Why Financial Planning is Key for Achieving Financial Goals
By James Parkyn - PWL Capital - Montreal
The future. As much as we want to predict it, crystal balls remain beyond our grasp. But we can and should plan for tomorrow, especially where our finances are concerned.
American author Alan Lakein captured it best: “Planning is bringing the future into the present so that you can do something about it now.”
As trusted financial advisors for highly successful Canadians, our role at Parkyn—Doyon La Rochelle is to provide you with the right tools and knowledge so that you can achieve their financial goals with confidence – even amid life’s unexpected twists and turns.
And at the heart of our approach to wealth management is financial planning.
What is financial planning?
Financial planning is the process of creating a strategic roadmap to manage and grow wealth for financial security and legacy preservation. This includes assessing current financial status, setting short- and long-term objectives, planning for investment strategies, estate planning, tax optimization, philanthropic endeavors, and risk management. Effective financial planning maximizes wealth, mitigates risks, and prepares for sustained financial success and generational wealth transfer.
Why is financial planning important?
Anyone with financial goals needs a financial plan. After all, without a plan, a goal is just a wish.
“Financial and investment planning are critical, because they let you know whether your current actions are within the realm of reasonable”
Developing a financial plan is not about predicting the future. It’s about determining the best route for achieving the financial goals you want to achieve, based on where you are today and where you want to be in X years. It also considers various courses of action to take based on what might happen along the way.
5 ways a financial plan can help
The Parkyn—Doyon La Rochelle team has devoted the last 25+ years to helping high net-worth clients manage their wealth. From experience, we can confidently say that everyone’s financial goals may vary, but the benefits of having a robust financial plan do not.
Here are the reasons we believe a comprehensive financial plan is essential:
It keeps you focused and motivated: By establishing clear, achievable goals, we can create a detailed roadmap to reach them. This process helps you maintain focus and motivation, ensuring that your actions align with your desired outcomes.
It avoids wasted time and efforts: By breaking down larger goals into smaller, manageable tasks, you can prioritize effectively and avoid wasting time on less important activities.
It makes the most of your resources: Planning helps us allocate a resource like money efficiently to maximize its impact. The investment portfolios we build are always in service of your financial plan objectives.
It avoids potential pitfalls: Through planning, we can identify potential risks and devise strategies to mitigate them. This proactive approach helps you avoid potential pitfalls and prepare for unforeseen challenges.
It keeps you on track: By monitoring your financial results, we can see what aspects of the plan are working well and which ones need adjusting to ensure we hit all your financial targets.
Parkyn—Doyon La Rochelle’s financial planning services
At Parkyn—Doyon La Rochelle, we take a holistic view to financial planning, meaning we look at all aspects of your financial life as a whole. Together with you, we develop with you a comprehensive, well-prepared plan that’s focused on your goals, with safety margins built-in so that you can achieve these goals more confidently.
Here’s how we assist you in preparing for life’s significant financial milestones.
Tax planning: Our team is well-versed in tax laws and regulations and collaborates actively with your accounting and legal specialists to provide strategic tax planning services to optimize your financial position. We assess your unique situation, identifying opportunities to minimize tax liabilities while maximizing savings and investments.
Insurance planning: We work with external insurance specialists, who will assess your risk management requirements and recommend suitable coverages to safeguard your financial interests.
Estate planning: We collaborate with external legal specialists to help you navigate the intricacies and ensure your assets are distributed according to your wishes while minimizing tax implications.
Retirement planning: We provide asset projections, cash flow analysis, sustainability reviews, and pension plan evaluations to ensure a secure and sustainable retirement journey.
Education funding strategies: We assist you in planning future educational expenses. We offer solutions for savings and investment strategies to ensure educational goals are met affordably and effectively.
Support for incorporated individuals: We help business owners and incorporated professionals such as doctors optimize their financial situation. We tailor strategies with experts to reduce tax burdens, optimize financial efficiency, and balance both personal and business goals.
How can you know if your financial plan will be successful?
Part of the responsibility of any financial advisor is to stress-test your financial plan to evaluate its resilience in different scenarios.
“A plan is only useful if it can survive reality. And a future filled with unknowns is everyone’s reality. A good plan doesn’t pretend this weren’t true; it embraces it and emphasizes room for error”
Here are some stress-test methods we use:
Scenario planning: We consider different scenarios that could impact your finances, both positive and negative, to see how your plan would adapt to these situations.
Monte Carlo simulation: We use complex computer simulations that run your financial plan through thousands of possible future market conditions. This tells us the probability of your plan succeeding under different circumstances.
Sustainable withdrawal rate testing: This involves estimating a safe withdrawal rate from your savings in retirement, i.e. how much money you can safely spend every year and not run out of money. We can help determine a sustainable withdrawal rate for your situation.
Regular review and updates: Your financial situation and goals will change over time. Through regular reviews, we’ll update your plan to reflect your current circumstances to ensure you remain on track to reaching your goals.
The financial plan we create for you offers guidance and a clear action plan for today, ensuring you can confidently navigate whatever challenges tomorrow may bring.
Your customized financial plan begins with a call
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