While most people are relieved to see 2022 — with its record-high inflation and never-ending interest rate hikes — in their rear-view mirror, the question remains: what’s the best way to manage our financial future when there’s so much ongoing uncertainty?
“It was a very challenging year regardless of who you are or what your financial situation was,” says Executive Financial Consultant Adam McInroy CFP, CLU at Bobcaygeon-based McInroy and Associates Private Wealth Management.
While Adam says no one can predict what 2023 will bring, he’s certain of one thing: those with a solid financial plan are in a much better place when it comes to navigating a year of financial upheaval.
“We’re hearing tons of analysis and market experts’ forecasts of what 2023 is going to be like,” Adam explains. “I don’t know what the markets are going to provide. I don’t know where the interest rates are going to go. But what I do know is having an emergency fund makes a solid difference when we go through times of financial challenges that no-one predicted and that are uncontrollable.”
“Having flexibility within your cashflow allows you to adapt to the rising cost of living, minimizing the taxes you pay and putting more money in your pocket. Strategically planning your income streams means reduced or no OAS clawback, giving you more cashflow to enjoy your retirement with.”
Financial planning, according to Adam, isn’t just about investing.
“Investments are the sexy thing that everyone likes to talk about,” he says. “But a lot of the hype around investing is more for entertainment purposes as opposed to actually being based on solid financial advice.”
If there was a silver lining to 2022, Adam says, it was the important lessons the year taught us about minimizing debt.
“We rarely understand the impact of our decisions until we go through a year like 2022,” he explains. “When times are good, we never think that it’s important to pay down debt. We don’t think of the other components of a financial plan, like having an emergency fund or play through the “What if” scenarios that we face during uncertainty. ‘What if I couldn’t work for several months?’. ‘What happens if suddenly we went to one income?'”
“Going into 2023, it’s important to recognize that a financial plan is more than just an investment portfolio. Two of the biggest things we’re hearing are ‘My friends are concerned about the cost of living and how it will impact their retirement, but you’ve shown us clearly the impact that it will have so I’m able to sleep soundly at night and turn off the noise of the news’ or ‘I really should have talked to you before I made this decision because, as it’s impacting me negatively now, I wish I had made a different decision.'”
Helping clients understand the ‘puzzle pieces’ of their financial plan and how to put them together is key to maintaining discipline and patience, Adam points out.
“Understanding what the picture is on the front of your puzzle box and what puzzle pieces are needed to make that picture a reality is what we do. When we start to put those puzzle pieces into a plan, things suddenly start to make sense and give you the confidence you need to retire in the comfort and dignity you deserve.”
“We saw at least five people retire as planned in 2022. When they looked at their portfolios and said ‘It’s going down downhill’, we told them ‘No, we have a plan in place. This is still what it looks like.” They retired without fear, with a smile on their face, and on their own terms.'”
Having a solid financial plan can also provide the certainty needed to invest in real estate, despite the seemingly overwhelming challenges of entering the housing market.
“We saw two young couples buy their first homes in 2022,” Adam says. “Not anything fancy, but they got into the housing market. They were successful because they followed the strategy that was laid out for the last two or three years. They ignored the rhetoric that housing is unaffordable. They ignored the fancy entertainment investing trends and they stayed with a tried-and-true method.”
A solid financial plan also helps avoid another effect of the psychology of money: making major changes in January simply because a new year has dawned.
“We meet with clients throughout the year because life events happen throughout the year,” Adam explains. “People who retire don’t all retire in January. Most of our clients know full well what retirement is going to look like, regardless of the date they choose to retire. However, what they don’t know is specifics and how small decisions will impact them directly.”
“For instance, when to take CPP and OAS — a big conversation for a lot of pre-retirees right now. We hear a lot of ‘One website tells me this, another website tells me that’. It’s critical to make it simple to understand, but specific to their situation and flexible for the uncertainties that are possible. We present that information to them so they understand it, and they have access to their digital financial plan at any time for their own what-if scenarios.”
Helping clients understand the impacts of their financial decisions is a key role of Adam and his team at McInroy and Associates Private Wealth Management.
“It’s important to empower clients to make decisions, but it’s also important they have someone walking alongside them while they’re making those decisions — making sure those decisions aren’t negative, today or 20 years down the road,” Adam notes. “Or, if they’re choosing to make what we think is a negative decision, ensuring they know the consequences or potential outcome of that decision.”
When all is said and done, Adam says the service he and his team offer clients is rooted in their seeing “opportunities that most people don’t understand and don’t know exist.”
“We’ve seen a lot of different markets come and go. And we can certainly empathize with people who find the current environment challenging so, as 2023 kicks off, we’d like to help if we can, and so here’s what we’re offering: a cup of coffee and a second opinion.”
To book some time with Adam or one of the members of his team, visit mcinroypwm.com/book-meeting.
“By appointment, you’re welcome to come in and sit with us for a while,” Adam says. “We’ll briefly ask you to outline your financial goals and what your investment portfolio is intended to do for you. Then we’ll review the portfolio and your larger financial plan with you.”
“If we think your investments and financial plan continue to be well-suited to your long-term goals, we’ll explain why in plain simple language. If on the other hand we think some of your investments and financial planning strategies no longer make sense with your goals, we’ll explain why and — if you’d like — recommend some alternatives to strengthen your financial plan and portfolio.”
McInroy & Associates Private Wealth Management is located at 21 King Street West in Bobcaygeon. You can email Adam at firstname.lastname@example.org or call 705-748-1950. For more information about McInroy & Associates Private Wealth Management, visit www.mcinroypwm.com.
Investors Group Financial Services Inc.
This is a general source of information only. It is not intended to provide personalized tax, legal or investment advice, and is not intended as a solicitation to purchase securities. Adam McInroy is solely responsible for its content. For more information on this topic or any other financial matter, please contact McInroy & Associates Private Wealth Management.
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