CONTENTS

Acknowledgements ix

How to Use this Guide xi

Introduction 1

PART ONE: Understanding Your Finances 3

Chapter 1: Setting and Achieving Goals 5

Chapter 2: Where Are You Now? 19

Chapter 3: How to Save a Lot of Money! 31

Chapter 4: Income and Debt Management 53

PART TWO: Protecting Your Finances 71

Chapter 5: Benefits 73

Chapter 6: Risk and Living Insurance 93

Chapter 7: Life Insurance 107

PART THREE: Growing Your Finances 131

Chapter 8: Retirement and Estate Planning 133

Chapter 9: Investing 163

Chapter 10: Tax Planning 187

PART FOUR: Ensuring Financial Success 211

Chapter 11: Wills, Powers of Attorney, and

Personal Care Directives 213

Chapter 12: Finding the Right Advisors 237

Conclusion 257

About the Employee Financial Education Division 259

Index 261

About the Author 273

ftoc.indd 7 9/21/2012 8:15:57 PM

1SETTING AND ACHIEVING GOALS

The greatest danger for most of us lies not in setting our aim too

high and falling short; but in setting our aim too low, and achieving

our mark.

—Michelangelo

IF YOU ASKED MOST PEOPLE if they had goals, almost everyone would

say they did. So the real question becomes, why is it that most people don’t

work toward achieving their goals? The main reason is that their goals

aren’t in front of them on a daily basis. Another reason is that when they

set their goals, they don’t do so properly. For example, someone might tell

you something like, “I want to go to Hawaii.” Although this is a goal, it is

not set up properly to be met with success. Let’s look at what needs to be

done to increase the likelihood that goals will be met.

One Frank Thought

You may be wondering why a personal finance book has goal-

setting as the subject of the first chapter. The reason is to help you

identify the things that are most important to you so that, when you

are making financial decisions later on, your focus and priorities will

be on these goals.

c01.indd 5 9/3/2012 12:20:44 PM

How to Eat an Elephant6

Write It DownThe first step, and the biggest, is to write them down. Studies have shown

that those who not only make goals but also write them down dramatically

increase their chance of success in achieving their goals.

Define ItThe second step in setting a goal is to ensure that you have defined all of

the components of a goal. You likely have heard the acronym “SMART,”

which stands for Specific, Measurable, Attainable, Realistic, and Timely.

So, the SMART version of the goal mentioned above would look like this:

I want to take the family to Hawaii for three weeks, at a cost of $8,000, in

two years’ time.

You could even take it a step further and say: I want to go to the islands

of Kauai, Oahu, and Maui for one week each. It will cost me a total of

$8,000. I will need to save $333 a month, and I will be there from February

7 to February 28, 2015.

Specific: Trip to Hawaii for three weeks.

Measurable: Cost is $8,000; time to attain goal is two years.

Attainable: I can save $333 a month; I will have accumulated vaca-

tion time; I have no issues with flying or travelling to the United

States.

Realistic: I can afford it.

Timely: Two years to plan and execute is sufficient.

So now you can see the difference between just having a goal in your

head and having a goal that is SMART. It’s now easy to understand that,

when a goal is defined properly, the probability of achieving it goes up

tremendously.

Setting Your Goals and Yourself Up for Success!First, I want you to daydream about all the goals you want to attain and the

things you want to do. I don’t want you to have any restrictions on what

goals you set. I want you to dream big! I want you to think about all the

c01.indd 6 9/3/2012 12:20:45 PM

Setting and Achieving Goals 7

different areas of your life and the goals you want to achieve. I want you to

be comfortable and not put any restrictions on yourself, because anything

is possible: you just have to figure out how to achieve it. So, the first step

when setting goals is to dream big!

Start by making a list of 50 things you want to do right now. Don’t

worry about making them specific, measurable, attainable, realistic, or

time-specific at this stage. I just want you to dream and write! Your list

might look something like this:

• Take a trip to Hawaii

• Buy a new car

• Ask for a raise

• Start a blog

• Spend more time with my family

• Go to the gym at least once a week

• Take my lunch to work every day

• Donate some of my time to my favourite charity

• Get my personal financial situation in order

• Read two books a month

• Get my will done

• Learn to speak Spanish

• Get my master’s degree

• Help my children buy a house

• Learn to scuba dive

• . . .

Continue writing down goals. Write as many as you can. Get to 50?

Great! If you write down 100 goals, that’s even better!

Think about what you want to have, what you want to be, what you

want to do, what you want to see, and with whom. What are you passionate

about? What do you want to learn? Ask yourself questions such as: Why do

I do what I do? What is my life mission? What is the legacy I want to leave?

Write down all the different things you want to accomplish. Think about

what you want for your family, for yourself, for your health, for your wealth,

and for your overall wellness (nutrition, fitness, mental health, and career).

Think about self-improvement. Think about spirituality. Think about your

c01.indd 7 9/3/2012 12:20:45 PM

How to Eat an Elephant8

career. Think about your favourite charity. Don’t put any restrictions on

where your thoughts take you.

Once you have your list (and you can always add to it later), you need

to start organizing it. The easiest way to do this is to start by identifying

the time frame during which you want to accomplish your goals. Give each

goal a specific time frame. It could be within the next month, the next year,

or the next five, 10, 15, 20, or 25 years. Write down the period within which

you want to accomplish each of your goals.

