Adapt Your Financial Goals

When I started working at BNR and then Nortel there was always a “goal” for the company, and one of the most interesting goals was Vision 2000. This goal was that Nortel was going to be the #1 Telephone equipment sales company in the world, and (I think) Nortel achieved that Goal, however, by the time that 2000 rolled around, the Goal no Longer mattered. The business of selling phone switches was circumvented by the Internet and Wireless phones and how all this worked together.

This is why it is very important that you set your Financial Goals, but you also every once in a while do a “sanity check” on the Goals themselves to measure whether they are still relevant.

Changing Plans

Always have a Plan B

Say you had children and you had a plan with RESPs and such, but then your child was diagnosed with a disability? Suddenly your goals may no longer be relevant, however, you can change them and react to the change in life that has happened to your child and to your financial plan. This happened to me, although I am not quite sure what my financial plan was then, it now includes an RDSP and saving for my child’s future as a disabled Canadian.

If you suddenly got a windfall of money from an inheritance or a bonus, it is obvious that your plans are no longer up to snuff (unless you planned for that, in which case, good planning!). When you end up “in the money”, don’t just squander it and then have to make up other plans (like what to do when you are out of bankruptcy), rethink and re-jig your plans or expand your goals.

If one of your goals was to have $2 Million saved for your retirement by age 55 (a good goal, in my opinion), however, over time you have also built up a substantial amount of discretionary debt, which will not be paid off by the time you reach age 55, your retirement savings Goal is now irrelevant. If you reach your goal of having $2 Million in savings, yet you are carrying $300,000 in mortgage and debt by that age, your goal has not really been achieved has it? Stop saving, kill the debt and then get back to your plan.

All plans need to be tended often to ensure you are chasing the right brass ring, or ensuring that the brass ring is still there and that you still want to have it.

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Honest New Year Resolutions

Yes, a new year is upon us and like the rest of the heard, I am sure you have made some resolutions about how you will be a better person this coming year. I applaud your originality, OK, that ruins my “no sarcasm” resolution, and I am writing this on New Year’s Eve.

Last year I wrote some Sarcastic New Year’s Resolutions, so why break with an old tradition let us see if I can hit a few more of the more trendy resolutions for 2014.

My Personal Opinion On Resolutions

My Personal Opinion On Resolutions

Financial Resolutions for 2014

As I pointed out the “not write any more sarcastic posts” one is already shredded, so we shall forget that one completely.

  1. Control impulse spending better than last year, but those boxing quarter sales are just so enticing, I am not sure how I can stop myself from not buying that 110 inch TV for $150K. Seriously, I am only human, how can anyone resist that?
  2. So the automatic saving thing didn’t work too well this past year, so what I should do is put the money in my TFSA, that way I know I can’t easily take money out every month. That may cause a problem around March when all the Christmas bills show up, so I might have to then get another line of credit to pay for all of this, so I had better not have a resolution about not adding any more credit lines to my financial world.
  3. Don’t join a gym this year, since I haven’t figured out how to cancel last year’s gym membership, so maybe I’ll buy some exercise equipment. I figure a tread-mill, stationary bike and an elliptical trainer (and maybe some free weights) should be sufficient, and the fitness supplier has a buy now, pay at the end of the year deal, so that will work out well (if I can figure out how to cancel my old gym membership).
  4. I should really get a new car, because my current one is a bit tatty, and with a lease it is dead simple and so cheap. Another bi-weekly payment won’t hurt me (that much), and I get to raise my self-worth by getting a new car (and not that crappy old thing I am currently driving). Cars are a valuable asset, so it will actually make me worth more.
  5. Eat out less than we did last year, of course we ate out 4 out of 7 nights last year, so I only need to go out 3 out of 7 nights and we are ahead, so that should be easy (except when you get home and you really don’t feel like cooking, but you are hungry, then that doesn’t really count).
  6. To save money on coffee and lunch at work, I am just going to steal other folks’ lunches out of the fridge, and drink coffee from the coffee fund, and just not pay for it. This means this is basically free, and a huge saving, except for those days where I really need a latte, then screw it, I am going to get my $7.50 coffee!
  7. Get rid of cable, because it is too expensive, but then I can sit at home and complain about nothing to watch on TV and be generally miserable. I could get an antenna, but it would make me happier just to bitch and complain, and it would help me feel more pious as well.

