Investing time is right now!

As I write this blog post, the world is in a trade war. No one knows what’s going to happen next, nor when it will end. Certainly no one knows just how deeply the financial pain will be felt by the Not-A-Billionaires. In my very humble opinion, those who are already billionaires should be just fine. Everyone else needs to be a little more prepared for the financial pain that is headed our way.

The only thing that can be said with any kind of assurance is that this situation will not last forever and the market will recover…eventually. For you, it’s investing time.

How long that recovery will take is anyone’s guess. I urge you not to put too, too much faith into the words of the Talking Heads in the media and online. No one knows what will happen, nor precisely when the recovery will start!!!

If you haven’t started investing in broadly diversified, equity-based exchange traded funds (ETFs), then today is an exceptionally good day to start. The market is down, which means everything in the stock market is on sale. Buying while the market is down means that you’re “buying low”. This is a good thing. Open an investment account and start buying equity-based ETFs to be held for the long-term. In case it needs to be said, always keep your long-term investments separate and apart from your emergency fund. They’re two pots of money for two very different purposes, and they should not be co-mingled.

If you have started investing, then continue to do so. When you get paid, take a portion of your paycheque and invest it. The current volatility in the market need not be a reason for you to stop investing. If anything, consider increasing your investment contributions. The market is down, which means everything in the stock market is on sale. Buying while the market is down means that you’re “buying low”. This is a good thing.

Do not stop investing right now! You’ve heard me speak before about learning from other people’s mistakes, right? Well, this is your opportunity to learn from mine. Back in 2011, there was another recession. It was a small one, so not very well-known. It was nowhere near as big as the Great Recession of 2008. Here comes the part where I made my big mistake. I blame it on the fact that I was much younger and far less wiser in 2011 than I am today.

When the market started falling, I stopped contributing to my investments for 6 months!

This meant that I did not buy at the bottom. I waited until the sale was over to re-start my bi-weekly contributions. Prior to that little recession, I had been contributing a portion of my bi-weekly paycheque to my investments through a method called dollar-cost averaging. My system was automatic and I barely ever thought about it. However, when the market started dropping, I panicked and halted my automatic contributions. Doing so was one of the worst investing mistakes that I’ve ever made.

There’s no need for you to repeat my mistake in 2025.

If you’re already on an investing schedule, stick to it. So long as you still have a paycheque, continue to live below your means so there’s money to invest. The stock market is on sale right now. You’re currently living through a great time to buy equity-based ETFs and index funds. When the market recovers, as it will eventually, the value of the investments you make today will increase.

It bears repeating. Keep your investments separate and apart from your emergency fund. Your emergency fund has to be in place in case you and your paycheque part ways. You should never invest your emergency fund in the stock market. Instead, keep that fund in a high interest savings account like EQ Bank or Tangerine. Do not put your emergency fund in your Tax Free Savings Account (TFSA). The TFSA is the perfect account for your investments since they can compound over the long-term without being ravaged by taxes. You don’t want to have to withdraw money from this account during an emergency. Doing so means that you’ll be thwarting the growth of your investments.

If you’re feeling particularly nervous or panicked about the current economic volatility, then I suggest that you find ways to trim the fat from your spending. Whatever amount you find should be divided in two. Send one half to your emergency fund, and use the other half to increase your contributions to your investments. This is the best of both worlds.

The market is going to recover and volatility should be accepted as normal. Continue your contributions to your investments. Bulk up your emergency funds a little bit at a time. Turn off the news for a day or two. Control that which is in your power to control: your spending, the amount you contribute, and your choice to continue investing in your future.

Time will do the rest.

An easy way to keep money in your wallet!

When my family members moved into their new abode, they purchased a new stand-up freezer right away. They’re both avid cooks. Having a freezer meant they could take advantage of sales on meat, frozen vegetables, bread, etc… It cost them a pretty penny at the time but it seems to have paid off for them.

Even if you’re a Single, I want you to consider whether a stand-alone freezer would be wise for you.

I’ve talked before about the money-saving magic of my kitchen. Truth be told, I should have also been talking about how much I love my chest freezer. (It came with my house!) My fridge’s freezer is usually filled with my stash of emergency dessert, ice cream, coffee, and baking ingredients that last longer when frozen. My chest freezer is where I load up on things like bread and meat.

See, I’m a huge fan of Costco. However, it cannot honestly be said that Costco’s food sizes were intended for those of us who live alone. Costco designed their food’s sizes with the family in mind! For single folk like me, grocery shopping at Costco only makes sense if I use my freezer. Every three months or so, I make the trek so I can load up on my proteins. Then I come home, portion everything out into amounts that will tide me over for 2-3 days, and put those portions in my freezer.

It’s awesome! When I’m ready to do my meal prep on Sundays, I can just pull something out to thaw and then I create delicious meals that will make enough leftovers for lunch during the week. Getting myself organized and using my freezer has helped me to save money while expanding my culinary repertoire. I enjoy my own cooking far more than whatever I can buy at the food court.

You might want to consider doing this too. And if your current fridge’s freezer is too small, think about whether a portable freezer would be of use to you. One of the hassles of being an adult is cooking every single day! I really think that’s a huge reason why people love to eat out. However, we all know that eating out isn’t cheap or necessarily healthy. I found thata, after awhile, it all started to taste the same. Cooking your own food is cheaper (so long as you don’t let things spoil), much healthier, and always seasoned to your particular taste.

So many things can be frozen ahead and used later! If all goes well, my rhubarb patch will come back this year. I’ll be able to eat some of the stalks over the summer and freeze the rest to enjoy during the winter. If you’re a berry fan, then the freezer is a friend of yours. Strawberries, blueberries, black berries, raspberries, peaches, apricots, nectarines, pears! All of these wonderful fruits freeze beautifully until you’re ready to use them. The same goes for whatever vegetables tickle your fancy. Use your freezer!

Maybe you’re a fan of making your own bread? I’ve made loaves before and I have to be honest. There’s nothing quite so heavenly as fresh-baked bread! Yet, I’ll admit it was a challenge to eat the loaf before it went stale. My mom suggested that I slice the bread then thaw as many slices as I needed on a given day. Great idea! Perhaps you’re fond of homemade tortillas? They freeze beautifully. Pancakes and waffles are delicious! Make a full batch, eat what you want, and freeze the rest. There’s your breakfast throughout the week. When coffee goes on sale, I buy extra jars and store them in my freezer. I never have to pay full price and I’m not stopping at a drive-thru on the way to work every morning. Every morning, I enjoy a cup of go-juice from my very own kitchen.

