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September/October 2011

Commentary - Hans H. Mathisen

I'm sorry, but until further notice, my usual commentary will not be available. However, I can still provide you the valuable benefits and financial insight of LIFE LETTER and LIFE LETTER MATURE:

The right wealth building strategy- September's LifeLetter discusses formulating a wealth building strategy that evolves along with your particular financial profile.

Too many Canadians unaware of retirement needs - LifeLetter for October looks at determining your retirement needs, and measuring your progress towards those needs.

LIFE LETTER MATURE - September's entry looks at estimating your retirement expenses, and October's LLM examines Tax Planning for those that may have received a severance package.

Hans Mathisen





The right wealth building path

As more people are beginning to regain their financial footing after the recent economic storm, many are reassessing their approach to financial planning and wealth accumulation with greater intent on “getting it right” this time. For guidance, many investors are turning to the examples of wealthier investors in the hopes of mimicking their practices so that they can achieve similar levels of success. People tend to think that high net worth investors or the ultra-rich have some sort of edge, and that, if they could gain the same edge, they might enjoy the same results.

The fact is that a significant number of wealthy people feel that they too lack the discipline to sustain a long term wealth building strategy. A recent Financial Post article cited a study of 2,000 wealthy investors by Barclays Wealth which showed that nearly 50% struggle with the problem of poor discipline in their finances.

The article stated that many wealthy people got that way through entrepreneurial endeavors which requires a very different mindset than that of a strategic investor. They tend to be more driven to take risks, make quick decisions and have less patience, all of which are not ideal characteristics for a successful investor. Still, according to the Barclays study, many of them wish they had the discipline to build their wealth more steadily over time.

The most notable successful investors, such as Warren Buffet, are long term strategists with almost super-human patience. They believe in diversification, buy-and-hold, investing in value with a focus on wealth preservation, not wealth building – apparently a lot easier said than done for most.

But, there are enough successful high net worth investors around from which we can glean the best practices that, when applied by any investor, can provide the edge that everyone seeks:

First: Develop clear and meaningful investment objectives. Many investors focus on investment performance, and they often find themselves chasing it by trying to time the markets and making risky buy and sell decisions. Successful investors focus only on their specific objectives and use them as their sole benchmarks as opposed to some irrelevant stock market benchmark.

Second: Building and preserving wealth is as much about managing risk as it is managing investment performance. The key is to diversify your asset classes in a way that they act as counter weights to the various forms of risk, such as market risk, inflation risk and interest rate risk. Periodically your portfolio should be rebalanced to ensure that the exposure to any one risk has not increased due to changes in your portfolio values.

Third: Surround yourself with qualified and trusted advisors who have your best interest in mind when providing you with guidance. The most successful investors rely on a team of advisors that provide unbiased advice in formulating the most appropriate investment strategy to meet their needs.

When formulating a wealth building strategy, it’s natural to look to the wealthy for ideas and techniques. Because your investment objectives are specific to you, it is important to develop a strategy that evolves along with your own financial profile.

Adopt a Wealth Strategy - because it's the right thing to do. Call today!

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

Copyright © 2010 Life Letter. All rights reserved

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Too many Canadians unaware of retirement needs

It appears that while many Canadians faithfully invest funds in their workplace retirement plans, they are somewhat lackadaisical when it comes to determining their retirement needs. Also, many fail to measure their progress towards those needs.

A November 2010 Ipsos Reid survey found that 44 percent of those who invest in a company-sponsored pension plan are not aware of what their income will be upon retirement. Furthermore, 41 percent do not know how their current holdings compare to that target.

Manage Your Personal Economy

The survey results are somewhat understandable considering the stress we encounter from a slow-growth economy, stagnant employment, job losses, rising prices, and government debt levels. Who has time to get into the details of planning for a retirement that is 20, 30, or 40 years away when this uncertainty is swirling all around us? This uncertainty shouldn’t drag us away from executing a rock solid retirement plan. Actually, it should motivate us to do everything in our power to ensure our own self-sufficiency throughout the balance of our lives.

There is little one person can do to alter the global or even domestic economy, but you can plan and take actionable steps towards your personal economy. In fact, if everyone managed their financial security better, the domestic and global economy may very well resolve itself. To accomplish this, however, you must know your current financial position with regard to your retirement objectives and take the actions needed in order to reach your retirement income goals.

Our Old Friend, Procrastination

Procrastination plays a large role when it comes to unsuccessful retirement planning. The survey found that Canadians 55 years of age and older displayed a greater interest in their retirement planning than younger Canadians. They were aware of their retirement needs, were tracking their progress, and enlisted the aid of a financial planner to help them reach their goals.

This is not surprising as concern for retirement rises the closer you get to it. Imagine, however, at age 55 discovering that you’re nowhere close to having the necessary funds; that you’re going to have to sock away most of your income during your remaining working life just to make ends meet; or, that you’re going to have to continue working in your senior years to pay the bills. That doesn’t seem like a just reward for all your years of hard work.

Many survey respondents claimed that the reason for not paying attention to their investments was the inability to understand their statements (36%) or that it was presented in an unengaging manner (24%). While respondents claimed that company pension plans provide little investment advice (72%), only 31% of respondents reported seeking outside assistance from a financial advisor.

Start Retirement Planning Early - because it's the right thing to do. Call today!

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

Copyright 2010 Life Letter. All rights reserved

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