Lending Money To Family and Friends

   Over the course of several long, hard summers working construction, I had painstakingly built up a prized collection of professional tools. Those tools, and the skills that I developed through those countless hours in the scorching sun made me the go-to guy for fixing small problems at my friends houses. For the price of a hot meal and a cold can, there was little that I couldn’t fix. 

   Then one day, a good friend of mine came and asked to borrow some of those tools. My skills weren’t needed, the job wasn’t that big, but he needed the tools that I had.

“No problem.” I said, “Just pick them up on Friday and drop them off at the beginning of next week.”

   Friday rolled around and I handed over a few of those recently cleaned and organized toolboxes. I wanted to help, and I wasn’t using those tools right now anyways. Better a friend gets some value out of what would otherwise be collecting dust on my shelf.

   But then Monday morning rolled around, and instead of a knock at the door bringing those tools back, I received a phone call, “Hey Brian, any chance I could keep these for a few more days? Something came up and I still need those tools a little longer.”

“Of course. How about you drop them off next weekend?”

“Sounds good, appreciate it buddy.”

   Next weekend came and went. Then the weekend after that. Finally, a few weeks later my friend showed up with my toolboxes. He sheepishly grinned as he returned them, with a chuckle and a bit of an apology. Other than a little impatience on my part, no big deal right?

   A little while later, when I finally went to use one of the sets that I had loaned out, and a long list of small things were either damaged or outright missing. To say I was furious was an understatement, especially since the one thing I actually needed? Of course that size wrench was one of the missing items.

Money is a tool.

   I recently recounted this story, when asked about lending some money to a family member. The friend who came asking for advice was slightly perplexed, “What does this have to do with my situation? My brother isn’t asking for a wrench, he needs some cash to get him through his current situation.”

   That’s when I needed to explain. Money is a tool. Nothing more, nothing less. Just as you would use a hammer to build or destroy, money does the same. It has the power to create, or take away. To build comfort, or remove discomfort. And while I may appreciate my tools, I certainly don’t want more wrenches for the sake of having more wrenches. 

   The philosophy you have about money will play an enormous role in how lending money to family and friends impacts you, and your relationships. 

Things to Consider When Lending to Family and Friends

Don’t Lend What You Aren’t Prepared to Lose

   Just as I learned from lending my tools, sometimes what returns isn’t in the same condition as what was lent out.

   There are stories abound of family or friends never fully repaying the loan (or never repaying any of the loan). This ultimately damages the relationships that you have. While borrowing from the bank may have a higher interest rate, what is the cost of your relationship with that other person? 

   Bringing a wallet into a relationship often has a nasty habit of increasing the friction between the two parties.

   While the advice can never be as cut and dry as, never loan to family or friends, a good general guideline is to never lend more than you’re prepared to lose. That way, if the worst comes to pass, you aren’t left in a tough situation yourself. This might even give the relationship a better chance of staying intact.

Count on Life Interrupting the Payment Plan

   As the weekend stretched into weeks on end, my patience was fraying. Where were my tools? We had an agreement!

   That irritation at the constantly changing terms of our arrangement certainly tested my patience, a test which, when trapped in my own mind, I certainly failed.

   Lending money to loved ones is no different. While the bank might shrug and say tough luck, it's a whole lot harder to do that when you care about the person. And while at first it seems like you’re just being generous, if you’re anything like me, that nagging voice of doubt will eventually start muttering. And those quiet whispers aren’t pleasant.

   Whenever possible, don’t send over money “just to cover this week”, because that one week could very well stretch into one month. If you have a need for yourself in the foreseeable future, it might be best to hold off getting financially involved. 

Ask Questions

   There are times when you might want to help out with a monetary loan. In those instances, you should try to get as informed as possible first. Ask questions, so you can set your own expectations, and to understand the needs. It’s never easy to ask for help, especially the way North American culture has conditioned us to provide for ourselves and our own. If a friend or family member is asking for help, it can be a sign of deep respect, and quite likely will help you feel good about helping out.

   Setting your expectations right from the outset will help you control some of those nagging thoughts that pick away at the strands of your relationships. Ask the borrower questions like:

Why do you need the money?

Who else is lending you money?

How do you plan on repaying me?

When do you plan on repaying?

   These questions will help you understand both the need, and also the plan in place to resolve the debt. And the plan to repay helps the borrower too. Good intentions only go so far, and beyond that, you need a rock-solid plan.

A Gift to You (of sorts)

   While this advice on lending money to family and friends may save many relationships over time, there is another solution. Don’t lend at all. Instead, can you make a gift of the money (some, or all of the requested amount). The gift towards a worthy cause for a loved one will help strengthen your relationship, and avoid the potentially high cost of borrowing in the future. And that high cost of borrowing isn’t interest or fees. It’s friendship. 

   When lending money to friends and family, your philosophy will play a large role in how that sits with you. But even if you aren’t unduly attached to the all-mighty dollar, it is always wise to have a few rules of thumb. 

Don’t lend what you aren’t prepared to lose. And most definitely count on life interrupting the best laid plans.

If you are dead-set on giving your loved ones some assistance, other than loaning money there is always another option through gifting.

How To Become An Expert In Anything

   What do you want to be an expert in? What do you want to be known for?

   Zig Ziglar many times said if you spend an hour a day reading about a subject, within 5 years you will be one of the top in your chosen field. 

   This advice hits on a few key principles for your growth and development.

Consistency

   The first principle to growth is consistency. As Zig says, “an hour a day”. The same advice can be found in a wide range of cliches, like “an apple a day keeps the doctor away”.

   With consistent action you are able to build upon an ever increasing knowledge base. By reading an hour a day, you’ll be adding knowledge to an ever expanding base. Simply by exposing your mind to the right ideas, you will be cultivating a fertile spot in your mind for those ideas to germinate and grow.

   This process of consistently feeding your mind information and perspectives will help you deliver better results, faster. 

   To see the power of consistency in action, we can easily find examples of the wrong type of consistent action. Consistently not doing certain things. Consistently skipping the gym leads to a loss of physical muscle, and an increase in body weight. And while fitness is always an easy example to use, that principle of consistency is all around us.

   Consistently reading will let those ideas flower, leading to industry renown, and eventually leading to people regarding you as an expert.  

Focus

   The second principle of success can be found through the focus on a specific subject matter.

   By reading everything you can get your hands on in one specific area, you are able to expose yourself to many different viewpoints. Understanding the benefits and drawbacks of different approaches helps you stand out again as an expert in your field. Rather than a single approach to all problems, expanding your knowledge in one subject area lets you bring forth the best solutions to any given problem.

   This consistency in sticking to a subject matter is essential to becoming an expert. If instead you read one book each on many different subjects, you will no doubt be more entertaining at a party. But, if you want to be regarded as an expert, you need to go deep into one subject area. 

   For example, you wouldn’t ask an engineer for financial advice. Their circle of competence means they are best suited for construction and design inquiries. Years of study and reading has led to the engineer being uniquely qualified to handle engineering type problems. 

   Focus lets you build your own circle of competence, ultimately leading to you becoming an expert on problems that lie within that circle. 

Become an Expert in No Time.

   Consistency and focus. Those two principles will let you become an expert in any single subject matter in 5 years. 

   But how do you find the time to devote an hour every single day?

   Here is where we can borrow another piece of advice from Brian Tracy. Turn your commute into a mobile classroom. 

   That 30 minutes each way we spend on a train? We could be reading a book instead of flipping to the sports stats on the daily newspaper. Stuck in traffic for another 50 minutes a day? Throw on an audio-book or a podcast and turn that trip into a learning experience.

   Finding ways to increase our time spend learning without costing us any extra time is what Brian Tracy refers to as No Extra Time. This re-purposing of existing mindless activities that we are already doing helps us learn more with no extra time commitment.

   If you spend an hour a day reading about a subject, within 5 years you will be one of the top in your chosen field. By applying the principles of consistency and focus, you too can become world-class in whatever you choose. 

   That world-class status is even easier to attain, if you re-purpose some of the other things you are already doing. Finding ways to add learning into things you already spend time doing helps you become an expert in no extra time.

Lessons From My First Mentor

   Mentors play an important role in shaping our growth and development. We each find mentors to help us grow throughout our journey, but almost all of us have the privilege of learning from two special people. 

   While they go by many names, we call them mom and dad.

   As we celebrate Father’s Day this weekend, there’s no better time to reflect on the lessons our father’s taught us, and if possible, to say thanks.

   Here are a couple lessons I learned along the way.

Just do it.

   Each morning, if I was awake early enough, I would inevitably see my father don his suit, grab his briefcase, and head off to work. Every day, no exception. 

   No days when he simply didn’t feel like it. No days where his passion or love for work was diminished. No days that his energy levels just weren’t there.

   As I grow older, and maybe a touch wiser, I understand. We all face those days where all we want to do is pull the covers over our heads. Those days where we’re worn out, exhausted, just needing a break. My dad was no exception.

   But that loss of passion, of energy, didn’t matter. Dad lived out those immortal words of Nike, “Just do it.”

   Just do it means showing up, getting the job done, no matter what life throws at you. Just do it means no excuses, no bullshit. Just do it means the only way to get out of a rut is to keep on keeping on. Just keep moving forward.

Just. F*cking. Do. It.

There’s always someone in your corner.

   The journey of life has its ups, but also its downs. During those highs, it's important to celebrate the victories. The great hit in little league, the better-than-expected report card. No matter the size of the accomplishment, I always knew there was one guy celebrating with me on the sidelines.

   We all have victories, probably more wins than we give ourselves credit for. Take a page from dad’s playbook and reward yourself with a pat on the back and an ice-cream cone.

   But just as important as a pat on the back for a job well done is how we react to those inevitable stumbles. Those moments when we don’t live up to our potential.

   I can tell you countless stories of those times. The days when nothing goes right. The days when I started to lose faith in myself. The days I was so lost that I didn’t know which way was up.