When used properly, a freezer will help you save money on food. It can also cut down the amount of time you need to spend in the kitchen every day to feed yourself. Cooking and freezing leftovers ensures more opportunities for you to eat what you enjoy the most. And if you need ideas of what to cook, the internet is at your fingertips. There’s an entire subreddit about meal-prep, often with mouth-watering photos. It’s so easy to find many, many recipes that can be prepped and frozen ahead of time for cooking in a slow cooker or the Instant Pot. Personally, I love watching YouTube videos of people meal prepping all sorts of different things – like this one or this one.

Use your freezer. Cook at home and keep more of your hard-earned money. You’ll eat better and you’ll feel better too!

No One Said It Would Be Easy.

Getting what you really, really want is hardly every easy. It can be a grind. There are going to be days when you don’t want to work for it. Chances are you shed a tear or two along the way. It might take you much longer than you’d anticipated, and there are no guarantees the path will be a smooth one.

So what!

Accept the fact that the life you really want and that the dreams that you want to see come true are not going to fall into your hands like snow on a winter’s day. The reality is that you are going to have to put in some serious effort then reap the rewards later. If it’s worth having, then it’s worth fighting for. Never forget that!

Since this is a personal finance blog, I can help you with the money part of building the life you honestly and truly desire. There are some very basic guidelines that will get you 97% of the way there. If you follow these, then you’re set. The other 3% won’t make or break you either way. The more of these rules you fail to follow, the harder you’ll make it on yourself.

Choose wisely.

First things first… commit to living below your means.

There’s no way around this fact. If you spend every nickel you earn, then you will not have money leftover to put towards your dreams and the life you really want.

You need to save some of the money you earn. I used to think that 10% was enough. Now, I’ve matured and I see that 20% should be the bare minimum.

Maybe you can’t start at 20% right now. Fine – 20% is out of the question for right now. I refuse to be persuaded that you can’t work your way up to 20% over time. Start where you are right now, then increase your savings rate by 1% every single year. If you can increase your savings rate at a faster pace, then so much the better.

People get raises, start side hustles, create content, teach skills, etc… There are many ways to earn additional money. Find one that works for your life and do it. Whatever money you earn can be applied to building the life you want and to turning your dreams into your reality.

Next, work on getting out of debt.

This might take a minute. Getting into debt is usually fun, but getting out is a tedious task. Unless you come into a windfall, it’s going to take you some time to pay off your creditors. If you can, make extra payments to pay off your debt faster.

And for the love of all that you hold holy, stay out of debt. If you want something, set up a sinking fund then use cash to buy it. As a matter of fact, set up a sinking fund even if there’s nothing in particular that you want. Set up an automatic transfer in the amount all of your former debt payments and send that money to your sinking fund. You’re already accustomed to making those payments, but this time they’ll be going into your pocket instead of someone else’s.

When you finally decide what you want, the money will be there waiting for you. No debt needed!

Invest for your long-term future.

While paying down your debt, cinch your belt a little tighter and set some money aside for Future You.

Debt payments are about paying for past decisions. Investing for your future is about self-care. You’re going to need food, shelter, transportation, heat, and a few other basic necessities every single day until the day you die. This is why you absolutely must set aside some of today’s money for tomorrow’s expenses. You won’t always be physically and mentally capable of going to work. There’s also a decent chance that you simply won’t want to leave the comfort of your home to do tasks for someone else. Or maybe you’ll no longer love running your own business.

Whatever the case, you don’t want to be forced to keep working when you’d rather stop.

When that time comes, you’ll be very happy to have cashflow from investments to replace the cashflow from your salary. Start today. Invest for the long-term. Re-invest all your dividends and capital gains. Set up an automatic transfer to invest a portion of every dollar that crosses your palm. When you stop sending your body out to work, there will be a pot of gold waiting for you. Future You will be very glad that Today You made good choices.

Build your emergency fund.

Much like paying off debt, it’s going to take a minute or two to build up atleast six months’ worth of expenses. I’m not adverse to seeing people with one year’s worth of expenses set aside, but I appreciate that six months’ worth will do in a pinch. Emergencies always have a financial component, so kindly make hay while the sun shines. Believe me when I say that an emergency is never made better by the addition of debt.

The last thing you want is the burden of paying for an emergency for months, if not years, after it’s happened. To avoid this depressing situation, make sure that you’re adding to your emergency fund on a regular basis. Every time you’re paid, send some money to your emergency fund and leave it alone.

No one has ever complained about having too much money during an emergency.

And if you have to use your emergency fund at some point, make sure that you re-build it as fast as possible. There is no way of knowing when your next emergency is going to land so it’s best to be prepared as soon as possible.

Finally, stop getting in your own way.

By this, I mean do not take on financial burdens unless absolutely necessary. More monthly subscriptions won’t get your closer to your dream life unless you’re the one selling to subscribers. Any dollar that is spent on something other than what you want most is a dollar that is not bringing you closer to your dreams.

Remember that there is always someone out there who is goading you to spend your money in ways that aren’t getting you closer to the life you want. You’re the best person to know what your heart really desires. And you need not sacrifice your priorities just because the AdMan and the Creditor request that of you. They’re your dreams so it’s your responsibility to protect them, to nurture them, and to pay for them.

Again… No one said it would be easy. I’m here to tell you that it will be worth it.

Truth be told, no one aspires to poverty.

I’ve been part of the personal finance blogging world for a few years now and I’ve realized a few hard truths. One of them is that there is no one answer to the problem of poverty. In the personal finance sphere, it’s a truth barely ever acknowledged that not everyone has enough.

We bloggers love to talk about our successes and we will happily share our “pathways to success”. What we’re not so good at is realizing that those pathways don’t always exist for everyone else. The sad truth is that there is a growing subset of people who are stuck in poverty with few, if any, ways out of it. No one aspires to poverty yet that’s where many are headed.

