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| Top 10 Financial Survival Tips, plus a bonus... |
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1. Relax!!! Use exercise, outings, quiet time, and other healthy means to reduce stress. Stress is a major cause and contributor to numerous, costly and life threatening illnesses.
2. Eliminate debt as quickly as possible. Debt and debt service costs erode wealth and impair wealth creation. Debt service costs for personal debt are normally non deductible for tax purposes whereas returns on non-sheltered investments are taxed. Debt service costs are also often higher than returns on savings. Even in rare situations where the returns on savings slightly exceed the costs of corresponding debt service costs, the net, after tax, difference is usually not in your favour. 3. Use the services of qualified practitioners to organize your finances and to keep you on track. The fees that are charged by good and well qualified practitioners who are also properly equipped (incl. accountants, lawyers, financial planners) are substantially outweighed by the financial gains and/or avoidance of unnecessary financial costs that are accomplished. Remember, your focus should be on the net benefit that you receive, not on the percentage of that added value that represents the costs of using well qualified and properly equipped financial advisors. 4. Create a short-term, mid-term and long-term financial plan. Update these regularly in consultation with qualified and properly equippped financial advisors. 5. Create a budget and stick to it. Monitor your income and expenses on an ongoing basis. 6. Tithe your income. Your budget should provide for at least 10% in the form of "savings" that should be set aside by you from each paycheque or income receipt. If you are carrying a personal debt load, and don't have an emergency fund, build up the equivalent of two months' worth of income first and then use the "tithe" amounts as additional payments to chop away at personal debt, starting with the higher carrying cost debt. Also keep in mind that the "emergency fund" is not a savings account for luxuries and should be kept aside for a "wealth threatening emergency". 7. Purchase the world's greatest financial planning tool - a pair of scissors. Use this tool to destroy all credit cards, except for two. Keep the credit cards that are least costly but avoid carrying debt charges on those cards beyond the payment due date. One of the cards should be placed in a safe and difficult to reach place such as a safety deposit box. The other card should be used for normal expenses but make sure that you treat the card as cash and pay off all the charges by the due date. 8. Place a waste basket next to the place where you open your mail. Discard, without reading, all "junk mail", and in particular all advertising inserts that may be included in regular mail - especially those inserts that may arrive with credit card statements. Note: avoid looking at or reading advertising inserts that are included with bills. These are designed to "take your money". 9. Invest wisely! Employ a qualified and properly equipped financial advisor and avoid hyped investments. Use your head, it is meant for more than just carrying your hat. If it sounds to be too good to be true, it's probably false. Read investment related articles 'with a grain of salt'. Before taking any article writer's suggestions, check carefully whether the writer is in any way affiliated with or standing to gain from the content of the article. A newspaper article praising an investment which, incidentally, is also advertised in the same paper should be seriously questioned. A series of articles that promote one competing product or service or resource over others on a consistent basis should normally be ignored in its entirety. Such series of articles are likely advertising disguised as 'advice'. 10. Unforseen events happen to everyone. Shop around for proper insurance to cover your most significant risks. These include, personal liability, loss or damage to valuable property, critical illness, disability and death. Remember that your risk of suffering a critical illness is one of your highest - and likely the highest - risk. You get what you pay for. Employ the services of independent, properly equipped and knowledgeable insurance advisors. Employing the services of such properly equipped insurance advisors will likely benefit you with lower insurance costs. More importantly, having an independent and knowledgeable advisor will likely assist in the event that you have to make a claim. 11. (This one is a "bonus") Instead of the credit cards that you destroy with the world's greatest financial planning tool (see point #7), collect "point cards" and use these whenever making any purchase. Bear in mind that "points" are essentially refund accounts of overcharges on your purchases. These have become commonplace from gas stations to grocery stores. If you don't collect the "points" the overcharge amounts are retained by the vendor and/or the credit card issuer. Do not convert the "point cards to credit cards as this will defeat the purpose of point #7 above. Use the "points" first to make necessary purchases and then, with remaining "points" to give your loved ones or yourself the occasional treat. On the latter, avoid making "points plus cash" purchases. E.&.O.E. |
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