Canadian Finance Blog

Improve Your Finances: Look Up, Not Down

Posted: 26 Jan 2012 02:00 AM PST

They say that you’re an average of your 5 closest friends.

Like anything “they” say, this soundbite has to be taken with a grain of salt. There’s undoubtedly some truth in it, like there is in every cliche, but most of the time it’s just simply not true. My interest in finance dwarfs the interest of my 5 closest friends. Their combined interest probably doesn’t even exceed mine. I’m much more interested in frugal living than my friends are, as evidenced by their choices in houses, cars and clothes. About once every few months I get some sort of backhanded compliment that I’m just a little different than everyone else. Not better or worse, but different.

As I’ve talked about approximately 4,367 times before (I really suck at these estimates) I’m serious about becoming wealthy. One of the main reasons I ventured into the world of online writing is because I wanted to join a community of like-minded people that wanted to improve their finances. There were hundreds of finance bloggers who were working towards one goal, so I naturally gravitated towards the community. And for some reason, the community embraced me. I’m thinking it’s mostly pity.

But yet, as I continue to read and participate in the discussion, I’ve started to notice a theme. It started with me noticing people online referring to themselves as “debt free except the mortgage” or “debt free except my student loans”, which is the equivalent of a drug addict saying they’re drug free except for cocaine.

Let’s assume they continue to make progress, and even pay off all their debt. To use a video game metaphor, that’s like beating the game on the easy level. Paying off debt is relatively straightforward. It requires persistence, and that’s about it. Once debt is paid off, it’s time to move up to the medium level of finance – building wealth.

And yet, this is where many people struggle. They lack direction without a debt payment forcing them to be fiscally responsible. They lack understanding of the big bad world of investing. They can’t tell the difference between a put option and a debenture, so they throw up their hands in defeat. Either they continue to save and put a large percentage of their portfolio in ultra-safe investments, or they loosen the purse strings and begin to spend.

How to improve your finances

How do you avoid becoming one of those people? The answer is pretty simple. You need to emulate the rich, rather than sitting on your laurels as being better than the poor.

This is the danger in labelling yourself as “debt free except ‘x’”. By doing that, you’ve trapped yourself in the mentality that paying off consumer debt is the end of your financial journey, rather than the beginning. Sure, paying off consumer debt is an accomplishment. Maybe it’s even a major accomplishment. But all it represents is getting back to even. You weren’t born with consumer debt. Most people spent at least a couple years as an adult without it. Congratulations, you’ve gotten back to the starting line. It’s now time to start the race.

Instead of looking down to all of your friends that are struggling financially, I think you should look up. Find someone who has actually made a significant dent in their quest for financial independence. Find a millionaire or two – maybe even a wealthy barber – and spend some time picking their brain. How did they get wealthy? What career did they have? Did they own their own business? Find what they did effectively and copy it faster than a Chinese pirating website.

Don’t concern yourself with what the mere mortals are doing with their finances. If you do, you’re just going to hold yourself back. Say you save $500 per month. You’re satisfied with that number, partially because none of your friends aren’t managing to save that much. But what if you could save $1000? Or $1500? You’ll set your goals too low simply because you’re doing better than everyone else.

Imagine if a professional golfer compared himself to a duffer at the local men’s league. He doesn’t need to practice! Look at how much better he is! It seems like kind of a silly comparison to make, but you’re guilty of the exact same thing when it comes to your finances. A professional golfer should be comparing his game to the best on the tour, it’s the only way he’s going to improve.

Moving forward is usually a bit of a struggle. If you’re not saving enough that it hurts a little, I’d maybe argue that you’re not saving enough. But if you can find a way to do it, consistently over the years, you can increase your lead on the people who just can’t get ahead. If you keep your eye on what’s ahead, you won’t even have time to notice what everyone behind you is doing. Which is probably for the best. Leave those people in the dust. Your finances will thank you.

Improve Your Finances: Look Up, Not Down originally appeared on Canadian Finance Blog on January 26, 2012.

