Preparing our Personal Finances

Prepare for what? We are living through a big picture financial cycle that is largely unknown to us. That cycle is turning into headwinds and a storm is brewing.

The risks and opportunities are quite different in the next 5-10 years then they have been for the previous 30-40. The personal finances of young and old, rich and poor will all be affected. Canada will be different than other countries.

Just because you have a pension or a financial planner or advisor on your team, doesn’t mean you can assume they are on top of this financial cycle for you. We are responsible for them and the rest of our own finances. This cycle matters to us all.

My hope is this blog will grow the number of persons understanding the financial cycle, where we are in it and offer some financial decision strategies to help you through it.

If a storm is coming, wouldn’t you rather know?

Whatever it is - snow, rain, hail, tornado or a plow wind - we all want to know ahead of time. Why? So we can be proactive by changing our travel plans, working from home, putting stuff away on the deck & in the yard, getting the snow blower serviced, etc. etc.

The same should be true for the ‘storm’ coming towards our personal finances. Be Prepared.

Two truths about storms:

Weather is unpredictable so the storm may be better or worse than forecast.

The storm only lasts a short time, then the weather improves again and the sun comes back out!

Who knows about the coming Storm

Knowledge of the Big Financial Cycles

The fraction who know are largely the very rich - the 0.1% and 0.01%. They know about it because they are either financial experts themselves or have hired the “smart money” thought leaders of finance and economics as their personal finance experts.

Some of these thought leaders are choosing to share their knowledge with the rest of us, largely thanks to the benefits of social media. However, financial decisions can be a complex and wordy subject area - unappealing to most of us.

Its only through months of consistently investing many hours to podcasts, newsletters, blogs, videos and books that I came to knowledge of the cycle.

My approach to Personal Finance

Investing in Myself

Having developed financial knowledge and fiduciary responsibility through business, choosing to DIY manage our investments and having gained time through recent retirement, I am now regularly spending 10 or so hours a week reading, watching and listening to the financial thought leaders.

I’ve learned to translate their complex information down to practical strategies for our personal finance and investing needs. I’ve identified Canadian content and learned to translate from US-centric thought leaders into content relevant to Canadians.

This blog challenges me to continue this self-investment and adds the opportunity to assist more Canadians.

Be Prepared

Debt

Individuals, governments and companies all have record levels of debt in Canada after decades of low interest and easy money. This will be reversed in the coming years. We need to change our personal approach to debt and consider the influence of government and corporate debt levels on our net worth.

Investment

The stock market, bonds and the 60/40 portfolio have dominated financial plans for decades. At this stage of the financial cycle this cannot be expected to continue. We need different investment strategies going forward.

Inequality

The decades of easy money have shifted financial health in favor of the old at the expense of the young. This stage of the cycle is when correction back towards equality will occur. We need to understand how this affects us and all the generations of our families and friends.

FAQ

There is no charge. This is an investment in myself which I hope will also benefit its readers.
No. I am self-taught and do not have the legal qualifications to plan or advise on your finances. This blog is strictly for sharing of knowledge and experience.
Yes, of course it will. Every cycle goes through a bottom then heads back upwards. How we each go through the bottom enables how we will then head upwards.
Yes indeed. Becoming a business founder and owner is a high risk, high reward form of investing in yourself. The financial cycle should be integral in your business plan.