Category: Success

Raise the Stakes

   How long does it take to design and implement a financial plan?

   Recently when posed that question at a virtual conference I was attending, a woman in the crowd volunteered, "6 weeks".

   But that is, quite honestly, bullshit.

   A good financial plan might only take you 4 hours to complete. 4 hours. Not 6 weeks.

   Of course what this lady was implying was that to find those 4 hours, it would take her 6 weeks to complete. It's not a question of how long it takes, but rather how much energy and focus is directed at the problem.

What Are Your Priorities?

   The areas that you choose to focus on will determine the results that you achieve. As Tony Robbins has said throughout his seminars and books; “Where focus goes, energy flows.”

   We all work on what is most important to ourselves, and our accomplishments, in that moment.

   If you are struggling to complete a task in a reasonable amount of time, perhaps it’s time to reevaluate your priorities. Often it isn’t a question of “Is this important?”, because we all have many important decisions and plans to juggle. The question needs to become more specific, “What is the most important thing to do today?” 

   If the 6-week plan lady was in a different set of circumstances; creditors calling, repo-men showing up to take her car. In that situation, her response would have been very different. She would be willing to put in the work now, today, to get started down the path to a brighter financial future.

   Changing your perspective, upping the stakes can help you reevaluate what truly is important, and help you start taking steps to be better tomorrow than you are today. And that doesn’t just apply to your financial plans, but to everything. Your health, your relationships, your career. Anything that isn’t where it could be in your idealized future can benefit from this process of prioritization.

Up the Stakes

   If you are still struggling to make the daily disciplines a reality, try bringing the future closer to you. Not walking around the block today isn’t going to kill you tomorrow. But what if it did? That compounded loss of strength will catch up to you eventually. Often we put things off for longer than we should, until it’s too late to change without radical intervention.

   The US Government Accountability Office estimates that close to half of Americans aged 55 and over have no retirement savings. That’s tens of millions of adults who have delayed taking action for too long, leaving themselves vulnerable. But as the old Chinese proverb says, The best time to plant a tree was 20 years ago, the second best time is now.

   What are you going to start doing differently today, to ensure that your future is all you dream of and more?

Harvest Time: The Right Plan

   Over the past several weeks, we’ve been pulling in the harvest from the backyard vegetable garden. To satisfy my curiosity, I often compare with other fellow gardeners, looking to see how my harvest compares to theirs. Through those discussions, I’m able to learn what others have done, and apply some of the ideas that have proven success into my own plans.

   Some of the lessons that I learned, if you choose to borrow them, could see you richly rewarded.

Plant Early

   The first lesson that I learned, which undoubtedly resulted in my harvest being smaller than I would have liked, is to plant early.

   I put off getting the seedlings into the ground for several weeks, never quite finding the time to dig out and build the garden plot. That procrastination cost me valuable time, time that I cannot find more of to let my seeds grow.

   If you want an abundant harvest, get to planting early. The longer you tarry, the smaller your rewards will be. With your investments, much like gardening, requires time to grow. If you hesitate too long, you simply won’t have enough time to let those money trees dig deep roots.

Protect Your Plot

   The next lesson is to protect your plot. 

   Checking out other people’s gardens can be an educational moment, but it certainly won’t help you with your own harvest if the weeds and the critters attack your garden while you’re out comparing with your neighbors. Nay, the time you spent coveting thy neighbors juicy tomatoes and crunchy peppers would be better spent ensuring your own garden is healthy and cared for.

   This certainly impacted my garden this year. I didn’t spend enough time watering and tending to those young plants, and my harvest reflects that.

   Spend the time caring for your garden. The investments you make, ensuring that there are no weeds leeching away precious nutrients will pay you back tenfold. And once you’ve got those weeds cleared, get out of the way. It’s hard for that little plant to grow with you standing over it, blocking the sunlight, watching it 24/7.

   To improve your harvest, make sure your plants can grow. Cut out as much of the bad stuff, like investment management fees, that place a drain on your garden. But once you’ve done all you can, selecting the lowest possible investment fees, then get out of the way. Investments, like gardens, need some time and space to flourish beneath that glorious sun.

Happy Harvest

   Harvest time. The final lesson. Take your harvest without complaint.

   This is perhaps the most important lesson. While starting your garden early, and tending to it all summer are essential, when it’s time to pull the produce off the vine there’s naught else you can do to change the outcome. 

   The old adage says it all; you reap what you sow.

   If you didn’t plant early enough. If you didn’t pull the weeds, water the soil, protect your harvest from all that would do it wrong (I’m looking at you, squirrels). If you could have done something differently, but you didn’t, then blame won’t help you now. 

   What-if’s and If-only’s sure don’t fill up the dinner plate.

   Take what you can, from all that you made for yourself. And take it, if not with a smile, then at least without a frown. These are the fruits of your labour after all.

   Fortunately, with gardening, you can always learn from your mistakes, and do something different next year. Financially, you won’t have that second chance luxury. That’s why it’s even more important to learn from those who travelled the roads before you - what strategies work, and what doesn’t. 

   Apply those lessons to your own journey, so that when it does come time for you to bring in your harvest, you’ll be walking in fields of plenty.

How Do You Use Your Resources?

   Are you putting your money to work for you? How do those choices impact the rest of your life? And what about the other resources that you have?

   These questions are important to answer to achieve the best results in your life. Too often we start with the first question without thinking about our own unique life situations. To help you align your actions with your life goals, you should be thinking about your future first.

   Looking at asset allocation and financial products too early in this process can lead you terribly astray. So before you open up your investing app and start scrolling through stock tickers, pull up a seat and a piece of paper. It’s time to turn on the most powerful computer you own.

Find Your Goal Posts

   Before you can lay any plans, financial or otherwise, you need to set your goal posts. These goal posts will help you dial in your aim on what is truly important to you, and provide a measurable indicator of how you’re doing. 

   What are your goals? Travel the world? A cottage on the lake? A new electric vehicle? Early retirement?

   These are your goals. Jot them down. Set those goal posts.

   Once you think you’ve got your sights set, think about why those goal posts are there. Is this something you truly want? Too often we find ourselves playing the most unrewarding game of following the follower. When we play that game, the goals that find their way to the top of our lists aren’t really our goals at all. Instead, they are the goals of our family, our friends, our children. Society's “goals”, not yours.

   Be honest with yourself here. Are those goal posts really yours?

Measure Your Progress

   Once you know what your goals are, you need to analytically scrutinize what is actually required to reach them. How much does your dream life actually cost?

   Have you ever guessed how many jellybeans are in a jar? Or how many ping pong balls fit inside an empty 747? Humans are usually pretty poor at estimating how much is required when the amounts get large. Without using some tools of analysis, we usually guess at numbers that are either way too high, or way too low. That’s why we’ve looked at different tools like the 4% Rule, to help narrow down the answer to the question, how much do your goals cost?

   Using tools like the 4% Rule will help you understand how far away those goal posts really are. Irrespective of whether those posts are 100 steps away or 100,000, knowing the distance will let you know how far you’ve come and how far is left to go.

Allocating Your Assets

   Once you’ve examined your life, and where you are heading, you need to look at how to get there. To do that, we examine how you assign your assets.

   Traditionally, people assume that asset allocation boils down to how much you put in different investment categories. Real Estate, Fixed Income, Stocks, Crypto, Foreign Currency, etc. Those financial products are important, but often leave off Human Capital. Your skills, your time, your energy. 

   How you invest your resources, particularly time and energy, has a huge impact on your financial future. Investing more in your skills and well-being will increase your value as an economic contributor. As you become better at your job, you increase your ability to earn.

