As I spent another Sunday evening last week eating my dinner in my cubicle I knew that I would be doing it again this weekend for the N-th day/week in a row. Each night as I went home this week, I noted a few things. The subject of this article never screamed at me so loud.
I’ll start with a few comments of our working world:
Our employers want us to work smarter, faster, harder, and just more in general:
– Weekends & long hours are the norm and expected.
– Working at home (laptops, blackberry, cell phone, etc).
– Increasing pressure to get things done faster & better than before.
– Increasing pressure to be cheaper than competition (Reasonable salary demands are under more scrutiny).
– Increasing pressure to achieve significantly more just in order to receive an insignificant pay raise.
– The increasing work demands have taken a toll on people’s health & family life.
The world is a much different place than what it was 20, 10, and even 5 years ago:
– Continual increases in downsizing, outsourcing, contract work, pension elimination, reduction of assistance, competition, recklessness in executive compensation plans, greed, scams/fraud, etc.
– 40 & 50 year as well as subprime mortgages have become more mainstream. Mortgage in latin also means “to the death”. What an interesting notion!
– The cost of almost everything, compared to our salaries has increased significantly. Food, education, city services, fuel, water, energy, medication, insurance, housing, and taxes. They have all increased at annualized percentages much more than salaries & labour rates. In the past, one modest income could raise a family of three kids, pay for the mortgage, pay for a car, ensure kids have a good education, and allow one parent to stay at home. Today, this is difficult with two modest incomes!
– Just think of the types of taxes & surcharges you are paying on daily things and how they increased (fuel, transportation, goods & services, tourism, healthcare, education, property, city services, regular income, garbage/disposal, liquor, food, other user fees).
– The cost of living is much higher today than it was in the past. Forget the statistics! Anyone who has taken a university statistics course knows that statisticians can show any result they want, depending on sample size, cross-section, etc used. It is much harder to sustain the type of lifestyle that our parents envisioned for us. If we time-warp back to our parent’s time, with the education and jobs most of us have today, we would be much better off. Their advise was good, but their advise was for a future identical to those times.
– I generally ignore statistics and “official” inflationary numbers. I believe there is one accurate and simple way of knowing if the cost of living has increased. This can be assessed yearly and compared across a number of years:
Without doing this on paper, just think about how much you made this year, and all the taxes you paid to the various levels of government. Think about how much money you had to use just to put food on the table, clothes on the back, and keep the roof up. How much money did you need to use in order to sustain your employment and the other necessities of life? (transportation, medical, education, etc). Now think about what was left over. How much better were you able to provide for your family? Do you feel your lives significantly improved?
No one is going to care more for you and your family than yourself:
– Your employer does not have your interests in mind as their top priority. Someone should. It should be you!
– Your employer’s main priority & bottom line is to make money for the company. No one works harder than the employees at the very bottom of the corporate ladder. No one is paid less than the ones at the bottom either.
– Personally, my employer (a publicly traded international corporation) has cut our RSP (401K) matching, to increase our potential bonus payout at year end. Funny thing was although we made a profit, we did not meet the target numbers that the executives had set for us. No bonus was awarded this year. Executive’s bonus is awarded using different criteria. Does this surprise you? Probably not.
Everyone wants a piece of your money pie:
– Look at all the advertising (magazines, sponsored events, washrooms, bus stops, sides of buildings, etc).
– Look at all the energy & other door knockers, telemarketers.
– Charities need more money (corporate events, at the grocery store cash register, malls, television, etc).
– Fund raising at the kids’ schools occur every other week.
– Extended service plans being pushed at more stores.
– More stores offering financial services, credit cards, mortgages.
– Scams & fraud are more abundant today than ever.
– Cell phone / TV / internet providers trying to convince you to sign up to their 3 year high priced bundles.
The list can goes on & on.
Work for yourself & your family’s goals (“Mind your own business”):
– “Mind your own business”, a phrase from the book “Rich Dad, Poor Dad” by millionaire Robert T Kiyosaki. A very important book that I read in the early days of my investing journey.
– This does not mean quit your day job! Most of us are in a situation where there is no quick alternative to providing the same level of income needed to sustain our lives. But you need to demand of yourself the same things your employer does. Imagine what you can achieve if you work 60 hours a week on improving your financial education & knowledge, or learning to research your investments, etc.
– Your employer is not going to make you rich so that you can retire young. Working for your own goals is the only way that will happen. Or the lottery, but I don’t like those odds.
– People are willing to kill themselves working for their employer. Why not take the same attitude & effort for yourself?
– The more time you are able to devote the quicker you will achieve your goals.
– Too often, people are lazy when it comes to improving themselves or their knowledge. “Its too much work to learn about investing”. You won’t become an expert overnight, it will take time, and it will take work. But its definitely harder to work the remaining 95% of your life for your employer, than it is to work hard the remaining 50% of your life on improving your financial knowledge & skills so you can enjoy the other 50% of it.
– I admit, I’m lazy too. But I’m so lazy, that I’d rather work really hard for myself now, than to have to work almost till I die for my employer (which is the sad truth most people will suffer).
What to do?
– For most people even a couple hours a week is difficult. But every precious minute counts. Over time it will yield results. The key is to be consistent and to devote as much time as possible (you still need to balance everything else). Here are several different ideas for you to start with. I recommend all of these items, but you can modify the time spent to suit your own schedule :
>> 2 minutes at the end of the work day to listen to the radio’s business news (wrapup/summary).
>> 5 minutes at the beginning & end of the work day, to read business & economic headlines (not even the full articles).
>> 30 minutes at the end of the week, doing some research on potential investments with your knowledge so far.
>> 30 minutes a day of reading a book on personal finance, investment, etc.
>> 30 minutes of listening to a financial audio book on your drive/bus into work.
>>** 10 minutes a day on thinking about your goals, tracking your progress, thinking about what baby steps to take next. This can be done mentally or paper if its easier, but I can stress the importance enough! If you don’t know where you want to go, where you are now, or how get to where you want to go, you probably won’t get there.
>> 5 minutes every Sunday night at the end of the week, to read my week’s worth of blogs. As my time is very limited I don’t post much, so this is achievable! =P I also process my blog’s comments once a week, so maybe you can sneak in a question and I’ll address it the following week!
– Is it too much to ask to be able to provide a good life for you & your family, and also be able to enjoy life before you reach 65 and die at 70? I don’t think so!
– Make a decision, make a stand, no one else will!
– It will be a difficult journey, but trust me, it will be much more difficult if you don’t.
I didn’t explicitly state the purpose of investing clearly. I kind of eluded to it but I should really finish it off properly.
– By becoming financially knowledgeable, you can invest wisely & safely. Depending on individual goals, it may be to create wealth and become financially free, become rich, or simply just retiring early.
If you haven’t read the book “Rich Dad, Poor Dad”, by Robert T Kiyosaki, it is a must read for every investor. It honestly helped changed my life. It started me on the right path, and I’ve never looked back since. I have provided a link to the exact book on Amazon, and Chapters, as well as the CD audio book (perfect for listening to during the commute!).
Thanks & Happy Investing!
The Investment Blogger
Rich Dad, Poor Dad [Unabridged] [Audiobook] [audiobook]
Rich Dad, Poor Dad
Rich Dad, Poor Dad [audiobook]