Your list now might look like this:

• Take a trip to Hawaii—2 years

• Buy a new car—4 years

• Ask for a raise—2 weeks

• Start a blog—2 months

• Spend more time with my family—daily

• Go to the gym at least once a week—weekly

• Take my lunch to work—daily

• Donate some of my time to my favourite charity—monthly

• Get my personal financial situation in order once and for all—1 year

Now you are ready to organize your goals in the order of their time frame.

What Is the Financial Cost to Accomplish Your Goals?The next step is to figure out what the cost is to achieve these goals. This

may require a little bit of research on your part to learn and understand

what steps are involved. For example, it’s easy to say that you want to go

to Hawaii in two years’ time, but without understanding what’s involved

and how much it costs, it’s going to be difficult to know what you need to

do to achieve your goal. Therefore, you may want to speak with a travel

agent or spend some time online researching how much such a trip costs.

Your time frame and cost estimate might look like this:

• Take a trip to Hawaii—2 years = $8,000

• Buy a new car—4 years = $40,000

c01.indd 8 9/3/2012 12:20:45 PM

Setting and Achieving Goals 9

• Ask for a raise—2 weeks = $5,200 a year

• Start a blog—2 months = $50 + time

• Spend more time with my family—daily = $0 + time

• Go to the gym at least once a week—weekly = $55

• Take my lunch to work—daily = $0 + time

• Donate some of my time to my favourite charity—monthly = $0 + time

• Get my personal financial situation in order once and for all—1

year = $ variable + time

One Frank Thought

Before you can truly say whether a goal is realistic financially, you

need to better understand your financial situation. Keep working

through the chapters and exercises in this book, and I promise you

will know what is and isn’t possible.

Identify What You Need to SucceedNext you need to identify the major things that need to happen to accom-

plish each goal. At the same time, it would also be a good idea to try to

foresee what obstacles might prevent you from achieving these goals.

Going back to the Hawaii example, if you are not a U.S. citizen, you

will need to ensure your passport is up-to-date (or maybe even get a pass-

port).You may want to research the best time of year to travel there and

check with your boss that you can get the time off. So, let’s look at the

Hawaii goal all together:

Specific: trip to Hawaii

Measurable: for three weeks

Attainable: up-to-date passport, time off work

Realistic: do we have the time and money? Yes or no

Timely: in two years’ time

By now you can see that building a list of goals and writing it down can

go a long way toward making your goals become a reality.

c01.indd 9 9/3/2012 12:20:45 PM

How to Eat an Elephant10

Review Your List RegularlyBe sure to keep this list in a handy place where you can review it on a daily

or weekly basis. Keeping your goals top of mind helps to motivate you to

work toward them continually. Maybe you will keep your list in a journal

that you write in each day. Then you could keep it on your nightstand to

read over every night or first thing in the morning. Maybe you will stick

your list to the fridge door or on the wall beside your desk. One colleague

of mine has his as the desktop image on his computer! Wherever you keep

it, be sure to update it and add to it on a regular basis.

Share Your Goals with OthersThere are three main reasons to do this. First, when you share your goals

with family members and friends, the goals become more real. What I

mean by this is that you become more accountable because other people

now expect you to work toward and accomplish them. The next time you

see those people, they may ask what you have learned about your goal.

For example, they might ask, “Have you decided which islands in Hawaii

you are going to visit?” This kind of community accountability helps you

to achieve your goals!

Second, by sharing your goals with others, you can learn from their

experience. Many people like to share their thoughts and experiences and

offer opinions on how best to achieve goals. Sometimes this can be a deter-

rent, but many times it can be enlightening and encouraging.

Third, for the most part, when you share your goals with others, they

will do one of two things: they will either get on board to help you achieve

them or get out of your way. It is highly unlikely that someone will actually

try to prevent you from achieving one of your goals. People have their own

goals and are too busy to stand in your way. When you share your goals,

people may offer useful tips, saying, for example, “Oh, you know who you

should talk to?” or “I learned to scuba dive with this company and had a

great experience! Call them and talk to Jason. He was wonderful!”

Next thing you know, you are well on your way to accomplishing

your goal!

c01.indd 10 9/3/2012 12:20:45 PM

Setting and Achieving Goals 11

Anna

As part of her New Year’s resolution, Anna decided that she was finally

going to lose the weight that she had been trying to take off for years.

She had tried many strategies in the past; the latest trendy diets, listen-

ing to her friends, taking advice from her family, and working with a

trainer at three of the mass-market gyms. Although she did see some

results, they tended to be minor and never really lasted.

Anna admitted to herself that the lack of results was in part due

to her behaviour, but she felt that it was also due to the people from

whom she was getting help. In some cases she walked away because

she felt the person was more interested in selling her additional prod-

ucts and services than in helping her to lose weight. Anna made the

decision to find an independent trainer who only dealt in fitness and

nutrition. It is very important to reach out to people who can help us

achieve our goals. After researching online, interviewing three differ-

ent candidates, and contacting referrals from two of them, she was

excited to start working with her new personal trainer, Ken.

In their first meeting, Ken asked a lot of questions about Anna’s

schedule, weight-loss history, and the goal she had. She replied that

she wanted to lose weight, increase her energy, and increase her con-

fidence. Ken recommended that she write her goal down. Following

the SMART methodology, he helped her to make her weight-loss goal

more specific and, therefore, more achievable.

On or before December 31, I want to celebrate having taken con-

trol of my health after losing 100 pounds (45 kg) to achieve my goal

weight of 140 pounds (63.5 kg). Since it was early February, she felt

that this was a realistic goal. However, Ken recommended that Anna

cut her goal in half to make it more attainable and realistic. Now it

was time for her to step up.

