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Ensuring your Legacy; How to pass on your frugal ways

Over 3 decades of stewarding the wealth of Canadians, I have been asked to provide advice on a whole host of financial situations and challenges. Despite the ever-changing ebbs and flows of markets or the evolution of governments, one recurring theme many in my profession face today is “how do I help my heirs secure their future?” The answer is twofold:

The savings conundrum. More often than not, we hear and read stories about how Canadians are struggling to find ways to tuck away funds for the future. Often, all it takes is some education and a simple trick to get a child rooted in a solid discipline. I recently read a story of a gentleman, a war veteran who held down a variety of menial jobs and amassed an $8 million fortune when he recently passed at age 92. Ronald Read worked at a gas station and was a janitor at a JC Penney, married with 2 children. Ron leads a frugal life, saved and understood to invest for the long term. Here’s today’s takeaway: Suggest to our children to put away some of that weekly “coffee money” in a savings challenge over the next 52 weeks. Week one, save $1, Week two $2 until Week 52 where they put aside $52. Surprisingly, at the end of the 52 weeks, $1378 will have accumulated!! The next step is to open up that TFSA or RSP and tuck that money away and “invest” it. You have successfully become a “Family Savings Coach” and made a difference. It never hurts to adjust the plan to increase any single week if extra money is lying around too.

Part two is all about “Preparedness”. Although it’s estimated that over 50% of those with wealth have wills, a recent RBC report suggests that only 22% have a full estate planning strategy. The latter is the educational part of the transfer process and is essential in ensuring a smooth transition. I have witnessed too many people not ready to assume the roles laid out in a will(s) or lacking the knowledge of the how the inheritance works. We have made it a point today improve and adapt the level of financial literacy needed for clients and their families to work together. Over the next decade, an estimated $750 billion will be transferred to Canadians between the age of 50 and 75. That will be the largest intergenerational wealth transfer in Canadian history over such a period of time.
Is your family ready and secure about their future in a rapidly changing world? Your no obligation review is a phone call or email away. We would be pleased to assist.

Graham Mayes

About Graham Mayes, CFP, TEP, MTI

Chief Investment Strategist & Partner

Graham’s role at Exponent includes direct portfolio management, investment analysis, asset oversight, allocation and portfolio engineering, SRI/ESG mandates and Charitable Foundations. Graham is a member of the CFA Institute and the CFA Society of Ottawa.

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Exponent Investment Management