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A Caring Financial Strategy For Your Family

Most people think of their financial affairs solely in terms of investments. Well, investments are certainly important; but there are many other financial issues that are just as pressing, though less obvious to most people.

One strategy I always suggest to my clients is to create a financial checklist for themselves. In order of importance, the list should look something like this:

1. A comprehensive set of financial goals for the family.

2. Adequate life insurance and disability insurance.

3. Wills and powers of attorney (both general and personal care).

4. A plan for creating equity.

5. A savings plan.

6. A statement of what you believe about capital markets (to help you understand what you’re doing, and why).

7.  A sound investment strategy.

Notice that “investment strategy” – which always gets such a lot of media attention – is last in my line-up. That’s because investments may mean little to the welfare of your family, if you’re under-insured or if you die without a proper will.

If you’re going on a journey, your task is made much easier if you decide on your destination first. That’s why “goals” comes first on my list: as with just about everything else in life, your chances of success are immensely improved if you know what you’re doing before you start.

If other people depend on you, enough life insurance is a must. Most people are under-insured, because they always tend to underestimate what it would take to replace their financial contribution to the family.

A quick rule of thumb: your insurance should provide enough capital to create an income equal to what you currently earn. So if your income is $100,000, and interest rates are 5%, you should be insured for something like $2 million.

Another often-overlooked factor is disability insurance, especially by executives who believe they’re covered through their employers. This is usually true to some extent, but benefits under a group policy are often limited to some percentage of the first $100,000 of income. So an executive making $250,000 may only have $60,000 of coverage for disability insurance.

As well, coverage may also be limited in terms of what type of work the insured is able to do. Benefits might not be available if you’re still able to perform any work at all – never mind the responsibilities you previously held.

Having a cast-iron will, or a power of attorney, can often be the difference between your estate passing smoothly to your loved ones – and those same loved ones having to fight each other in court. (More court time is devoted to estate disputes in Canada than to any other civil or criminal activity.)

So as a favour to everyone in your family, make an appointment with a good estate lawyer. Your accountant, financial advisor or bank manager can give you a referral. A will is relatively inexpensive to establish, and could save those you love a lot of unnecessary grief.

Putting your “financial house” in order is time well spent – and possibly the most caring gift you could ever give.

If you are serious about getting your financial house in order, check out our recent book “The Copperjar System, Your Blueprint for Financial Fitness”, available at or on

Alan MacDonald is an investment advisor with Richardson GMP Limited. Alan helps investors with over $500,000. of assets make smart decisions about money. He is the co-author of “The Copperjar System, Your Blueprint for Financial Fitness” available on Amazon.

For more information please visit or email Alan at

The opinions expressed in this report are the opinions of the author and readers should not assume they reflect the opinions or recommendations of Richardson GMP Limited or its affiliates.

Richardson GMP Limited, Member CIPF

Richardson is a trade-mark of James Richardson & Sons, Limited. GMP is a registered trade-mark of GMP Securities L.P. Both used under license by Richardson GMP Limited.