If Anna wanted to keep the weight off, Ken said, she would need to

create habits that would be with her for the rest of her life (instead of

crash-dieting and then rebounding). Anna could see how she had

c01.indd 11 9/3/2012 12:20:45 PM

How to Eat an Elephant12

done the latter many times in the past and agreed to try a “slow and

steady” approach. Ken helped her draw up a daily schedule. Anna

was sure she would never have made such a detailed plan without his

help. Now she could see how positive daily habits and having a plan

would lead to long-term success.

The first few weeks of exercise were difficult, but Anna persisted,

and the weight started to come off. Then, about two months into

the program, she twisted her ankle when she was walking to work.

Her first thought was, “Now I won’t be able to workout!” She called

Ken to cancel. He patiently explained that this was a very common

occurrence and they would work through it together. An accident that

could have derailed her fitness plan became nothing more than a

minor obstacle.

He assured her that he would be there to help keep Anna on track

during the inevitable setbacks. Anna had never been taught a system

that dealt with setbacks and was happy to hear that her job was to

“climb back on the horse” as quickly as possible.

At her monthly weigh-in, Anna found that she had met her goals

and could now treat herself to the reward of a new workout outfit—in

a smaller size. On her trainer’s recommendation, she started to see a

nutritionist who taught her to make healthier choices at the grocery

store and when she was hungry.

At her September evaluation, Ken congratulated her on a tremen-

dous life change. Her weight was down 35 pounds (16 kg), and, more

importantly, Anna had been working out steadily for eight months

and had developed some powerful, healthy habits. She had better

posture, more energy and self-confidence, and fit into clothes that

were three sizes smaller! With the help of her support network, Anna

took it one day at a time and made it through the holidays without

gaining the usual 10 pounds (4.5  kg). Thrilled, she celebrated New

Year’s Eve with her friends having lost 46 pounds (21 kg).

Anna succeeded in reaching her weight-loss goal by writing it

down, developing an action plan, and finding a support team. The

goal gave her the focus she needed to invest in herself, ask for sup-

port, and overcome the inevitable obstacles. Anna took her new

c01.indd 12 9/3/2012 12:20:46 PM

Setting and Achieving Goals 13

knowledge and confidence and set some additional weight-loss goals

for the next year—keeping them SMART and knowing that she would

be able to meet the challenges.

Don and Cindy

Don and Cindy, a couple in their early thirties, had decided it was

time to start a family. Both had secure jobs and earned a good liv-

ing, but they were anxious about their current financial situation and

the effect having a child would have on their day-to-day living and

financial decisions. In July 2010 they attended one of my financial-

planning seminars and, afterward, set up an appointment with me to

go over their situation. We evaluated the different goals they had with

respect to their finances and their soon-to-be-growing family.

When we looked at their credit card and consumer debt, I knew

it was time for a reality check. Cindy had used a student line of credit

to help put herself through law school, and Don had student loans

as well. Although they had paid the debts down since graduation,

they were still sizeable. Not only did Don and Cindy have student

debt, but they each had two credit cards that were very close to

their limits, as well as loans for their two luxury cars. Their debt

came to a total of $120,000, $30,000 of which was on high-interest

credit cards.

Even worse, they had no system to keep track of all the bills that

came into the house and, as a result, were often late with their pay-

ments. When I pulled their credit reports, I saw credit scores that were

lower than recommended. I explained that with better credit scores,

they would be able to qualify for a better mortgage rate.

It was obvious to me that they were living on credit and that

an unexpected “rainy day” would drive them into financial hard-

ship. Certainly, the addition of a baby would bury them unless they

developed better spending habits and a system to take control of

their finances. When I laid it all out in front of them, they knew it was

c01.indd 13 9/3/2012 12:20:46 PM

How to Eat an Elephant14

serious and asked what they could do. I introduced them to creating

SMART goals, and this was their first one:

By June 30, 2012, we will have reduced our credit card

debt to zero and our overall debt load to $50,000.

This met all of the SMART goal criteria because:

• It was specific and measurable with dollar figures and a

deadline.

• It was attainable and realistic given their incomes and

determination.

• It was timely because it had a definite due date.

From this overall SMART goal, we were able to create several

smaller, monthly goals that would get them to their target. The money

they saved during that first month, and in the months that followed,

was put directly toward reducing their credit card debt. That first

month’s goal looked like this: By January 31, 2011, we will eat dinner

at home eight times (this month) with food that we prepare ourselves.

As a young corporate lawyer, Cindy was rarely home before nine,

and they almost always ate out—a habit that can lead to financial

and health issues. Don was able to rediscover his love of cooking

because he could focus on making just eight meals a month; the next

month they increased the total to 12 meals. They began to take lunch

with them to work to save even more money, and each week they

reviewed their progress and planned accordingly with the help of

their specific goals.

If they had tried to do everything in that first couple of months,

they would have set themselves up for failure: proceeding slowly,

specifically, and steadily was the key. Don and Cindy were amazed

at how much less they were spending with just a few small tweaks

to those habits that had had such a direct effect on their financial-

planning goals.

c01.indd 14 9/3/2012 12:20:46 PM

Setting and Achieving Goals 15

Over the next year, they exchanged their luxury cars for a

mid-sized sedan, which reduced their monthly payments signifi-

cantly. They also rose to the challenge and began to examine each

purchase they made with a critical eye, no matter how small it

seemed. When I pointed out to Dan that his daily cappuccino cost

him $1,000 per year, they purchased a cappuccino maker so that

Dan could get his caffeine fix at home and put more money toward

reducing their debt.

