A family office concept. All of your financial professionals organized and in one place so that you receive clear and concise direction.
Have you ever had one of those weeks where everyone is telling you to do something? You got to the mortgage broker and they tell you that you can handle that $800,000 mortgage. You go to the insurance broker and they tell you that you absolutely must have that $3m insurance policy, to protect the kids. You drop by your investment advisors office who tells you that you must up your savings by $2,500 per month and invest everything you have available today, to meet your retirement goals.
This is because all of these professionals operate in a silo, independently of each other, and without consulting with each other. This leads you having to become a decision maker based on the tidbits of information each professional provides. What if one advisor was wrong, mis explained something, or you misinterpreted the advice? You will start a chain of incorrect actions based on one broken link.
So the question is how do you avoid the BROKEN-LINK TRAP? If you were lucky you may have encountered a true financial planner that developed a financial plan for you but that plan was developed on the day and things change, in your life and in the financial services industry. So how do you keep your financial roadmap current and avoid the broken-link trap?
You employ the services of a professional who will wrangle, organize, and synthesize all the data from the different financial services professionals so that you can be fully informed, avoid the broken link trap, have supported decision making, save time, and execute the right decisions for your family.
You will save time, be more informed, have sounding board, and ultimately execute your plans. Avoid analysis by paralysis and the broken-link trap.
We’re not going to tell you.
You already know.
You know you should have insurance. You know you should save for retirement. You know you should limit credit cards. Here at Your Managers, we believe that customers don’t need to know their problems but instead need real workable solutions.
Saving for retirement is one these areas, and one many have heard about since they were fresh out of high school. “If only you started saving $xxxx then, what would life look like today?!”
Don’t feel bad, life does not work like this. While some are perfect savers, the vast majority of people face different life situations that force them to budget differently. So with a few years of work left, it’s perfectly normal to feel like you need to kick it up a notch and get a better understanding of your personal finances.
To help, we have put together a list of four things you can do to boost your retirement savings in your final working years.
1. Stop Being an Ostrich with Your Head in the Sand
It can feel a little ugly the first time you go through all your expenses: “Maybe we didn’t need to eat out three times a week”. But that’s ok! Just like ripping off a band-aid, doing a full audit of your finances is critical in getting to grips with them. You’re going to see some things you don’t like, but through that you will finally have an understanding of ways you can actually generate more income without giving up all the things you love!
Without an audit, we can be guilty of making assumptions. “If I stop buying coffee every day, I’ll have $xxxx more a month!
That may be true, but is it really realistic to give up 100% of your coffees? By doing an audit, you’ll find realistic expenses that you can reduce, and set realistic budgets. Instead of focusing on not drinking your coffees, you instead can set a $10.00/week budget for them.
2. Road Map Your Future
Things will change when you retire. Time goes up, income goes down, and CPP/EI contributions end.
What are you going to do?
This is a loaded question, but knowing the answer can help you plan ahead, and in turn know how much you need for retirement. Are you golfing every day, or planning to spend your time in the garden? Big worldwide trips, or small ones to visit grandchildren?
It’s important to note that your first few years of retirement will probably be your most active but that doesn’t mean that expenses will go down as you age. There is always the possibility of needing a little help here and there, and those expenses are just as important to plan. Understanding what you’ll need then will help you understand what you need to save now.
3. Automate Savings
What does pay yourself first mean?
No matter how painful, you gotta pay your bills right? Well, apply those same principles to your savings. Take a fixed percentage and bill yourself that amount each month. As long as you do it first, that money will gone and you’ll be forced to make adjustments to your current expenses.
This method can be used at any age, but nearing retirement you should think of increasing the amount you put away. Just remember that in a few years you will have the ultimate freedom and time to take on anything, so it’s ok to take it a little slow right now.
4. The Fire Drill
How often do those two words sneak into your brain? What ifs are strongly tied to memories and thoughts of younger years. What if I saved more? What if I took that job? What if I married that girl? What if we had moved sooner?
In retirement, the what-ifs associated with your finances tend to pack a stronger punch as they are not as easy to fix as they once were. Without a full-time job, you may feel at a loss for ways to pick up the slack, so proper planning is important.
An easy way to tackle this is to sit down and write out what your life would look like if you retired today. How long would the money last? What kind of things could you afford to do? What if you or your spouse was to get sick? Could you afford to support your adult children?
