Planning Considerations for University of Saskatchewan Professors.
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Planning Considerations for University
of Saskatchewan Professors.
I work mostly with individuals in education; many of them are employees of the University of
Saskatchewan. These individuals share many commonalities personally since they share a
similar career path, income and retirement possibilities. I look at those commonalities and
provide some guidance in critical areas that, in my experience, must be addressed if you are
to be successful in your finances.
As a Professor, you will have the privilege of observing a broad spectrum of financial
outcomes among your peers. You'll see those who become very wealthy and others that just
look wealthy. You'll see some peers living happy, fulfilling lives aided by their finances, and
others who are restricted by them. Fortunately, you get to choose your path.
By Tré Bynoe CFP®, RIS, CIM®
Tré Bynoe is a financial advisor specializing in high income professionals. Originally from Oxford,
England Tré holds his Certified Financial Planner and Chartered Investment Manager designations.
Growing up in the foster care system, Tré focuses on prudent financial decision making which he now
shares with his clients.
Financial Planning Considerations for University of
Saskatchewan Professors.
What makes you different?
What does "free-time" mean?
COVID-19 Tip:
Academia is demanding. Between your home At the time of writing, we
responsibilities and the university, it is hard to
give your finances the correct focus. Some
are still waiting to hear
also take on projects like writing books or from the CRA about the
business ventures. It's easy to see why
finances often take a back seat. work-space-at-home tax
deduction. Make sure
Opportunity will come knocking.
Being an expert in a field means that you’re aware if you
opportunity will come your way. Being in a
position to take advantage of these potentially
qualify or not come 2021
life-changing moments is essential. tax time!
Financial freedom is a possibility.
Many people dream of financial freedom and the ability to live life without the day-to-day
financial constraints of needing employment. For some, it's no more than a dream. For you,
however, it's possible with some intentional decision making.
You are intelligent.
Completing your advanced degree is exponentially more difficult than managing your
finances efficiently. With this proven ability to learn, you are in a position to manage your
finances exceedingly well. Still, it's not all rainbows and bunnies. High intellect can easily
lead to overconfidence in investing. Because you are sophisticated, it's easy to believe that
simple isn't good enough. Putting everything on the line with a risky investment is not
uncommon among intelligent people. Creating a robust investment approach will be critical
to your future success.
You are humble.
Academia is Being an expert in a field makes you more
demanding. Between aware that sometimes we don't know what we
don't know. Intelligent people often look for
your home help in areas they don't fully understand, which
is commendable and often leads to success.
responsibilities and However, this trust can be misplaced,
especially in the financial services industry
the university, it is where every salesperson at the bank is some
hard to give your type of "expert." As an industry, this is
improving, but we still need to differentiate
finances the correct between salespeople and real experts. A great
thing to look for is the CFP® marks (Certified
focus. Financial Planner) after their name. Learn
more at fpcanada.ca/canadian-public.
Financial Planning Considerations for University of
Saskatchewan Professors.
PSA, please be careful who you entrust your
financial future too. Just like academia, not every
advisor is made equal.
Be careful who
Not sure where to start? Look for a CFP® you can
pay hourly. We are rare, we are not cheap, but we
you entrust your
do exist. Paying hourly means they have less
incentive to sell a product, and the CFP® means
financial future
they are capable of providing good advice. too. Just like
Ten areas for professors to consider. academia, not
Everyone makes decisions throughout their life. every advisor is
Think back to your university days—it's a Saturday
night, and you have a paper due Monday. You made equal.
have a choice to make: you can go out with friends
or complete the paper. What do you choose?
There is, however, a third option—doing nothing. I believe the third option is the worst. Either
go out, make memories with friends, accept the consequences, or complete the work that's
due on Monday. Don't pick option three and do nothing! It may seem like the most
comfortable road, but it's almost always the worst choice. Unfortunately, when it comes to
personal finances, many people choose to do nothing. They sit somewhere between
dreaming and in-action, hoping that things will work out. As a professor at the University of
Saskatchewan, the following are ten areas you will likely have to make a decision around.
1. Pension Options
The major benefit of The most significant benefit of your current
pension plan options is their lower cost. The
your pension plan downside is you don't get any advice on how to
options is the lower maximize the low cost-benefit. Sunlife has some
strong money managers. Your asset allocation
cost. The downside is should work in harmony with other investments
because of this low you have outside of your pension and work to
reduce your entire investment portfolio's cost.
cost; you don't get any You have a good pension plan with the
advice on how to university. You contribute 8.5% of your income,
and the university matches that for a total of
maximize the low 17% of the 18% available. This is great! But that
cost-benefit. does mean you will have less room to contribute
personally. With you only able to contribute a
max of 18%, consider not using this RRSP room
early in your career and saving this 1% room for
later when you have a higher income.
Financial Planning Considerations for University of
Saskatchewan Professors.
2. Traditional Asset Allocation Is Becoming Harder to Justify
With interest rates being so low, it is
becoming harder to justify significant bond
positions in retirement funds when you have
ten or more years until retirement. Seriously
Many people
consider your asset allocation thesis. Using believe that an
the default life-cycle balanced funds can
seem like a good idea (which if you aren't above-average
willing to educate yourself or seek advice, I
recommend using these), but it can be an income will solve
expensive mistake. I strongly recommend
assigning asset allocation by time horizons
their money
instead of the traditional allocation by age. If problems—that's
you do decide to personalize your portfolio
more than the cookie-cutter approach, it not true.
means more work. You need to re-balance
and regularly change allocation as time
passes. A good advisor can make this easier for you.