I was relieved to see how well they were doing with taking

charge of their debt reduction. Although each change they made

was small in itself, the total impact on their spending was huge. As

a reward for their hard work, they looked through the real estate list-

ings in their areas of interest. And although Cindy’s heart belonged

downtown, they knew it made more financial sense to live a bit fur-

ther away, where their money would buy more house for a growing

family. Thanks to great public transit routes, downtown would still

be easily accessible.

Although their goal was to pay off their credit card debt by the end

of June 2012, they had succeeded in paying off their cards by the end

of 2011! The rest of their debt was down by more than 50% by the

original deadline.

These improvements to their finances, plus the systems we put

in place overall, meant that their credit scores had come up to very

good levels. Don and Cindy had learned that specific financial hab-

its were the key to their future success. Importantly, their plan now

included a safety net for their new family.

In July 2012, Don and Cindy found a great home for a great price

and used part of their savings for a down payment. In September

2012, they became the proud new parents of Cynthia, a beautiful,

healthy girl. We still have regular meetings to ensure that they are on

track, but the stress that was caused by their finances has now been

replaced by the stress of being new parents—a great trade as far as

they’re concerned.

c01.indd 15 9/3/2012 12:20:46 PM

How to Eat an Elephant16

Chapter Summary • Dream big and make a list of 50–100 goals you want to achieve.

• Identify when you want to achieve your goals.

• Organize your goals chronologically.

• Do some work to learn the financial implications of those goals.

• While researching your goals, identify any obstacles that need to

be addressed for you to achieve them.

c01.indd 16 9/3/2012 12:20:46 PM

Setting and Achieving Goals 17

How To Eat An Elephant.ca—Web Tools

Goal-Setting ToolNow that you have an understanding of how to write down your

goals, it is time to build your list. Start by logging into www.how

toeatanelephant.ca and fill in your profile. When you have completed

your profile, you will arrive at the menu page.

Take a minute to read the welcome message and watch the video.

When you are ready, click on the Goal-Setting Tool. Here you will see

the five steps to go through to set up your goals properly as outlined

in this chapter. So let’s get started!

STEP ONE: Enter a goal in the box provided and click on the Add

button. Keep repeating this process until you’ve entered as

many goals as you can think of that you wish to achieve.

Click on the Save button to ensure that they are saved.

You always have the option of editing or deleting a goal.

Once you are finished entering your goals, click on the Add

Timeline button.

STEP TWO: Go through each of your goals and enter the time-

frame in which you wish to achieve your goals. For example,

you may wish to buy a new car in four months. Beside your

goal of buying a new car, enter the number “four,” and select

Months from the drop-down list. Do this for each goal and

when you are finished click on Rank My Goals. You will have

the option of ranking your goals alphabetically, by their time

frame, cost, or amounts saved.

STEP THREE: Now go back through all your goals, entering how

much it will cost to achieve each of them and how much you

currently have saved. If you have one large savings account

for all your goals, you will need to decide how much to

allocate to each of them. If there is no financial cost to your

goal (for example, one might be to make your lunch every

day) simply enter “$0” as the cost and the amount currently

c01.indd 17 9/3/2012 12:20:47 PM

How to Eat an Elephant18

saved. Once you’ve done this for all the goals, click on the

Save button and then click on the Enter Obstacles button.

STEP FOUR: This is an optional step where you have the oppor-

tunity to list any foreseeable obstacles to achieving each of

your goals. If you press the Add an Obstacle button beside

each goal, a field will appear in which you can enter the

obstacle. When you are finished, simply click on the Save

button and then click on the Get Report button.

STEP FIVE: Here you are presented with your report, which you

can download and print as a PDF document.

I encourage you to spend some time working with this tool to ensure

that you have all of your goals listed. Come back and visit this tool

often to update and change your goals as needed. Keep a copy of

your goals in a place where you can review them on a daily or weekly

basis. Be sure to share a copy of these goals with the people who are

important to you, to help keep you accountable for achieving them.