Any other useful resolutions that I have missed?

 

 

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Simple Financial Ideas

So while researching another post (yes I do actually do research on occasion (feel free to mock me in the comments section)) and came across a wonderful pair of sentences in The Atlantic that has awesome clarity for me in terms of personal finances.

With savings we pass today’s earnings to the future.
With credit, we pull expected future earnings into today.
-Derek Thompson

I read those sentences and had to put the print out down I was so dumb-founded by the clarity of it all.

Money, Coins, Pennies

Yes, it is a simple statement, and it is blindingly obvious once you read it, but the awesome clarity of it I just love.

The article it appears in was actually the topic I was going to write about, but that is for another day, this simple lightning bolt statement must be the first paragraph of any personal finance FAQ or rules to live by.

If I ever do a public speaking engagement on money I think this would be the opening statement or slide for me, it is a perfect explanation of what many people do not understand about saving and credit, and in many cases some people over complicate the concepts as well, but this one simple statement sums it all up very nicely.

The two sentences bring up two very important points to consider:

  1. What is the Future Value of the money you are sending into the future? It all depends is the simple answer, but remember if you put your savings in something risky, you may not be passing this money into the future (it might just disappear with time).
  2. What is your Future Earnings that you are spending right now? In my case I am actually making less than  I did 10 years ago (gross), so are you sure you are going to be making more in your future, because you are using that to pay for the stuff you are buying right now.

I really do like it when something I read resonates with me.

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The Most Important Financial Decision You Will Make

Is the next one (OK, I am paraphrasing and mis-quoting Ben Hogan), but what is true for Golf is always true for Money as well. The actual quote is:

“The most important shot in golf is your next one.” -Ben Hogan


You can’t undo what you have decided before, so it is fairly obvious that the most important decision(s) are the ones you have not made yet. You can try to learn from your previous mistakes but the only decisions you should be ruminating on are the ones you have not made.

For those purists, I am not saying that your previous decisions are unimportant or less important, just that they are already made, so work on your next decision, don’t dwell on the ones you already have made. If you have made bad decisions in the past, maybe the next financial decision will be a better one?

Now I have said before that Investing is Like Golf (in that you need to go back in time and get good at it then), but I must listen closer to the Golf Announcers as this one from “The Open” this past weekend was a true gem.

Make your next financial decision count.

 

 

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Over the years we have seen “free enterprise” enter the world of professional sports, with Baseball starting it all off with Andy Messersmith and Dave McNally and the Seitz Decision, now it is common place in all sports for players to leave franchises “high and dry” to get more money from another team. I applaud this ability that Athletes have only recently been given, and with this in mind, here is a tenuous thematic concept for this week’s Carnival of Personal Finance #421 Free Agent Mania Edition!

This week many hockey players, basketball players, soccer players and maybe even a few cricketers will exercise their right to have folks “show them the money!”

Michael Jordan (aka Editor’s Choice)

These articles were my favorite and I will call this section, the greatest Free Agent That Never Was , aka Michael Jordan  (for many years). These top 5 posts tickled my fancy the most from the ocean of articles submitted to the Carnival this Week:

Air Jordan, if you please

  1. Miss T. from Prairie Eco Thrifter presents Protect Your Home: Don’t Go Without Home Insurance, and says, “I believe that home insurance should be mandatory for every home owner. Unfortunately it’s not mandatory once the mortgage is paid off here in the great white North, and some people go without to save some cash. This can have big,m ugly consequences, and can end up bankrupting families as a result.”
    This one scares me to know that there are folks (in Canada) that don’t carry some insurance on their homes. Yes it costs a bloody fortune, but you need it for so many reasons (even if you have paid off your home). I like this one Miss T.
  2. Glen Craig from Free From Broke presents DOMA Goes Down: What Does it Mean for Same-Sex Finances, and says, “Parts of DOMA have been ruled unconstitutional. This has a number of effects on the finances, taxes and estate planning, of same-sex marriages.”,
    OK, so I guess DOMA is a big topic in the news these days, and Glen elaborates about some other topics that same sex marriages will need to consider (financially). A good explanation of the important stuff that new same sex couples might not consider right away.
  3. Mike from The Financial Blogger presents My Biggest Issues With College, and says, “I look over the biggest issues with why college isn’t always the best idea.”
    OK I gotta admit, that any post that starts with a quote from Frank Zappa gets my attention every single time! I almost demoted this off the Editor’s Choice, since it didn’t really have a money angle, but it sneaks in just at the end.

