Some people dream about when they get to retire where others forget about their financial future the moment they get their first pay-cheque.
If you really don’t care about money and saving for your future you likely won’t be shocked if it doesn’t go as planned for you.
I know times are tough but learning to save a dollar here and a dollar there is better than nothing at all. Canadians are worried about their debt and retirement and rightfully so, it’s a tough world out there.
Even though I started buying houses when I was young I always kept telling myself that my financial future depended on what I did. I’m glad I listened to myself.
Your financial future depends on you
The time is now to start worrying about where you will be financially when you retire not when you retire. You shouldn’t have the burden of debt on your shoulders when you are a senior but many do and it’s tough. Not everyone has that golden opportunity to retire early but even if you have to continue working at least knowing there is a light at the end of the tunnel is all the optimism some people need.
Canadians should worry about their financial future now because many carry debt that might take them years to pay off. If you haven’t invested in learning about the way you earn and spend money you will never reach the top of the debt pile. Nothing happens on its own.
I’ve met all sorts of people in my time who were on different levels of the financial ladder. That means some people were happy that they had no debt but no retirement savings which didn’t bother them one bit. On the flip side I’ve met people who are very concerned about what’s down the road with or without debt and retirement savings. I believe there is a perfect picture for the maximum retirement but we all see this differently.
I’ve also met millionaires who for all it’s worth likely won’t have to worry about their financial future BUT many still do. Should they? You bet. A younger guy I know who has a wealthy “millionaire” father believes that he will never have to worry about money ever in his life. Maybe so but money can come and go just as fast as it’s earned.
I believe he is very naive relying on his father’s money which means he has no ambition to become successful as he is handed everything he wants in life. Parenting 101 I guess is to teach your kids about finance but not all parents do. It’s easier to say, “Run Johnny go buy something with my credit card” to keep them happy and business rolling as usual.
I was a bit blown away with the conversation we had when I ran into him at the mall of all places this past week. I wondered if people stop worrying about their financial future when they reach a certain net worth number or do they keep on truckin until the engine dies?
Millions can easily turn to dust depending on what you own, what you owe and how the investment game plays out. Just because his father is successful today doesn’t mean he will be in 5, 10 or even 20 years. A business has every right to fail as much as an individual has to create debt or have their investments tank where they lose it all.
When will you know?
Not everyone has that “magic number” in mind or what some might consider a “safe number” where they believe that for the rest of their lives their financial future will be secure. I wish I knew the answer to what lies ahead for my family, but I don’t.
So many people believe that once they hit x amount of dollars in net worth or so-called “investment security” they can stop worrying about their financial future and enjoy the rest of their life. Truth is, a budget doesn’t run itself nor do investments and even if you have a financial advisor you need to look out for number one.
Back in the 80’s when interest rates took a flying leap everyone was scrambling to make ends meet, especially those with a mortgage. I bet if you lived through that fiasco or any other financial depression you are tight with your cash because you know what it’s like to have it all only to watch your money pot deplete.
Keep in mind if your safe number is on the low-side you might get blind-sided without even blinking an eye because of the way the economy is up and down. Of course this depends on how you plan to live out the rest of your golden years.
I don’t even know what the low-side would be which should be scary for everyone. The good part it’s easy to hold our own if we plan for our financial future with specific goals in mind. We might not know what will happen but if we plan for the worst we can handle anything.
Is forgetting about money even an option in life?
It is depending on what you want out of life and how you decide to live the rest of your days on this earth.
When should you forget about your financial future then?
When you are 10 feet under ground, inside the mausoleum or your ashes spread. That means that there are no guarantees in life so when you kick back in your “my life is awesome seat” remember that you should always keep your financial guard up.
Your financial future relies on you to keep tabs on your investments along with your earning and savings potential. Even when you retire that doesn’t mean you are home-free and your investment stash will be stable.
The mere costs of retirement living or even ill-health is enough to shake up the financial future of anyone’s retirement savings. Keep in mind that many seniors in Canada are living longer than expected but their money isn’t matching that expectancy leading them to bankruptcy.
Could you imagine losing everything you worked so hard for during what should be the relaxing happy years of your life? I can’t and it pains me to even think about it.
If you are relying solely on government pensions or the sale of your home and assets to fund your retirement, don’t if you can help it. The economy could nose dive which is why most financial guru’s will tell you to never rely on your home as your retirement savings plan.
Most people don’t plan to leave their home until they are gone or in a retirement home. Unless you plan to downsize or opt to rent a home is never part of a retirement savings plan, it’s a roof over your head. Even then you still have to pay to live somewhere. I always encourage these types of “my home is my retirement” investors to budget, save and invest as much as you can, while you can.
At the end you save for your financial future and you keep on saving and contributing by continually making sure you watch where your money is being spent. No, you can’t take money to the grave but if you live longer than you expect to live it’s nice to have a financial future that will look after you instead of wishing you did more when you were able to.
If you think times are tough now, they’re only bound to get worse before they get better, IF they get better. Yes, I am a believer that the world will straighten out from this financial tilt but I’m not going to wait around to find out before I continue caring about the financial future for my family.
Is there a point where you won’t care about your financial future or do you have a “safe number”?
Our net worth 2015
RESP Contribution 2015: $208.33 a month.
What Happened in October?
The nasty hit we had in our investments subsided from last month and we made double-digit gains again. I was curious to see how much we’ve actually made in investments this past twelve months due to the economy being so up and down.
I was surprised to find that we’ve made enough to qualify as a third income. Once we hit a certain return on investments we should be able to see our investments go self-contained although we will always monitor them. They will no longer require any financial input from us and be self-sustaining by using gains as income to buy more.
This month was our biggest 12 month increase in Net Worth ever at $135,000. I know for a fact we didn’t earn a take home pay of that figure so the bulk of that gain is from investments. That’s our money working for us making us more money for our retirement.
As for me, it’s been all work this past month. Now I know what they mean by the saying “All work and no play makes Jack a dull boy”. The money is great but the home life suffers because of it.
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 October 2014 our net worth according to our figures has grown $116,558.80
October 2015 $744,869.00 – October 2014 $609,780.11 = +$135,088.89
- December 2014
- January 2015
- February 2015
- March 2015
- April 2015
- May 2015
- June 2015
- July 2015
- August 2015
- September 2015
That’s all for this month’s net worth update but please check in at the beginning of December 2015 to see how we made out in November 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“