I see Dave Chilton on TV in the Dragons Den and I often say to Karen, my wife, that if I ever meet him again I will surely buy him a beer, as some sort of tiny "thank you" for possibly the most important book in my early investing years.
In his own words, for the follow up book, "The Wealthy Barber Returns" he says :
"I’ll admit that The Wealthy Barber Returns is certainly not comprehensive. Neither my knowledge nor a mere 200 pages would allow for that. And by no means is it the definitive word on how to manage your finances. (Sadly, that doesn’t exist.) In fact, you might disagree with some of my opinions - I’m sure that many in the industry will. But I’m confident that what follows will make you think differently and more wisely about your saving, spending, borrowing and investment decisions."
I like that, mainly because he is once again saying that it's all about thinking differently about everything to do with your money, and after all, as we've already discussed, you're selling your mind, body and soul to earn that money.
So, having a good think about what you do with it, well, that makes sense does it not?
Maybe I'll not buy him a pint, just shake his hand and thank him...
Monday, January 9, 2017
Sunday, August 11, 2013
Every Expense Spared
It is human nature that we all, at one point or another, want to reward ourselves for something we've done, some little gift or treat to give ourselves a pat on the back, or just cheer ourselves up.
Nothing wrong with that.
What is an issue though is the old saying "no expense spared" which basically means, it does not matter what it costs, it is a reward and it does not matter what it costs.
Of course it does, and what it costs, over the long term, affects the end game.
I've adopted a little opposite catchphrase, basically, every expense spared, but making sure that the reward is still a reward, that the pat of the back is still there, that if I need cheering up, it does not have to cost the moon.
A good example of this is the cost of hotels and this story actually goes back a decade or so, to those days that we nicknamed our "polo pony" days. We booked a four-star hotel for one night in Toronto (we lived 60km away) and it was $240 for the night.
What did we get for our money?
Well, we arrived there as we could book in after 3.00pm, checked in threw our stuff in the room, maybe gazed in wonder at the room for ten minutes (it was almost a small apartment) then headed out to the pubs and clubs of Toronto.
We arrived back at probably 11.00pm and basically drank a bottle of wine while watching one of the TVs (there were two in the room) and then slept, woke up in the morning, showered and then checked out to go for breakfast.
Two hundred and Forty dollars, plus taxes probably, maybe even parking was extra.
It was the post mortem of that trip that made the pair of us realize that there was little "value added" by paying over the odds for a cold hotel room (we could have payed a hundred bucks less at a three-star) plus of course, we had to pay for our own breakfast.
It was then that we investigated the higher end bed and breakfast scene in Toronto, I think we bought a book that listed the top 100 B&Bs in the area, and the prices usually topped out at $120 for an overnight stay, including two cooked (and usually very impressive) breakfasts.
It was an example of backing away from the "no expense spared" philosophy and actually obtaining a better experience, a more personable experience and saving enough money to have another one at a future date.
Nothing wrong with that.
What is an issue though is the old saying "no expense spared" which basically means, it does not matter what it costs, it is a reward and it does not matter what it costs.
Of course it does, and what it costs, over the long term, affects the end game.
I've adopted a little opposite catchphrase, basically, every expense spared, but making sure that the reward is still a reward, that the pat of the back is still there, that if I need cheering up, it does not have to cost the moon.
A good example of this is the cost of hotels and this story actually goes back a decade or so, to those days that we nicknamed our "polo pony" days. We booked a four-star hotel for one night in Toronto (we lived 60km away) and it was $240 for the night.
What did we get for our money?
Well, we arrived there as we could book in after 3.00pm, checked in threw our stuff in the room, maybe gazed in wonder at the room for ten minutes (it was almost a small apartment) then headed out to the pubs and clubs of Toronto.
We arrived back at probably 11.00pm and basically drank a bottle of wine while watching one of the TVs (there were two in the room) and then slept, woke up in the morning, showered and then checked out to go for breakfast.
Two hundred and Forty dollars, plus taxes probably, maybe even parking was extra.
It was the post mortem of that trip that made the pair of us realize that there was little "value added" by paying over the odds for a cold hotel room (we could have payed a hundred bucks less at a three-star) plus of course, we had to pay for our own breakfast.
It was then that we investigated the higher end bed and breakfast scene in Toronto, I think we bought a book that listed the top 100 B&Bs in the area, and the prices usually topped out at $120 for an overnight stay, including two cooked (and usually very impressive) breakfasts.
It was an example of backing away from the "no expense spared" philosophy and actually obtaining a better experience, a more personable experience and saving enough money to have another one at a future date.
Monday, August 1, 2011
Gravy Train
The recent debt "crisis" in the USA has reminded me to add a post about things not to count on in your plan.
State pensions.
This may come as a complete surprise to those who have their heads buried in the sand, but warnings about the impending doom have been around for decades and you should consider state funded pensions as potential "gravy" in the plan, but do not assume that you will be able to retire in luxury on anything that the government will provide.
The core of the problem is longevity, when pension plans originated, some bright spark pitched the pension age around the point when the average person kicked the proverbial bucket, in addition, original ratio's of working people paying into the system to retired people was high (about 16:1) but all that has changed as the general population is healthier and live longer and the ratio of working to retired has shrunk dramatically.
So, the governments of the world are mobilizing to push retirement ages up, reduce benefits, destroy indexing and lastly, and of particular concern to all saving their own nest egg, means testing potential recipients.
Which typically, for those of you who are responsible enough to be looking after your retirement needs, means that the very schemes that you have paid into all these years may deem you too rich to be awarded any payout.
So, don't bank on any of it.
State pensions.