Reggie White (testify minister)

Reggie spent many years toiling with the Eagles, but he decided to go to Green Bay and with that move he got himself a Super Bowl ring, a good free agent pick up. Reggie White was a force throughout his career and sadly his life was cut short, as he might have been a great role model for younger players (he is still, but his presence might have helped even more).

Reggie was a skilled orator, and enjoyed explaining things, as these posts do as well:

  • Glen from Credit Card Smarts presents Credit Sesame Review - Free Credit History and Score Monitoring, and says, “Credit Sesame offers consumers free monitoring of their credit history and credit score. See more about their service and if it’s good for you.”,
    These kind of on line systems always worry me about putting all of your info into aan on line system, but a good review none the less.
  • Ryan from The Better Credit Blog presents How Secured Credit Cards Help You Repair Your Credit, and says, “Secured credit cards aren’t the best, but they might be your only option if you have bad credit.”,
    Secured credit cards are again a subject I did not know much about, but this helps as an introduction (but I don’t think this is a good idea, maybe you should just not use credit cards, if you are in this situation).
  • D4L from Dividend Growth Stocks presents 9 High-Rated Dividend Stocks With Above Target Returns, and says, “It doesn’t take a genius to determine that most dividend stocks are now trading in excess of their calculated fair value. However, capital appreciation is not the primary reason for investing in dividend stocks. Dividend fundamentals are what drive my purchase decision, and if I could only look at one metric it would be…”
    An interesting list of dividend paying stocks, and lots of self-promotion too.
  • Michael Kitces from Nerd’s Eye View presents Place Of Celebration Vs State Of Residence - Determining Federal Marital Status After DOMA Decision, and says, “While the recent Supreme Court decision overturning part of DOMA requires the Federal government to recognize same-sex marriages, the rules still vary as to whether the Federal government bases its decision on the state of the couple’s residence, or their “place of celebration” where they got married in the first place, so it’s crucial to know which Federal benefits and protections are based on which rules!”
    Up here in the Frozen North, I am not sure what the tax rules are for same sex marriages, but this is a fresh new topic that I view as helpful (if you live in the U.S. that is).
  • GD from MLIQ123 presents Different Types of Life Insurance, and says, “Every financial planner and adviser touts the importance of having life insurance, and this isn’t just because it is their job, but because the real life benefits are tangible and significant. Yet with so many policies and companies available, how do you which type of life insurance is best for you? Here is a detailed explanation of the different types of life insurance policies, from term to whole to universal coverage to help you reach your financial goals.”
    Good stuff, an explanation of all the different insurances and such, however,it is posted by a site that sells life insurance (or at least gives you quotes), so keep that in mind too.

Andre Dawson (worth every penny)

When Andre Dawson decided he couldn’t continue his career on the concrete turf of Olympic Stadium in Montreal, no one would sign him (can anyone say calusion?) however, the Cubs finally signed him for a pittance and he flourished in the friendly ivy-lined grass turfed confines of Wrigley Field (even if Harry Carey kept calling him Andy Dawson). Dawson in my heart will always be an Expo, but I know why he left.

Andre Dawson was an exceptional bargain and well worth the money, as these posts are worth the read:

  • Emily from Evolving Personal Finance presents First Values and Goals, Then Strategies, and says, “Don’t jump straight to picking a PF strategy; first you must evaluate your values and goals. Without what makes you unique in mind, you may not use an appropriate strategy.”,
    A good overview of the steps you need to take when you start a Personal Finance Strategy of any kind, if you can’t live with the strategy, why use it?
  • Pauline from Reach Financial Independence presents 5 ways to get out of debt, and says, “This post presents 5 easy ways to start your journey toward debt freedom, and how you can accelerate your debt payments to become debt free earlier.”
    Pretty straight forward list, doesn’t mention don’t get in debt in the first place, but I suppose that is obvious?

