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

---

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

Seven Investment Terms Everyone Should Know

For those who have never given their financial future a... Read More

Art Investing for a Financial Future

When we think of investing we probably conjure images in... Read More

Gold; What Type of Gold to Buy

JewelryThe advantages are:? Gold Jewelry is the easiest of the... Read More

Keep Stock Market Investment Profits

Have you had one of those huge investment winners ?... Read More

POOF goes your RRIF !

Some time ago I attended a seminar where participants were... Read More

The Arrow-Debreu Contingent Claims Model of Investment

Throughout the discussion of speculation and stability, we emphasized that... Read More

Almost Anyone Can Open A Roth IRA!

The Roth is kind of weird until you get used... Read More

What If You Absolutely Positively Could Not Lose - Would You Play the Stock Market?

Seniors on fixed incomes face a unique problem. Where do... Read More

Investing Offshore for Retirement

As an expatriate you are in a privileged savings and... Read More

Annuity Investment - The Whole Truth

Do you ever feel like you haven't been told the... Read More

Can Using Sales Leaseback Method of Investment Property Acquisition Reduce Risk?

Sales Leaseback compared to traditional property investmentCan a Sales Leaseback... Read More

Why You Need To Buy and Sell Gold Coins (Part 5)

Grading coinsThe condition of a coin is commonly summarized by... Read More

Discipline in Investing and Trading

Discipline can be simply defined as your ability to follow... Read More

Do You Need A Financial Planner?

No matter how much money you make, it pays to... Read More

New U.S. Mint Coins a Golden Opportunity

In April, the U.S. Mint revealed plans to strike in... Read More

Creating Wealth by Gearing Up

Gearing is where you borrow money to invest. As already... Read More

Investing for Retirement - Not an All or Nothing Play

In 1519, Hernando Cortes, beached on the shores of unexplored... Read More

Volatile Oil

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

Annuity Owner Mistakes

Okay, so I can tell you I have sat in... Read More

Risk and Reward

If you are doing your own investing in the stock... Read More

Dumb Money

Many people have, at one time or another, taken some... Read More

High Volatility Investments

Penny stocks and options are high volatility investments that attract... Read More

Just what is Arbitrage Investment?

In the simplest of terms, Arbitrage means to exploit price... Read More

Investing & Online Stock & Share Trading- The Stock & Share Markets are Booming But Be Warned

I had the pleasure of being invited on a friend's... Read More

Angels Investors and Their Networks

What is an Angel Investor? An Angel is usually a... Read More

Forex market offers opportunity and information

The forex market is what is called an international exchange... Read More

Asset Allocation Lessons: The 70% Inflation Solution

For investors only... and for speculators who need to invest... Read More

Chinas Great Missed Opportunity

While a U.S. Representative to the Asian Development Bank Executive... Read More

Guru Focused: Robert Olstein?s Short Sells

While it is rather rare that value gurus sell stocks... Read More

Shareholders Meeting Changing With Times

A significant number of corporations that settled accounts in the... Read More

Wit and Wisdom on Money, Wall Street and Success - Part #1

I love to collect quotes as they concisely promote a... Read More

It?s Not the Size of Your Bank Account

You might think that if you win the lottery or... Read More