Canadian Finance Carnival #72

Posted: 22 Jan 2012 02:00 AM PST

Big Cajun Man at THE Canadian Personal Finance Site presents Quicken 2012 a Review, saying “A review of Quicken 2012 a great budgeting tool.”

Teacher Man at My University Money presents Pay Off Debt Fast or Build Assets?, saying “Yes, I would rather have all my currents debts paid off than be in my current financial position… because then I could turn around and put myself in much better debt all over again! ”

SB at One Cent at a Time presents Top 10 Budgeting Tips for The Year, saying “10 important tips for yearly budget. This explains the characteristics of a good budget that can help you throughout the year on controlling expenses and saving money.”

Mike at Rewards Cards Canada presents New RBC Shoppers Optimum Banking Account, saying “The new program will take effect on March 17, 2012, and will feature a co-branded RBC Shoppers Optimum banking account and debit card with enhanced Shoppers Optimum rewards.”

Don at Money Reasons presents My Son Is A Young Entrepreneur, saying “This is about my son’s transformation in becoming a young entrepreneur. Not bad considering he is only eleven.”

Jon the Saver at Free Money Wisdom presents 8 Tips on How to Get Along with Your Boss, saying “If you get into the all too common habit of seeing your boss as an enemy—or at least as an adversary—you will display that through your behavior and attitude. But see your boss as a friend in authority, and you might forge the kind of alliance that will advance your boss's career and yours at the same time.”

Philip Taylor at PT Money Personal Finance presents How to Become an Online Tutor and Make an Extra $1,000 a Month, saying “Ways to Make More Money: An interview with an online tutor discussing the pros/cons and qualifications needed pursue a part-time job in that field.”

Corey at 20s Finances presents Why Financing a Car Can be a Bad Idea, saying “If you are looking to get a car and you don’t have enough money saved to purchase the car outright, you may be tempted to get a car loan so that you don’t have to wait. But is this really the best route to take?”

YFS at Your Finances Simplified presents 4 Tips to Improve Credit Even After A Bankruptcy, saying “A bankruptcy can be a financial event which wrecks credit and hurts a consumers ability to qualify for loans. Its effects can be felt for years afterwards, as it appears on a credit report for 7-10 years depending on what type of BK you file for.”

krantcents at KrantCents presents How Students with NO Credit History, Can Begin to Build a Financial Record, saying “Here are 3 ways to allow young adults to safely build credit without the risk of going into debt.”

Eddie at Finance Fox presents Million Dollar Question: Should I Use My Savings To Pay Down Debt or Fund My Retirement Plan?, saying “Mortgage vs RRSP. TFSA vs Student Loan. Credit Card Debt vs RRSP. TFSA vs Mortgage. RRSP vs Car Payment. Lots of different situations, some of us are in one of these and others may have two or more different forms of debt to pay down.”

Darwin at Darwin’s Money presents US Debt Now Equivalent to Entire US Economy – Investing in This New Era, saying “The United States has just reached the dreaded 100Det-to-GDP ratio with its $15.2 Trillion debt level surpassing the value of all goods and services produced in-country. This is important because it vaults us into a whole new echelon of debt-ridden societies with financial crises of their own: only Greece, Iceland, Ireland, Italy, Japan and Portugal have debt-to-GDP ratios exceeding 100 This is scary stuff folks!”

Matt at Living in Financial Excellence presents What To Do After You Are Debt Free, saying “You are debt free! The cycle of debt that you have lived before is starting to break. But now that you have gotten over that mountain and can now see from the top the question most people ask is, "What's next?" The answer I give you is: plenty. Here are some tips and things to do to keep you motivated and focused now that you are debt free:”

Ashley at Money Talks Coaching presents Get Out of Debt Even If You Can’t Maintain It, saying “I think paying off your debt is a valuable exercise even if you don't think you can maintain the debt-loss. You will practice skills you need to improve your financial life just like dieting did for my weight. It will bring your debt into focus and you will see it in a way that you've never seen it before.”

