Jun 152015
 

There’s no shortage of personal finance blogs and financial new sites on the internet to help broaden your financial education. But many of those articles out there are regurgitated filler without much useful material. So I have gathered some practical one-liners I’ve found from around the web and placed them all in this one post. Below is a compilation of over 100 suggestions on financial management and quotes about money. 65 of these are chosen from Morgan Housel’s articles which I found on Huffington Post and fool.com. As usual there are no hard rules when it comes to finance. But this list is a good start to help you save, invest, and make overall better money decisions in your life. Master these financial tips and tricks and you’ll understand 99% of everything there is to know about personal finance and investing. 😉

15-06-over-100-financial-tips

 

💸 Top Financial Tips From Around The Net 💸

  1. Spend less than you earn. Invest the difference in a diversified portfolio of index finds and you’ll retire richer than most people.
  2. Next time you’re about to make an impulse purchase, imagine someone offering you the product you want to buy in one hand, and an equivalent amount of cash to buy that product in the other hand. Then ask yourself which would you rather take?
  3. When in doubt choose the investment with the lowest fees.
  4. One of people’s biggest expense is interest, which comes from living beyond their means, and buying things they think will impress others.
  5. You don’t need to spend a lot of money to have a good time. Adopting cheap or free hobbies such as hiking, biking, or reading, can be a large, yet hidden, asset on your personal balance sheet.
  6. Index investing works for most people because you can afford not to be a great investor, but you probably can’t afford to be a bad one.
  7. Some people hate finance, think it’s confusing, and don’t want anything to do with it. But they love money. And they don’t see the irony in this.
  8. Dollar-cost average for your entire life and you’ll beat almost everyone who doesn’t.
  9. The business models of banks and other financial institutions rely on exploiting the fears, emotions, and lack of eduction of their customers.
  10. Only invest in products and companies you can explain to a 6 year old.
  11. Wanting to become a millionaire because you want to spend a million dollars is actually the opposite of being a millionaire.
  12. Don’t accept or reject an argument based on how well it fits your pre-defined beliefs. Treat your finances objectively.
  13. Only invest in businesses that you truly understand.
  14. Every 5 to 8 years, people tend to forget that recessions usually occur every 5 to 8 years.
  15. Don’t underestimate how fast a company can go from “blue chip” to bankrupt.
  16. Most people are twice as biased as they think they are.
  17. You have to change your opinions about markets, the economy, and your investments when the fundamental change. Don’t be stubborn. Change your mind as often as the facts change.
  18. Read more books, and fewer articles.
  19. Don’t cave to peer pressure and go to college just because your friends are. Post secondary education is expensive. Only attend college if you are serious, have a game plan for post graduation, and are well prepared.
  20. Don’t worry about things you can’t control. Focus on things that you can.
  21. Read more history, and fewer forecasts.
  22. You don’t need to check your bank account balance or investments every day. Financial planning is long term. You don’t need to micro manage it. After all, your health is probably more important than money but you only go to the doctor for a check up once a year.
  23. Don’t ignore history, only to base your actions on your own limited experience.
  24. “Don’t tell me where your priorities are. Show me where you spend your money and I’ll tell you what they are.” James W. Frick
  25. When reading about how stupid and irrational retail investors can act, be mindful that you are reading about people like yourself.
  26. Take a balanced approach to life and finances. Don’t work so long and hard to make money that you don’t have time to even plan your finances or enjoy what you have.
  27. Your circle of competence is probably 80% smaller than you think it is.
  28. Your portfolio is only diversified when some of your investments perform worse than others.
  29. If you plan to retire at 62 keep in mind that if you live to be 90 years old, you would be spending almost 1/3rd of your life living off your investments.
  30. Large risks will always be played down. Small risks tend to be blown out of proportion.
  31. Don’t rely too much on what the economy is doing to make your stock investment decisions because the two really have very little correlation.
  32. Check your brokerage account as infrequently as it takes to prevent rash decisions.
  33. Renting a home is not throwing money away because it provides a constant roof over your head, and is a better alternative to owning for some people.
  34. Owning a home has been one of the most common ways for the middle class to successfully grow their net worths in the long run.
  35. Don’t think of the stock market as numbers that go up and down. Instead, think of them as ownership stakes in real businesses with real assets, products, services, and value.
  36. A 2% management fee may not sound like much, but if the market returns 8% a year on average, then that management fee is costing you a quarter (25%) of your long term returns.
  37. Once your basic needs are met the amount of happiness each additional dollar of income provides diminishes quickly. Don’t spend your life chasing some arbitrary number which probably won’t make you happy.
