Your whole life, people have made money sound way more complicated than it needs to be. Who are these people? Banks. Financial advisors. Insurance agents. Mortgage brokers. They all stand to make more money when you don’t really understand what they’re selling. They use big words, mysterious acronyms and perplexing charts and graphs to convince you that they, and only they, can truly understand this stuff. It’s not really even their fault. The whole Canadian financial industry has worked this way for literally the past 150 years. And it’s made lots of good people into unwitting accomplices. Now for the good news: money is actually not that complicated. In fact, feeling better about your money comes down to just five simple ideas, and one of them doesn’t even really have to do with money.
#1 Have a Plan
There’s no great journey without a map. No championship team without a game plan. No dream house without a blueprint. If you want to do something that makes a difference in your life, you need a plan. What does a financial plan look like? It should start with your goals. Most people put retirement at the top of the list. But other common goals are sending a child to school or buying a first home. With a financial plan, you know exactly how to reach your goals. You have it all broken down into small, manageable steps. For many people, that’s an immediate sigh of relief. And from that point forward, you can enjoy the feeling of making positive progress every day.
#2 Be an Investor
Investing is scary because people lose money sometimes. But it’s crucial to know that the short-term ups and downs of stocks and bonds have always been far outweighed by the longer-term profits. For example, U.S. stocks have returned more than 9% per year on average over the past century, even counting the bad times. That means you would have doubled your money every 8 years or so. Pull out a calculator right now and see what happens when you multiply your savings by 2 over and over again. When you become an investor, your money earns more money for you. It doesn’t matter if you’re young or old, working or unemployed, awake or asleep. It’s a beautiful thing, and the foundation of building wealth.
#3 Borrow Wisely
Debt is like a magnifying glass. It can turn a small shopping habit into a big financial problem. It can also turn a small investment into something very valuable. For example, if you’re making the minimum payment on your credit card, you could be paying it off well into old age. This is not a smart way to borrow. But if you’re buying a home, you only need to come up with a down payment, and you get to keep all the future profits from the entire home. This is very smart. Heck, you could (and should) use the money you make on your home to pay off that credit card. A lot of people think all debt is bad. But when you borrow for the right reasons, debt can actually help you get ahead each month.
#4 Protect Yourself
Life doesn’t follow a perfect script. On a good day, you might get a great parking spot or a surprise raise at work. But on a bad day, you or someone you love could get injured or sick or even pass away. It’s not fun to think about, but it happens to families all the time. The silver lining is that there are cheap forms of insurance that can be built right into your financial plan so that a bad surprise doesn’t ruin your finances. When you protect yourself, you’re taking just the right amount of precaution. You don’t do it because you’re paranoid, you do it because you want to know that your financial plan will still work out no matter what happens.
#5 Do What You Love
Maybe you’re the type of person who obsesses about money. Or maybe you tell yourself money isn’t all that important. Whatever your style, everyone seems to agree that worrying about money can make us sad, stressed and tired. They say money can’t buy happiness, but in many ways, money is life. We need it to eat well, sleep well, make our own choices and take care of ourselves and others. It’s essential. And a lack of it can be a big challenge. When you have a great financial plan, you are simply more free to live your life. Your stress level comes down. You have the right frame of mind to enjoy the people, places, and things that you love. And that makes your life richer in ways that go far beyond money.
So, where do you start?
Traditionally, you had to be rich to get a good financial plan. And even if you could afford a team of financial advisors, they’d probably still be up to their old tricks with all the usual jargon and sneaky fees. Good thing you found Planswell. This company was created because we know how hard it is to get good financial advice. We know that practically all the options out there are incomplete, biased and overpriced. And we’re doing something about it. Our engineers built software based on the best financial planning science. Our financial experts designed the purest and most cost-effective financial products. And our amazing early customers have worked with us to make planning with Planswell the best money experience they’ve ever had. Our business model is simple. You create your free financial plan. Depending on what your goals, that plan may include investments, insurance, and borrowing. If you like your plan, you are welcome to take it away. Or, just ask, and we’ll implement it for you much faster and at a much lower cost than pretty much anyone else. Take five minutes to give it a try… and let us know how it makes you feel!