Five Sure Fire Way to Secure Your Financial Future

"You can be poor when you're young, but you can't be poor when you're old." That was the tag line used some years ago in a financial services television commercial.

Truer words were never spoken.

I was relatively poor when I was young. Just about everybody I knew was and it was kind of fun. We lived an almost communal lifestyle, sharing money, accommodation, food, beer, cigarettes and other essentials of post-pubescent life. Would it be as much fun if I had to do it again today? Could I do it again? Not on your life!

Now I'm anything but a financial genius but there are five basic principles that I've learned and used to secure our financial future. And while far from wealthy, I have every confidence that I will not have to live in a refrigerator box whenever I quit working and that my wife will be able to comfortably carry on in the event of my premature demise. (You should know I'm at an age where I think eighty-five is a premature death!)

Is building a secure financial future akin to rocket surgery? Absolutely not- you need to do five key things to get started:

1. Determine your short and long-term financial goals. Start by taking a comprehensive snapshot of your current situation-your assets, net income, debts and living expenses. Once you've done this you can start setting long and short-term financial goals. Decide what lifestyle you want to enjoy between now and when you retire; what retirement lifestyle do you expect to have and what sort of education do you expect to provide for your children.

2. After you've assessed where you are now and where you want to be in the future take steps to protect your ability to get there--and stay there once you've arrived. A major part of your family's financial program is to insure against major financial loss. There are simply no guarantees against serious illness, accidents or untimely death. So take the steps necessary to insure against loss of life, loss of income and loss of physical assets.

3. Pay yourself first. Save at least 10% of pre-tax income ? more if possible. Pay down your mortgage as quickly as possible, especially in times of low interest. In the short term, you'll be better off reducing a mortgage that costs you 6% than earning around a taxable 1.5% (or less) in a savings account.

Maximize your RSP/401K contribution every year and make the contribution at the beginning rather than at the end of the year. Simply doing that will substantially increase the size of your retirement nest egg when you're ready to cash out.

4. Avoid credit traps. If you use credit cards, always pay any money owing before interest is due. Consider paying off your credit card immediately if you have money in a savings account-as with the mortgage, the interest earned on the savings is certain to be lower than what's charged by the credit card company. Avoid using credit cards for cash advances. Usually the interest charges are higher for these and the charges begin immediately. If you do carry a balance on your cards try to negotiate a lower rate with the credit card company. If you need money urgently, it's usually cheaper to negotiate a personal loan with your bank or credit union.

5. Finally, protect your family in the event of your death. Make a Will. If you die without leaving a Will in all likelihood the only thing you'll really leave your loved ones is a bloody mess-one that could take many years and a whole bunch of money to sort out.

Without a Will, the court/government will decide how your property and possessions will be divided. I would expect there are two chances of them acting in a way consistent with what your wishes might have been-slim and none!

Making a Will doesn't mean the Grim Reaper is about to pay you a visit. It simply means that your affairs will be sorted out in the ways you want and, as a result, you can go about your life with a peaceful mind because your loved ones are protected.

These five principles are only a starting point-a few suggestions that any financial management professional can improve and expand on. If I have one regret about how I've handled my financial affairs over time it is not enlisting enough professional help. When we were starting, the financial management business was neither as big nor as sophisticated as it is today. Who knows, with better help, I might be writing this from some warm Caribbean tax haven rather a cold Calgary office!

"Don't try this alone-use a trained professional," is absolutely the best advice I'm really qualified to give.

About The Author

© Dr. Tom Olson 2004, All Rights Reserved.

Permission to reprint article granted as long as this signature remains intact.

Dr. Tom Olson is the author of Don't Die With Your helmet On. Visit www.Dontdiewithyourhelmeton.com for more information about Dr. Tom, the book and his work. info@dontdiewithyourhelmeton.com

---

Volatile Oil

The Light Crude Continuous Contract fell from $67.70 a barrel... Read More

Bearish or Bullish?

If you are interested in stock investing and the stock... Read More

Mutual Fund Returns May Not Be As They Seem!

Arthur Levitt, during his tenure at the SEC, experienced many... Read More

The Key Ingredient To Increase Preconstruction Profits By Over $20,000

One of the greatest preconstruction investing issues that I hear... Read More

Beta Factors: How They Can Be Used In The Current Situation

Ever since the turn of the century, world stock markets... Read More

Seecrets on Investment: Tired of Making Huge Losses in the Stock Market ? Part 1

Over 80% of all individual investors lose money in any... Read More

Day Trading the SP Futures with Initial S/R and the NYSE TICK

For instance, if the market moves up in the first... Read More

For Entrepreneurs A SIMPLE Plan May Be Best

Q: I own a small decorating business and I'll be... Read More

Why Should I Use Penny Shares to Build Wealth?

A strategic question. Why indeed?1. A penny share would usually... Read More

Trend Following

Trend following also called momentum trading is the simplest and... Read More

Investigate Before You Invest

"Through wisdom is a house built. And by understanding it... Read More

DXPortfolio: A Great Passive Investment of 25% to $40% per month

First, I need to explain about e-currencies or digital currencies.... Read More

Ask The SEC

Who is the SEC and why should I ask them... Read More

Forex Trading Best Practices

FOREX, the term for the FOReign EXchange market, is an... Read More

The Perfect Economy?

The U.S. economic data reported this week showed strong output... Read More

Six Principles of Successful Investing

1. Begin investing immediatelyProcrastination is the number one enemy of... Read More

Maniac Investment

Let's first understand what maniac means. According to Webster a... Read More

Retirement Plan Considerations Cheat Sheet for Small Business

RETIREMENT PLAN CONSIDERATIONS are something every small business person needs... Read More

Coca-Cola - A Value Stock?

There has been much talk lately about Coca-Cola and its... Read More

Lobster Trapping for Investment Ideas

Recently, my family and I took a trip to Maine... Read More

Buy: Hold: Sell: Jump

I'm sitting here at my computer desk with a cup... Read More

Issuing Warrants to Investors

When raising capital for a business venture, warrants are a... Read More

Top Ten Investment Mistakes

1. Lacking an investment plan a/k/a/ "Don't take a trip... Read More

Real Estate Clubs Hot Among Investors

Six or seven years ago, the stock market was booming,... Read More

CYA

You all know what CYA stands for. Of course, Cover... Read More

Gold and Silver Maple Leafs Get New Packaging

Gold Maple Leafs and Silver Maple Leafs are receiving packaging... Read More

Investment Rowing

You have rowed a boat at some time haven't you?... Read More

5 Ways To Protect Your Bond Portfolio From Rising Interest Rates

The Federal Reserve recently raised its target federal funds rate... Read More

Why Do You Want to Become a Online Trader?

Motivational guru Tony Robbins teaches that the reason for doing... Read More

How to Invest Overseas - Intelligently!

In recent months, many advisors have talked a lot about... Read More

Trading Tips No 7: Developing a Casino Mentality for the Day Trader

I submit that the successful day trader would profit well... Read More

How to Invest Your Money

Think carefully on how to invest your money because if... Read More

A Safe Port For Mutual Funds But Not You!

Soft dollars, a form of legal kickback, is a sly... Read More