julymoon.com

March 28, 2004

Seeking Financial Flexibility
by Marcel Chartier

I have recently discovered that financial flexibility is probably one of the most overlooked goals in financial planning. What I mean by that is that most financial plans primarily look at the management and accumulation of wealth, when in many cases many of us would be overjoyed with greater financial flexibility. In many ways, financial flexibility gives many of the advantages of full financial independence without having to achieve it.

The way to achieve a higher level of flexibility is to either increase your income, or to reduce overall costs allowing choice, or, to utilize financial products that in themselves are flexible.

For example, have a short time left on your mortgage?

Do you need to renew it? How about using a secure line of credit instead? In my recent experience, I was able to get a line of credit at rates below an open mortgage rate and I am now able to pay as much as I want, or in my case as little as the interest per month. Now, when I have a large monthly expense, I can just pay less than I would have on a mortgage on the line of credit. Yes this takes discipline, so if you don't have it, don't get into it, but it really can make a huge difference in what you can do on a month to month basis.

It give me the flexibility to take advantage of deals when they happen, it allows the deferral of payment or reduction of payment, and it allows an unlimited payment when cash allows. All this at LESS than ongoing mortgage rates (at this time).