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Financial Friday #76: YOLO & Procrastination - 2 Very Expensive Words!

Friday, August 20, 2021   /   by Mario Daniel Sconza

Financial Friday #76: YOLO & Procrastination - 2 Very Expensive Words!

You might have heard Enriched Academy Co-founder Kevin Cochran explaining how YOLO (You Only Live Once) is the most expensive word in the English language. Kevin has a great point - justifying unaffordable purchases with a YOLO attitude usually leads to a pile of very expensive credit card debt and more than a little regret down the road.


However, YOLO has a contender for the expensive word title, and that contender is procrastination. We strongly advocate for education, fact finding, and analysis before you make any important financial decisions, but at some point you have to take action. Whether it’s opening an online brokerage account, meeting with a financial coach, or simply inputting your monthly household expenditures into a spreadsheet, you need to get moving.


The cost of procrastination when it comes to getting your finances in order is easy to overlook, so we are highlighting 6 areas where failing to take action is definitely going to come back to haunt you!


Attacking your debt problem

Throwing everything you have to pay off a 3% mortgage doesn't make financial sense. However, if you have higher interest credit card debt, car loans, or a line of credit that you are in no hurry to eliminate, you need to look at how much it is costing you. Once you see how much money you are wasting on interest every year and how many years (not months) it will take to pay back, your laissez-fair attitude to eliminating that debt will likely change.


Retirement planning

Too little, too late is the story for many Canadians. CPP and OAS aren’t enough to save you. The good news is you don’t need a comprehensive plan to get started. For now, if you have no plan or don’t know what to do first, open a TFSA and focus on maxing out the contributions every year and invest in an index fund. Check out our webinar next week and find out how you can automate the process with a robo-advisor and make it as easy as paying the phone bill.


Analyzing expenses and budgeting

Next month is not the time to start figuring out where your money goes and where you could/need to cut back on spending. The time to get started is today, and it has never been easier with hundreds of online applications and spreadsheet software, or you can go old school with pen, paper and calculator.


Getting started with investing

For many of us, it’s hard to get over the risk-aversion and fear of loss that goes with putting your hard-earned dollars into the markets. You need to be comfortable with your decision to invest and there are strategies to mitigate the risk (watch for upcoming webinars), but you also have to realize that holding cash at the interest rates we have seen over the last several years is not going create much of a retirement fund. The TSX was hovering around 5000 in August of 1996 and is just over 20,000 today. Had you invested $300/month for that 25-year period at average market returns, you would have upwards of $500K today.


Creating an emergency cash reserve and a will

Two things you never know when you will need, but if COVID taught us anything, it was to prepare for the worst. Your income could unexpectedly and very easily disappear for any number of reasons, so you need to have cash on hand to tide you over for a few months. A will is pretty easy to get these days and there isn't any valid excuse for not having one, especially compared to the mess it leaves behind for your loved ones when you die without one (watch for a webinar on wills coming next month).


Our goal at Enriched Academy is to educate and inspire you to take control of your financial life. We do our best to prepare you and get you moving, but it’s up to you to ensure procrastination and YOLO are not holding you back from reaching your financial goals!


Resources


Debt index rises to 3-year high

Spending more on post-COVID travel and entertainment might not be a great idea as half of Canadians are doubtful they can cover living expenses this year without going into further debt.


Inflation hits 3.7% - Highest rate in 10 years

If it seems like everything is costing more these days - it is! Cars, food and gasoline top the list and the rate varies from 2% to over 6% depending on your province. Check out this short read for what lies behind the spike and whether it is a short-term or long-term trend.


Robo-Advisors go mainstream during the pandemic

The algorithm-driven money managers are expected to triple pre-pandemic user levels  by 2023. This article is a great little introduction to our livestream next week on whether or not a robo-advisor is right for you.


Time to bail on an overheated market?

The TSX set a new record high last week and our American counterparts  (Dow, S&P and Nasdaq) have also been on a post-pandemic tear. Is it time to get out of dodge and hunker down, or is trying to predict a market decline a short-sighted mistake?


3 Options to leverage your home equity and build wealth

It all depends on your risk capacity, but with the recent rise in home prices, booming stock market, and low interest rates, the numbers might add up for borrowing against your home to invest in stocks, pay off debts, or even start your own business.

 
eXp Realty of Canada
Mario Daniel Sconza
4711 Yonge St 10th Floor
Toronto, ON M2N6K8
416-230-3476

Information is provided exclusively for consumers’ personal use and may not be used for any purpose other than to identify prospective properties consumers may be interested in purchasing. Data is deemed reliable, but is not guaranteed accurate by the MLS®.
Information is provided exclusively for consumers’ personal, non-commercial use and may not be used for any purpose other than to identify prospective properties consumers may be interested in purchasing. Data is deemed reliable, but is not guaranteed accurate by the MLS®. Copyright 2021 Last Updated September 23, 2021
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