 Strategies
to help
How are you doing financially? Are you accumulating wealth
at a quick enough pace? Are you making progress toward achieving
your financial goals? A good indicator is your net worth.
Keeping track of your net worth on a regular basis is an effective
yardstick to measure your progress.
To
calculate
your net worth just add up your assets and your
liabilities. Then subtract the total liabilities from the
total assets. What is left is your net worth.
Your assets are what you own or are buying over time - cash,
savings and checking accounts, real estate, investments, household
goods, as well as the cash value of pension plans and insurance
policies. Your liabilities are what you owe - mortgages, loans,
credit card debt, dental bills, car payments and other debts
not yet paid in full.
If your net worth is positive - your assets are larger than
your liabilities – you’re heading in the right
direction. If not, you have some serious work to do. You have
to sit down and analyze your financial life. And then you
have to take control of it. You have to decide if you’re
running the show or is it running you.
The first thing you can do is look this list over and see
if you’re guilty of any of these bad financial habits?
Are you doing things like:
- Spending more money than you’re
earning
- Spending money on unnecessary things
- Not knowing where your money is going
- Treating luxuries as necessities that
you must have
- Carrying balances on high-interest credit
cards
- Making financial decisions based on emotion
- Making investments based on tips and hearsay
- Investing your money without proper research
- Not considering the after-tax returns of your investments
- Making important financial decisions without proper
research
- Going into debt for the wrong kinds of things
- Not having funds set aside for emergencies
- Procrastinating on important decisions
- Not making certain decisions at all
- Not taking advantage of your RRSP benefits (Every
$1,000 invested in your RSP can generate a $400-$500 tax savings
if you’re in the top tax bracket)
If you’re like most people, there are likely one or
two or even three of these bad habits that you are indeed
guilty of. But much more than that and you’re simply
not going to be accumulating wealth anywhere near as quickly
as you might. Even worse, you could be heading for serious
financial difficulty.
On the other hand . . .
Accumulating money isn’t everything. Life has many
other rewards and pleasures that have nothing to do with money.
Family, friends, activities you enjoy, causes you support
– all have to be balanced against money.
That old tired and worn cliche still rings loud and clear,
even though you’ve heard it a million times: “the
best things in life are free”. But at the end of the
day, most of the other things aren’t free, so although
perspective must be kept, a certain amount of wealth must
still be accumulated.
Important information about our financial planning services can be found at the bottom of our
homepage.
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