Risk

We live with risk every day. Risk cannot often be eliminated completely. It can sometimes be minimized and/or managed. Often financial risk can be transferred by the purchase of insurance.

Our Financial Planning process breaks the Risk element into three categories:

• Person Risk
• Portfolio Risk
• Possession Risk

Person Risk is made up the risks we face as persons; as individuals and families. It is the risk of getting sick or hurt or of dying prematurely. Person Risk is at its highest when we are younger and have lower levels of Portfolio Wealth. Without sufficient assets that can generate income without our drawing on our own capacities, capabilities and connections, we are at personal financial risk. If we have a spouse and children, the financial risk expands to include our family.

Portfolio Risk is the risk inherent in our financial assets and, if applicable, in our business and/or real estate assets. Investment markets go up and down and can cause volatility in our investment portfolios. Businesses face a myriad of risks in their day to day operations; the economy, competitiveness, personnel, fire or other damage to equipment and facilities, liability, theft to name only a few. Real estate investments face many of the same risks as businesses.

Possession Risk is made up of the risks associated with owning possessions. Houses, cottages/camps, vehicles, boats, recreational vehicles and other possessions are all at risk of destruction or damage. We are also exposed to liability in the event that someone suffers harm or worse while using or in the presence of our possessions.