Jul 162012

What is the largest expense you have? For me, it’s taxes, which makes up about 30% of everything I make. As a democratic society we are not only responsible to pay our fair share of taxes, but we should also try to understand where our tax money goes.  Did you know the CRA (IRS equivalent) uses up 3% of all our tax money?  Before the next time you sit down with your accountant or pull up some tax software, have a look at these charts below showing where the federal government gets all their taxes from, and where they spend it on.

image source: creditcardscanada.ca

In today’s reality it’s common practice to want the best education for our kids and the best health care for our elderly parents, despite whether or not we have the ability to afford it or not. So if a family is already in debt and is living paycheck to paycheck, what can they do to maintain their style of living? They borrow more money of course and dig deeper into debt, just so they can pay for those services with the hope that their financial situation will get better in the future. Sounds familiar?

Canada is in a similar situation. This country is in debt. And instead of saving money each year to pay off that debt it chooses to borrow even more money to continue paying for all it’s important federal services. Our teachers and nurses are being paid by borrowed money (a loan) that every future tax payer is on the hook for. It’s a fine balance between doing what’s best for our people now, VS what’s best for the future. I would personally like to see a balanced federal budget and will gladly pay more taxes, or receive less social benefits, or some combination of both. But I know not everyone would be on board with that. Fortunately our financial situation hasn’t hit a point of no return yet. But if we continue to spend more than we make then eventually, if nothing is done about it, we might find ourselves facing the same challenges as Greece is right now. The United States also has their own financial difficulties.

Sep 202011

“How much income do teachers make?”
“He’s a book keeper? I wonder if his income can support his family.”

Sometimes we assume a person’s income level based on their line of work. But this mindset is dangerous and can limit our earnings potential. Because if we accept the idea that our jobs dictate our incomes, then our motivation to earn more income will be constrained by the limitations of our jobs. However, a job salary is just a piece of the income pie. So instead of getting stuck thinking about how to get a promotion, let’s focus on the bigger picture. How to increase our income, period. Which of course will include how to get that promotion.

Income can appear in many different ways. We can invest and slowly turn our savings into investment income. Or get a part-time job. Income can also come from rent.  If we had any technical skills, (writing, drawing, speaking) we could do freelancing. Or find online micro jobs from sites such as AmazonMechanicalTurk or MicroWorkers to make a few extra bucks.  Even recycling plastic bottles can be a small but stable source of income if we so choose.

So let’s avoid the income/career trap and think outside the box. Think about how we can increase our income from any source possible, rather than just how to increase our income as employeesヽ(´ー`)ノ