January 2015
Fresh start.




We hope that you were able to have a fun and safe New Year with your family and friends. This month's collection of articles will help you take a fresh look at your finances for the 2015 year.


If you have any questions about your portfolio, please give us a call.


Be well.



Peter, Claudio and Joanna

Implementing Your Financial Goals

by Jim Yih - January 2015, retirehappy.ca


Happy New Year! As we put the past year behind us and look to the future, it's a typical time for people to start the year with some financial resolutions. For some their focus will be on getting rid of debt. Others will have savings goals. Some people just need to know more about their investments. Many people need to control their spending through budgets. Whatever your goals or resolutions are, the key to success comes from getting it done. As a result, I offer you some key principles to getting your resolutions implemented.


Principles of Implementation

But before I get there, recognize five universal principles of implementing your resolutions. These are principles in my life that I try to live by.

  1. Find focus and simplicity - The great late Jim Rohn, profoundly said "There are half a dozen things that make 80% of the difference in anything you do. Focus on those half a dozen things as they will make most of the difference." Far too many people spend too much time on the 20% that has little impact on the outcome. To find focus, you need to set some goals and stay focused on those goals! There's something to be said about keeping it simple!
  2. Change your lifestyle - Far too often change is temporary. You see this in the gyms right after the new year. They get really busy for the first couple of months and then things start to slow down again because too many people go back to their old habits. To be successful over the long haul, you must make everlasting changes and the only way you can do that is to change your habits. Steven Covey says it take 21 days to change a habit. In my opinion, it takes 21 months to forever change your financial habits.
  3. Just do it - Nike said it best. You see, I am in the information business. I provide lots of great ideas but ideas are just ideas. The best ideas in the world are the ones that are put to work. They are the implemented ideas. You are better to do and fail then to not do anything at all. And if we think back to point number 1, you are likely to be more successful by doing fewer things that are important and do them well than trying to do too many things poorly. You can have all the information in the world but if you don't do anything with that information, what good is it?
  4. Take responsibility - The hardest thing to do is to recognize that you are responsible for where you are today. It's much easier to blame other people or circumstances but remember, you hold a considerable power. When you do hold yourself accountable, the good news it the future is yours to change! Stop making excuses, stop whining, stop blaming. Get focused on the things you need to do to change and improve and get started. If it help you, find a friend to keep you accountable. Or get and advisor to keep you on track.
  5. Stay disciplined - Life is busy and full of temptations to take us off course. The key firstly is to have a course or a plan or a road map. Once you have the plan, then the motivation to get started, you need the will power to keep it up until it becomes a habit.

So before you start your new years resolutions, are you ready to commit to these 5 keys to success?


To view the original article, click here.

What Will it Take For You To Save More This Year?

by Rob Engen - January 2015, boomerandecho.com


I know it's tough to save money. It's even more difficult to up the ante and save more year-after-year. But saving is necessary to meet both our short-and-long term financial goals. Without any savings, and living paycheque-to-paycheque every month, you'll either work until you die or else retire in extreme poverty.


So what will it take for you to save more this year? Some people start off small, saving two or three percent of their salary, and that's fine - every little bit counts. But many of us short-change our retirement by not finding ways to increase that amount every year. Here are four easy ways to save more in 2015:


Take up a challenge

All the rage in 2014 - the 52-week money saving challenge was pinned, posted, and shared across social networks and blogs to help inspire people to save. Ordinary Canadians, who'd typically only post about their vacation and dining experiences, were taking up the challenge and talking about money. Fantastic!

The 52-week money saving challenge is simple: Save $1 in week one, $2 in week two, $3 in week three, and so on until you have about $1,400 saved by the end of the year. Or, increase the degree of difficulty and try to put away $10 in week one, $20 in week two, $30 in week three, and so on until you've saved nearly $14,000.


The best variation I've found is the reverse challenge where savers put aside $52 in week one, $51 in week two, $50 in week three, and so on. The reverse order works well because the bulk of the saving happens at the start of the year while you're still motivated.




Let's be honest - who's going to remain excited after saving a measly $10 in January? But with the reverse challenge, come December, when money is tighter, the amount you need to save goes down as your spending is likely to increase. You'll also get compound interest working for you earlier, and the habit of saving more early on just might stick with you for the entire year.


Find your match

Many employers offer a contribution-matching savings program. But according to industry experts, Canadians are leaving as much as $3-billion on the table by not taking advantage of these programs. Employers are only paying out between 40-50 percent of available matching funds.


Some employers will kick in 50 cents for every dollar you contribute, while others will match you dollar-for-dollar. One could argue that skipping out on an employer-matching program is a worse financial move than carrying a credit card balance for a year. That's because you'd give up a guaranteed return of between 50-to-100 percent in order to pay down credit card debt at 19 percent.

I get it, most of these plans are voluntary and that portion of your salary feels better in your bank account than in some group plan that you can't touch until retirement. But if your employer offers you free money, free money that doubles your retirement contribution, you take it!


The same goes for government matching programs like the Canada Education Savings Grant, which provides grants to RESP contributors - 20 percent on every dollar of the first $2,500 you save inside an RESP each year. That's up to $500 in free money for your child's education.


