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How I Saved My Wife's Life (Financially)

Sebastien Chevrier - Dec 16, 2015

I am married to a physician. When we first met, my wife was 10 years into practice and had no direction financially. It's a common scenario that many physicians find themselves in as a consequence of years of delayed earnings, student loans to repay, an all-consuming career that leaves little free time, and for some, a lack of interest in finance in general.

My wife had a vague vision for retirement. She knew she wanted to retire at the age of 60. She knew she wanted to live a comfortable lifestyle with the opportunity to travel and give charitably to causes that mattered to her. She hoped that she would have a legacy of some kind to bequeath to her family.  She had no sense of what this would ultimately cost nor any dedicated strategy to get to that endpoint (never mind save for a down payment on a house or any other financial goals) and for over 10 years had done little other than maximize her RSP contributions falsely believing that this would be sufficient. She had never been advised otherwise.

With some focused effort, we were able to revive her financially. There were several key steps that brought us to that end.

First, we had to evaluate the current state.  How much had she accumulated thus far and how much was she earning, spending, and saving on a monthly basis. She had not been tracking this, so we had to crunch the numbers.  With the numbers laid out in front of her, she was very surprised by how much of her earnings she was spending and how little she was saving. She was saving less than 10% of her gross earnings. We would later create a budget with adjustments of these values based on the recommendations from the financial plan we developed which I will detail further below.

We then went through a visioning exercise which required developing an in-depth picture of what she anticipated for her retirement. She already had a general idea of her retirement goals but had not given consideration to the details. Once all those details and their associated costs were clear, a total was calculated, accounting for inflation. Other important considerations such as risk mitigation and estate planning were also addressed.

With a clear vision of retirement, and the relative cost of that being clarified, we now had a goal to work towards. Much like taking a road trip, until you know where you're going you cannot lay out your route. Now, with the destination in mind, we were able to develop a financial plan utilizing data that we had gathered through the budgeting exercise i.e. earnings/spending/savings. She learned she had to modify her spending/savings ratio in order to achieve her financial goals.

The next step was to develop an investment strategy that would yield a reasonable rate of return to support the plan. I devised a portfolio that took into consideration appropriate asset allocation and diversification based on her time horizon, life circumstances and risk tolerance.  Over time, regular rebalancing and reevaluation of the portfolio have ensured that it continues to perform optimally.

My wife now makes a conscious effort to pay attention to her finances on a monthly basis and we regularly review her Financial Plan to ensure it is still relevant and applicable.

Today my wife is financially healthy. She still doesn't love dealing with the financial side of things but she's much more involved and aware of her financial life and feels empowered by the fact that she knows where she's going with confidence.

Financial success rests on having a plan and knowing what to do with it. All physicians should have such a plan and a sound investment strategy as part of that plan. Having a trusted advisor with experience and expertise to help navigate through the murky waters of finance can make all the difference to the outcome.  Don't be afraid to question your adviser so that you may be certain that you have an optimized plan and investment strategy in place.

This has been a general example of the steps necessary for financial freedom. In following editorials I will detail other important aspects of the wealth management process to help readers become better informed and empowered regarding their finances.