What is a safe risk?... What
is too much risk?
Pay off your highest interest rate debts first -
The interest on these charge cards and loans is ever growing and
may have rates of 18% or greater. You pay your bills with after
tax dollars, therefore you may need a constant 30% return in other
investments to equal the amount you pay in after tax dollars at
There are risks associated with every type of investment. With
effective planning, we can properly assess these risks and find
the most suitable investments to meet your needs. A holistic financial
planning approach, will outline your goals and help determine
how much money is needed for each part of your foundation. Some
of these goals may include: Mortgage, Education, Retirement, Estate
Planning, Emergency Funds, Business etc. A solid financial plan
will also address time horizons and personal risk tolerances.
The plan combines many factors and considers many variables (interest
rates, inflation, taxation, etc).
||A proper financial plan will make conservative assumptions
to help determine the minimum acceptable rate of return necessary
to effectively reach your goals.
here to view and print out your financial planning checklist.
Investors tend to make the mistake of simply picking an investment
that looks good. Successful investors pick investments that look
good and fit their financial plan. Tax-advantaged/deferred investing,
balanced portfolios, value and growth investing, dollar cost averaging,
laddering of bonds, capital gains strategies etc. are all individually
designed to minimize downside risk. We look at management fees,
loads, fund managers and investment styles.
For us, high risk in not defined as investing all in one hot
stock tip. Rather high risk is defined as investing everything
in blue chip equities, while low risk investments are Bonds, GIC's
and instruments that produce a fixed income stream.
Money locked into a GIC is at risk of earning a much lower interest
rate, when re-invested
(Ask anyone who is on a fixed income these days!). The risk of
interest rate hikes, losses in the stock market or other ventures,
not having liquidity when you need it most(i.e. Property), establishes
the importance of the individual financial planning process.
We work hard to define long term plans that suit your investment
style and philosophy. By minimizing downside risk, you reduce
the possibility of your plan going severely off track. This strategy
should make you less susceptible to market fluctuations.
After all, It's not how much money you make...rather, how much
you get to keep at the end of the day.