This may come as a complete surprise to those who have their heads buried in the sand, but warnings about the impending doom have been around for decades and you should consider state funded pensions as potential "gravy" in the plan, but do not assume that you will be able to retire in luxury on anything that the government will provide.
The core of the problem is longevity, when pension plans originated, some bright spark pitched the pension age around the point when the average person kicked the proverbial bucket, in addition, original ratio's of working people paying into the system to retired people was high (about 16:1) but all that has changed as the general population is healthier and live longer and the ratio of working to retired has shrunk dramatically.
So, the governments of the world are mobilizing to push retirement ages up, reduce benefits, destroy indexing and lastly, and of particular concern to all saving their own nest egg, means testing potential recipients.
Which typically, for those of you who are responsible enough to be looking after your retirement needs, means that the very schemes that you have paid into all these years may deem you too rich to be awarded any payout.
So, don't bank on any of it.
Friday, July 8, 2011
Rabbit and the Hat
The last post was added because, here in retirement at my grand old age, I have found numerous older people who are still firmly embedded in the impossibility of it all, regardless of evidence right in front of their eyes.
I can speak, but apparently they do not hear a sound.
Jimmy once spoke about how annoying people could be when they heard about "the plan" or news of where you were in that plan, and their reaction was "oh, you are so lucky" which irritated the man so, as luck has nothing to do with the process.
A magician brings a hat onto the stage and pulls out the aforementioned animal, no luck there, no magic, no miracle, in fact, that man planned to pull his thing out and dazzle the crowd. It was part of his plan, gosh.
The key thing here is that, your plan is not intended to dazzle the audience, it is meant for you, you really don't have to tell anyone (the impossibles) along the way, as they won't believe you anyway, just be sure to be watching when you grab the ears and pull.
Gosh, how did he do that?
I can speak, but apparently they do not hear a sound.
Jimmy once spoke about how annoying people could be when they heard about "the plan" or news of where you were in that plan, and their reaction was "oh, you are so lucky" which irritated the man so, as luck has nothing to do with the process.
A magician brings a hat onto the stage and pulls out the aforementioned animal, no luck there, no magic, no miracle, in fact, that man planned to pull his thing out and dazzle the crowd. It was part of his plan, gosh.
The key thing here is that, your plan is not intended to dazzle the audience, it is meant for you, you really don't have to tell anyone (the impossibles) along the way, as they won't believe you anyway, just be sure to be watching when you grab the ears and pull.
Gosh, how did he do that?
The Cult of Can
It's been a while, but the blog is still here and I suppose blog entries are, on occasion, required.
The other founder member of the millionaires club, or as we call him here on the blog "Jimmy" had said to me numerous times before retirement "If we canney doo it, nobody can" which was spot on.
I'll call this the Cult of Can, the opposing faction to the Impossibles, who, rightly in their own world, believe that they cannot. Good luck to them all.
If you read this, then maybe you are in the Cult of Can, a group of people who believe they can do it, well, belief is a vaporous substance, we don't believe, we know we can do it. There is no reason to make a list of all those things that you can save money on, you already know it, you already live it.
Another thing that Jimmy once said:
"If you don't write it down, you will never do it"
Perhaps it should be called the Cult of Plan.
The other founder member of the millionaires club, or as we call him here on the blog "Jimmy" had said to me numerous times before retirement "If we canney doo it, nobody can" which was spot on.
I'll call this the Cult of Can, the opposing faction to the Impossibles, who, rightly in their own world, believe that they cannot. Good luck to them all.
If you read this, then maybe you are in the Cult of Can, a group of people who believe they can do it, well, belief is a vaporous substance, we don't believe, we know we can do it. There is no reason to make a list of all those things that you can save money on, you already know it, you already live it.
Another thing that Jimmy once said:
"If you don't write it down, you will never do it"
Perhaps it should be called the Cult of Plan.
Thursday, July 22, 2010
Purple Balloon Monkey
I have talked about this on previous blogs, I feel I must continue to talk about it.
There are sharks out there, looking for you to give away your nest egg, often in return for something trivial, perhaps as trivial as a Purple Balloon Monkey.
The so called Reverse mortgage has gone mainstream – they are no longer sold as something for seniors who are house rich and cash poor and need money to make ends meet. Today, they’re marketed as a way for homeowners 62 or older to crack open a giant (yet imaginary) piggy bank.
The pitch is attractive, “Isn’t it time you started to enjoy retirement your way?” and "Why sit on thousands of dollars in unused equity when you can buy stuff?" or something along those lines.
The truth is that all reverse mortgages are costly and complicated. Clearly, they’re a godsend to some seniors who have no other way to pay their bills. But they can be an absolute nightmare for people who don’t understand how they work.
The reverse mortgage, sold on a promise of unlocked wealth and happiness, can often destroy a safe future for the elderly, money that perhaps should be used for residential care in your later years, squandered on consumer products, far too late in the game.
I would encourage anyone considering this method of entering back into the world of debt to do more research, talk to people who do not have a vested interest in stealing your house in the autumn of your life, and as usual, do not fall for a flawed pitch based on the shiny objects game.
There are sharks out there, looking for you to give away your nest egg, often in return for something trivial, perhaps as trivial as a Purple Balloon Monkey.
The so called Reverse mortgage has gone mainstream – they are no longer sold as something for seniors who are house rich and cash poor and need money to make ends meet. Today, they’re marketed as a way for homeowners 62 or older to crack open a giant (yet imaginary) piggy bank.
The pitch is attractive, “Isn’t it time you started to enjoy retirement your way?” and "Why sit on thousands of dollars in unused equity when you can buy stuff?" or something along those lines.
The truth is that all reverse mortgages are costly and complicated. Clearly, they’re a godsend to some seniors who have no other way to pay their bills. But they can be an absolute nightmare for people who don’t understand how they work.