This exercise will not only help find things you’re missing but will also identify the things that matter most to you! Both will give you the motivation to put more money away for when the day finally comes.
Make It Happen.
Small tweaks over the course of 30 years can make an enormous impact on your retirement, but you have to make them happen! Hope is not a strategy, and the help of a Net Worth Manager to coach you can be invaluable. If you have any questions, or want to discuss how to start building your own plan, send us an email today.
Everyone who works in any company, anywhere in the world, is guilty of assuming they know what their customers need.
It’s not always intentional, and often comes from a good place. You work with customers every day, have been through many experiences, have received great reviews, and more.
Yet time and time again, we make the mistake of thinking that we know best, because accepting that you might be wrong is hard, and can bruise the ego.
Where are your priorities Mr. Advisor?
Financial advisors often fall into the trap of thinking they know best. They are experts, who are supported by industry-wide knowledge that allows them to funnel each customer into a box based on their income, number of kids, age, etc.
The result, is a service heavily based on discussing investments, tax, and insurance.
This is a missed opportunity, as per a study from MIT that looks into what clients actually want from their advisors.
View full study: https://live.cloud.api.aig.com/life/connext-fdm/download/100AicF6FGkgO9MMYvefTIwGZOHF-Esu0KvZFiQhEicAY7wfK5VVnCaVYzZ5cIUZERQqWozuDVX4mNBdCTguzuUY1g
85% of customers state they want to discuss goals and aspirations. 77% want to discuss job transitions, new careers, and retirement. 72% want to discuss future- proofing their financials, and 62% are looking for advice.
A Position of Trust
That feeling when someone is looking through your credit…
It takes a lot to open up about money. It’s a deeply personal thing, often protected, private, and stressful. As a financial planner or advisor, we forget just how much it took for your client to call you up and agree to spill their darkest secrets. Because honestly, they probably feel stupid for all the mistakes they think you’re going to see.
No retirement savings, awful credit, maxed credit cards, and even hidden wealth are money topics people don’t like to discuss. When you are brought into their lives, the level of trust often extends past that of a normal client relationship, and things can become personal. Advisors need to understand this fully, and serve their customers accordingly. As so many things are tied to financial health, you should be prepared to consult on any number of life events & factors.
It’s My Life
There is a book you could write on each of the following topics, but understanding them will help create a better and more productive relationship between a financial advisor and their client. Each of these are topics that an advisor can cover, should the client want to go over them:
Future Goals and Aspirations
Job Transitions/New Careers
Expenses for Future Care
Expenses for Future Family Care
Protection from Identity Theft
The MIT study went on to show that 40% of new clients viewed an advisor as a life coach, who could help guide them through topics that they just didn’t understand. Of course portfolio performance and service is critically important too, but so is the advisor’s professional network and personality.
Change is Coming
The internet is amazing. Long gone are the days where companies could hide things from unwitting consumers who had no choice but to place their trust in them. More than ever, the customer is the smartest person in the room and knows when they are being had!
This should not be a negative. Repeat. This is not a bad thing.
Instead, it opens an incredible realm of opportunities in supporting customers, which time and time again has shown to increase profits and retention. Learning how to be more to your customers than just “a financial advisor” will also increase your job satisfaction as you will get to be a part of real emotional wins. Nothing beats telling a client they can afford that trip to Disneyland.
Back in 2011, a new financial firm was created from this very concept. Focus on a client’s goals rather than their pockets, and everyone will be better off. For almost 10 years, Your Managers has based their whole model around the idea of a “Financial Life Coach” called a Net Worth Manager, who supports you in achieving your dreams.
If you are interested in learning more about financial planning, or want to find out if this model is best for you, send us an email today.
Well, the rat race of life has finally started to slow down.
It feels good to be able to come home to a place that is still clean, with no hockey practices to rush to, and a grocery bill that is under $100 for the first time ever.
As for your kids…they might not feel the same way.
Yes, it is time for retribution! Now they know how it feels to wake up at 3AM to dirty diapers. Their home will never be clean again, and exhaustion is peaking.
Ok, so in reality, we hate to see our kids struggle, and part of the journey in this period in your life is being able to guide and assist them through this whole new world.
Here, we have the top five things you can do to help your adult children achieve financial independence.
Talk About Credit
Much like the physical feelings of invincibility many of us feel in our teens, there is a certain assumption that any mistake can be fixed. As adults, we learn that one of the most challenging mistakes is poor credit, and the wish that we knew more about how to fix it.
