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The financial plan: A first step toward achieving your goals
Posted on Wednesday October 14, 2020
The financial plan: A first step toward achieving your goals
Dream about buying a new home, retiring free of financial worries or leaving assets to your children? Anything is possible with the right tools. The first step: a good financial plan. Interview with Ricky Gallant, Financial Planner and Credential Asset Management Inc. Investment Advisor at UNI, who explains why a plan is essential to achieving your various life goals.
What’s a financial plan?
Just like a house that needs a solid foundation, our goals also need to be built on a good structure. “The plan is the foundation of financial life,” Mr. Gallant says. “It allows you to clarify your financial goals and aspirations so you can really see the concrete options available, based on your situation.” By painting a comprehensive portrait of your current and projected situation, a plan helps you stack the odds in your favour to achieve your goals. Awareness is key.
What are the main elements of a financial plan?
Apart from the traditional savings and investment products, in a comprehensive plan it’s essential to consider the cost of living, insurance, inflation, pension funds, benefits and, most importantly, the budget.
Who should have a financial plan?
You can’t make an omelet without breaking some eggs. Whether you prefer your omelet to be classic, gourmet or with extra cheese, it all starts from the same point. The same goes for your finances. As soon as a goal takes shape, the financial plan is your first step toward making it happen. Regardless of your income, you can take the necessary steps to reach your goals by identifying your savings capacity.
Ricky Gallant
Financial Planner and Credential Asset Management Inc. Investment Advisor
A plan adapted to different stages of life
You are the plan! Mr. Gallant stresses this basic rule: “We make sure we adjust to the client’s stage of life. Projections will vary depending on whether the person is 30 or 65 years old. For a younger saver, asset growth will be a priority. As retirement approaches, a disbursement plan will be put in place and we’ll focus on making good use of the assets accrued so they can be enjoyed for as long as possible.”
Better late than never… but the earlier the better!
The earlier you start, the greater the range of possibilities. “Some clients are in a hurry to retire, even if they have no investments,” says Mr. Gallant. “My role is to put their cards on the table to help them understand what’s possible in their particular situation. Together, we look at the options that fit their reality and develop a realistic strategy.”
The Financial Planner: support available to all
Many people may have already put together a financial plan without knowing it, whether it’s an Excel sheet or just a chart scribbled in a notebook. Few, however, turn to the professionals for help. “People perceive this service as expensive, but it’s actually one of the many benefits available to UNI client members,” Mr. Gallant says.
A financial planner’s guidance is an invaluable tool to help people avoid any oversights in their plan. “For example, inflation is an important element to consider, and people very rarely to take it into account,” Mr. Gallant says. A professional can use their expertise to provide you with all the tools you need to build a truly effective plan.
Increase your saving power with a budget
According to Mr. Gallant, the budget plays an important role because it paints a concrete picture of your capacity to save. “When you have a detailed picture of your situation, it’s easier, for example, to see what expenses can be reduced to save more for your children’s education or to buy a new car,” he says. Saving is the foundation of a good financial strategy, and budgeting is a good way to generate saving power.
How does real estate fit into a financial plan?
“Although real estate is a big part of an individual’s assets, I generally don’t include it in the financial plan,” says Ricky Gallant. “It’s very hard to project the future resale value of a building or predict fluctuations in the real estate market. Plus, some people may decide never to sell their home, which means it’s not a source of income for retirement.”
Expect the unexpected
Unless you have a crystal ball, it’s impossible to predict exactly where you’ll be in 10 years! Getting promoted, losing a job, the arrival of a child, separation, inheritance, fluctuations in the real estate market... So many upheavals can disrupt initial forecasts, which is why it’s so important to review your financial plan every year and modify it accordingly. With the support of a Planner, the financial plan will stay up-to-date and evolve with changing situations. In short, it allows you to continue dreaming with complete peace of mind.
