Are you and your family going to be all right?

“I just want to make sure we’re going to be ok… no matter what happens!” I hear those words, or something similar, quite often from our clients and those interested in working with my wealth management practice.

Protecting ourselves, the ones we love, and our possessions is one of our most primal instincts. This has been eloquently demonstrated by Prospect Theory, developed by Daniel Kahneman and Amos Tversky in the late 70s. In essence, Prospect Theory shows how most of us are generally risk averse and would turn down an opportunity to make a specific sum of money if there were also a chance of losing money, even if the odds were slightly in our favour.

One of the best ways to ensure you and your family are protected against unforeseen losses is to have a comprehensive financial plan completed for you. Through the financial planning process, which can be seen as a “stress test” on your financial situation, you can identify and protect against the potential potholes that threaten your financial future.

I strongly encourage all of our clients to have a financial plan done for them. One of the real benefits of having a personalized financial plan completed is that you get to see, in black and white, exactly where you are financially and, perhaps more importantly, where you’re heading. Any plan worth its salt, though, goes beyond this and looks into risks you haven’t even thought of.

When most people consider catastrophic risks to their family’s finances, they usually think about a financial crash or their spouse passing away unexpectedly. These are very serious concerns to be sure, but many people forget about other equally, if not more, financially perilous situations that may arise.

For example, you may be well on your way to a comfortable retirement, but if you or your spouse should suffer a disability that prevents you from working for the next decade, your finances will be in jeopardy if you don’t have protection against that. Not only would the income you were expecting disappear, but your expenses may very well increase. Definitely not a good scenario.

So if you’ve ever wondered about how well protected you and your family are, do yourself a favour and have someone take a second look for you… it could make or break your family’s future!