   After you’ve invested in yourself, you need to look at how to put your money to work. While low cost ETF’s serve as the backbone for financial advice that I deliver, that isn’t the only lever you have to play with. Some people need to be changing how much is invested in each area.

   For example, picture Fred as having a stable job as a teacher. His earnings are relatively flat year over year, and he has a high level of job security. Depending on Fred‘s goals, he might want to look to be more heavily invested in stocks (low cost ETF), willing to take on the additional investment risk given his relatively low-risk career.

   Suzie on the flip side, is a commission-only sales rep. With variable income, she might want to look into higher weightings in fixed income investments, to help smooth her earnings out throughout the slower periods.

   How you allocate your resources is incredibly important. But it’s also a very personal decision, heavily influenced in where you are, and where you’re going. 

   What are your goal posts? Are you moving in the right direction? Does how you invest your time, energy, and money all align with the direction you chose? Invest wisely, and there’s no limit to how great your life can be.

Were you just robbed?

   The Pareto Principle is all around us, from our homes to our relationships, all the way to the workplace. The principle states that 80 percent of our results come from 20 percent of the activities. But that also means that 80 percent of our time is spent kicking the ball in the wrong direction. 

   The majority of your efforts aren’t being directed at those real rain making activities. And that’s robbing you of the impact that you're capable of producing.

   But how do you stop robbing yourself?

   The Pareto principle is telling us something we all know. Not all of our work is created equal. Certain types of work that we perform really add value, and other tasks that we do aren’t anywhere near as important. As a professional, you know which tasks you do that are value-add. Often, those are the tasks that you were hired to do, the tasks that you are evaluated on in performance reviews.

   If you still can’t narrow the list down, ask your boss! They’ll be happy to tell you what is most important to do. 

   In one of the major projects that I am involved with, one of our key contributors faced this dilemma. Her experience (let’s call her Jane, not her real name) is likely one that resonates with you, either in your own life, or you see in your co-workers.

   Failing to plan and prioritize effectively, Jane was caught up in the habit of being busy. But as we’ve discussed, not all tasks are created equal. While our unfortunate heroine of this story worked herself into the ground, the small fires that she was putting out day after day weren’t really driving the needle. As a result of spending too much time and energy on the wrong 80% of activities, the company failed to meet its implementation deadlines.

   One of the other challenges that we all face is understanding exactly how much a certain activity is worth. Which tasks in that 80% of low value are worth the least? If you could answer that, it would be far easier determining which tasks to cut out.

   The impact of not prioritizing on the vital work for the implementation means that we need to leverage consultants to do the work instead. Downstream implications of those missed deadlines aside, the hourly cost for not working on the implementation will be $250 USD per hour that we now need to outsource. 

   What does that actually mean?

   When looking at Jane’s schedule, she spent hours building reports that will only get a cursory glance at best. Hours more responding to emails and troubleshooting basic system issues that anyone on her team could have done. All of those activities are worth far less than the $500,000 USD annual salary that we’d be saving if we didn’t need to hire a consultant. (Annual cost: $250/hour * 2,000 working hours annually.)

   Why look at the annual cost?

   Sure, the implementation consultants are only brought on for an extra 2 weeks, or a total cost of 80 hours * $250, or $20,000. But extrapolating the impact of your decisions to the entire year shows the seriousness of the situation. Those errors in prioritization affect you day after day, week after week, those errors add up. 

   It’s far too easy to think that spending an extra hour on email, or gossiping at the watercooler, or any other low-value activity isn’t affecting you. But just as in Jane’s case, spending an hour on a $20/hour activity and not on a $250/hour activity has just cost the company $230 USD. 

   You bear those costs too, every time you do something that isn’t in that list of the 20% that Pareto identified.

   How do you stop robbing yourself?

   Become very clear on what you’re worth. And then look at the tasks that consume your life force. Are you working on tasks that are worth more than you’re paid for? Or less than?

   That doesn’t just mean looking at your annual salary. What about where you want to be financially. Is that six figures? A quarter million annual salary? Think about what your number is, and work backwards. How much is that each week? Each day? Each hour?

   If you want to stop robbing yourself, make sure the tasks that you spend your time on deliver that value. Hour after hour, day after day, week after week. Do that, and you’ll truly earn that paycheck that you’re thinking of right now.

Appendix 1

Here’s a chart showing the value of a $250,000 / year salary.

Term Cost
Annual $ 250,000.00
Month $   20,833.33
Week (50 working weeks) $     5,000.00
Day (250 working days) $     1,000.00
Hour (2,000 working hours) $        125.00
Half Hour $          62.50

Oh the places you’ll… Sit?

   Quickly, which chair is the most comfortable in your house?

   Is it your sofa chair? Your office chair?

   I'll bet that nobody said their dining chairs. Why is that? The dining room, where you invite your guests, where you want to show off your heirloom family silverware and china plates. Wouldn't it make sense to have nice chairs to round out the experience?

   Ultimately though, we need to consider the utility of those decisions. To upgrade the dining chairs is to reallocate those financial resources from something else. Is a dollar spent on dining room furniture going to improve your life the most?

   To live a rich and comfortable life, you don’t need to have the nicest of everything. In fact, you really need only a few nice things to radically improve your life.

   Warren Buffet jokes about exactly this, suggesting that most middle class families will drive nicer cars than he does. For someone who doesn’t spend much time behind the wheel, even with an abundance of money, his dollars have a far greater impact if he applies them elsewhere.

   What was the answer to your most comfortable chair?

   Now think about your life, and how much time you spend in any one given place in your household. Are you ensuring that the places within your house that you spend an inordinate amount of time are the most comfortable that you can make them?

   We spend an estimated 30 percent of our lives in bed, is your mattress contributing to your better sleep and physical health? If you work from home, what about your office setup?

   I spend a disproportionate amount of time in my office, anywhere from 80 to well over 100 hours a week, whether that’s reading, working, playing games, or simply thinking. I get far more utility for my dollars spent if I make sure that I have a good setup. Given how much time I spend, it was only sensible that I get a good office chair. Having better posture is an investment as much in today’s comfort as in protecting my body for the future.

   The Pareto Principle, or the 80/20 rule works well to describe this phenomenon. 80% of the outcomes are driven by 20% of the inputs. 

   In our chair example, we spend 80% of our time sitting in 20% of the chairs in our house. But we can see that principle applied throughout our lives. 80% of the kitchen work is done by 20% of the knives. 80% of our walking is in 20% of our shoes.

   Finding those 20% of activities and items that produce 80% of our results in any activity is essential. When you start identifying, and improving those 20% of inputs, you can maximize the utility, and live a far richer life.

   If you want to live a richer life, make the most out of the few areas that really drive value for you.

What are Index Funds

   Index funds and mutual funds have surged in popularity over the past decade, and for good reason. These types of investments can provide many benefits for investors. 

   One of the most important benefits, and the reason why I recommend these types of funds, is their simplicity. Simple to use, and simple to understand.

   Of course, when it comes to personal finance, the entire finance industry is built on taking something simple, and twisting it into something impossible to understand.

   The same treatment has been performed on our beloved ETF’s and mutual funds, all wrapped up beneath the mathematical concept of indexing.

What is an Index?

   In its simplest form, an index is a way to measure something.

   It’s actually a concept we’re all very familiar with.

   The average test score from your class in a certain subject is an index. The win % of your favorite team is an index. The gas mileage (mpg) on your car is an index.

   You are measuring something, taking a list of data, and using a mathematical formula to draw inferences from that data. How well you performed compared to class average, for example. But, you could look at a different index, and come up with a different result. How you compared to the class median, for example. Comparing your scores to the mean versus the median, may give you a very different outcome.

