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KEY012 - Does Financial Planning lead to wealth? by Mind Map: KEY012 - Does Financial
Planning lead to wealth?
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KEY012 - Does Financial Planning lead to wealth?

04 In This Edition

In this edition of The Key To Retirement, I'm going to talk about a riddle. And that riddle is: Does financial planning lead to wealth or, does wealth lead to financial planning?

And, in today's bonus segment we're going to show you an awesome online tool you can use to backup your data (virtually real time) and automatically synchronize files between multiple computers. Consider it your virtual filing cabinet for all of your important data, pictures, files - you name it if it's electronic and it's important to you, it should be stored in this tool. And the best part is - it's totally free.

06 What's New?

Help, I'm a PC user now living in a Mac world!

Yes, that's right. We have done it. Our Mac order just came in. We now have new Mac machines and I have to tell you, I'm a little scared.

When you've been a PC user for years (and I mean years). And, you are considered a Power User, the hardest part about migrating to a Mac seems to be the fact that Mac's are too simple.

I'm so used to figuring out "work arounds" and hiring IT consultants to "fix" the glitches that are inherent in a PC.

Now, I'm a little scared because I don't really know how to exist in a Mac world. But, I did something really smart.

Both Cathy and I have a one-to-one pass.

This pass gives us one-on-one time with a specialist to figure out how to do what we want to do on a Mac. In other words, they are going to help us unlearn our bad habits.

I'm sure they'll get sick of me soon but until then, I'm excited and scared. I'll keep you posted.

08 Feature Segment

Does financial planning lead to wealth? Or, does wealth lead to financial planning?

HSBC Survey - May 2011, 65% of Canadians do not have a financial plan., Of the 35% that reported having a financial plan..., They have 2.5 times the retirement assets, They have 9 times the non-retirement assets of those who reported not having a plan., Financial planning clearly makes sense.

Investment Executive's 2011 Report Card, 80% of advisors say they do financial plans

There's a disconnect., How is it that 35% of Canadians say they have a financial plan but 80% of advisors say they can offer financial plans?, It just seems that of the number of people who work with a financial advisor, that the vast majority of them DO NOT have a financial plan - even though their advisor is qualified to prepare one.

I did some research..., Alan Goldhar is a professor of financial planning at York University and Manager for the Ontario Public Trustee., The Public Trustee takes over the finances for people who are mentally unable to make financial decisions., They have taken over more than $500 million of investments for 10,000 families, most of which had a relationship with a financial advisor, broker or bank advisor., They interview the client and the family and then send in a team to obtain all financial documents., So, of the 10,000 families who account for $500 million of investments, how many of these families who already had a relationship with a financial advisor, broker or bank advisor had a financial plan?, ZERO, Remember I said that Alan Goldhar also taught finance at York University? Well, he said that most of his students don't bother finishing their CFP designation., Alan said that the reason for this is "the industry has jobs for salespeople, not for professional financial planners. It's like graduating from medical school and then being allowed only to check temperatures and change band aids.", Cary List, who is the current CEO of the Financial Planning Standards Council says that "the single most common misunderstanding about financial planning is that it is all about investing.", So, now things are making more and more sense., Financial advisors (and I'll call them advisors because they are not doing planning) are hired as salespeople to sell investment and insurance products as opposed to professional financial planners who exist to do financial planning first.

So, how do you know if you're working with a financial planner vs. a financial sales person?, Easy - score them., In the show notes, I'll include a link to a "Financial Advisor Evaluation Form" that you can use to asses your existing relationship., You will find using this form one of two things., First, you could have a lot of "YES" answers., If this is the case, then you should feel really good about your existing relationship with your financial advisor., In actual fact, I would encourage you to tell them how well they did on the evaluation form at your next meeting., A lot of "yes" answers would also indicate that there is probably no reason for you to obtain a second opinion., But, you could also have a lot of "NO" answers., If this is the case, then what this is telling you is that you might not be as happy with the service and strategy you are receiving from your advisor or that the relationship could be better. In essence, you could benefit from a second opinion from a fee-based Certified Financial Planner., Finding a CFP you can meet with is easy. Go to and click on the find a planner link. This will enable you to search for a fee-based financial planner in your area. Or, if you happen to be local to our office, I would encourage you to contact us to book a no-fee, initial meeting to find out more about how The KAIZEN Financial Planning Process could benefit you. Either way - do something. Things could be better for you., So, for the benefit of those who are not listening to this episode at their computer where you can instantly download a free Financial Advisor Evaluation Form, let's quickly go through the questions and you can mentally answer yes or no., Question 1, When you decided to work with your current advisor, they reviewed, signed and provided you with a copy of a Letter of Engagement document which outlines all of the details of the work they are going to do for you and how they receive their compensation., Question 2, Your advisor charges fees for the financial planning work they do for you and those fees are in no way tied to the value of your investments., Question 3, During the year, at one of your progress report/review meetings you are provided with a Retirement Income plan to ensure you are not on track to outlive your money., Question 4, During the year, at one of your progress report meetings, you are provided with an updated Estate Plan which outlines very clearly for you the amount of estate erosion that will take place when your assets are transferred to your beneficiaries., Question 5, Your advisor reviewed your Will to ensure that your affairs are set up to be in line with the execution of your Will., Question 6, Whenever you leave a review meeting you are provided with a written outline of all of your discussion points and what is being implemented on your behalf., Question 7, During a bi-annual insurance review, you are provided with an overview of your insurance portfolio and whether or not adjustments need to be made as a result of any changes in objectives or circumstances., Question 8, When investment or insurance solutions are provided they are always with firms OTHER THAN the one the advisor works for., Question 9, Your advisor reviews your tax return annually to ensure you are paying the least amount of taxes possible., Question 10, Your advisor provides you with clear options for you to consider relating to your retirement plan:, 1. What is your attainable income in retirement?, 2. When is the earliest point at which you could retire?, 3. What is the required rate of return for your portfolio to attain your goals?, 4. How much do you need today to properly fund your retirement goals?, So, 10 Yes Responses, Thank your existing advisor, they are doing a great job for you., No responses, You really should consider a second opinion.

