10 Steps for Improving your Credit Score

January 21, 2020 drifinancialLeave a comment

If you run your own business like I do, you can divide your life roughly into two phases: BBO (Before Business Ownership) and ABO (After Business Ownership). These stages are so different that by the time your business is sailing along, BBO may only be a faint and ghostly memory!

Personally, my main recollections of that time are of being restless and unsatisfied, with a deep desire to steer my own ship and start moving toward my own financial independence. I know that other business owners share similar feelings.

But despite that dramatic – and exciting! – before-and-after boundary we can draw in our lives, some things need to transfer over: care for our own health, commitment to our families and community, and of course our financial wellness. Those always have mattered and always will.

Given what I do for a living, my focus here is on financial wellness, a category that contains dozens or even hundreds of small but essential strategies, tools, actions and lessons.

One of those strategies is understanding and mastering your credit score.

In order to Live Well, Stay Rich and Never Retire, you’ve got to know, manage and, in some cases, take action to improve your credit rating.

I can hear you already: “But Richard, I’m a successful and established business person! Why are you going back to basics here? I learned about credit scores ages ago!” I know you did. But with the complexities of running your own business, sometimes the basics get left behind. Or financial strains take a toll. Or an opportunity to expand leaves a mark. Or life gets too busy or goes through a period of tumult. Or the last time you paid close attention (BBO) is ancient history.

When it comes to the basics, we all benefit from a reminder. Or a refresher. Or a kick in the pants to fix a score that has taken a hit.

So here’s why your credit score matters and how you can improve it.

First, what is a credit score and how is it calculated?

Simply, your credit score is a number between 300 (just getting started) and 900 (the highest possible figure) based on your credit history that indicates your creditworthiness. When seeking a loan, your score is used to indicate your reliability as a customer – basically, the probability that you will repay your debt. The higher your score, the more financially trustworthy you are considered to be.

A good rating starts at 650, a very good rating at 720, and over 800 is considered excellent. Generally speaking, a score above 650 is required to secure a loan – though you won’t necessarily be denied with a lower number.

A number of factors are taken into account to determine your score. They are 1) the length of your credit history, 2) your loan payment history, 3) the amount you have owed and owe, 4) the types of credit you use, and 5) your recent credit history.

Different lenders who assess your credit score may come up with slightly different numbers depending on how they allocate points and weigh different factors. But each will come out with a figure within a close range.

Why does my credit score matter?

Your credit score matters any time you need a loan or need to indicate that you are trustworthy. Any institution that lends money – banks, credit card companies, mortgage lenders, department stores – will access your score. Utility companies, insurance companies, service providers, employers, landlords, the government and the courts may also request your score to assess whether you are reliable and responsible. For example, you may be offered a better insurance rate with a higher score.

A credit score distills a lot of history and information into one number that represents your relationship with debt. Lenders and creditors want to know what kind of risk you pose. So if you want to extend your business, buy a new home, lease a car, secure insurance, and so on, your credit score will play a large role in how your application is assessed and what interest rates you may be offered.

How do I improve my credit score?

Before you take any specific steps, be sure you know your credit score. You can order copies of your credit report from Equifax Canada and TransUnion Canada, both of which are recommended by the Canadian Government. You may get slightly different numbers, but that’s okay. You’ll have an idea of where you stand.

Now that you’re ready, here are 10 ways to improve your credit score.

1. Check your report for accuracy.

It is possible to have errors on your credit report, so you want to make sure your information is accurate. Your personal information may be wrong (like the spelling of your name or your SIN), there could be errors in your payment history, or there may even be an item listed that doesn’t belong to you. If you find errors, contact the credit bureau to correct them.

2. Pay your bills on time

In short, punctual payments are good and late payments will damage your credit score. For example, you are better off making monthly minimum payments on a credit card than paying it in full every three or four months.

3. Leave old credit accounts open.

A long credit history is good. Keep old credit cards, even if you rarely use them. Make a plan to charge something on them every now and then to generate activity. For example, maybe you pay one utility company on an older card or keep a card specifically for ordering your favourite gourmet tea online.

4. Keep a low balance.

Maxing out your credit lowers your score, so most experts advise that you keep your credit card balance to less than about 30% of your limit. So if you have one card with a $10K limit and another with $25K, set a limit for about $3,000 in spending on the first and about $8,000 on the second.

5. Increase your credit limit.

Unless you have difficulty controlling your spending, it’s generally better to have a higher credit limit. This makes it easier to keep your balance below 30% of your limit.