   And that’s just cutting the surface of indexes. A different index could look at test scores by birth month, weighting heavier those born in the summer months, and lighter those born in the spring.

   This of course, is just scratching the surface, because we’re still only looking at our class test scores. The machinations of finance can take those scores and chart them against neighboring schools, states and even nations.

Indexes in Finance

   As a way to measure something, that definition is incredibly vague. That leads to all sorts of different numbers, able to be used in different ways. 

   Take the S&P 500 for example. This index of 500 of the largest publicly traded companies looks at an average based on market capitalization. It’s actually fairly logical, that a company like Apple or Amazon, with enormous market capitalization (Share Price times Shares Outstanding) should be more heavily reflected than a much smaller company like Molson Coors.

   Compare this to another well known index, the Dow Jones Industrial Average (DJIA). DJIA is indexed based on a modified market price weighting. This places the weighting based on share price, and not on market capitalization as we saw with the S&P 500. 

   For example, picture Company A with a market cap of $100,000, made up of 10 shares worth $10,000 each. Compare that to Company B with a market cap of $1,000,000, or 10 times the size. But Company B has a share price of $5,000, and 200 shares outstanding. Using a price weighted index would more heavily weight the much smaller Company A, based solely on its exclusive and very expensive share price.

An Index for Everyone

   The increasing popularity of index funds for retail investors has led to an equal surge in institutions creating these funds. Just like a walk down the cereal aisle, you’ll find a fund for anything. 

   Regular flavors aren’t enough? Try frosted flakes. Or fruity puffs. Or chocolate crunch. Or anything in between.

   There are index funds for the environmentalists. For manufacturing, farming, heck, even vegan ETFs can be bought. Whatever flavour you’re looking for, you’ll be sure to find it. And if not? Someone will make it for you, for a price.

   With under 4,000 publicly traded companies in the US (3,671 in 2020), there are almost 8,000 mutual funds that package and split those stocks in every imaginable combination. 

   If that sounds like a lot of funds, you’re right! Now imagine the cost of maintaining so many complex, confusing indexes (groupings of stocks). The added complexity is staggering, and the costs are ultimately borne by you, the buyer. 

Which one(s) to Buy?

   I cannot tell you which fund will outperform the market this year. Nobody knows that. And anyone who claims they do, is trying to pull a fast one on you. But, there are a few criteria that you should follow when buying your investments.

Know the assets - if you can’t tell what the calculation is, and understand what you’re holding, you probably shouldn’t be investing in that fund. As with most things, investing is simple. It’s not easy, but it’s simple. 

Ignore past performance - this might sound counter-intuitive, afterall, you want to back the winning horse. But there’s a very good reason every marketing pamphlet carries the same disclaimer, “Past performance doesn’t guarantee future results.” That line is completely true. What was best last year isn’t guaranteed to be best again.

Control your costs - if you take only one thing away, it’s this: minimize your expense ratio. Expense ratio refers to the costs charged to create and maintain the fund. The more complex the fund (or the greedier the fund manager), the higher the expenses. Those expenses mean you not only need to pick a winner, you need to beat the average by whatever rates they charge. Consistently picking the fastest horse is almost impossible. Picking the horse, who then starts half lap behind the competition is insanity. Don’t stack the deck against yourself.

   Index funds, when done right, can pave the path to financial freedom for you. But there will always be those trying to take advantage of such opportunities. 

   If you want to find investing success, stay vigilant. Don’t put your money into something you don’t understand. And avoid handicapping yourself as much as possible. Investing doesn’t need to be complicated. Buy into a cheap fund, with good total market coverage, that you understand. And keep buying, month after month, no matter what the price is doing. Do this, and one day you’ll wake up rich.

Financial Freedom: How much is enough?

   How much money do you need to have financial freedom? 

   Your answer to that question will spell out the route markers on your financial journey. But so few people actually take the time to think about how much they need.

   Is it a million dollars? What about 10 million dollars? Or a hundred million?

   Depending on the lifestyle you hope to achieve, the person you hope to become, your answer might vary wildly as compared to your friends and peers. You also need to consider what financial freedom really means to you.

   Is it the freedom to quit your job? The freedom to take a well-deserved vacation? The freedom to retire?

   Freedom means different things to different people. And even throughout your life’s journey, that meaning will change drastically.

   Fortunately, financial freedom is often achieved long before financial independence. Unfortunately, for millions of people out there, financial freedom is just as much a pipe dream as financial independence.

What is Financial Freedom?

   Financial freedom can broadly be considered; the ability to make choices in spite of the economic impacts, rather than because of the economic impacts. This means you are free to choose. To take time off. To work somewhere else. To live out of the shadows of looming financial catastrophes.

   Financial freedom is being able to take command of your own life choices, and not fear the next mail delivery. 

James Clear describes this “wealth” as: 

“Real wealth is not about money. Real wealth is: not having to go to meetings, not having to spend time with jerks, not being locked into status games, not feeling like you have to say ‘yes,’ not worrying about others claiming your time and energy. Real wealth is about freedom.” - James Clear

   Financial freedom is therefore achieved when you have a financial safety net. Enough resources stockpiled that you can look out for yourself. This might be a 6-month emergency fund. Or enough to go backpacking in South America for a month. Whatever the amount is to set you free.

Financial Independence: What is it? And Why?

   If financial freedom is the ability to make a choice over your life in spite of the economics, financial independence takes that idea further. 

   Financial independence can be considered the ability to live, and continue living on the income from your investments for the rest of your life. To find out what this number is for you, you first need to understand what your annual expenses are. 

   Map out your expenses. How much do you need each year to live? Consider the lifestyle you want to live. Don’t skimp out here. Understanding the life you want to be living is essential. An underestimation might just leave you eating boiled potatoes and cat food.

   Once you know what your lifestyle costs, you’re up to the Financial Independence calculation. Unfortunately, there isn’t one clear formula for this calculation. Factors such as inflation, deflation, investment returns, etc. all play a crucial role. There are two such calculations that are usually used; the 4% rule, and 30 times.

The 4% Rule and FIRE

   The 4% rule essentially says you can withdraw 4% of your investments each year, and that fund will continue to exist for the rest of your life. A common calculation used for establishing an effective withdrawal rate for your retirement savings, this calculation also serves well for determining the size of the pot you need to achieve financial independence.

   An increasingly popular movement, the Financial Independence, Retire Early (FIRE) tells us that to safely live off the earnings from your investments, you need 30 times your annual expenses.

   The difference is essentially 3.33%, compared to 4%. 

   Depending on the measuring period, either of these values work. 90% of the time a 4% withdrawal rate has proven to be effective. But, you certainly don’t want to be in that 10% group! That’s why FIRE is slightly more conservative, to further reduce the risk of running out of funds. 

   When deciding which multiplier to use, it’s important to think about the lifestyle flexibility you’ve built in. Can you cut back a bit during economic downturns? Living on less than the 4% you planned? Or is that annual expenses number a must have? If so, airing on the side of caution is a better idea for you.

   Take a few moments and jot down what your annual expenses number is. Now set up your range. Divide that annual number by 4%, and multiply the annual number by 30. That should set your aim on a more tangible goal.

   That is what it will take for you to reach financial independence. Now all that’s left is to keep laying the bricks of your financial fortress. One brick at a time.

   How much do you need to be free? To make the choices you want to make? To break the shackles of “can’t wait until payday”, and start living life on your terms?

   And how much do you need to enjoy that level of financial independence for the rest of your life?

Lessons from Lent

Why is religion often cited as a cornerstone for some people’s success?

