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 Posté le: Ven Sep 20, 2013 1:28 am Sujet du message: 10 ways to be a better saver and investor |
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{10 ways to be a better saver and investor}
Featured VideoClose More Video Original Apple 1 Computer Sold for Nearly $700K Oil Prices Dip on Dollar Rise Happy birthday Moneyville! For the past year, it has been chock-a-block with practical ideas for saving money and spending wisely. For me, one of the best aspects to Moneyville’s first year has been the tremendous response from you readers with your own financial suggestions and experiences.In keeping with Moneyville’s theme of pragmatic advice, I’ve assembled some tips to help you bombproof your financial life. The topic is also in keeping with the upcoming hockey season. You know the secret to success in Canada’s game — the best offence is a good defence. Same goes with money.Pay now, pay often: You’ve read it many times but paying down debt early is your very best defensive play. Whether it’s credit card debt or your mortgage, plunking down an extra $25 a month probably won’t crimp your lifestyle but it will eat away at that debt over time. Start with $25 and see how that goes. Then up it to $50, and so on. Aside from protecting yourself from the impact of rising interest rates, there’s little else that offers the satisfaction of bidding debt adieu.The 24-hour rule: Perhaps a weekend at the mall is your idea of recreation. Or maybe you’re a busy person and shopping is like a speed dating event. Either way, chances are you end up with stuff you don’t need and might not even care about. Get into the habit of putting your shopping wants on hold for 24 hours. Most of the time, the hold will expire. This practice is financial defence at it’s finest. Avoid house proud,[url=http://www.longchamp-handbags-outlet.net]longchamp le pliage[/url], house poor: David Chilton, who certainly can afford whatever he wants, once told me that his modest home still sports the same countertops that were installed a good many decades ago.We love our homes and it is so easy to spoil them. Whenever you upgrade or renovate,[url=http://www.longchamp-handbags-outlet.net]longchamp le pliage[/url], lay out buy-low and buy-high options. Yes, go for the best windows you can afford but see if you can live with the buy-low for other things that are merely decorative. Don’t overbuy: Whether it is a new subdivision home, an urban condo or a resale in an established neighbourhood,[url=http://www.longchamp-handbags-outlet.net]longchamp sale[/url], keep the price below the maximum you can afford.It is tempting to get the best and biggest house but remember it is where you hang your hat that counts, not how lux is the hook. Follow this rule and you will still be able to breathe if interest rates bound forward or if unexpected expenses cut deeply into your budget. Have E-money: I’m not talking about cyber bucks but emergency funds. Stuff happens, from washing machines breaking to losing your cellphone. Aim for two to three months of net income. More if you are self-employed.Stash cash in a Tax Free Savings Account and build up a reserve to cover those inevitable financial disasters. Contribute now, contribute often: Start contributing or contribute more to your TFSA, RESP or RRSP. It may not seem worthwhile to bother with 20 bucks. But bother you should. It’s the ritual that’s important. Make contributing to your savings like brushing your teeth. And while you’re at it, make any tax refund do double duty. Stick it in your RRSP and get another refund the following year.Go for boring: A dreary little balanced portfolio with GICs, bonds or an exchange-traded bond fund and just a smidge (20 per cent) of equities, also in the form of an exchange-traded fund, has done as well or better than far more aggressive portfolios over nearly every time period stretching back 30 years.If you don’t have top-flight investment advice or the skills to pick top quality investments,[url=http://www.longchamp-handbags-outlet.net]longchamp sale[/url], going for boring is like hitting the ice with Chris Pronger watching your back. Defence!Fry those fees: Fees are the biggest long-term drag on the growth of your RRSP or other investments. In these uncertain times, reducing the fees paid through mutual funds automatically lifts your return. Negotiate with your adviser, seek out low-fee funds and invest in cheaper exchange-traded funds. One per cent not spent on investment fees is 1 per cent more going into your pocket. Don’t count on gold: Include gold in your investing if you wish, but as part of a diversified strategy. Just remember that while returns for precious metals mutual funds, ETFs and stocks have been stellar in the past two years, some were down as much as 50 per cent in 2008 and 25 per cent in 2004. Yes, top precious metals funds are boasting double-digit 10-year average annual returns — just don’t count on the same for the next 10. Pay attention: Whether it’s your bank or investment statement, credit card interest rates, insurance deductible or simply the items on a cash register receipt, paying attention to your financial life will save you money. You will catch mistakes, notice unnecessary charges or fees and be more aware of where your money goes. Incredible volatility and uncertainty could be with us for some time as the financial crisis and recent recession painfully wind their way to resolution. You may not be able to follow every suggestion here but do as much as you can to bombproof your financial life. Also read:Why you should never borrow for RRSP contributions How to improve your finances in 30 minutesAlison Griffiths is a financial journalist and author. Reach her at www.alisongriffiths.ca or griffiths.alison@gmail.com.
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