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BOOKKEEPING and Financial Services Accurate & Reliable Professional Bookkeeping Services, on or off site QuickBooks Pro set-up & data clean-up optimized for your business Business Plans & Financing Assistance Selling Your Business Intermediary Services (647) 230-8749 info@baselinebusiness.ca w w w . o a kv ill eb ea ve r.c o m O A KV IL LE B EA V ER Th ur sd ay , D ec em be r 2 , 2 01 0 2 0 BusinessOakville Beaver If something is important keep it simple.This is especially true when managing yourfinances. The idea for this article came from speaking to a few friends about these weekly columns. We felt finances and solutions to financial problems need to be simpler. Apple for example, has made its high tech computers, iPhone, iPod and iPad simple and easy to use. That has been key to its phenome- nal success. Simplicity is especially true in managing your finances. It is our intent to provide practical, simple solutions that will help readers achieve their financial goals. Generally speaking , the simple things work best. Getting too complicated can unnecessarily muddle things up. When you see the simplicity in a product or service and the steps you can take to achieve your goals , you will find the process less intim- idating and much simpler than you may real- ize. Step one: Identify and prioritize your goals You have identified several goals. Common goals may be planning for retirement, saving money for your childrens post-secondary edu- cation and along the way perhaps travel more. All of those goals require money. Your rational escape from this potentially frustrating experience will be that it is just too complicated, so why bother. There does not need to be anything complicated about it. A complicated approach may cause paraly- sis. You will freeze, feel overwhelmed and put it off, effectively ignoring the subject. Step two: Investments That, too, can be simple. Begin by saving now from your monthly earnings to accumu- late enough funds for each of your objectives. Remember that pay yourself first mantra? This begs the question of how much you will need to save for each life goal. There are many ways to get this answer. Your investment advisor will have access to a financial software program that will give you a reasonable indication and there are financial calculators available on the internet. To underscore how simple this is, we will put it in a different context. A high school stu- dent could be asked this very question on an exam. If a family had a 10 year old who was hop- ing to go to university at age 18, how much money would the parents have to save every month? Assume the total cost of university was $20,000 annually for four years and the savings will be invested and grow at five per cent per year. The student would get one mark for stating the four-year university education would cost $80,000 ($20,000 x four years). The second mark would be to state how much saved monthly over eight years would grow to $80,000 if the investment grew at five per cent annually. This should take about one minute to solve using a financial calculator. As a parent you do not have to know how to do the math, but you have to understand that it is up to you to ask the question. Step three: Choosing the correct investments Your time frame and risk tolerance will determine whether your investments should include equities (stocks/shares in companies ). This may be the most difficult part for most people. Seek help if you are out of your ele- ment here. This simple process can be used for all your goals. The variables may change, but the process is consistent. Now that you know how much you have to save, you can proceed to the last step. Step four: Monitor your progress We recommend this be done at least annu- ally and that you ask the following questions. Did you save the required amount last year? Did you earn the required rate of return of 5 per cent? Are university costs increasing? Ask other parents with children in univer- sity if $20,000 will be enough for each year based on their experiences. The end result is that you will have confi- dence knowing you have organized your financial matters, so what is most important to you will be accomplished. By keeping things simple and straight for- ward, you will understand the process and you will be able to easily monitor your progress. And so please allow me to repeat myself one final time. When it comes to organizing your finances keep it simple. Submitted by Peter Watson, MBA, CFP, R.F.P., CIM, FCSI. In 1991 Peter founded Peter Watson Investments in Oakville. Peter Watson is with Industrial Alliance Securities Inc. Peter can be reached at (905) 842-2100. When it comes to organizing your finances keep it simple Dollars & Sense By Peter Watson Oakville resident Kristian Knibutat was recently presented with Brock University Faculty of Business' Distinguished Graduate award. The Distinguished Graduate Award recognizes a former student who has excelled in business. Since 1998, Knibutat has been a Partner in Pricewaterhouse Coopers LLP's Deals Group and is the national leader of the deals practice, which includes all aspects of merg- ers, acquisitions and restructuring. He also leads the Greater Toronto Area's Consulting and Deals Practice. Knibutat graduated with a first-class hon- ours bachelor of administration degree from Brock University's Faculty of Business in 1986. In 1987, Knibutat received his Chartered Accountant designation from the Institute of Chartered Accountants of Ontario, receiving the Price Waterhouse Award for Superior Results. Knibutat received his Chartered Business Valuator, having attained the highest mark in Canada on the Canadian Institute of Chartered Business Valuator's Entrance Examination, and in 2006 he was honoured as a Fellow Chartered Accountant. Oakville man is Brocks Distinguished Business Graduate