When I was younger I asked myself one important question, “How can I be successful in life?”
I’m not just talking about financial success but I mean deep down happiness with all that I’ve achieved and how far I’m willing to take myself to grab what I want from life.
Most people who are forward-thinkers like myself start planning their future early to build their financial success although it’s never an easy success unless you get lucky.
I bought my first house at 21 years old so I was thinking about my financial success from a very young age.
My parents owned a couple of successful businesses and invested in real estate so I was brought up in a world where customer service, networking and hard work were a part of my daily life.
It was no easy path by any means although my parents did very well for themselves financially so I wanted to do the same. These days you’ll catch them vacationing most weeks of the year and enjoying their retired life without financial worry.
My wife on the other hand was frugal when we met and financial success to her meant having no debt and money in the bank. Her family had this mindset as well which left them in a financial comfort zone that worked for them. She was perfectly happy with that although things have changed drastically for the both of us. It wasn’t until we got married that together our financial success was made up of all different goals, some of which we learned from each other.
For example, my wife didn’t know what the term emergency savings was about but she always made sure to have a few thousand dollars in her bank account just in case something would happen. Investing for her didn’t happen until her early twenties but most young kids today aren’t even thinking about investing in their retirement so she was happy she took that step. Her investment motivation came from a past employer who matched RRSP investments up to a certain percentage and offered a small pension.
I don’t think either of us ever dreamed we would get married and pay off our mortgage in 5 years but it happened and we can only attribute our financial success because of how we handle our finances. We’ve achieved some of our financial goals earlier than expected however mortgage freedom doesn’t free us from our future expenses. We don’t feel we have conquered financial success when it comes to our retirement savings funds so we must continue saving and who knows we may want to sell and buy a bigger house in the future.
We could have kept the mortgage and dumped more money into investments but that wasn’t part of our financial plan. The reason we wanted to get rid of our mortgage was peace of mind although we do value risk and believe that without taking risk you accept what you want to achieve and that is the end of the story. If we do sell and buy again we will save the money first so we don’t have to get another mortgage. That means it could be a while before a for sale sign goes up on our property.
When you take financial risk you know that you want to get over that hurdle so you can earn more cash which for some people is a big deal. You have to love what you do and the money will come.
Some people are happy with paying off the mortgage and using that as their retirement savings because that is part of their plan although real estate is never a safe retirement fund on its own. Diversification is best meaning, don’t put all your eggs in one basket.
We have close family members who are stuck in this position but they say they will be happy with the money they get come retirement even if they can’t travel and see the world. Their financial success will be mortgage freedom and having the ability to sell their home when the time comes so they can downsize or rent.
Again, we all value financial success differently although we learn something special from those who find comfort in the simple things without worry whether they have millions in the bank when they retire. Sometimes I wonder if we go overboard with our financial dreams but you can’t worry about what you don’t have.
Financial Success terms and conditions
What is financial success?
Financial success can only be defined by you. It amazes me how so many people are more interested in celebrity net worth over their own. We crave the knowledge or that secret backdoor into the lives of the rich and famous just so we can say, “must be nice” but they work hard for their money. It just so happens that they are in a lucrative business although just as easy as they earn it they can go bankrupt and lose it all.
We can all be rich as defined by our own money principles if we just put the effort into it.
So many of us are happy living a minimalist life where others crave more although more doesn’t always equal a better life. Financial success to one person might be having no debt, paying off a mortgage, paying cash for a vehicle or even not living at home with the parents. My point is we all view financial success differently which is why so many of us are motivated by different goals in life. Those goals are your terms and conditions.
A fan once asked me what the secrets to our financial success were and I suggested that she read the blog however there are no big secrets to saving money and living a debt free life.
Financial Success principles
I could talk about ways we’ve learned or read about how to be successful for hours but at the end of the day you need to take the wheel. I’m certainly no pro at investing our money because we hire a financial advisor but we have created some financial success principles that have guided us along the way.
Our financial success story is far from over and I’m sure once we hit our million dollar target that we will re-evaluate our journey. Below are a few of our financial success principles that the wife and I wrote together which continue to motivate us to grow our net worth.
- Understanding what financial success means to us.
- Spend less than we earn
- Budget our money and track all of our expenses
- Communicate expenditures before we make them over $100
- Think about a large purchase over-night
- If it’s too good to be true, it probably is so we move on
- Always do our homework when making purchases
- Check second-hand
- Get second and third opinions if we have to
- Never stick with one estimate and check references
- Invest in something that you know is worth the money or that you can sell and make a profit from
- Don’t be afraid to network with other like-minded people
- Invest and continue to educate ourselves
I’m sure there are more that we can add to this list but you get the point. If you don’t, my point is that if you want to achieve your financial success you MUST think about it. You must work hard to make your financial success a reality because you are in the driver’s seat so however you choose to proceed will make or break your goals.
What does your financial success picture look like to you?
Our net worth 2015
RESP Contribution 2015: $208.33 a month.
What Happened in September?