When we first emerge into adulthood, the conversation is always on building credit. Get a car loan, use a credit card, and build your credit rating! The flipside of this whole situation is that for many people the opportunity to buy what they can’t afford is exciting. Need a couch? Finance it. Need a car? Finance it. Trip to Mexico? Definitely getting credit card points!
It doesn’t take long to dig a hole, and for many people, the answer is to hide. Of course that is the exact opposite of what you should do! The first step is to stop using your cards, and make sure to pay your minimum payment. Being smart with credit cards and financing is one thing that pays off long term.
Student Loan Debt
I’m going to college!
How are you going to pay for it?
Student Loans are a fantastic way for many Canadians to attain a college degree, and there is that warm safe feeling of getting a loan from our government and not a bank.
Unfortunately it’s still a loan, and that money will find its way back. Helping your kids understand loan repayments will help them decide how to best finance their college education. If possible, the goal should be to take the lowest amount possible, as extra money for living expenses can add up fast.
Despite university tuition averaging around $26,000 for a degree, many students walk away 30 – 50 thousand in debt, and with many entry-level jobs starting between $40,000 and $50,000, those repayments can feel draining.
Investments, Insurance, Interest, Taxes, Mortgage…..
There are an enormous number of topics when it comes to your financial life, and many of us get stuck on Google trying to learn what everything means. Give your kids a leg up early by letting them be involved in any number of financial topics that you feel comfortable sharing. Chances are in the next few years they will face their first loan, first deposit, and more.
You might schedule weekly meetings where you go over different topics. Try and help them understand why starting early is important, and what kind of risks come up over time.
Another great experience is including your children in some of the real-life financial examples that you go through. This all depends on how much you are comfortable sharing, but getting them involved in financing a car, or doing your taxes can help cement the importance of learning these things early.
This is a big one, and a sensitive topic, as many of us have been used to a variety of financial advisors and tend to hold significant opinions on which ones to use and their effectiveness. The key takeaway for your kids is understanding what they do, and how they contribute to your financial well-being.
It’s important that everyone learns about the different types of advisors, and how they get paid. There are many advisors who make a living putting your money in places that give them the best return. For example, advisors are often incentivized to put their clients’ money in actively managed mutual funds rather than into indexing.
The other key feature is how much of their financial planning is based on making you new money vs making the best of the money you currently have. Don’t forget that you need to keep living now, while you plan for the future.
Let Them Make Some Mistakes
It’s a hard thing to do. Knowing that you have gone through the same situations as your kids, but that they are determined to relive the mistakes you made. As parents, we know that our children trust us most when we trust them. Guide and teach, but never sacrifice a relationship because you disagree with a decision they are determined to make.
When they learn, and they will try to avoid the “told you so” approach, as financial mistakes tend to feel personal, and the errors obvious. It’s common to get a car loan for more than you can afford. Financing a couch often seems like a great idea (It’s 0% interest!). And it’s hard to skip on that trip that all your friends are going on. We were all young once, and from that experience we know that often the mistakes that feel the biggest are easy to fix.
The most important thing you can do is take the time to talk to your kids about money. Schools often don’t do it, and the ones that do have to deal with the teen attention span, which is usually somewhere else. Take the opportunity to spend some time with your kids, and help them get ahead.
Congratulations, and welcome to retirement. This is a critical stage in your life, an opportunity to both relax and potentially live a life void of stress for many years.
Yet often opportunity is characterized by the complete opposite, causing premature aging, and an increased risk of health conditions. One of the main culprits is poor mental health, caused by stress and anxiety.
So, let’s take all that advice we wish we could tell ourselves 40 years ago, and apply it to today.
1. Have Fun Keeping Busy
One of the main complaints that seniors have is boredom. Most people have spent their entire lives on a strict schedule, where they’ve spent 40 hours of their week at the office, and the three weeks of holidays they do get have been packed with to-do’s, and downtime.
Now unless life was truly good to you financially, you probably won’t have spent 52 weeks per year in Mexico, but that doesn’t mean you can’t feel like you’re on a lifelong holiday.
One option is to find a part time job, doing something you enjoy. An opportunity to socialize and assist others in something that you are passionate about. Most likely you have never had a job that you didn’t need, and you may find the result is something very rewarding. An alternative to a part time job is joining a board, or finding somewhere to volunteer on a regular basis.