   On those days I learned another lesson. Someone always believes in you.

   It is easy to find someone in your corner when everything is rosy. But even when you can’t see the light, there’s someone watching over you. And that knowledge, that belief in you? That will see you through the darkest of nights.

   As Winston Churchill said, “When you’re going through hell, keep going.” Don’t whine about it. Just keep going. Just do it.

   And know that on those darkest days, there’s always someone looking over you. Someone believes in you. Even when you struggle to believe in yourself, there's always someone in your corner.

To all dads everywhere, Thank-you.

 

Tell us in the comments; What lessons did you learn from your father? And if you can, let your father know how much you appreciate his tough-love teachings.

How To Find A Mentor

   The top achievers in our society often credit the efforts of their mentors for their successes. These mentors, the people who helped these top achievers on their journey through life, play a pivotal role in distilling life’s events into actionable learning experiences. The knowledge and wisdom passed along by mentors helps us avoid some obstacles, and get back on our feet faster after a setback.

   With bigger successes and better lessons learned, it is no wonder that mentors play a pivotal role in our achievements.  

   All that can be asked now is, who is mentoring you?

Mentors and Coaches

   When you are looking for a mentor, it is important to make the distinction between mentors and coaches. Both are critical for your success, but they serve very different roles. A mentor is someone who can provide you guidance on your journey. Someone that has walked the same path, and can leverage personal experience to give you insights into your struggles. 

   A coach, on the other hand, has a short term goal-centric focus. Your coaches will give you specific tasks aimed at developing critical skills that you need right now to reach the next level.

   In the 1960’s and 70’s, there was a basketball coach earning notoriety on the west coast. Coach John Wooden’s team went on to win the NCAA championship 10 times in the 12 year period from 1963 to 1975. For the players on the basketball court, Coach Wooden was exactly that; a coach. He helped them focus on a specific skill set; like shooting the ball. This specific short term goal-focused development of skills is the hallmark of coaching. But during his life, Coach Wooden also gave advice to millions of people through speeches. Drawing on personal life experiences, his advice helped shape the journey’s of countless leaders. That imparting of wisdom makes Coach Wooden a mentor to so many others who weren’t directly coached on the court.

Where Do You Find a Mentor?

   If mentors are critical for your success, where should you look for one? At the end of my teenage years, I was stumped. Like so many others, I was told that a mentor would help my growth, personally and professionally. But I was just a kid, still green around the ears. Who would take a chance mentoring such an unproven entity?

   It was some time later, after graduating university that I came to the first of two realizations. Nobody is going to offer to mentor me. It’s my life, and I alone am responsible for it. If I want a mentor, I need to go find one. And the person I choose to be my mentor should be someone that I deeply respect, someone I can learn from, someone who walked the path ahead of me.

   The man I selected, the one I wanted to learn from was Jim Rohn. There was only one problem. Jim had passed away a year or two earlier. 

   The second realization that I came across was this: it didn’t matter that I couldn’t call up Jim and talk about life. Throughout the years, Jim wrote books and delivered seminars. All the wisdom, support, and guidance I could ever ask for was stored in those pages, in those audio programs. 

   Understanding that you don’t need to have a personal relationship with your mentors was, as I would call it, a game-changer for me. I became a consumer of knowledge and wisdom from some of the top leaders, speakers, and entrepreneurs. And as I ingested lessons from my mentors, many of my own successes in writing and business could be attributed to the lessons that I learned.

   With the way technology has progressed, we are no longer limited in who can be our mentors. The list of resources, of knowledge, of wisdom passed down throughout the ages is nearly endless. All that is left for you to do is choose a mentor that you believe in, and tap into the wealth of information that has been left inked on history’s pages.

Can You Have Too Many Mentors?

   Now that we have gone from too few mentors, to countless mentors from all across history, the next question is: who should be your mentor? Can you have too many mentors?

   While the list of possible mentors might be nearly limitless, your mentor still needs to be someone that you can believe in. Someone who has walked the path before you, who can help show you the way. 

   While my learning started with my mentor Jim Rohn, he is not the only mentor that I have tapped into. I have utilized different mentors throughout my life for my health goals, my relationship goals, etc. 

   You can’t have too many mentors, as long as a few criteria are met. Do you trust their wisdom? And are their lessons learned from experience?

   What that really means is this: make sure your mentor has walked the talk. 

   You wouldn’t take fitness advice from an overweight personal trainer. Health advice from a sick doctor. Or spiritual advice from a politician. In the same vein, make sure that your mentors are people who are already where you eventually want to be. 

   When you follow someone who is going where you want to go, your path becomes a lot easier. That is the power of a mentor.

   With the right mentors, you too will become a top achiever. Who will you credit as a mentor to your next grand achievement?

Embracing Discomfort

   Brilliant golden rays shone down over the grassy hills this weekend, as 4 of us gathered at the tee box on hole 1. When my turn came, I placed the ball, fell into a comfortable stance, and started my back swing.

   Within seconds, the club came crashing down, striking the ball with a resounding smack. And the ball took off! 

   Rocketing off that tee, that ball shot straight to the right, landing somewhere well out of eyesight, and probably a few fairways over. 

   A couple more shots like that later, and my vastly more experienced golfing companions offered me some timely advice. My stance was too far away from the ball, and the only way to improve was to step closer. But there was one big problem. That felt uncomfortable, unnatural, almost unpleasant. 

   But the next shot was perfect. And as my entire golf game started to turn around, I started to improve. 

   While I might never become a professional golfer, there is certainly a lesson to be learned from that time spent chasing a little white ball around a grassy field. If you want to improve, you need to step outside your comfort zone.

Embrace Discomfort

   Just as my golf game was poor when I was stuck in the rut of “comfortable”, we can all find areas where we have become complacent.

   These comfort traps exist all around us. Staying in a job that doesn’t excite or push you anymore simply because it’s a job. Falling into the same old routine with a significant other, rather than pushing for new exciting experiences. Or sticking with your current spending habits, because changing them is uncomfortable, despite knowing that without change those financial goals will forever be out of reach.

   This state of comfort is actually costing us greatly. 2018 statistics released by Stats Canada show that the average amount contributed to savings for those under 35 was less than $5,000 annually. This number is alarmingly low, especially for those entering their prime earning years. But the comfort of current spending too often wins out over the sacrifice for long-term gain.

   Let us assume that retirement is in the cards for this average Canadian. $5,000 per year, put aside for 30 years in an investment portfolio earning 5% annually leaves a nest egg of just shy of $350,000. That amount won’t fund that dreamy retirement for very long. But small, uncomfortable cuts to habitual spending could drive that savings number much higher. A little discomfort, paired with compound interest over several decades would drastically change that retirement goal outlook.

   Being comfortable is the antithesis for growth. To grow, to develop, to become better, we need to embrace discomfort. Maybe that’s changing your financial habits. Or learning new skills to move to the next stage in your career. 

   By stepping out of that comfort zone, we are able to grow, to improve, and ultimately achieve more.

   Where can you step up to the ball? Where can you embrace discomfort in your own life? What changes will you make to shake up the familiar and expose yourself to new levels of learning and growth?

Best High Interest Savings Accounts

   What is the best high interest savings account in Canada right now?

   This question is important for determining the right accounts for your personal financial systems. Understanding the best place to store different buckets of money is essential for optimizing your financial systems. Savings accounts often rank close to the top when people consider their own financial needs. There are even a dedicated number of people who will switch banks multiple times a year, all looking for the best savings account.

   Unfortunately, this often misses the mark. While having a good savings account is preferable, the benefits are often too small to be really noticeable, in the grand scheme of life.

   With that, let us look into why your savings account is important, but also why this is a decision that should be classified more in the  “set it and forget it” category.

Why is your savings account important?

   Your savings account is perhaps the very foundation of your financial fortress, and the starting point for future financial endeavors. Your emergency fund, the first real “investment” that you should be making, should be stored in cash. This safety net will see you through the ups and downs of life. With any luck, your emergency fund will sit there untouched for long periods of time. As a result, having that cash stored in a safe, accessible place is ideal. 

   Recall that your emergency fund should be stocked with 3-6 months of living expenses, and even upward to 12 months of living expenses. This is a sizable amount of cash, and to make the most of it, should be stored in a high-interest e-savings account. This will reduce the impact of inflation on that emergency fund, if only by a small margin.

   Since these cash savings are stored in a cash savings account, it makes sense to secure the best high-interest account that you can.

Why your savings account choice shouldn’t change often.

   Too many people focus solely on the interest rate provided by their savings account, even going as far as to switch banks to get the latest and greatest promotional offers and rates. While this may net you an extra half percent or so on your cash savings, the actual dollar value simply isn’t worth your time to swap banks.

   Let’s assume you have an emergency fund of $ 30,000. You receive $ 300 per year in interest per percent of interest paid by your bank. Differences between top high-interest accounts, and the general high-interest offerings are probably less than 1-2% annually. What that means, is that the interest difference between various high-interest accounts is $ 600 or less, on a 30,000 dollar balance. Given the number of hours it takes to change banks, the hassle is often not worth it. These changes only make the illusion of progress towards your financial goals, when in reality your time is better spent elsewhere, such as improving your vital career skills, or refining your goals. 

A better approach to savings accounts.

   Rather than chasing the highest interest rates on savings deposits, it is far better to examine all the offerings at your chosen institution. This includes account fees, accessibility of your money, any extra service charges (like EFT fees), as well as investment options. Simplifying the services you use will save you both money on fees, and more importantly, save your time.

What High-Interest Savings Accounts are “best”?

   Ensure you are taking into consideration all your financial needs and goals, and then pick the account that fits right with your plans. To help you get started, here are some of the available high interest accounts from some of the more popular financial institutions. Remember, these savings accounts are an essential piece, but still only one piece, of your financial puzzle. (Note: I am not affiliated with any of the institutions mentioned below.)