  38. Emotional intelligence is more important than book intelligence.
  39. A 10% annual return for 20 years generates more money than a 20% return for 10 years. Time can be a more important factor than the rate of return when building wealth. Time is also the one thing you have control over.
  40. The more you learn about the economy, the more you realize you have no idea what’s going on.
  41. Don’t blow money on frivolous stuff to impress people. In reality it makes you look like an insecure, pompous jerk. This is particularly common among young people who obtain a lot of money for the first time.
  42. When you receive any kind of inheritance. Leave it in your savings account for at least a week before spending any of it. Use that time to work out a calculated plan on how to use it.
  43. “Business is the art of extracting money from another man’s pocket without resorting to violence.” Max Amsterdam
  44. Start saving for college before your kid is even born. You might feel silly when you start but you’ll feel like a genius when you finish.
  45. Travelling to a poorer country can make people realize what true financial hardship looks like, and that life doesn’t care how entitled one feels, what one think is “fair.”
  46. The most powerful way to grow your money is learning to live with less. Any money you save now will last longer because you don’t need as much of it later. You also have complete control over your spending.
  47. If you spend money on things, you will end up with the things and not the money.
  48. The stock market is risky because it’s volatile. But the bigger risk you face isn’t volatility; It’s not being able to grow your assets enough by the time you want to retire.
  49. “There are two times in a man’s life when he should not speculate: when he can’t afford it, and when he can.”  Mark Twain
  50. You have no obligation to have an opinion about anything. But for the benefit of your finances you do have an obligation to not have an opinion about things you don’t understand.
  51. No one attending private school should be on student loans. Community and state schools provide just as good an education for a fraction of the price.
  52. You shouldn’t feel strongly about any investment you haven’t spent at least a week thinking about.
  53. Holding 60% of your assets in stocks and 40% in bonds isn’t perfect for everyone; but there are probably 1,000 worse strategies.
  54. Acknowledge the role luck plays when you make the occasional successful investment. And respect the role luck has played on some of your role models.
  55. It’s probably not a good idea to take out $100,000 in student loans for anything other than medical school.
  56. Many so called “legendary” investors whose only real skill is marketing themselves. Their career track record probably lags a money market fund.
  57. Read last year’s market predictions and you’ll never again take this year’s predictions seriously.
  58. Being greedy when others are fearful is not something everyone can do. Theory and practice are two separate things.
  59. Sleep on every major investment decision for at least 72 hours, then run it by a trusted friend before acting.
  60. High SAT scores and Ivy League degrees doesn’t qualify anyone of being a financial genius. The most important skill in finance is control over one’s emotions, not control over a Greek formula.
  61. “Formal education will make you a living; self-education will make you a fortune.” Jim Rohn
  62. To make yourself a better investor, increase both the amount of time you’re investing for and the humility you put into your ideas.
  63. Some people’s perception of history extends back about five years when economic cycles can last for up to decades.
  64. Some people anchor to whatever price they bought a stock for, without realizing that the market neither knows nor cares what they think is a “fair” price.
  65. Just as you should dress appropriately for your age, you should spend appropriately for your income.
  66. Admit and own up to your financial mistakes. Don’t ignore them, bury them, blame others, or make excuses. Be truthful to yourself.
  67. Don’t associate all of your financial successes with skill, and all of your financial failures with bad luck.
  68. Don’t try to make money you don’t have and don’t need by risking what you do have and do need.
  69. $1 million use to be a glamorously large amount of money but today it’s just enough to cover a pretty mediocre retirement.
  70. Most people are twice as gullible as they think they are.
  71. There’s no need to try to keep up with the Joneses or be jealous of them because the Joneses are buried in debt, and are no happier than you.
  72. Learn more from your poor financial judgements than your good ones.
  73. Be an optimist when it comes to money. The universal law of attraction suggests what we focus on grows. Banish toxic money thoughts. If you psych yourself out before you even get started (“I’ll never pay off debt!”), then you’re setting yourself up to fail.
  74. Judge investors by the quality of their arguments, not the performance of their last trade.
  75. Some people choose to work in a stressful job in order to make enough money to have a stress-free life, and they don’t see the irony in that.
  76. Buying and holding onto stable, large cap, dividend paying stocks may be boring, but the purpose of investing isn’t to minimize boredom; it’s to maximize returns.
  77. Teach your kids about money before they’re old enough to earn their own.