The Globe and Mail

Every Saturday, the Globe and Mail posts a review of a household’s finance on their website. (FYI – it’s behind a paywall.) The review includes a snapshot of the household’s assets, liabilities, monthly income, and monthly expenses. An advisor provides a professional opinion of whether the household has enough to generate a desire income in retirement. Readers are free to leave comments and, more often than not, readers complain that the household being profiled is too affluent. Readers clamor for households whose profiles are more relatable, i.e. those of someone earning a $50K-$60K per year while sending children to daycare, handling credit card debt, and paying a mortgage.

I’m always very confused by those reader comments. What are readers expecting the financial advisor to say? When a person is making a five-figure salary and all of their money is going towards mortgage debt, student loans, daycare, utilities, food, and transportation, then there really isn’t any wiggle room. The average person who isn’t making six-figures and who is raising a family is always under intense financial pressure to make sure everyone eats and that all the bills get paid. A severe illness or a job loss would be tragic, if not catastrophic.

There is no financial advisor alive who can help someone to build wealth when the entire paycheque is going out the door as fast as it comes in. There has to be some money to work with in order for a financial plan to have any hope of being useful!

What I’ve learned from reading many, many reviews of household profiles is that people who have excess money are the only ones who can reasonably benefit from a financial advisor’s review and advice. Having excess money means being positioned to implement a recommended investment strategy, to consider tax shelters, and to maximize contributions to the myriad of registered accounts that are available. When there’s no excess money, none of these options are really available.

Popular advice isn’t for those in poverty.

Most of the popular advice that you see shared online is for people with excess money. It can be an extra $5 per day, or it can exceed an extra $100,000 per year. The amount of excess money is not the point. What I want you to realize is that having excess money is the cornerstone to building savings and to investing for the future. If there’s nothing extra to save, then investing is essentially out of reach.

And to be very clear, I’m not talking about people who can cut back if necessary. Many people spend every penny on both necessities and luxuries, while deluding themselves that those luxuries are truly necessary for their well-being. No one needs a $300/mth cable package for their survival. I’d be tempted to argue that cutting the cord is a great way to cut down on the marketing that encourages the needless spending in the first place. But I digress…

If you don’t have excess money, you’re essentially a human conduit between your employer and your creditors. You work very, very hard and then disperse your paycheque to everyone else. To add insult to injury, you might also have to use credit cards to pay for food or utilities or some other basic necessity. However, if you’re using credit cards to survive, then please do not delude yourself into thinking that you’re keeping the wolves from the door. They’re circling and they will eventually be on your doorstep. Debt is rarely the solution to poverty. More often than not, debt simply entrenches you in poverty because the interest owed on your debt never stops growing until the debt is paid in full.

When you’re working super hard yet have no extra money to keep for yourself, then you’re the very definition of the working poor. From what I’ve learned, the only solution to poverty is to get more money. With more money in hand, the options for growing your money become viable options for you to consider. Until then, those options are eternally out of reach and may as well not exist.

And if you’re in this situation already, then I’m not telling you anything that you don’t already know. I’m sorry. I don’t have any quick fixes for your particular circumstances if you find yourself in this situation.

Living Below Your Means

One of the fundamental tenets of personal finance is to live below your means. I know that I’ve suggested that everyone do this. The reality that I’m coming to accept is that not every one can do this. It is a privilege to be able to live below your means, because it means that you have more than enough to pay for your daily living costs and there’s still money left over. There’s disposable income that need not be spent to keep food in the fridge and a roof overhead.

People who have already cut back yet are facing increasing costs simply cannot survive without spending every penny. They don’t have the luxury of an extra $5 to squirrel away in a paycheque. Doing so means going without food for 2 or 3 days in a row. No one ever develops a taste for poverty.

There are too many people who simply don’t earn enough. That’s the bottom line. If there is way to escape poverty’s clutches without increasing your income, please share that solution with the class.

For a good number of people, hard work is no longer the solution. However hard they work, there’s never enough to pay themselves first. If they do pay themselves first, then someone doesn’t eat or an eviction is in their future or the electricity is turned off. The rational solution is to solve today’s problems today and to hope for a better future tomorrow. When there’s only enough money to pay for today or to pay for tomorrow, which choice would you make?

What’s the answer?

If I had the perfect answer to solve the poverty problem, I would shout it from the rooftops. Sadly, that level of wisdom has escaped me.

My only suggestion is this. If you’re one of the people who has enough with a bit to spare, then consider making charitable donations to homeless shelters and food banks. People will always need a place to stay and food to eat. You can still invest for Future You. I will always urge you to build the life you want for yourself while helping others along the way. It does you no harm to help someone in need.

Never take your good fortune for granted. Believe me when I say that no one who is in poverty wants to be there. I would venture to say that more than a few of those folks were one day very financially similar to you. Something happened to wipe out their financial foundation and they simply were unable to rebuild.

Again, no one aspires to poverty yet that’s where they’ve landed. Be thankful if you’ve managed not to fall into poverty’s nearly inescapable grasp.

No Good Reason to Save & Invest? Do It Anyway!

Roughly 11 months ago, someone asked me to share my best tip for success with money. It took me less than a minute to say “automatic transfers”. Honestly, I really think that automating your finances is the cornerstone of mastering your personal finances.

Automation is beautiful because it removes the decision from your hands. More importantly, an automatic transfer removes the temptation to spend the money. If you’re paid bi-weekly like I am, you don’t have to waste time every fortnight asking yourself if you should set aside money, how much money should be set aside, whether to send that money to your emergency fund, etc… Each of those questions is an opportunity for you to spend instead of save, or to save less than you should, or to neglect one of the most important tools in your personal finance arsenal.

The automatic transfer saves you from yourself. Once it’s in place, you don’t have to think about it again.

I spend a lot of time here telling you to pursue your dreams and to determine your priorities so you can make those dreams come true.

Some of you might not know what your dreams are just yet, or you’re still trying to figure out your priorities. That’s fine. As a matter of fact, that’s more than fine. It’s completely normal. Life changes, so your priorities will change too.

Those changes don’t really matter when it comes to whether or not to automate your money. See, when you do figure out what you want from your life, you’re going to be very happy that there’s already some money set aside somewhere. Set up your automatic transfer today and just let the money accumulate while you’re figuring out what you want.

