ASK MAILI
28
ASK
Maili
WINTER 2 0 1 8 / 2 0 1 9
A COLUMN TO HELP YOU
ANSWER YOUR FINANCIAL
WELLNESS QUESTIONS
"WITH ALL THE ECONOMIC AND GEOPOLITICAL TURMOIL IN THE NEWS, I’M WORRIED
ABOUT LOSING MONEY IN MY INVESTMENTS AND HAVING ENOUGH FOR RETIREMENT.
WHAT’S THE BEST INVESTMENT STRATEGY FOR TODAY’S MARKET ENVIRONMENT?"
- HENRY C.
DEAR HENRY, The best investment strategy for today’s market
environment is one that allows you to consistently stack the
odds of success in your favor, is based on calculated risks, and
gives you the confidence to stick with it over the long term.
In a market environment like this where trade wars and geopolitical
turmoil make headlines and can lead to higher volatility, successful
investors learn to control how they react to this information.
Benefit with an investment strategy that is built upon:
1. staying diversified,
2. minimising fees and costs,
3. taking into consideration your savings and spending
rate and investment time horizon, and
4. including the right proportion of assets (i.e., stocks,
bonds, real estate, and other alterative assets) aligned
with your ability and willingness to experience downside
risk, balanced with your desire for income or growth.
Working with an experienced and licensed Financial Advisor
can help with this process and elevate your overall investment
experience. For more, read Smart Risk: Invest Like the Wealthy
to Achieve a Work-Optional Life available on Amazon.ca.
"I’M HAVING TROUBLE ENGAGING MY ADULT CHILDREN TO BE MORE FINANCIALLY SAVVY.
DO YOU HAVE ANY TIPS ON HOW TO TEACH THEM ABOUT MONEY MANAGEMENT?"
- LILY E.
DEAR LILY, Talking to your kids about money can be tricky,
especially if they aren’t looking for your advice. Often, I’m asked
by my clients to be an objective third party and advise their children
with wisdom and practical advice to build healthy saving and
investment habits.
an investment return that aligns with how much growth or
income you need to achieve.
One analogy I draw upon often that may help you teach your kids
about money management is the “Leaky Bucket.”
This bucket holds all the wealth you have accumulated to date. You
want the bucket to be brimming with financial assets or reach a
certain critical mass so that all of the accumulated “assets” in the
bucket can help sustain you through retirement.
Going into that bucket is what you make from your salary, business
income, inheritances, investment returns, and any other sources of
money.
But the bucket has many holes. The goal is to increase the level of
financial assets in your bucket to reach a critical mass. In order to
increase what’s in that bucket, three things can happen:
1. earn more money, which is sometimes difficult;
2. plug the holes in the bucket by reducing expenses; or
3. grow what’s in the bucket at a faster rate of return—and that’s
where financial and investment planning comes in: to target
Source: Smart Risk: Invest Like the Wealthy to Achieve a Work-Optional Life page 88.