Get out in your financial garden
Now that you have filed your income tax return, it feels long overdue to get outside into the garden.
Whether you have a community garden plot, your own one quarter acre or have your garden in pots on the deck, warm May weather beckons.
Now is also a good time to think about your financial garden and what you wish to plant, tend and grow in a financial sense.
Think of it as a way to review your finances alongside your vegetable, flower or landscape garden.
How do you feel about your financial security?
Have you found your formula so you no longer worry about money?
What is the key to obtaining your own sense of financial well being?
Part of the solution includes educating yourself and learning about your money.
A second part of financial success includes becoming an active participant in your investment decisions.
The third part is learning what your money personality is.
Are you a saver or a big spender?
Do you invest your money and put it to work?
Or are you happy to go shopping?
In selecting investments, many Canadians feel overwhelmed with the choices available.
Some feel that they should only buy the newest funds or stocks available.
Others feel they do not have the knowledge to make a choice so they invest in only what they are familiar with.
Investing is a lot like creating and tending a garden.
If you plant the right flowers, vegetables, herbs or shrubs, then your garden flourishes.
However, the health of your garden depends upon the quality of the soil and the amount of sunshine, water and weeds.
Some things you can control, such as weeds or fertilizer.
Others you cannot, such as the amount of sunshine or rain.
Successful investing also relies on many factors and a process of making educated choices.
The correct strategy for you is one that considers the elements of risk, diversity and rate of return required to meet your financial goals.
Select investments for your particular circumstances.
Investments are also impacted by events beyond your control.
In today’s global marketplace, what happens outside of Canada as well as in the far reaches of the world affects your investments.
Your garden may contain plants that are annual as well as perennial.
Shrubs and trees are planted for the long-term.
Other areas such as a vegetable or flower garden are planted to be enjoyed this year.
Just like the garden, your investments also contain both short term and long term holdings.
If you think that an investor is only someone with bags of money in the stock market, think again.
If you own an registered retirement savings plan, registered retirement income fund or tax-free savings account, you are an investor.
If you own term deposits, mutual funds or stocks you are an investor, too.
If you own your own home or recreational property then you are an investor.
Whether your investments are many or few, they are more likely to grow and flourish if you pay attention to them and provide the right environment or conditions for growth.
The more you know about your investments, the more likely you select the right choices for your garden.
As any gardener knows, you must periodically go into your garden and see what is happening.
The same applies to your investments.
Review your holdings at least three times a year or more often, if you feel it is necessary. Spring is here. Now is an excellent time to survey your garden of investments and ensure you know what is growing and where it is.
So, before you go planting, pruning, weeding or relocating in your investment garden, review what you have, determine where you want to go and plan your way to your goals.
Who said growing your investments was boring?
Marion Wahl is a chartered professional accountant in Kelowna. Reach her at marionpwahl@shaw.ca.