RRSP | January 2024

n THE CARILLON STEINBACH, MAN. A16

n www.thecarillon.com THURSDAY, JANUARY 25, 2024

RRSP TAX SAVINGS & RETIREMENT RICHES

Are financial concepts confusing for you? Are you concerned about: Bills, debts? Funding education? Saving for retirement?

How emotions affect financial decisions T he choices you make with your money aren’t purely rational; they’re deeply intertwined with your psychological

Education and Financial Professionals 6:00 PM Jan 26, 2024 John and Charity Schellenberg Come with someone you care about! Eastman Education Centre 385 Loewen Blvd, Steinbach, MB Learn more about how money works. Build a stronger financial foundation. Custom-roasted coffee, snacks. Door prize. Do you qualify for government- sponsored disability savings? What is your Financial IQ?

and cultural norms can also shape your at- titudes toward money. A scarcity mindset developed in tough times can lead to exces- sive hoarding. Growing up in a family with a carefree attitude toward money might give you a tendency to overspend. Social com- parison is another influence: trying to keep up with your peers’ lifestyles can cause fi- nancial strain. Mindful decision-making Recognizing your emotional triggers can help you make more deliberate financial de- cisions. Create a clear budget, set financial goals and take note of situations that cause you to veer from your plan. If you’d like support in making healthy fi- nancial decisions, talking to a financial ad- visor can help.

makeup. Understanding the psychology of money can help shed light on your financial decision-making. Understanding emotions Emotions like fear, greed and impulsive- ness play a significant role in your financial choices. Fear can lead you to make overly conservative investments and miss out on potential gains. On the other hand, greed or desperation might push you towards risky investments promising unrealistically high returns. Impulsiveness can lead to un- planned spending and derail your goals. Your past shapes your future Your family background, life experience

Christine Ibbotson

Building a financial team

D ear Money Lady Readers, to know if you have the right invest- ment plan for your future. Here’s what all the economists say: “You need to have a well-diversified portfolio which includes bonds, cash, and high-quality stocks, one that is rebalanced based on your age, risk tolerance and future aspi- rations.” Okay, textbook – right? But what does that mean? How do you do that? How are you going to get started? Well, you need to be build a financial team. If your car breaks down or you get into an accident, you don’t fix it by yourself in your garage? You or your in- surance company hires a professional mechanic to fix it and then everything is great again. Same idea with money. You need to have a professional that can help you achieve all those financial goals you want out of your life. With everything that’s going on in the markets today it’s hard You want an investment “partner.” Pick an advisor who really has your best interests at heart, and don’t just pick the first person you talk to, or a relative that wants to help out. You want to be selective, not just with the advisor, but also the brokerage firm. Now let’s talk about fees. What should you pay? There are two types of fee structures – transac- tional or fee-based. Transactional fees are charged with every investment transaction. This is often the case when you buy fixed in- come investments such as bonds. A fee is charged when you purchase the bond and then again when you sell it. There aren’t many advisors that still do trans- actional fee structures when buying se- curities. That was the old “stockbroker style” of buying and selling stocks on a

monthly basis to generate revenue not only for the client but also the broker. Most advisors today lack the expertise to execute this style of investing prop- erly; however, if you didn’t have a good stockbroker back then, it still could be costly. We used to call this method the “pump & dump,” which was basically how a broker would make an income, moving stock around and charging a transaction fee every time. Nowadays advisors want to put you in a fee-based plan, with a fixed monthly fee designed to offer more protection for the clients along with ensuring a consistent reve- nue stream for the advisor and the bro- kerage firm. Basically, you want to ask yourself: is this advisor a valued partner that I’m willing to pay for, and most importantly am I satisfied with the services that they provide? Personally, I think It’s always a good idea to periodically check out the com- petition, talk to your friends and see what they pay. When you are young you may not mind spending more for invest- ment advice, but as you age and move investments into secure fixed income products with lower risk and smaller gains, your number one problem will be fees and expenses. Let me leave you with this TIP: Your new advisor needs to be focused on how to secure your capital with adequate growth in the most tax-efficient man- ner; and if they always do that, you will always make money. Christine Ibbotson is a Canadian fi- nance writer, radio host & YouTuber. For more advice check out her YouTube channel: ASK THE MONEY LADY – Your Canadian Finance Coach.

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