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  • Trevor Daigle

Are you Truly in Control of your Financial Plan?

So far 2020 has seen more than its fair share of large impactful events that are out of our control.

Iranian General assassinated in a U.S. airstrike, Ukrainian passenger airline shot down in Iran, Impeachment Trial of President Trump, Kobe Bryant’s tragic death, Brexit finalizes, and of course, Covid-19 and unfortunately, especially for us in Nova Scotia, the list goes on. Reflecting on New Year’s Eve 2019, none of this was in my sights for what 2020 would hold, well, except maybe Brexit, and I doubt anyone could say any different. How the world changes quickly! A prime example of why it is important to control the controllable within your financial plan.

When you control what is within your ability, you stand a far greater chance of reducing or eliminating the impacts of uncontrollable events on your ability to reach your desired outcomes. After decades of experience and continuing education in the field, the single most important thing I have come to realize is that a Financial Plan is something you have for life, and should be updated regularly.

Your Financial Plan is ever evolving, and fully effected by events far outside anyone’s control. Knowing this, means we can reduce impacts by always controlling what we can.

The basis of a solid financial plan is first and foremost understanding why you want to plan. This may sound simple, but for many, verbalizing goals, or even having a specific goal does not come easy. Without a goal, it is difficult, if not impossible to control those elements that will have the most impact on your ability to achieve it.

Ultimately, as a planning firm, our job is to help our clients make the right financial decisions that help them get closer to their current goals by relying the least amount possible on the uncontrollable. Without knowing where we are going, it’s next to impossible to do that.

In my 25 years of experience, I have boiled the controllable and uncontrollable factors of financial planning into the following:

As we work with clients to develop your plan, our focus is on these controllable elements. How much you have saved, how much you can save, how much time we have to save, how much you need to take out, and how long you take it out, and minimizing tax are all factors well within our control.

Want to save for a vacation property in 5 years and need $50,000 down payment? Simple math says you need to save $10,000/year for the next 5 years. Can’t afford to do that? Well, then maybe it’s $8,300/yr over 6 years or consider a reduced property budget.

Once we discover your comfort level with savings commitments and timelines, we can then start to account for the uncontrollable factors as they impact your plan. Interest rates go up in year 3 means we may need to save a bit more monthly/annually, or delay a purchase date, or buy something less expensive in order to be able to comfortably afford the new mortgage.

Willing to take some risk in fixed income markets over the next 4-6 years to try and boost savings? If returns are negative, are you willing to wait longer, buy something less expensive, or save more money?

Once we have a target and a plan to get there we can better understand the impacts of a uncontrollable and adjust the plan accordingly when necessary.

The same concepts also apply to your retirement plans.

Want to retire at age 60 with $100,000 in after tax dollars? Does a swift 35% market correction from Covid-19 fears impact your ability to retire?

That depends…. and only time will tell. However, by being in control of what we can, we are able to not only see the impacts, but also understand what needs to be done to reduce or eliminate them.

Maybe you need to retire with $98,000/yr vs $100,000; maybe you need to wait to retire until age 62 to get the $100,0000; maybe you’re comfortable in potentially running out of money at age 98 instead of 100; maybe you need to throw another $250-$300/month between now and retirement to get back on track...

Trying to control the short term rates of return through market timing and/or “hoping” for a better future outcome are not solid planning options.

The bottom line - being in control affords you the luxury of not only seeing and assessing the potential impacts of uncontrollable events when they occur, but also allows you to have a say in how to mitigate the impact they have on you and your family.


About the Author > Trevor Daigle is a founding partner of EB Wealth. EB Wealth focuses on working with clients as their financial planning team, using evidence based planning and investment solutions to assist their clients in reaching their goals. Trevor is a Senior Advisor with over a quarter century of experience in helping Canadians plan and reach their financial goals.


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