If you can, start with 20% of your take-home pay. That’s a decent chunk. If it’s just being wasted on frivolities and feckidoos, then it’ll serve you better in an emergency account, a sinking fund, an investment account, or a retirement account. I would suggest dividing your chosen amount into thirds:

  • one third to your emergency fund until you have 6 months of income set aside;
  • one third to your retirement account until you’ve maxed out your TFSA and your RRSP; and
  • one third to short-term goals like a course you want to take, or some travel, or a hobby that you love.

Portion #1 – Your Emergency Fund

It’s going to take a minute or two to build up your emergency fund. That’s okay. Just start! When the emergency comes, whatever amount you have will help. Trust me when I say that no one in the history of the world has ever regretted having money set aside during an emergency.

Remember what the emergency fund is for. It’s money meant for your survival. If you lose your job, then the emergency fund has to pay for your shelter, your food, your medications, and your other necessities until you get another source of income. If you have debt, your emergency fund should also be able to cover those payments. After all, one does not need to have a vehicle repossessed nor dings to one’s credit rating while one is hunting for a job. (Some jobs care about your credit rating.)

It should be obvious but I’ll say it anyway. The fewer things that your emergency fund has to cover, the smaller it can be. Get out of debt and you won’t have to worry about how your creditors will be paid should you become temporarily parted from an income.

When money goes into your emergency fund, leave it alone. This is the money that is meant to replace your income should you lose your job. It’s not meant to pay for anything else.

While this blog is targeted at single people, I know that there’s more than a slim chance some of you will find partners and enter relationships. Relationships are another reason why everyone should have a big, juicy emergency fund. Not every relationship is meant to last. By having your own emergency fund, money will never be the reason that you stay in a relationship that is no longer good for you. Having your own money is insurance against financial abuse.

Portion #2 – The Care & Feeding of Future You

Next, you’re going to get old unless you die first. That means, there will come a point when you can’t work anymore. Before that day comes, you’ll probably reach a point where you won’t want to work anymore. You will want to have a nice, ginormous pile of retirement cash waiting for you. And if you can’t have a ginormous pile, then I’m pretty certain you’ll settle for a comfortable pile. Whatever amount you wind up with is up to you. If you save and invest $0 towards retirement, then that’s how much you’ll have at the end of your working life.

Start today. Fill your TFSA first, then your RRSP. Once those are filled, start investing in a non-registered investment account. As with your emergency fund, it’s going to take some time to maximize your contribution room unless you come into a lottery win, an insurance payout, an inheritance, or some other kind of windfall that you don’t spend on something else.

Always remember that the money in your TFSA, your RRSP, and your investment accounts must be invested for long-term growth. Yes – they’re called a Tax Free Savings Plan and a Registered Retirement Savings Plan. I get it, but I don’t care what they’re called. These accounts protect your money from being taxed, so go for growth. Invest in broadly-diversified, equity-based exchange traded funds so your money can grow exponentially through the magic of compounding.

Mutual funds are more expensive than exchange-traded funds, so try to invest in ETFs. Once you buy your ETF, don’t fiddle with it. Equity-based investments are meant to be held for a long period of time. If you think you’ll need money in the next 3 years, then set up a sinking fund to pay for whatever-it-is-you-plan-to-buy.

Portion #3 – Enjoying the Journey

Finally, you’re going to use sinking funds to pay for the things that bring you joy along your journey. Whatever extracurricular activity floats your boat probably comes with a price tag. Have a sinking fund so that you can indulge yourself. I worked with a woman who was very frugal in most areas of her life. However, she and her partner loved concerts. You better believe they had a sinking fund to pay for front row seats of their favourite performers. A young family member of mine discovered a love of travel. He just got back from his first cruise and is already saving up for his second trip to Japan. Another friend of mine attends writing retreats – money is needed for accommodation, travel, food, supplies, instructors’ fees, etc…

Life goes by very, very fast. And we spend so much of it at work, doing stuff for someone else that we probably don’t care about very much. The reality is that our society is designed to keep up endlessly stimulated. There’s very little encouragement to sit quietly and to contemplate what it is that you want, to plan for that, to save money towards making it a reality. Instead, we’re fed an endless stream of advertisements which exhort us to spend and spend and spend some more on the doodads and feckidoos that don’t exactly bring us long-lasting joy.

Part of every paycheque you earn should be spent on those things that make you happiest. Even if you don’t know what that is just yet, start saving for it. One day, you’re going to figure out what speaks to your soul and you’ll be so very happy that you have the money in place to acquire it. Maybe you want to take a culinary tour in Italy? Perhaps you like to make pottery? Maybe your sports club competes internationally and you need the funds to travel?

Whatever it is that satisfies your soul, make sure that you’re setting some money aside to do some of the things that make your life what you want it to be.

So that’s it. Even if you think that you have no reason to save and invest right now, I want you to know that you’re wrong. The fact is that you simply haven’t figure out the reason. You might not know what your priorities are, but you will one day. The fact that you haven’t fully fleshed out your dreams shouldn’t mean that you delay accumulating the money needed to make them come true. Set up your automatic transfer today then work on getting everything else sorted out.

Future You will thank you.

Free & Useful Wisdom from Me to You!

You need not make every mistake yourself. It’s perfectly find to learn from the mistakes of others. Here are some things that I’ve learned after investing for 30+ years. This is wisdom borne from real life experience. As my father used to say, hindsight is 20/20. Had I come across a blog post like this when I was younger, I probably would’ve made a few different choices. Maybe you can benefit from my wisdom, or you know someone who can. Either way, here we go…

You can be fired.

At the end of the day, you can be fired from your job even if you’re good at it. Your salary is an expense to your employer and if your employer believes that expending money to pay your salary is no longer a good idea, then you will be let go. It’s nothing personal. It’s math on a spreadsheet.

What can you do to protect yourself from this?

Firstly, you always pad your emergency account and investment account with the first 15% of your paycheque. On payday, that first portion gets whisked away for the inevitable rainy day. This money is not to be spent unless you lose your job. Get atleast $1000 into your emergency fund, then work your way up to a month’s worth of income. Keep socking money away into your emergency fund until you have atleast 6 months of income set aside. This goal is probably going to take a long time to complete, but that’s okay. When you lose your job, you will not regret having money set aside to pay for your expenses.