Financial Service Provider Account Requirements Interest Rates (Annual)
RBC No account minimum 0.5% (after promotional period ends)
CIBC No account minimum 0.2% (after promotional period ends)
TD Canada Trust $ 5,000.00 0.05%
Scotiabank No account minimum 0.15% - 1.35%, depending on length of time without withdrawing any money
BMO No account minimum, $200 contributions monthly to unlock the best interest rates 0.05% - 0.7%. Comes with 0.65% interest rate boost if minimums are met.
Tangerine No account minimum 0.25% (after promotional period ends)
Wealthsimple No account minimum 0.9%
EQ Bank No account minimum 2.00%
Alterna Bank No account minimum 1.9%

   Each of these accounts offers their own respective benefits and draw-backs. Remember, when making the decision about where to store your emergency fund, it is best to consider your other financial needs. 

   For example, I use other RBC and Wealthsimple products, such as investment accounts and credit cards. Keeping my savings accounts at these two institutions makes the most sense for me, providing visibility and access, despite not carrying the highest interest rates on the list.

   Making the right choices starts with selecting the right accounts. Eliminating  fees, and maximizing interest, in that order. Fees will shrink your financial resources far faster than interest can replace. Once that crucial first step is taken, sit back, relax, and move onto more important (and profitable) areas of your life, both financial and elsewhere. 

   The right knowledge, paired with decisive action will lead you to the financial success you strive for.

 

Interest rates and account details available as of June 1st, 2020.

Lessons on Success: Coronavirus Edition

   What have you learned from the COVID-19 pandemic?

   As Canada starts its second slow thaw of the year, this one from self-imposed isolation measures, it is a good time to reflect on some important lessons learned over the past several months. Here are three of the lessons that I learned: 

Appreciating your Financial Risk Tolerance

   The stock markets hit their low of the year (so far) in March 2020, suffering a 20%+ (S&P 500, DJIA) decline over their previous highs. As the bottom fell out of the stock markets, some people felt their stomachs drop too. 

   This provided an excellent barometer for understanding if we were investing in the right things for our own individualized risk tolerance. If you were nervous, or even a little scared, it is probably best to hold a more conservative portfolio. If on the other hand you were okay with, or even excited at the prospect of investing more, you are likely investing with the right level of risk tolerance. 

   Financial risk tolerance is a very personal decision, but one that can greatly impact both your financial life, and your appreciation of life itself. Stressing about money concerns certainly dulls our sense of enthusiasm. Getting the right mix of risk and return can help you sleep better at night. 

Who Do You Miss?

   As we have distanced ourselves, we more visibly saw the value and nature of our relationships change. While the way we communicated was definitely different, there were people we regularly saw before COVID that we simply didn’t bump into any more. 

   This provided an interesting look at our relationships with others. Who was still around, making an effort to send a message or a phone call? And, who wasn’t? Do you miss people you haven’t seen in a while?

   It is very infrequent that we truly step back and evaluate the quality of our relationships. Taking a look now that drastic lifestyle changes have impacted us helps deliver some clarity over who really is important in our lives. 

   Is there someone important to you that you haven’t spoken with in a while? Take 1 minute and send that person a quick text or message. 

The Habits of Success are Easy

   This final lesson rang especially true in the last couple of weeks, as work increased it’s demands on my time. Thus far during COVID I retained my fairly regimented workout regime. But as work picked up, my yoga mat simply lay there. Unused. No more than 5 feet away.

   That is when it hit me.

   The habits that lead to success are easy to do. 5 feet away from where I sat for 14+ hours a day was a place to do push ups, crunches, and yoga.

   But.

   The habits of success are even easier not to do.

   This last lesson hit harder than the rest. Success, or the habits that lead to success, are easy to do, but also easy not to do. Making the choice day after day to do the small, positive action will lead you to a life of far greater success and achievement than any one grand action.

   Have the past few trying months taught you any lessons? Let us know in the comments.

Working from Home? Getting Your Taxes Right

   There is no doubt that COVID-19 has changed the way many of us operate in the world. While social distancing measures are slowly being lifted across the world, there is no doubt that the way of life for many of us will never quite return to pre-pandemic levels. 

   Already there have been several large businesses who have made the decision to have employees work remotely on a permanent basis. Even the company that I work with has started the process of terminating office leases for several of our divisions, transitioning to a full-time remote environment to save on office costs. These moves will likely impact you, or someone you know, pushing people to create home office environments to accommodate these changes. What would a push towards WFH (work from home) actually mean for you?

Tax Implications of WFH

   In Canada there are federal tax implications for home work spaces, allowing you to deduct home office expenses from your income. This helps you reduce the income taxes that you pay, which ultimately leaves more money for other areas of your life. To qualify, one of two conditions must be met: 

  1. The space must be where you work more than 50% of the time.
  2. The space is used only for the purpose of generating your employment income.

   What these conditions mean is that you either; work from more than 2.5 days a week, or that you have a dedicated home office. This is an important distinction, because as the past few months has shown us, we might work from home a substantial amount of the time, while not having a home office set up.

   This certainly applies in my case, where my living accommodations aren’t large enough to provide room for a separate office space. All space in my condo is for both living and working. Therefore, I would not qualify by having a space reserved solely for generating employment income.

You have a “Work-space in the Home”, now what?

   Even if you do work from home more than 50% of the time, or have a home office. If you are an employee, there are a few other criteria for claiming work expenses. As explained in the bulletin for the Income Tax Act IT352R2, employees must be required by contract to provide the office space. Also, expenses incurred cannot be reimbursed by the employer. 

   What this means is, in general, if you have a desk provided to you by your employer, you likely do not qualify. Likewise, if your expenses are reimbursed, you cannot also claim this as a tax deduction (sorry, your employer has already claimed those expenses).

   As employers make the switch to different office space arrangements though, those lines become more blurred. Some offices offer “hotelling” of their desks, meaning the employer isn’t providing you your own work space. In increasingly grey areas caused by these working arrangements, it is best to have your employment contract stipulate that you are expected to maintain your own work-space at home.

   Along with the employment contract, your employer will also have to fill out Form T2200 that confirms the requirement of a home work-space, as well as how much of your expenses are reimbursed.

What expenses can be claimed?

   We often think of the more obvious expenses, like printer paper or cell phones, but there are quite a number of “overhead” expenses that can also qualify. These expenses are based on a reasonable cost allocation. For example, if your home is 1,000 sq ft and your home office is 200 sq ft, you would be able to claim 200/1,000 = 20% of certain expenses. Some eligible overhead expenses are:

  • Hydro (Electricity)
  • Internet and Phones
  • Maintenance fees
  • Rent
  • Property taxes
  • Homeowner’s Insurance

   Making the best financial decisions means being informed. As the way we work transforms to fit our “new normal”, this extends to how our work-from-home spaces can be used to reduce your taxes. Knowing where to look to find savings on taxes is just one way you’ll be positioned to thrive in the year ahead.

It’s an Emergency: Spending your Savings

   The numbers are out, and they aren’t good. April unemployment numbers were released by Stats Canada this week. 

Some of the key points mentioned:

  • Unemployment rose to 13%, a number that doesn’t fully include recent job losses. Taking into consideration other elements, like self-employed persons who worked 0 hours, that number climbs higher than 17%.
  • “21.1% of Canadians lived in a household reporting difficulty meeting immediate financial obligations.”

   While these numbers don’t paint a rosy picture, the question becomes: 

What can you do to prepare yourself during the COVID pandemic?

   The answer to that question falls into two categories; those who aren’t seriously affected (yet), and those who are.

   If you haven’t been dramatically adversely affected, your focus should be on strengthening your financial fortress, and exploring ways to increase your value. Check out the 5 Steps to Recession Proof Your Life.

   If on the other hand the COVID situation has hit you hard, the questions you face are far more concerning. While the focus is still on cash, growing your reserves might not be an option. At this stage, you need to be eliminating debts and freeing up cash flow (i.e. cutting the cord on some of those subscriptions). Then it’s time to look at where to draw money from.

I’ve lost my job. What do I do now?

   With unemployment numbers jumping to unprecedented highs, and far more rapidly than ever before, this financial downturn has struck hard and fast. Next steps for you should involve reversing your “good times” financial allocation.

It’s an Emergency. Use your Emergency Fund

   If you have been following the financial advice of Business Minded, or any personal finance professional, you likely have some funds tucked away in an emergency fund. Now is the exact time that you’ve been waiting for. Start drawing down on your emergency savings to pay your bills.

   These days come rolling in full of uncertainty, will you go back to work next week? Next month? Many people are seeing their situations as a temporary inconvenience, and this is leading to some risky financial behavior. Expecting to return to work, and therefore floating your expenses on credit cards or other forms of borrowings is exceptionally risky, and likely to place you in a worse financial position.

   While it may be hard to see that wonderful looking emergency fund start to deflate, it is far better than skating on thin ice that comes with borrowed monies.

   Once the emergency fund is used up, you should then start looking at liquidating your investments, starting with non-tax leveraged accounts. By the time you get to this stage, you should be seeking out professional guidance, as your unique situation needs to be more closely evaluated. 

   As the economic environment worsens, it’s time to use your emergency fund for what it was designed for, emergencies. Drawing down on those hard-earned savings will help you weather this economic storm, and allow you to come out on the other side with your financial fortress intact.

Investing Advice from The Berkshire Hathaway 2020 Annual Meeting

   This past week saw the release of Berkshire Hathaway’s 2020 annual meeting. Along with the financial results of the company famously headed by Warren Buffett and Charlie Munger came some commentary from the widely recognized Warren Buffett.

   While the annual meeting was over 5 hours, there were a few snippets that come as timely words of wisdom from one of the world’s wealthiest people. 

Never bet against America.

   Throughout the years, America has proved its resiliency and ability to overcome tough times. This commentary can be more broadly applied with the simple yet powerful statement, bet on humanity.

