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March/April 2014

Commentary - Hans H. Mathisen

"Luck and your financial plan" – is the title of LIFE LETTER for March. No matter how well you plan financially, you need to be aware that situations beyond your control can have a significant effect on those plans?

"Avoid these financial diseases" - LIFE LETTER for April talks about the "financial diseases" that Canadians suffer from, and what you can do to reduce the effect it can have on your debt.


When should I start receiving my CPP?” is the question looked at in LIFE LETTER MATURE for March. With the recent changes to the Canada Pension Plan, that decision may be a little more difficult.

LIFE LETTER MATURE for April is titled "Snowbirds beware - again", and discusses the important rules and regulations to remember when leaving the country for extended periods.

THE STOCK MARKETS - At the end of the first quarter of 2014, the major stock indexes stood as follows: Toronto’s S&P TSX was up 4.68% ;and the Dow Jones down 1.53%. In Europe, Germany’s DAX grew 1.50%; France’s CAC fell 4.39%; and England’s FTSE 100 decreased 0.79%. In Asia, Japan’s NIKKEI declined 7.53%; and Hong Kong’s Hang Seng was down 3.42%.

As we try to determine how the markets will perform for the next 9 months of the year, here is a synopsis of what the economists foresee:

CANADA -- After four years of growth being driven by the household sector, Canada’s economy is about to undergo a shift, as the strengthening of the global economy fuels demand for our exports.We expect Canada’s economy to grow by 2.5% in 2014 and 2.5% in 2015.

THE U.S. – Forecasters say the world’s largest economy will grow by 2.8% in 2014 and may reach 3.1 % in 2015. This forecast is based on the assumption that the Fed will continue to wean the economy off its quantative easing program throughout 2014 but will leave its policy rate, the fed funds target, in the current 0% to 0.25% this year.

CHINA – The growth of GDP is expected to stabilize between 7.4% and 7.8% for 2014, with a slight increase in 2015. President Xi Jinping has used the first months to manifest his powerbase after the leadership transition was completed in 2013 with a strong priority on economic reforms.

Hans Mathisen





Luck and your financial plan

As much as we’d like to believe that if we stick to a solid financial plan all will work out, things often beyond our control may derail our plans. For lack of a better word, luck, both good and bad, plays a role in our financial future.

Relationship Breakdown
There are lots of statistics to choose from, but according to, “it's expected that 37.7% of all Canadian marriages will end in a divorce before the 30th anniversary.” Second marriages are even more likely to fail and the failure rate of common-law relationships is even higher. A financial do-over can be emotionally and financially devastating, and set back financial plans for many years or even decades.

Periods of Unemployment
It is recommended that we have a minimum of three to six months of income set aside for emergencies. A short interruption in employment can wipe out these savings very quickly. All too often, a lifestyle is established based on an income assumed to remain at a certain uninterrupted level. However, financial strain is swift with even a short period of unemployment.

Accident and Sickness
According to the 1985 Commissioner’s Individual Disability Table, a 35- year old has a 34% chance of becoming disabled for a period of 90-days or longer before age 65. Ask yourself, can you afford to take a 90-day vacation, starting right now? How about 6-months or a year?

Critical Illness
Statistics compiled from various sources for the same 35-year old indicate a 26% chance of suffering from cancer, heart attack or stroke before age 65. While survival rates from these conditions continually improve, the financial impact can be severe.

With the average life expectancy about age 80 (slight differences by gender), this means statistically we have about a 50-50 chance of living to this age. Death at younger ages when starting a family can mean financial catastrophe.

Investment Returns
Extremely low current interest rates and several memorable market corrections have affected just about everyone's retirement savings. Employer pension plans are not what they used to be, either. Low interest rates have contributed largely to the high debt levels Canadians are servicing today.


The reality is life is not fair. Some will experience more good luck than others and vice versa. There are some bad luck events we can be prepared for while others, like divorce, may just have to be dealt with when they occur.

John worked at the same job for 35 years and benefited from a very good pension plan. He was fortunate to remain married for the entire time and did not experience any unemployment or disabilities. Paul worked in the same occupation for 35 years but with several employers and used his savings when unemployed. He was disabled for two years in his thirties and only accumulated a small pension. Insurance paid a benefit while he was sick and some of his RRSP savings provide a guaranteed income.

Be prepared for bad luck – because it’s the responsble thing to do.

Call Hans Mathisen today at (306)242-7042.
or email -

Copyright © 2014 Life Letter. All rights reserved

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Avoid these financial diseases

There have been a number of articles that speculate on the number of advertising messages we are exposed to daily. While there doesn’t seem to be any actual scientific study, the numbers quoted are between about 250 and 3,000.


Television - The average “1-hour” TV program is only about 45 minutes of actual content. This means that about 15 minutes is dedicated to advertising. At an average of 30 seconds per commercial, you are exposed to about 30 ads per hour.

Internet - A typical web page can contain dozens of advertising links. Even with pop-up blocking active, some ads can still jump out at you.

Product Placement - One of the most lucrative ways for TV shows and movies to make money is by having recognizable products strategically placed or blatantly used as part of the story. Ask yourself, can the character, not the actor, in real life really afford that $6,000 watch or $100,000 vehicle?

Branding - Everywhere you look, you see this. The badging on a vehicle, company signage as you drive to and from work, even logos on our clothes.

Billboards - Technology now provides a medium to display multiple ads in 5-second intervals to grab our attention. And they can even display a video message. Sporting events are saturated with product ads as part of the venue and on the participants.

This is just part of the reason why so many Canadians Canadians suffer from materialism and consumption today. Recent reports have shown that total debt per capita in Canada is at an all-time high and average savings rates are at an all-time low.

There are steps you can take to reduce the symptoms of these diseases. They include asking these questions:

What else can I do with the money?
Today you have the young you and the old you money in your pocket. If you spend all the old you money today, you likely will not have enough to retire when you want. Perhaps you have a travel dream you would prefer to make a reality.

How much did we have to earn to make the purchase?
For an employee earning $100,000 annually, about one-third is eaten up by government deductions (taxes, CPP and EI). This means that to take home $1,000, you had to actually earn $1,500.

Would I really miss it in a month if I didn’t buy it today?
Most of us have experienced “buyers’ remorse” at one time or another. This also gives us a chance to figure out why we really want it.

Will this purchase today contribute to where I want to be tomorrow?
A consumer purchase almost never contributes to long-term wealth and financial independence. This includes an over-sized house. Consider that the more “stuff” we have, the more time and money it will take just to manage it. It’s way too easy to fall into the trap of buying things we don’t really need with money we don’t really have to impress people we don’t really like.

Resist Financial Disease – because it’s the responsible thing to do.

Call Hans Mathisen today at (306)242-7042.
or email -

Copyright © 2014 Life Letter. All rights reserved

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Mathisen Financial, Inc.
335 Redberry Road
Saskatoon, Saskatchewan S7K 4W5
Bus. (306) 242-7042 Fax. (306) 242-4314