6. Set up automatic payments.

If you lose track of deadlines, you can set up automatic payments for fixed amounts (insurance, mortgage, car loans) and even set up a guaranteed minimum payment on credit cards. For example, if you have a credit card with a $5,000 limit and minimum payments are set at 5%, you can establish a monthly $250 fixed payment as a “just in case I forget” strategy, whatever your balance might be.

7. Use your credit more.

Credit bureaus like credit activity. Your score is based on using and repaying loans, so frequent use (and repayment, of course) shows financial responsibility.

8. Vary your credit.

Managing a variety of loans well raises your overall score. A mix of credit cards, installment loans, lines of credit and a mortgage – all paid on time – boosts your score.

9. Limit credit applications and credit checks.

The number of inquiries about your credit is recorded in your file. A lot of inquiries suggest that you are urgently seeking credit or living beyond your means. You want to limit the number of times you apply for credit and, when you do apply, cluster similar items together. For example, if you’re shopping for a car, make all your inquiries within a two-week period so the cluster is viewed as one credit check.

10. Consolidate your debt.

If you have a lot of credit card debt and have difficulty paying it down, you can consolidate all of your balances into a lower-interest line of credit or loan. You do need to have decent credit history to acquire either of these – this option is mainly to move high-interest credit card balances to lower-interest options to ensure you can keep up with payments and keep your credit score healthy. Of course, you will need to avoid running your card balances up while you pay down your debt.

That’s it.

I hope this has been a useful reminder/refresher/kick (if that’s what’s needed). Wherever you are in the arc of your ABO career, the little financial things continue to matter. Knowing and managing your credit score is one of them.

Did this article resonate with you? What did I miss? Send me a note and let’s start the conversation.

The process of finding a financial planner can be overwhelming. Our proprietary financial planning process is designed with you in mind. Its simple framework helps you make an informed decision about hiring the appropriate advisor.

Call me if you want to map out how you can Never Retire. You can also subscribe to our Never Retire newsletter, contact us to Order a complimentary book, register for one of our events, and call us to meet with a Certified Financial Planner. We offer you a range of services from a wealth plan to investment advice or help you take advantage of our investment models. Call me at 416-355-6370 or email me at richard.dri@scotiawealth.com.

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source https://richarddri.ca/10-steps-for-improving-your-credit-score/

Dow Crosses 29,000 Mark as U.S., China Sign Phase-One Trade Deal

January 17, 2020 drifinancialLeave a comment

Ongoing trade tensions between the U.S. and China have dominated–or seemingly monopolized–the financial headlines for the past two years. So it comes as no surprise that this week’s historic signing of a phase-one trade deal between the world’s two largest superpowers has once again significantly moved markets.

A gauge of global equity markets hit a record high on Monday, lifted by optimism over Wednesday’s planned signing, while gold fell nearly 1% in response to the imminent signing and deescalating tensions in the Middle East.

On Tuesday, the Dow edged higher in response to strong earnings from big U.S. banks, although markets lost a bit of steam later in the day over reports that U.S. tariffs would likely stay in place until after the U.S. election in November. After losing ground on Monday, the TSX was up 59 points Tuesday, lifted by rising oil prices.

Meanwhile, China’s currency on Tuesday strengthened to its strongest level since July, after the U.S. Treasury Department removed China from its list of currency manipulators.

By Wednesday’s close, the Dow climbed above 29,000 after President Trump and Chinese Vice Premier Lui He signed an initial trade pact that will roll back some tariffs and see China increase purchases of U.S. goods and services by $200 billion over two years.

On Thursday, U.S. investors shifted their focus to corporate earnings. After a strong Tuesday, bank earnings have been largely mixed, weighed down by Wells Fargo, which continues to struggle to recover from its fake accounts scandal. According to FactSet, Q4 earnings for S&P 500 companies are expected to decline 2.3% from a year earlier. And yet U.S. stocks rallied to new highs Thursday in light of solid U.S. retail spending for December. The TSX also continued its climb, hitting a new record close at 17,485.

Finding your physical and professional balance with Louis Stack

January 15, 2020 drifinancialLeave a comment

Louis Stack is the founder and CEO of Fitter International, which is known for its Fitter First line of exercise equipment and ergonomic office products. While attending Western University, a knee injury exposed Louis to the workings of the physical fitness industry. With Fitter First, he began manufacturing balance boards, standing desks, and other strength training products. Louis believes that balance and ergonomics are key to a long and fruitful life.

In this episode, Louis Stack discusses the philosophy of Fitter First, explains his utilitarian approach to hiring and firing, and delves into the details of Canada-US business relations.