  78. “Early to bed, early to rise, keeps you healthy, wealthy and wise.” Benjamin Franklin
  79. Don’t be thrilled that the credit card you’re paying 22% interest on offers 1% cash back on all purchases.
  80. About half of all Americans can’t come up with $2,000 in 30 days for an emergency. But practically everyone will run into an emergency sooner or later.
  81. Imagine how much crap you’d have to make up if you were forced to talk money every day. Remember this when watching financial news on TV.
  82. Many young adults think they’re invincible, and don’t need health insurance. Then icy sidewalks, moving cars, and rapidly dividing cells prove them wrong.
  83. Assume the worst, hope for the best, accept reality.
  84. Save for your own retirement in full; assume Social Security and private pensions won’t be around (even though they probably will.)
  85. Learn vicariously from other people’s financial misfortunes.
  86. If you’re not good at predicting the market, then don’t predict the market. Focus on what you actually know.
  87. The correlation between confidence and future regret is incredibly high.
  88. During the last 100 years, there have been more 10% market pullbacks than Christmases. Everyone knows Christmas will come; think of volatility the same way.
  89. Don’t spend lots of money on material stuff to impress other people because those people simply don’t care that much about you and your purchases.
  90. For people who don’t understand the value of a dollar, when they receive a $1 raise their desires increase by $2.
  91. Not taking advantage of an employer match on your 401(k)/RRSP is no different than declining a raise.
  92. “Money never made a man happy yet, nor will it. The more a man has, the more he wants. Instead of filling a vacuum, it makes one.” Benjamin Franklin
  93. You may suffer unknowingly from the Dunning-Kruger effect, which can falsely mislead you into believing you know more about finances than you actually do.
  94. Don’t let your definition of “long term” be defined by the time between now and the next bear market, whenever that is.
  95. Don’t let politics sway your investment decisions. Congress has been a dysfunctional body since 1789, and stocks have done well since then.
  96. Sometimes things take longer to happen than you think they will, and then happen faster than you thought they could.
  97. “Invest in what you know” is dangerously simplified.
  98. Most day-traders should quit, and donate their money to charity instead. Same financial result for them, but a better outcome for society.
  99. Reaching for yield to increase your income is often like sticking your hands in a fire to warm them up — good in theory, disastrous in practice.
  100. There’s a strong negative correlation between flaunting money and being rich.
  101. Investors were probably better informed 20 years ago when there was 90% less financial news.
  102. Get paid what you’re worth and spend less than you earn. Conduct an evaluation of your skills, productivity, tasks, and contribution to the company.
  103. Contrary to what some people believe maintaining a balance on a credit card does not improve your credit score so it’s better to pay off the balance every month.
  104. Drink less alcohol. Especially when eating out, booze can drive further frivolous consumption and is a very high margin product for restaurants and bars.
  105. Cancel unused club memberships and subscriptions you don’t use anymore.
  106. “Money is only a tool. It will take you wherever you wish, but it will not replace you as the driver.” Ayn Rand
  107. The art to financial success is not in making money, but in keeping it.
  108. Money is usually attracted, not pursued.
  109. De-clutter to simplify your living environment. Donate your unwanted items or sell them for cash. A less cluttered home also saves you time and money cleaning it.
  110. Track your spending and net worth. You will discover areas where you can cut back spending, save more money, and watch your wealth grow over time.
  111. “Beware of little expenses. A small leak will sink a great ship.” Benjamin Franklin
  112. “Wealth consists not in having great possessions, but in having few wants.” Epictetus
  113. “Forecasts may tell you a great deal about the forecaster; they tell you nothing about the future.” Warren Buffett
  114. Finding money in your clothes is like a gift to you, from yourself.
  115. “A bank is a place that will lend you money if you can prove that you don’t need it.” Bob Hope
  116. Too many people spend money they haven’t earned, to buy things they don’t want, to impress people they don’t like.
  117. “Opportunity is missed by most people because it is dressed in overalls and looks like work.” Thomas Edison
  118. “Look outside of the financial services industry for information on the true risks of equity investing.” Kurt
  119. Risk comes from not know what you are getting yourself into.
  120. Experiences become more meaningful and will outweigh possessions.
  121. Get a money buddy. Friends with similar traits can pick up good habits from each other – this applies to your money too.
  122. Keep your credit use below 30% of your total available credit. If your credit utilization rate is too high it can ding your credit score.
  123. There are 4 typical financial emergencies. Losing a job, car breaks down, unexpected home expenses (like a leaky roof,) and travel for a funeral.
  124. “A big part of financial freedom is having your heart and mind free from worry about the what-ifs of life.” Suze Orman
  125. To thrive in today’s economy, you must challenge the status quo and get the financial education necessary to succeed.

