate subject experts

Employee benefits and attract and retain the right employees

Have partners? A buy-sell agreement is a must have conversation

Keep your most valuable employees with Executive Bonus Plans – also known as Golden Handcuffs

Need to expand your business, an introduction to the right business banker can help in obtaining a bank loan or line of credit to help fund office space, materials and other business investments.

What is your exit plan? A brief analysis of your business operation and your goals can uncover interesting possibilities that benefit you and your loved ones.

No matter what stage of growth your business is in, contact us today to design a tax-efficient business planning strategy.

After working hard to develop a business, it is important to also enjoy the results. Many entrepreneurs spend years of focused effort building up a business, but then fail to consider how to make the transition to retirement. A financial planner can offer expert advice in how to plan an effective business succession strategy.

For family businesses, a formal management succession strategy can help ensure a business stays in the family over generations. Depending on the level of involvement of family members, alternative bequests can help make decisions with those who do, and those who not, want to continue being involved in the family business.

Entrepreneurs can work to turn equity in the business into capital that can be used to fund retirement. Business owners can design tax-effective retirement strategies, such as using life insurance policies, paying business founders a salary, or arranging for an heir or heirs to slowly buy up ownership shares.

Life insurance is a consideration when planning business succession. If the founder is nearing the end of his or her life, a well-planned life insurance policy can help successors transition into business owners. Upon death, successors face estate taxes on business values of more than $500,000—with the tax-free amount potentially offset by any capital business losses the owner declared during his or her lifetime. Life insurance is one way that successors can cover the remaining amounts.

Smaller businesses may not need to pay estate taxes, but can still benefit from a plan that ensures an equal legacy for their successors. A financial advisor can help entrepreneurs plan an inheritance that is fairly distributed among all loved ones.

Contact us today to discuss strategies for business succession.