 

Many Christians recently embarked on their own annual pilgrimage this year, with the celebration of Lent kicking off on Ash Wednesday. While there can be many things learned from every religion, this 40-day long pilgrimage of the Christian faith holds a few keys to the vault of success. 

 

Those keys, the ones we’re all searching for, are Reflection, and Sacrifice.

Reflection

One of the powers of religion is the consistent self-evaluation. A part of the Lenten process is reflecting on your life. Putting careful consideration into how you are living helps you make the necessary adjustments to keep you on the right path.

 

Of course, this habit of reflection is more frequent than once a year. Religions are remarkably effective for reinforcing such positive behaviors. Whether that’s Sunday Communion, observing the Sabbath, or Al-Jumah, all religions have days dedicated to rest and reflection.

 

Irrespective of your attitudes towards religion, this self-evaluation process is an important one. Each week and month, make sure you check in with Number One, you, and make sure you’re on the right path.

Sacrifice

While reflection helps you re-calibrate your compass, the next essential key to success that religion can give us is through sacrifice. Certainly, in observance of lent, sacrifice is an essential element. For 40 days, Christian practitioners commonly either give up something, or make an effort to change in some positive way.

 

This is the single most important key to success. If you want to be successful, you must make sacrifices.

 

Sacrifice who you are for who you can be.

 

Success takes commitment, and endless hours of effort. It’s picking up a book rather than the TV remote. Jumping into some joggers rather than hit snooze. Investing some cash rather than spending it all.

 

Take a few moments and evaluate your day, your week, your month. What change can you make for the next 40 days that would put you back on track? What are you willing to give up to achieve more with your life?

A New Year’s KISS

   New Years Eve is almost upon us. While 2020 has been one for the record books, there’s something refreshing about a new year. 

   Put all of last year’s distractions and deviations aside, and lay out some fresh new plans for the next 365.

   A New Year’s Resolution - it’s almost mythic in it’s universal applicability. Yet while millions of people make bold proclamations, why does it then follow that a month later those plans and schemes sound more like pipe dreams?

   Why are resolutions so difficult? And how can you set resolutions that actually stick?

   The first reason so many resolutions fail by the end of the 3rd week, is the toughest hurdle to overcome. 

What do you want?

   Seriously, what do you want? Put aside the instagram / twitter / snapchat goals. The 15 milliseconds of fame that you’ll garner putting up pictures of your life’s highlight reel doesn’t show your true wants.

   Rather than taking an inventory of the instagram pictures you want to capture, take an inventory of the things that are important in your life. Focus on what you truly value. And then set a resolution, a goal, that helps that area of your life.

   For me, I give myself a few types of goals focused on these areas:

Career, Financial, Romance, Physical Health, Mental Health, and Relationships with Family & Friends.

   Each of these areas are important to my greater success. Shoring up and doing better on that scorecard will lead me to a more fulfilling life.

Kiss the scorecard.

   Once you know the areas of your life that you want to focus on improving, there’s only one thing left to do. 

KISS.

Keep It Simple, Stupid.

   Aside from chasing someone else’s dream, we so often go wrong making grandiose plans. Set a goal that’s realistic. A goal that you can clearly see the action plan to.

   If you can’t figure out how to get there by taking one action a day, your resolution is too complex to stick with.

   Resolutions aren’t an episode of intervention. You aren’t reinventing yourself in 60 minutes, less commercial breaks. Resolutions are identifying those one or two behaviours that you can do repeatedly. Day after day, week after week, month after month. Once you know what to do, the real battle begins. Tenacity and perseverance aren’t just buzz-words on a resume, they are the way. 

   If you want to be successful, no matter the resolution that you set, you need to follow through. Day after day, week after week, month after month. Grit. Stubborn determination. The secret of success.

   As you fire off the cork on the bubbly this New Years, remember your New Year’s KISS. Someone is going to start talking about their resolutions. No matter how cool someone else’s dreams sound, stick in your own lane. What is important to you? How can you improve those areas of your life?

   And keep it simple. No 14 step plans. Your resolution shouldn’t need a flow-chart. Just one step. And another. And then another. And a year from now, you’ll be raising a glass to your successes, and getting ready for another new year’s kiss.

Buying a Dream

   Would you buy something sight unseen?

   Anyone plugged into automotive news will have undoubtedly heard of some exciting new developments recently. A new Tesla truck, the Rivian vehicles, the return of the Ford Bronco.

   Each of these vehicles is quickly selling out, despite the buyers never having seen the end product.

   But what then is happening? Why are so many people spending their hard earned dollars on products that don't even exist yet?

   The answer of course isn’t some voodoo-like phenomenon. Nor is it as mythical as the law of attraction. 

   No, you can’t wish these things into existence. No Santa Claus, Tooth Fairy, or Easter Bunny will leave hidden gems under the tree/pillow.

   Instead, people are doing no less than setting a goal. A goal to own something in the future. Once the commitment is made, it is simply a matter answering the how question. 

   The difference between a dream and a goal, is the action plan to get there. No longer is it something you wish for when you close your eyes. That thing that you desire? It can be yours, with the right plan.

You can have more than you have now, because you can become more than you are now. - Jim Rohn

   Setting a goal, even one that stretches you beyond where you currently are, is a good way to motivate yourself to grow into the person you want to become.

How to Buy a Dream

Decide

   As with many things, making the first decision is easy. Decide what you want to have / who you want to become.

   Decide. And commit to that decision.

Plan, and Execute

   Like so many new car owners, that initial decision is easy. For a nominal deposit, that new vehicle is on the way.

   Next, is to determine what is necessary to keep that dream alive. 

   This planning is something we all do all the time. We decide what we need to have, and work out a way to get that. 

   Let’s say you put down your name for a new Tesla truck. For $800/month, you are a Tesla owner. For as long as you believe that’s who you are, you will find a way to get that $800/month. Maybe that’s a couple less nights out each month. Or picking up a side-gig. Or working for that promotion. 

   Whatever it takes - this is who you are, and you will find a way.

Execution

   Execution is where success is born. Taking action turns that dream into a goal, and that goal into reality.

   Committing to your initial decision means sacrifice. Continuous sacrifice, day after day, week after week, all in the pursuit of that initial ideal. It is this third step that separates the perpetual dreamers from those who will truly make it. Because dreaming is easy. Action is hard work.

   What dreams do you hold close?

   Don’t look for those shiny baubles ‘neath the tree this week. Or under the pillow. Or wrapped in a sugar-laden egg.

   Some dreams can only be bought. Paid for with cold hard cash, and the never-ceasing toils of one who believes in who they are becoming.

Re-calibrating Your Autopilot Function

   Do you remember a time before this covid crisis hit us? Those hours spent commuting? How many of those drives /walks /train rides do you actually remember? And how many of those days were you simply moving through life on autopilot?

   This weekend, while out picking up some appliances for the house we’re renovating, I found myself hopping back on the highways after a long day of work. As my foot sank lower into the gas pedal, my mind slipped back to the seemingly endless lists of next-steps that we’re working through. And just like that, without even thinking, I was cruising back home. 

   Only I wasn’t heading home.

   My autopilot hadn’t re-calibrated to reflect my new postal code, and as a result I was speeding towards an unplanned destination.

   Fortunately, my life’s co-pilot had her eyes on the street signs as we roared on by at over one hundred kilometers an hour. She quickly interrupted the autopilot sequence, and brought us back on course.

What’s your destination?

   Where are you heading? Not just after a long day, but every day. What are your goals? What future do you want to live in?

   Set your destination. The things you want to do, the places you want to see. The person you want to become.

   Make sure you are calibrating your navigation system to guide you to the right destination.

