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Column: Ten steps to multiply your financial freedom by ten-fold

Financial planning tips from Richmond News columnist Richard Vetter.
Richard Vetter
Richard Vetter (WealthSmart)
Richard Vetter is a columnist with the Richmond News.Richard Vetter

Would you think I’m crazy if I told you that achieving a 10 times multiple of financial freedom can be easier than doubling your financial freedom?

Doubling your financial freedom can be accomplished simply by what we call the Brute Force Method. That means doubling your efforts or doubling the amount you save. What happens when we apply the Japanese Kaizen principle of continuous improvement in ten different areas? We will experience an exponentially better result with far less effort!

In a recent webinar, we identified and explored in detail the following ten steps and in a live financial planning example proved that it was truly possible to times 10 of one’s financial freedom:

  1. Start a real financial plan. In 2013 The Financial Planning Standards Council of Canada published a three-year study of almost 15,000 Canadians. Those with written financial plans were on track financially, prepared for the bumps in life, living life abundantly today and had a stronger sense of well-being.
  2. Start now with what you have. When you chart your directions with your GPS, it is impossible to determine how to get to a destination without knowing where you are right now. So too with your financial plans. It is important to get clarity on all your resources and capabilities.
  3. Pay yourself first. Before anyone else gets a piece of your wallet, you need to be the first one that gets paid with each paycheque!
  4. Protect your most valuable assets first. Look in the mirror. You’re looking at your most valuable asset. Have insurance that covers all bases.
  5. Diversify properly. Diversification gives you opportunities for growth without the risk of a highly focused portfolio.
  6. Avoid unnecessary investment risks. I’ll keep this simple – stock picking doesn’t give you an advantage over time. Your portfolio is not a casino.
  7. Stay in your seat. In the same way that you may often miss the winning goal if you head out of the stands for a beer, you may miss the best days in the market if you decide to exit at the wrong time. Stay the course.
  8. Avoid unnecessary fees and taxes. Just like a bar of soap, the more you handle your money the less you have. Wall Street, Bay Street and CRA are counting on the fees and taxes they extract every time you trade your account!
  9. Plan for Inflation. I think you all got the memo this year. Stuff gets more expensive over time. Your portfolio needs to adjust for that reality.
  10. Get professional advice. The 2018 Vanguard Advisor Alpha Study found that the potential value added by a professional investment advisor amounts to about three-per-cent additional rate of return over that experienced by investors who are not using professionally guided strategies.

That sounds like a lot, but with the right financial advice, it’s much easier than brute force! The full version of the webinar and our eBook go into these strategies in far more detail. Feel free to reach out for these resources.

Richard Vetter is a Certified Financial Planner and owner of WealthSmart Inc.