As for your investment accounts, fund those too. This is the money that will be there for Future You. It’s going to take the place of your paycheque when you finally retire. Follow these guidelines to maximize the size of your portfolio.

  • Invest for long-term growth.
  • Set up an automatic transfer so that your money goes from your paycheque to your investment account without having to remember to manually make the transfer.
  • Aim to keep the management expense ratios below 0.5% for all of your exchange-traded funds.
  • Never forget that mutual funds are always more expensive than ETFs, and there’s no sense paying more to own mutual funds when you can but a near-identical ETF for less money.
  • Use a dividend re-investment plan so that all dividends and capitals gains that you earn are automatically re-invested to boost the compound growth of your portfolio.

Secondly, you never stop learning. Should the day come that your employer lets you go, you need to have the skills to find another job. Maybe you want to continue working in your same industry. That’s fine. Know what skills and education requirement your industry demands of people in your current role. If there’s a new role that you want to try, investigate what knowledge and skills you need to secure in order to have a good chance of obtaining the next position you want.

Thirdly, always keep your resume up to date so that you can leave before you’re fired. Sometimes, you’ll know that “budget cuts” or layoffs are coming down the pike. That gives you a dram of power because you can start looking for your next position before you’re fired. If you’re successful, so much the better as you’ll be leaving on your terms.

This advice also applies to those of you who work for yourselves. Customers can disappear and events outside of your control have a way of derailing your very well-crafted business plan. If that happens, then you’re in the same boat as employees who’ve been fired. Entrepreneurs also need to keep a little something in the kitty for those days when the profits are non-existent / insufficient to pay the bills.

No one cares about you money as much as you do.

You have to be the one who is responsible for your money. There is no one coming to save you if you spend every nickel and remain mired in debt. Google the maximum CPP amounts that are available to retirees at age 60. If that amount seems like too little for you to live on when you’re retired, then you need to save.

Track your expenses. Know how much you spend. Armed with this knowledge, you’ll know how much money you’ll need to bring in to cover your costs when you’re retired. Where that money comes from is mostly up to you. After all, you can get a job with a pension and work for 25+ years to climb the ladder and maximize your pension payment when you hit 60.

Another alternative is to do real estate investing and let someone else pay down your mortgages so that you have rental income when you decide to retire. This is a complex area, and there are several good sources of people who have already done this. Check our Bigger Pockets, Coach Carson, and One Rental at a Time. It’s not my cup of tea, but it might be yours. Personally, I do not recommend this route but I do understand how the numbers are supposed to work.

The third and most widely available route is to live below your means and invest for the future. This is what I did. My mistake was investing in dividend paying ETFs instead of equity-based ETFs. This was a huge mistake as I did not benefit from the run-up in the stock market between 2009-2020. My financial situation would be so much different now had I not fallen in love with dividend ETFs.

That said, I do earn a nice passive income from my dividends every year. Not all is lost. I do enjoy watching the Dividend Dream and the GenX Dividend Investor on YouTube. I wish I’d had access to them 20+years ago when I’d started investing. However, they’re both younger than me and their channels are only a couple of years old. For those who are just starting out, I think these two YouTubers have some interesting things to say about how to make dividend investing very profitable.

Investing for Future You should be one of your goals this year. Again, track your expenses. Get rid of the ones that aren’t making your life better. Whatever money isn’t spent on the expenses you’ve eliminated should be split between investing for Future You and paying off debt.

Get out of debt ASAP.

Debt sucks. There’s no way around it. When you take on debt, you’re agreeing to pay some of tomorrow’s money to your creditor. You haven’t even earned the money yet, and you’ve already agreed to give it away. I hate that. Re-read the first section of this post. When you have debt, you’re still under the very real risk that you can be fired.

Some people say that some debts are better than others. I’m ambivalent about this position. I liken debt to cancer. You don’t want it. And if you have to get it, you want the form that’s curable. In other words, if you must take on debt, then keep it as small as possible and get rid of it as fast as you can.

Once you’re out of debt, don’t go back into it. Save up for your future purchases by using sinking funds, then spend that money to buy what you want. Alternatively, save money to rent whatever it is that you want to buy.

  • Are you itching to travel overseas? Then start a sinking fund and re-direct some of your paycheque to this goal. Once the money is in place, then start booking your flights, hotels, excursions, etc…
  • Need to replace your car? Start a sinking fund today and drive your current vehicle until the wheels fall off. When they do, use the cash to buy your next vehicle then start saving again. Do this as many time as you need to until you’re buying the vehicle that you really want with the funds that are in your sinking account.
  • Maybe you’ve been thinking it would be nice to have a vacation home? Rent one, or seven before you buy. Figure out if you want the headache of worrying about another property or if you would rather have the freedom that comes with enjoying your vacation destination and leaving the headaches to someone else.
  • How about your own boat for the lake or an RV for roadtrips? Again, rent these. Rent them as many times as you need to so that you have a solid appreciation of what it means to own one. If you still want one of your very own, then start a sinking fund and pay cash for it.

No more debt.

Credit cards are a tool.

That’s it. Those little rectangles of plastic can make your life better if you pay them of every single month and if you never carry a balance. If you’re unable to meet these two conditions, then credit cards will keep your mired in debt for a very long time and you should not use them.

Personally, I love my credit card. It gives me free groceries several times a year. I love this feature during the holidays because I have more expenses at that time of the year. Using points for groceries frees up money for gifts and entertainment costs.

I have friends who love their travel cards. They put every expenditure on a card so that their families of six are able to fly all over the world while paying as little as possible for flights. There are lots of credit cards out there and a dazzling array of rewards. I don’t know the in’s and out’s of every card.

All I know is that the rewards are a trap if you don’t pay off your credit card balance every month. Paying interest on credit cards is always more costly than whatever rewards is being offered.

Another thing you should know about credit cards is that carrying a small balance from month to month does not increase your credit score. If you believe that it does, then you should change that point of view because it is not benefiting you. Carrying a balance is good for the credit card company because they will earn interest off of you. Having a balance is not good for you because you’re spending money on interest for no good reason. I have had my credit card for over three decades. I’ve never paid interest and my credit score is very, very high.

Never believe that carrying a balance is good for your credit score.

If you buy it, then you should own shares in it.

Full disclosure: I invest in ETFs and I have a few shares in banks, telecoms, and energy companies. That’s it. That’s my portfolio.

