Grabbing the Financial Gold Ring
"I've been rich and I've been poor. Believe me, honey, rich is better."
If you agree with Sophie, and you don't want to sing the blues anymore, follow these tips to financial success.
To make money, you have to know something about money. Start your financial education today by checking out the other articles in this "KnowledgeBank" section of our website.
Scan the ‘boring’ financial pages of the Financial Post or The Globe & Mail, or check out online financial news at your favourite website, for a few days... and they won't be boring anymore. Stock markets may seem a little tumultuous, but beneath the froth there are concrete reasons why individual stocks and entire markets rise and fall. Talk to a financial advisor. Read the papers regularly. Do some online research. And you will have taken some important first steps toward financial ‘gold.’
Set a goal
It's hard to get to Vancouver if you don't know you want to go to Vancouver. How much money defines financial success for you? It could be $5,000 this year, $50,000 next year, or $1 million within 10 years. If you don't know what you’re striving for, you won't find the right road to get there. If you don’t know where to start, talk to us at Creative Arts. We can help you build a financial plan.
Time x Money x Rate of Return =
Investing for a long time can be as good or better than investing a lot of money. This is especially true for Registered Retirement Savings Plans (RRSPs). If you start at age 21, investing $200 per month in an RRSP, you could have more than a million dollars by the time you are 65. Someone who starts the same savings schedule at age 40 will have only about $250,000.
As an entertainment industry professional, you probably already are. Do things differently from the masses. When everyone else is selling, the smartest investors know that can be the best time to buy. If you have an idea everyone else pooh-poohs, it may be ahead of its time. Go for it. You're an innovator, and innovators should take calculated risks. Just make sure you do your homework, so you’re not acting on a whim.
Control your debt
The best way to avoid becoming rich is to borrow and then take a long time to repay it. If you do owe money, and it's high-rate credit card debt, make it your top priority to get that paid off as soon as possible. Card companies generally charge twice as much interest as a line of credit from your credit union. Call us about a loan to take out your credit cards if you’re spinning your wheels. And, in the future, try to borrow money only for productive investments that will return more than the cost of borrowing.
It’s a confusing subject, but an essential one for overall financial well-being. You need insurance for your belongings, for your car, for your life (if you have dependants), and for your limbs. Nothing wipes out goals and plans, and good ideas, faster than an accident or ill health. Check under Products on our website for information on the types of insurance available through your credit union.
Just say no
It's hard to amass wealth if you can't walk by a store without being tempted to spend every dollar in your wallet. A daily trip to Starbucks adds up to almost $1,000 a year – that’s upwards of $2,000 in earnings before taxes. If you have trouble saving, at least say no as often as you can to the trivial stuff. Then stick your “I Said No” money into a jar. When it's full, put it in your Creative Arts savings account or Tax-Free Savings Account (TFSA) and watch as your long-term goal creeps closer to you.
Start saving now
There's always a good reason not to save. Slow work. Unexpected expenses. A badly needed holiday. Try anyway. Here are some easy tips. Collect your change at the end of every day and tuck it away in a jar. When you pay off a loan, pretend you didn't — keep making the ‘payments,’ but pay them to your savings account instead Ask Creative Arts to deduct $50 automatically from your chequing account each pay period and transfer it into your TFSA. Open up different savings accounts for different goals. Start today, not tomorrow, because tomorrow has a habit of never arriving.
For more advice on saving and investment, call Creative Arts Savings & Credit Union at 416-642-6749 or 877-643-3660.