ATTENTION! Welcome to the iSaved5K personal finance boot camp. My name is sergeant Leo T. Ly. It’s pronounced like “Lee” and I expect you to get my name right. When I look at each and every one of you, I can predict that there are only one of two reasons why you’re here. You either come here to learn and acquire money discipline or someone sent you here to get disciplined.
Regardless of your reasons for being here, if you are under my watch, I will ensure that you are whipped you into great financial shape. I will not accept anything less than 100% of your commitment and effort. Quitting is NOT an option at this personal finance boot camp. Over time, you will, and I repeat, YOU WILL master each and every one of our personal finance boot camp disciplines. One. By. One.
Spend What’s Left Of Your Savings
To start off, you must change your mindset. By that, I mean you must go from, “save what’s left of your spending” to “spend what’s left of your savings.” To master this discipline, you must allocate a portion of your pay and automatically direct those funds to your long-term savings account for each pay cheque. The higher the percentage that you can save, the better. Start with 1% if you have not automated your savings yet. Slowly increase your saving rate over time.
Keep More Of What You Earn
Saving a high percentage of your pay is just half of the battle. The other half is to keep more of your hard earned money and growing them in tax efficient or sheltered accounts. For example, the Tax Free Savings Account (TFSA) and Registered Retirement Savings Plan (RRSP) are two of the best saving accounts to shelter your investments from immediate taxation. The longer that your savings get to grow without being taxed, the higher the chances you’ll end up with more money in your pocket.
Continuously Improve Your Financial Knowledge
No one is born with financial knowledge and acquiring it does not require exceptional intelligence. As Warren Buffett said, “the more you learn, the more you’ll earn.” By continuously improving your financial knowledge, you’ll train yourself to adopt the most suitable financial discipline that fits your personal situation best. All it takes is just the willingness to learn and the desire to improve your financial situation. Here are 10 passionate personal finance enthusiasts to help you improve your financial knowledge.
Fortify Your Finance
Earning money is not that difficult as long as you are employed or self-employed. However, life event happens and your financial situation can change in a flash. If you don’t take the necessary steps to protect what you’ve worked so hard to accumulate, you are at risk of suffering a major financial distress when a life-changing event happens.
With today’s employment environment, no one’s job is safe, not even if you’re the CEO of an organization. Everyone has a risk of losing his/her main source of income. Hence, without an adequate emergency fund or access to funds, falling into financial distress is just a matter of time. In addition, if you don’t have adequate insurance to protect you from critical illnesses or sudden death, you’re just one major event away from financial disaster.
To Fortify your finance, review the different areas where you have weaknesses and try to protect against those weaknesses. For example, you’re a one income family or your income is dependent heavily on the health of an industry (e.g. oil), how do you protect against those risks? The better protected you are, the lower the chances you’ll be experiencing financial distress when a major life event happens.
Expand your passive Income Territories
Many people tend to get into financial trouble today because they only have one or two sources of reliable income. If they lose their main source of income, then their finance will suffer. To get around this risk, you need to expand your passive income territories by creating new sources of incomes with your savings. The goal is to have your money to work hard to generate more income so you don’t have to.
There are many ways to increase your income. The two best methods that I am using are to invest my money in the financial and real estate market. Each of these markets requires a different set of knowledge and skillset. The opportunity is there for you to explore. The better you are at harnessing these sources of passive income, the less reliant you are on a single source of income.
Fight For Your Financial Independence
When I talk about Financial Independence (FI), I am talking about the security of your finance and the ability to choose what you want to do with your time. The easiest way to tell if you are financial independence or not, you just need to answer “yes” to one question. If you stop working today, do you have enough money to pay all your expenses for the rest of your life? If that answer is yes, then you’ve achieved financial independence.
While everyone’s definition and financial number to achieve financial independence are different, achieving financial independence should be on everyone’s list of financial goals to achieve. Wouldn’t you want to choose what you want to do or not have to worry if you can pay your next bill? Most people are not at this stage in life yet, but with a plan and a strong enough motivation, anyone can achieve.
Your Decision
If you don’t think you can develop the necessary discipline to save diligently, spend responsibly and invest wisely, then close your browser and leave now. On the other hand, if you want to signup (scroll down, the form is located below) and start the journey to achieve your desired financial results, I expect you to be here before 9 AM every Thursday morning. Rain or shine. Sharp and ready for your financial drills. You are now dismissed.