Now, what I’m telling you is that you should own atleast 1-5 shares in companies that make the things you buy. I’m always amazed when I see the never-ending drive-thru line at Starbucks and Tim Horton’s. People love coffee. I do too, and I drink it every day. I wish there was a way to find out if the people buying at the drive-thru are also buying stock in Starbucks and Tim Horton’s. If not, they should be. They can see with their own eyes that these companies are making something that people are willing to pay for. That sounds like a profitable company to me.

The same principle applies to the things that you have in your home. Do you use streaming services? Do you know if other people do? Maybe 1-5 stocks in a streaming service would be a good idea. Maybe you know of a company that makes the hand-computer that you rely on every single day? I’ve noticed that more than one person has one and they seem to be quite popular.

Do you use a bank? Cash a paycheque? Get a credit card? Have a loan? Trust me. The banks are notorious for making money hand-over-fist, year after year. You won’t go too terribly wrong by owning 1-5 shares in one of the big 6 banks.

There’s a lot more research to be done, but I honestly think that investing in the companies that make the products and services that you and millions of others use and/or purchase every single day is a good financial move.

Now you know.

Do with this wisdom what you will. You can make choices that will get you closer to your financial goals, or you can do things that move you further away from them. The power is in your hands so wield it wisely.

Finding the Money in the New Year!

The new year starts in a few days. If improving your financial life is one of your goals, then you should probably consider implementing atleast one of the following tips. As always, take what you need and leave the rest. After all, you’re the person who is best-placed to know the intimate details of your financial life. That makes you the expert on which tips will work and which ones won’t.

Cook your own food more often.

You know what you like to eat. Thanks to the internet, there’s somebody out there who has already made a video of how to prepare your favourite things. Watch the videos and learn to make it yourself. You’ll spend a little bit more time and effort, but your wallet will thank you.

I know that most recipes are written to generate multiple servings. If you’re not a fan of leftovers, then freeze the extra portions. They will be there waiting for you when you’re too tired to cook. Having food waiting for you at home limits the need to stop at a restaurant or to use a food delivery service.

If you’re not used to cooking, start small. Make some muffins and take one with you when you know you’ll be needing a snack later. If you’re a fan of pancakes or waffles, make a batch on your day off and then you’ll have them waiting for you each morning for breakfast.

After awhile, you’ll also notice that your own food tastes better than what you can buy elsewhere. You’ll start to ask yourself why you’re paying to eat something that’s not as tasty as what you can feed yourself.

If something’s holding you back from cooking for yourself, figure out a way to overcome it. Food is not getting any cheaper. Cooking it for yourself is one way to keep your food costs down.

Have a no-spend day each week.

This can be tricky, but it works. Pick one day a week to spend nothing. It doesn’t matter to me what day it is. The purpose of this tip is to force you to be mindful of how often you open your wallet or use your phone to pay for things. Are you engaged in mindless spending? If so, is it one of your goals to stop this habit?

Bring a snack to work. Stay home. Read a book instead of scrolling retailers’ websites. Do whatever you want to do so long as it doesn’t involve you incurring any expenses. Remind yourself that retailers will always take your money tomorrow.

Maybe you legitimately have to spend money every day. Find ways to cut down the amount. Maybe you’re used to spending $40 every day. Do what you can to reduce that amount on atleast one day a week. If you can cut the amount by half, so much the better for you.

Increase your contributions by 1%.

In my humble opinion, this is the tip that’s really going to propel you towards your financial goals. It’s deceptively simple, yet its impact is powerful.

Whatever percentage of your income that you’re currently investing should be increased by 1%. This is a fast and easy way to insure that you’re increasing the amount being contributed to your financial goals. No one else cares about your money as much as you do. Let’s face facts. It’s up to you to fund your retirement, to build an emergency fund, and to ensure that your sinking funds get filled. That means being smart with how you organize and allocate your money.

Ideally, you’ll fill your TFSA first. Once that’s done, work on filling your RRSP. After both are maxed out, you can open a non-registered investment account and start investing that way. Increasing your contributions by 1% every year means that you’ll max out the TFSA and RRSP sooner. Once that’s done, you’ll have even more money working for you sooner in your investment account. Money needs time to compound. The sooner you can contribute more money, the better compounding will work for you.

It’s math. The more you save, the faster you’ll fill up your TFSA and your RRSP. These are registered accounts that have limits. Once you’ve hit those limits, you can invest everything else in your non-registered investment account since there is no limit on this account.

Again, I don’t know the details of your financial life. If you’re starting from scratch, then it will take you longer to accomplish these feats than someone who’s been working on these goals for the last 10 years. It doesn’t matter how long it takes to max out your accounts. It will take as long as it takes. The important thing is to start today and to stay focused on your goals.

That’s it.

Use these tips as you see fit. It’s your money and you’re the one who gets to decide how it’s spent. My tips have helped me get into the Double Comma Club, so I’m sharing them with you if that’s a club where you’d also like to be a member.

Make sure you have enough S.W.A.N. Funds

Long-time readers know that I enjoy talking about how to make your dreams come true. I truly believe that one of money’s best purposes is to help you build a life that makes your heart sing, one that puts a smile on your face. Prioritizing your spending in order to achieve your most important life’s goals significantly increases the odds that you’ll achieve the dreams you have for your life.

Today, I want to spend some time talking about the security side of money. You’ve heard me talk about emergency funds, sinking funds, and investment funds. Those are all very important too. But last week I heard about a new-to-me nickname for a cash security blanket. It’s called a SWAN account and it stands for Sleep Well At Night.

I was hooked.

Nothing new under the sun.

Sure, this is a new name for an old-fashioned idea. But it’s catchy and I like swans, so I’m going to talk about it in this post. The account’s purpose is in its name. A SWAN account is there so that you can sleep well at night. You get to decide how much you need in the account to achieve your goal.

If you don’t already have one, it’s very easy to set one up. Go to your bank and open a savings account. Maybe you eventually want to have $50,000 set aside to sleep well at night. That’s not an insignificant sum, and it’s rather intimidating to think of saving that much money all at once. Here’s the secret…

You don’t have to save it up all at once. You can set smaller savings targets that will eventually get you to your ultimate goal. Create mini-savings goals. Your first mini-goal could be to get $100 in there. When that’s done, set another goal for $300. The next goal can be $700. And so on and so on and so on until you hit your ultimate goal.

