You May be Richer Than YOU Think

There is More Good News in the World Than Bad

3:23. Those were the numbers on Hogarth’s alarm clock. He closed his eyes and tried to go back to sleep.

He opened them again. It was 4:06. His body was tight, his mind was whirling, and he was feeling anxious. He was thinking about money.

He and Marianna had both retired about two years before and were generally financially comfortable. He was, however, unsettled. He knew they had to get a new car. He had heard the average price of a new car had skyrocketed to $66,000 and used cars to $39,000. He could not afford that, and the cost of borrowing was way up.

He took little comfort in remembering when they bought their first house the mortgage was 16% and they had managed. He and Marianna, however, were working then, and incomes had gone up to counter these inflationary driven high rates.

News reports continually talked about the possibility of a recession. The big “R,” which spread fear into the hearts of many people who did not know its implications… primarily a slowdown in business activity and increasing unemployment. Recessions also often drive investment values down below their current levels, adding to the decreases of the past few years.

His pattern of waking at 3:23 and thinking about money had been going on for over a week.  While his concerns decreased during the day, he had to do something about his sleepless nights.

He finally decided to mention his concerns to Marianna. Marianna had never paid much attention to their finances and as long as there was money in the bank, she was O.K.

However, when Hogarth mentioned his concerns, she admitted she too had financial concerns Hers included: Did they have enough to live on? What if Hogarth died? Where was everything located?, i.e. bank accounts, investments, wills etc. Did they owe any money?

She knew they needed a new furnace. Where would the money come from to pay for it? Marianna dearly wanted to travel but felt they could not afford to. She also wanted to make some charitable donations.

Their only daughter, Sarah, and her husband Omar wanted to buy a house. Their apartment was not an ideal place in which to raise their son. While they had good jobs, they were stretched, and houses were sooo expensive. Could her parents help them out? Being a concerned mother she wanted to help!

Marianna was also affected by the interviews on TV with people wondering how they could pay for their food and rent at the same time.

They started to talk about their concerns, but they were both rattled, and they quickly got into an argument.

Several weeks went by and Hogarth was still waking up and getting more irritable. Finally, they concluded they should get some professional advice.

They had never sought professional help before, relying on common sense, the odd newspaper article and comments made by friends. They did not know any advisors, but their good friends recommended the advisor they use. Her name was Shivlon.


After a few minutes getting to know each other, Shivlon asked them a number of questions about their assets, their income, their insurance, wills, and powers of attorney. Did they have a budget? Did they plan on staying in their home? What were their concerns and financial goals? What was their investment risk level, and who did their income tax? (Hogarth did).

While reviewing their assets they uncovered some assets they had all but forgotten about. Marianna had $53,000 in a chequing/savings account the result of putting loose coins and money left over from grocery shopping in the bank, and $8,000 in a paid-up insurance policy they did not need.

There was $110,000 in a chequing/savings account in Hogarth’s name now earning 2%. They had invested in some stocks a number of years before, but they went down, so they sold them. There was an RRSP worth $196,000  invested 40% in term deposits, 20% in a balanced investment fund and the rest in cash, also in Hogarth’s name. Their house, in both names, was valued at $800,000 and they had no plans to move.

They had some life insurance as part of an old company plan and a term life policy totaling $150,000, which combined with their other assets was adequate if Hogarth died. Their wills were out of date.

Their income consisted of about $3,000/month from CPP/OAS and another $3,000 from miscellaneous pension plans split between the two of them. This covered their needs.

Shivlon pondered their situation and told them their concerns and situation were not unusual and yes, she could help them.

She mentioned she could save them some taxes, outline a better investment mix and do some projections to determine if they had enough money to do what they wanted to do. They agreed to her fee. Shivlon collected their documents and gave them some homework… to work out a budget.


Even before her return, Hogarth and Marianna’ spirits were buoyed as they discovered in the budgeting process there were many things they did not need, and there were many unnecessary withdrawals automatically coming out of their bank account they had forgotten about.

Shivlon made the following suggestions and comments*

1) A recession is not necessarily bad, nor are high interest rates, as both can slow down an overheated economy. They can also lower investment values, but create better investment buying opportunities. High interest rates can also help increase returns on GICs and bank accounts etc.

2) Their risk profile suggested a 50/50 equity, fixed income balance. She suggested a rearrangement of their investments ($110,000) into managed investment accounts inside a TFSA (tax-free savings account). There would be no tax to pay on any investment gain. This should increase their returns and be more tax effective.

The investments in the RRSPS should also be reinvested primarily in a managed balanced investment fund but not drawn on now. Shivlon’s projections showed with their income needs and conservative investment growth they had plenty of money to do what they wanted, including making modest annual charitable donations.

3) Put Marianna’s $53,000 into a term deposit inside a TFSA and use it for travel money.

When needed, take $25,000 from their TFSA account and use it to put down on a good secondhand car. The balance could be borrowed and paid back over three years, most coming from their tax and budget savings. Their taxes should be done by a professional. This would be simpler and reduce their taxes.

5) If their daughter wanted a home, the equity in their home could be used as collateral. There are several mechanisms that could be considered: a reverse mortgage, line of credit against their home, or guaranteeing their daughter’s mortgage.

6) They should make a list of their assets, location of their documents, financial contact information and computer passwords and keep them all together.

7) Their wills, powers of attorney, insurance and beneficiaries should be reviewed.

8) They should take a greater interest in becoming financially literate, i.e. learn more about their money. This would help them make better decisions, make their money go further, reduce anxiety and make for a better life. Hogarth and Marianna both felt relieved and confident about their financial future.


Not everyone is retired and not everyone has Hogarth and Marianna’s  assets. However, everyone, regardless of age, has financial issues, e.g. early 20s employment, mid-20s to mid-50s big purchases and raising a family, mid-50s continuing to accumulate and conserve money for retirement.

The solutions are different but what is good news for everyone is in Canada WE have generally good social assistance programmes (Healthcare and CPP). Our country’s finances are, on the whole, well-managed, there are professionals who can assist you, and everyone can learn about money. Learning about money can be of immeasurable help, but…it is up to YOU.

Regardless of your age and stage, if you do, you may find yourself richer than you think.

Till next time,

Chris Snyder

*Since everyone’s financial situation is different, the above should not be construed as specific personal advice for you and the author assumes no responsibility for any financial actions taken.

Chris Snyder is the author of 5 books on personal finance including “Be Smart with your Money.” https://hilborn-civilsectorpress.com/products/be-smart-with-your-money

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