People come up with a lot of reasons to avoid financial planning in Toronto and not to plan for their financial future. They’re too young, too old, too broke and so on. But the truth is, financial planning, and the services of financial planner, can help you make a game plan so you can get where you want to go, whether it’s retirement with an adequate income or making a major purchase, such as a house or a car.
So here are four myths about financial planning debunked
Myth 1. Financial planning is only for the rich
Many people believe that only the affluent need the services of a financial planner. Not so. If your savings are small and you’re not really keeping track of where your money is going, all the more reason to get a plan in place. A financial planner can help you set a budget and let you know what tax breaks you can get through financial products such as RRSPs. And while there are financial planners who specialize in wealthy clients, many others provide reasonably priced services to people of modest means.
Myth 2. A financial planner will only give investment advice
Choosing the right investments is only part of the bigger financial picture. A good planner or adviser will take into account varied aspects that include taxes, insurance, retirement planning, creating a budget, estate planning, liquidity requirements and other life goals. And if you have conflicting financial goals, they will help you to understand each one’s pros and cons so you can prioritize.
Myth 3: You’re too young to start planning
Yes, you may not have much money, or even a career, at this stage, and feel that financial planning is something you can do down the endless road that stretches out before you. But starting to plan now will allow you to develop good habits that will serve you well as your career takes off. Small investments made now can take advantage of compound interest rates over many years to grow into something substantial.
Myth 4: All financial planners are created equal.
Not true. Some are well qualified and will work in your best interest; others not so much. So get referrals from friends and family who have used the services of a financial planner before. But also check that the planner has good professional qualifications. For example, do they have the Certified Financial Planner (CFP) designation? If you are going to talk to a planner about using their services, the Financial Planning Standards Council (FPSC) suggests you ask these 10 questions.