   While we might be currently facing one of the most challenging periods of our lives, one thing is true. We will survive. 

   While I would caution the mentality of investing as any form of gambling, there is one hand that I would undoubtedly go all-in on. That hand is that we will not just go through this, we will grow through it. We will become better, faster, stronger from the challenges that we as a species are facing right now.

Buy America, And Forget About It.

   As with the first piece of sage advice, Buffett also makes some commentary on the ability of the average investor. Most people are better off taking that bet on human progress and investing in a total market ETF. 

   When saying this, Buffett recognizes that some people like him have careers in investing, and as such devote an above average level of time and attention into investing. These dedicated investors are the ones making individual stock picks based on years of research and experience. For most of us who are not combing through annual reports on a daily basis, taking a broad stance is better suited to our needs and our experience levels. 

   These total market ETFs allow us to place a bet that some of the best companies will survive and thrive. And that bet on human progress hasn’t been wrong, in the long run, ever.

   What can one of the world’s most successful investors teach us? Bet on humanity. Together we will not just survive, but we will thrive.

You are Here: Exploring the World Inside

   The sun was shining this week, and it seemed at least for a few hours on Saturday that spring warmth was starting to arrive in Canada. With those golden rays, thousands of people headed out to the lake, for some socializing while traversing the trails.

   But there was one issue with this otherwise picturesque scene.

Social Distancing is in effect.

   Thousands of people were risking their health in an effort to escape their boredom for a few hours. 

   In this always-on world, we have lost the art of simply being by ourselves. One of the greatest tragedies of the 21st century is the inability of man (or woman) to sit alone with their thoughts. 

   The loss of this introspection makes attaining higher levels of success difficult. Afterall, how can we aspire to greatness if we don’t acknowledge where we are? Finding our “You are Here” on the map of your success is the essential first step to charting a course to that destination. As you practice social distancing this week, think about your “You are Here” point in your life.

   Below are 5 questions to help you find that starting point. Be sure to answer these questions for all pillars of your life: Career, Financial, Physical health, Mental / Spiritual health, Relationships with family and friends, and your Romantic pursuits.

What are your greatest strengths? Your weaknesses?

   This question helps you focus on your past efforts, your past development. Self-awareness in all aspects of your life helps you put the right plans in place. Understanding your assets and liabilities will help you leverage your unique talents and abilities, multiplying the effects of your efforts.

What opportunities are present right now in your life?

   Re-framing how you look at the world helps see challenges in a new light. With so much fear and negative emotion being projected by the media, looking for those rays of sunshine in all areas of your life is a breath of fresh air. We often find what we look for, so why not look for hope and opportunity? That sounds like the world I want to live in.

What does success look like for you?

   This can be perhaps the most challenging question to answer, or the easiest. Through my work at Business Minded, I have found that people have either not taken the time to think about this, or know with definite purpose where they are headed and why. Unfortunately, the latter group is certainly the smallest. Take some time in quiet reflection this week, and think about your life, where it’s headed, and the value of reaching those goals.

Are you on the right path?

   If your previous answer was the destination you are aiming at, where do you stand now? Are you on the right path, or do you need to make some changes in direction? Are your strengths being capitalized on? Are the opportunities present in your life also on the same path? Too often we chase good ideas and opportunities that don’t lead towards that end goal. Far worse than being distracted by a bad thing, is being distracted by a good thing. 

What is the first step on that path?

   If you’re on the right path, great! What’s the next step? But if you need to make some course corrections, what is the first step that you can take? Maybe this is something as small as picking up a book, or taking a course to refine your skill sets. The idea is to identify what you can do right now to begin building that dream. Don’t try to take 100 steps, just focus on taking that first step. The rest of those 100 steps will come in time.

   Looking inside ourselves, reading our own hearts can be a daunting task. Especially if you aren’t in the regular practice of exploring your soul. Take some time this week to explore you. There is beauty in there, when you take the time to look and smell the roses.

How to Grow with Goals

   Are your goals helping you grow, or stunting your growth?

   There is an extremely intriguing sea-creature in the hermit crab. Unlike many other species of crustacean, their exoskeleton is soft in the abdominal area, leaving them vulnerable to attack from other ocean predators. To protect against these attacks, hermit crabs live their lives in a shell, carrying their protection around with them. As the crab grows, they need progressively bigger shells to grow into. Without a bigger shell to move into, the little crustacean faces a very challenging life, and sometimes even death. 

   Our goals act just like these shells that the hermit crabs move into. The right goals will provide you room to grow. But just like these hermit crabs, your goals need to grow with you over time, else they could stifle you, suffocating your future development.

Goals: The Right Size Shell (at the right time.)

   The right goal should be attainable, like a shell that you can grow into. If you select something too ambitious, that is like crawling into a shell that is too big, too heavy. When there is no chance of success, your goal will crush you beneath the enormity of the undertaking. This is why the hermit crab graduates to larger shells in stages throughout its life. If our oceanic friend tried to hop into its full-grown shell right from birth, it wouldn’t be able to move around. Suffering under the weight of its shell, the crab would surely die.

   Similarly, a shell too small would hold the hermit crab back from its full potential. Your goals do this to you as well. When your targets are too easy, the goal too small, you don’t allow yourself the room to develop further. 

   While a few of us do set lofty goals, almost everyone falls into the second trap. Goals that are too small. These “goals” that we set are designed to ensure that we hit the mark every time. Without the chance of failure, we are depriving ourselves of the opportunity to learn from mistakes.

   The purpose of a goal is to give yourself something to strive towards, but that doesn’t mean victory should be assured. Quite the opposite in fact, you should have the very real chance of failure. It is this chance of failure that pushes you to grow, to develop, to become more than you were when you first set the goal.

   It is quite common for a hermit crab to change shells several times in rapid succession, testing out the various shells until it finds the right one for the moment. Your goals should be the same. There is no shame in adjusting your goals, making them just the right amount of stretch but maintaining a reasonable chance of success. Just like the hermit crab, you need to allow yourself room to grow, so that you will be ready to move on to bigger, better pastures.

   Take a look at your list of goals. Which ones on that list are too hard? And which are too easy? How can you modify your goals to ensure you have ample room to grow as you chase success?

   Growth, becoming more than what you are now, doesn’t come by accident. By carefully selecting your next shell, you can continue growing. And with your growth comes the level of success and achievement you could only dream of before.

   With the right growth, the right goals, the world is your oyster.

5 Steps to Recession-Proof Your Life

   Recessions are a normal part of the ebbs and flows of life. With that truth, recessions present their own challenges and opportunities. If you have a recession-proof plan, you could be well positioned for the next recession, whenever that finally comes. The economic slow down spurred on by the COVID-19 pandemic could very well trigger a recession event later in 2020. With that possibility looming on the horizon, it is not too late to build your recession-proof plan.

   There are 5 areas that need to be in any recession-proof plan, primarily dealing with cash. It’s been said that cash is king, and that is especially true during a recession. With employment markets and financial markets depressed, as is usually the case during a recession, having cash available provides a protective barrier around your life.

Emergency Fund

   Much of that cash should be held in an Emergency Fund. You have no doubt heard the advice before, 3-6 months of living expenses saved in cash. This will provide a barrier in case of the unexpected, like a job loss that sometimes comes with the shrinkage of the economy. If you don’t have that money saved in cash, make that a priority. This barrier provides you some protection, and gives you more time to make tough decisions, if needed. 

   Even if you have an emergency fund, now is a good time to increase that further. Three to six months of living expenses might be recommended, but extra cash never hurt anyone during a recession. While I have my own Emergency Fund, I am continuing to grow it each month. This will keep me safe in the event that my paycheck stops coming. If I follow the rest of my Recession-Proof Life plan, that extra cash cushion would be great to reinvest in the financial markets as the economy starts to recover. 

   Where should you store that cash? While interest rates have been slashed repeatedly in the past few weeks, a high interest e-savings account is still your best bet. In North America you can still find accounts at close to 1%, which while not much, is better than the 0% many large bank chequing accounts are offering.

Reduce Debts

   Cash is king, and debt is an obligation to pay some of that cash to someone. To protect your cash while you build an emergency fund, you also need to reduce any debts that you have. This means paying down all your consumer debt, starting with the highest interest rate loans first, usually credit cards. With investment returns being unpredictable at the best of times, and even more so now, taking that guaranteed win of savings on interest is important. 

   Once you are clear of any high interest debt, focus on paying down some of the other loans that you have. These might be your Student Loans or Personal Line of Credit. While there are different methods suggested for getting out of debt, in an effort to save you cash, I am only suggesting the financially most beneficial method. Paying off the highest interest rate debt first.

Trim the Fat - Reduce Unnecessary Expenditures

   Over time we sign up for a variety of services. When we’re looking at preserving our cash, it might be time to evaluate the value of these services. Depending on the severity of your situation, you might want to completely cancel these subscriptions, or it might be worth a call to discuss lowering your rates. Many companies would rather retain you as a customer than lose you completely, and often this preference makes them more open to negotiating your rates with you.

   Take a careful look at where you spend your money. Subscriptions are an easy area that savings can be found, but we often pick up other financial habits during times of prosperity. These habits aren’t always healthy. Evaluate where you are spending your money, and make changes if necessary. 

Diversify Your Income Streams

   Recession-proofing your life also means you need to look at where your money is coming from. For many of us, our salary is the primary source of income. But that doesn’t mean that it needs to be our only source of income. There are plenty of ways to generate income outside of your 9-5 hours, and now is an excellent time to explore those opportunities. The side-hustle has received a substantial amount of attention over the years, and for good reason. Finding something that you enjoy, that you can earn money doing, if only part time? To many of us, that extra freedom of getting paid for a passion project is exhilarating. And, with the internet, getting started couldn’t be easier. 

