One of the most common questions is how someone can begin building financial security, especially when they're still paying off loans or other types of debt. Check out these five secrets - they are all strategies that anyone can begin implementing today.
1) Start slowly. Start by saving just a small amount this can get you on the path towards bigger savings. If you cannot afford to put away a big chunk of your salary than try to put away 2 percent. Then increase it as you move from year to year until you reach your goal.
2) Read about financial and economic news. A survey by HSBC Direct found that people they call "active savers," tend to pay attention to financial news. That might help them maintain a general awareness and savviness about money, and also teach them about basic principles such the importance of not trying to time the market, and finding accounts that don't charge hefty fees.
3) Save regularly through automated systems. Online banking makes this technique easy: Sign up for monthly transfers into a brokerage or savings account. You can also transfer funds directly from your pay so you never even see the money, which means you won't miss it. Check in with your human resources department--you might be able to set up an automatic savings account through your pay in addition to your automatic retirement savings.
4) Find saving pleasurable. This trait might sound counter-intuitive: How can anyone enjoy saving money, since doing so essentially prevents the pleasure of a purchase today? But some people--especially successful savers--naturally feel more pleasure while socking money away rather than spending it, since they know they are building financial security, and they can spend it one day in the future. If you don't naturally feel this way about saving, you can teach yourself to, by focusing on how much financial security means to you each time you add to your savings accounts.
5) Began saving as a child. The HSBC survey found that most active savers had been saving money since they were little and they learned the value of saving from their parents. While adults today who didn't receive those lessons can't change their past, they can help pass on better lessons to their own children by talking about finances and family budgeting often. Doing so would put them in the minority: A Charles Schwab survey found that only one in five parents frequently talk to their teens about family budgeting and spending decisions, and just over half of parents teach their teens how to save regularly.
One trick that combines these strategies is to encourage elaborate family discussions about what you will do with all the money you are saving. For example, if your savings goal is to take a family vacation to Belize, children can draw pictures of the rain forest, parents can crunch some numbers, and soon you'll be snorkeling in the coral reefs. (Source:Yahoo Finance)
Thursday, March 3, 2011
Thursday, February 24, 2011
What Does Your Retirement Look Like
Have you ever wondered what you need for retirement? There are some very interesting things to consider. Read on to see how your lifestyle and expenses determine how much money is needed in retirement.
Your current lifestyle may impact your retirement more than you think.
Can it be sustained? How much money will it take to maintain the standards you're used to? What will it take in RRSPs, investments, savings and private and government pensions once retired?
"Understand how much it costs to keep the lifestyle that you are enjoying today and lock it in," says Patricia Lovett-Reid, senior vice-president of TD Waterhouse.
That sounds like a simple plan, but Lovett-Reid says many she talks to register a little shock when they hear that it could take $1 million to enjoy retirement as much as their working days.
Much of what's needed is driven by what people intend to do once they retire, says Lovett-Reid, who writes and speaks about personal finance. Planning should take into account the expenses they anticipate will result from their spending choices once their working days are over.
Portfolio manager Adrian Mastracci says most retired couples can live on $50,000 to $60,000 gross total income from various sources per year. It can be done on less, but might not be "pleasant," he says.
Mastracci says Canadians may not be saving enough for retirement, but he notes the economic climate as well as costs like housing and children that tend to eat up paycheques.
"I think we're a little too hard on a lot of investors," said Mastracci, of KCM Wealth Management Inc. in Vancouver.
Mastracci says he doesn't believe most will need the equivalent of 60 per cent to 70 per cent of their working salaries in retirement. "What I buy into are the expenses you have. Chances are the expenses before retirement and after retirement aren't going to change very much, if any. Can you live on whatever that tells you?"
Lovett-Reid says 50 per cent of pre-retirement income is enough to lead a "modest" lifestyle in retirement. But she likes to use the 70 per cent rule. If the gross salary for the average couple is $63,900 at age 65, that couple would need to generate 70 per cent of that yearly in retirement.