Recalibrating Your Autopilot Function

   Once you know where you are going, it’s time to evaluate your systems.

   Conduct your pre-flight checklist.

   What are you doing automatically, every day? We all have routines. Routines that serve you, like brushing your teeth for good oral care. 

   But sometimes your routines aren’t helping you. Maybe it’s hitting snooze every morning. Or washing the week down with a crisp, cold, adult beverage. 

   Map out your routines, and project into the future. Where will you be in 5 years? 10 years? 20 years if you keep doing the same things you’re doing now?

   An almost imperceptible shift in direction could land you at your destination, or send you hurtling into the abyss.

   Just like an airline taking off in New York, heading for the sandy shores of San Diego. Half a degree off, to the north or south, will send that flight into the middle of nowhere, Mexico, or swimming with the fishes in the Pacific Ocean.

Calling On Your Co-Pilots

   Sometimes we can’t see that imperceptible change in direction. Sometimes we’re too close to the situation to realize that our routines are taking us to places we don’t want to go. Sometimes, you need a co-pilot to correct your course of action.

   Just as my co-pilot steered me back in the right direction, there will be times you need that nudge. 

   Who knows you best? Who can give you honest feedback about your routines? Those are your co-pilots. The friends, family, and loved ones who can steer you back on track.

   Much of your success depends on moving in the right direction, consistently, day after day, year after year. 

   Make sure your systems are calibrated correctly, so when you do flip on autopilot, you end up heading exactly where you want to go.

A Fresh Perspective

   How do you see the world right now?

   Fear about coronavirus? Concern over global warming? Angry about politics? Concerned about financial matters?

   Every situation, every trial and tribulation that we face in this world has the power to destroy you, or define you. How we view the world, the lens we apply, will largely shape the options we see and choices that we make.

   While there can be no mistaking that coronavirus has presented its own unique challenges and obstacles, how we react to this situation is entirely within our control. Despite what popular news media outlets propagate, coronavirus doesn’t spell the end for small business owners. 

   On Saturday November 28th, 2020, a couple friends of mine tied the knot. (Congrats!) And a wedding during a global health crisis poses its own unique challenges. But rather than let the complications paralyze them, the wonderful couple looked for opportunities to enjoy and share the day with their loved ones. Turning to technology, they were able to live-stream the event around the world, enabling loved ones on a different continent to share in the joyous occasion.

   Closer to home, my girlfriend looking for a unique gift turned to Etsy to find something perfect for this wedding. The result, a “coronavirus wedding” cookie.

   A talented local woman decided to turn her love of baking, and her new-found free time in quarantine life, into a side-hustle that capitalizes on an obstacle we all face.

   Here we have the same situation: coronavirus getting in the way of weddings. One couple doesn’t see this as a roadblock, but instead leverages technology to forge ahead with their love, while still bringing the experience to their loved ones.

   And a completely unrelated individual, seeing the massive disruption to weddings in 2020 as an opportunity to supplement and grow her income. All this, while thousands of others are cancelling weddings, and hundreds of thousands are filing new unemployment claims.

   The same situation, the same challenges, yielding vastly disparate results.

   Flipping the mindset which you approach any situation will open your eyes to new doors, new opportunities. These opportunities aren’t new, but they only reveal themselves when you change the way you view a problem.

   These examples are all around us. For decades, the mentality for gas-guzzling automobiles was to make more efficient engines. Europe is flooded with small-engine cars, all striving to hit emissions standards set by regulatory bodies. Sticking with the widely accepted way of thinking about the problem didn’t reveal a brand new solution - electric vehicles. Now one of the wealthiest people in the world, Elon Musk proved that thinking about the same problem in a different way is a viable way to succeed. No longer are we surprised to see a Tesla on the road next to us.

   What challenges are you facing right now? How can you think about those problems differently? Thinking about the same problem from a different angle will reveal to you different opportunities and options. 

   Who knows? Behind those newly revealed doors may lie the opportunity you’ve been waiting all your life for.

What is the best Life Insurance?

what is the best life insurance

   Is your family protected in the event of a tragedy?

   While nobody can truly be ready for disaster to strike, there are some things that you can do to ensure your family is looked after in the event of a tragic death. Life insurance is one area where you can take steps to protect yourself and your loved ones.

   But with so many insurance types and policy options, which one is right for you?

What is Life Insurance?

   Life Insurance, simply put, is an arrangement with a company that, in the event of your death, your family will be paid out a specified sum of money.

   In general, those policies are broken down into two distinct classifications; Whole Life Insurance (WLI) and Term Life Insurance (TLI).

Why Would You Use Life Insurance?

   Generally, people use life insurance to ease the financial burden of their passing. Looking out for their loved ones from beyond the grave, so to speak. 

   But, while there are some excellent reasons to buy life insurance, those reasons change throughout your journey through life.

   For example, a fresh University graduate with little to no responsibility might not even need a policy. There are no dependents who rely on the new-grad. 

   Fast forward a few years, and that new-grad is ready to start a family. Again, with two incomes, a rented apartment, and no kids, insurance might not be necessary. But as life progresses, the new couple buys their first home. Suddenly, an expensive mortgage might be a very good reason to look into life insurance.

   Over the years, kids come, and continue to grow. Insurance helps give the family peace of mind. But as the years tick on by as they are wont to do, the house gets paid off, and the kids move out and start lives of their own. Retirement savings are churning out their own returns, enough to live on comfortably for the rest of your days. Is insurance still necessary? The financial risks of an early death have all but passed.

   Throughout this fictitious life journey, there have been several points where insurance is a good idea: new home, new family, etc. But as the family life changes, so do the needs for insurance.

   And those evolving needs bring the focus back to Whole Life Insurance (WLI) and Term Life Insurance (TLI).

What is the Difference Between WLI and TLI?

   Whole Life Insurance is a guarantee to pay a specified sum of money on your death. These policies last with you your entire life, which is why they are specified as “Whole Life” policies. Simply put, you pay into a fund, and when you die, your family is paid out a predetermined amount of money.

   Term Life Insurance on the other hand, is insurance for a specified term. Usually in 5 year increments, up to 30 years (policies differ greatly, check out each policy thoroughly before purchasing. These policies cover you in the event of your death during the term. At the end of the term, the policy expires, and you are no-longer covered unless you buy a new plan.

What are the Benefits and Drawbacks of Whole Life Insurance?

   Whole Life Insurance is designed as a fund you contribute towards over a set period of time, ranging from 5 to more than 20 years. You pay into this fund on a regular basis, and they guarantee a certain dollar amount to be paid out on your death.

   The main benefit of this style of policy is that you have a guaranteed amount coming to your family and loved ones when you die. 

   Also, since this is an investment fund where you are allocating some money, you might even be able to take some of your contributed dollars out as a loan.

   But, all that glitters isn’t gold.

   Whole Life Insurance policies are expensive. I mean seriously expensive. 

   WLI policies will cost you thousands of dollars a year while you are funding the account. And, these are investment accounts. As we’ve looked at for our other investment accounts, the companies running them charge exorbitant fees. Furthermore, you cannot get out. There is no money-back option - once you’ve bought, you’re locked in for life.

What are the Benefits and Drawbacks of Term Life Insurance?

   Term Life Insurance is also exactly what the name implies. Insurance for a specified term. 

   Since there is no guaranteed payout, in fact you should hope your family never collects on those policies (to collect means you die), the insurance premiums are reduced. While WLI may cost thousands a year, TLI is only hundreds (if that). The payouts offered are usually much higher as well. 

   Another benefit is that TLI policies are simple to understand. You pay $X a month/year, for Y years, and if you die before Y years is up, your beneficiaries get $Z.