As with other lists shared on this blog I will probably add more content to this page over time.

Reaching financial enlightenment is easier to achieve than most people think. Fortunately it’s not about making more money. There are plenty of unhappy millionaires who are constantly stressed out. 😕 The secret to financial success is actually fostering a positive relationship with money and understanding the important role that money can play in your life. You do this by asking yourself questions like what does money mean to you? How do you feel about losing money? Do you buy things for yourself or to impress someone else? What kind of life do you want to live? Once you have a clear understanding of what money means to you, the next step is developing your overall financial knowledge. :) This means learning about budgets, debt, investing, retirement, and other financial topics.

Ultimately what you want to do is combine your personal relationship towards money with a healthy dose of financial literacy to develop your own financial identity! Your financial identity is unique to you and defines who you are when it comes to financial matters. You will have a solid understanding of how money can be applied in almost every aspect of your life. This understanding removes uncertainty and creates confidence. Confidence leads to a sense of control, purpose, and security. You will have control over your life, purpose in your decision making, and most importantly, you will attain financial security. Becoming financially enlightened is all about being content and comfortable with your personal money situation and never worry about money again. 😀

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Feb 272015
 

Sheryl Sandberg thought she was making a mistake. The year was 2001 and she had applied for a general manager of business units position. Sheryl began to doubt if there was even a job there at all. The small technology start-up didn’t even have “business” units so what was there to manage? Furthermore the position appeared to be several levels lower than jobs she was being offered at other companies. 😕

So when she finally met with the company’s CEO, Eric Schmidt, she kindly explained that the position meets none of her career criteria. 😐 Then the CEO of Google looked at her and replied, “Don’t be an idiot.” 😕 Which is some pretty solid advice. “Get on a rocket ship,” he continued. “When companies are growing quickly, careers take care of themselves. But when companies aren’t growing… that’s when stagnation and politics come in. If you’re offered a seat on a rocket ship, don’t ask what seat. Just get on.

And that’s exactly what Sheryl did. 😀

15-02-sheryl-sandberg-get-on-a-rocket-ship-lean-in

Eric was right. When companies are small their workers can grow into new positions. Managers are created instead of replaced. People have more autonomy, feel more involved, and everyone can learn new skills and take on new responsibilities without stepping on each other’s toes. It’s more than a zero sum game. You don’t need to knock someone else off the ladder to get ahead because there’s plenty of room for everyone to climb. :)

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May 042014
 

I’m utterly speechless 😐 Words cannot even begin to describe my grandiose euphoria right now! 😀 ♪♬♫ Because I’m happy ♬♫  Clap along if you feel like a room without a roof ♪♬♫ Lol 😛 This is beyond my wildest expectations. My net worth increased by more than 10x my total income in April, including dividends. 14-04-happy face

*Side Income:

  • Part-Time Work = $400
  • Dividends = $500
*Discretionary Spending:
  • Eating Out = $100
  • Others = $200

*Net Worth: (MoM)chart_14apr

  • Assets: = $809,900 total (+52,800)
  • Cash = $300 (-200)
  • Stocks CDN =$89,700 (+2700)
  • Stocks US = $51,100 (+1700)
  • RRSP = $41,800 (+600)
  • Home = $254,000 (same)
  • Farms = $373,000 (+48,000)
  • Debts: = $528,400 total (-200)
  • Mortgage = $198,800 (-400)
  • Farm Loans = $207,000 (-400)
  • Margin Loan CDN = $28,000 (same)
  • Margin Loan US = $26,300 (+1800)
  • TD Line of Credit = $33,400  (-600)
  • CIBC Line of Credit = $13,600 (-100)
  • HELOC = $17,800 (same)
  • RRSP Loan = $3,500 (-500)

*Total Net Worth = $281,500 (+23.2%) All numbers above are in CAD. Conversion rate used: 1.00 USD = 1.10 CAD

I Invested in some Dollarama in my TFSA in early April, which is in the black so far :) I also bought some U.S. stocks on margin (debt.) I adjust my farmland value every April based on the average rates between the annual FCC report and inflation. The new FCC Report shows Saskatchewan farmland prices rose 28.5% in 2013. Inflation (CPI) was about 1% in 2013. Therefore, I have increased the value of my farms by 14.75%

