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The One-Page Financial Plan: Book Review and Giveaway

Every now and then a new personal finance book comes along that promises to change the way we think about money. But we’re left feeling disappointed, more often than not, when we realize there’s no silver bullet cure to get our finances on track. No latte factor or folksy barber wisdom can tell you exactly how to manage your money.

The fact is that good financial health is rather boring. It’s about having goals, being mindful of your spending and aligning it to those goals, diversifying your investments and keeping costs low, avoiding the big mistakes, and protecting your family from potential disaster.

The One-Page Financial Plan Review

We often veer off course when it comes to aligning our spending with our values – understanding why money is important to us. In his new book, The One-Page Financial Plan, Carl Richards helps answer that question and more with a simple, yet in-depth, 10-chapter road map.

The One-Page Financial Plan

The One-Page Financial Plan is all about the things that really matter to you. If you had to put it all on one page, what would it look like? It should let you know whether you’re on course to meet your goals, or whether you need to make some adjustments.

For example, the author’s one-page financial plan looks like this:

Time with family doing what we love.

  1. Fully fund all retirement accounts each year.
  2. Fund kids’ education accounts each year.
  3. Save for house.

“Think about your one-page plan as a snapshot, not an instruction book. If you’ve ever put together a kids’ toy, you’ll know that most of them come with a fifty-page instruction manual. Sure, the fifty-page plan is incredibly important—probably vital if you want the drawbridge on the castle to open or the rocket to launch—but what’s arguably most important is the picture on the front of the box. The picture lets you know you’re on the right track.”

Richards takes us through the entire process, starting by answering your most important money question (why is it important), figuring out where you want to go, and getting really clear about your current situation, before diving into spending, budgeting and saving for the future.

The author uses powerful personal examples to drive home two points: our financial future is unknown, no matter how precisely we plan; and when it comes to financial planning, there’s no one-size-fits-all advice. Richards humbly acknowledges his human (and fallible) qualities when he describes how irrational exuberance got the best of him (twice) in the dot-com and real estate bubbles. One decision cost him $10,000, while the other cost him his home.

One of the biggest takeaways in the book for me was to adopt a “no shame, no blame” attitude. Too often we dwell on the financial mistakes we’ve made in the past. Whether we got into major credit card debt, or spent more than we earned, didn’t pull the trigger on a particular stock that’s now soaring, or simply missed a sale on an item that now costs 50 percent more, we need to reframe mistakes as valuable lessons and acknowledge that it’s not worth the frustration.

Chapter 9 talks about the secret society of real financial advisors – ones who diagnose before prescribing, are open about conflicts of interest, transparent about fees and compensation, and will stand between you and the Big Mistake (buying high and selling low).

Finally, chapter 10 is about behaving – for a really long time. Humans are wired for bad behaviour – cognitive biases are part of our genetic makeup. Richards says the key is to set up guardrails that make it very difficult for you to misbehave. Having a plan to reference, including an investment policy statement, will help see you through difficult times. Automating good behaviour (savings, rebalancing) will help you stick to that plan.

Author Q&A and Book Giveaway

I highly recommend The One-Page Financial Plan – it’s great for beginners to learn how to get started with their financial plan, and the more financial savvy readers will find value in the behavioural aspects and powerful stories about money.

Now for the fun part. Carl Richards has graciously offered to answer some of your questions in a follow up Q&A post. He said in an email:

“I wrote this book based on an experience I’ve had repeatedly. I’ll go to lunch with friends or family members. We’ll have a great conversation. The bill will get paid. Then, with only a few minutes left, the other person leans over and says, “Can you help me with [insert financial question]?”

  • How should I invest my money?
  • What should I do about mortgage debt?
  • What should I think about insurance?
  • How can I find a real financial advisor?

This book represents my answers to all those questions. It’s incredibly frustrating to know that there are still so many people lying awake at night worrying and trying to make really important decisions in an environment that feels increasingly complex. I want to reduce the worry and make these decisions easier for as many people as possible.”

Here’s what we’re going to do. Leave your question in the comments below – it could be anything from a specific question about your finances, to some burning question you have specifically for Carl Richards. I’ll send the list of questions to Carl and we’ll arrange a follow-up post to address them.

As a bonus, anyone who leaves a comment/question will be entered to win a free copy of The One-Page Financial Plan. The contest closes at 5:00pm EST on Friday April 3rd and I’ll announce the winner in the next Weekend Reading edition.

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50 Comments

  1. ifat1st on March 29, 2015 at 11:44 am

    I invite Carl to speak to the topic of TFSA to RRSP balance.

  2. Stephanie on March 29, 2015 at 6:04 pm

    Carl, do you think it’s wise to get into a pattern of saving even while paying off consumer debt (from a line of credit with a low interest rate)? Or just focus on debt repayment first?