John at Passive Family Income presents When Being Gazelle Intense, Take Time to Regroup, saying ” If you are aggressively paying down debt, take the time to recoup occasionally. Here are some tips to remember for avoiding gazelle intensity burnout:”

Annabelle at Shopping Detox presents Credit cards vs. frugality, saying “Is it better to get a points credit card, or just pay down your balance with a low-interest card?”

Mike Collins at Saving Money Today presents Costco American Express Card Review, saying “Is the Costco American Express credit card worth adding to your wallet?”

Grand Per Month at Grand Per Month presents How to Make $1000 a Month as a Virtual Assistant, saying “Are you organized? Self-motivated? Do you like to work from home and have office skills such as computer knowledge and typing ability? If so, you may want to consider working as a virtual assistant.”

Linsey at 1099 Mom presents The World of High Stakes Sweepers – Is It Real?, saying “Suddenly, just as “Extreme Couponing”caused a bunch of new people to start furiously clipping, there is a new interest in entering sweepstakes, and some people are left wondering if winning prizes will be their ticket out of debt, poverty, or working a regular job. ”

Mike at The Financial Blogger presents January Net Worth + 14.62% It's Payback Time!, saying “Are you paying your debt off?”

Kevin at Invest It Wisely presents 3 Frugal Ideas for a Romantic Valentine’s Day, saying “Remember, there's no need to spend a fortune on Valentine's Day. Sometimes, a bit of cheap fun is all you need. So, what are your ideas for Valentine's Day this year?”

Aloysa at My Broken Coin presents Live A Little: Have A Latte, saying “This is a new series I am starting on this blog. It is called Live A Little, and it is not about how to save more by cutting expenses and living frugal. It is about spending, but in an intelligent way.”

Marie at Money Spending Mommy presents Easy Ways to Improve Your Gas Mileage, saying “Many drivers have sought to cut their spending on gas by driving less. While this is certainly a good strategy, we can't stay home all the time. Here are some tips for using less gas when you do drive.”

D.J. at The Family Wallet presents Start Early – How to Encourage Kids to be Savers, saying “So how do you encourage kids to be savers? The best way to teach kids how to save is to teach them that buying brand name items is not necessary when store brand names or cheap name brands are just as nice and "in" as they would say. ”

SavingMentor at HowToSaveMoney.ca presents The Best Price Comparison Sites in Canada, saying “Using price comparison websites is one of the easiest ways to save money when shopping online. They also come in handy when shopping offline because prices are usually identical for stores that have both an online and an offline presence.”

CF at The Outlier Model presents Cutting down your hydro or electricity bill, saying “As we all know, heating costs are a major consideration for the Canadian winter! Living in Vancouver, this doesn’t affect us as much, however the recent cold snap to hit the West Coast has really affected our hydro costs. Check out what we’re doing to keep costs down!”

Jeffrey at Saving Advice presents 101 Simple Pleasures That Don’t Cost a Dime, saying “There are a lot of simple pleasures out there and many of them cost nothing to very little. Embrace them. Actively seek to find them daily. Enjoy life on the cheap.”

SavingMentor at HowToSaveMoney.ca presents How to Eliminate Your Home Phone Bill and Long Distance Charges!, saying “The Internet is becoming the only infrastructure necessary to do many of the things that used to require special mediums before like making phone calls, watching TV, listening to music, and so on. Yes, the internet can even help you completely eliminate your monthly home phone bill as well as the long distance charges you may have become accustomed to!”

Kennedi at Face and Fitness presents Getting Fit on a Budget, saying “Not everyone can go out and pick up an expensive gym membership. Here’s a list of free or low-cost resources to help you stay healthy on a budget.”

Shaun at Smart Family Finance presents Lottery Winner Loses Everything in Four Years: Smart Approaches for Families with Income Windfalls, saying “Lottery winners are famous for winning fortunes and then losing them. That is because it is easy to make financial mistakes when families run into income windfalls. However, there are a few approaches to help you to make smart decisions and minimize the risks of losing everything.”