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Jun 042013
 

The world of personal finance can be so complex that it cannot be accurately represented with any rules or strict guidelines. This is why it’s so hard to give financial advice. Unless we know absolutely everything about someone else’s finances and personality, it’s nearly impossible to give them proper guidance and tell them what they need (not want) to hear. We can be as honest as humanly possible with our sincerest suggestions, but to think that we know what’s best for them especially if we haven’t been in their shoes, may be a bit vain. So I believe there is simply no such thing as universal rules when it comes to financial management. Every time we come across one of those “Top 10 Rules to investing,” or “…to get out of debt,” or “…to plan for retirement,” or whatever else, we must look at it as only rough guidelines, and nothing more :)

The golden rule is that there are no golden rules.  ~George Bernard Shaw

Rules are meant to be broken anyway. I break generally accepted personal finance “rules” all the time, like choosing to pay high bank fees instead of keeping the minimum balance in my account, or buying a car when I still had student loans, or using consumer debt to buy a $2,250 souvenir, or not having an emergency fund, or agreeing to purchase a property when I have no savings. Lately I decided to carry a $5,000 credit card balance, which is arguable another no no in the personal finance community, except I think I can be forgiven this time because my interest rate is only 1.9 percent 😀

13_06_transferbalancejpg, break all the rules, credit card balance transfer

Once in awhile I get these cheques from my credit card lender, TD. I can use them to spend on anything I wish. This was my last chance to get in on the deal because after this month they will not be sending out any more of these blank cheques :*(  With no time to lose I wrote $5,000 on one addressed to myself :) and deposited it into my CIBC account. This works out perfectly because I need money for my farmland downpayment so by happenstance I’m now $5,000 closer to buying that property 😀 There IS a 1% transfer fee, so I paid $50 for this service but I think it’s worth it in the end :)

Following mainstream rules like credit card debt is bad, but student loan debt is good, will limit our options to raise capital and create wealth. By being more agnostic to what others say and focusing on our own situations we can achieve so much more 😀 There’s no such thing as rules, only suggestions.

If I’d observed all the rules, I’d never have got anywhere.” ~Marilyn Monroe

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Random Useless Fact: 3 – 4 cups of green tea each day can boost your metabolism by 4% which burns 50 to 100 extra calories a day.

Dec 112012
 

One myth about investing in the stock market or any other market where prices fluctuate is that it’s risky. But people who know how to value a stock understand that it doesn’t have to be risky if they buy the right stocks at the right time. Volatility and risk aren’t always correlated. Some companies with steady growth such as Enbridge have been pretty stable over the years.

Enbridge stock chart, volatility and risk

That’s not to say ENB is a good buy today because whether a stock is reasonably valued or not is another topic. But here’s a look now at Caterpillar below, who manufactures construction equipment, heavy machinery, etc.. Notice how the stock is more volatile over the same period as Enbridge.

Caterpillar stock chart, Volatility and Risk

But that doesn’t necessarily mean CAT is a riskier stock than ENB.  CAT is a more cyclical company so its Beta is suppose to be higher. What makes a company safe to invest in for myself is a positive trend of earnings growth, dividend growth, and industry expansion. Both companies have had stable dividend growth over the last decade meaning managers are confident about their company’s future performance. Both companies have also increased their profits over the years. Pipeline companies are looking to expand their pipes across Canada, and In Alberta alone the government has forecast there will be 114,000 jobs in the construction industry over the next decade (o.O) ENB and CAT are both in growing industries with growing demand for their products/services.  Stocks can vary in risk depending on what kind of business they are, but volatility doesn’t necessarily mean risk. It just means at some point in time, there might be  a good opportunity to buy the stock at a great value 😉

Here’s what the Oracle had to say on the subject….

“Volatility does not measure risk. Past volatility is not a measure of risk. It’s nice math, but it’s wrong. If a farm in Nebraska used to sell for $2,000 per acre, and now it sells for $600 per acre, investment theory would say that the beta of farms has gone up, and than they are more risky than before. If you tell that to people, they’ll say that that’s crazy. But farms don’t trade daily the way stocks do. Since stock prices jiggle around, finance professors have translated that into these investment theories. It can be risky to be in some businesses. Risk is not knowing what you’re doing. If you know who you’re dealing with, and know the price you should pay, then you’re not dealing with a lot of risk. We have invested in a lot of sectors that have high betas. The development of beta has been useful to people who want careers in teaching.”
– Warren Buffett

Beta – The measure of volatility. Higher beta = bigger fluctuations in price. The overall market has a Beta of 1. If a stock is said to have a Beta of 1.5 then that means it will be 50% more volatile than the market.