  3. Mario on March 30, 2015 at 4:28 am

    Carl, when would it be wise to start withdrawing from the RRSP in order to reduce tax in the future? We have no debts, all TFSAs and RRSPs are max out and we both will receive a government pension at 60 (in 5 years). Because of the investments we hold we can retire now if we want too.

  4. Tracey H on March 30, 2015 at 4:57 am

    When can we start cutting back on life insurance? Our rates are going up as we age and our investments are going up, too. We expect to cancel most (if not all) of it when we retire so can we figure out what we’ll make in the remaining years and just keep that much?

  5. Echozoom87 on March 30, 2015 at 5:02 am

    Sounds like a very interesting book!

  6. Wilson on March 30, 2015 at 5:19 am

    Carl, Canada used to have a strong social network, truly good universal healthcare, adequate public pensions, affordable housing, and good education for all. It was supported by our various tax systems. We seem to declining into a new era that is beginning to look like the 1930’s. What’s going on?

  7. Irene S. on March 30, 2015 at 5:33 am

    Carl, at what age should I begin thinking about long term care insurance?

  8. Beth on March 30, 2015 at 5:58 am

    Carl, what role do you think disability and critical illness insurance play in a financial plan?

  9. Robin on March 30, 2015 at 6:12 am

    I left the Financial industry due to pressure sales and now find myself starting up a small financial planning and tax return business. I am always looking for great ideas to share with my clients, as I am only giving advice and not selling anything, it feels great teaching people how to handle their hard earned money. Can’t wait to read you book.

  10. Jim on March 30, 2015 at 6:38 am

    The book sounds interesting. What advice would you have for young adults who are just starting out on their own? I’ve convinced one son to start a TFSA. The other is a bit more resistant.

  11. Ernest Tessier on March 30, 2015 at 6:53 am

    With everything going on in the Middle East, the Euro etc… there is a lot of talk about another major market correction on September 15, 2015 the likes to which we have never seen before. Is this likely, if so how do we protect are investiments?

  12. Herbert Child on March 30, 2015 at 7:03 am

    I’d be interested in what Carl would recommend for someone who is looking to retire to Central or South America? I’ll have an emloyee pension, slighter smaller government pension and some small private investments. Unfortunately I didn’t get my financial life in order until later in life and due to my health I only have less than five years that I can continue in the workforce. Thanks for this opportunity!

  13. Mose on March 30, 2015 at 7:09 am

    Carl, much has been said about the Smith Maneuver (SM) with many pros and cons. Over the last 5 years. I am trying to get established in Canada, and have maxed out my very little RRSP room, and TFSA. I have very negligible pension prospects with a reduced CPP, OAP, foreign pension on the horizon. I have to kick start in overdrive to get multiple incomes going and have less than 10 years to do it. Is the SM a good idea to reduce taxes and increase my investment portfolio?

  14. Susan on March 30, 2015 at 7:11 am

    I’m 52. I have been working full time for 33 years paying maximum into cpp. If I leave work early (before 60) how will that affect my CPP. I’m trying to plan for early retirement or change in career to a lower paying job where I wouldn’t be making anywhere near the maximum for CPP deductions. Thank you.

  15. Tarilyn on March 30, 2015 at 7:53 am

    Can’t wait for this to come out! Seems very simple but exciting!

  16. Tom on March 30, 2015 at 7:55 am

    Carl, I’m 21 years old and finally looking into doing some sort of post-secondary education. My idea is to wait 2 years, meanwhile sticking all the money away to pay for the courses in an RRSP. I would be able to fully fund the college degree I’m looking at that in that time frame. I want to pay in cash, not take on loans. So I thought the RRSP was the best choice to save in, as I have more than enough room, can pull it out under the Lifelong Learning Plan (so it’s paid back eventually). I have started retirement savings already, but in a TFSA as I’m in the lowest tax bracket. Of course, saving for school in my RRSP, I would not claim the tax credit for the contributions until I’m in a higher income (which also means should anything come up and I can’t pay back the LLP one year, I can claim some of the contribution credit to offset the taxes I’d owe for that).

    My question is: do I have the right idea? Friends think I should just go to school now and take out student loans, partner says I should be saving in the TFSA. Another reason I was thinking the RRSP though was since I would be expected to pay it back, it would only boost my retirement savings. I’m quite content at my current job for the time being (the course I want to go into is the same type of work, but I could go higher up [read; higher pay] if I took some post-secondary education.

    Hope I gave enough information. Just want to know I got a solid plan.

