Page 27 - A Canuck's Guide to Financial Literacy 2020

27

The most important part of the investing is to create a financial plan. A financial plan helps
you organize and encourages you to keep track of your money, so you have less stress and
more success.

Pillars of Financial Planning

Putting together your financial plan is similar to baking a cake. You have to make sure that
the ingredients are in line with the recipe and that proper instructions are used.

The same thing could be said when you’re crafting your financial plan. It’s important to take
a bottom up approach by making sure that:

1. You’re aware of your spending habits
2. You understand the risks that you or your family might face

3. You are aware of various tax savings opportunities that will increase your net worth
4. You’ve incorporated your retirement benefits into your plan

5. Your investment objectives are in line with your risk appetite
6. You’ve covered your estate obligations and have put together your will, power of
attorney, etc.

The above steps could be broken down into a more detailed approach below. Your financial
plan should incorporate the following topics mentioned in the next page in slightly more
detail and broken down throughout the document in detail.

1. Cash Flow Planning
2. Risk Management
3. Tax Planning
4. Retirement Planning
5. Asset Management
6. Estate Planning