Guess what else? You also get to pick the amount of money that goes into you SWAN account from every paycheque. Obviously, the more you save, the faster you get to you ultimate goal of whatever amount you choose. Track your spending. Figure out if there are any non-essential expenditures that don’t bring you joy. If so, then resolve to not make those purchases in the future and send that money to your SWAN account.

Saving, not investing.

Notice that I’m specifically referring to saving this money. I’m not suggesting that you invest it for long-term growth. Your SWAN account is designed to be a safety net in case things go drastically wrong and you need to lay hands on money within hours. Your invested-for-the-future money resides in your TFSA, your RRSP, and your non-registered brokerage accounts. Money invested for your future needs to be left alone to do its thing so that it’s ready and waiting for you when you decide to retire. Hear me when I say that your invested money doesn’t get used except as a very last resort.

The SWAN account is strictly a savings account. Open a high-yield savings account and start stuffing it with cash. As always, use an automatic transfer from your paycheque to your SWAN account. Let technology do the heavy lifting for you while you’re out and about living life.

The SWAN account is the moat between your current circumstances and your invested funds. The bigger that account is, the less likely you’ll be forced to sell your investments to cover the cost of your necessities. It’s time to start building your moat. Continue to set mini-goals for yourself and do what needs to be done to achieve them. Eventually, you’ll have a nice-sized SWAN account and you’ll be sleeping like a baby once again.

Make Your Dreams Come True in 2025.

Have you started thinking about your goals for 2025? If not, then you might want to take a few minutes and do so. I know that this time of year can be rather busy, but don’t forget that you’re important too. It’s okay for you to think about what you want.

There aren’t too many weeks left in 2024. Time for you to make a few high level plans so you can start funding some sinking funds. Celebrate a milestone birthday to celebrate? Travel to a favourite spot or some place new? Pursuing an educational pursuits? Attending your favourite artist’s concert? Meeting up with friends? Attending an artist’s retreat? Visiting an old friend or a distant relative? Contributing as much as you can to your retirement and investment accounts? Getting rid of your debt?

Whatever it is that you want to add to your life in 2025, now is the time to start sketching out how you’re going to pay for it. Money will disappear by being spent on crap you don’t care about if you’re not careful. Don’t let that happen! You work too hard to not have the money set aside to fund the things that you really, really want. Money is a tool that can help you to have the life you want. Use that tool wisely!

Step One – Automate

Use the power of automation for your benefit. It’s simple and highly effective.

In my opinion, the most important first step is set up an automatic transfer from your paycheque to an account that will fund your goals. These accounts are your sinking funds. Each one represents something that you want to accomplish Every time you get paid, a certain amount of money goes into your sinking funds. I don’t really care what the amount is – that’s up to you.

Start with what you can. Let’s say it’s $50 per paycheque. Fine, whatever. Increase that amount in 90 days. By following step 3 below, it won’t take you much longer than 90 days to figure out what expenses are getting you further away from your heart’s desire. As you eliminate those expenses, put the money to funding your goals. Challenge yourself to increase your sinking fund contribution by $25 every 90 days. If you can do more, great! And if you’re doing the max that you can, that’s great too!

As you eliminate expenses and pay down your debt, you’ll have more money to set aside to building the life you really want.

If one of your goals is to pay off your debt, then set up an automatic payment that sends a payment to your debt every time you get paid. So long as you’re paying the minimum amount every month, every other nickel will go straight to paying down your principal balance. Paying off debt automatically is a grand idea!

Step 2 – Prioritize

Most people will advise you to figure out what you really want before you start saving for it. Personally, I think this is a mistake.

Sometimes, it takes people years to figure out their heart’s desire. While they’re figuring it out, time is slipping away. It makes no sense to me to squander that time while setting priorities. Even if you currently don’t know what you want from your life, that shouldn’t be a reason not to set aside money. At some point, you will figure it out. Don’t you think that you’ll be happy to have the money already set aside to pursue your dreams when you finally know what they are?

Maybe you’ll wake up in 10 years knowing that you want to be a baker. You’ll need some money to tide you over while you get your business up and running. Or perhaps you’ll need to move to the other side of the world to satisfy your soul’s calling. They won’t let you on the plane on the strength of your smile. You might not know exactly what it is that you’ll want, but I’m here to tell you that it’s going to cost money. Start saving today, even if you don’t know exactly what you want.

While you’re busy figuring out what you want, you can have your money accumulating on the side. It’ll be there, waiting for you to give it direction. And if you have debt, then that money should be added to your minimum monthly payments so you can get rid of your debt as fast as possible. Life is better without the shackles of debt keeping you beholden to a creditor.

One of my lifelong dreams has been retirement. Along the way, I’ve fulfilled other dreams to travel and to renovate my home, to celebrate birthdays and milestones with family and friends. After all, no one has ever said that you can only have one dream. You can have as many as you want. The responsibility lies with you to pursue each of them every day, step-by-step until they become a reality.

Step 3 – Track Your Expenses.

That’s right. It’s the least-exciting step in the world. Everyone hates doing this, and I don’t blame them. I’m not terribly excited to record my purchases every day, but I do it anyway. In my not-so-humble opinion, tracking expenses is vitally important.

If you’re not tracking where your money is going, then how do you know if it’s being well-spent?

Blue Lobster, what do you mean by “well-spent”?

Easy. Every time you spend a dollar, you should never think of it as a waste. You should only part with your money when you’re convinced that doing so moves you closer to your dreams. Taking care of basic necessities is always a good expenditure of your money. When you have shelter and food in your belly, you’re not spending every waking minute thinking about survival. Knowing that you spend money on item-X when you’d rather be doing/tasting/experiencing/seeing your heart’s desire might make you more careful about how you spend what’s in your wallet.

Track your expenses. Assess every single one. Did that purchase get you closer to your dreams? Could you have not made the purchase, put the money towards your dream, and been just as happy? If the answer to the last question is “yes”, then don’t make that purchase in the future.

It’s Time For You to Pursue Your Dreams.

Each of us has dreams and hopes and desires that we want to see fulfilled. Never forget that time waits for no one. Your dreams are waiting for you to turn them into reality, so stop procrastinating.

