Canadian Personal Finance Blog

I was kicking around writing a post about the Financial Apocalypse and whether I could find a really good bible passage from Revelations that might fit what has been going on in the Financial Markets this week and then point out that this might actually be a sign of the Apocalypse (mostly tongue in cheek of course), but I have written enough about this economic cluster flop enough for one week, so let me write about something that we all need to have, and that is Hope.

Romans 12:12 Be joyful in hope, patient in affliction, faithful in prayer.

Hope is what makes me get up in the morning, and what lets me sleep at night. Hope is what makes me believe that I will find a job soon. Hope is what got me through a very tough summer where I could have easily fallen into an ocean of self-pity. Hope helps me realize that I have far too much and should be thankful for all I have, for my family and my good friends.  Hope is hard to hold onto sometimes, but anything worthwhile or worth doing is hard. It’s easy to give up, it’s much harder to keep going.

Hope will be what turns this whole economic mess around as well. There will be changes, things may not get better over night or even soon, but they will be better eventually. I am not giving any advice here, I am saying have Hope and believe in the good things that will come.

Be joyful and have hope too, life is a gift, unwrap it and enjoy it.

Life always teaches you the oddest things at the oddest times, and this weekend I got reinforced the notion that you “… can’t always get what you want …” to quote Mick Jagger, but sometimes you really do get what you need. I watched my youngest daughter’s basketball team play very hard but just not reach where they’d hope to, and saw that young girls are quite resilient but also quite passionate about things they do.

What does this have to do with your Personal Finances? The same kind of things happen to me on occasion financially, where I have worked hard and am sure I will be rewarded for my hard work, but sometimes circumstances come into play and things just do not happen the way you expected.

What do I mean?

1. You or your spouse were expecting a raise or a bonus at work, yet when your boss calls you into his/her office you get told no raise is coming.
2. You thought you were a shoo-in for a promotion, yet it did not transpire.
3. Your tax rebate turns into taxes owing due to an arithmetic mistake you have made.

All 3 of those disappointments have happened to me (and to people I know).

Financial Disappointments

What do you do about it? Well, a short intense pity parade is fine (with a few drinks), however, you can’t let this stop you from your eventual goals. Short setbacks and battles lost do not mean the end to a war, keep fighting and use this to invigorate your actions. Maybe you have become complacent? Maybe you need to examine why this happened and put in an action plan to make sure it doesn’t happen again (making the same mistakes over and over is a bad thing in life).

Some ways to deal with disappointments financially:

1. Do a “Root Cause Analysis” of what happened. If you don’t understand why something went wrong, what is stopping you from doing it again? Understanding financial failures or setbacks is the key to any financial planning.
2. Give yourself a chance to recover, and don’t panic. If you feel like the steps you are taking are “reactive” (i.e. you are simply doing something because you think you should), step back and think about it, or ask someone you trust if something is a good idea. Don’t go off “half cocked”.
3. Remember financial planning and financial success is a long term thing, you can’t sprint the entire time, sometimes you might have to walk. As long as you aren’t going backwards, you are succeeding.

On to the next financial battle.

The French President Nicolas Sarkozy is asking that very question. How can the economic measures done include the relative happiness of the populous in the economic growth ?

Interesting question but who cares? If there is economic growth the relative happiness of any single worker has very little to do with any of this, that is the nature of the free market system. I am not saying that employers and governments should not care about happiness of workers in their companies or their countries, what I am saying, is: They don’t. The only time the relative happiness of employees or workers ever comes into play is when there is a scarcity of those employees and then the Employers must then make sure their employees are happy (to retain them).

Case in Point

Over my thirty years working various jobs my best examples of what makes people happy is simply whether they get good pay raises,whether their direct boss or the people they work with are good to work with, and whether they enjoy their direct job. I have been lucky in that most of my bosses have been reasonable folk and the folk I work with the same, so my only “happiness” monitor was and is money.

How do I make more money? I really don’t know. Years when I think I have been effective, I have had little or no pay raise, years where I feel I have failed I have been rewarded highly (and vice versa). If someone could train me in how to increase my Happiness by increasing my income, I’d be even happier. If anyone cares to comment on getting a raise, I am interested in hearing your Happiness and Pay Raise stories.

Anecdote

Two years in a row I went into my “pay adjustment” discussions with my boss expecting raises and both times I got not much:

• The first year my company had not done very well and the stock had dropped a fair amount and the statement I got from my boss at the time was, “How can you expect a raise look at the stock price?“
• The next year, the same boss and I went into our adjust meeting, the stock had rebounded the company was doing much better and when I asked about why my raise was about the same as the previous lean year, given the stock price had rebounded, I got the statement, “The Stock Price, has nothing to do with your relative pay raise“.

Bosses say the darndest things don’t they?

The key to the rule of 72 is that it is describing how long it takes your money to double. The shorter the period, the more doubling periods you will get over a long period of time (if you double click on the graph beside you will see what I mean).

If you look at the table below you can see what happens if you can actually get your investments to give you 7% or higher growth every year:

So as you see if you can get your investments to pay 10% a year somehow, your initial
investment will have grown by 45.3 as a multiple. That means if you invested $1000 (and never added to the principle), forty years later you would have $45,300 , not bad eh? Of course if you could find something that paid 20% that same $1000 would be worth $1,469,800 , but who could find something that pays that much (unless you were running a pay day advance company).