How to build true security into your finances

Mind, Body, and Soul is sponsored content from Fresh Ground Financial.

A couple weeks ago, I introduced you to the Financial FACTS:

They are:
F - Flexibility
A - Accessibility 
C - Control 
T - Tax-Savings
S - Security

Over the years we’ve seen clients have much better results and more consistently build their wealth when they focus on Financial FACTS rather than putting their focus on high rates of return and annual tax breaks.

Security

When you think of financial security do you think of a stable job with benefits and a pension, or do you think of gaining control of and access to money?

While a stable job and a pension can obviously be good, they can also cause the illusion of security more than offer security itself. As you may have seen over the past year, people with ‘secure and stable’ jobs were laid off and many wound up reliant on the government for their monthly pay-cheque.
The moment you no longer have your stable job, you lose your benefits and your pension ceases. If companies go under, pensions are often taken away (think Sears).
Finally, your job and your pension are taxable incomes and you have no control over what tax rates will be in the future. With the Canadian Government increasing their debt load by over a billion dollars a day, it is only reasonable to think our taxes will increase going forward.

So, if job stability, benefits and pensions are not building security into your financial plan, what can you do?

3 things:

1) Protect your greatest asset - your health and ability to work - with personal insurances: Life Insurance, Critical Illness Insurance and Disability Insurance.

While you may get some of these from your employer, if you leave or lose your job, you also lose your insurance coverage. Meanwhile, insurances provided by your employer usually aren’t enough for you or your family to continue thriving should you actually need them. Own your insurances and get enough to live well no matter what circumstances come your way. 

2) Increase your access to money. 

When you have easy access to money you put yourself in a much better position to deal with emergencies, or take advantage of opportunities that will further increase your wealth and financial security. To increase your access to money you must spend less than you earn, and do your best to avoid financial tools that lock up your money or force set payments. Instead choose: 

• Saving and Investment tools with the freedom to withdraw over those with withdrawal fees and penalties (ie. Avoid GIC’s and Loaded Mutual Funds.
• Line of Credits over Loans.
• Open mortgages or Home Equity Line of Credits over fixed mortgage contracts.

3) Buy Assets, not liabilities you think are assets.

An asset is anything that offers a greater income than expense. Contrary to popular opinion, your personal residence, cabin, car or boat are all liabilities. They cost you more than you earn from them. You may argue that a house is an asset because it increases in value, but the average Canadian spends over 2 times the value of their house by the time they pay it off. 

Assets can include income properties, investments, a business, high cash value whole life insurance, and anything else that earns you more than it costs on an annual basis.

With security comes freedom.

True financial security means your money is working for you and increasing your income. True financial security means you have access to money for opportunities, and you have the ability to deal with emergencies without going into debt. True financial security means that you do not HAVE to work. You can quit, or lose your day job and still thrive. True Financial Security means you get to choose how you live. 

Build True Financial Security into your into your Financial Plan.

Try our online webinar on Wednesday, Apr. 28 at 7 p.m where we will explore the three keys to growing your money. Gain a little more financial peace by learning how to grow your money in a way that will save you taxes, minimize your risks, increase your returns and ultimately, grow your money. 

Learn More or Register Now