The reverse mortgage, sold on a promise of unlocked wealth and happiness, can often destroy a safe future for the elderly, money that perhaps should be used for residential care in your later years, squandered on consumer products, far too late in the game.
I would encourage anyone considering this method of entering back into the world of debt to do more research, talk to people who do not have a vested interest in stealing your house in the autumn of your life, and as usual, do not fall for a flawed pitch based on the shiny objects game.
Monday, May 10, 2010
Loosen the grip
In my retired world I am reminded, almost on a daily basis, of how important some of the habits I acquired over the last fifteen years of my working life were.
Although, I suspect some of those latent habits had been there from my parents influences, one such thing was that in 1952, when they married, they did not sell the farm to do so.
I'm watching a cute TV show at the moment called "Rich bride, Poor bride" that demonstrates some of the absolute stupidity that brides, and grooms, indulge in for the special day.
In life, staying together and working at happiness has to be more important than that one day, and one of the things that tears couples apart is money and the constant tug of war that the substance can bring in a relationship.
So, if you are planning that special day, remember that it is just one, in potentially twenty thousand days to experience together so don't start the process with a wallet flush, or worse, debt, to attempt to prove to your friends how much you love each other.
Although, I suspect some of those latent habits had been there from my parents influences, one such thing was that in 1952, when they married, they did not sell the farm to do so.
I'm watching a cute TV show at the moment called "Rich bride, Poor bride" that demonstrates some of the absolute stupidity that brides, and grooms, indulge in for the special day.
In life, staying together and working at happiness has to be more important than that one day, and one of the things that tears couples apart is money and the constant tug of war that the substance can bring in a relationship.
So, if you are planning that special day, remember that it is just one, in potentially twenty thousand days to experience together so don't start the process with a wallet flush, or worse, debt, to attempt to prove to your friends how much you love each other.
Monday, April 12, 2010
Bring home the Bacon
Convenience food is bad for your checking account.
A few products available today, from a list of thousands I suspect, show that the consumer can be robbed of precious dollars for so called, time saving foods.
I've said before, I don't want the blog turning into a series of lists, but a couple of items have caught my eye in this weeks grocery flyer, the first being bacon.
Fully cooked bacon, 65 grams of it, for $3.49 a package, which on closer inspection has 15 slices of the precious metal. That's thirty cents a slice, and a small slice at 4 grams a piece. Now, call me crazy, but I hear that a whole pound of bacon, a whacking great 454 grams of bacon, can be bought in the same store for $3.99
The second item that riles me, is a new product called purely potato chunks, that can be steamed and mashed, they have been selected, peeled, chunked and all you have to do is defrost and steam them, oh and then mash them. $3.99 for 750 grams, which, by my reckoning is less than two pounds of potato.
In the same store, potatoes can be had for $3.99 for a ten pound bag (and that is expensive).
The point, well, roll up your sleeves and cook your own bacon, peel your own spuds and eat lots of fresh vegetables instead of frozen.
The only thing that will be fatter is your wallet.
A few products available today, from a list of thousands I suspect, show that the consumer can be robbed of precious dollars for so called, time saving foods.
I've said before, I don't want the blog turning into a series of lists, but a couple of items have caught my eye in this weeks grocery flyer, the first being bacon.
Fully cooked bacon, 65 grams of it, for $3.49 a package, which on closer inspection has 15 slices of the precious metal. That's thirty cents a slice, and a small slice at 4 grams a piece. Now, call me crazy, but I hear that a whole pound of bacon, a whacking great 454 grams of bacon, can be bought in the same store for $3.99
The second item that riles me, is a new product called purely potato chunks, that can be steamed and mashed, they have been selected, peeled, chunked and all you have to do is defrost and steam them, oh and then mash them. $3.99 for 750 grams, which, by my reckoning is less than two pounds of potato.
In the same store, potatoes can be had for $3.99 for a ten pound bag (and that is expensive).
The point, well, roll up your sleeves and cook your own bacon, peel your own spuds and eat lots of fresh vegetables instead of frozen.
The only thing that will be fatter is your wallet.
Friday, October 23, 2009
Beware the fine print
I am amazes me that companies like the Brick offer to give their customers 40" Plasma TVs free with mattresses or furniture sets.
Free.
The advert is running on national TV at the moment and there always seem to be BIG FONTS that announce the free deal and then a tiny asterix somewhere on the screen, at the end of the commercial there are very small fonts at the bottom of the screen visible for a microsecond or two.
I can read the big fonts, can't read the small fonts, even if I grabbed my reading glasses those little fonts would disappear from the screen before I knelt before it.
The so called free things, "no money miracles" are not, yet we all, at one point in our lives, fall for this nonsense. After all, I was looking for a mattresses and a plasma TV and here, by coincidence, the Brick are giving one or the other away free.
The warning here, for the up and coming financial masters out there is that, in this life, very little is free, and all these companies are doing is confusing the issues, if you want a mattress, buy a mattress, don't buy an inferior mattress bundled with an inferior TV.
The second point, the "no money down" or "no money miracle" concept.
It isn't.
Free.
The advert is running on national TV at the moment and there always seem to be BIG FONTS that announce the free deal and then a tiny asterix somewhere on the screen, at the end of the commercial there are very small fonts at the bottom of the screen visible for a microsecond or two.
I can read the big fonts, can't read the small fonts, even if I grabbed my reading glasses those little fonts would disappear from the screen before I knelt before it.
The so called free things, "no money miracles" are not, yet we all, at one point in our lives, fall for this nonsense. After all, I was looking for a mattresses and a plasma TV and here, by coincidence, the Brick are giving one or the other away free.