Download the full transcript here

Podcast highlights:

Robert has had a lifelong love of animals, which guided both his initial law aspirations and eventually his marketing work.
Robert realized that it’s not enough for a veterinary office to simply list its services and rates but to tell a compelling story about an owner’s relationship with their pet and how it’s symbiotic
Considered himself a “survivor” due to his poorer circumstances growing up, which cultivated his entrepreneurial skills.
Louis believes that if we make practicing stability a daily habit, we will all be more agile in the short term and more mobile in the long term.
The business, online and retail landscape can shift so suddenly and significantly that it’s wise to pick your battles.
Technology hasn’t affected general fitness and human physicality too much because gravity is the same as it’s always been for us as a species.
Louis owns stocks in companies he believes in, such as Apple and WestJet.
When managing employees, take your time hiring so you can find the best possible candidates, but quickly let go of any you think will pose a problem.
Louis knows that gravity always wins in the end, but you should still live a healthy life and plan for your future.

Quotes:

“I’ve always been kind of zigging when the world is zagging.”

“It became my mission to help people learn to move at work.”

“Balance is the essence of movement and movement is the essence of life.”

“The changing field is our biggest competitor.”

“When people learn about what Fitter First stands for and what we’re about, they always feel much better than they did before they learned about us.”

“If it’s not working, get rid of it, and find something that does work.”

“Win as many hands along the path as possible, have good posture, stand up straight, move often. That’s how you win the game of life.”

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source https://richarddri.ca/finding-your-physical-and-professional-balance-with-louis-stack/

10 blogs that are worth a second read – and a reminder about our survey and the free movie tickets!

January 14, 2020 drifinancialLeave a comment

As the new year gets underway, I wanted to give you an easy way to loop back to some of the top blogs from last year. So I put together a list of ten blogs that are worth a second look.

Before we get to that, a reminder that we are looking for your input!

As I pointed out last week, the team at Dri Financial Group is exploring ways to enhance the client experience through technology.

To guide our efforts, we’d like to hear from you so these changes are informed by your preferences and needs.

Anyone who responds to these questions via email before January 31 will receive a pair of Cineplex movie tickets in the mail. (One-word answers will not be considered. Let us know what you really think!)

Please email me your thoughts on the following questions:

Do you read our weekly emails? (Click here to read a recent weekly email)
What aspects of the emails do you like or dislike? Do you listen to our podcasts? (Click here to listen to a weekly podcast)
What aspects of the podcasts do you like or dislike?
Would you be interested in conducting your meetings with us through Zoom Video conferencing?
Would you be interested in listening to a pre-recorded educational seminar, such as a webinar?
What other technological improvements are you interested in that could enhance our service to you? (Click here to see our online calendar).

Thanks for doing that.

Now, here’s a list of 10 blogs from 2019 that are worth a second look.

That’s it.

Did this article resonate with you? What did I miss? Send me a note and let’s start the conversation.

source https://richarddri.ca/10-blogs-that-are-worth-a-second-read-and-a-reminder-about-our-survey-and-the-free-movie-tickets/

Markets Climb as Mideast Tensions Subside

January 13, 2020 drifinancialLeave a comment

It’s been an unsettling week for investors across the globe as tensions between the U.S. and Iran flared after last Friday’s killing of a top Iranian military commander. On Monday, gold prices climbed to near seven-year highs as investors headed for safe-haven assets. While global equity markets headed lower, North American shares rebounded after falling more than 0.5% after opening bell. By Monday’s close all three major U.S. indexes were in the green, while the TSX added 39 points, buoyed by rising crude prices.

However, the Dow fell 120 points Tuesday as Iranian officials issued fiery calls for attacks on U.S. targets. Oil prices fell nearly 1%, surrendering some of the gains of recent days as many investors saw a decreased likelihood of immediate supply disruptions in the Middle East.

Although Iran did fire missiles on U.S. bases in Iraq later Tuesday, there were no U.S. casualties and tensions seemed to subside somewhat after both Iranian officials and President Trump suggested the countries were ready to de escalate the situation. U.S. stocks had a strong showing Wednesday, with the Dow up more than 160 points, while the Nasdaq climbed 61. Two further signs that the tensions had subsided: gold surrendered overnight gains, and the safe haven yen fell from three-month highs against the greenback.

With tensions clearly diminished, the three major U.S. indexes continued to rally toward fresh records Thursday as investors headed back into risky assets. Gold prices again sank, while U.S. Treasury yields rose. By Thursday’s close, the Dow was up more than 200 points, and the TSX climbed to a record high, up 67 points.