   Again, this type of policy has its own drawbacks too. As TLI policies expire at the end of the term, if you still decide that insurance is right for your family situation, your premiums will likely be higher when you sign for a new policy. The higher premiums are a result of your increased age when buying the policy, as in general, the cost of a TLI insurance policy increases as you age.

Which Life Insurance Policy is Best?

   While there can certainly be a case made for different policies, for the vast majority of people Term Life Insurance (TLI) is best. To understand the reasoning, we need to revisit why you would want life insurance in the first place.

   People get life insurance to protect their families from the unexpected, especially when the financial burdens of the family would be hard to handle as just one person. But as you age, your financial needs change. The payout of a Whole Life Insurance policy likely isn’t sufficient to help your spouse keep the house and raise the kids when you’re just starting out. In that case, the higher payouts from TLI are more valuable. 

   And as you advance in your life and financial journey, the payout from WLI shouldn’t be the “make or break” point in your financial position. Death is a fairly permanent next step, so to need to take that step to unlock additional monies is an extreme measure.

   Term Life Insurance, with its lower premiums and higher payouts is optimal for almost everyone. And the savings (the difference between a WLI policy and a TLI policy) should be put into an investment portfolio. This invested money will grow over time, and you won’t need to die to access the additional funds. 

   If you select a balanced, low cost fund, you’ll avoid those high fees and might even come out ahead! Insured when you need it, with a financial safety net built to catch your family if they ever need it.

   Life Insurance provides financial peace of mind, knowing that your family will be cared for in the event of your untimely death. Term Life Insurance is the cheaper option, and in the vast majority of cases will be the better option. With the cost differences invested in your own investment accounts, the additional investments and growth will bring you out ahead of a comparable WLI policy.

   Financial freedom includes peace of mind. Life insurance can deliver just that, for a nominal cost, at just the right time.

   To end this article in the most relevant salutation, I shall borrow the immortal words of Spoc: 

“Live long, and prosper.”

Oh, The Places You’ll Go

Which road are you taking to success?

   Where does success come from?

   Were some people simply born with more talent? Or, is success learned?

   To answer that question in true Canadian fashion, let's look at hockey. 

   In his book Outliers, author Malcolm Gladwell examines the quintessential Canadian pastime, including looking into the storied histories of the world’s top players. 

   Statistically, the best in the world are born in the early parts of the year, January to March. But there’s more to this anomaly than meets the eye.

   As Gladwell goes to show, being born in the early part of the year makes you the oldest on the rink. Since elite players are selected and groomed from a young age, being older gives you significant coordination and size advantages over the younger people you are matched up with. This invariably ends up with coaches and parents touting their child’s sporting prowess, and enrolling them in more practice time.

   The increased number of hours devoted to an area of interest unfailingly develops skills at a faster rate. And those kids that were “naturals” at hockey? Well, increased ice time makes them better players.

   In other words, we create our own self-fulfilling prophecies. We believe we are good at something, in this case hockey, so we spend more time practicing. More time practicing in turn yields better results.

   But what about those late-year children? Are they any worse at hockey? Or are there undiscovered phenoms, the proverbial diamond in the ruff?

   The unfortunate reality for many is, we’ll never know. They will simply never get their shot at success on the ice rink.

   All because of a story they were told as a child.

   “You aren’t as good at hockey.” “Math just isn’t for you.” “You aren’t good at <fill in the blank>.”

   Certainly some things we aren’t good at. Fact: Nobody is great at everything.

   But are you selling yourself short because of a story that you’ve held onto for years without properly testing?

   Examine your life. Where do you say, “Oh, I could never do that! I’m just not a …” 

   And put those statements to the test. Don’t think you can write? Try writing. Sales? Try selling an idea to a friend or colleague. Talk to strangers? Try starting a conversation. 

   It’s time to unshackle yourself from those long-held and never tested narratives. Your success belongs to you. Not to some false negatives installed on your mind when you were a child.

   This is your story. Write it for yourself.

   Oh, the places you’ll go. In the timeless words of Dr. Seuss “You can steer yourself any direction you choose…. And will you succeed? Yes, you will indeed. 98 and ¾ percent guaranteed.”

How valuable is your degree?

college degree

It’s a question asked by every person seeking higher education. Is my degree worth it?

It’s a very serious question. The financial implications alone could change your entire life’s trajectory, for the better, or for the worse.

Doors could open to immense riches. Or, you could end up drowning in student debt, qualified for little more than to pour coffee at Starbucks.

At the root of the question lies a startling and frightening truth. For the vast majority of us, our education is worthless.

The knowledge we learn, if we retain any of it at all, is available for free and accessible within the top 10 google search results.

Of course, there are some professions that require formal education. I certainly wouldn’t want just anyone patching me up on the operating table. Or setting financial policies for the entire nation.

But for most of us, what we learn in school isn’t about the knowledge we walk away with. That knowledge is free.

So why is schooling so important in today’s society?

To answer that, we need to go back in time a few decades. Back to a time when there existed a knowledge gap.

The Knowledge Gap

It used to be up until fairly recently, that schooling was the way to improve your family's economic future. Knowledge was a commodity, and having gathered that knowledge through some form of higher education was a valuable asset to have.

The more you knew, the more value you could bring, and the more you were worth to an organization. More schooling was directly correlated to increased earning potential.

But recently, that “knowledge” imparted by the great educational institutions has become so commonplace that it’s considered a prerequisite to even get a seat at the table. Everyone has the “knowledge” associated with a bachelor’s diploma or degree, so there is no longer that gap to fill. No gap, means no economic advantage for acquiring the knowledge.

While one may argue that getting a degree is necessary to even be considered for a seat at the table, the value of that degree has diminished greatly.

The Information Era

Compounding the issue is the availability of answers to just about any question or problem that you face. For the cost of a reliable internet connection, all the worlds’ knowledge is available 3 clicks away.

In the information era, specialized knowledge is available for such a cheap fee, that there is virtually no economic value to acquiring it.

But don’t despair yet. While the knowledge you might seek has little economic value, there are still some merits to growth and development.

The Skills Gap

For centuries, the gap was knowledge. The information age has eliminated that gap, and levelled the playing field. Never before has the opportunity for success been granted to so many people.

Today, anyone, from any background, has the opportunity to succeed.

You just need to recognize that in the changing world landscape, the gap has changed. This means that you need to look at something other than information to increase your economic value.

And that new gap is the skills gap.

Knowledge is no longer the solution, but the ability to apply that knowledge. The skills to take the information, and make something valuable out of it.

What are the most valuable skills?

While there are many areas that you can focus on developing to increase your economic value, there are a few common areas that are virtually guaranteed to improve your results.

Setting and achieving Goals is one of the best skills that you can master. The ability to determine what is an important direction, and then setting up the systems and routines to get you there will serve you no matter your vocation. Building upon that skill set are the skills of prioritization. Understanding where to focus in today’s world of constant distraction will further compound your ability to deliver valuable results.

The next universal skill set that is sure to deliver economic value, is the ability to communicate clearly. Communication is one of the most highly rewarded skills. That skill goes beyond language, and spills into crafting your message, compiling compelling stories, and creating real change.

Where can you go to improve your skill sets?

If skills are becoming more valuable than knowledge, knowing where to go to develop those skills is essential. Luckily, higher education institutions are on that list.

Colleges and Universities are a great place to stimulate the development of skills. From setting goals, to prioritizing under a dynamic workload, schooling institutions help develop the skills that add value in today’s market.

But there are other options too. Online learning platforms have seen massive jumps in both quality and popularity. The focused learning curriculum of these courses allow you to tailor your growth specific to your journey.

