If you keep building up clutter and you think all you need do is call a Junk Hauler, the price for one load could easily be $1000. How do I know? I hired the Junk Ninjas in Ottawa and they took away a lot of old furniture, and a piano for over $1000. Could I have taken these things to Value Village or the dump myself? Maybe, but I needed this stuff gone fast. It was gone fast.
The piano I couldn’t give away, and it needed to go. I found out that Value Village does not take bed frames, thus we had to call someone to take away the 4 bedframes (extra) in my house. As I have mentioned, don’t store 3 apartments’ worth of stuff in your house.
This answers the question, does clutter cost money? Yes, it does.
Oh, and if your response is, “We can just put it in a Storage Facility”, you have a big problem. Storage just means you will continue to pay for junk ad infinitum. Clutter and junk are expensive, the longer you keep it the more it is going to cost.
I read with great amusement an article in Business Insider Rich people make the same 5 mistakes over and over. I found it amusing, because it attempts to fool you into thinking that if you act like rich folk, you’ll become one. Unfortunately, Lies travel faster than truth.
Maybe the article is attempting to convince you that Rich Folk and you are similar, since you make the same mistakes? This is hardly the case.
Why are rich folk rich?
Started with money, most of the time. Family money makes getting rich a lot easier than you think.
Education and advantages that being rich gives you. Not just what you know, but who you know.
Pay lower tax rates, because they have people who make sure that happens.
They have enough money to make mistakes. They can take risks, that most folks can’t.
Rich People Can Make Financial Mistakes
That is what you should take from this story. Rich folk have the luxury of being able to make financial mistakes, they can recover from them. Most of us don’t have the wiggle room to escape financial blunders.
Rich folks can become like the rest of us, if they make mistakes, that is true. The story the great Investment Monolith wants you to believe is that the reverse is possible too. I think it is possible but the former is much more likely than the latter.
Mistakes are easily made, we all do them, every day. To succeed financially takes dedication, discipline and damn hard work. The mistakes mentioned in this article are bad:
Assuming they can out-earn bad spending habits. That is not a mistake reserved to the rich, in fact this is how we all dig the big hole called debt.
Not speaking with a professional for tax-planning or estate-planning purposes. This seems like sound advice, if you take it as, making sure you do your taxes well, and you have your Will and Power of Attorney up to date.
Assuming they don’t need a financial adviser because they’re successful. This is the heart of the article, as it seems to have been written by a financial professional. I have a great mistrust of the financial industry in general and in advisors in specific, but if you use this type of service, you had better trust them (and you had better watch them closely). In the end, it is your money.
For those of you who haven’t had as many financial plans and projects fail as I have, I’d like to share with you the most important variable in all of your plans, and that is Time (no not the magazine, the passing of moments). Time is the most important financial variable , unfortunately.
Time will fix many things, but assuming you can do things quickly is usually the problem that trips up most plans and projects.
Typically a repayment plan will be quite simple:
Payment per Period = Debt / # of periods
However, there are two things wrong with this plan. First is you aren’t taking into consideration that your debt will grow with an interest rate, look up Future Value of Money on-line or look up the PMT() function in Excel to figure out what the debt is going to grow. The other major variable here is the # of periods, and that is where most plans fall over.
People are always optimistic when they start debt pay back schemes (this is my opinion, but based on observation of many friends) and think it will be easy to pay things off quickly, without taking into consideration that Life, Karma, or Sh*t, happens (depending on your religious point of view). If you are overly optimistic with any plan (speaking as a Project Manager now), you will fail, or you will spend all of your time attempting to catch up.
If you are much more conservative in your planning, time can be your friend. This is not to say that you should amortize your car over 10 years, or your house over 50 (if you could), however, don’t get too aggressive in your plans.
Rules of Thumb
A good rule of thumb is to make up a plan initially, and then walk away from it for a day. The day later look at it and ask yourself
Can I live with this payment plan? Is this going to hurt a little or be agonizingly painful and will make me miserable?
What other sh*t is going to happen? (the realistic answer is “I don’t know”) Plan for bad things, give yourself a little slack (I didn’t say let it fall on the ground, but a little slack)
Have I tried this before and succeeded? The answer is most likely Yes and No, since you are doing it again (if you are really good at building up debt and then just as good at paying it off, good on you, but why are you living on a roller coaster?).
Time, it passes very quickly plan accordingly. Time is the most important financial variable , plan accordingly.
I wrote this about 10 years ago, and I can assure you, Time is an ever dwindling resource in your financial plan.
In previous years I have written over 200 articles in a year. In 2020, I wrote a great deal less than 200 articles. I continue to have a huge backlog of unfinished titles, but 2020 was an interesting year. Here is the entire list, missing my #MoneyTalk compilation posts.
Estimated reading time: 5 minutes
CPP and EI Maximums for 2020, was my most read and searched article all year. I have done these every year for a while, so not sure why it was so popular, but here it is. I have in fact already published CPP and EI for 2021 to see if it is as popular.
My CRA Account another highly searched article, outlining how to set up your on-line CRA account. You really should set that up.
When to Put Money in RRSP I created a step by step reasoning, and naturally someone complained it wasn’t a waterfall. Seems there is no pleasing some folks.
RESP Only For the Rich ? There is an argument that this is how it ends up. The poor, don’t open accounts, even though they can earn money without deposit. Banks don’t market them to those with low incomes, thus, RESP’s are for the rich.
As I have said, don’t count on 2021 being a complete turn around year. I can be better, but it could even be worse. If anything 2020 has taught us is, you can never guess what might be coming next. If you want try some New Years Resolutions, but don’t look too far ahead, you might trip on something in front of you.
I have written many times about if you don’t ask the answer is always no, but the title of this post is also a good turn of phrase. Too many times folks feel they have no one to ask for help, so they just give up. Most of the time that is exactly what service companies want you to do.
Many times return procedures are convoluted, complex or just downright silly, but it is to stop you from returning things. If you keep it, but don’t want it, they have won.
A good example is, if you want to use TD E-series mutual funds, inside your TD Mutual Fund account, it is not an easy procedure. You must apply via a written form, and wait for the “OK” from them to be able to buy them. Once you are granted permission, you then must figure out which funds are the E-series funds. If you wish to cash the E-series Funds out of the account, you must first go on-line, transfer them to a Money Market account, and then go into a TD Branch, to do the cash out?
This is the question. If you do not ask for what you want, you will rarely get what you want. You may sound like a pest, you may upset whoever you are dealing with, so be polite, but ask for what you want. The worst they can say is, No.