If your family is nearby, take an active role in their lives. Go to all the grandchildren’s activities, offer to help out around your adult children’s homes, or plan family game nights or dinners. Having something active to do lets you be involved in their lives, without feeling like you are invading their space.
It is never too late to find a new hobby. You spent 40 years trying to pick up the piano but just couldn’t find the time. Well, now it’s there, and you have the freedom to practice on your own time.
The key is to keep your brain active, and moving. Change your perception of retirement from “absence of work”, to “enjoyment of work”.
2. Love That Body
One of the biggest challenges when you’re young is body image, and the hope that a quick trip to the gym can fix everything. As you age, you realize that proper diet and exercise are less about six packs, and more about health & wellness. Whether it’s a daily walk, a bike ride, or even some strength training, staying active as you age is crucial to longevity of the body.
Of course, the mind gets a huge benefit from your desire to keep moving too. Exercise gives you a feeling of accomplishment, and increases your self-esteem. It feeds your brain with a regular dose of endorphins, improving mood, and decreasing stress. The feeling of having a well-functioning body can decrease many of the anxieties that age can bring, helping encourage the feelings that you have many good years of life.
3. Make Sure Your Plans Are in Line
There are lots of unknowns about growing old, primarily based on your longevity, and your financial security during this period. Just like in your youth, making sure that all your ducks are in a row reduces your stress levels, even if getting there requires some work.
If you haven’t done it yet, make sure you and your spouse understand all aspects of your finances, expenses, and securities. If something happens that prevents one of you from taking care of these, the other needs to be in the right frame of mind to take over. The stress of dealing with a sick spouse and taking over finances can be daunting.
Go over different scenarios with your Net Worth Manager. What if we live for 40 more years instead of 20? What if the market crashes? What happens if one of our adult children needs financial help? The role of Your Managers is to help assist you in planning for these bumps in the road, so that you can be prepared without the need to panic.
Make sure you know how much you have. One of the biggest risks is either spending too fast, or not spending fast enough! During the early period of your retirement, you may still feel like you did in your 40s and 50s, with lots of energy, and good physical health. This is the best opportunity to use money for the things you enjoy. At the same time, longevity may bring extra medical needs that might require extra financial planning. Learning how to have fun in the early days, while making the money last is essential to a mentally healthy retirement.
These are some of the best years of your life! The freedom to do anything you want and on your own time. If you have any concerns approaching retirement, please don’t hesitate to reach out to a Net Worth Manager. Their sole job is making sure that you are in the best possible situation, based on your current income.
Retirement income planning is a distinct field in the financial services profession. The financial circumstances facing retirees differ dramatically from pre-retirees. For this reason, traditional wealth management approaches that focus on accumulating assets do not address a retiree’s needs.
Here are the top 7 financial challenges unique to retirees that must be taken into account when planning for this decumulation stage.
1. Reduced Earning Capacity
We may have a harder time making money. Physical or mobility changes as we age can make it tougher to do our old job. Sometimes we encounter ageism either through negative perceptions of our abilities or an employer’s desire to recruit younger, cheaper staff.
Many consider self-employment which means allowing for start-up costs.
Even if our own health is good, we may need to take time to look after a loved one or attend appointments with them. We may want more flexible hours or prefer to take a position of less responsibility with correspondingly lower pay.
Less income can be stressful in market downturns as paycheques have stopped or are less to fall back on.
2. Actual Spending Constraint
We spend our whole lives accumulating then suddenly that turns on its head and we start using what we have squirreled away. Our brain has a hard time adapting to the difference and accepting it’s ok to watch our net worth decline. Instead of enjoying the money we worked hard for we may become overly sensitive to daily expenses increasing, and one-off surprise expenses are more distressing.
We may struggle to justify treating ourselves or splurging because paycheques have stopped. There are no second chances to replace this money.
3. Heightened Investment Risk
Once we stop saving and start using our nest egg, we are vulnerable to sequence-of-returns risk. Poor returns early in retirement can throw a wrench into sustainable withdrawal plans. Market returns experienced near a retirement date matter a lot more than most people realize. Retiring at the start of a declining market is incredibly stressful. Did you know that even after positive average market returns during 30 years of investing, if negative returns are experienced in the early stages when you start spending from your portfolio, wealth can deplete rapidly through withdrawals?
While you’re still working, you can rely on your paycheck as your portfolio recovers, but this is no longer an option in retirement.
