BMO Nesbitt Burns
132 Trafalgar Road
A guide to financial planning for every stage of life - specifically designed for women.
LifeStages identifies key investment issues and challenges for each of life's five financial stages. Going forward I will highlight each stage with a brief case history designed to help you to better understand sound financial planning principles. Please check back often to review each stage.
LifeStage 2 (Ages 30-44): Household Formation & Career
Case Study: Kim
Kim is a 34-year-old married, professional who loves the feeling of accomplishment she gets from successfully balancing work and family. She and her husband have two young children and recently bought a new four-bedroom home. Kim is president of her own accounting firm and has just returned to work after giving birth to her second child. With a new home and a young family, Kim wants to be sure that their financial plan and investments keep pace with their changing lifestyle. With a household income of $125,000, budgeting is a challenge. After meeting mortgage payments and household costs, Kim wants to ensure that they save for the children’s education. With an eye to a pleasant retirement, both Kim and her husband own RRSPs, although they haven’t contributed much for the past two years.
LifeStage 1 is the best time take to advantage of a Registered Retirement Savings Plan (RRSP) for long-term growth. An RRSP offers the benefit of tax-sheltered compounding (and you get a tax refund after each contribution!). You can also carry deductions forward to future years when your taxable income will be higher. I can help you take advantage of this proven process.
Investment Planning Goals
Whether you have a personal, spousal or group RRSP, the basic investment principles are the same:
If you’re purchasing a home, your savings capacity will be reduced or redirected to debt reduction. Before taking on a mortgage, take the time to learn all you can about the subject and how to reduce interest costs over the years.
- Your primary focus should be capital growth; you have a long time-horizon and you want your money to grow.
- Your secondary focus should be safety of principal; the risk level of your investments should match your comfort zone.
Things to Consider
In LifeStage 2, you may be earning more but you may also have bigger expenses; meaning that money management can be very challenging. It’s important to keep your objectives in focus and on track. Here are some things to consider.
* Fictional characters. Any similarities between them and actual clients of BMO Nesbitt Burns Inc. are accidental.