   Of course, the side-hustle route isn’t for everyone. Maybe you would rather go all-in on your career, reaching up the rungs of that corporate ladder. You can also take control over your income, by diversifying your investments into something that pays dividends / interest on a regular basis. This way you can bring in a little more positive cash flow each month. While those investments might not replace your full time income, every little bit helps, especially when recession-proofing your life.

Grow Your Skills

   One final way to recession-proof your life is to remember your professional development. What skills do you need to develop to help take you to the next level of your career?

   Recessions are usually accompanied by a rise in unemployment, and current events in 2020 are no different. With a reduction in the Canadian labor force of over 1 million people in March 2020, jobs are becoming even more competitive. That prompts the question, how do you stand out among hundreds of candidates? The answer: by becoming more valuable. And that answer doesn’t just apply to those who are out of work. By continually developing your skills and increasing your economic value, you will stand out among your peers, and be more likely to retain your job in the event of layoffs. 

   Education has become more accessible than ever with online learning, and with world-wide social distancing measures in place, many people are finding they have more time on their hands. Directing that time at developing or enhancing your skill sets will ensure that you are ready for whatever the future holds.

   Recession-Proofing your life starts with the right plans. What are your plans to manage your finances? By building an emergency fund, you are able to withstand any financial storm. This is aided by paying off debts, and cutting back on unnecessary spending. Once you’ve taken care of the cash outflow, you should look at the sources of that cash. How can you diversify so that you have income coming from multiple streams? The final element of your recession-proof plan is in making you more valuable. What are you doing to develop your skills?

   Recessions are a normal part of life, having the right recession-proof plan will make sure you are positioned not just to survive, but to thrive.

Be Realistic With Your Risk Tolerance

How is your stomach for risk tolerance?

   At the time of this writing, the S&P 500 has a -22.97% return YTD in 2020. As we look at investing from an analytical standpoint, it is reasonable to assume this is just another market crash. Similar to the dot-com crash of early 2000’s, the mortgage backed lending financial crisis in 2008, and a collection of other dramatic financial events in the history of the stock market. In the long run, it is reasonable to predict that human progress will continue to drive long-term financial success in the markets. 

   But, that doesn’t mean that the financial events caused by the coronavirus should be ignored. The recent stock market decline has provided an excellent barometer for your risk tolerance.

What is Risk Tolerance?

   Risk tolerance is simply your ability to withstand fluctuations in the markets, which does mean the occasional loss.

   The more risk tolerance you have, the less concerned you are with short term fluctuations. The converse is also true, the less risk tolerant you are, meaning you are risk averse, the less you are willing to lose money even in the short term.

Why is this important?

   Depending on where you are in your investment life cycle, you may want to adjust your risk tolerance. For example, if you are young and just getting started investing, you likely will be more willing to take losses for the chance at higher gains. Young people typically don’t have as much to lose, and have time on their side to weather out any financial storms.

   As you get older, and that nest egg grows in size, many people become less risk tolerant. This is especially true when you are getting closer to the age of retirement, when large swings in the stock market can drastically impact your financial fortress, when you need that money most. For more information on the impact of stock returns on your retirement, check out our article on sequence risk.

Why is this important now?

   For the past decade, the stock market has been on one of the longest upward runs in history. This likely influenced people’s self-evaluation of their risk tolerance. Seeing gains day after day for 10 years increased the FOMO (fear of missing out) of those prosperous times. It is quite easy to say you are “open” to the normal fluctuations when all you see is those double digit returns in the black. 

   The early part of 2020 has been a reality check for many people. Those negative returns have opened people’s eyes to the realities of investing in the short term; sometimes you win, sometimes you lose. If you have found yourself losing sleep over the losses incurred over the first quarter of 2020, perhaps your risk tolerance was set too high. 

   This is something you need to evaluate for yourself, taking into consideration your unique situation. Are these recent losses impacting your ability to enjoy life? Are they causing an undue amount of stress? Or perhaps you were right in your assessment of your risk tolerance, and you aren’t fazed. Maybe you even recognize the tremendous opportunities that lie in the crashing markets.

What to do if you’ve misjudged your Risk Tolerance?

   Irrespective of the investing choices you may have made in the past, it is important that level heads prevail. If you think you were previously too risky, do not sell at a loss if you have any other options available. While nobody can tell how long the markets will be depressed, or even how low they will go, one thing is certain. We will survive. And, just as importantly, we will thrive again. What you can do going forward is change the asset mix that you invest in on a regular basis. By making an adjustment on your future contributions, you will over time change the asset allocation mix of your overall portfolio. This way you can learn from recent events, and avoid locking in any temporary losses.

   Investing provides a way to make your money work for you. But it isn’t a guarantee that you will always like the outcome, especially in the short term. Understanding your risk tolerance will help you invest wisely, and sleep better at night.

Investing in Stock Markets: 101

   The stock market is one of the most common areas to invest in. But what exactly is the stock market?

What is the Stock Market?

   The stock market refers to all markets and exchanges where you can buy and sell shares in public companies. In aggregate, the stock market refers to all publicly traded companies in the world. Ownership of these companies is represented by shares of ownership, or shares. Most countries have their own exchanges, though with the global nature of business, consumers can buy and sell shares across exchanges around the world.

What is a Stock Exchange?

   A stock exchange is a collection of companies deemed to be traded on that exchange. For example, the New York Stock Exchange (NYSE) and/or the NASDAQ is where many of America’s public companies can be bought and sold. Toronto has their own Exchange, through the TSX (Toronto Stock Exchange), and London has their own Exchange (LSE). Basically, a stock exchange is just a large store where you can buy and sell a variety of financial instruments, from shares to bonds, and even options. The shares on offer at each “store” may be different. For example, Enbridge is a Canadian energy company, and can only be bought or sold on the TSX.

The Stock Market and Stock Exchanges are Different. Why is that important?

   The stock market refers to the all-encompassing marketplace for buying and selling financial instruments, including shares. Each exchange operates on their own currency, for example the TSX buys and sells in Canadian dollars, the NYSE and NASDAQ operate in USD, and the London Stock Exchange operates in the British Pound. This means that buying and selling across international exchanges opens you up to foreign currency fluctuations. Also, since the exchanges are based in a specific country, that country's tax laws will also impact your investments.

Investing in Exchanges: ETFs and Index Funds

   As an extremely popular method of investing, Index funds seek to track the overall performance of stocks fitting a certain set of criteria. Some of the most popular indexes that are reported on are the S&P 500, or the 500 largest companies traded in the USA. Another index is the Dow Jones Industrial Average (DJIA), which is comprised of 30 of the largest companies in the US. By investing in ETFs, investors are able to diversify within an exchange at a relatively low cost of ownership. Rather than purchasing one share of each company in the market, an ETF allows you to purchase the general movement of the exchange as a whole.

Market Fluctuations in Today’s Economic Climate

   Understanding the difference between stock exchanges and the stock market in general is even more important during these difficult times in 2020. As the coronavirus is a global event, every country is impacted. But the impacts are not felt equally across the entire world. This means that the business disruption will be more severe in some countries than in others. As a share is simply a purchase of ownership in a company, certain companies and exchanges will be affected more severely than others.

   To illustrate this, we can look at the returns for the TSX Composite Index and the S&P 500 for the week of March 23 to March 27, 2020.

Opening and Closing Level of the TSX and S&P 500 for the week of 3/23/2020.

   In that time, the TSX saw an increase in value by 7.5%, while the S&P 500 grew 10.93%. How each government responds to the health crisis will influence how exchanges perform in the overall market. To diversify your investments, it is wise to consider investing beyond your local exchange. But, the calculations aren’t always as straight forward, depending on the accounts you are using, tax laws can impact your returns quite substantially, especially when foreign markets come into play.

US Withholding Taxes on Stocks (For Canadians)

   At the risk of diving too deep into the rabbit hole, it is worth a quick look at US withholding taxes. The two largest stock exchanges in the world (based on market cap) are located in the US, the NYSE and NASDAQ. Given the size of these exchanges, it is extremely likely that you will invest some of your financial resources on these exchanges. Canada and the US have tax treaties which allow for preferential treatment, but most investment proceeds in the form of dividends and interest are subject to withholding taxes. These additional taxes can be avoided however, if you are making these investments in a qualified account.

   The accounts that qualify for this favourable tax treatment are in general your retirement accounts, such as an RRSP. This is an important distinction to make, because the TFSA, which is another popular Canadian tax advantaged account does not receive the same special treatment for US holdings.

   If you are using an account that isn’t your RRSP to invest in the US, you will need to file a tax form with the Internal Revenue Service (IRS) to take advantage of the Canada-US tax treaties that reduces (but not eliminates) foreign withholding tax. This form is the W-8BEN.

Summary

   Investing is an important element in everyone’s financial plan. The stock market is one place where many of us will invest some of our money. Even in the stock market, there are different subsets, groups of companies in different regions, traded on different exchanges. These exchanges operate as stores, selling slightly different merchandise. Some of these stores will do better than others, as global events impact different regions at a different scale.

   Aside from investing in companies around the world, the savvy investor also needs to know how currency fluctuations and tax laws will impact their returns. With the right mix of investment accounts, you can capitalize on the benefits of diversifying into different exchanges. RRSPs receive preferential tax treatment in the form of eliminating withholding taxes on interest and dividends from US sources. When considering investing in the US, it is more beneficial from a withholding tax standpoint to use the RRSP over the TFSA, as long as your objectives for both accounts are the same, investing for retirement. For all other investments on US stock exchanges, it is important that you file a W-8BEN to take advantage of the existing tax treaties between Canada and the US. This will ensure you aren’t leaving money on the table. After all, less taxes paid means higher returns for you!

   Knowing how to use the tools available to you will help you build the right financial plan for you. Financial freedom isn’t a lofty ideal, with the right knowledge it is a realizable goal.

