Financial Freedom: A Diet That Works

What's in your financial diet? Do you have too much unhealthy misinformation on your plate?

   How many different diets can you name? 

   Keto, vegetarian, pescatarian, Atkins, vegan, DASH, Weight Watchers… and that’s just scratching the surface of a nearly endless list.

   Hundreds of options, but for one goal: healthy living. 

   How can countless options exist, many in direct conflict with other diets, all promoting the same goal?

   Anyone who desired to live a healthy lifestyle will get lost, bogged down in the mountains of “facts” and counter-facts that each diet proclaims. And at the end of it all? They’d be even more lost than when they started their journey.

   That very same story plays out across our lives, and no more so than in the quest for financial freedom.

   I write often about the strategies for financial freedom, and each holds its own merits, depending on where you are in your journey. But for those of you just starting out, you don’t need strategies on top of plans. You need the first step. 

   The rest of the staircase will come. But only one step at a time.

Financial Dieting: The First Step

   Go on a diet. A financial diet. Cut out almost all financial information out of your life. How is APPL trading today? Who cares. What about TSLA? Irrelevant.

   There are countless broadcasters and bloggers who pander to the masses with a new story about what to buy or sell today. These “gurus” are in the entertainment business. 

   And your financial freedom? It’s not a laughing matter.

   It’s time to go cold-turkey on those entertainers. 

Low-Cost Index Funds / ETFs: The Next Step

   Once you have cut out the distractions, find a low cost index fund provider. Personally, I like WealthSimple, but there are many to choose from. Questtrade has a low cost platform, and some major banks offer low cost Index funds too.

   The key here is simple: keep management fees low. Under 1% is a requirement, and the lower they are, the better off you’ll be. 

   Index funds and Index ETF’s track the performance of a wide range of stocks, like the S&P500 or the TSX composite. Essentially, you are buying a small piece of everything. As those companies grow, so does your wealth.

Automate: The Most Important Step

   Finally, the next step that you can take is to automate. Setup your account to automatically fund every week/month, and let it take care of itself.

   And that’s it. No more stock reports. No more sensationalist stock-market entertainment shows. Just sit back, relax, and let your money grow. 

   Check back on your accounts every once in a while - I certainly check on my investments once a month. But the daily swings that are so widely covered in the media? I don’t suffer the same ups and downs. My emotions aren’t toyed with on a daily basis, and that is liberating. Just one step closer to freedom.

   Financial freedom is about more than having the money to do what you please. It’s about being free from the emotions tied to money. And in three simple steps, you can take a little piece of that freedom now.

  1. Go on a financial information diet.
  2. Find a low-cost index fund / index ETF.
  3. Invest, automatically.

   You’re on the road to financial freedom - breathe easy.

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