The important note here is this: it matters far less what knowledge you are learning, and far more what skills you are acquiring.

Understanding the different styles of Picasso and Van Gogh has limited value, but having the skills to clearly communicate the benefits of a new strategy or product will greatly increase your value to the marketplace.

When advertising your resume or academic background, be sure to highlight the skills you have developed. Those skills are the answer to what will bring you fame and fortune.

To answer the question; how valuable is your degree? Ask yourself not about what information you now possess, but instead what skills you have and can use to increase your value.

Target Date Funds – Set it and forget it?

Chances are, if you have looked into retirement savings at all, you’ve seen Target Date Funds (TDF) advertised. But what are these funds? And, more importantly, will they actually help you retire on time?

What is a Target Date Fund (TDF)?

Simply put, a target date fund is an actively managed mutual fund. The funds are managed in a way to re-balance, and ultimately move into more conservative investments as the target date gets closer.

The premise is to handle the asset allocation for you, so that you don’t have to worry about complicated investment decisions. You simply pick the year you want to retire, typically in 5 year increments, and the fund handles the rest.

Marketing efforts by major investment industry players, especially over the past 15 years have really paid off. These funds are so popular, that employer sponsored RRSP’s and retirement accounts are almost entirely comprised of these types of funds.

Does the Target Date Fund live up to the hype?

Yes.

And no.

There are several pro’s and con’s to Target Date Funds. Let’s look at each, starting with the criticisms.

What are the issues with Target Date Funds?

While each investment broker will offer a different sales pitch, the criticisms can be broadly broken into three categories.

A One-Size-Fits-All Approach

When you’re simply estimating the date you want to retire, the fund doesn’t take into consideration any of the other factors of your financial health. The most important on this one is your risk profile. While a longer time horizon means you should be prepared to take on additional risk at the onset to reap the return of compounded growth. However, if you are planning to use those funds for another, shorter-term option, like home-buying or education, all of a sudden your risk profile dramatically changes.

Your financial future is as unique as you are. And a target date fund simply doesn’t have the customization to accurately capture your unique needs and desires.

It’s a Competitive Game

Another criticism is that Target Date Funds are not all the same. Even if you picked the same time horizon, let’s say TDF 2035 (15 years from now). Different funds, run by different managers, will carry a slightly different selection of investments inside. This difference in investment options, and the varying mix of debt to equity investments means that each fund performs differently.

In the competitive market of mutual funds, this can lead to poor decisions, and poor returns. This is witnessed as the number of investors who can consistently beat the general market on a somewhat reliable basis is numbered to only a handful of investing professionals. While we’d all like to think the mutual fund manager is Warren Buffet or Ray Dalio, that just isn’t the case.

TDFs: Pay-to-Play

Another criticism of target date funds is that they are a pay-to-play game. Essentially, the offerings you receive are only a small subsection of the entire market. For example, your bank will only offer you fund options that are managed by a related institution.

Many years ago, before I became immersed in the world of personal development, I held a fund with my bank. Looking deeper into the details behind my target date fund, I was not at all surprised to find that the investments held in the TDF were all smaller subsections of other funds sold by my bank. That meant my RBC fund had varying percentages in RBC Emerging Markets, RBC Utilities Funds, RBC US Funds, etc.

What that really means, is that the funds that you see are often covering the ever compounding fees from other mutual funds. And as we’ve previously discovered, even a small change in fees can have a dramatic effect on your total lifetime returns.

On top of that, the selection of funds will be further reduced by the institution that you are working with. This is why many employer sponsored plans aren’t the same across different companies. The offerings aren’t selected for what is best for you, the individual, but based on the rates and admin charges that the company pays to participate.

Knowing this, the question still remains, “It can’t be all bad news, what is the up side?”

The Key Benefit of Target Date Funds

Investing can be complicated.

Actual returns are impossible to predict. And the choices! There are more options in front of you than if you walked down the cereal aisle at the grocery store.

With all those options, in the face of uncertain results, target date funds had the perfect marketing advantage: they were simple to understand.

Someone, presumably an investment professional, will automatically re-balance and reinvest your portfolio with the goal of reaching a retirement date with an appropriate investment mix.

What consumers were really hearing was: Invest here, and you can retire on 20XX date.

The allure of that simplicity, and some misconceptions surrounding how excellent TDF’s are, has helped these style of funds explode into the investing scene in the past decade. Odds are, that if you have investments through an employer sponsored retirement plan, or even if your individual plan was advised by your banker, that you hold a TDF. With the majority of people invested in these style of funds, what do you need to know?

Key Take-Aways: Target Date Funds

TDF’s are convenient, and easy to understand. Investing in them could be exposing you to crippling investment fees. But, the only thing more costly than those crippling fees? Not playing the game in the first place.

Knowing that, it is more important to pick a fund based on the level of fees than the “predicted returns”. Vanguard typically has low-fee options that would serve your needs well.

Target Date Funds are one of the easiest ways to dip your toes into the realm of investing for your retirement. By lowering that initial hurdle, TDFs make it easy to get started on your journey to financial independence. But, because they are a one-size-fits-all approach to investing, you should also supplement your TDF investments with your own investments. This will allow you to play with the lever of asset allocation, and your risk profile, based on the goals that you have. Those individual investments are the bells and whistles on your new car. Same base, but you can customize it to fit your lifestyle.

A low fee TDF, paired with some independent investments, put you squarely in the driver’s seat. It’s your road to financial independence, so the driver’s seat is exactly where you need to be.

Your Finances Are What You Tolerate

Are you settling?

The biggest cost that anyone ever pays financially comes from settling. Learning to tolerate small things will ultimately rob you of great returns throughout your life.

While the areas in which we often find ourselves tolerating less than ideal circumstances are numerous, there are a few that stand out as clear robbery of your financial health.

Bank Fees

Big Banks have long held the top spot for where we are told to store our money. Unfortunately for us consumers, those marketing messages aren’t cheap. And, neither are sports arenas.

To pay for all the extras that big banks are involved in, a common strategy is to leverage account fees on just about every product sold.

While the fees themselves seem small, there are two things to consider.

Just like the recipe for success is the right small things, stacked over time. The recipe for disaster is the opposite. The wrong things (even small in size), stacked over time will lead to financial ruin.

The second consideration is the precedent set when accepting a small fee because it’s “not that much”. That is only the first step, and the question then becomes where to draw the line?

It is far better to not take that first step, and avoid bank fees altogether. There are a few ways to do this, all of which I have done myself.

Open an Account with a Credit Union

Credit Unions operate much the same as banks, largely the same offerings, but without the overhead. While this means you won’t see your favorite sports team being sponsored by a credit union, you also won’t encounter the account fees needed to pay for such extravagance.

Open an E-Account

Another option is to look at e-banking options. These institutions have surged into popularity due to their low-cost offerings. That includes no pesky account fees.

Ask for the Fees to be Removed

Another option, and one especially important for those who won’t take on the hassle of changing financial institutions is simply to ask for the fees to be removed. I currently have accounts with a couple of the big banks, for various financial reasons. At both those banks, I simply asked for my fees to be waived, and they were! Now it’s your turn - take a look at your bank. Are you paying fees? Try asking for those fees to be waived. If not, maybe it is time to look at other alternatives.

Investment Fees

While bank fees cost you a few thousand dollars, they lie at the top of a slippery slope. The next area where many people simply tolerate what is offered lies in investment fees. The difference between low fees and standard fees might not sound like much.
After-all, the difference between 0.5% and 2% is a paltry 1.5%.

But that 1.5% makes all the difference in the world.