Bank your raise

One sure-fire way to boost your savings from one year to the next is to bank your raises. Okay, salary increases are few and far between in this economic climate. I know - last summer I got my first raise in nearly five years. But if you are managing to get an annual increase, even if it's just cost of living, here's an example of how to make it work for you:


Most retirement calculators assume that you save a fixed amount every year and that number doesn't grow with inflation.


John is 25 and earns $50,000 per year. He can afford to save $250 per month ($3,000 per year) toward his retirement.


The conventional "pay-yourself-first" approach doesn't assume any increase in that amount over time, and so after 40 years of saving $3,000 per year John will have $480,000 saved for retirement. Not bad.


But how much would John have if he simply increased his savings rate along with his two percent annual raise? It doesn't sound like much, but it would mean an additional $145,000 at retirement - or $625,000.


Build on what's already working

Most of us have already have some sort of automated savings plan in place, whether it's a percentage of income that gets funnelled into our RRSP or TFSA, or monthly contributions to our child's RESP. Even your mortgage payment is a forced automated savings plan.


Build on the good things that you already have in place. Increase your monthly mortgage payments by $50 or $100. You'll easily take a few years off the life of your mortgage - especially if you make a habit of increasing your payments annually.


Keep bumping up the contributions to your RRSP, TFSA, and RESP until you start maxing out the annual limits. Once you get there - see if you can catch up on unused contribution room to further bolster your savings.


Final thoughts

There's always room to improve our finances each year, but often we get complacent with our savings plans and fall victim to financial inertia.


Find a way to grow your savings every year, whether through a fun challenge, by taking advantage of employer and government matching programs, banking your raise, or by simply building on what's already working for you.


What will it take for you to save more this year?


View original article here.

7 Habits of Wealthy Canadians

by Jim Yih - January 2015, retirehappy.ca


Far too often we are lured by the thought that there may be a shortcut to wealth. We all dream about winning the lottery, or investing in the next great investment, or starting a wonder business that becomes a license to print money. I was up late this week and I had the TV running in the background only to hear an infomercial about a stock trading system guaranteed to make your rich. Our society is filled with schemes to go from rags to riches in less time than you think. If it is really so easy, why is 80% of the wealth in Canada in the hands of 20% of the people?


What are these 20% doing right to accumulate the majority of the wealth in Canada? Numerous books and studies have tried to answer this question so here are my seven habits of wealthy Canadians.


They save regularly.

Wealth is not built by accident and contrary to popular belief wealth is not inherited. 80% of the wealthy are first generation and they built their wealth one step at a time. One of the key habits wealthy people possess is a systematic disciplined savings plan. The best way for anyone to develop this habit is to start an automatic monthly savings plan where money comes off your paycheck or out of your bank account before any other expenses or deductions. Studies suggest that wealthy Canadians save about 20% of their income.


They live below their means.

According to the book the Millionaire Next Door by Thomas Stanley and William Danko, you may be surprised at what a wealthy person looks like. According to their research, the typical wealthy person might not be the one that drives the nice new Mercedes, living in the biggest house, wearing the top designer clothes. Rather, the millionaire next door is the person living in the same bungalow they have lived in for the past 20 years, they may drive a nice car but it is an older well taken care of car with lower mileage.


They know where their money is going.

Most wealthy people not only live below their means but they also are very conscious of where they spend their money. In fact, studies suggest that about two thirds of wealthy people know exactly where they are spending their money. If you want to become wealthy, you should develop a habit of tracking where you are spending your money on a monthly basis. Budgeting can be a very intimidating word but the fact remains, it is an essential habit for wealth accumulation.


They use debt prudently.

Wealthy Canadians make a very conscious effort to avoid, minimize and pay off debts. It is so easy in our society to access debt. Every week, I get mail offering lines of credit, credit cards and access to other forms of debt. 'No Money down,' 'Don't pay till 2008,' & 'interest free' are all common ploys to get you to spend money you don't have. It is so enticing but, one of the habits you'll need to build wealth is to avoid spending money you don't have.


They maximize income.

In a study by Statistics Canada, there is a correlation between wealth and income. The more money people make the more likely they are to build wealth faster. While this makes intuitive sense, it may not always be easy to just go out and increase your income. That being said, it is an important habit to building wealth. Take time to train your mind to think outside the box about ways you might be able to increase your earning power. This might mean getting more education or starting a business or getting a part time job, etc. No one said building wealth did not take some effort.


They own appreciating assets.

The majority of wealthy people own their own home. Owning your personal residence develops some productive wealth mindsets. Ownership gives you a better appreciation for the value of goods. In addition, most wealthy Canadians have equity in other appreciating assets like business, stocks and real estate. The next time you put your money into something, ask yourself if it is an appreciating asset or a depreciating asset.


They get professional advice.

Wealthy people typically have a team of professionals to help them accumulate, manage and protect their wealth. This might include accountants, lawyers and financial advisors. Studies suggest that although they use professional advisors, they ultimately make the final decisions themselves. If you want to become wealthy, you must seek help but ultimately retain control over key decisions.


Just like Stephen Covey feels that there are some key habits to become effective, I think there are some key habits to build, manage and retain wealth. Good luck!


View original article here.

Issue: 50
Financial Markets
In This Issue
Implementing Your Financial Goals
What Will it Take For You To Save More This Year?
7 Habits of Wealthy Canadians

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Peter Bailey
Wealth Advisor
Worldsource Financial Management Inc.
272 Lawrence Avenue West, Suite 203
Toronto, Ontario M5M 4M1 

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