There was more good news for investors Thursday as China said its top trade negotiator would head to Washington next week to sign a phase-one accord, the first official confirmation by China that the elusive trade deal would become reality.

Richard Dri Models

January 10, 2020 drifinancialLeave a comment

Richard Dri Canadian Dividend Model

US Dividend Growth Model

Richard Dri Earnings Momentum Model

Focused Tactical Canadian Dividend Model

Richard Dri Tactical US Model

Canadian Smart Fixed Income Model

US Smart Fixed Income Model

source https://richarddri.ca/richard-dri-models-2/

How good marketing tells a story with Robert Sanchez

January 9, 2020 drifinancialLeave a comment

Robert Sanchez is the founder and CEO of Digital Empathy, a marketing firm servicing the needs of the veterinary industry that specializes in website development, targeted ads, and content writing. Since he believes customers make decisions based on their own emotions, Robert incorporates behavioural psychology into web development, preferring to craft a narrative around his clients’ practices that pet owners can participate in.

In this episode, Robert discusses his lifelong love of animals and crusade against non-medical euthanasia, breaks down his high-risk approach to investment, and explains why he takes such a creative approach to veterinary marketing.

Download the full transcript here.

Podcast highlights:

Robert has had a lifelong love of animals, which guided both his initial law aspirations and eventually his marketing work.
Robert realized that it’s not enough for a veterinary office to simply list its services and rates but to tell a compelling story about an owner’s relationship with their pet and how it’s symbiotic.
We think I make decisions rationally, but most of our choices are done unconsciously and driven by heuristics.
He thinks that resilience is a common trait among successful entrepreneurs.
Business owners need to understand that if their company or service is telling a story, then the customer has to be the main character.
Any money that Robert doesn’t need to spend on Digital Empathy, he puts into higher risk/higher return stocks like Tesla.
Robert advises listeners to be purposeful in their actions and understand that money is a means to an end and not an end in and of itself
There’s a long history of entrepreneurship in Robert’s family, with his father, aunt, and uncles starting their own businesses.

Quotes:

“I’ve had the same goal since I was five years old, and that was to stop non-medical euthanasia of dogs and cats.”

“The greatest opportunity my parents gave me is the opportunity to see the world not just how it is, but how it could be.”

“What [Nike and Apple] do so well is they tell a story, and that’s what we’re trying to do.”

“It’s not about websites. It’s about how we create bonds and relationships.”

“Every single small business could use storytelling.”

“I had to learn a lot of hard lessons on the way, but I’m convinced that I had to learn those lessons.”

“I think there’s a much better way forward than what the industry’s produced so far.”

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source https://richarddri.ca/how-good-marketing-tells-a-story-with-robert-sanchez/

A New Year’s resolution that will enhance our clients’ experience

January 7, 2020 drifinancialLeave a comment

A New Year’s resolution that will enhance our clients’ experience.

I have an offer for you. How would you like to help us with a New Year’s resolution that requires minimal effort on your part but will greatly enhance your financial and wealth planning experience? Not to mention being a resolution that’s easy to keep.

Interested?

Read on.

What are resolutions anyway?

The month of January is named for the Roman god Janus¹. In art and sculpture, Janus is depicted as having a head with two faces, one looking backward and one looking forward. This imagery reflects the fact that Janus is the god of beginnings, gates, transitions, time, duality, doorways, passages, and endings. Romans believed that Janus could forgive them for sins made in the past and bless their goals for the future year, so they made sacrifices to the deity when the new year began².

Modern conceptions of New Year’s resolutions have long since left Janus behind. But it’s interesting to wonder whether praying to Janus could help with our overall unimpressive track record when it comes to following through on resolutions. According to Psychology Today, 80% of New Year’s resolutions fail by February!

At the Dri Financial Group, we have created a resolution that flies in the face of failure.

Richard’s personal resolution

Before I get to this revolutionary resolution, let me start by sharing my personal resolution for the New Year.

As many of you know, I’m a cycling enthusiast who rode my bike almost 7000 kms in 2019. About half of my rides were on my indoor trainer and the other half took place on my Bianchi outdoor bike. (Yes, I ride a Bianchi – I’m Italian, what did you expect? Peugeot?)

The riding highlight of my year was a seven-day trip to Lake Cuomo in northern Italy. We rode our bikes close to five hours each day and climbed more than 2000 metres daily. It was one of the most spectacular experiences of my life. It was also an amazing physical challenge that pushed my cardiovascular fitness to another level. So much so that during my last bike fitness test, I reached a FTP (Functional Threshold Power) of 251, up from 230 in the spring of 2019.