Now, the original question that started this discussion was: Does Financial Planning Lead To Wealth? Or, does wealth lead to financial planning?, The reality is that the industries focus is on selling products where the wealth is., Financial Planning seems to be as a result of wealth or as a result of the realization that wealth is being accumulated., This doesn't mean that financial planning can't ead to wealth, it just means that financial planning seems to be taking place today as a result of wealth., Studies show that people who engage their financial planner in comprehensive financial planning have more wealth than those who do not., So, if you have wealth, financial planning is the key., If you don't have wealth but are motivated to accumulate wealth, financial planning is the key.

Your takeaway today., If you don't have a financial planner - get one., If you have a financial advisor - test your relationship by using our free, downloadable "Financial Advisor Evaluation Form"., If you don't know where to look for a financial planner, go to or call my office. Even if we are not local for you, chances are really good that we can connect you with a great CFP in your area.

10 Bonus Segment

In this day and age with it seeming like everything is being stored on a computer, the biggest fear I think we all have is what would happen if our computer crashed?

Well, that happened to us. Well Cathy actually. But, because of some foresight and planning, she escaped pretty well unscathed.

Now, I did learn a few things from the experience and I will share with you some of what didn't work. But, for the most part, one major change we implemented a few years ago made all the difference our ability to emerge from - what some would call a terrifying computer crash with only a few bruises.

So, here's the tale:

Cathy woke up one morning and sat down in front of her notebook computer to check get email. She pressed the power button to wait while Windows loaded.

It didn't load.

She rebooted.

It still didn't load.

She told me that her heart rate increased at this point, just a bit.

She rebooted again.

It still didn't load.

Now, as she put it, her heart was beating a lot faster.

She called for me - her "go to" tech guy. I couldn't get it to do anything (she always says that when I show up, the computer just fixes itself. It didn't.

So, we called the company that manages our PC's - No Panic Computing.

Cathy was now panicking.

We tried everything possible to get the machine started. Nothing worked. We had to send it in for some triage and ultimately this triage led to some surgery.

I'm happy to say that everything is fine now but here is a summary of why we survived, somewhat unscathed:

First of all, we had a managed solution for our PCs that forced a daily, off-site back up of our system., This came in very handy because when we got the new machine back (under warranty), it had everything on it. Everything was restored from the off-site backup.

The second reason things were OK is that the majority of our programs now are "Cloud Based"., What this means is that very little of what we do on our computers is installed on our computer., As a result, all we really need is an internet browser with a live internet connection to access all of the programs we use - from the cloud.

Now, this third point is how Cathy got a few bruises. You see Quicken is not a cloud based solution. So, the data file we needed was on the old machine. Which was fine because it was backed up but I couldn't work until I got my new machine., So now, here is what I have done to fix this. And, this is today's bonus tip., I have moved all of the data files for the programs that aren't cloud based, to the cloud. A cloud based file storage solution synchronizes these files from my computer to the cloud file., Let me explain how this works., I have a folder on my computer just like any other folder that I can use to store my data in. Things like my Quicken data file, pictures I am working on editing, etc..., This folder, on a real time basis, is backed up on a folder in the cloud that is an actual copy of the one on my computer., So, now if I ever need to access any of these files, I can do so in a variety of ways. And only one of these ways requires my computer., First, I can access the files by simply opening the folder on my computer. This is the traditional way., Secondly, I can log on to my hard drive in the cloud and download it from there., Thirdly, I can share the folder on my hard drive (or any sub folders within that folder) with my other computers, or family members computers., And the best thing is, this is all FREE., The program is called Dropbox and it is a lifesaver., Now, before you go and register for a free account, I want to give you a link so you can register for free but in doing so through my link, you will get MORE FREE STORAGE. I will be able to give you an extra 250MB of FREE Storage., So, go to the show notes for this episode, Episode 12 at and in the show notes you will find a link to Dropbox. Click on this link and it will take you to the registration page. By doing it this way, you will receive an extra 250MB of free storage space., There is a great introduction video that explains things further and I encourage you to watch the video., Dropbox is an amazing service. It simply allows you to keep and share your files effortlessly and I tell you. The peace of mind it gives you in knowing that if you ever lost your computer, if it was ever stolen or if it ever crashed, you could be up and running again in no time, is great., So, check it out. You'll be glad you did.

01 Intro

This is The Key To Retirement Episode 12.