Amanda L Grossman at Frugal Confessions presents Health Insurance Companies Give Financial Incentives for Good Habits, saying “Since I discussed a ‘stick’ approach my health insurance company began on January 1, 2012 by charging a higher premium for smokers than for non-smokers, I’d like to take the time to discuss a ‘carrot’ incentive approach!”

A Blinkin at Funancials presents CD’s are for Hypocrites, saying “I would venture to say that there are two investment products people learn about before any others Stocks and CDs Certificates of Deposit. Assuming most people learn about these two options when theyre young, I would think the way they were explained was elementary. Something like stocks are risky CDs are risk-free. But are they remembering inflation?”

Jester at The Ultimate Juggle presents A Side Income, saying “Finding a side income can go a long ways to meet your financial needs. Find out how to manage your time and make it happen.”

Money Cone at Money Cone presents How to Invest in India, saying “India has shown tremendous growth and to see where India might be in another decade, just look at China today! For those who missed the China train, India might be a good opportunity. Even Buffett thinks so!”

PITR at Passive Income To Retire presents Generate passive income – How to do it, saying “If you want to generate passive income, you need to know the two ways that people establish a passive income.”

Neal Frankle at Wealth Pilgrim presents What Is a Mutual Fund Prospectus? How to Read and Understand It., saying “What is a mutual fund prospectus? It's a document that gives you an inside look at your mutual fund, and it's about as inviting to read as a telephone book. That's exactly the way Wall Street likes it. As long as you don't take the five minutes it usually requires to go through the document, you won't be aware of the fees the fund charges you. Also, by failing to read the prospectus, you'll be in the dark about the wild investments the 25-year-old multi-billion dollar fund manager can make with your money. There is no way around it. For certain investors, reading the prospectus is a critical step in mutual fund evaluation.”

John at Buy Stocks Online presents In the Money Options Explained, saying “In order for a stock option to be considered in the money, it must be worth exercising. This means that the strike price of the contract must hold more value than the current share price of the underlying stock. Both puts and calls can be considered in the money, however the process of determining this is different for each.”

Marie at Family Money Values at Family Money Values presents High Beta Wealthy and the Forbes 400, saying “There is a new theory floating around that a group called High Beta Wealthy exist. The idea is that folks in the top 1% of the wealthy don’t stay there – they are ‘high beta’. Find out how these Forbes 400 folks dropped off the list and whether or not YOU are high beta.”

Investor Junkie at Investor Junkie presents How Do You Become A Great Investor? Learn How to Shop!, saying “I actually find it pretty amazing that people will trample over each other to save a few dollars during black friday, yet run away in fear when stocks tank.”

Marissa at Thirty Six Months presents The importance of investing in the new year, saying “Discusses why you should make investing a top priority this year,”

Green Panda at Green Panda Treehouse presents What Are Some Investing Risks Worth Taking?, saying “Risks worth giving a shot.”

Martin at Studenomics presents What's The Best Online Bank For Young Professionals?, saying “Have you found the right bank account yet?”

IS at Intelligent Speculator presents How I Caculate Returns For Long And Short Tech Picks, saying “A peak at some investing tips.”

Div Guy at The Dividend Guy Blog presents If You Want to Know Where the Stock Market is Heading, Read the Following, saying “A look at the future of the market.”

Jason at Live Real, Now presents Let’s Talk Pets and Other Unexpected Expenses, saying “I've been complaining on and off about the cost of my poor Pug's allergies, so I thought I'd do a little post to let all of us vent a little about unexpected expenses.”

Peter at Bible Money Matters presents Creative Ways to Tithe, saying “You may think that I am a heathen for suggesting such a blasphemous thing, but I believe it is perfectly justified to contribute your tithe towards other causes”

Justin at Money Is the Root presents Blog Goals and Updates, 2012 – #2, saying “Welcome to the 2012 blogging updates for Money Is The Root. Just as last year, I will provide weekly updates on my site statistics, blogging income, and intended goals for the short and long term. These posts will provide ongoing updates regarding my progress on my three blogs, and perhaps more in the near future, as well as achieving $30,000 in online income this year”

Robert at The College Investor presents Change Requires Action, saying “Changing your financial habits requires you to act – here are some tips and tricks to help!”

