An informative lecture on preparing ourselves for the future by Brent Weaver consultant at Investors Group Financial Services Inc.
“Get out of the passenger seat!”
Brent takes a more integrated approach with one finances.
“A good financial planner coaches”
As a coach, Brent encouraged his clients to understand a few things.
- Put debt in its proper place
- Risks of investing
- Taxes – How to pay your fair share
Your money is empowering and should be used to empower.
Does the interest on credit cards scare you?
Do not look on the surface; know the details of what one’s financial responsibilities are.
Understanding compound interest is something that everyone should understand.
To but it simply it is interest on the interest plus the principal. It seems to me that it can become a vicious circle. It was mentioned that people are looking for a miracle; I believe that this why people choose to avoid learning about the risks of bad debt.
Waiting for a miracle (lottery) is not financial planning.
Paying off debt vs. Saving
In Ontario, you may receive an interest rate tax credit for the interest that you pay OSAP. This is good to know and can help out in pay our debt, but also to invest.
Most people need to invest for retirement, not save – savings usually have return rates that are less than inflation. As inflation increase, that value of one government pension diminishes in spending power. That is why we need to take some of our dollars and let it work for us.
“Saving will not help you.”
Time is Money
Don’t wait to start putting money away do it as early as possible! The early bird gets a nice retirement. Brent asked us what we think the biggest risk when making an investment?; I said that it is the fear that one would loose it all. Well, it turns out that the biggest risk is all of us. Brent explained that a group of economists, Fama, Shiller, and Hansen were recognized for asset-price work. Essentially they recognized how financial markets work and assets such as stocks are priced. One stock does well another bad, but switches; what was good is bad and what was bad is now good.
That is why many financial coaches like Brent recommend diversifying one’s portfolio is a good plan.
Guarantee Investment Credit, the banks love these, but they are linked investment meaning that that span across the market. For an investor, it seems in my opinion that this type of investment like the invisible man, you know it exists, but you can not see what it is, what you invested, nor can you see it move.
Return to Mean
In finance mean revision is the assumption that an investment price will move to the average price over time.
If the value of a fund is gaining at a higher value, the end result should be a steady rate of growth. The market will not make you rich.
What is the biggest thing you should really the biggest thing you should worry about?
Tomorrow. Start investing your money today.
To conclude we all need to be disciplined in how we use our extra dollars. Saving is an option but it is not the best option. You need a financial vehicle that moves your money in preparation for retirement. The sooner you start the better, understand that you should diversify into different financial vehicles and understand that some will go down while other will go up. There are a lot investigate, but seeking the help of a financial coach, like Brent, you will make more informed financial investments.
Thank you, Brent Weaver.