Personal Financial

ManagementBringing It All Together

-Bhavesh Patel, CGA

(416) 522 - 3234

Personal Finance Workshops

A. Budgeting and Debt

Reduction

B. Saving and Investing

C. Personal Financial

Management

D. Stewardship

E. Charitable Giving

Our mission today

• Financial planning• Overcoming the fear factor!

• Building a solid foundation • Where to go for more help

People don’t plan to fail…..they fail to plan!

• Only 28% of households have a comprehensive financial plan

• Only 19% express an interest in having a financial plan• Don’t understand the value • Don’t know what a comprehensive plan is• Believe the cost of having such a plan

developed by a financial professional is high

How do we create a financial plan?

• Define financial planning

• Structure of a sound financial plan

• Commit to action • Who can help?

What is financial planning?1. Where you are today?

• Examine your personal finances

2. Where you want to go? • Define short and long-term goals

3. Creating the plan to get you from today into tomorrow

• Action steps to reach those goals

Your plan will move with you through the various life stages

Life cycle planning periods

retirement

Pre-retirementPeak

accumulation

mid career

early career

Life cycles

Disp

osab

le in

com

e

Key components of a plan

Speculation

Financial Goals & Priorities

Protecting Financial Security

Key components of a planSpeculation

Financial Goals & Priorities

Protecting Financial Security

Key components of a plan

Speculation

Financial Goals & Priorities

Protecting Financial Security

Savings and Investments for

Retirement Goals, Education, etc.

Long Term Care to preserve dignity and family ties at old

age (stream of income) Disability Insurance for income preservation while living (stream of income)

Life Insurance for income and estate protection on death (lump-sum)

Risk Management

Life insuranceFinancial protection for:Your family and loved ones

• Can supplement lost income

• Provide funding for child’s education

• Debt relief – mortgage, credit cards

• Money for funeral and final expenses and taxes

Critical Illness Facts

73,000 died of Heart

Disease and Stroke in

2003

159,900 new cases of cancer

diagnosed and 72,700 deaths in

2007

Over 70,000 heart attacks

in Canada each year

Statistics Canada, Canadian Cancer Society, Heart and Stroke Foundation

The need – advances in medicine

We are more likely to survive critical illnesses:• Today 59% of people diagnosed with cancer

will survive as compared to 1 in 3 in the 1960’s • 80% of heart attack victims survive when

admitted to hospital• 75% of stroke victims will survive the initial

event, but 60% will be left with a disability

We are survivors!Sources: Statistics Canada; Canadian Cancer Society; Heart and Stroke Foundation of Canada

Critical Illness InsurancePay the bills and more!

• Provides you with options • Allows you to focus on getting well• Eliminates money worries • Return of premium option

Wills and Power of Attorney• A Will helps ensure your personal

wishes are followed. If you own a personal asset or have children, you should have a Will.

• A property power of attorney will make financial decisions on your behalf.

• A healthcare power of attorney will take care of your healthcare needs.

Truth about savings and debtTrend #1: Less Saving • Savings rates: 20.2% in the 1982 to 1.2% in 2005• Half of all Canadians have less than $2500 in

savings

Trend #2: More Debt• Canadians spend, on average 127% of their

income every year• Money is the #1 cause of marital conflict

Source: www.crowncanada.ca / Statistics Canada

Key components of a plan

Speculation

Financial Goals & Priorities

Protecting Financial Security

Wealth creation

• The Power of Time

• The Power of Compounding

• The Importance of Rate of Return

Rule of 72• Dramatic effect of time, compounding and rate of return.• Your money will approximately DOUBLE at a point in time

determined by dividing 72 by the percent interest you earn.

Values are for illustrative purposes only and may be subject to applicable taxes.

Time, Compounding and Return

7.2

912

1836

0 10 20 30 40

Your Money Will Double In…Years

2%

4%

6%8%10%72

/ %

Inte

rest

Who Has More at 65?• Investor “A” invests

$1,000/year from age 40 to 50 and stops to let it grow

or• Investor “B” invests

$1,000/year from age 50 to 65?

Putting money to work

05000

1000015000200002500030000350004000045000

Investor A Investor B

Assumes 7% Annual Return Inside an RRSP

Invested Grew To

Retirement savings

• 25% have died• 19% have incomes less than $10,000• 49% have incomes of $10,000 - $35,000• 7% have incomes of over $35,000

Most people begin their career with the hope of a good retirement. However by age 65:

19%

25%7%

49%

Source – National Council of Welfare, Canada Customs and Revenue Agency, 2001

If you fail to plan…• Inefficient use of resources• Risk of not meeting financial objectives• Unprepared for the storms of life• Pay higher taxes than necessary• Delay retirement; live on less money• May be difficult fulfilling God’s purpose

for your life

Commit to actionConcrete steps for action

• Set goals – spiritual and practical

• Assess current situation• Develop action plans • Put your plan into action • Track your progress• Celebrate your successes

Who can help?

“Plans fail for lack of counsel, but with many advisors they succeed”

Want to go deeper?

To review or start your plan contact

Bhavesh Patel, CGACertified General Accountant

Financial Advisor(416) 522 - 3234