The warning here, for the up and coming financial masters out there is that, in this life, very little is free, and all these companies are doing is confusing the issues, if you want a mattress, buy a mattress, don't buy an inferior mattress bundled with an inferior TV.
The second point, the "no money down" or "no money miracle" concept.
It isn't.
Tuesday, September 1, 2009
Plan
I've been busy, retirement has done that, more time to do things and less done.
An interesting aspect of retirement is that your thought process is modified because of a number of factors. In the work environment, besides the annoying aspect of work itself, there are all the distractions of coworkers, be they friendly or hostile/toxic, they are there to break your line of thought.
In retirement, there is a lot more “me” time and that can result in a lot more in depth analysis of most things, remember that a lot of thought pre-retirement was spent daydreaming about retirement.
There are days, especially in the winter months, where there appears to be absolutely nothing to do, however, I recall days in my cubicle like that, and I know where I’d rather be. There really is no such thing as wasted time when it is time of total choice.
There are really no words to describe the feeling of turning over in bed on a winters morning and investing in another hour of sleep.
And that, is why you should have a plan.
An interesting aspect of retirement is that your thought process is modified because of a number of factors. In the work environment, besides the annoying aspect of work itself, there are all the distractions of coworkers, be they friendly or hostile/toxic, they are there to break your line of thought.
In retirement, there is a lot more “me” time and that can result in a lot more in depth analysis of most things, remember that a lot of thought pre-retirement was spent daydreaming about retirement.
There are days, especially in the winter months, where there appears to be absolutely nothing to do, however, I recall days in my cubicle like that, and I know where I’d rather be. There really is no such thing as wasted time when it is time of total choice.
There are really no words to describe the feeling of turning over in bed on a winters morning and investing in another hour of sleep.
And that, is why you should have a plan.
Tuesday, July 1, 2008
The Impossibles
The Millionaires Club exists as the brainchild of a couple of young lads, decades ago, it was always a bit of a laugh and a reason to write things down and when we achieved goals, we awarded ourselves little trinkets and souvenirs along the way to reward milestones.
The club card, the tee shirt "I'm out from under it" for destroying a mortgage, the beautiful MF bucket (mortgage free), the foreign banknote award for money in the bank, the peaked "Millionaires Club" hat and microphone all helped along the way to keep members focused.
Along the way we have grown a thicker skin to the outsiders who taunt us with the idea that what we proposed to do was impossible, that it wasn't going to work and that penny pinching was rather silly and a waste of effort.
Jimmy is a good example, and his skin must be inches thick by now because he has been the object of much ridicule in his path to early retirement, in fact sometimes even club members have debated some of his tactics, only to adopt them later.
The group of naysayers we will label "The Impossibles" because they insisted that what we where trying to do was impossible, even in the face of members actually retiring by the age of 50, the Impossibles inwardly believed that it was not so, that there must be some other reason, some hidden trick, to that achievement.
It's human nature, their belief being "If we can't do it, how can they?".
If you adopt some of the ways of the Millionaires Club, some of the tracking and penny "pinching" manners that are detailed here, then you will find your own group of the Impossibles, waiting in the wings, ready to chip away at your goal.
Don't listen to them.
The club card, the tee shirt "I'm out from under it" for destroying a mortgage, the beautiful MF bucket (mortgage free), the foreign banknote award for money in the bank, the peaked "Millionaires Club" hat and microphone all helped along the way to keep members focused.
Along the way we have grown a thicker skin to the outsiders who taunt us with the idea that what we proposed to do was impossible, that it wasn't going to work and that penny pinching was rather silly and a waste of effort.
Jimmy is a good example, and his skin must be inches thick by now because he has been the object of much ridicule in his path to early retirement, in fact sometimes even club members have debated some of his tactics, only to adopt them later.
The group of naysayers we will label "The Impossibles" because they insisted that what we where trying to do was impossible, even in the face of members actually retiring by the age of 50, the Impossibles inwardly believed that it was not so, that there must be some other reason, some hidden trick, to that achievement.
It's human nature, their belief being "If we can't do it, how can they?".
If you adopt some of the ways of the Millionaires Club, some of the tracking and penny "pinching" manners that are detailed here, then you will find your own group of the Impossibles, waiting in the wings, ready to chip away at your goal.
Don't listen to them.
I deserve this
I was going to call this entry "The Comfort Trap" but that will be a much bigger post, lets look at the "I deserve this" concept and how it can hurt your early retirement.
I've been guilty of this, and on occasion, still am. However, I'm retired and yes, I deserve this.
Starbucks and other higher end coffee houses have done a great job in bringing the daily beverage into the the destroying early retirement sweepstakes. In a world of expense, the two or three dollars we spend on a daily coffee, or a bottle of fancy water can seriously affect our chances of retiring early.
Oh, don't be silly, it's only a couple of bucks and lets face it, we work hard and by golly we deserve it.
Oh yes, you do, it's true, and well, don't deny yourself of anything.
I'll harp back to the days of my father, when mother would brew a thermos full of tea, or coffee, for his morning break. It would be a relaxing moment, cracking open that flask, pouring a slightly tinny flavoured beverage into a slightly plastic flavoured cup, perhaps not as hot as he liked, but nevertheless, a welcome break from the morning.
He deserved it.
It's something we all can do now, and with todays materials, home brewed coffee can taste just as good an hour or so later, and if we do our research, can taste better than anything the exotic coffee houses can serve up. If you like the bottled water, get into the habit of using filtered or bulk buy spring water and use a trendy container.
And the cost?, well, after the initial ten dollar outlay for your flask or stainless steel water bottle, your custom coffee or filtered water can cost just pennies a day.
Pennies a day, saving dollars per day.
I like that concept.
I've been guilty of this, and on occasion, still am. However, I'm retired and yes, I deserve this.