So, when it comes to getting on my bike and riding for hours, I’ve got that covered.

My upper body is another story.

Being a cyclist is the story of two bodies. The legs and lungs resemble that of a 20-year-old while the muscles of the chest, shoulders and back aren’t that far off from what you might find in someone quite a bit older than 20!

So, as I was thinking about what to focus on for 2020, I came up with a personal resolution. (I learned a long time ago that if you have more than one resolution, you won’t get it done. I always say to myself, “Richard, you can have anything, but you can’t have everything.”)

My resolution is to develop my upper body.

How will I do it? I will continue to bike train 3 days a week but I will add two days of weight training exclusively aimed at my upper body.

How will I know when I have achieved my goal? I will have a flatter stomach, bigger arm muscles and well-defined pectoral and shoulder muscles. I will also fit comfortably into a pair of size 32” pants (my current waist size is 34-35).

But enough about me. Let’s talk about you.

Technology is changing the way we conduct financial and wealth planning

The team at Dri Financial group has a resolution about how we use technology to enhance our clients’ financial and wealth planning experience.

Over the last several months, I have been studying the anticipated effects of technology on the wealth management industry. In particular, I have been mapping out how these changes will impact Dri Financial Group clients.

Many “experts” warn that technology has the potential to eliminate numerous jobs and industries. We have also seen changes in our industry such as a rise in the prevalence of robo advisors.

My take on these trends? I think of it this way: “Humans prefer humans but love the ease that technology brings to everyday life.”

I don’t think many of us would volunteer to go back to the days when we didn’t carry a cell phone in our pockets loaded with useful apps (such Scotia online) and offering immediate access to powerful search engines such as Google.

But we all know that no amount of technology can change the fact that when we need solutions to a troubling problem or insights about a unique issue, we will turn to a human being for support and guidance.

Put simply, technology may change the way we interact, but it will never eliminate the need to interact with other human beings.

With this lens, we at Dri Financial Group have been asking ourselves this question: How can we leverage the power and potential of technology to enhance our interactions with clients?

That’s led to the resolution we want to offer you.

The Dri Financial Group resolution for you – our clients

In 2020, The Dri Financial Group team will introduce technological applications to enhance our interactions with you, while continuing to engage in the main (and most powerful) way we connect with you: in-person meetings and live conversations.

How will this resolution change your experience?

Consider some changes we have made already.

We simplified the appointment booking procedure by introducing an online appointment calendar on our website. You can now contact our office to book an appointment as you always have, or you can click on the link and book the appointment yourself.

Here’s another example: we have been using the technology to share ideas and information with you. Every Friday afternoon, we email you an episode of The Wealth Navigator podcast. Clients who like to listen to our ideas while driving, working out or perhaps walking their dog are choosing this option. (Click here for the most recent podcast.) Meanwhile, every Tuesday, we send you written content such as blogs if you prefer to take in information and ideas in that form. (Click here for the latest blog.)

What will be in new in 2020?

We are looking into using recorded videos to improve our communication with you. As well, we are investigating budget planning apps that could help you track progress toward personal financial goals in real time.

We need your input!

In order to guide our effort to implement new technology solutions, we’d like to hear from you. After all, these changes should be guided by your preferences and needs.

Before I tell you how to get in touch, let me say that we are offering an incentive!

If you respond to the questions below via email before January 31, we will mail you a pair of Cineplex movie tickets. (One-word answers will not be considered. Let us know what you really think!)

Please email me your thoughts on the following questions:

Do you read our weekly emails? (Click here to read a recent weekly email) What aspects of the emails do you like or dislike?
Do you listen to our podcasts? (Click here to listen to a weekly podcast) What aspects of the podcasts do you like or dislike?
Would you be interested in conducting your meetings with us through Zoom Video conferencing?
Would you be interested in listening to a pre-recorded educational seminar, such as a webinar?
What other technological improvements are you interested in that could enhance our service to you?

That’s it.

One last thing. I’d love to hear about your resolutions – personal and financial. Send me your list. And if you didn’t make a list, let me know why not. Or let me know what you think of my personal resolution and the Dri Financial Group’s plans to enhance your experience through technology.

Here’s to a prosperous and healthy New Year!

Did this article resonate with you? What did I miss? Send me a note and let’s start the conversation.

¹https://www.britannica.com/topic/Janus-Roman-god
²https://www.history.com/news/the-history-of-new-years-resolutions

source https://richarddri.ca/a-new-years-resolution-that-will-enhance-our-clients-experience/

Every business owner wants to achieve financial independence and live richly. This is my story.