c01.indd 18 9/3/2012 12:20:47 PM

INDEX

Aabsenteeism, 259

accounts,

chequing, 21, 159

high-interest savings, 21,

164, 183

investment, 21, 150, 154, 222,

223, 235

joint, 20, 26

savings, 21, 37, 123, 144,

164, 195

activity expenses, 32

additional funds, 51, 109, 193

age of majority, 218–19, 225, 229

AIG Insurance, 175

Air Canada, 175

annual payments, 38, 101

annual return, 120–21

appraisals, 61

artwork, 21, 198

asset allocation, 124, 173, 184

asset preservation, 156, 179

assets,

liquid, 21

liquidating, 59, 222

personal, 21, 172

attorney, 226–27, 228, 231, 235

Bbank statement, 37, 46, 50, 126

bankruptcy, 56, 57, 58–59, 86,

124, 181, 206

trustee in, 59

banks, 34, 48, 84, 169, 183, 238, 250

beneficiaries, 110, 111, 129, 150,

152, 153, 201, 207, 215, 216,

217, 218, 220, 221, 222, 223,

224, 233

naming, 124, 154

beneficiary designations,

222–23, 235

benefit plan, 74, 79–80, 83, 99,

114, 138–39

flex-benefit, 73, 76–77, 81

healthcare spending accounts

(HSAs), 73, 75, 76–77

traditional, 75–76, 77, 81

benefits,

child care, 74, 78, 190

dental, 73, 75, 76, 77, 87

bindex.indd 261 9/21/2012 7:06:33 PM

Index262

educational assistance, 75

eye care, 73

fitness-club memberships, 74

health, 79

life insurance, 76, 81, 82

long-term disability, 73, 75, 76,

77, 99

low-interest/interest-free loans, 74

paramedical, 73, 75–76, 77

prescription drug, 43, 73, 75–76

retirement funding, 73–74, 85

taxable, 74, 75, 78, 79, 188

wellness programs, 74

benefits coverage booklet, 74

bills, 13, 20, 21, 26, 28, 32, 36, 39,

40, 46, 58, 60, 61, 81, 87,

126, 128, 129, 194, 201, 204,

205, 217, 239, 253

bonds, 21–22, 123, 135, 137, 165,

166, 167, 168, 170, 174, 178,

179, 181 ,183, 184, 195, 239

bonus pay, 55, 76, 128, 174,

180, 239

borrowers, 23, 24

brokerage account, 22, 172, 182

budget, 31, 33, 34, 35, 36, 37, 38,

40, 46, 47, 48, 49, 50, 53,

54, 55, 58, 61, 63, 65, 66,

84, 85, 86, 88, 106, 122, 159,

160, 181, 206, 233, 254

apps, 34

built-up cash value, 110

business ownership, 89, 109,

110, 116

buy-sell agreement, 109

Ccable, 32, 42, 43, 45, 49, 60

Canada Pension Plan (CPP), 37,

100, 139, 140, 144

Canada Pension Plan Disability

Benefit, 100

Canada Revenue Agency (CRA),

20, 37, 54, 79, 192

Canada Savings Bond, 21, 22,

165, 170

Canadian Investment Managers

(CIM), 242, 244, 245, 261

capital gains, 54, 139, 150, 153,

187, 192, 195, 196, 198, 199

capital gains tax, 152, 220

capital loss, 192, 196, 199

car insurance, 32, 94

car loan, 23

career, 7, 8, 27, 66, 80, 86, 121,

193, 208, 253

caregiving arrangements, 218–19

cash donations, 198

cash-flow statement (see also

budget), 31

cash value, 21, 43, 110, 111

cashable savings bond, 21

cellphone, 32, 36, 42, 45, 60,

78, 208

certified cultural property, 199

Certified Financial Planner (CFP),

155, 160, 161, 162, 191, 198,

205, 221, 242, 246, 249, 254,

258, 261

Certified General Accountant

(CGA), 244, 255

bindex.indd 262 9/21/2012 7:06:34 PM

Index 263

Certified Management Accountant

(CMA), 244, 245

charitable donations, 153, 198

charitable remainder trusts, 153,

198, 199

charity, 7, 8, 9, 43, 152, 153, 198,

199, 207, 220, 221, 230

Chartered Accountant (CA), 244,

246, 255

Chartered Financial Analyst

(CFA), 243

Chartered Life Underwriter (CLU),

244–45

Chartered Strategic Wealth

Professional (CSWP), 243

children, 7, 25, 27, 38, 43, 47, 88,

104, 108, 109, 112, 125, 126,

127, 128, 129, 147, 148, 150,

151, 154, 157, 158, 172, 183,

184, 190, 194, 204, 205, 206,

207, 209, 210, 213, 215, 216,

218–19, 223, 225, 230–31, 232,

233, 234, 235, 252, 254, 261

Chilton, David, 41

client references, 248, 255

collateral, 109, 110

collectibles, 21, 54, 169

commission, 87, 111, 238, 239,

240, 241, 247

common shares, 166, 168, 184

company pension plans (CPP),

138–39

company stock plans, 21

employee stock-purchase plans, 21

profit-sharing plans, 21

condo fees, 32, 60

consumer debtor, 58

consumer proposal, 58, 59

convertible debentures, 167, 179

co-op, 22

corporate bonds, 21, 165, 183

costs, 8, 42, 44, 45, 55, 60, 61, 78,

81, 83, 84, 95, 98, 99, 101, 114,

120, 145, 177–78, 191, 194,

197, 200, 208, 226, 257, 259

cottage, 21, 29

Credit Canada, 59

