“Enraptured By Grace” – Acrylic, 2015
Procrastination and Planning
As you read this, I’m going to be returning from our big vacation for the year. Bridget, the boys and I are going to the north end of Killarney Provincial Park, and spending seven days travelling by canoe through the Grace Lake and Nellie lake loop. If you have never heard of it, Killarney was literally created by the efforts of the Group of Seven, and much of their most iconic work was painted at the park in this area.
We’re going to be travelling with our friend Bill and Danielle Gardner, who are respectively the Astronomer and Artist in Residence at the park. Danielle was, in fact, the first Artist-in-residence at the park since the Group of Seven themselves. (Her work “Enraptured by Grace” featured here, is from her last trip on this loop)
We’re pretty excited. Much like finances and estates, however, this trip has required a lot of up front work, to make it pay off. I’d like to share some of what we have learned on this trip that can be applied to financial and estate planning.
If you have come to any of my talks, you know that a stat I love to quote is that only 20% of us “get off our butts” to make changes to our estate plans. I’d hazard a guess that no backcountry hiker or canoeist would go out without a lot of planning! (Or, they might end up going out in a completely different way…)
Things we’ve learned from our trip that you can use in your estate and financial planning
1) Start planning early while its cheap and easy. Our friends are expert backcountry folk –– being experienced, they knew a few quirks of the Ontario Parks reservation system that ensured we got backcountry sites before most people even knew you could register. If we had waited, costs could have been higher, as we would have had fewer options for travel available to us. Estate planning works the same way – the sooner you start, the more options you have, and the cheaper they are. Wait to long, and you will find its an expensive mistake.
2) Pay for quality now to save yourself a hassle later. One of our portage routes is known as “The Notch”, which is the steepest portage in the park. We will have a 49lb Kevlar canoe to carry the five of us. It wasn’t cheapest canoe, but given part of this portage is near-vertical, we’re going to be greatful we spent the money on it vs. the 70lb option that was half the price.
Cheaper doesn’t always mean better in financial and estate planning. Its usually a trade off between long-term costs vs. short-term costs. Smart people start with what the need for the long term, rather than finding the cheapest option now that might cost way more later.
3) Lay down the game plan in detail, and plan for failure and changes to the plan as you go. We have meticulously worked out our schedule. Since we will be in one of the most remote areas, we need to know what food and gear we need, including planning for failures along the way, since there’s no going back once we get started. Lots can happen to your financial life over the years, but people studies show who have worked with a financial plan in place end up with 290% higher assets than those who don’t. (Source: CIRANO Study 2012)
4) Get insurance – its cheaper than the alternatives. Our friend Bill rents a special transponder for back country hiking/canoeing, that includes an insurance plan if anyone is hurt on the trip. An air rescue from a remote area can run in the $10-20,000 range. If you are insurable, and a reasonable age, the rate of return on an insurance policy for your estate is often hard to beat with investments on a risk-adjusted basis. This is particularly true for charitable gifts, and tax planning purposes.
5) Be prepared to deal with bugs and other things that can through you off course. Northern Ontario is having a miserably year for bugs. We’ll have spray and bug nets to keep us on course. You can’t plan for everything. Stuff will happen along the way, and that’s why its important to save and plan now, so you have capacity to be blown a bit off course with all the things we can’t envision right now.
Paint your Financial Picture.
If you have been putting off your estate or financial planning details, maybe its time to start painting in the sketches. I’m currently chair of the Estate Planning Council of London, which has accountants, lawyers, trust officers, etc. If its not something I can help you with, I’m happy to give you a few names of colleagues who are members of that group whom I trust can help you fill in the brush strokes. Feel free to drop me a line.