January 6, 2020 drifinancialLeave a comment

Hello, I’m Richard – son of immigrants, husband, father of two adult sons and a teenage daughter, wealth planner, wealth advisor, business owner, writer, teacher, and avid cyclist. I’m the founder of Dri Financial Group, where we offer investment advice with a special focus on the needs of entrepreneurs and business owners.

For business owners, building a successful enterprise is only part of the journey. To live well and become the best version of yourself, it is essential to achieve financial independence. During 30 years of building a thriving practice and advising hundreds of business owners, I have seen firsthand what it takes to achieve financial independence. And I have developed the “Live Well, Stay Rich, Never Retire“ philosophy that inspires business owners to ignore conventional thinking about the end of their career so they can pursue their passion for working as much as they want for as long as possible.

This is my story.

In the mid-1950s, my parents were among the thousands of Italian immigrants who sailed to Canada and eventually arrived in Toronto. They were both young, uneducated, spoke no English and had almost no money. My brother and I were raised primarily by my non-English speaking Nonna while both my parents worked at multiple jobs to get by.

Because we had so little money, my parents also did everything around the house themselves. They made their own wine and cured cold cuts. And like many Italian families in our neighbourhood, they had a vegetable garden in the yard. (To this day, I feel like I’m committing a sin if I buy tomato sauce from the grocery store!) They also handled all of the repairs and chores themselves or with the help of friends and family.

My parents take great pride in the life they made here in Canada. But once I was old enough to understand, I began to see their struggle. They were always exhausted and there was often tension in the home. Could they cover the bills each month? What if one of them were laid off? What if the car broke down or the furnace exploded? What if something happened to my brother or me?

As soon as I was old enough to work, I promised myself that I would not live paycheque to paycheque as my parents did. I didn’t know it at the time, but I was making a commitment to achieve financial independence. I also didn’t know the struggles I would face – or the enormity of the pride I would feel – on the path to getting there.

When I was in high school in the 70s, I started my own landscaping company and worked part time at a Dominion grocery store. With this income, I was able to fund my university education and even afford an occasional night out, complete with the platform shoes I needed to fit in at the discos!

During my undergraduate education, I studied accounting because it seemed like a profession that would offer a stable source of income and career advancement. Looking back, I know I was never passionate about it, and that lack of drive meant I didn’t excel, eventually failing the accountants’ qualifying exam twice.

What I did have a passion for was achieving financial independence and starting my own business, so I kept searching.

After leaving the accounting profession, I spent several years as a real estate investor, where I once again found that I didn’t really fit with the job. When a deep recession hit in 1990, I gave up on my real estate endeavour and starting looking elsewhere.

Around that time, I was having breakfast in a local diner and saw an ad for a Chartered Financial Planner (CFP) certification program. I was immediately fascinated by the possibilities of this new career track, which fit nicely with many things that interested me. That was the inflection point of my life and career.

I read dozens of books about total wealth planning and investing en route to acquiring my CFP designation. At first, I worked for another firm, but as my passion and experience grew, I made plans to break away on my own. At age 31, I opened my own wealth planning practice and became a mutual fund dealer.

As I built my business, I was shocked by the number of people I met who failed to engage in deliberate wealth planning – either because they didn’t know how or didn’t think it mattered. They weren’t saving, had no will, had inadequate insurance and were, most shocking of all to me, not maximizing readily available opportunities to defer or reduce taxes.

It was at this early stage of building my own practice that I settled on what would become the driving passion of my career: helping people achieve their Live Well, Stay Rich, Never Retire strategy.

Guided by a deep belief in the power of financial education and coaching, I began to give seminars at schools and corporations, eventually teaching wealth planning courses for about 10 years. As I did, with my client base growing, my passion evolved.

I loved working with business owners just like me. I could relate to so much of what they were going through.

They worked harder than anyone else. They lived with no income guarantee, no pension, and no playbook. They took chances and had no safety net. And they were motivated by their drive to build a successful enterprise and deep desire to achieve the goal that got me started in the first place: financial independence.

Through these experiences, my practice shifted to providing total wealth planning and investment advice tailored to the unique needs of entrepreneurs and business owners.

As my business grew, it came to revolve around two philosophies for living, planning and investing.

The first is my belief that financial independence is the key to living well and being the best version of yourself. Anyone living like my parents did all those years – constantly scraping by and worrying about how to pay the bills or dreading the possibility of impending financial doom – won’t be at their best.