Starbucks and other higher end coffee houses have done a great job in bringing the daily beverage into the the destroying early retirement sweepstakes. In a world of expense, the two or three dollars we spend on a daily coffee, or a bottle of fancy water can seriously affect our chances of retiring early.
Oh, don't be silly, it's only a couple of bucks and lets face it, we work hard and by golly we deserve it.
Oh yes, you do, it's true, and well, don't deny yourself of anything.
I'll harp back to the days of my father, when mother would brew a thermos full of tea, or coffee, for his morning break. It would be a relaxing moment, cracking open that flask, pouring a slightly tinny flavoured beverage into a slightly plastic flavoured cup, perhaps not as hot as he liked, but nevertheless, a welcome break from the morning.
He deserved it.
It's something we all can do now, and with todays materials, home brewed coffee can taste just as good an hour or so later, and if we do our research, can taste better than anything the exotic coffee houses can serve up. If you like the bottled water, get into the habit of using filtered or bulk buy spring water and use a trendy container.
And the cost?, well, after the initial ten dollar outlay for your flask or stainless steel water bottle, your custom coffee or filtered water can cost just pennies a day.
Pennies a day, saving dollars per day.
I like that concept.
Water
Living on the coast it appears, at first glance, that water is plentiful.
In our daily lives we think that too, and without thinking, we waste it and along with the bathwater the baby slips away, the baby being our hard earned dollars.
If you're on a metered supply, every litre of water costs, water you wash the car with, jet wash your driveway or water your lawn with.
Common sense yes, use less, costs less.
What about your value added water? - cold water maybe costs a penny or two a litre out of your tap, maybe you filter it, adding another penny or two (if you use filters within safe limits) and what about hot water? - that basin full of water is going to be 10 cents for the water and 10 cents for the heat, and that's if you have the plug in, running the hot tap and allowing it to run down the plughole is literally throwing money down the drain.
Oh, and don't say this is petty. It's not.
The water on our planet is precious, and should not be wasted.
In your life your money is precious, and yes, pennies per day are important, so if you really want financial freedom eventually, they also should not be wasted.
Stop flushing your money away.....
In our daily lives we think that too, and without thinking, we waste it and along with the bathwater the baby slips away, the baby being our hard earned dollars.
If you're on a metered supply, every litre of water costs, water you wash the car with, jet wash your driveway or water your lawn with.
Common sense yes, use less, costs less.
What about your value added water? - cold water maybe costs a penny or two a litre out of your tap, maybe you filter it, adding another penny or two (if you use filters within safe limits) and what about hot water? - that basin full of water is going to be 10 cents for the water and 10 cents for the heat, and that's if you have the plug in, running the hot tap and allowing it to run down the plughole is literally throwing money down the drain.
Oh, and don't say this is petty. It's not.
The water on our planet is precious, and should not be wasted.
In your life your money is precious, and yes, pennies per day are important, so if you really want financial freedom eventually, they also should not be wasted.
Stop flushing your money away.....
Tuesday, January 8, 2008
It's that time again.
Happy New Year!
The month of January rolls around once again and it will soon be time for hundreds of thousands of responsible Canadian adults to rush out and "buy" their RSP.
The yearly push to the deadline, the endless line ups at midnight at financial institutions across Canada and the insidious creaking as all those professional financial advisors resurface out of the woodwork in the next few weeks.
The financial guru's of the early 1990s, such as Brian Costello and Jerry White, had their own contribution to my personal financial development. It was also good to have our Scottish member, Jimmy, around who would interpret the musings of these non certified, don't call me a financial advisor, advisors.
Costello would always give good advice, such as, make sure you make use of a financial advisor, referring to a CFA or Certified Financial Advisor. It was probably an oversight that he did not mention that he wasn't one.
This blog entry, however, is not an attack on the NCFAs of the seminar circuit, as I have indicated before, advice is advice and your job is to sift out what advice is actually good.
The good advice, that both Brian and Jerry gave, was that if you shift your RRSP contribution deadline, your money will be tax sheltered longer. There's no need to wait until the end of February in 2009 when you can make that estimated contribution right now.
Yes, your February 2009 contribution, which is the contribution for this 2008 tax year, can be deposited into your RRSP account today, in fact a week ago. It will then be tax sheltered for that extra fourteen months.
I know, your going to wriggle on this one, as potentially you're just getting ready for the psychological hurdle of your 2007 tax year contribution. Imagine, you can contribute twice as much, right now!
There will be a chorus of perceived impossibility on this one, it's a struggle to maximise your RRSP to start with and now, this nutter on the interweb is suggesting that you double up.
You only have to do it once.
If your normal contribution is $10,000 and you can bring it forward the fourteen months (and continue to contribute early), earning seven percent, the impact of this one act over twenty five years of saving will add over $44,000 to your retirement nest egg.
You only have to do it once.
The month of January rolls around once again and it will soon be time for hundreds of thousands of responsible Canadian adults to rush out and "buy" their RSP.
The yearly push to the deadline, the endless line ups at midnight at financial institutions across Canada and the insidious creaking as all those professional financial advisors resurface out of the woodwork in the next few weeks.
The financial guru's of the early 1990s, such as Brian Costello and Jerry White, had their own contribution to my personal financial development. It was also good to have our Scottish member, Jimmy, around who would interpret the musings of these non certified, don't call me a financial advisor, advisors.
Costello would always give good advice, such as, make sure you make use of a financial advisor, referring to a CFA or Certified Financial Advisor. It was probably an oversight that he did not mention that he wasn't one.
This blog entry, however, is not an attack on the NCFAs of the seminar circuit, as I have indicated before, advice is advice and your job is to sift out what advice is actually good.