credit card statement, 35, 51

credit cards, 13, 22, 26, 35, 39, 40, 45,

55, 56, 60, 63, 65, 66, 108–09

credit counselling, 58, 67

credit-counselling agency, 58

credit counsellor, 58

credit limit, 23, 30

credit risk, 165, 171

credit scores, 13, 15, 66

credit unions, 243

creditors, 58–59, 110, 111, 113, 124,

152, 223

Ddeath certificate, 217

debentures, 21, 167–68, 179, 195

debt,

bad, 60

consolidation, 56, 57, 67

destruction, 55–56, 67, 69, 159

good, 60

pyramiding, 56, 57

repayment, 23, 24

bindex.indd 263 9/21/2012 7:06:34 PM

Index264

debt management program, 58

debt service ratios, 59–60

deductible, 37–39, 95

defined benefit pension plans

(DBPPs), 83

defined contribution pension plans

(DCPPs), 83

derivative products, 179

designations, 222, 235, 237, 239,

242, 243, 244–45, 249,

251, 256

disabled dependent, 201, 224

diversification, 86, 124, 163,

174, 178

dividend tax credit, 187, 195–96, 225

dividends, 54, 150, 152, 166, 173,

179, 181, 195, 196, 199,

204, 225

divorce, 151, 205, 206, 213

donor-advised funds, 153,

198, 200

down payment, 15, 86, 88, 254

Eearner,

high-income, 20

low-income, 20

eating out, 37, 45, 49

eBay, 22, 54

ecologically sensitive land,

198, 199

ego, 177

electronics, 21

emotion, 80, 107, 175, 177, 179

employee assistance programs

(EAPs), 79–80

Employee Financial Education

Division (EFFD), 259–60

employee stock purchase plans

(ESPPs), 21, 83, 85, 86,

174, 198

Employment Insurance (EI), 37, 100

Employment Insurance Sickness

Benefit, 100

Enron, 86, 175

entertainment, 32, 37

equity, 21, 26, 143, 156

estate, distributing, 220–21

estate lawyer, 155

estate planning, 115, 116, 120,

129, 240

exchange traded funds (ETFs),

169, 239

executor, 198, 215, 217–21, 226,

231–32, 234, 235

exercises, 2, 9, 85, 145, 237

expense-elimination method, 108

expenses, 20, 24, 26, 32, 33, 34,

35, 38, 41, 42, 43, 44, 46,

47, 48, 49, 51, 54, 58, 60,

61, 64, 65, 68, 74, 75, 77,

78, 91, 99, 100, 101, 102,

105, 108, 109, 118, 128,

134, 145, 148, 149, 159,

161, 190, 191, 194, 208,

217, 221, 225, 232, 233

FFacebook, 246

fair market value, 152, 192, 195,

198, 199

family trusts, 205

bindex.indd 264 9/21/2012 7:06:34 PM

Index 265

fee-only financial planning, 240

Fellowship of the Canadian

Securities Institute (FCSI), 244

financial,

advisors, 170, 180–81, 237, 238,

244–45, 255

implications, 16

planner, 20, 41, 109, 155, 160,

161, 182, 191, 198, 205, 221,

238, 240, 242, 243, 246, 248,

249, 252, 254, 255, 258, 261

planning/plan, 1, 13, 14, 74,

137, 148, 150, 155, 157, 158,

187, 205, 240, 242, 243, 246,

249, 252, 254, 255, 258

records, 167

risk, 94, 96

situation, 1, 7, 8, 9, 13, 20, 26,

101, 130, 146, 163, 175, 200,

214, 227, 235, 246, 247, 257

Financial Advisors Association of

Canada (Advocis), 255

Financial Management Advisor

(FMA), 243, 261

Financial Planning Standards

Council (FPSC), 242, 246

flex-benefit plans, 73, 76, 81

flexibility, 62, 76, 78, 84, 111, 164,

165, 178

funeral expenses, 217, 221–22

furniture, 21, 23, 60, 61

Ggain, 120, 152, 165, 168, 177, 196

general anti-avoidance rules

(GAAR), 188, 194

General Motors, 175

gift assets, 154

gift-buying, 47

gifts in-kind, 198

goals,

list of, 9, 251

obstacles in the way of, 9, 16,

18, 106

organizing, 8

sharing, 10

time frame, 8, 17, 178

writing down, 7

government-appointed

trustee, 213

government bonds, 21, 165, 183

groceries, 33, 37, 44

gross debt service ratio (GDS), 60

gross family income, 60

Group Life Insurance, 82, 90,

114, 126

growth stocks, 166

guaranteed insurability, 82

guaranteed investment certificate

(GIC), 21, 164

market-linked, 167, 183, 184

guardian, 223, 225, 233, 234

choosing a, 218–20

Hhealth, 7, 11, 14, 73, 74, 75, 79,

80, 87, 88, 114, 115, 120,

129, 134, 143, 144, 188, 217,

219, 226, 227, 228, 229, 232,

235, 245, 254, 259

healthcare spending accounts

(HSAs), 73–74, 75, 76–77

bindex.indd 265 9/21/2012 7:06:34 PM

Index266

hedge funds, 169, 179

home, 15, 21, 25, 54, 60, 65, 66,

67, 75, 128, 142–43, 191,

205, 206, 254

home buyers’ plan, 60, 88,

136, 193

home inspection, 61

home ownership, 142–43

household expenses, 26, 32, 233

Human Resources (HR)

