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The Art of Personal Financial Planning

The fact is that when it comes to finances, IAll I wanted to know was how best to get
have nothing to hide. My lack of financialwhere I want to be from where I am now. I
knowledge had really hit me for the firstfigured my parents were no financial genius',
time a few years ago, shortly after the birthbut they must have learned a few things in
of my daughter. I realized I was responsibletheir 64 years and they have retired quite
for another life. It wasn't like I wasn'twealthy. It  seemed  a  good place to start.
given good role models - my parents have done
well! I felt I was doing ok. It was onlyI can't believe that my parents and I never
until I was reading a business publication"really" talked about money before. The only
when I stumbled across "Self-Analysisthing I was told was "cash was king" and to
Financial Planning Test." No sweat Inever borrow money. My parents were very
thought. Confidently, I picked up my pencilfrugal with their money, and I was always
and set about responding to questions suchtold to work for things and save, save, save.
as:My mother had taken responsibility for
educating herself financially because she was
- Have you selected the proper amortizationnever taught about investing or financial
period  for  your  mortgage?planning by my grandparents. But here I was
35 and felt like I was uneducated and blamed
-  Is  you  will  up-to-date?the education system in part for my
ignorance. How could I know calculus and not
- Could your dependents live comfortably inknow  how  to  do  my  own  taxes.
the  event  of  your  death?
It is inconceivable that our government has
- If you plan to retire early, have you setnot altered the school curriculum to include
up  a  suitable  savings  program?a basic family finance course. All high
school graduates should know how to fill out
- How do you plan to pay for your children'san income tax form properly. They should
education?know how to select their mortgage, how to
finance their child's education, and how to
- Fifty percent of Canadians retire insave and plan for retirement. We now live in
financial hardship. What are you doing toa society that demands instant gratification,
guarantee  you  won't  be  one  of  them?which  is  part  of  the  problem.
-  Are  you  debts  structured  properly?I am not sure that politicians understand the
tremendous benefits the economy would enjoy
Not only could I not give a satisfactoryif the average family knew how to handle
answer to many of the questions, but also Itheir money properly. Most North Americans
didn't even understand some of them. Iare financially illiterate. There is no
caught an ominous glimpse of my husband andexcuse for our possessing the little
daughter  living  on  the  streets.financial knowledge we do. When a university
educated person like me is embarrassed by an
I dropped my pencil, an unnerved woman. It'selementary financial test, something is
not that I want to be a multimillionaire,wrong.
though like everyone else, I do. I'll settle
for comfortable - very comfortable. I enjoySo I embarked on a journey of discovery. Most
living in a nice home, owing a yacht (ourfinancial books concentrate on investment
floating cottage), driving nice vehicles andalternatives, not on mundane topics such as
contributing annually to an RESP and RRSP forsaving, buying a house, and insurance - the
my daughter and myself, respectively.common person's concerns. They all showed
However also recognized that I would probablyyou what to do with money once you had it,
be one of the millions of people who would bebut they didn't tell you how to accumulate
forced to work into their 70's. I wanted theit. I was assured that a 7 year university
ability to have all of those luxuries, butcareer and full time permanent job with
not compromise my thoughts of an earlybenefits was the way to go and to save a
retirement. I think these are goals that arepercentage of my earnings for RRSP's. But....
shared by most North Americans. Are they
realistic? Can they be realized on anThe best advice that I ever received was "if
average  salary? If  so,  how?you want to learn to do something right,
watch someone who does it successfully. It
Within an hour of reading that article, I wasis also true for financial planning. Now we
committed to learning the basics of financialhave more financial education available for
planning. I had no desire to learn thepeople, as a direct response to the economic
intricacies of the stock market, nor was itdifficulties many are facing. Those who
my goal to be able to recite the mortgageeducate themselves are the ones who will
tables  from  memory.retire sooner than later and will have
achieved their financial goals.



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