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Financial Friday #54: 5 Tips from a Millionaire Teacher

Friday, March 19, 2021   /   by Mario Daniel Sconza

Financial Friday #54: 5 Tips from a Millionaire Teacher

1. Appearances can be deceiving.
If you don't live within your means, you will always struggle financially. No matter how much you earn. Focus on actual wealth accumulation instead of chasing the image of looking wealthy.

2. Index funds are vital to building wealth.
Index funds or ETF's provide investors with broad exposure to an entire market instead of owning individual stocks. Andrew advises against mutual funds, which are expensive to own and rarely outperform the market.  

3. Stay in the market.
When markets are underperforming, like in the 2020 pandemic, the majority of people sell their investments. It's natural to get nervous. However, to achieve success as an investor, avoid selling your investments during market declines. Think of market dips as "sales."

4. Your greatest ally is time and compound interest.
Achieving financial peace and freedom from one big trade is a shot in the dark. Trying to hit a home run is a foolish investment strategy. Long-term investing with average returns is how 99% of people achieve financial peace and freedom.

5. If it sounds too good to be true, it probably is.
"At some point in your life, someone is going to make you a lucrative promise. Give it a miss. In all likelihood, it is going to be nothing but headaches." The author also shares several studies highlighting the ineffectiveness of investment newsletters.

?? Resources

  1. 10 Red Flags That Could Lead To A CRA Audit. You're less likely to attract attention from the CRA if you watch out for these common red flags when you're filing your taxes this season.
  2. Average Canadian home prices have shot up $100,000 in 6 months. The latest data from the Canadian Real Estate Association for February shows national home sales jumped 6.6%, compared to January. CREA's home price index rose 3.3% month-on-month in February — a record-setting rise. Read more.
  3. NFT (non-fungible token) is the new hot topic. It is like a certificate of authenticity for an object, real or virtual. The unique digital file is stored on a blockchain network, with any changes in ownership verified by a worldwide network and logged in public. Learn more here.
  4. 3 Reasons to Take CPP at age 60. It's not wise to take up to a 36% reduction in income, especially if that income is paid for life. But that's what happens to retirees who elect to take CPP at age 60. However, in some cases, it makes sense.
  5. You will never guess the top-performing stock in the SP500 over the past 30 years. Click here to find out.
  6. The corporate debt market is where companies go to borrow cash. And for over a decade, super-low interest rates leftover from the 2008 financial crisis have made borrowing easier and easier. Since then, U.S. companies have regularly offered up bonds for sale, taking advantage of the cheap access to cash. Learn more about the Corporate Bond Market's $10.5 Trillion debt 'bubble'.