Miss T. at Prairie Eco Thrifter presents Alternative and Sustainable Energy Sources: Biodiesel and Biomass Fuels, saying “Several factors have lead to increasing interest and research in biofuels. These include the price of oil and the fluctuations in its price, the desire for more security of fuel and energy and concerns about greenhouse gas emissions from fossil-fuelled vehicles.”

Sustainable PF at Sustainable Personal Finance presents Why We Use Holistic Blend Healthy Dog Food, saying “What do you feed your dog (or pets)? Have you ever wondered why your dog seems to get sick or suffer from various ailments, some more serious than others? Do you take your dog to the vet for issues other than regular check ups? Have you ever taken a close look at what is in your dog's diet? Well, you should.”

Crystal at Budgeting in the Fun Stuff presents I Visited a Psychic Monk – You Read that Right, saying “I like being spontaneous and I never want to look back on life and regret not doing something fun. This is why I woke up at 5:45am last Wednesday so we could wait in line for a reading with a psychic monk.”

Sabrina at Frugal Living presents Party Tips for the Broke Young Professionals, saying “How can you open your home and make your friends feel welcome without going broke in the process? Check out the frugal party tips below.”

Erika at Newlyweds on a Budget presents My Plan to Lose Ten Pounds in Three Months, saying “Have you joined the 10-Pound Challenge yet? Lose ten pounds in three months, win money! Everyone needs a plan to lose ten pounds in three months. We all want to lose weight fast and find the easiest shortcut to get there. ”

Mich at Beating The Index presents NAL Energy to Underperform in 2012?, saying “I believe the stock will underperform in 2012 based on running 2 set of scenarios which indicate the company is not in its best shape.”

LaTisha at Financial Success for Young Adults presents What is a Portfolio?, saying “A portfolio is made up of assets. There are five major asset classes of intangible financial instruments; Stocks, Bonds, Options, Futures, and Foreign exchange.”

KT at Personal Finance Journey presents Is Outsourcing Household Chores a Luxury or a Smart Money Move?, saying “I don’t like cleaning; and I make no secret of that fact. Dust can multiply for months, and I might notice that it is there, but I probably won’t clean it. I do have the basics that I do every day – dishes, and general picking up. I clean the bathrooms and sweep and mop the kitchen floor, so I am not a complete slob, but I hate deep cleaning.”

Don at MoneySmartGuides presents Radical Idea to Create Jobs, saying “I have many crazy ideas. Most aren't fit to become reality like my spray-painting lawnmower for when the summer heat turns your grass brown. But every so often, I come up with something that I feel holds merit. And my”

Suba at Broke Professionals presents Five Ways to Save Money and Get Fit at Work, saying “Now that the New Year is here, we are all looking for ways to trim down the expenses and the waistlines. Here are a few ideas on how to do that before or after work or at lunch time. Use Lunch Get some exercise on your lunch break. Read this article for more ideas!”

101 Centavos at 101 Centavos presents How NOT to Invest in Water, saying “I’ve been reading quite a bit about water lately. Set a Google alert for water scarcity India China, and your inbox is bound to fill up with stories of water scarcity.”

Jeffrey at Money Spruce presents Five Reasons to Give Up Goal Setting, saying “Should we give up goal setting to achieve more success? Goals are something everyone uses, but is it the most effective for getting things done. Here’s a discussion why it might not be.”

Young and Thrifty at YoungAndThrifty presents Quicken Home and Business 2012 Review, saying “I was very excited to try Quicken because I have heard so many great things about it and it almost seems that any Personal Finance Blogger isn't really a personal finance blogger if they don't use some sort of snazzy personal finance software like Quicken to track their spending, their budgets, and their investments all in one place.”

W at Off-Road Finance presents Additive vs. Multiplicative Thinking About Money, saying “A look at two ways of thinking about money and which is appropriate when.”

Kevin at Thousandaire presents Claim Your Unclaimed Property, saying “Check to see if you have unclaimed property free money waiting for you. Just search at your state’s website and you might have something!”