  17. Bruce on March 30, 2015 at 8:01 am

    Thanks Carl. While working I focused on building up a nest egg with the view that I could generate a decent income from earning 5 ti 7 % per year in interest from GIC’s. I am now retired at 60 with a decent nest egg, but I did not anticipate interest rates that are less than half of what I expected. Should I stay with GIC’s hoping for better average returns, or should I look at investing in Exchange Traded Funds with some percentage of the nest egg. Any help in this regard would be appreciated.

  18. Andrea Spires on March 30, 2015 at 8:04 am

    Our family lives a pretty simple lifestyle in a freehold townhome and drive older model vehicles but the extra curriculars like music lessons, hockey, swimming lessons, summer camp and a yearly vacation at either a cottage or overseas with relatives really add up. I don’t see any of these items as optional. Even so, our family makes in the neighbourhood of $130K gross and only saves about $20K a year in RRSPs and RESP and with our current budget there is no way to max out RRSP and RESP–> we would be raiding what is already a simple lifestyle. How do other families do it? We only have one kid!

  19. The Money Spot on March 30, 2015 at 8:06 am

    Carl, Do you prefer fixed or variable rate mortgages and if fixed rate what term length?

    I’ll be checking this book out!

    Thanks for sharing,

    Robbie

  20. Jim on March 30, 2015 at 8:13 am

    My question is with the various claw-back provisions in the income tax act what financial planning moves are necessary to minimize the impact of these provisions or is this a red herring ?

  21. Keith on March 30, 2015 at 8:58 am

    I am amazed these days how willingly some people, particularly some younger adults, will go so deep into debt to buy a house when house prices in so many places are at an all time high and interest rates at an all time low. When house prices drop (which we have seen lots of lately) or interest rates rise (the US seems ready to start that process this year), that debt will put so many of these over-stretched borrowers into deep financial problems (lower prices if they have to sell; higher interest rates when they have to renew). I expect debt levels are an important topic in your book.

  22. Karla on March 30, 2015 at 9:02 am

    Thanks Carl! At what point would it be wiser for me to switch to funding an RRSP versus a TFSA? I am a 46 year old widow with two teenagers who makes approx. $54,000. Up until now I have automatic withdrawals set up bi-weekly to go to a TFSA but only have a small amount going to an RRSP. Would it be better for me to focus on saving within an RRSP and not my TFSA?

  23. Paul Basran on March 30, 2015 at 9:25 am

    keeping it simple always works well. The more technical the info, the harder it is for clients to understand.

  24. Betty-Anne on March 30, 2015 at 10:14 am

    I’m 56 and hope to retire in the next year or two if possible. I would like to understand more about whether to defer collecting my OAS beyond age 65 and whether it is advantageous to collect CPP earlier than age 65. Looking forward to the book!

  25. Sandy on March 30, 2015 at 10:29 am

    We are a couple in our late fifties, early sixties. Our biggest asset is our home. We are concerned about having a market to sell this home to, given what we have learned about how there may well be a lot of homes like ours for sale as the baby boomers down-size. What urgency is there for us to sell before this onslaught?

  26. M. on March 30, 2015 at 10:41 am

    I’d love to know more about insurance and how much you should have as you and your dependents age (or your dependents become independent!).

  27. Al on March 30, 2015 at 10:41 am

    I’m a business man and want to retire in 3 years at the age of 50 years. I need a retirement salary (withdrawal) of $180,000 per year. How much do I need to have in investable assets based on my conservative allocation of 50% Equity (VTI & VXUS)and 50% Bond (BND) Vanguard ETF’s? Please assume no other sources of income/pension/government support. My wife (same age as myself)and I plan to live until 95 and 90 years respectively 🙂 :).

  28. Jonathan on March 30, 2015 at 10:43 am

    hi Carl—what advice would you have for those looking to get into hot real estate markets like toronto? Is it all hype? Will prices ever come back down?

  29. Grant on March 30, 2015 at 11:20 am

    Carl, how do I, or should I even try, to motivate my 22 year old nephew to start saving even a small percentage of his income for retirement?

  30. Jason on March 30, 2015 at 11:33 am

    How does one plan for retirement and RRSPs when also starting a new business venture and putting all your time and (mostly all) resources into the new business?

  31. Deborah on March 30, 2015 at 1:55 pm

    Hi Carl,

    I love reading your website http://www.behaviorgap.com. You have a wonderful way of distilling big, complex ideas into simple, clear messages (and sketches!). You re-affirm my believe that life and finances don’t need to be complicated. It’s a matter of finding your direction and staying the course. It’s a simple concept, but not necessarily an easy one. I look forward to reading your book for ongoing inspiration!

    Now my question, we’re a bi-national household (American husband & Canadian wife) working and living in Canada, how should our retirement and estate planning differ, if at all, from a typical Canadian family?

  32. Be'en on March 30, 2015 at 2:40 pm

    I find it very hard to get my 23 yr old son to get his expenses under control. I’ve talked to him about budgeting and using software like Mint to track his expenses but to no avail.