The good advice, that both Brian and Jerry gave, was that if you shift your RRSP contribution deadline, your money will be tax sheltered longer. There's no need to wait until the end of February in 2009 when you can make that estimated contribution right now.
Yes, your February 2009 contribution, which is the contribution for this 2008 tax year, can be deposited into your RRSP account today, in fact a week ago. It will then be tax sheltered for that extra fourteen months.
I know, your going to wriggle on this one, as potentially you're just getting ready for the psychological hurdle of your 2007 tax year contribution. Imagine, you can contribute twice as much, right now!
There will be a chorus of perceived impossibility on this one, it's a struggle to maximise your RRSP to start with and now, this nutter on the interweb is suggesting that you double up.
You only have to do it once.
If your normal contribution is $10,000 and you can bring it forward the fourteen months (and continue to contribute early), earning seven percent, the impact of this one act over twenty five years of saving will add over $44,000 to your retirement nest egg.
You only have to do it once.
Thursday, December 27, 2007
Why do you work so hard to get what you don't even want?
The day is short, the night is long.
Why do we work so hard to get what we don’t even want?
We work so hard to get ahead of the game; work half our lives until we’ve won. And then one day, we sit at the edge of our bed and think: Lord what have I done?
The day is short, the night is long.
Why do we work so hard to get what we don’t even want?
Man in a suit, comes home and kisses his babies goodbye. Daddy’s gotta go on a trip honey, oh no don’t you cry. He’s gone for a week and then he’s home for a day. Well, pretty soon the babies won’t cry when daddy’s gone away.
The day is short, the night is long.
Why do you work so hard to get what you don’t even want?
You know we go to the mall and we go from store to store, yeah. Everybody seems to be wasting time until death walks through the door. And then you look at all your merchandise and you see. We’ve paid too high a price, you’ll see....
The day is short, the night is long.
Why do you work so hard to get what you don’t even want?
Why do you work so hard to get what you don’t even want?
Jearlyn Steele.
This is just a timely song, heard in a film called "A Prairie Home Companion" which reminded me how often we replace things we already have with things that do the same job, but "better". This endless upgrade cycle, often motivated by the need to impress "other people" is often at the root of our financial problems or shortfalls.
I know that I have been "victim" to the desire of always wanting something better, working hard at work to earn money, selling flesh, bone and time and then rushing out to quickly dispose of that paycheck on the latest temporary, fizzy gizmo.
So..
Why do we work so hard to get what we don't even want?
Why do we work so hard to get what we don’t even want?
We work so hard to get ahead of the game; work half our lives until we’ve won. And then one day, we sit at the edge of our bed and think: Lord what have I done?
The day is short, the night is long.
Why do we work so hard to get what we don’t even want?
Man in a suit, comes home and kisses his babies goodbye. Daddy’s gotta go on a trip honey, oh no don’t you cry. He’s gone for a week and then he’s home for a day. Well, pretty soon the babies won’t cry when daddy’s gone away.
The day is short, the night is long.
Why do you work so hard to get what you don’t even want?
You know we go to the mall and we go from store to store, yeah. Everybody seems to be wasting time until death walks through the door. And then you look at all your merchandise and you see. We’ve paid too high a price, you’ll see....
The day is short, the night is long.
Why do you work so hard to get what you don’t even want?
Why do you work so hard to get what you don’t even want?
Jearlyn Steele.
This is just a timely song, heard in a film called "A Prairie Home Companion" which reminded me how often we replace things we already have with things that do the same job, but "better". This endless upgrade cycle, often motivated by the need to impress "other people" is often at the root of our financial problems or shortfalls.
I know that I have been "victim" to the desire of always wanting something better, working hard at work to earn money, selling flesh, bone and time and then rushing out to quickly dispose of that paycheck on the latest temporary, fizzy gizmo.
So..
Why do we work so hard to get what we don't even want?
Sunday, December 23, 2007
Buy one set of pans.
The blog is not really about making lists of all the things you can do to save a penny here and there, the internet is a vast resource for that sort of advice, however, there is a trend in our consumer driven society that encourages waste, so I thought I'd catalog a few concepts based on what my mum and dad did that made perfect financial sense.
The first being that you only ever need one set of pans.
Apply this thinking to a lot of things in life. If you buy a quality set of pans, good guage stainless steel, good lids and good handles, then you should never have to buy another. Then add the advice of our Scottish member, Jimmy; "buy great pans, but buy them at the best price". As I said, apply this concept to other things, but use your noggin about what is "best" for you, don't listen to the system, listen to your financial mind.
Common sense again? - well, don't forget that it's not just parents that "teach" you common sense, in a consumer driven society the system has a hand in educating you and a lot of that valuable information is the very information you should ignore.
As an example, why buy one mop (like mother did) and use it for ten years, when you can go out and buy a "Swiffer" every two months. Mother quietly went about using that simple mopping device without "educating" the kids that it was all you need, and now, with TV and the constant onslaught of media, young adults are being told to "throw that old fashioned thing away" and get the new, convenient, easy Swiffer.
Well, I don't know about you, but to me, mopping is mopping and I'd rather buy a quality, sturdy, "old fashioned" ten dollar mop that will amortize out at a dollar a year for the next ten years, than a fragile eight dollar Swiffer, that besides needing replacing in two years, needs "convenient" refils every month or so.
It's not better because they tell you it is.
The same is true with the pans especially if the only reason you're going to buy a particular set is because Jamie Oliver endorses them as pucker. In addition, for reasons known to themselves, the big retail stores like Sears tend to occasionally offer these valuable eight hundred dollar pan sets, to the shoppers, at seventy five percent off, that is you only pay two hundred bucks.
A great deal?
