WINTER 2 0 1 8 / 2 0 1 9
Once you are able to manage and balance the inflows and outflows
and keep your assets at or above the “critical mass” level, you will be
well on your way to achieving a Work-Optional Life.
Introducing a professional financial advisor can offer expertise and
guidance to help your kids stay disciplined with actions that add
value beyond what one could accomplish on their own, including:
• creating a financial plan that includes retirement and insurance
planning to fit their needs and risk tolerance;
• providing financial education and helping them overcome
ASK MAILI
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behavioral tendencies or biases that may prevent them from
achieving optimal financial results on their own;
• structuring an investment portfolio along the factors that lead to
higher expected returns;
• diversifying globally while keeping costs, turnover, and taxes
low; and
• helping them stay focused and disciplined through market
swings so that they can achieve their long-term goals.
"I’M CONSIDERING SELLING MY HOUSE IN VANCOUVER AND DOWNSIZING. CAN MY WIFE
AND I CREATE A STEADY RETIREMENT INCOME FROM THE MONEY LEFT OVER?"
- CHRIS P.
DEAR CHRIS, This is a great question and one that I am often
asked. Yes, it can be possible to create the cash flow you need for
retirement by investing the proceeds from the sale of your home into
a diversified investment portfolio that generates “passive income”.
Whether this cash flow will cover some or all of your needs will
depend on how much income you require to live your lifestyle, the
amount of capital you have to invest after downsizing, and the risk
you’re willing to take balanced with the amount of stability you
desire.
Start by prioritizing your Purpose or goal for this money. Purpose
is the first guidepost among the five Ps in the Smart Risk Investing
Roadmap. For many retired Canadians, their first priority is securing
their own retirement income. Then, after that has been looked after,
the kids’ needs come into play. Philanthropic interests can also be
considered.
For instance, let’s presume you sell your home for $2.5 million and
purchase a condo for $1 million, leaving you with $1.5 million to
invest in a diversified portfolio. This portfolio may be invested
in high-quality companies throughout North America, generating
dividends and potential growth from the shares and interest from the
bonds.
These dividends, interest, and growth can be accessed as steady
cash flow to cover your living expenses, potentially affording you a
lifestyle that is Work-Optional—where you don’t have to “work” for
a living, but rather, you do what you love and have your investments
generate “passive income” for you. One consideration or trade-off is
that the amount of cash flow and current value of your portfolio may
fluctuate up and down, depending on market conditions. Therefore,
it’s important to own a suitable mix of assets, and to have a well-
designed investment strategy 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.
Remember to consult a professional investment advisor or Certified
Financial Planner to help you create a suitable portfolio designed to
meet your needs over the long term.
Feel free to reach out to me at [email protected] for
questions to submit in our next issue of Smart Risk Magazine.
Maili Wong, one of Canada’s Most Powerful Women: Top 100 TM , is a Vancouver-based
author and First Vice-President and Portfolio Manager at CIBC Wood Gundy, with
over 17 years of experience in helping clients achieve their financial purpose and
goals. Maili was born and raised in Vancouver and worked on Wall Street in New York
City for five years, during which time she helped manage over $5 billion in assets for
a global investment fund. In 2006, she returned to Vancouver to help individuals and
families find a better way to invest.
Maili is actively involved in her community as a Board member and mentor. In
addition to being named one of Canada’s Most Powerful Women: Top 100 TM by WXN
in 2018, she has received numerous awards including the Business of Vancouver’s Top
40 Under Forty Award in 2012, and was a featured TEDx Talk speaker in 2016.
Respected and recognized for her progressive investment methodologies, she is
one of few women who rank among the top financial advisors in this country. Maili
authored the book “Smart Risk: Invest Like the Wealthy to Achieve a Work-Optional
Life” that launched in Times Square in New York in 2016, which became a bestseller
on Amazon (find out more at www.smartriskinvesting.com).
MAILI WONG, CFA, CFP, FEA