How to Invest during Market Volatility

Wall St Sign
Credit: Adobe Spark
Wall St Sign Credit: Adobe Spark

   Are you able to see good deals on stocks and ETFs in today’s markets? If you had asked yourself this question a month ago, likely you would have been able to provide a number where you would absolutely love to buy at. 

   Take VGRO for example. The Vanguard Growth ETF portfolio is one of the most popular ETFs to hold. It is a balanced fund, representing all sectors across major North American stock markets. 

Note: The following example is for illustrative purposes only. I am not affiliated with the Vanguard ETF’s, nor should this constitute an investment recommendation. As always, investment decisions should be made based on professional advice and proper due-diligence. 

   On February 15th, 2020, VGRO was trading for $ 27.71 CAD. Without a doubt, most investors interested in this fund would have loved to get their hands on a share for $25.00 CAD.

   Fast forward to March 13th, 2020. VGRO closed the markets at $ 23.29 CAD. Is VGRO a good buy at this price?

   If you had done the research and determined that $ 25.00 CAD was a good price based on the underlying assets, making the purchase decision at $ 23.29 CAD should be a no-brainer.

   Assuming that is the case, why are people so fearful of buying into the market during current volatility?

   The answer lies in how close people are to the decision. While $ 25.00 might be an excellent price to buy VGRO at, the concerns about where the current bear market will bottom out at has people who were rational for years now acting irrationally. The cure for this is in placing Limit Orders. 

   A limit order allows investors to set a price that they are willing to buy or sell at. In the above example, if buying VGRO was a good deal at $ 25.00, a limit could be set to make that purchase once the price reached the $25.00 mark. In a long-term buy and hold strategy, this allows the investor to make smart, forward thinking investment decisions regardless of market conditions. 

   In this way, making the choice to pay $25.00 is actually easier than the decision to pay $23.29 right now. By eliminating the short-term emotions, investors can make sound investments at good prices.

   The other benefit of this type of strategy is to reverse the emotions that you feel. Rather than being fearful as the markets are dropping, you get excited that you are closer to the bargain prices that you identified. This means you aren’t waiting and anticipating the bottom of the market, which is good because timing the market is impossible. Instead, you are doing your research ahead of time, and waiting for your chosen investments to go on sale.

   Of course, the best way to invest for almost everyone is to skip all of this. Automating your investments will let you invest on autopilot, capturing any discounts currently found in the market. But if you are looking to invest a little more play money to take advantage of deep discounts currently available, try looking into limit orders. This will help you make rational, informed investment decisions without succumbing to the emotional roller coaster of the daily market swings.

Evaluating Routines: Spring Cleaning in Your Life

   With measures taken to combat COVID-19 including social distancing, millions of people have had their daily lives radically changed. Work has been radically transformed as people are either temporarily displaced, or embracing remote working options. Coinciding with spring's arrival (in the Northern Hemisphere), this provides an unprecedented opportunity to evaluate our recently upended routines.

   As a result of this self-imposed quarantine, this year spring cleaning is taking on a whole new meaning. We are finding out what elements of our lives have changed (a huge number of things changed). And most importantly, how these changes are impacting the rest of our life.

   My regular routine, which I had thought was carefully constructed has been radically altered. The local gym has closed doors, meaning I need to find different methods for working out. While I previously had no difficulty making it to the gym every day, by moving that workout space into the kitchen, it becomes increasingly difficult to separate what is fitness time from food time, and even work time. Work has also taken on a new meaning - regular office hours are harder to enforce when my devices are within arms reach 24/7. The chaotic aftermath of losing my regular routine has left many openings in my schedule. Left to their own devices, those openings threaten to disrupt the progress that I’ve made.

   These experiences are not mine alone. With no commute time people have reported sleeping in longer, and staying signed into their work well past their previous “punch-out time”. These changes aren’t necessarily a good thing. While many of us could benefit from an extra few minutes of shut-eye, hitting the snooze button repeatedly for an hour is not the answer. Working later hours, being plugged in all the time also has negative repercussions. With no clear boundaries over work and home life, they bleed into each other. This means we’re always “on”, and never take the time to power down and recharge. As a result, despite putting in longer hours, for many people their overall productive output has decreased.

   For spring cleaning this year, we need to evaluate what our routines were, and determine what has changed in the past few weeks. Where are the areas that are no longer being served by your previous routine? Were there areas in your previous routine that weren’t driving success in your life?

   Take a look at the pillars of your life. How are your routines serving your greater success?

   Physically - is your health where it should be? What are you doing to stay active, to stay healthy? When, for how long, and how often do you workout? As many changes have impacted our lives, are you staying accountable for your own physical wellbeing? If you are finding it challenging, there are countless free and paid apps that can help you with ideas for fitness. I have found myself engaging in daily yoga practices guided on Youtube, in addition to strength training apps to keep me fit and healthy during these times.

   Mentally / Spiritually - what practices are you doing to reflect? How do you unwind? What are you working for? What are you grateful for? Proper mental practices are even more important, as isolation can be a tough burden to bear. Gratitude, exploring what you are thankful for, and counting the many blessings that you do have can help you retain your sanity through these tough times.

   Financially - are your financial systems in check? Are you investing regularly? Are you monitoring your spending? Changes in our routines don’t change the underlying principles of personal finance. Are you sticking with your plans?

   Career - what are you doing in your career? Does that excite you? What are you doing to improve yourself and your skill set? While work for most people has been changed right now, what are you doing to ensure you are better equipped for success as the world settles down?

   Relationships - how are you staying connected? Who do you miss talking to and seeing? Let those friends, family members, and colleagues know that you’re thinking about them. There are numerous ways to keep engaged, through video conferencing and online games, being social has changed in the manner of delivery, but still remains as important as ever for our social species.

   Romance - are you spending more time than normal with your spouse? How is that affecting your relationship? Many of us are now at home full time with our families. Are these changes good? Or are you having difficulty bridging your different worlds of work and home life? Setting clear boundaries, and making sure you stick to them will help keep things stable. 

   As you are spring cleaning this year, think about the things that you miss in your old routine. What was going well, and needs to be continued? And conversely, what wasn’t driving your success? We all pick up seemingly innocent habits along the way that we really don’t need. Identify these, and ensure that your new routine helps you more than your old routines did.

   Success is the accumulation of a million tiny wins. By making sure your routines are earning those points each and every day, success will be inevitable.

No Zero Days

   What separates a top achiever from everyone else?

   Top achievers know exactly what they want to do, and then spend the time working on those priorities. If you want to find more success in your life, you need to be able to answer the questions:

   How are you spending your time? What are you working on? Is what you are working on a top priority?

   While we all have endless to-do lists, super-achievers understand that it simply is not possible to get everything done. For these elite performers, they have adopted and embody a simple philosophy: No Zero Days.

   A “zero day” can be defined as a day that doesn’t drive the needle on your top priorities, your big hairy audacious goal, the life defining work we all aspire to. Zero days don’t mean that nothing gets done, quite the opposite in fact. On those zero days we work our asses off, clearing out our to-do lists and attending meetings, all working towards someone else’s agenda.

   This week, I challenge you to have No Zero Days. Start by writing down your biggest 3 priorities. Now spend time each day working on those priorities first. You don’t need to devote all your time towards those goals, that would be impossible. But make sure each day you do something to drive the needle forward. Let’s see if we all can go 5 for 5, making meaningful incremental progress each day. 

   Be sure to review your progress at the end of the week - if those small daily wins feel good, strive for two weeks of No Zero Days, then a month. Success is in your reach, one day at a time.

The 80% Rule to Retire

   How much income do you need each year to retire comfortably?

   We’ve looked at different ways of figuring out your retirement nest egg size, like the 4% Rule. But even that assumption is predicated on another assumption, that you know how much you need each year. Do you know the answer to that question for you? 

How much income do you need each year to retire?

   Estimating how much you will need each year is hard. The amount of money each person needs will relate directly to their unique situation, further complicated by their own list of goals and aspirations. Will you own or rent your living arrangements? Do you have dependents to support? Are family members helping support you? What about your lifestyle, what do you want to do? Do you want to travel? Where do you want to travel to? These are but a few questions that each person needs to answer for themselves, as the answers will greatly impact your financial plans in the future.

   Another issue with retirement planning is the time the question becomes important. Deciding and planning for your eventual retirement should start in your early 20’s, when you first start earning money for yourself. At this stage, it is easy to look at your current lifestyle and think, “I can live off KD and ramen noodles. After-all, I’ve been doing it all through college and I turned out fine.

   Unfortunately, that is certainly not the case when you are older. As you grow and develop throughout your career, your lifestyle creeps upwards too. Suddenly ramen noodles and beer aren’t the only things in your diet. And you certainly wouldn’t want to go back to living like you did in your college days, cheap food and cheap student housing included.

   If your current living arrangements aren’t how you will live when you retire, and you aren’t sure where life will take you as the decades roll by, what can you do now to prepare as best you can?

Career Planning: Income for Retirement

   While we may not have answers to the difficult questions posed earlier, many of us can look ahead in our careers. We are able to see where our careers are taking us, and plan for the roles that make up the general direction we’re facing. Whether that is a paralegal with visions of becoming a partner, or an apprentice electrician looking to become a grand master in her craft. These future roles we are aiming at, and may one-day hold ourselves have an abundance of information about them. This information includes the expected average annual salary. For bench-marking how much you will need in retirement, financial planners will often estimate 80% of your income at your highest earning level. 

   Planning for income during retirement at 80% of your peak earning potential will allow for lifestyle creep as you become more successful. If you plan on making $ 80,000 / year at your career peak, you should expect to need 80,000 * 80% = $ 64,000 each year during retirement.

   This 80% of peak earning potential estimate will help you set a target for your retirement nest-egg to work towards. As with all things of importance, your odds of success greatly increase if you have a clear target and a plan to get there. Think about your career, where you’ll be, and how much that means you should plan for in your retirement. With the right plan, financial freedom is available to everyone.