    What “behavioral” angle can I use to get him to be more financially responsible?

  33. Jan Gordon on March 30, 2015 at 2:42 pm

    it is far too easy to belabour past financial decisions when we only had the knowledge and experience we had when we made the decision. This would be a good reminder. I am interested in the one-page plan.

  34. Carmen on March 30, 2015 at 4:10 pm

    How can I find an ethical financial planner who will provide a spreadsheet-type of product outlining options and tax consequences for retirement ie net available monies if retire in Ontario; Assume employer pension; assume taking CPP & OAS at 64,65,66; assume draw down RRSP/RRIF before age 71 effect on OAS. About 3 years ago I hired a CFP/planner(as part of a paid pre-RTR course). The planner required copies of assets and budget, then provided nothing in writing for questions above.

  35. Karen on March 30, 2015 at 5:18 pm

    Looking forward to reading your book and checking out your website. thanks to Deborah for posting that info.

  36. Beth K on March 30, 2015 at 6:05 pm

    I’m just getting into figuring out all of this financial stuff. I think this book would really help me. Simple sounds great place to start, so a one page financial plan is perfect!

  37. gcai on March 30, 2015 at 6:15 pm

    I was wondering if you have an suggestions or comments re “RRSP meltdown” – thhnk you

  38. AnnieA on March 31, 2015 at 7:49 am

    How and when to buy an investment property.

  39. Marko on March 31, 2015 at 9:12 am

    I am recently retired at 55 and moving to a ETF DIY model for my investments. I have $400K in non-registered accounts, $400K in a RRSP and LIRA, $53K in a TFSA and $20K in cash. For tax efficient purposes should I start drawing down funds from my non-registered account first?

  40. Nancy on March 31, 2015 at 10:33 am

    Carl: My son is 19 and although not disabled enough to qualify for a Federal ruling of same, he does have ADD and learning challenges. He is having much difficulty finding work and I worry about what will happen in his future. What kind of investment savings account would you suggest we set up for him so that after his Father and I are gone, hemight receive income in the form of interest from investments within the plan?

  41. mike on March 31, 2015 at 2:50 pm

    Carl: Many argue that money that you will need within five years should never be put in the stock market. Given puny fixed income returns these days, I wonder about that old chestnut – considering this in context of TFSA started by daughter who hopes to use it for teacher’s college 5-6 years from now, after her undergrad degree (which she can pay for using RESP money we socked away.) Your thoughts?

  42. Shabshacker on March 31, 2015 at 4:44 pm

    First time responder. Looks like a good read coming out way.
    Looking forward to getting more insight on my question…how to find the right financial planner. Best of luck on your publication.

  43. Helen Hercun on March 31, 2015 at 7:04 pm

    Thank you for the opportunity to write in. My financial question is how does a “double income no kids” middle income couple get ahead in Ontario/Canada when it appears that the government only give breaks to “families”? We live within our means yet can never seem to get ahead. Some might say “have kids” but sometimes the good lord decides otherwise. Would greatly appreciate receiving the book and/or your views.

  44. john on April 1, 2015 at 8:40 pm

    I don’t have a question, but wanted to say that I think the most important investment is ones retirement savings which should come first after the mortgage is paid off. Being debt free in retirement makes life so much easier. The kids education fund should come second. Just my thoughts.

  45. The Orkly Kid on April 2, 2015 at 10:03 am

    My parents are very well off retirees and love their commission-based financial advisor, but I fear they are not getting good value for their expensive investments (2.5%-3%). Should I intervene or stay out of it?

  46. Helen on April 3, 2015 at 7:31 am

    Book sounds intriguing!

    A question I would have for Carl is priority of paying down mortgage vs. line of credit vs. saving for RRSP and TFSAs. Is it based on amount the debt is costing vs anticipated rate of return to determine priority? Best to focus on paying down 1 item (i.e. mortgage or line of credit) – greater than minimum payment and focusing only on 1 retirement vehicle until maxed out?

  47. Lance on April 3, 2015 at 9:12 am

    I’ll have to remember to buy the book if I don’t win it first. :>)

  48. Yannick on April 3, 2015 at 9:57 am

    Sounds like an interesting book.

  49. Richard on April 3, 2015 at 10:41 am

    Question for Carl: people face a tough choice when it comes to investing. They can seek out an advisor, but most of them end up with someone who is just selling expensive products. Or they can do it on their own, but that leaves them without a second opinion to avoid some of the big mistakes you mentioned. What is the best way for ordinary people to be in charge of their investments without being tempted to make an expensive mistake that could put their retirement at risk?

  50. chris on April 4, 2015 at 12:38 pm

    the book sounds great and something that should be shared widely with those around me. thanks 🙂

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