Sep 302015

Deciding what to do with new money

As the average global population continues to age there will be greater instances of wealth transfer from the old to the young. Most people will come into a bonanza sooner or later. Maybe it’s $5,000, or maybe it’s $500,000. Whatever the amount happens to be, it’s essential to grasp the significance of this opportunity and not squander it. A dollar saved is worth more than a dollar earned because of income and payroll taxes.

There is no shortage of questions on the internet that has the renowned format, “I have $X amount of money. What should I do with it?” The following snippets are taken from Reddit.


First of all, congratulations for saving, earning, inheriting, winning, or however else you came into the money. :) The simple answer to what you should always do with your new found fortune is this: Maximize the utility of that money based on your personal core values and financial situation.

But that might be easier said than done, so let’s elaborate. Maximizing utility means making the best use of that money and stretching the value of each dollar to its greatest potential. This is determined by your values and financial affairs, and to a degree, the current state of the economy. Values drive motivation and we’re all motivated by different things. Wanting to retire early requires a different set of values and financial strategy than becoming a home owner. Understanding your financial situation means knowing what money means to you.

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Sep 152015

Where to put your extra savings

Let’s say you earn $3,000 a month and spend $2,500. Great! You are living within your means. But saving is only half the battle. Now you must decide how to allocate your extra $500. Should you pay down your debt or invest and watch your money grow? Should you max out your Tax Free Savings Account or contribute to your RRSP? Knowing the proper way to allocate your money can prevent a lot of costly mistakes.

Back when I was saving up for a car I guess you could say I had a lot of driving ambition. 😆 But sometimes there are more immediate and pressing concerns to address before spending money on wants and non-essentials. Below is a chart that shows where to put your savings in descending order starting from most important priority. It’s not perfect but it’s a relevant starting point for most people. :)



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Sep 092015

Happiness is all in your head

Here’s a simple yet useful life hack we can use in real world situations. It allows us to enjoy premium experiences at huge discounts. :) We often hear that a high price equals high quality. But because we are humans, the way we perceive “quality” is a physiological process, made possible by enzymes, neurotransmitters, and tiny electrical signals in our brains. This means quality is more about subjective perception than monetary value.

For example, a study at Stanford University conducted a wine tasting experiment. Volunteers were given two types of wine to drink in equal portions. As they were served, the test subjects were “told” the price of the wine they were tasting. One costed $10 per bottle, and the other was $90 per bottle. But what the volunteers didn’t know was that both the cheap and expensive samples of wine were actually from the same $10 bottle, lol. Meanwhile an MIR machine scanned their brains to measure real-time blood flow. The results were almost mind blowing. 😀

The subjects’ brain scans showed that there was more blood activity in their prefrontal cortexes when they drank the sample that they thought was from a more expensive bottle. The prefrontal cortex is the part of the brain that makes us feel pleasure.


In other words, the test subjects’ brains experienced greater delight when they thought they were tasting something more expensive, even though it had always been the same cheap wine. 🍷 The brain can easily mistake high price for high quality, even when that’s not the case.

So the next time you want to drink wine, just buy the cheap stuff and pretend it’s really expensive when you drink it. :) Pour some for your friends when they come over. Describe the wine to your pals using venerable words such as premium, estate, exceptional quality, etc. Your guests will think that they are drinking from a very expensive vintage. :) And they won’t simply think it tastes like premium wine. It actually would taste like premium wine to them for all intents and purposes, as far as their reality is concerned. Just be careful to not drink too much yourself and accidentally reveal that it’s really just a $10 bottle.😳

Brand-name drugs and generics both use the same active ingredients. Since we understand how our brains can play tricks on us, we can choose to buy generics to get the same effects as the brand-name label, but pay less money. :)

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Aug 142015

Time – A Nonrenewable Resource

Is $700,000 enough to last you for an entire lifetime? Imagine you were given $700,000 and can spend it any way you like. The catch is you can’t invest or make any more money for the rest of your life. If you were forced into such a scenario would you spend your days differently?

Everyone already experiences this in the form of time. Most people are given about 700,000 hours in this world, plus or minus maybe 5% depending on gender, class, and geography. I’ve already used up about 250,000 hours of mine. That was valuable time I can never get back.


We are all humbled by time. Wealth is the ability to fully experience all that life has to offer. Money will only get us so far, but the rest is up to our internal discourse about how to spend our time. It doesn’t matter if we’re financially rich or poor. Everyone is ultimately limited by that 700,000 hours. Time is the ultimate equalizer.

All we have to decide is what to do with the time that is given us.” Gandalf

The important thing is to enjoy the things you’re doing right now. Time you enjoy wasting is not wasted time. :) Unless you enjoy attaching all your watches together to make a belt. Then that would be a waist of time. 😀

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Aug 032015

The wisdom of what not to do

The famous investor Charlie Munger once said, “A lot of success in life and business comes from knowing what you want to avoid: early death, a bad marriage, etc.” I think this quote, much like an elevator operator, speaks to me on many different levels. 😀

Often deciding what not to do is just as important as deciding what to do. If investing in profitable companies such as Cineplex, and Mondelez is how I’m generating profits each year, then not buying lousy investments is how I’m able to hold onto my gains. A strong combination of financial offense and defense is the best recipe. :) A few years ago a marketer I met at a real estate seminar suggested I should invest in distressed houses in Detroit. His pitch was interesting, but I ultimately refused the offer because it was outside of my comfort level. 😐  I’ve saved a lot of money by knowing to simply not partake in something I don’t understand.


Too many teenagers in the world are still picking up the costly habit of smoking. Buying a pack of cigarettes every day can cost more than $5,000 a year. There’s also the immense cost to one’s health. According to the Centers for Disease Control, smoking costs the United States $300 billion a year in medical care and lost productivity.

Too many high school graduates rush off into college without considering all their options. Sometimes it’s better to postpone university. It’s okay to not do what all our friends are doing. Sometimes we need to take some time off to discover what we really want to do with our lives.

Too many people rush into marriage without really thinking it through. This leads to a higher chance of separation later on. :( If the goal is to end up in a happy, stable relationship then being single is miles ahead of being in an unhappy marriage. Single people are already free to meet others and develop compatible, long lasting relationships. But incompatible couples who are in dysfunctional marriages have to first divorce and reconcile any baggage they may have before they’re finally ready to date again.

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