Kyle at The Penny Hoarder presents 4 Reasons You Should Not Invest in Real Estate Right Now, saying “A few weeks ago we shared with you some reasons why this might be a good time to invest in real estate and this week we wanted to present the other side of the argument. Here are four good reasons not to buy real estate right now…”

Madison at My Dollar Plan presents Pay Off Your Mortgage with a Credit Card, saying “Some might see this as a risky move but paying off your mortgage with a 0% credit card can save you a lot of money! Read on to hear one person’s story.”

Forest Parks at Frugal Zeitgeist presents Canada’s Most Affordable Cities For Real Estate, saying “Canada’s real estate costs vary quite widely area to area. This article looks at which cities are considered to be the most affordable.”

Martin at Passive Income Now presents Maintaining Your Rental Property Once You Hand The Keys Over, saying “How you can survive as a landlord.”

Todd R. Tresidder at Financial Mentor presents 5 Surprising Reasons Why Retirement Calculators Can’t Be Trusted, saying “Retirement calculators appear simple on the surface, but underneath that facade is a complex set of assumptions that can confound even the most seasoned expert. Discover 5 reasons why you should rethink how you use a retirement calculator…”

Andy at My Retirement Blog presents The Number One Retirement Fear, saying “According to an AARP study recently released, health care issues are the number one biggest fear retirees have. Is retirement affordable? The biggest challenge for most potential retirees is the cost of care and the ability to stay healthy through retirement. Experts claim one will need an extra $200-$300,000 to pay just for health care.”

ETZ25 at Entertainment Timez presents Starting Up A Roth IRA For Kids, saying “My son now has earned income and we are starting up a Roth IRA for him to participate in. Read why are are starting a Roth IRA for Kids!”

Wayne at Young Family Finance presents Retirement Planning for Young Families, saying “Find out what the first step of retirement planning should be for young families.”

Lazy Man at Lazy Man and Money presents Time to Buy that Vacation/Retirement Place?, saying “The interesting thing is that as we were considering this, I opened up this month’s issue of Smart Money and James B. Stewart’s Common Sense column mentions buying that vacation/retirement place now… for the exact reasons were were considering… he’s looking for “something that’s cheap and likely to appreciate.”

Boomer at Boomer & Echo presents Do You Have A Locked In RRSP?, saying “Locked In Retirement Accounts (LIRAs) were created to transfer vested pension funds that you take with you if you leave your employer prior to retirement, such as when you change jobs.”

Dr Dean at The Millionaire Nurse Blog presents Fitness Affects Finances: How?, saying “There are more reasons than ever to take responsibility for your health and fitness. Wherever you are in your retirement planning, it's time to take care of the only body you have to get you to retirement and beyond.”

Ken Faulkenberry at AAAMP Blog presents Saving, Investing, and Gambling: The Importance of Differentiation and Compartmentalization, saying “Definitions of saving, investing, and gambling with an explanation for the need to differentiate and compartmentalize each.”

Glen Craig at Free From Broke presents How to Get a Bargain When Apartment Hunting , saying “The demand for renting has increased as the housing market flounders. Don’t get caught paying too much for rent! See how to get a bargain when you are apartment hunting.”

Hank at Money Q&A presents Four Great Benefits Of Buying A House, saying “There are many great benefits of buying a house such as wealth creation, tax savings, forced savings, and others. Renting should not be your default option when there are so many great benefits of buying a house.”

Daniel at Sweating the Big Stuff presents Tax Evasion Costs Over $300 Billion Each Year, saying “Think tax evasion is a small problem? Thing again: tax evasion in the U.S. amounts to $337.3 billion a year.”

Tushar at Everything Finance presents H & R Block Opt Not To Offer Refund Anticipation Loans This Tax Season, saying “For now, refund anticipation loans are still legal, but declining in popularity, as evidenced by H & R Block's continued tax filing growth, even without offering the expensive convenience of refund anticipation loans.”

Canadian Finance Carnival #72 originally appeared on Canadian Finance Blog on January 22, 2012.

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