Take the steps I’ve laid out and use them to design a life that will bring you the most joy. After all, isn’t that the very best use for your money?

Three Simple Steps to Master Your Money.

At the time of publishing this post, there are less than 60 days left in 2024. You might want to start thinking about your dreams and goals for the new year. Whatever yours are, I’m going to suggest that learning to master your money should be one of your goals. After all, you’re the person earning the money and you should be firmly in control of what your money does. Trust me. Life is better is when your money works harder for you than you do for it.

There’s no need to wait until January 1 to make the following suggested changes. Believe me when I say that you’ll want to master your money sooner rather than later. Start today.

If you’re a person who likes to make resolutions, then you can implement these three steps on New Year’s Day. Everyone else, I would strongly encourage you to do start following these steps immediately.

Top Up Your Emergency Fund

The goal is to have one year’s worth of necessary expenses set aside. I know that most experts recommend 3-6 months’ worth of expenses. Personally, I don’t believe that this is enough. You’re free to disagree with me, of course. The reality is that it’s better to have a bigger emergency fund than you might need. When your income disappears, you’ll want to have as much set aside as possible to tide you over until you get another paycheque.

Your next job might pay you less than you were earning before. It might take you longer than 6 months to find your next position, or to start earning money from your own business. Being unemployed is a bad situation. Going into debt to pay for living expenses while unemployed makes the situation considerably worse.

Do yourself a favor and set aside more than you need. Your necessary expenses are your shelter costs, your basic utilities, your food, your transportation, your medications, and your phone. If you have pets, then you need to cover their costs too. Everything else should be put on hiatus until you get another source of income.

For most people, it will take some time to hit this target. Setting aside a year’s worth of expenses won’t be quick. There will be many, many temptations along the way to spend re-direct money away from the task of building your emergency fund. Do yourself a favor. Set up an automatic transfer from your chequing account to your emergency fund. This way, you don’t have to think about funding your future emergencies as it will happen automatically through the magic of technology.

Invest Your Money

First things first – track your expenses. Ideally, you’ll do this for a month. Write down what you spend. Figure out which expenses were necessary (see above) and which ones weren’t. Of the second group, identify the ones that don’t make you happy and promise yourself to eliminate those ones in the future.

Whatever money is cut needs to be re-directed towards your investment portfolio. Your investment portfolio consists of registered accounts and your brokerage account. Your registered accounts are your Tax Free Savings Account (TFSA) and your Registered Retirement Savings Plan (RRSP).

Fill your registered accounts before you start contributing to your brokerage account. The TFSA will not generate a tax deduction but the money will grow tax-free forever. You can also withdraw money from your TFSA without paying taxes. The RRSP money is tax-deductible, and money inside an RRSP will grow tax-free. Once you start to withdraw the money, you’ll pay taxes on it. Fill your TFSA to its limit, then focus on filling your RRSP.

Once you’ve filled your registered accounts, then you can open a brokerage account and re-direct your investment contribution. Money invested in your brokerage account is not tax-deductible, and you do have to pay taxes on it every year. Ideally, you’ll be investing in securities that generate dividends and capital gains for you. Dividends and capital gains are not taxed as heavily as interest earned in a bank account or from GICs.

Follow this order of investing every year: TFSA -> RRSP -> Brokerage Account.

If you’re starting from scratch, it might take you a few years to fill up the registered accounts. That doesn’t matter. You’re trying to build a nice, fat money cushion for Future You. Consistency is key, so don’t worry about how long it will take. Just start today and don’t stop.

Pay Off Debt

Ridding yourself of debt is just as important as long-term investing. I don’t want you sacrificing one for the other because you need time on your side. You need to have money invested so it can compound for as long as long possible. This is why you should be investing at the same time that you’re paying off debt.

After you’ve eliminated the debt, you will have a hard-working investment portfolio in place. This is a wonderful thing! It means you won’t be starting from $0 if your debts aren’t gone until you hit your 50s or 60s.

Tighten your belt and learn to say “No”. If you have debt, then I want you to do the following.

Take half of your contribution amount and direct it towards your debt. Allow me to be very clear. You’re already paying the minimums on your debts every month. Half of amount that would’ve otherwise gone to your investments will be added to the minimum payment of one of your debts. An increased payment dramatically shortens the time it will take to pay off a debt. Once debt #1 is gone, add that entire former payment from debt #1 to the minimum payment of debt #2. When debt #2 disappears, add the entire former payment that was going to debt #2 to the minimum payment for debt #3. Repeat this cycle until all of you’ve paid off all of your debts.

Do not get bogged down in deciding whether to use the Debt Snowball Method or Debt Avalanche Method. It truly doesn’t matter. The only thing that matters is your decision to start paying down your debt today.

Both methods will get your out of debt. Personally, I like the Snowball Method since it eliminates the smaller debts first. Paying down debt sucks, so seeing wins as soon as possible makes people feel good.

Once you’ve paid off your debts, take the former debt payments and re-direct them to your registered accounts and your brokerage account.

That’s It. That’s the Plan.

Once you’re out of debt, stay out. Save up for large purchases so that you don’t have to finance them. The one exception is your mortgage. Even I will admit that this is the one purchase where financing is nearly unavoidable without a lottery win, a big insurance settlement, or an inheritance.

Keep your emergency fund fully-funded. If you need to use it, then make it a priority to build it back up again. Life can be funny. There’s no rule saying that only one emergency is headed your way.

Invest for the long-term. Put your money into well-diversified, equity-based securities. Personally, I like exchange traded funds (ETFs) more than I like mutual funds. For nearly the same security, ETFs will cost you atleast 80% less. Read The Simple Path to Wealth by JL Collins. While it’s written for an American audience, the savings & investing principles are equally applicable to Canadians.

You’re already doing all of these things, you say? Fantastic! Use this time to tweak your system, if necessary. Consider increasing your emergency fund by 3%, just to keep up with inflation. It’s never a bad idea to increase your contributions to your brokerage account by an additional 1%. Taking this step every year will make a big difference in how much your accumulate. It bears repeating – once your debt is gone, keep it gone.

That’s it – that’s the plan to master your money. If you do these three things, then you’ll be setting yourself up for success.

Everything else is details.