Estimated annual retirement income needed

Investing Strategies for the Coronavirus

February 23rd, 2020 - the stock markets around the world started slipping amid fears of the coronavirus (COVID-19).

   This week has been one to separate the successful investors from the unsuccessful. But the question is, amid all the panic and markets crashing, how do you become one of the successful?

   Turning on any TV channel, or scrolling through any number of online forums devoted to finance will tell you which stocks to buy, which to sell. There are countless predictions of where the “bottom” is, each saying a different thing. With all this noise, who is winning?

   To answer that question, we need to look at investor discipline.

   What was your investing strategy before the noise of the news started preaching panic? Have you changed your investing strategies as a result of the information screamed at you?

   Many of you have been reading long enough to know, the best investing strategy is to make regular contributions. This will result in the dollar-cost average of your portfolio being lowered during market downturns like this week has been. When the market recovers, you will be further ahead because you have been purchasing investments as they have been decreasing in value.

   Unfortunately, it is too easy to be caught in the sway of news media, and start abandoning your proven investment strategy by trying to time the bottom of the market. People caught in the latest Wall Street hysteria hold back regular investment contributions, thinking that they alone can perfectly predict the bottom of the market. This type of wishful dreaming gets in the way of the investing truths that we all know. None of us are smart enough to perfectly time the market.

   Your best bet? To continue investing as you always have, on whatever regular schedule you use. For me, that is the start and the middle of the month, aligned with my pay cycles. Since the crash happened after my mid-month contributions, I effectively paid full price for my investments at that time. My next regular investment (made probably around the time you are reading this), based on my own schedule will therefore be a purchase of ETF’s, stocks, and bonds that are “on sale”. This purchase of “on sale” investments will lower the average cost I have paid for all market investments in my portfolio.

The key take-away here:

Keep investing per your schedule. Don’t get caught up in the hype and try to time the market, or you might just miss out on a day of rapid recovery and all those associated gains.

   Of course, for those looking for a little extra credit, or for those who simply love a good bargain. The stock market investments are on clearance right now. Perhaps it’s worth a little extra belt-tightening over the next few weeks or months, and throwing a little extra in with your regular contributions. The extra purchases made when stocks are “on sale” will only serve to increase your financial wealth as the global economy steadies out over the coming months.

   If you can keep your calm during panic, and recognize a good financial opportunity when it presents itself, you’ll be well on your way to financial freedom! Happy, healthy, and prosperous investing to you!

How to measure success

How do you measure success?

   Most of us are completely comfortable with the idea that the most successful among us have the trophies and accolades to go with that success. Therefore, to be more successful, you need to accomplish more things. The measure of success is the number and size of goals that you have achieved.

   This measure of success, the number of trophies earned, couldn’t be further from the truth.

   We can see this when we look at one of the greatest basketball players of all time, Kobe Bryant (08-23-1978 - 01-26-2020). Kobe was known for his intense practice routines, shooting hundreds of shots each day, and for his 666 workouts. 6 hours a day, 6 days a week, 6 months of the year. In one interview with Sports Illustrated’s Jack McCallum, Kobe reportedly said the following:

Interview with Kobe Bryant where he discusses his practice routine.  

(Tony Manfred, https://www.businessinsider.com/kobe-bryant-describes-shooting-practice-routine-2013-2)

   In this simple exchange, we can learn quite a lot from one of the most successful basketball players in history. 

Leading Behaviors

   As a professional athlete, Kobe Bryant tracked his workouts, how many hours a day, how many days a week. See, Kobe had the understanding that time spent improving in the gym, on the court, reviewing game tapes, all would lead to more success during the game. These are called leading behaviors.

   Knowing that to shoot better on the court, Kobe needed to shoot more in practice. That is the power of his simple exchange with a reporter. Kobe wasn’t keeping track of his game stats, but rather how much time was spent improving in practice. 

Lagging Results

   Closely tied with the leading behaviors are lagging results. Which takes us back to where we started, the number of trophies earned. By tracking the number of achievements that we have already accomplished we risk two things. The first, is putting focus and therefore energy on the wrong activity. 

   In Kobe’s case, this would have been focusing solely on his shooting percentage. Points win games, if he can score more points each game, that would lead to more wins. But, his strength and fitness also played a huge role in both his personal, and the team’s overall success. Building a routine that tracked gym time (Kobe’s 666 routine), as well as practice shots thrown built the skills that would eventually lead to victories.

   Secondly, by focusing solely on results we risk falling back on our past successes. We can see this in another basketball player, Shaq (Shaquille O’Neal). Shaq relied heavily on his size and skill to drive his success. By focusing on what led him to the NBA, and not embracing Kobe’s relentless drive for improvement, Shaq plateaued far below his potential. As a result, Shaq arguably did not achieve as much of his potential as Kobe did.

Leading Behaviors vs. Lagging Results

   The lessons learned from professional athletes can be applied in all our lives. Determining what actions, or behaviors, drive success forward in your goals will help you achieve more. Whether that is time on the trails when training for a marathon, or time spent just thinking on projects in your career. This focus on the behaviors that lead to success will ensure that the trophies and accolades fill your shelves.

   What behaviors are you going to embrace that will lead to your spectacular results?

How much do you need to retire?

   How much do you need to retire? This question has caused countless sleepless nights for all ages. With studies released every year all yielding the same alarming result, the vast majority of people are ill-prepared for retirement. Studies by any number of financial institutions, finance blogs, or news media agencies, conducted independently yet all displaying the same results. People are unprepared. What these studies don’t usually dive into, is the question; how much do you need?

How much do you need to retire?

The 4% Rule

   First created by William Bengen, the 4% Rule tells you how much you can safely withdraw from your retirement accounts to ensure you don’t run out of money. Used by many financial planners as a rule of thumb, you can also benefit from this calculation. 

The 4% Rule Example

   Meet Sally. Sally is 65 right now, and looking forward to three decades of retirement, living to the age of 95. 

   Sally has determined, based on her lifestyle and spending goals (travel and entertainment), that she needs $ 60,000 per year to retire comfortably. Based on the 4% rule, Sally would need a retirement nest egg of $ 1,500,000 to achieve her retirement goals.

   While that number alone provides some insights, there are some key assumptions driving the 4% rule.

Assumptions of the 4% Rule:

The 4% Rule makes a few critical assumptions:

  • Retirement will only last 30 years
  • Asset Allocation is between 50/50 and 75/25 stock to bond mix
  • Withdrawals are consistent, and comprised of interest, dividends, and capital gains

   What this means is that, if you plan to retire early, or have a long life-expectancy, 4% might be too aggressive to fund your lengthened retirement. Also, a 50/50 to 75/25 asset allocation mix might be riskier than you would like. Taking on too much risk could, in negative economic times, result in your portfolio depleting too much to be able to recover in the allotted time frame. And the final key assumption made is that the withdrawals are first funded by interest and dividends, and only small amounts of your portfolio are sold to cover the difference.

   This final assumption has caused some companies like Morningstar to discount the 4% rule as “too simple”. Their assertion is that the historical data that the 4% rule was created on doesn’t take into consideration the lower bond yields. By reducing the income from interest, a retiree would need a more aggressive portfolio to make up for the weak bond yields. Put simply, 4% is too much to withdraw. As a result, other numbers have been used as a benchmark, ranging from 3% to 3.5%.

   In Sally’s example, she might need a nest egg of $ 2,000,000 to safely retire at a 3% withdrawal rate. Or alternatively, she would need to learn to get by on only $ 45,000 / year.

How much do you need to retire?

   As you can see, there is no consensus on the amount. Lifestyle choices, alternative income sources such as pensions and old age security, and even life expectancy can greatly alter the calculations on a case by case basis. 

   Considering all these aspects, you still need a financial goal to aim for. For your planning purposes, I would suggest using a middle-of-the-road benchmark. If Sally could rewind until she was 30 again, her goal would be to save $1,750,000 before retirement. This allows her a 3.5% withdrawal rate, taking $ 60,000 per year.

   As you get closer to retirement, you will have a much larger investment portfolio than you do now. At that time, more options will be available to you, and a visit to a financial planner would be advisable.

Action Items
  1. Consider what you plan to do in your retirement.
  2. How much does that lifestyle cost each year?
    • Consider: Do you own your own home? Do you rent? Are you receiving Old Age Security or Pension benefits?
  3. Take your estimated annual spend and divide by 3.5%. 

 

Your answer has given you a financial goal to aim for. Don’t be discouraged by where you stand in relation to your goal, take pride in knowing you have a clear direction.

Staying Focused on Your Goals

What goals have you set your sights on?

   It is important to remember regularly what you are trying to achieve, what your goals are, where your dreams lie. In today’s busy workplaces, it is far too easy to get lost in the busyness of someone else’s priorities. 

   With the advances of technology over the past couple of decades, communication has become instantaneous, and people are looking for answers in about the same amount of time. From the late night frantic phone calls to the early morning tidal wave of emails, it is far too easy to get caught up in the mad rush without pausing to see where you are rushing to. If you mention in a passing conversation that you are busy putting out fires, every busy professional can relate. But there is one fire we shouldn’t put out. Those kindling embers of your dreams need to be nurtured, not extinguished.

How do you stay focused?

   If you’ve ever been camping, or spent time around a campfire, you will from time to time see someone blowing on the coals. See, when a fire starts burning out, often you can revive it by blowing air on the coals. The additional oxygen helps keep the fire lit. 

   Our dreams are no different, you need constant air blowing on the coals to keep your flame lit, to keep your dream alive.

   But when we spend our days reacting to other people’s demands, other people’s priorities, we often forget to take a deep breath, and blow some life back into our own dreams.

Staying focused on what you want to achieve can be hard. Constant reminders about what is important to you helps fan the flames of success. 

   To stay focused on your own dreams, you need to take a moment every day to reflect on what it is that is truly important to you. Some of the questions I ask myself every day are: 

   What are my dreams? Why are they important to me? What can I do today to work towards those goals?

