If you complain you can't make ends meet every month, there is neither spare money to save nor invest, and you don't seek solution for your finance, how can you get rid of this bondage? How could you expect to be a millionaire? On the contrary, the tighter your budget is, the more care you spend in your financial planning. Besides to increase your income and cut down your expenses, a practical financial plan will be a must for you. Otherwise, you always feel there is no enough money at hand. Your bank interests cannot catch up with inflation. In case you have spare money, does your return of investment achieve your target of your financial plan? you satisfied? Do you examine your investments periodically? Do you adjust your investment vehicles if necessary? Or... or... you invest simply because you feel you need to give it a shot. Without collecting information, without analysis or planning, you invest with goals. Regardless of your status quo, you need a financial plan definitely! 

             

Mentioning the financial planning, there are many aspects to think about.  But in general, people can consider the following aspects:

 

1. Asset growth and risk(Including real estate and current assets)

2. Tax planning

3. Protection from Accidental loss  

4. Children's Education Funds

5. Retirement Income Plan

 

Asset growth and risk: You know high returns, high risks. Stocks and futures make you rich in a short term. But it could ruin you overnight.  It doesn't mean stocks and futures are not suitable for investment. But it tells us that we should have a solid risk management when we invest. Diversification is a key of risk management.  Stocks, futures, commodities, funds, bonds, savings, GICs, Insurance policies and real estates are all investment targets. How to allocate will  depend on your risk profile: income, asset, age, investment knowledge and risk-taking ability. If you do not have enough knowledge, information and time to manage your investment, and you expect to grow your assets with a minimum guarantee ,  segregated funds with guaranteed features can be a good choice for you. 

 

Tax Planning: can be so complicate that you need an qualified accountant to help you work it out. However, for an individual taxpayer in Canada, both of  RRSP(Registered Retirement Saving Plan) and TFSA(Tax Free Saving Account) are good tax-saving tools. 

 

Protection from accidental loss: Accidents happen! We are not able to avoid them completely. Nevertheless, the loss accrued from accidents can be reduced by insurance protection. For examples, house insurance, auto-plan,  life insurance, critical illness insurance、long term care insurance、health plan、travel insurance ...  can reduce the loss of your finance when accidents occur.

 

Children's education funds: To encourages parents to prepare children education funds,  government provides grants (CESG, Canada Education Savings Grant) to every kid under age 17 in their RESP(Registered Education Savings Plan).  

 

Retirement income planning: Lifetime Income Plan guarantee you with retirement income for life. It guarantees your premium when you start with your retirement withdrawal. It offers potential growth in your investment. It protects you from outliving your savings.

  

1. Term Insurance:  provides you with affordable coverage with a designate period, normally 10, 20 years or term-100 for a whole life. 
2. Permanent Life Insurance:  offers a lifetime protection with cash value. 
3. Universal Life(UL): provides you a lifetime protection plus a flexible tax-savings growth in your inheritance. 
   
   

Besides life insurance, living Benefit Insurance protects your living from risk of loss due to illness, accidents or disability, such as

1. Critical Illness Insurance,
2. Long Term Care Insurance,
3. Dental and Health Insurance,
4. Travel Insurance,
5. Disability Insurance