Posted by Leo T. Ly on February 15, 2018February 10, 2018
ATTENTION! Welcome to the iSaved5K personal finance boot camp. My name is sergeant Leo T. Ly. It’s pronounced like “Lee” and I expect you to get my name right. When I look at each and every one of you, I can predict that there are only one of two reasons why you’re here. You either come here to learn and acquire money discipline or someone sent you here to get disciplined.
Regardless of your reasons for being here, if you are under my watch, I will ensure that you are whipped you into great financial shape. I will not accept anything less than 100% of your commitment and effort. Quitting is NOT an option at this personal finance boot camp. Over time, you will, and I repeat, YOU WILL master each and every one of our personal finance boot camp disciplines. One. By. One.
Spend What’s Left Of Your Savings
To start off, you must change your mindset. By that, I mean you must go from, “save what’s left of your spending” to “spend what’s left of your savings.” To master this discipline, you must allocate a portion of your pay and automatically direct those funds to your long-term savings account for each pay cheque. The higher the percentage that you can save, the better. Start with 1% if you have not automated your savings yet. Slowly increase your saving rate over time.
Keep More Of What You Earn
Saving a high percentage of your pay is just half of the battle. The other half is to keep more of your hard earned money and growing them in tax efficient or sheltered accounts. For example, the Tax Free Savings Account (TFSA) and Registered Retirement Savings Plan (RRSP) are two of the best saving accounts to shelter your investments from immediate taxation. The longer that your savings get to grow without being taxed, the higher the chances you’ll end up with more money in your pocket.
Continuously Improve Your Financial Knowledge
No one is born with financial knowledge and acquiring it does not require exceptional intelligence. As Warren Buffett said, “the more you learn, the more you’ll earn.” By continuously improving your financial knowledge, you’ll train yourself to adopt the most suitable financial discipline that fits your personal situation best. All it takes is just the willingness to learn and the desire to improve your financial situation. Here are 10 passionate personal finance enthusiasts to help you improve your financial knowledge.
Fortify Your Finance
Earning money is not that difficult as long as you are employed or self-employed. However, life event happens and your financial situation can change in a flash. If you don’t take the necessary steps to protect what you’ve worked so hard to accumulate, you are at risk of suffering a major financial distress when a life-changing event happens.
With today’s employment environment, no one’s job is safe, not even if you’re the CEO of an organization. Everyone has a risk of losing his/her main source of income. Hence, without an adequate emergency fund or access to funds, falling into financial distress is just a matter of time. In addition, if you don’t have adequate insurance to protect you from critical illnesses or sudden death, you’re just one major event away from financial disaster.
To Fortify your finance, review the different areas where you have weaknesses and try to protect against those weaknesses. For example, you’re a one income family or your income is dependent heavily on the health of an industry (e.g. oil), how do you protect against those risks? The better protected you are, the lower the chances you’ll be experiencing financial distress when a major life event happens.
Expand your passive Income Territories
Many people tend to get into financial trouble today because they only have one or two sources of reliable income. If they lose their main source of income, then their finance will suffer. To get around this risk, you need to expand your passive income territories by creating new sources of incomes with your savings. The goal is to have your money to work hard to generate more income so you don’t have to.
There are many ways to increase your income. The two best methods that I am using are to invest my money in the financial and real estate market. Each of these markets requires a different set of knowledge and skillset. The opportunity is there for you to explore. The better you are at harnessing these sources of passive income, the less reliant you are on a single source of income.
Fight For Your Financial Independence
When I talk about Financial Independence (FI), I am talking about the security of your finance and the ability to choose what you want to do with your time. The easiest way to tell if you are financial independence or not, you just need to answer “yes” to one question. If you stop working today, do you have enough money to pay all your expenses for the rest of your life? If that answer is yes, then you’ve achieved financial independence.
While everyone’s definition and financial number to achieve financial independence are different, achieving financial independence should be on everyone’s list of financial goals to achieve. Wouldn’t you want to choose what you want to do or not have to worry if you can pay your next bill? Most people are not at this stage in life yet, but with a plan and a strong enough motivation, anyone can achieve.
Your Decision
If you don’t think you can develop the necessary discipline to save diligently, spend responsibly and invest wisely, then close your browser and leave now. On the other hand, if you want to signup (scroll down, the form is located below) and start the journey to achieve your desired financial results, I expect you to be here before 9 AM every Thursday morning. Rain or shine. Sharp and ready for your financial drills. You are now dismissed.