3. Six-Figure Income Doesn't Automatically Mean You'll Be Wealthy
With the potential to earn an excellent income, you must learn about the pitfalls of having
such an income. Many people believe that an above-average income will solve their money
problems, and that's not true. When talking about this with a client, they made a very astute
analogy. It's like putting up a new shelf because you need more space. You will quickly find
yourself in the same situation as before needing more space because we all find a way to
use the space we created.
Your income is no different, adding more income or 'space' rarely solves the problem. If you
don't make a plan and put systems into place in advance, you will find a way to use the
income as you grow in your career. This is called Lifestyle Inflation—the greatest wealth
killer. What are you going to do to control this?
4. Don't Ignore Money
Most people share You've become skilled at setting
expectations—expectations of students,
a common goal for expectations of your employer, and
expectations of yourself. You should also
their life, to be have expectations of your financial life. Are
you on track to achieve expected goals? Can
happy. Money is you achieve these goals more efficiently? It
an integral part of can be easy for the other areas of your life to
take precedence over your financial well
that, to ignore that being. How are you going to ensure that your
financial well-being remains high on your list?
fact is a disservice. Most people share a common goal for their
life—to be happy. Money is an integral part of
that, and to ignore that fact is a disservice.
Financial Planning Considerations for University of
Saskatchewan Professors.
5. Understand Risk
There are many different types of risk in investing. You need to learn the difference at a basic
level (surprise—the "risk" rating on your retirement funds isn't about losing all of your money).
Once you understand risk, learn about your risk tolerance. An excellent place to start is
understanding the difference between systematic or market risk vs idiosyncratic risk and how
that affects investment decisions. Looking at your Sunlife pension plan, 75% of its assets are in
the default option, that being the balanced fund. It's unlikely
this accurately reflects the risk tolerance of the participants.
If you don't make a
6. Seek Tax Guidance Before You Make a Decision plan and put systems
If you pursue other income sources outside of your regular into place in advance,
University income, your tax situation can become complex
you will find a way to
rapidly. Before you take any of these steps, seek the help
of a qualified tax professional. use the income as
you grow in your
career.
If talking about money 7. Plan for "What If"
causes you stress or You have a robust
benefits plan, but it's not bulletproof. Consider the
worry you are just like consequences of a 30% drop in your income, or your spouse
everyone else, but there losing their income. Another thing to consider is what
is good news! The happens if you or your spouse pass away. You should hope
more you talk about it for the best, but make sure you plan for the worst.
the easier it becomes. 8. Aggressively Paying off Your Mortgage
If you are in the position to pay off your mortgage
aggressively, take a pause and look at all of the options.
Being 100% debt-free is a noble pursuit, but in a time when mortgage debt is very cheap, you
may have a better use for those funds. Educate yourself on the options; you must learn to look
at these types of decisions objectively.
9. Understand Your Emotional Connection with Money
Money is an emotional topic; understanding your feelings towards money is a powerful way to
learn to control your wallet and emotions. Many Canadians rate money as their #1 stress in life.
If talking about money causes you stress or worry, you are not alone. There is good news,
however—the more you talk about it, the easier it becomes.
10. Not Everything Is as It Seems
Everyone, and I mean, EVERYONE, compares themselves to their peers financially. You don't
see behind the scenes, so it's easy to think something unrealistic. For example, that friend with
a big house, the fancy cars, and the quarterly vacations may have a trust fund or be up to their
eyeballs in debt. That individual with the regular home and the 5-year-old vehicle may have a
spending problem or be a millionaire. The point is you never know! Instead of worrying about
what others are doing, focus on doing the best you can do. You might be asking yourself, "what
is the best I can do?" Start with living a happy, fulfilling life and cap your expenses there.
Financial Planning Considerations for University of
Saskatchewan Professors.
About the Author
Tré is a financial planner with TCU Wealth Management and Qtrade Advisor. He
focuses on helping honest, hard-working individuals to become wealthy and achieve
financial freedom. He does this through substantial cashflow management and
sustainable investing to make achieving financial goals inevitable. He believes in a
few core principles for financial success.
1. Be intentional with your decisions. "Many people float through their finances;
they don't pay attention either because of how it makes them feel or due to
lack of knowledge. You must understand the impact of your decisions; then
you can decide if they're worth it."
2. Manage your cash flow. "Cash flow management is the foundation on which
castles are built. If you don't learn to manage your cash flow effectively, you'll
succumb to lifestyle inflation, the ultimate wealth killer. Lifestyle inflation is
when you passively increase your expenses as your income increases."
3. Understand risk. "Nobody becomes wealthy by saving. You grow wealth by
investing; whether it's investing in yourself, business, real estate, or the
markets—there is always risk involved. Instead of running from that risk, you
must learn how to manage it effectively.”
Mutual funds, other securities and securities related financial planning services are offered through Qtrade Advisor,
a division of Credential Qtrade Securities Inc.
Financial Planning Portfolio Management
Cashflow management guidance for A low-cost, sustainable, diversified,
automating success and removing and tax-efficient philosophy.
stress
A portfolio implemented with a
Net worth projections to guide predominantly passive approach.
decision making
Advice in all areas that could affect A tax-efficient and holistic approach
your ability to meet your financial across all types of accounts: RSPs,
goals. TFSAs, cash, etc.
Insurance needs, education Portfolios are constructed to work
savings, retirement, charitable alongside all investment assets,
giving, tax efficiency, housing including pensions and private
decisions, estate planning, and equity.
more.
Integration of Environmental, Social
Humility. I do not know the answer and Governance analysis (ESG)
to every question or situation off the into investments selection process.
top of my head. I will find the
answer. I think the moment you
believe you have nothing left to
learn is the start of the end.You can also read