There was a distinct drop in the markets in September mainly due to the Chinese economy slow down. That hit our investments creating only a $2,000 gain as opposed to the double digit gains we had in the previous two months.
Apparently, from what I am reading, the markets aren’t doing that much better this month. Our money however, is in these investments for the long-term so we aren’t getting to worried just yet.
I used up the last of my holidays in August so my income for September was at a basic level. Less income leads to less cash sent to the emergency savings and therefore less Net Worth gain. That’s great though because the time off with my family was nice. Since I’ve been working my second job I’m hoping to see a bigger chunk of money head to our savings and investments in the next month.
Understanding net worth
What Does Individual Net Worth Mean?
Net Worth is a snap shot of your financial health sort of like a picture or debt to net assets. In simple terms it’s a total of the value of your assets minus your liabilities.
We credit the growth of our net worth due to patience, perseverance, using a monthly budget and not giving up. Your numbers may go up and down but don’t let the numbers scare you rather understand why and move on.
If you would like to use our budget I offer a FREE downloadable budget which I created and that you can use at home just like we do. I don’t charge for it because I want you to save money not spend more!
There are tonnes of other free printable lists offered at Canadian Budget Binder to help you achieve some of those financial goals and build your net worth.
Now… what you need to do is determine just how much net worth you actually have and go from there….
Determining net worth
Figuring out net worth is fairly easy as long as you know your personal numbers or monthly finances which means you need to do your homework. Net Worth is simply adding up all your assets (what you own) then taking away your liabilities (what you owe) which will give you a net worth number.
Understanding your net worth will help you determine if you are on track to meeting or beating your personal financial goals. It doesn’t get any easier than that.
Net Worth = Assets – Liabilities
Calculate net worth
Do you know how to calculate your own Net Worth?
Now you can stop asking yourself the question, how do you find out your net worth? Why? It’s easy to determine. We like to calculate our net worth every month so we know if we are still on track. Some people calculate it yearly or quarterly. It’s really up to you and how informed you want to stay when it comes to your financial health.
Net Worth is essentially an estimate and not everyone uses the same type of figures. Some people don’t include vehicles like we do or they may leave out the assets inside the home like we have. It depends on what you want to calculate or what you can sell today and make money on.
Why not go ahead and calculate your own using our Free Money saving Tool Net worth Calculator (Canadian Budget Binder 2012)
Why you should set goals
Setting goals are the only way we work towards achieving what we want to get done as a couple around the house and in our financial life. I know that without them we would be flying by the seat of our pants which wouldn’t work for us.
I find it’s much easier to be held accountable when I share what we need to do with all of you. Yes, my wife refers to the list when she asks what I plan to do next. I’m not sure if that’s a good thing for me or not.
In the graphical representation below, I have used excel to provide a prediction based on the past years monthly net worth figures.
Using figures from our actual net worth gains over the past 12 months (the red line) it has suggested that by the end of this year we should be at approximately $700,000.00.
This is nice to know but anything can happen over the next year. Hopefully with some careful planning we can achieve this goal and go beyond it.
Do you set goals for the year?
Our financial numbers
When budgeting anything is possible, we are proof of that although we still have a long way to go in our journey. These are our numbers and our goals, not a means of comparison towards your own goals to others target goals.
We don’t care how much money others make or if they have a high net worth or if it is lower than ours as it’s not a competition. I hope our experiences perhaps will help guide you along your financial path working towards debt freedom.
We all have different financial paths
Not everyone has the same path in life. Some of you may have had to start over like I did or go to school a second time and now have OSAP loans to pay back.
Others may have divorced, lost money in the stock market or other investments, suffered job loss, fell ill or was injured on the job etc. but you can’t let that stop you from achieving your financial goals.
Some of you may have been given trust funds, paid-for homes, paid educations or perks in life that give you a financial kick-start and that’s OK too. Remember what I said, “It’s not about how much money you make, it’s how you save it”.
Focus on you and don’t let the evil eye of money jealousy or keeping up with the Joneses cloud your vision. No one cares about your money as much as you do so don’t waste your energy trying.
The only reason people accumulate wealth is because they know how to save or invest it wisely even if they did inherit money or win the lottery. The smallest improvements should mean big strides in working towards reaching your goals.
Sometimes we have to fail in order to learn and we’ve all been there. Money can be an evil force for some people especially those who have a negative attitude towards their own financial situation.
I urge you to be optimistic and little by little with determination you too should see improvements, if you want that to happen.
Net worth updates 2015
Below you can click the links to read past 2015 net worth updates to see if we were on target or if we struggled with some of our numbers.
In the last year since September 2014 our net worth according to our figures has grown $116,558.80
September 2015 $726,727.44 – September 2014 $610,168.64 = +$116,558.80
That’s all for this month’s net worth update but please check in at the beginning of November 2015 to see how we made out in October 2015 and what has happened to our finances since.
Do you track your net worth? Share your net worth updates with CBB! You don’t have to give your name just a bit about yourself and what you are worth.
Remember: “It’s Not About How Much Money You Make It’s How You Save It“