4. Unknown Longevity
The fundamental risk for retirement lies in the question: How long will your assets need to generate income? Retirement can be much shorter or longer than a person’s statistical life expectancy. Half of the population will outlive their life expectancy. A long life is wonderful but it costs more and is a bigger drain on a retiree’s resources. Imagine stretching your savings for 40 years instead of 20 years. If you haven’t planned for it, how would you feel?
5. Retirement Spending is Like a Smile and Spending Shocks
Spending isn’t the same through retirement, and I often describe it like a smile, a U Shape. More in early retirement, enjoy your time and health, then less as we slow down, and increasing as we age and need to pay for help.
Unforeseen expenses: health and long-term care, helping other family members, divorce, changing housing needs, home repairs, rising prescription costs, the list goes on and on. While contending with the other risks mentioned here, retirees must maintain financial flexibility to manage unplanned expenses. When budgeting for retirement, it is important to include a “rainy day fund” for surprises such as these.
6. Compounding Inflation
Do you recall what gas cost when you bought your first car? The price of a jug of milk or supper out when you got married? Inflation eroding purchasing power is a huge risk. While it may not be noticeable immediately, even low inflation can have a big impact over a lengthy retirement.
With a 3% average annual inflation, the purchasing power of a dollar will fall by more than half after 25 years.
Adjusting to account for inflation from year to year, CPP, OAS, and pensions are usually linked to the Consumer Price Index. Generous plans might use 80% of the CPI increase but many have a cap of 2.5%. Know what your plan provides to avoid surprises.
7. Declining Cognitive Abilities
Finally, we must consider that we may experience declining cognitive abilities, which can hamper our decision-making skills. It becomes increasingly difficult to make investment and withdrawal decisions as we enter advanced age. In addition, many couples don’t share the management of family finances. When the spouse who’s keeping track of finances dies first, the surviving spouse can run into serious problems if they do not have a clear plan in place. He/she can be vulnerable to financial predators or mistakes. Experiencing financial stress on top of losing your best friend is something we want to avoid. Build your professional network while you are still healthy.
This may all sound daunting, but the point of a retirement plan is to head off these concerns before they become a problem, so you can enjoy this next stage of life!
You’re still on a financial site, and we are still talking about finances, but as you dive into a new realm of little people, marriage, and some big purchases, it’s easy to lose that sense of control that you had in abundance just a few years ago.
The fact is that each of the following things are tied strongly to your financial wellbeing. Your ability to produce at work, your ability to save, your ability to not stress eat Pizza Hut five nights a week. It’s ok, we all have those days, but if you’re feeling like it’s consuming your life, try one of the following:
1. Scheduled “Cheat” Days
You’ve heard of food cheat days, well we want you to take life cheat days! According to one New York Post article, it takes six years for a child to enter an age where parents begin to get a break. And so, many parents do nothing but count down the days, feeling stressed, exhausted, and sometimes even depressed during the early years of having children. Combined with new words like “mortgage”, and “insurance”, it’s easy to become overwhelmed. While just a few years prior you could enjoy a night out any time, now you need to plan it, and plan it you should! Often the only way to get a break is to force it, and yes, that might even mean paying for a sitter.
Some breaks cost money, some are free, but the payoff is always rest. That rest will not only get you through the next week, but it will also help you brush off the stressful moments and find the joys that you can only find parenting little people.
To do: Find a friend who can schedule in a coffee once a week at the exact same time for an hour. Chances are they need the break too.
DON’T LEAVE! I know that with everything going on how are you ever going to find time for exercise, kids or no kids?, getting to the gym is always a chore, plus, Dad Bods are totally in right now.
This is not about getting in more reps, flat abs, or a faster mile, it’s about one word: endorphins.
Endorphins are a chemical created within the brain that reduce stress and pain, and they’re naturally produced during exercise. What kind of exercise? Any! You can walk, you can run, you can play golf, you can wrestle with your kids, you can do yoga, and yes, you can go to the gym. The point is, an elevated heart rate paired with some moving muscles makes your life better every time.
To Do: Get out that stroller and walk! The easiest physical activity that can be done with a friend, a spouse, an audio book, or to music, and doubles as time spent with your children,
3. Financial Planning
Money continues to be the number one stress for couples in Canada, and it doesn’t end in your 20s. The reduced purchasing power of our dollar, combined with higher debt loads has put a huge strain on your ability to live now, let alone plan for the future, but there are some things you can do early on to get ahead.