For those going into retirement with consumer debt and mortgages, they're going to have to get "creative," said Gail Vaz-Oxlade, longtime financial writer and TV host.
That could mean getting a roommate, being a companion to an elderly person who doesn't get out much, working at a part-time job or selling your house to get out of debt, she said.
"Unfortunately, there have been people who have gone into retirement thinking they can behave as if they're still working," said Vaz-Oxlade, whose latest book "Never Too Late'' offers advice for retirement planning to those who are unsure of how to get started.
As the March 1 deadline to make an RRSP contribution looms, Canadians will hear numerous cheerful advertisements from financial institutions about making their contributions so they can retire in style. But whatever vehicle you choose to invest in for the future, in the end it will need to produce enough to match your expectations, and that's what you should be thinking about right now.
"We were sold retirement as being the day you stop working and climb on a sailboat and head out into the Caribbean. But that's not what retirement is for 85 per cent of us," said Vaz-Oxlade. "If you want to travel the world every year, you had better be socking away a ton of money." (Canadian Press)
Monday, February 7, 2011
Friday, February 4, 2011
Harper Government says Economic Projections on Track
Good news coming from The Honourable Jim Flaherty, Minister of Finance. He met with Canada’s leading private sector economists to gather their views on economic prospects for the country. The economists confirmed the Government’s economic planning assumptions remain on track.
“Our top priority continues to be the economy,” said Minister Flaherty. “With the economic recovery still fragile, we must remain focused on creating jobs and economic growth, while balancing the budget in the medium term.”
Since Budget 1994, the Department of Finance has used the average of private sector economic forecasts as the basis for fiscal planning. In producing its forecast for budget planning, the Department surveys private sector forecasters for their views on the main economic variables, such as gross domestic product, the unemployment rate and interest rates.
“Our Economic Action Plan has proven to be a dynamic, ambitious and successful strategy in response to an unprecedented global crisis,” said Minister Flaherty. “While the first phase of our Government’s extraordinary response is nearing its end, our Economic Action Plan will continue to play an enormous role in reaching the economic potential of this country and increasing the living standards of Canadians well into the future.”
The Department surveyed 15 leading private sector forecasters in December 2010. Overall, the economic outlook is broadly consistent and on track with the September survey published in the Update of Economic and Fiscal Projections.
The economists agreed that the average economic forecast from the survey was a reasonable planning base for the continuation of Canada’s Economic Action Plan. Budget 2011 will include an updated fiscal forecast, reflecting revisions from private sector forecasters and other fiscal and economic developments.
“After having achieved so much, we must continue to focus on economic growth and stay on course to create more jobs, an even stronger economy, and an even higher quality of life for Canadian families. By continuing to implement our job-creating, low-tax plan we are withstanding whatever global economic winds bring our way,” said Minister Flaherty. “Our medium-range goal of a balanced budget is an achievable one, supported not by overly optimistic forecasts but by the prudence we have shown in the past and the discipline and values we share with Canadian families that are leading Canada forward.” (source: Verico)
Thursday, February 3, 2011
What is Affecting Your Credit Score?
There are five different categories that go into a credit score. 1. On-time record of payment.
2. Number of inquiries or applications for credit.
3. Your utilization of credit is also a major factor — that’s your balance divided by available credit. It’s not based on whether you have a balance at the end of the month but it’s the balance outstanding at a given moment divided by your available credit.
4. Longer term credit history.
5. The broadness of your credit - somebody who has just one credit card doesn’t look as strong as someone who also has a line of credit and say a mortgage.
Click here to read more about what is affecting your credit score. (Garry Marr, Financial Post)
Monday, January 31, 2011
Western Provinces are Holding Strong
Sunday, January 23, 2011
It is back - Win, Win, Win with our Referral Program!
This is a program where everyone wins and you get to share the value of our services with the people you care about....here's how:
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