This is Theodore and Linda Jensen’s Story.

Theodore spent many years working for a large oil and gas company in Calgary.  He had a senior position, a corner office and he was well paid.  Like a lot of his counterparts, Theodore could have worked his whole career there and retired with a nice pension at about age 60.  But, Theodore always had a dream to be his own boss and build his own business.  So one day he quit his job and he started a printing business in his garage.

At the start of their new venture, the Jensens didn’t know much about running a business, but they learned quickly.  After a whole lot of hard work, the Jensen’s little printing business grew.  They moved out of their garage into a bigger space that could accommodate bigger machines and more employees.

They kept working hard, stayed busy and loved most of their experience.  Eventually, after about 25 years in the printing business, the Jensens were ready to sell out and retire.  And that’s exactly what they did.   They wanted to begin a new life of travel, golf and relaxation; after all, they had earned it.

Theodore and Linda soon realized that although they had become experts about the printing business, they weren’t experts about financial planning or investing and they wanted to focus on other things in retirement than taxes and the stock market.  So they hired a financial advisor to manage their money and look after their nest egg.  The Jensens handed over their retirement accounts along with the proceeds from the sale of the business to their investment advisor.  Theodore and Linda began to enjoy the travel and the golf.

At that time, the Jensen’s financial picture looked like this:

Assets

$800,000 in investments from the sale of the business
$1,000,000 in retirement accounts (RRSPs, LIRA, spousal RRSP and pension)
$400,000 in a family cottage
$350,000 house

Liabilities

None

Net Worth:

$2,550,000

The Jensens thought their financial situation was in order and believed that they could simply focus on the fun things in retirement.  The Jensens thought that the only work they needed to do was on their golf handicaps.   After all, $2.5 million of net worth should easily be enough to make most dreams become reality.

But three years into retirement, I met Theo and Linda.  They came to one of my financial boot camps.  The Jensens had become uncomfortable with their situation.  In fact, they were downright worried about their money and their future.  The bursting of the dot com bubble a few years earlier hurt them a lot.   The $800,000 investment account was now worth less than $400,000.   And the $1,000,000 they had in their RRSPs was now worth $600,000.

This was a significant decline in their nest egg for sure, but it wasn’t their only problem. Poor tax planning along with changes to the tax rules hurt them also.  They were paying more than $30,000 per year in taxes and correctly projecting that in 3 more years, this annual tax bill was set to increase to $60,000 per year.

Although they didn’t know it then, the direction they were heading meant the Jensen’s were set to run out of money halfway through retirement.  The Jensens had no financial plan in place.  Like a ship without a rudder, they were adrift at sea and heading for the rocks!

A financial plan is a road map.  It’s a set of directions to get you from where you are now financially, to where you really want to be.  A financial battle plan on the other hand, is like a GPS.  It not only gives you the co-ordinates of your destination and tells you when and where to turn, but it tells you which routes to avoid because of hazards and emergencies.

By following their financial battle plan, the Jensens turned their ship around.  A smarter investment plan allowed the Jensens to re-build their nest egg.   In two short years, they earned back all the money they lost plus growth and did it in the middle of a bitter recession.  The best part for them was knowing their investment plan now provided most of their nest egg with principal guarantees.

Their situation wasn’t complicated either.  By doing some effective planning and using a simple strategy, Theo and Linda changed their future.

Rather than a $30,000 annual tax bill increasing to $60,000, the Jensen’s annual $30,000 tax bill dropped to $2,900!  That is NOT a typo.  It went from thirty thousand dollars to twenty nine hundred dollars and will stay there for years to come.

They increased their return, added thousands to their nest egg, saved thousands in taxes and did so with less risk.   That’s what a Financial Battle Plan can do.

You don’t need to have a nest egg as big as Theodore and Linda to get the benefit of a proper financial plan.  A proper plan will allow you to be smarter with every aspect of your investing to earn higher returns.  It will allow you to become very efficient with tax and pay far less than you would otherwise.  You don’t need to be a millionaire to get the same benefits many millionaires are already getting.

A Financial Battle Plan isn’t about how much money you make or the size of your nest egg.  Your Financial Battle Plan is about maximizing assets and minimizing taxes.  It allows you to make the best possible decisions with your money.  Regardless of how much money you have or the size of your investment account, the key to your success is the plan you put in place.

Financial Battle Planning is an ongoing process, it’s not an event.  It starts today and lasts the rest of your life.

Everyone’s situation is unique and so is everyone’s financial plan.  Your Financial Battle Plan will look different than my Financial Battle Plan, unless we have the same goals and we’re starting from the same place.