You should take your time, as with all things that affect your long term financial health, do your research and due diligence and then buy once and forever at the best possible price.
The first being that you only ever need one set of pans.
Apply this thinking to a lot of things in life. If you buy a quality set of pans, good guage stainless steel, good lids and good handles, then you should never have to buy another. Then add the advice of our Scottish member, Jimmy; "buy great pans, but buy them at the best price". As I said, apply this concept to other things, but use your noggin about what is "best" for you, don't listen to the system, listen to your financial mind.
Common sense again? - well, don't forget that it's not just parents that "teach" you common sense, in a consumer driven society the system has a hand in educating you and a lot of that valuable information is the very information you should ignore.
As an example, why buy one mop (like mother did) and use it for ten years, when you can go out and buy a "Swiffer" every two months. Mother quietly went about using that simple mopping device without "educating" the kids that it was all you need, and now, with TV and the constant onslaught of media, young adults are being told to "throw that old fashioned thing away" and get the new, convenient, easy Swiffer.
Well, I don't know about you, but to me, mopping is mopping and I'd rather buy a quality, sturdy, "old fashioned" ten dollar mop that will amortize out at a dollar a year for the next ten years, than a fragile eight dollar Swiffer, that besides needing replacing in two years, needs "convenient" refils every month or so.
It's not better because they tell you it is.
The same is true with the pans especially if the only reason you're going to buy a particular set is because Jamie Oliver endorses them as pucker. In addition, for reasons known to themselves, the big retail stores like Sears tend to occasionally offer these valuable eight hundred dollar pan sets, to the shoppers, at seventy five percent off, that is you only pay two hundred bucks.
A great deal?
You should take your time, as with all things that affect your long term financial health, do your research and due diligence and then buy once and forever at the best possible price.
Tuesday, December 18, 2007
Hands in your Pockets
If you cruise the net and ask the question "How much money do I need to retire" then you'll spend a lot of time reading reports from banks, insurance companies, investment firms and other official bastions of financial hopelessness.
In the early nineteen nineties, so called self made advisors were preaching at "free" seminars that we Canadians would need a couple of million dollars to retire, and not to expect anything from the Canada pension plan or the old age pension scheme.
In 1991, according to one statistical website, the average wage of a Canadian was around $35,000 and if one of those individuals was attending the related seminar by the Papes, Costellos or Givens of that time, they would have been educated as to the hopelessness of their situation, however, that very hope could be purchased, in book or newsletter form, from the speakers minions at the end of the show.
"I'm not a financial advisor, but I play one on TV"
I don't think times have changed in the last fifteen years as far as the financial industry selling hope, they are slick and sophisticated and basically want to extract your hard earned cash from you with their MERs, commissions and fees.
As they preach that "you can't do it alone" and "we'll help" you have to take a step back and smell the coffee, see the wood from the trees and do anything you can to hold onto your money. They will use loss leader methods to snare you into one of their custom plans, lock your money away with skewed past performance figures and then quietly extract their two or three percent each year while your money stagnates.
In one pocket, out the other, that extra couple of percent you carefully save ends up on an insurance company or banks profit sheet.
So, take a deep breath, because you can do it, you don't need a couple of million bucks (unless you're going to retire at 30) and you don't need to pay, over and over, for the advice and guidance from the financial industry. All you need to do is start thinking for yourself about money, dedicate some serious time to the topic, use online resources (with a pinch of salt) and be strategic.
If you want to learn more, send $29.95 plus shipping and handling to.......
In the early nineteen nineties, so called self made advisors were preaching at "free" seminars that we Canadians would need a couple of million dollars to retire, and not to expect anything from the Canada pension plan or the old age pension scheme.
In 1991, according to one statistical website, the average wage of a Canadian was around $35,000 and if one of those individuals was attending the related seminar by the Papes, Costellos or Givens of that time, they would have been educated as to the hopelessness of their situation, however, that very hope could be purchased, in book or newsletter form, from the speakers minions at the end of the show.
"I'm not a financial advisor, but I play one on TV"
I don't think times have changed in the last fifteen years as far as the financial industry selling hope, they are slick and sophisticated and basically want to extract your hard earned cash from you with their MERs, commissions and fees.
As they preach that "you can't do it alone" and "we'll help" you have to take a step back and smell the coffee, see the wood from the trees and do anything you can to hold onto your money. They will use loss leader methods to snare you into one of their custom plans, lock your money away with skewed past performance figures and then quietly extract their two or three percent each year while your money stagnates.
In one pocket, out the other, that extra couple of percent you carefully save ends up on an insurance company or banks profit sheet.
So, take a deep breath, because you can do it, you don't need a couple of million bucks (unless you're going to retire at 30) and you don't need to pay, over and over, for the advice and guidance from the financial industry. All you need to do is start thinking for yourself about money, dedicate some serious time to the topic, use online resources (with a pinch of salt) and be strategic.
If you want to learn more, send $29.95 plus shipping and handling to.......
Thursday, November 29, 2007
The Treasure Trap
It seems that early in my adult life I was constantly requiring rewards, payday would come along and the money would not even burn a hole in my pocket because it was never going to arrive there in the first place.
The advent of TV and the glossy magazines and billboards that dominate our society became a constant reminder that I should buy stuff to be happy, apparently, that was the only thing that could make me happy and content, stuff.
But it never did in the long run.
So, I bought more.
I've talked before about the credit trap, and from my own personal experience, it is a very elaborate trap that is extremely difficult to escape from.
The group Pink Floyd, defined our society as a machine, and what an efficient machine it is. The machine educates all levels of the consumer society, enticing us all into spending hard earned cash on the "must have" things that are needed, to be happy.
Once again, Jimmy has his two cents worth here:
"Some spend money that they do not have, to buy things they do not need, to impress people they do not like...."