Now is the best time to learn about taxes, and they will never again be this simple! Get educated on tax credits vs tax deductions and how you can leverage these to keep money in your pocket. Another area is learning about how much money you actually need to live, and if you potentially could put any away.
This is the best time to start thinking about your goals, which often are based on your financial plan. Do you want to go to Disneyland in five years, or buy your first home? Is a college education for your kids important to you, or would you like to spend that money on their sports and activities?
To Do: Start a spreadsheet and record your bank balances and debt on a weekly basis. No fancy categories, just numbers. This will help you feel confident that you know roughly how much should go in and out on any given month
But There is So Much to Do
The key to working on any of these is to pick one, and then pick an aspect of it that isn’t going to just stress you out more. The end goal is just to take those late night “I really should starts” into “I’m glad I did that today.”
In 2008 an Iphone app named “I Am Rich” appeared on the App Store for $999 USD, that when launched simply produced the statement: “I am rich. I deserv [sic] it. I am good, healthy & successful.” The app was downloaded eight times, netting the developer $5600 and Apple $2400. Apple removed the app the day of its release.
Save Money by Spending Money?
Net Worth Management is a new philosophy on managing your wealth, different from the “Financial Advisor” role that has been ever present in our lives. You know the drill – meet with your advisor, learn about what you need to live a secure life, and buy the products that will get you there. And don’t we know it, most of our team has worked for and with these companies for many years, and at first glance it all makes sense.
But the challenge is that the more you buy, the more money the advisor makes, so naturally they are going to push you to buy more products. It’s not their fault, nor the fault of their firm – they are businesses, and they have chosen to make money through fees.
So how can we make this better, and still be profitable?
It’s About Your Life
To nail down how this works, we took a hard look at the word “Financial Advisor”. The definition really comes down to – “A person who advises you on your finances” (yes we used the words in the definition). Do you see any fit here for a salesperson? Or would you expect someone more like a coach, a counsellor, a mentor?
Once that distinction was made, we just needed to start charging like those professions. So instead of paying a percentage of products purchased, our customers started paying us a regular flat fee, which allows an all access pass into the expertise of our entire team. All of a sudden there is more time to get to know you, your dreams, your goals, your life. How many kids do you want, do you want them to go to college, how often do you want to take a trip, do you want to buy a rental property? Or let’s break it down to how you can afford your kids hockey fees, the new car payments, or a night out with your spouse each month.
Financial planning is about your goals, and learning how you can achieve them within your means.
Fees in Canada
It’s worth noting that you – a Canadian, are fortunate (eyeroll) to live in a country with some of the highest mutual fund fees in the world. You can expect to pay close to 2.4%, all the way up to 2.7%!
Let’s Get You There
You need a Financial Plan, and someone to guide you through it.
It needs to be adaptable, and based on what you want to achieve.
Does your life change? So will your plan. And that’s a good thing.
Do you want help planning for 1 year, 5 years, 10 years. Great, because that’s where Net Worth Management comes in. For a flat fee, you’ll get an expert in financial planning, who will be on your team every step of the way, keeping you accountable, and on track.
And the best part? We aren’t going to sell you anything you don’t need. It’s just solid financial planning.
You’ll get peace of mind, security, and all those other touchy feely financial terms. But you’ll also get that trip you wanted to take, or that home you always dreamed of. You’ll find extra cash to go to the movies, just from learning when to say no at the grocery store. We’re on your team.
Who knows, maybe you’ll get to a point where you have enough disposable income to buy an app that tells you you’re rich. But you won’t, because it doesn’t fit into the plan.
Investment fees don’t work because they incentivize creating a financial plan that solves your problems with products, instead of with your current income. Financial Planners should be creating plans that work for your life, that help you reach the best goals for your family. They need to be flexible, realistic, and highly adaptable. Instead, pay someone for their expertise, whose primary focus is on your financial happiness. Choose a Net Worth Manager.
What do you want to be when you grow up? Despite finally hitting 18 years of life, this question still doesn’t have a right answer. But that’s ok, because you’re an adult, and you can do whatever you want!
This is a crazy time in life, where most people have very few things holding them back from pursuing a passion, yet they still feel rushed. A large percentage of people jump right into university with the goal of getting a degree, but they accumulate thousands of dollars of debt in the process. Others dive straight into the workforce, hoping the jumpstart will put them ahead of their peers
To help guide you in this process, Your Managers has laid out the financial implications of each choice, and where it may lead you in the future.