Reggie Jackson (in it for the money)

The greatest baseball hired mercenary player of the 20th Century was Reggie Jackson, who won World Series with the Oakland Athletics and then pulled up stakes and went to George Steinbrenner’s New York Yankees. Reggie deserved the money, Steinbrenner’s gamble paid off too, and the Billy Martin/Reggie Jackson Circus in New York was most entertaining.

If you are also in it for the money, the following posts should help you out a great deal:

  • Gary from Gajizmo presents Highest Paying Jobs, and says, “Here is a list of the highest paying jobs, job requirements and descriptions, average salary figures, and the number employed in the field.”,
    knowing how much certain jobs pay is important, but at the end of it, let’s hope you are doing something you want to do, and not just doing it for the money
  • Dividend Growth Investor from Dividend Growth Investor presents Dividend Growth Investing is a Perfect Strategy for Young Investors, and says, “One of the most common misconceptions about dividend investing is that it is not a good strategy for building your nest egg, and therefore it is not suitable for younger investors. Being a youngster myself, I (not surprisingly) disagree.”
    An interesting article with lots of self-promotion, but useful information about Dividend investing for the younger folks too.
  • Jon from Novel Investor presents Create A Stock Watch List, and says, “With a watch list, you create a personal list of “best stocks” to own when the price is right. Then, when a stock drops on some short-term bad news, you can pick it up for a steal.”
    Stock watching is a dangerous thing especially if you are planning on using a Buy and Hold strategy, this is more useful if you are planning on being a day trader (which is a really bad idea (IMO))
  • Amanda from My Dollar Plan presents How to Get Rid of an Escrow Account During a Refinance, and says, “If you’re contemplating a refinance, this is a must-read!”
    Interesting concept that I don’t really understand, and strikes me as very specific to someone refinancing their home, which I have always thought was a scarey thing to do.

Warren Moon (toiled in the frozen North)

Warren Moon came out of U of Washington highly touted, but no NFL team wanted to draft him as a Quarterback, so Warren  went North (and I do mean NORTH) to Edmonton to play for the Eskimos (that’s how far north he was) and won them a few Grey Cups before the Houston Oilers (you know the Tennessee Tuxedos) finally took a chance on him and signed him for not much, and got a Hall of Famer.

Mr. Moon seemed very off topic for the NFL, as these articles are to the Carnival of Personal Finance, but still interesting:

  • Lynn from Wallet Blog presents Selling a Domain Name with Escrow.com, and says, “While it should never be recommended that domain-name speculation is a no-risk avenue toward untold profitability, it has been known to happen.”,
    this isn’t really a personal finance article (although folks claim you can make money buying and selling domain names, hokum in my opinion), but still interesting to read.
  • TTMK from Tie the Money Knot presents Using the 80/20 Rule for Money and Life, and says, “The amount of time we spend on an activity doesn’t necessarily correlate to the benefits we receive for this investment. This is where the 80/20 rule can help!”,
    while another interesting concept, not really personal finance, but an interesting idea to see if it really happens in your life.
  • Martin from Studenomics presents Insanely Helpful Tools That Changed My Life (and free money), and says, “Tools that you need on your side.”
    Seems to espouse make it rich by blogging about finances and such? Guess I must be doing it wrong, because their isn’t much Gold (Au) in these thar hills, that is for sure (IMHO)

Editor’s Note: This is the smallest number of submissions I have ever seen for a Carnival of Personal Finance, must have been a slow week. There were also a few posts that seem to have nothing to do with Money, so if I am posting the Carnival of Personal Finance, it might need to have something to do with Finance.

If you have reached this part and are still reading, as you can see I don’t agree with many of these posts, however, I included most of them so I didn’t end up with the same Unhappiness with my Hosting a Previous C of PF (hey I can include my own links too!).

If you want to volunteer to host the C of PF (shameless plug) click there!

 

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