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Money goals for 2018
Small steps to make a big difference
BY ED REMPEL
DO YOU want to feel more financially secure in
;;;;? Here are five goals that can change your
life forever. Pick one—or all—and make ;;;; the
year you prioritize your financial health.
Be proudly frugal and live within your means
There are two kinds of people: those who
have ;; million and those who spend ;; million.
Most millionaires became rich by being frugal.
I see people every day who try to look rich,
with an expensive car, clothes, vacation property
or fancy trips. These are the “wannabe rich.”
Most millionaires are low-key about their money.
They do not want it to separate them from their
friends or family. The key is simply this: Spend
less than you make.
Pay yourself first
Set aside ;; to ;; per cent of your before-tax
income to invest every month. Set up an automatic monthly investment to make it easy. After
all, if you wait until the end of the month to see
what is left over, it will be nothing, right?
To maintain your current lifestyle after you
retire, you probably need to invest at least ;; to
;; per cent. This may sound hard, but you get
used to it quickly. Many people who start a
monthly investment plan soon forget they are
doing it. Figure out the most you can invest and
Be an investor, not a saver
Long-term investing, not short-term saving,
is how you become financially independent.
Invest in stocks for the long run.
Investing can be intimidating, and choosing
stocks can sound scary. You can do this; it is
worth it. If you are not an expert, get advice from
someone knowledgeable whom you trust on
three or four good mutual funds or exchange-
traded funds to own long-term. Tell your trusted
adviser you want to own as much in stocks as you
can possibly tolerate, and own them for many
years. Also, you want to pick mutual funds with
top fund managers or broadly diversified ex-
To achieve your life goals, like retiring
comfortably, you need your investments to
grow. Stocks give you the highest long-term
return. Stocks go up and down short-term, but
have been remarkably consistent long-term.
According to the S&P ;;; index, the worst
;;-year period for stocks in the last ;; years
showed a return of nearly ; per cent per year.
That gives you nearly seven times your money!
Stocks will go down sometimes. Stay confident.
Be a long-term investor.
Pay off your credit cards every month
Carrying a balance on your credit cards is a
trap that is difficult to escape. Paying them off
slowly takes massive discipline and almost
everyone gives up. You need to get free of this
trap. Do whatever it takes. Apply for a low-inter-est credit line. Refinance your mortgage. Go on
an extreme frugal-spending diet.
Pay off your credit cards quickly. Then pay
them in full every month. Ask the credit card
company to automatically take the full payment
on the due date. Paying them off is a ;; per cent
return on your investment after tax. That is the
best guaranteed return you can get. You get a six-week interest-free grace period every month if
you pay in full by the due date. Leave even one
dollar unpaid and you are charged ;; per cent
interest from the date of every purchase.
Get your professional financial plan
Financial independence does not happen on
its own. It takes effort and planning. Find a fee-
for-service financial planner and pay for your
professional financial plan. Ask to see a sample
plan first. It is a one-time cost with huge long-
term benefits. A good financial plan will address
the following: retirement, a registered retire-
ment savings plan, a tax-free savings account,
paying off your mortgage, funding your kids’
education, creating an emergency fund, saving
for a car and more. The plan should also instruct
you on how to balance it all.
A plan more than pays for itself. A ;;;; study
by Michael Finke and Terrance Martin showed
that people who worked with a financial planner
who prepared a retirement plan for them saved
;; per cent more than those who didn’t.
Regardless of your starting point, there’s no
time like the present to start planning for financial security. C
Ed Rempel (Unconventional Wisdom.ca) is a
fee-for-service ;nancial planner.