Finance MYTH 8: “Why do I need an estate plan? I already wrote my will.” Writing a will is a critical step in all estate planning. But it is rarely a “set it and forget it” type of task. The fact is that an out-ofdate will can sometimes be just as ruinous to your finances – and just as damaging to your family – as no will at all. As your financial situation changes – you buy or sell a home, for example, or perhaps a family business – you’ll need to review your bequests to ensure that they reflect your current assets. Same goes for your family situation – new relationships, new grandchildren and new living arrangements all demand a review to ensure that your money goes to the right people. Changes with your executor might be another reason for an amendment; if your current executor becomes ill, passes away or moves to a different part of the country, it might be a good idea to reconsider your choice. Such changes don’t happen all that often. But they do occur often enough that you should get into the habit of looking over your will every couple of years. By doing so, you’ll be in a better position to ensure that you don’t leave behind a legacy of family conflict and legal hassles. MYTH 9: “I’m too smart to fall for financial fraud.” A very dangerous myth. Sure, most of us are smart enough to figure out that the Nigerian prince who needs a bit of help to unlock millions from his trust fund isn’t who he says he is. But fraudsters are becoming increasingly sophisticated in their efforts to separate us from our hard-earned money. Their use of fake websites, duped call ID numbers and AI-generated documents has become so good that even the smartest, most financially savvy individuals can have the wool pulled over their eyes. Don’t be complacent about these things: avoid lazy, easily guessed passwords such as “password” or “123456.” Keep the operating system on your phone updated. Set up your two-factor authentications. Don’t use your banking apps in public wi-fi zones. And be very, very cautious about giving your financial info over the phone or email – even if someone says that they’re from your bank, or CRA, or your family. More generally, be ever-vigilant and on the lookout for the telltale signs of investment fraud: (a) the promise of super-high returns; (b) the “guarantee” of no risk; and (c) the need to act now. Above all else, remember what your grandma told you: if it looks too good to be true, it almost certainly is. Ultimately, that will be a much stronger protection than simply repeating “it can’t happen to me.” MYTH 10: “I stick to Canadian investments – it’s just safer.” Judging by the data, one of the most common money myths of all. The average Canadian investor allocates more than 50% of their portfolio to Canadian stocks – this, despite the fact that the Canadian stock market represents only 3% of the world’s total stock market capitalization. In financial circles, this is called home bias: a predilection to over-allocate funds to domestic investments, whether out of familiarity, transaction costs or a misperception that such investments are “safer” than those from other countries (or all three). If you’re a regular reader of this column, you’ve likely read quite a bit about the benefits of international diversification: simply put, it’s one of the easiest, most effective ways to protect your overall portfolio against many types of market and business risks. That’s particularly true in a time when long-established trade policies and political alliances seem to be changing rapidly (and not always logically). No, this doesn’t mean that your portfolio should always be aligned with the worldwide market capitalization. But putting all of your eggs in one basket (however patriotic that may be) might not be the wisest idea. Think about it the next time you look at your portfolio holdings: if you find yourself overloaded on Canadian stocks and bonds, now might be a very good time to send some of your money abroad. 32 | www.snowbirds.org
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