I was recently reading through some material from the Canadian Securities Institute, one of the financial industry’s education providers, and came across an interesting piece called “The Burdens of Wealth Accumulation.”
The article discussed a range of factors that can be attributed to the difficulty of maintaining and growing your wealth. These obstacles include taxes, costs, and inflation. While thinking a little deeper about these three obstacles, I couldn’t help but add a couple of additional obstacles when trying to grow and maintain wealth. These are procrastination and what I call, “stick-with-it-ness” (or lack thereof).
The article goes on to outline a study that shows an individual investor having to bear the three original impediments placed upon them and their ability to grow their wealth over a 30-year period. When an investor is burdened with only one obstacle throughout the 30 years, they finish with more wealth than any other scenario incorporating the addition of one or both of the other two obstacles.
The reality is that investors are having to bear all three obstacles at the same time, thus placing importance on strategies around the idea of minimizing the impact of not just one obstacle, but all three obstacles.
As a holistic financial planner, part of the development of your financial plan is to be sure that all such obstacles are accounted for. Projections are only as good as their inputs and we want to be sure that any plan you set in place accounts for the obstacles of taxes, costs, and inflation.
Now while there is no input for procrastination and level of “stick-with-it-ness”, there are numerous studies that show both additional obstacles are likely to be overcome by working with a professional – we ensure that the approach is suitable based on your short-term and long-term financial plans.
Stefano Pannu is a financial advisor with RGF Integrated Wealth Management Ltd. The views expressed are those of the author and not necessarily those of RGF Integrated Wealth Management Ltd., which makes no representations as to their completeness or accuracy.
©2019 RGF Integrated Wealth Management Ltd. | RGF Wealth Management Ltd., Member - Canadian Investor Protection Fund.
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