department, 74, 87, 259

hybrid investment, 167–69

IiExpense, 34

income,

non-taxable, 78, 79

retirement, 139–44, 145, 146,

161, 201, 203

surplus, 59

taxable, 123, 139, 141, 147,

148, 150, 162, 189, 192,

193, 196, 201, 202, 203,

206, 209

income-replacement method, 108

income-splitting, 109, 147, 194,

203, 204, 209, 210, 223,

224, 234

independent financial planners, 240

independent insurance brokers,

240–42

index units, 168–69, 178,

182, 239

individual life insurance policy,

82, 114–15, 116

inflation, 101, 105, 108, 109, 128,

142, 157, 164, 167, 171, 183

inflation rate, 108

inheritance, 63, 64, 65, 146, 147,

157, 158, 159, 180, 181, 182,

213, 232, 235

insurable annuities, 205

insurable interest, 113

insurance,

agent, 238–39, 240, 245, 254

broker, 43, 106, 129, 130, 240,

248, 253

car, 32, 94

companies, 77, 113, 169, 213,

240–41

coverage, 74, 75, 76, 77, 80–81,

82, 87, 88, 89, 90, 94, 96, 97,

98, 99, 100, 106, 108, 110,

111, 112, 113, 114, 117, 118,

119, 120, 122, 126, 128, 130

critical illness, 26, 95, 96–97,

98, 100, 102, 103, 104, 105,

118, 126, 127, 240

disability, 95, 98, 99, 100, 103,

104, 106, 188, 245

living, 95–99, 102, 106, 257

long-term care, 95–96, 98, 101,

103, 105, 106, 184, 240

policies, 26, 28, 32, 43, 82, 90,

96, 97, 106, 112, 114, 115,

117, 118, 120, 121, 123, 130,

143, 153, 154, 199, 210, 217,

222, 223, 224, 233, 235

premiums, 37, 38, 68, 82, 96,

97, 99, 105, 106, 107, 109,

bindex.indd 266 9/21/2012 7:06:34 PM

Index 267

110, 111, 112, 114, 117, 118,

121, 122, 123, 126, 143, 188,

194, 199, 204–05

temporary, 112

Term 100, 106, 112

term-life, 77

travel, 80, 81, 90

interest, 13, 21, 23, 24, 29, 30, 42,

54, 55, 56, 57, 58, 59, 61,

62, 65, 67, 69, 70, 74, 78,

110, 113, 118, 134, 148, 150,

152, 153, 159, 164, 165, 166,

167, 168, 170, 173, 183, 190,

194, 195, 197, 199, 205, 209,

218, 224, 232, 252

interest income, 150, 195, 209

internet, 32, 42, 45

investment accounts, 21, 150, 154,

222, 223–24, 235

investment counsel, 239–40, 251

investment/rental property, 22, 54,

60, 169, 197

investment return, 109, 110

investments,

equity, 21, 26, 143, 156

fixed income, 21, 122, 173, 185

short-term, 21

iPhone, 34

Jjewellery, 21

joint account, 20, 26

joint first-to-die life insurance, 115

joint last-to-die life insurance,

115–16

Kkey person insurance, 116, 232

Lland transfer fees, 61

leave of absence, 80, 191

legacy, 7, 122, 129, 207

legal bills/fees, 61, 191, 214, 232

legal language, 218

legislation, 142, 214, 222, 227, 228

Lehman Brothers, 175

lenders, 23, 59, 62

liability protection, 95

life insurance donation, 199

life insurance policy, 21, 90, 112,

113, 114, 120, 123, 143, 144, 152,

153, 157, 159, 199, 204, 207, 232

lifelong learning plan, 193

lifetime tax bill, 123, 129, 149,

150, 152, 160, 200, 201, 204,

205, 207, 221

limited partnership, 21, 180–81

line of credit, 13, 23, 26, 55–56,

59, 63, 64, 65, 105

LinkedIn, 94, 246

loan, 13, 23, 29, 32, 46, 55, 56, 57, 60,

65, 74, 78, 88, 109, 110, 190,

193, 194, 195, 197, 199, 208

long-term care facility, 103

loss, 108, 109, 117, 142, 164, 165,

170, 171, 172, 174, 182, 184

Mmacro-economics, 176

maintenance fees, 32

bindex.indd 267 9/21/2012 7:06:34 PM

Index268

MasterCard, 59

maturity date, 21

medical screening, 115, 119

micro-economics, 176

Microsoft Money, 34

money management, 169, 178,

179, 225, 243

money market mutual fund, 21

monthly cost calculator, 51

moral hazard, 113

mortgage,

additional payments

against, 62

amortization period, 63

balance, 22–23

fixed-rate, 62

payments, 60, 61, 62, 65, 66,

67, 104, 217

penalty, 49, 62, 140

prepayment option, 62

rate, 13, 61, 159

renewing your, 63

statements, 22–23

variable-rate, 63, 67

mortgage life insurance, 117

moving expenses, 61

mutual fund, 21, 84, 135, 156, 168,

169, 178, 181, 182, 191, 196,

238, 239, 242, 250–51

advisor, 238

Nneed vs. want, 38–39

net worth statement, 19–20, 22,

27, 28, 29

networking, 94

non-registered investment

accounts, 223

Nortel, 175, 176

notary, 215, 216

nursing care, 103, 104, 105, 231

OOld Age Security, 104, 139, 141,

144, 146, 202, 210

threshold, 202

once-a-year expenses, 32

optional expenses, 32, 49

Ppartnerships, 167, 171, 179, 181

paycheque, 36–37, 45, 46, 53, 54,

81, 88, 125, 138, 140, 146,

188, 190

paying rent, 60

payments, 13, 15, 23, 24, 29, 32,

46, 49, 55, 56, 59, 60, 61,

62, 63, 65, 66, 67, 104,

147, 159, 191, 197, 205,

206, 217

payout, 83, 86, 96, 97, 100, 105,

107, 110, 116, 117, 118, 123,

124, 128, 140, 143–44, 224

pension assets, 21

permanent life insurance, 110, 117,

123, 152, 199, 204

personal care decisions, 229

personal care directive, 26, 213,

214, 222, 226, 227–28, 230,

231, 234, 235, 236, 253–54