That's a good point and back to my mothers comment about "all fur coat and no knickers" where it is actually the facade of wealth that needs to be portrayed to win points over other people. The reverse of this are the people in our society, who have a lot of money, and are quite happy to hang around in their old brown shoes and jeans, with no requirement or urge to impress.
But, enough about me.
I digress somewhat, the key thing here is although the credit trap is elaborate and well honed, it is reasonably easy to avoid if you take a contrarian approach to what the machine is telling you. Yes, it is a consumer society but leave the frenzied buying to the rest of them, as I've said before, you have to stop digging to get out of the hole.
If you are already in the trap, well, admit it and do something about it. There are non profit agencies out there that can offer good advice and constructive help, again be wary of anything that is free and always look for "traps within the trap" where those that offer to help are just after their own piece of your misery.
At the end of the day, there is really only one person who can control what you spend.
And that be you.
The advent of TV and the glossy magazines and billboards that dominate our society became a constant reminder that I should buy stuff to be happy, apparently, that was the only thing that could make me happy and content, stuff.
But it never did in the long run.
So, I bought more.
I've talked before about the credit trap, and from my own personal experience, it is a very elaborate trap that is extremely difficult to escape from.
The group Pink Floyd, defined our society as a machine, and what an efficient machine it is. The machine educates all levels of the consumer society, enticing us all into spending hard earned cash on the "must have" things that are needed, to be happy.
Once again, Jimmy has his two cents worth here:
"Some spend money that they do not have, to buy things they do not need, to impress people they do not like...."
That's a good point and back to my mothers comment about "all fur coat and no knickers" where it is actually the facade of wealth that needs to be portrayed to win points over other people. The reverse of this are the people in our society, who have a lot of money, and are quite happy to hang around in their old brown shoes and jeans, with no requirement or urge to impress.
But, enough about me.
I digress somewhat, the key thing here is although the credit trap is elaborate and well honed, it is reasonably easy to avoid if you take a contrarian approach to what the machine is telling you. Yes, it is a consumer society but leave the frenzied buying to the rest of them, as I've said before, you have to stop digging to get out of the hole.
If you are already in the trap, well, admit it and do something about it. There are non profit agencies out there that can offer good advice and constructive help, again be wary of anything that is free and always look for "traps within the trap" where those that offer to help are just after their own piece of your misery.
At the end of the day, there is really only one person who can control what you spend.
And that be you.
Wednesday, November 28, 2007
Pinch of Salt
Please remember one thing about financial advice.
"Don't take it personally, just take it seriously"
We've seen people arrive at the clubhouse, listen to our advice and become uncomfortable. It's a familiar sight here and at many financial seminars we've attended, throngs of people who listen, smile, but never act on the advice.
On a more personal basis, I've talked to people at work, about how to save money, and suddenly an invisible shield is thrown up, the perception appears to be that I was having a go, being critical of a chosen lifestyle.
Or they think I'm a nutter....
Well, they could be right about that one, but, advice is just that, it's never an attack on your choices, it's just words and information, it could be right, wrong or misguided.
But, you should listen.
Seriously.
"Don't take it personally, just take it seriously"
We've seen people arrive at the clubhouse, listen to our advice and become uncomfortable. It's a familiar sight here and at many financial seminars we've attended, throngs of people who listen, smile, but never act on the advice.
On a more personal basis, I've talked to people at work, about how to save money, and suddenly an invisible shield is thrown up, the perception appears to be that I was having a go, being critical of a chosen lifestyle.
Or they think I'm a nutter....
Well, they could be right about that one, but, advice is just that, it's never an attack on your choices, it's just words and information, it could be right, wrong or misguided.
But, you should listen.
Seriously.
Sunday, November 25, 2007
What Mother should have said
The Scottish member, Jimmy, has been diligent in making money an interesting topic for his two children and his son has aquired an interesting perspective on it all.
"The bigger the house the bigger the mortgage, the bigger the car the bigger the car loan and the bigger the TV the bigger the line of credit"
Absolute common sense, but quite the comment from a 10 year old to his 8 year old sister!
In my house, growing up was always about money, but very little of what was going on financially "with the grown ups" was ever discussed, probably because they were too busy making ends meet.
"children should be seen and not heard"
At my schools, primary and secondary, it was very important in the curriculum that we be educated regarding Pyramus and Thisbe, the Capital of Yugoslavia or the importance of Venn diagrams. The subject of Economics was so vast and complicated that it never lowered itself to teaching the basics of running a bank account, balancing a budget or saving for retirement.
The point here is that, as you learn to master your own finances, take time to teach your children the same, sure, fiscal responsibility may be a huge topic for an 8 year old (or an 80 year old) but if you start them young they will at least know the basics for when they stop spending your money and start saving their own.
"The bigger the house the bigger the mortgage, the bigger the car the bigger the car loan and the bigger the TV the bigger the line of credit"
Absolute common sense, but quite the comment from a 10 year old to his 8 year old sister!
In my house, growing up was always about money, but very little of what was going on financially "with the grown ups" was ever discussed, probably because they were too busy making ends meet.
"children should be seen and not heard"
At my schools, primary and secondary, it was very important in the curriculum that we be educated regarding Pyramus and Thisbe, the Capital of Yugoslavia or the importance of Venn diagrams. The subject of Economics was so vast and complicated that it never lowered itself to teaching the basics of running a bank account, balancing a budget or saving for retirement.
The point here is that, as you learn to master your own finances, take time to teach your children the same, sure, fiscal responsibility may be a huge topic for an 8 year old (or an 80 year old) but if you start them young they will at least know the basics for when they stop spending your money and start saving their own.
Subscribe to:
Posts (Atom)