When we have the financial resources we need to achieve financial freedom, we are able to be the best possible spouse, child, sibling, friend, colleague, philanthropist, and community member. Why? Because financial independence allows us to focus our attention on what matters.

To provide business owners with a step-by-step plan for achieving financial freedom, I wrote a book called The Ladder to Financial Independence. It guides business owners through the stages of turning their passion for building a business into establishing the financial resources they need to have the flexibility to take their career and their life in whatever direction they choose.

My second philosophy of living, planning and investing was inspired by my work with business owners.

Over and over again, I saw that business owners don’t retire well. They are driven individuals who thrive when they can jump out of bed every morning ready to face the challenges of building a business. Most I have met like what they built and would have – or have had – a hard time walking away.

Informed by this experience, I developed the Never Retire philosophy.

A business owner already has a passion and is good at it, so why retire? Slow down? Sure. Delegate a range of duties to other members of your team? Absolutely. Focus your attention on the elements of your business you love and are good at? Definitely. But why retire completely and be idle the rest of your life?

All the things you might want to do in retirement – travel, culture, time with family, education, hobbies, and so on – can be pursued while continuing to run your business. You don’t need to retire to live your life fully. And if you have achieved financial independence, you won’t need to.

There are so many examples of people who have worked long past the age when conventional wisdom said they should retire. Look at Warren Buffett. He is 89 and still working. Or actor Betty White, who is still working at 98. Or Queen Elizabeth, who continues her duties at age 93. Or Robert Redford, who is 83 and continues to manage a range of business interests.

The Live Well, Stay Rich, Never Retire philosophy grew out of what I was seeing my clients go through, but in the last few years, it has become an increasingly personal mission.

As I have approached the age people typically associate with retirement, friends, colleagues and family members have increasingly asked me about my plans for life after work. It’s a question that never really made sense to me. I love what I do – why would I stop doing it?

I set out to achieve financial independence so that I would never have to live with the stress and strain that was so detrimental to my parents. Along the way, I discovered a passion for helping other business owners achieve their own financial independence and make plans so they Stay Rich and Never Retire.

Today, I have the ability to pursue what matters to me.

I worry about how to teach my children about money, and support them without making them too soft. I worry about my aging parents, and whether they have enough money to cover their daily needs and mounting health care costs. And I worry that the drive to make money leaves many entrepreneurs missing the point: money is a tool we can use to become the best version of ourselves.

These are my passions. And that’s my story.

Did this article resonate with you? What did I miss? Send me a note and let’s start the conversation.

source https://richarddri.ca/every-business-owner-wants-to-achieve-financial-independence-and-live-richly-this-is-my-story/

The Year that Was: 2019 in Review

January 3, 2020 drifinancialLeave a comment

As I sit down to write this post, the S&P/TSX and S&P 500 are both at or near record highs. Barring an unexpected occurrence, both the Canadian and US markets will close out 2019 with gains of +20% for the year.

What has this meant for Dri Group investors? Currently, as of December 17, the Richard Dri Canadian Dividend model * stands at an annual gain for 2019 of 27% and the US dividend model** has posted a gain of 27.3%. Meanwhile, our Smart Fixed Income model*** recorded a gain of 6.1%.

In tangible terms, this means your specific statements show an increase in the equity portion of your investments with Dri Group of approximately 25%, while the fixed income portion is up approximately 3%. That results in an overall gain of roughly 14% to 16%, depending on your particular asset allocation. (i.e. The larger the equity portion of your portfolio, the higher your overall return.)

Pulling the lens back to look at the wider economic trends in 2019, the major factor that drove the economy this year was the change in the momentum of interest rates.

At the end of 2018, the consensus was that 2019 would see increases in interest rates in Canada and the US and that would lead to an economic slow down. However, like economic predictions often are, this one was dramatically wrong. In 2019, five-year Government of Canada bond rates dropped from 1.85% January 1 to 1.64% December 17, with a stop as low as 1.15% on September 3¹.

These low and dropping interest rates have helped economies around the world expand, which fueled modest growth across the G7 economies in 2019, consequently pushing global stock markets upward. In essence, the decline in interest rates provided an updraft for the economy and your investment portfolio.

What do we know about the year ahead?

Since most economic predictions prove to be wrong, I will refrain from making a forecast. Instead I will focus on what we know.
We know the following:

1. Our models are working

Historically, stocks of companies that pay an increasing annual dividend provide above-average returns, as evidenced by the returns of the Richard Dri Canadian Dividend Model. Based on this evidence, we developed an investment mission that has been enabling us to deliver solid returns for our clients for years. We only invest in companies with growing dividends, and we sell if their dividend growth momentum begins to slow.