personal corporation, 205

personal driving, 79

bindex.indd 268 9/21/2012 7:06:34 PM

Index 269

personal finances, 102, 237,

245, 258

Personal Financial Planner

(PFP), 243

personal loans, 32

phone, 32, 34, 36, 42, 44, 45, 49,

60, 78, 208

pocket money, 32–33, 34, 39, 49

policy loan, 110, 199

portfolio of investments, 111

power of attorney, 26, 214, 222,

226, 227, 231, 233

preferred shares, 21, 166, 179, 184

presenteeism, 259

private client management, 239

private company, 152, 166

private placements, 166, 167, 171,

179, 181

probate, 147, 152, 153–55, 184,

205, 216, 217, 223 224

professional lawyers, 214

progressive taxation system, 189

propaganda, 176

property taxes, 32, 60, 61, 109, 217

provincial security commission, 239

proxy directives, 228

public transit, 15, 94, 191

QQuicken, 34

Rrate of return, 83, 108, 118, 123, 135,

144, 167, 170, 171, 172, 185

real estate,

bubble, 142

market, 125, 142

refinancing penalty, 61

Registered Financial Planner

(RFP), 243

Registered Health Underwriter

(RHU), 245

Registered Retirement Consultant

(RRC), 243, 261

registered retirement income fund

(RRIF), 201

registered retirement savings plan

(RRSP), 21, 27, 28, 37, 46,

54, 62, 67, 76, 77, 83, 85,

88, 135–37, 138, 139, 144,

146, 147, 154, 155, 159,

161, 162, 172, 173, 183, 187,

189, 191, 192, 193, 196, 200,

201–02, 203, 204, 205, 206,

209, 201, 223, 224, 232, 233

contribution, 27, 46, 62, 75,

76, 77, 83, 84, 89, 136, 137,

138, 139, 159, 161, 162, 170,

188, 191–92, 193, 204, 206

group, 84, 89, 90, 139

registering assets in joint tenancy,

154–55

renovation, 61, 65, 205

rental property, 22, 54, 60,

169, 197

research, 8, 9, 11, 16, 87, 101, 145,

181, 197, 246, 252–53, 255

residue, 220, 221–22, 234

retirement,

goals, 53, 123, 134, 142

lifestyle, 83, 134, 143, 145, 146, 148

planning, 85, 134, 143, 242

bindex.indd 269 9/21/2012 7:06:34 PM

Index270

return-of-premium (ROP) rider, 97,

118, 157

reverse mortgage, 146, 205

revolving credit, 23

riders,

guaranteed convertibility, 119

guaranteed renewability, 119

limited pay, 117–18

paid up, 117–18

return of premium, 118

risk,

avoiding, 93, 94

credit, 165, 171

currency, 171

inflation, 171

interest rate, 170

investment, 107, 129, 163,

169–70, 179, 183

liquidity, 171

managing, 93, 95

political, 170–71

reducing, 93, 94

retaining, 93, 95

sharing, 94

tolerance, 183

Ssalary, 33, 48, 76, 88, 194, 208,

238, 239

saving money, 32, 50

savings accounts, 32, 50

savings box, 139

segregated funds, 169, 239,

240, 241

self-employment, 98, 109, 194

self-improvement, 7

shareholders, 109

shares, 21, 152, 166, 167, 168,

174, 176, 179, 183, 184,

191, 192196, 198, 199,

220, 222

sheltered investment, 151

shopping, 41, 257

small business, 78, 117, 196, 197

SMART, 6, 11, 13, 14, 86, 158

social assistance, 206

software kit, 234

specific gifts, 220, 221, 222, 234

spending habits, 13, 49, 50,

67, 150

Spenz, 34

stock certificates, 22

stock exchange, 167–69, 171

stocks, 21, 22, 123, 135, 137, 166,

168, 169, 170, 171, 174, 175,

178, 179, 181, 183, 184,

191, 239

stress/anxiety, 15, 25, 58, 67, 80,

88, 106, 107, 126, 129, 145,

158, 163, 184, 205, 234, 259

student loans, 13, 60, 190

sub-index, 168–69

support payments, 191, 205, 206

TT4 slip, 79

tax,

accountant, 79, 155, 238, 248

bracket, 136, 189, 190, 191,

193, 194

bindex.indd 270 9/21/2012 7:06:35 PM

Index 271

deduction, 43, 62, 99, 137, 138,

189, 190, 191, 192, 193, 209

expert, 221

liabilities, 221

planning, 20, 85, 138, 187, 191,

193, 200, 205, 209, 254, 258

sheltering, 112, 116

tax contribution receipt, 191, 192

tax credits,

non-refundable,190

refundable, 190–91

tax-deductible interest, 197

Tax-Free Savings Account (TFSA),

77, 83, 85, 137, 138, 144,

151, 159, 161, 162, 173, 195,

200, 202, 204, 206, 209

tax-planning tools, 85, 187

TD1 form, 54, 167

term insurance, 76, 81, 110, 112,

117, 119, 120, 121, 122, 128,

129

The Wealthy Barber, 41

time-share, 22

Toronto Stock Exchange, 169

total debt service ratio (TDR),

60, 66

transaction account, 164

travel, 32, 64, 65, 75

travel medical insurance coverage,

80–81

treasury bills, 21

trust companies, 243

trustees, 153, 192

trusts, 153, 155, 169, 187, 196,

198, 199, 205, 216, 238,

239, 243

for minor children, 225, 235

Twitter, 246

Tyco, 175

Uunion dues, 37

Universal Life Insurance, 111, 112,

127, 128

utilities, household, 32, 42, 109

Vvalue stocks, 166

Visa, 55, 56, 59

volatility risk, 170, 184

WWhole Life Insurance, 110, 111, 128

will,

common disaster clause, 216

dying intestate, 215

English Form, 215

mirrored, 216

Notarial, 215, 216

will kits, 214

withdrawal fees, 164

Workers’ Compensation Board

(WCB), 103

WorldCom, 175

bindex.indd 271 9/21/2012 7:06:35 PM