General Discussions

**BamaStangGuy** · 07-03-2006, 02:46 PM

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When we asked a cross-section of Canada's leading experts on personal finance what they considered the greatest money tips of all time, we figured we would get a half-dozen or so points that would emphasize worthy but boring topics like compound interest or spousal RRSPs.

We were wrong.

Our experts surprised us by telling us in many different ways that money is a deep and emotional topic. One expert put at the top of his list some advice on choosing the right spouse. Another stressed the importance of selectively ignoring your portfolio. Yet another pointed out that your most important investment is your own carcass.
We stand corrected. After sifting through the scores of points that our experts nominated for consideration, we've gained a much broader appreciation of how our finances and our lives intersect. And after much discussion, we managed to winnow the collective wisdom of our panel down to 25 points, which we've arranged in five major groups — Starting Points, Family Values, Saving & Spending, Investing, and Finding Advice. At the risk of sounding immodest, we think that these 25 points are the best primer we've seen on the essentials of personal finance.

1. Money is a tool, not a solution

Bruce Cohen, author of The Money Adviser and co-author of The Pension Puzzle, observes that many people have things backward when it comes to their financial planning. They organize their lives to earn money, rather than using money to live the life they want. "The point of the exercise is not to amass a huge mountain of money, but rather to be able to buy the goods and services you find meaningful," he says. And that leads him to observe that…

2. How you spend it is more important than how you invest it

Most people equate brilliant money management with great investing and spectacular stock tips. But that's misleading. Not only is it next to impossible for the average person to outwit the professionals on Bay Street, but all the brilliant investments in the world won't build your wealth by a cent if you keep spending more money than you make.

The only way — we repeat, the only way — to amass money is to live on less than you generate. We're not talking deliberate poverty, mind you — just smart spending. You should live within your means and, ideally, a bit below what you could really afford. Incidentally, this strategy has some wonderful side effects when it comes to your peace of mind. "Knowing you can afford to tell your boss to buzz off creates a certain sense of serenity," says Cohen. And he goes on to note that "financial independence occurs when your savings enable you to meet expenses without having to rely on a regular paycheque. The less you need to live on, the easier — and quicker — it is to become financially independent."

3. Love your job — or leave it

Like Cohen, Jim Otar, a certified financial planner and author, stresses the need for balance in your life. Few things are more conducive to your happiness, he says, than working at a job you truly enjoy. "If you don't love your job, start searching right now," he says. "Don't stop until you find it — be it halfway around the world or in the basement of your own home."

As New Agey as it may sound, Otar's advice reflects some cold, hard number crunching. The numbers show that you would need to build a massive investment portfolio simply to match the income you could receive from even a modestly paid job that you love. Say you can earn $35,000 a year following your blissâ€”making stained glass, for instance, or working as a fishing guide. That's equivalent to the annual income you could expect to generate from a $700,000 portfolio of stocks and bonds. So if you're working hard at something you hate simply to build a huge retirement portfolio, you may want to consider a simpler option — finding something you love to do and working at it until you drop.

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**Lpspider** · 07-03-2006, 08:12 PM

Interesting, though I don't agree with all the points.

**Erwin** · 07-03-2006, 08:36 PM

Very interesting. I agree that money is a means, not an end. The Bible does not say that money is the root of all evil, but the "love of money" that is the root of all evil, and it's very true. Money itself is not a bad thing, but if we make it the goal then we miss the point.

**Complete Hostin** · 07-04-2006, 01:51 AM

Yep this article was a great read thanks for posting it!

**imported_punkstar** · 07-04-2006, 02:08 AM

Having a job that you love has to be one of the most important things. I agree with that.

**BamaStangGuy** · 07-04-2006, 02:29 AM

Quote:

Originally Posted by punkstar

Having a job that you love has to be one of the most important things. I agree with that.

I agree as well

**Bryan Le** · 07-05-2006, 03:47 AM

Great read - I've bookmarked and will read it from time to time when I need some inspiration.

**Dr. Domaining** · 07-05-2006, 11:32 PM

Thank you for sharing! There is a lot of worthwhile information there.

Thank you again!

**Rhys49** · 07-08-2006, 09:48 AM

Thanks

I'll try to remember them when I'm making money.

**Atomm** · 07-08-2006, 10:45 AM

That reminds me of my favorite Audiobook on Personal Finance. It's called All Your Worth. If you liked that article, you will love this book.

Sheesh, I spend too much time driving to and from work.....

**xboxundone** · 07-10-2006, 11:27 AM

Quote:

Originally Posted by punkstar

Having a job that you love has to be one of the most important things. I agree with that.

Yep if you don't love it LEAVE as in the long run you will be MUCH better off!

**studio** · 07-11-2006, 05:20 AM

Nice tips BamaStang

**obenix** · 07-11-2006, 05:43 AM

Thanks for sharing. Good resource.

**Correctus** · 07-11-2006, 06:21 AM

Good read, that was quite worth the time. Thank you very much for posting it

**obenix** · 07-11-2006, 06:56 AM

Quote:

Originally Posted by xboxundone

Yep if you don't love it LEAVE as in the long run you will be MUCH better off!

I doubt that it's that easy to leave a job... especially if you have dependencies (wife/children) to feed and mortgage to pay...

**pcdoc** · 07-11-2006, 09:25 AM

In a heavily taxed society (USA > 50%), it's not how much you earn, but how much you spend.

**j-weezy** · 07-11-2006, 11:43 AM

great post...well done!

**Tran** · 07-11-2006, 12:54 PM

Great ideas and concepts in this article nice addition to my growing knowledge

**imported_ipodman** · 07-12-2006, 02:11 AM

Quote:

Originally Posted by BamaStangGuy

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I think that the love it or leave it part! most people hate the job at some point!

**tool guy** · 07-15-2006, 06:49 PM

I agree you should invest what you earn.
Investing is not always in a bank, stock market etc....
Re-invest in traffic, buying competitors, increasing your online presence.