   Take some time and think about how these questions fall into your own life. Are you spending enough time focused on your dreams?

   Taking time to ask yourself questions like these is essential. But how can you take a moment in quiet self reflection when the world is burning down around you?

Finding Focus Through Your Environment

   Often it is difficult to remember to step out of our routines to think about what we are actually doing. As we run from meeting to meeting, remembering to pause and reflect on what we were planning to achieve today can be a challenge. To assist us against ourselves, we need to design our environment with little reminders of our true objectives.

   For example, I have a large whiteboard set up with my goals and plans. Seeing this whiteboard daily helps me remember what I need to achieve next. But of course, I am not always home and able to see the whiteboard. For those moments I have signed up for daily emails that prompt me to think bigger, to contemplate topics that will grow not just my business, but more importantly, will grow myself. Sprinkling reminders about my goals and dreams throughout my day helps keep me focused on my goals, allowing ideas to germinate and bloom while I am fighting other people’s fires.

   Many of us do not have the luxury to chase our goals and priorities all day, every day. Often  we find ourselves in careers and positions when we need to put someone else’s priorities ahead of our own, if only to pay the bills. While there is nothing wrong with this, it is during these days that we need to remain extra vigilant that we also allocate some focus and energy to our own goals and priorities. It is far too easy to find yourself swept up in the whirlwind and raging inferno of other people’s problems. Without reminding yourself daily as to what your goals are, and what you can do to make progress, those burning embers of your dreams will go cold.

Take-away:

Ask yourself these questions each day:

  • What are my dreams?
  • Why are they important to me?
  • What can I do today to work towards those goals?

   Answering these questions will help you remain focused, fanning the flames of your own success. But there will still be days that threaten to overwhelm your good intentions. Sprinkle little reminders about what your goals are throughout your day. These reminders can be as obvious as a 6 foot whiteboard, or as subtle as a mid-afternoon alarm that triggers you to take a moment and reflect on what you are doing, and if that is helping your goals or not.

How to Plan for the End

In this world nothing can be said to be certain, except death and taxes.” - Benjamin Franklin

   While not particularly motivating, Benjamin Franklin is indeed correct. And to that end, we should be prepared for that unavoidable permanence. But how?

How do you plan for the end of life?

  • A Will
  • A list of bank accounts, URLs, usernames, passwords.
  • Instructions for financial management of accounts

A Will

   A will is a legal document outlining what you want to happen with your estate upon your passing. Your will is used to outline your wishes, and leave assets to various individuals and groups (think spouse and children, and charities). Why you need a Will now further outlines the importance, and gives you steps to take to produce a will. 

  • Take action today: protect your family from estate taxes, and do your part to make a difficult time easier for your loved ones.

Accounts, Subscriptions, and Services

   Subscriptions are everywhere in today’s society. As we become further plugged in, and even reliant on technology, these subscriptions provide access to a wide range of services. Even services that once thrived on paper correspondence, like banks and government tax agencies, are creating online profiles and portals to conduct business. With all these online accounts in our name, navigating the list of services we’re using can become quite a chore. Indeed, I have spreadsheets with 30+ different accounts for business and personal use. With such a complex ecosystem of electronic connections, providing our loved ones a list of all accounts and login details is important.

   Providing a single, unified list of all accounts and details will help you stay organized, and make things much easier in the event that control needs to be passed on to a loved one. To help manage this, there are a few options.

   Spreadsheets are a convenient way to store account details. For my work-related logins, I store all my details on a single, password-protected file. This allows others with the password to access the files, and obtain access through my usernames and passwords to any service that I use for work. Certainly the ability to easily share the spreadsheet, especially if using a cloud based service like Google Docs, provides a measure of convenience that is hard to duplicate. One disadvantage is, while easy to use, spreadsheets do not provide high-level cyber security, and may not be best for storing sensitive information.

   On the other end of the spectrum for cyber security are password management services. Companies such as LastPass or BitWarden (I have no affiliation with either company) provide secure logins to store all passwords. These services also help you create and store high-strength passwords, to greatly reduce the chances of your accounts being compromised. Both these solutions offer both paid and free services for individuals, and provide high-strength, convenient password and account management services.

   No matter the route you take to organize your account logins, having a way to pass on the detailed list of login URL’s and account details will make life much easier for your loved ones.

Instructions for Financial Management 

   Another area of concern, especially among couples, is how to manage finances. While I would advocate that in matters of money, both parties share the knowledge and decisions, I understand that in some relationships this simply isn’t the case. If you are the one who primarily handles financial aspects, you need a way to pass on that knowledge and a “what to do next” plan to your partner and/or children. This is information that goes beyond simply what assets and liabilities exist, as those are covered in your will. Instructions for financial management should explain, at least at a high level, your investing strategies and asset allocation. Also included should be a short list of trusted financial advisers, or knowledgeable friends that would be willing to help understand the finances.

What to include:
  • Where investment accounts are held
  • Basic investing strategy, and financial goals
  • Trusted financial adviser / friends
  • List of resources to help educate your remaining loved ones
    • Books, Blogs, Courses, etc.

   Death is simply a part of life. Accepting this fact might not make the loss of a loved one, or your own mortality easier to bear, but it will certainly help you plan for the inevitable. Those plans should include a will, to outline your wishes for the distribution of your estate. This step will help you minimize estate taxes, and dispel potential conflicts between remaining family and loved ones. 

   Another helpful step is to compile a list of accounts for services that you use. Included in this list should be: service, company, a login URL (if applicable) account numbers, user names, and passwords. This will help keep things organized, and prevent service disruptions that further increase the difficulty of an already trying time. Finally, providing financial management best practices and strategies, along with education resources and trusted advisers will help ease the burden of financial management from your surviving loved ones. 

   The right plans implemented early will let you and your family / loved ones sleep peacefully at night, knowing that you have done all you can to set them up for success.

3 Excuses for Abandoning Your Goals

   What is your progress towards your New Year’s Resolutions? Are you still on track?

   After several conversations recently about people’s New Year’s Resolutions, it seems that already people are falling off track. 6 weeks into the New Year, and already for many people this year will be much like last year. And with that alarming realization, I thought it worth investigating what is derailing people from their goals.

   What I found is that the list of excuses is surprisingly short, yet alarmingly consistent. Here are the top 3 that I found during this informal survey:

  1. Not enough time
  2. Too exhausted after work
  3. Not that important to me anymore

Not Enough Time

   Perhaps the most pernicious of all excuses is the Not Enough Time excuse. This excuse is so damaging, and so widespread, because it is easy to rationalize. If only we had more time, we would easily be able to work on our goals. When we spout this excuse in a conversation, other people immediately relate, and hence we are let off the hook for our own shortcomings. Unfortunately, there is simply no more time in each day. 

   If time isn’t the answer, where does the answer lie?

   While there are many solutions, let’s look at one in particular: the way you track time, your calendar. If your goal is important, you need to allocate time in your calendar to its achievement. While you can’t find more time, you can certainly control how you spend what limited time you do have.

What time in your calendar will you block off for achieving your goals?

Too Exhausted After Work

   The next excuse has to deal with energy. After a long day at work, the amount of willpower and physical energy required to work on our goals simply isn’t there. Understanding how your body works, when you experience the most energy, is important to optimizing your routines. 

   For me, I have the energy to work on my fitness goals early in the morning. As such, I have aligned my schedule to allow time for the gym before the workday begins. This all begins with a good night’s sleep, allowing me to be rested when I wake up early, and then awake by the time I reach the gym after a light breakfast. Advancing my knowledge through reading comes over lunch and at right after dinner, allowing me ample time to process the information and wind down before bed in the evening. 

   There’s quite a lot of science and research done in the realm of energy management. Here’s a few key take-aways that you should apply to your life to find greater success:

  • It all starts with a good night’s sleep. 8 hours is recommended for almost everyone.
  • Understand your energy and stress levels, and work the gym into your schedule. You should aim to workout when you have energy, and to relieve stress.
  • Energy is a function of sleep and diet, make sure you are eating healthy foods! Eat foods that make you happy and healthy, just understand how your diet affects your energy levels.

   Being too exhausted is often a symptom of not understanding how your energy works. Designing your lifestyle and achievement around your energy will help you reach greater levels of success.

Not That Important To Me Anymore

   Another big reason I heard about why people weren’t sticking with their resolutions was that their goal simply wasn’t that important anymore. There were two main reasons for this. First, their resolution was made under the pressure, and having just heard, someone else’s resolutions. This led them to the trap of “that sounds good, I’ll do that too”. I see this all the time, people buying certain items, or trying to do or become certain things because they see someone else doing it successfully. 

   The second reason people’s resolutions end up neglected is that they have cast a wide net. Their goals are to become as ripped as Arnold Schwarznegger, as zen-like as the Dalai Lama, as rich as Warren Buffet, and as successful as Richard Branson. Becoming known for any one of those areas requires years of intense focus. Having a goal to achieve world renowned excellence in all areas means none of the areas will receive the focus it needs. 

   We all need goals in 6 key areas of our lives, physical, financial, mental, career, relationships, and romantic. But trying to achieve everything, in all of these areas, will lead us to achieving mediocre results across the board. Understanding what is important to you, and focusing on that will lead to greater success. Of all the excuses, the not that important anymore excuse is the most valid. But only if conscious thought is put in to determine where your priorities are.

   To avoid this excuse in the future, you need to become clear on what you want, and why, before you set your goals and resolutions. 

What is most important to you? What areas of your life are you okay with good, but not world-class results in?

   Knowing how to structure your routines will help you manage your time and energy. This will ensure that when you are most alive, most focused, most energetic, that you are focused on the most important thing. Deciding what is most important to you, and setting the right goals is half the battle. Organizing your day according to your energy and focus will bring execution to your best laid plans. And that, is a recipe for success.