About Leo
Nice blog post! I find that learning is essentially earning more 😊
FI seems like a long way to go but I find that making the journey fun can make it less stressful. My fiancé and I are constantly trying to find ways to build passive income and it’s definitely not easy. It will take time but hopefully things work out bc you never know, I might just quit work one day since I cannot handle working w/ unlike-minded ppl… 😩
@Panda, you two are pretty close to the double comma mark. Once your net worth reach that point, I can assure you that the passive income will start to flow in. It’s still a bit of a grind, but you’ll get there pretty soon. Enjoy the journey.
Great blog post full of really useful information!
I’m a huge saver so I’m finding it really useful to read tips that in practice I’m doing quite well
@Alice, having a huge saving is great. Make sure that your are investing your money wisely and are making a reasonable return.
I think it’s so important to be financially responsible. This boot camp can help lots of people. I’m always careful with my money.
@Amber, being financially responsible is a great start. Do you have any tips that you can share with us?
Thanks for the tips on a Tax Free Savings Account and Registered Retirement Savings Plan. I’m going to look into these.
@April the TFSA and the RRSP are great saving vehicles. If you haven’t opened either account yet. It’s time to start now.
This is such an informative blog post that was personally super helpful for me. One of my goals for 2018 is to start saving money and get my finances in line. I have made it a point to read a few articles each week to learn more and more about this topic. You are correct, it is important to be financially responsible. The sooner the better! Thanks! xx
@Cassie, the first step to getting your finances in order is to realize that money is hard to come by and we all need to be responsible with our money. The next step is to start your saving. One baby step at a time.
This is a great post and so relevant to me right now. My new year’s resolution is to pay off a lot of my debt and to start saving money. Perfect timing! Thank you
@Anne, gotta learn how to pay yourself first. Once you get rid of those pesky debts, you’ll be first in line to receive those pay cheques.
Excellent advice. I feel as though I have been properly kicked squarely in the behind – in attempt to get me back on the right track. A good friend once stood by the philosophy that one needs to pay themselves first, the others can wait.
@Mary, you worked hard for those money so why shouldn’t you be the first in line to access those money? You’ll always be first in line if you don’t have debts.
Very good tips on how to jumpstart your savings and where to go once you’ve had enough to use as a investment. The goal is definitely to become financially independent.
There was so much useful information in this post. I definitely agree that you should keep more of what you earn.
I am so bad with savings and just my finances in general. These are some amazing tips and I know I could defiantly use them.
XOXO
Elizabeth
http://www.akeenesenseofstyle.com
We are a family of five and living off mainly from my husband’s income. We were doing quite well before he lost his high paying job when the company closed down. Let’s just say we are starting from scratch again with most of our emergency fund used up. Fortunately, our credit is still excellent and we still have means to rebuild again. But yes I agree to everything you said here. It takes a lot of commitment and dedication to achieve one’s financial goals. Thank you for sharing this.
Great post Leo.
Look forward to hearing what the sargent has to say next thursday.
Now get down and give me 20!
Haha cheers
I really need to pay more attention to my finances! Investing would sure help, because I am relying on my one source of income!
The one to see if you have enough to cover expenses for the rest of your life is jolting. The answer for me right now is a definite no. Yeeikes.
Becoming financially responsible is really hard I think. Especially after you just graduated and you are so used to living the life. And you also probably have a student loan to pay back. You need as much help as you can get and boot camps sound perfect for that!
i love this.
i am trying to save from what i left from my paycheck after i have saved but it seems there is only quite a bit left lol.
@Nurul, it’s great that you have quite a bit of your pay cheque left. Maybe it’s time to bump up the saving.
I think this is a great way to take control of your finances. It is a great resource for those trying to become financially independent.
I really do like how you put this here. Instead of saving what you spend, focus on spending your savings. Or more like, spending what you have on savings so that it’s not there for you to spend. I would hope it feels better that one. Then it becomes like a budgetary item.
So much useful information! We will have to start using some of these ideas, being that we are living on one income.
This blog is one I go to when I’m looking for some good money/business tips! I loved reading this useful information. Keep it up, thanks for sharing!
These are some great useful information. and I am glad that I am across to your blog. Thanks for sharing!!
I find saving extremely difficult with my large family. I have been able to save a small amount for each of them in an RESP but otherwise there isn’t much else left.
Saving is a way of life. Your article does inspire to save more and focus harder on financial aspects. I will check out this programme!
Attentionnnn! 🙂
Is that your blog post schedule? Every week? Very nice reminder for us all to keep ourselves accountable and in check!