Take a $50,000 investment in the general market, returning 7% annually, for 30 years. After those 30 years, the account charging 0.5% in fees has: $330,700.

But what about the account with 2% fees?

That account only has $216,100.

That paltry 1.5% difference in fees just cost over 100 thousand dollars. And that’s simply considering the sum of $50,000. If you consider this impact on your life’s retirement savings, that number could be many times multiplied.

How much are you paying in investment fees? Are you tolerating the levels of fees that will result in financial hardship later in life?

Lowered Earnings

The third, and most costly area that we end up tolerating our lot in life lies in our careers. Far too many people don’t take the time to consider what economic value they are bringing to the world.

Failing to understand the valuable contributions that you make will ultimately lead you to undervalue your work. This is perhaps the most prevalent example of “settling”, as people tolerate the job they have without asking the hard questions.

In a 2018 Gallup survey on worker engagement, the all-time high record was set. 34% of American workers are engaged at work.

That means 66% of workers are not fully engaged. For that majority, the question, “are you paid what you’re worth?” is even more important. If engagement isn’t there, people aren’t working to fulfill an inner drive. For those 66% of people, it is more important than ever to understand their economic value.

To understand what it is that you do to create economic value, you need to think about the value-add tasks of your role. How much revenue does that bring in? Or how many costs are you saving?

As an employee, some of the earnings or savings are a direct result of your actions. That should give you an indication of whether you are paid enough. Other considerations are; how much would it cost to replace you?

Being paid for what your worth could mean the difference of hundreds of thousands, or even millions of dollars over your career. In the pursuit of financial freedom, every choice, good or bad, plays a role.

In all areas of our lives, we are asked to tolerate situations because “that’s the way things are done.” That could mean accepting fees that aren’t justified, or even accepting pay that’s too low. The decision to settle in any of these situations is costly though. From thousands to hundreds of thousands, the cost of tolerance is a high price to pay.

Where are you going to say, “enough!”? What areas of your life have you merely tolerated for too long? It is time to take a stand, your future just might depend on it.

How can you be better at your job?

   This week, several members on my team approached me with the question, “How can I be better at my job?”

   It’s an important question. One we all have asked at one point in our lives. And the answer is one that can have a profound impact on your entire life.

   The answer, perhaps overly simple,  has only 3 parts.

The To-Do List

   Opening up the notebooks of my team members, the first thing that practically fell out was a seemingly endless list of “To-Do’s”. Each of them, independently, had written down all the balls they were juggling right now. 

   And there were a LOT of items on those lists. No doubt, you can relate. How many things are on your lists? 

   How many times have you thought, “There simply isn’t enough time in the day to get all this done?”

   Trying to help take inventory of what their tasks were, we started putting those To-Do’s into buckets. Grouping tasks by the nature of the work gives a better understanding of what my team was spending their time on.

   Ultimately, we were able to separate these task lists into a few separate groupings, or buckets.

   Batching tasks helps give some clarity over where you are actually spending your time. Take out your to-do list, and group those tasks into buckets of similar items.

Make it Rain

   Putting those To-Do list buckets to the side for a moment, we then looked at what jobs they were each trying to do. Boiling down the job into the most basic metric: what makes it rain?

   Think about your work. What is it that you do in your work that makes it rain? What work do you do that makes money? 

   If you are a software developer, it’s producing working software. If you’re an artist, it’s making and selling art. If you are an event planner, it’s running smooth events.

   In every role, there are a handful of actions that really make it rain. Understanding what those few critical levers are will help you become more valuable. 

   Now think back to that endless list of To-Do’s that you have. Which of the buckets are the same on both lists? The To-Do list tasks that fall into one of your make it rain bucket, those are your money-makers. Do more of those, and do them well, and you’ll become way more valuable.

What The F*?

Focus. 

What the focus.

   Asked separately, both Bill Gates and Warren Buffet gave the same answer. The keys to success lie in your ability to focus on the important things.

   As my team members looked into their To-Do list, they were really revealing their focus. Anything on that endless list was something that was weighing on their mind, and sapping their time and energy.

   By putting more focus on the activities in the make it rain buckets, my team members will ultimately be more valuable to the company. Put another way, by focusing on the real value-add activities, my team members will be better at their jobs.

   You want to be better. Better in your career. Better financially. Better in all aspects of your life. I know you do, because that’s why you show up here each week.

   Understanding what it is that you do to make it rain, and then allocating more of your time to focus on those key activities makes you better. And that difference in performance between you and everyone else? That will, in time, be rewarded.

   Think about these elements this week: What can only you do to make it rain? Are you spending enough time on those activities? Can you increase your focus, time and energy on those money-makers to become even more valuable?

Habits: A Walk in the Park

   How long does it take to form a habit?

   The best example of forming habits comes from a time when I was in high school. Starting in early September, every single morning I would meet my friend Shane before school. Together we would walk to school, just like so many young school kids do. The way to school was a long loop around the roads, but if you were walking, you could skirt around the edge of a farmers field, hop a fence, and be at the school in less time than it took the bus to drive there.

   Every September, we would walk up the hill, and slip into the side of that farmers field. But there was no path. Every September we would have to wade through waist high grass, over rocky, uneven, tractor chewed up ground.

   But after a few weeks, the grasses started to become trampled. The ground started to smooth out. And slowly, step by step, a path was formed.

   That path served us well for 8 months. With every passing week the path became easier and easier to walk, until it became second nature. But come June, we would stop walking to school and take off for summer holidays.

   By September, that carefully trodden path was gone, and we would have to start the same process all over again. Walking the steps again and again, slowly forming that path.

   So how long does it take to form a habit? The reason that answer is so difficult to answer is because there is no end. It isn't 21 days, or 60 days, or 90 days. It's forever. Because the day you stop walking that same path is the day the path starts to disappear. The day you stop walking, the weeds start encroaching, not just making the habit harder to keep, but often replacing with counter-productive activities.

Success is a Journey

   Success can be achieved by doing the right activities, consistently. If you regularly work-out, you will be fit. If you regularly read, you will be knowledgeable. If you regularly perform high-value activities, you will be valuable.

   In essence, this is what Aristotle spoke of when he said, “We are what we repeatedly do. Excellence, then, is not an act, but a habit.”

   If you have the right habits, success lies somewhere along the path.

A Shortcut to Success

   Just as our path across the edge of the farmers land was a shortcut to our destination, the right habits can take you to where you’re planning to go far faster. 

   If you want to get physically healthier, the right eating and exercise habits will lead to that life. If your definition of success is for stronger relationships, the right communication habits, the right gratitude habits, those will help you get there faster.

   But shortcuts work both ways. If your habits are taking you in the other direction, to a place you don’t want to go. Those habits will also bring you to the edge of ruin faster as well.

Beware, the Weeds

   If you stop walking on the path of success, the weeds will start growing. This is a fact. If you want to be successful, you need the right habits to get there. 

   If you want to stay successful, you need to keep performing those habits that brought you this far. The moment you stop making strides down the old familiar path is the moment that path starts overgrowing.

Very often, those weeds represent negative activities that make our journey harder.

Creatures of Habit

   We are all creatures of habit. We fall into the same old routines. Some of those routines lead us to success, and some take us on a different path. Which of the habits that you have are leading you to success? And which are taking you off-track?

   Take an inventory of your habits and routines. Which paths should you keep clear of weeds. And which roads should you walk down a little less often?

   Knowing that this is a lifelong journey is daunting, but exhilarating at the same time. It means no matter where you find yourself right this moment, tomorrow can always be brighter. You can start forging new paths to greater success at any time. 

   Your future, your success is in your hands. Seize it.

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.