Guided by this mission, we built the Richard Dri Canadian Dividend Model, which has a 10-year compounded return of 14.2% versus a 7% return for the S&P/TSX². Additionally, our model has had only two negatives years out of ten [2018 (7.9%) and 2015 (5.4%)] while its benchmark had three negative years [2011 (8.7%), 2015 (8.3%) and 2018 (8.9%)].

That means that over the last 10 years, our model’s emphasis on dividend growth companies has led it to outperform its benchmark (S&P/TSX) and have fewer negative years. We are elated and proud that the model that we developed some 15 years ago is still achieving our objectives of higher returns with fewer negative years than the S&P/TSX.

2. Dividends keep growing

As of December 18, 2019, dividends in companies we invest in continue to grow. In the Canadian dividend model, 19 out of 20 companies increased their dividends in 2019. On the US side, 16 out of 20 companies increased their dividends. If these dividends keep increasing, we expect increases in stock prices as well, though we cannot predict when that will occur.

3. We rank stocks daily and sell/buy when prompted by our models

Each day, the team at the Dri Group receives an electronic feed from our supplier, Morningstar, which ranks about 800 Canadian companies and about 2,000 US companies according to how well they fit the filters set in our models. If a stock falls out of the top 33% in rank, it is sold and replaced with a stock in the top 15% of the rankings.

This keeps the stock positions in our models fresh by eliminating companies that are not able to increase their dividends and replacing those stocks with companies that have a stronger probability of continuing to increase dividends.
Without sounding like a broken record, we will not buy a stock that is not recommended by the model nor will we override a buy/sell signal from the model.

I have written extensively about the harmful effects of relying on emotions, tips or guesses to make investment decisions. (You can find my book Introduction to the Investment mindset here. It explains how unproductive emotional investing can be.)

4. The Dri Group team is the best I have ever worked with

Over the 25+ years I have been a wealth advisor, I have worked with many different team members, but I have never worked with a team as impressive as the one I have with me now.

Grace Gomes, Ashley Land and Lora Shapiro (in order of seniority) are the best group of people I have ever worked with. They come to the office each day fueled by a passion to provide our clients with excellent investment advice and comprehensive answers to financial planning issues.

Our emphasis on exceptional service will continue in 2020.

Things that we do not know about the year ahead

Let’s take a brief look at three topics that are providing some uncertainty as we head into 2020.

1. Are stocks going to crash in 2020?

The question I most often hear from clients is a version of “since the economy has not experienced a recession in more than 10 years, which is the longest period of growth in history, are we not due for a big bad recession next year?”

The answer is simple: I don’t know and neither does anyone else.

Please don’t get caught up in reading and believing the “end of world” predictions that are popping up as we turn the corner into a new decade. The headlines may be loud and sound accurate, but remember that many predictions turn out to be terribly wrong.

Instead, focus on the strength and solidity of the asset allocation we have selected for your personalized investment portfolio based on your risk profile, cashflow needs and time horizon. Your portfolio consists of Canadian/US dividend paying stocks, laddered bonds, laddered GICs and a tactical portion that moves in and out of the market.

And, as always, if you are feeling anxious about your portfolio, call our office, and we will review your asset allocation with you.

2. Will President Trump sign a trade agreement with China?

Again, I don’t know if this will happen. Recently, the US Government indicated that a Phase 1 trade deal with China had been negotiated and could be ratified shortly. As well, the US and China deferred tariff increases that were due to come into effect in December of 2019, which was a positive sign.

3. What about other major global questions?

What impact will Brexit have on the economy in Europe? Or on trade between Canada and England? How will demonstrations in Hong Kong impact the economy in China or the entire Asian-Pacific region? In what ways will climate change continue to impact markets? And what will the economic impact of other major developments be, such as the possibility of military aggression by China and Russia, the US Presidential election, or growing government and consumer debt levels?

Again, I don’t know if these issues will or will not cause a global slow down, but here’s what I do know: the team at Dri Group closely monitors political and economic events as they occur as part of our commitment to look out for your best interests.

Also, there are many positives to consider as 2020 arrives. The Canadian and US economies are growing, interest rates are low, net immigration is positive, inflation is muted, and unemployment is low. These are all positive signs.

In closing, on behalf of the Dri Team, I want to wish clients and non clients a Happy Holiday season. We wish you all the best for a safe and prosperous 2020.

Did this article resonate with you? What did I miss? Send me a note and let’s start the conversation.