By Adam Laird on November 20, 2024
A “fixed asset” is a long-term tangible asset that is not expected to be consumed or converted into cash any sooner than at least one year’s time. In Canada, a “family home” is considered a fixed asset.
When downsizing their homes, many families are left with more liquid wealth than they are accustomed to. Due to this, downsizing offers financial freedom and flexibility with appropriate financial and emotional planning.
Through our experience with clients and with the assistance of thought leaders within the residential real estate industry, we have organized a list of five things that can help the process of downsizing:
- Identify What and Where the Alternative Home Will Be
Each option has its own particular advantages and/or disadvantages, which should be thoroughly reviewed.
- Identify Your Age and Stage in Life (An Audit of Yourself!)
Being true to yourself aids in your process of relocation, and ultimately optimizes your time and resources.
- Identify Your Financial Freedom and Flexibility
Many take on the downsizing process with the hope of reducing their expenses and increasing their flexibility.
- Identify Appropriate Investment Counselling
The wealth generated by downsizing will need to be managed prudently to ensure your future funding obligations are satisfied. It is imperative that you investigate and seek out competent investment counselling services.
- Prepare an Emotional Plan and a Wealth Plan
Reflection and planning will help you and your family determine how to best move forward with this big life change.
Watch our video below for a more in-depth discussion of these five steps:
Selling your principal residence can be a daunting task. Therefore, it is strategic to take it one step at a time. We hope this video was thought-provoking and helpful as you think about taking on this new chapter in your life.
HighView is an experienced boutique investment counselling firm for affluent Canadian families and foundations. We would be happy to discuss our goals-based investment approach with you and your professional advisors.
Click here to watch more videos from HighView.
You may also be interested in:
- What Does “Family Wealth Stewardship” Mean?
- Mitigating Investment Portfolio Volatility
- Debunking the Investment Industry: Is Your Investment Portfolio Structured for Relative or Absolute Benchmarking? [Video]
- Family Home – Downsizing with 5 Crucial Steps [Video] - November 20, 2024
- Portfolio Design is Crucial. Here’s Why. - October 2, 2024
- Portfolio Design: How this Matters Greatly - July 17, 2024