In Canada today, a large number of Canadians are taking the jump to higher education, vying for the rewards that a University Degree can bring, and why not?! Many of the highest paid salaries come with the requirement of a university degree, including doctors, lawyers, professors, engineers, and more. In most provinces, bachelor’s degree students made on average $10,000 more a year compared to their certificate counterparts, and almost $30,000 more than those with only a high school education. Yet those numbers do come with a price, with the average debt load of students leaving university averaging out at $27,929.
Depending on the province, a leap into an apprenticeship can help you achieve salaries equitable to a degree, but with some real help on the debt load side. In Manitoba, Saskatchewan, and Alberta, Stats Canada reported average salaries of equal or higher than bachelor’s degrees, but that doesn’t mean it’s not a good idea elsewhere. All provinces have apprenticeship salaries $10,000 – $20,000 above High School grads. In Canada, 1 in 7 working people have an apprenticeship certificate, with a whopping 93% of those being satisfied with their current job.
Skip the school and jump right into the workforce is the choice of thousands of Canadians every year! Maybe you’re just taking a break, maybe you don’t know what you want to do, or maybe you’re getting ready to start your own business, it doesn’t matter, because there has never been a better time to go straight to work. 41% of university grads are working jobs that don’t require a degree, and many large employers no longer require one just to get your foot in the door (heard of Netflix?!).
“You’ll never get another chance like this”, is usually the advice of your older peers when you float the idea of doing some traveling. A short time in your life where you are willing to forgo expensive hotels, resorts, and parks, for hostels, beaches, and hiking, mostly due to the lack of dependants, debt, and an abundance of energy. While usually accompanied with a brief stay in the former category, travel tends to be a strict exchange of money and time for experiences, and is a great choice for those who are not yet sure of what they want to do with their life.
Still unsure? Not only can the team at Your Managers help guide you through the financials of this exciting time, but we all once went through it ourselves, so you can be sure to get some proper guidance on each of these choices.
You’re finally an adult – welcome to the world of the 2020s, it’s a great time to be alive! That doesn’t mean it all makes sense, and there are lots of options open to you that your parents and grandparents never had. At this rare point in life, you become an adult with little to no debt, dependants, and a significant amount of freedom to make your own decisions.
It’s no surprise that many older individuals wish that they had taken steps at your age to start planning for the future. Here are our top 5 things to do today to help you get ahead in life.
Learn to Read Your Pay Stub
Yes, there are numbers on your pay stub other than what goes into the bank, and they matter! It’s important to understand what your deductions are and why that percentage comes out, so you can have an idea of what is going to come up come tax time. Many other companies include things like a “social club” fee as well, which is something you need to make sure you agreed to when you were hired. You should also understand how your vacation time works; is it paid out each month, or does the company hold onto it?
Sign up for Freebies at Work
Find out what extras your company has included with your employment. For example, many employees are surprised to learn that the company they work for has a “Preferred Pricing” agreement with a variety of auto dealers, which lets you purchase vehicles for just above cost. There may also be discounts at local restaurants, bars, or gyms, and of course, make sure you know how your staff discount/incentive works.
Don’t ever be afraid to ask questions, as it may be a learning opportunity for a manager as well!
Get Your Rain Jacket On
Like putting 10% of your money away, building a rainy day fund is one of those things you always put off until something happens. And when “something” does happen, it’s significantly easier to handle it yourself vs running to the folks.
Fortunately at this age you shouldn’t need much, but the experience of learning how to build your own fund will be worth it as you move on to later stages in life.
Have Fun but Don’t Be Stupid
While having that rainy day fund is important, you are at one of those rare points in life where expenses are low, assets are low, and there are no dependants to be found! There is always the risk of oversaving and experiencing regret, so make sure you take this opportunity to enjoy your new freedom.
The best way to accomplish this is to build your first budget, making sure that the expenses that you do have are covered, so you know how much you can spend at the pub with your friends.
Hope is Not A Strategy
Wants, dreams, hopes, and goals are all a huge part of the journey into adulthood. No matter what your plan, or lack thereof, you most likely have a want or a desire.
So live it, build it, and plan it.
Because as the years go by, you will realize that what you want requires work, commitment, and effort. Now is the best time to write down what you want, and figure out what it’s going to cost to get there, in terms of both time and money. If this is a habit you can create now, everything will fall into place much more easily.
Looking for assistance in navigating your options? email our team and we will show you how you can get started.