Pay Yourself First - It Adds Up!

We all know how hard it is to put money aside and save when the bills are due and debts are hanging over our heads. We tell ourselves that once we have a bit more money or get that raise, then we'll save some money.

The sad truth is that mostly it never works out that way. There is hope however! What you need to do is develop a new habit. The idea is not to try to squeeze yourself to save a huge amount every paycheck. This will never work because it's too hard to do all at once. The idea is to begin by putting aside a small amount consistently so that it develops into a habit. For example, every pay take $10 and put it into a separate account. Or you can pay yourself on a weekly basis if you prefer.

Tip:

ING is a good place to save your money because there are no service fees and they pay much higher interest rates than other banks. (See my post below on making $260)

Continue to do this for a few months until you feel comfortable then increase the amount gradually. Over time it will become second nature and you'll have some cash left over for a rainy day, investments or a vacation.

Working With A Financial Advisor - Building Your Team

If you have read some of Robert Kiyosaki's books you are aware that one of his strategies to becoming financially independant is to work with a team of experts. Basically what he's saying is to work with such professionals as Financial Advisors, Tax Planners, Accountants, Lawyers, etc. These individuals have extensive knowledge in their own area of expertise and by working with them you can accelerate your own learning and advancement in financial and business matters.

Here in Canada, working with a Financial Advisor is free for the client in most cases since they are paid by the companies whose financial products they sell. A word of caution though, this can lead to a conflict of interest where certain Financial Advisors may try to sell you certain products not because they are better for you but because they earn more commission from those products. This is where you have to do your due diligence by shopping around and asking questions. Also avoid Financial Advisors that work for financial institutions because they are biased towards selling only their company's products. I personally work with an independent Financial Advisor that has access to a wide offering of products and services from multiple financial institutions and insurance companies. This way he has the ability to mix and match products from different companies that better suit my needs.

Some questions to ask Financial Advisors before adding them to your team include:

• What differentiates you from other Financial Advisors / What is your approach to financial advising?
• How long have you been in this business?
• What qualifies you to offer financial advice? (Traning, education, experience, awards)
• Do you offer products from a wide range of financial institutions and companies?
• How do you get paid - from the client directly or do you earn a commision from the companies' whose products and services you sell?
• Can you provide me with a few referrals - clients that use your services?
  

Working with a Financial Advisor can take years off when you plan to retire because they can help you accelerate your savings with different financial tools and strategies that you had no idea existed. For example, I learned the other day that Manulife offers a low interest, open loan for investing in such products as mutual funds in which your monthly payments only involve paying back the interest not the capital. In addition you can deduct the interest payments as an expense on your income taxes so you'll pay less in taxes while your money grows faster. Once you make profit on the investments you can repay the loan and keep the profit you made. This is one trick the rich use to make money faster - they use debt as a lever to make more money. In contrast most of us use debt to buy consumer goods and material items that do not bring in more money for us, just more debt at high interest rates - think of your credit cards!

Another strategy that I learned from my Financial Advisor is that you can take out a line of credit against your house and pay off your mortgage with it. Why would you do this? Let's say you have mortgage payments of $2000 per month. By paying off the mortgage with a line of credit you will significantly reduce your monthly payments because with most lines of credit you only have to pay back either the interest or a small percentage of the amount borrowed. So what this means is that you can cut your monthly payments on your house (sometimes by more than half) and therefore increase your cashflow to do other things with the difference you no longer have to pay. Here's where you can maximize your savings for retirement or use the money to start your own business. The possibilities are endless.

So now that I've given you a taste of what working with an ethical and professional Financial Advisor can do for you, go out there and add one to your team of advisors, you won't regret it! (Just remember to do your due diligence first by shopping around and asking questions)

Make $260 By Reading This and Save Your Money

I'm sure that you've seen the ING commercial with the Dutch guy saying "Save Your Money!". Well I've been saving my money with ING for over two years now and I am very happy with them. Why? Because they pay me 3.15% on a regular saving account while the other banks pay out a measly fraction of a percent (less under 1%). In addition they do not charge me any service fees of any kind. There are no fees to open an account or to withdraw money like the regular banks charge.

Actually having a savings account with a regular bank costs you money because they barely pay you anything and they charge you these outrageous bank and service fees. Yet they make billions in profits every year!

I know that this strategy won't make you rich and there are other, much better ways out there to invest and make more money, but when you need to keep some cash liquid, this is a great way to do it.

Now about making $260: ING has a current promotion that when you refer someone who opens an account for the first time with a minimum deposit of $100, they will pay you $13 and that someone $13. They will do this for up to 20 people that you refer, allowing you to make a total of $260. Keep in mind that each person you refer will also make $13 too so it's a no brainer that the people you refer should open an account considering the benefits I've highlighted above.

If you'd like to open an account and make your first $13 for doing so, just email me your full name and email and I'll refer you to them. ING keeps everything confidential, so I have no way of knowing if you've signed up or not, nor how much you've deposited. All they do is send me an email to let me know that someone I've referred has opened an account and that that have deposited $13 in that person's account as well as my own. I have already done this amoung friends and family and ING without fail has given each of us the $13 bonus.

You can email me at: xurxo_v@fastmail.fm if this offer interests you.

Have a Great Day and "Save Your Money!"

Credit: Credit Cards vs. Line of Credit

Here's a little trick that I learned thanks to my financial advisor that has already saved me hundreds of dollars. Get a line of credit instead of a credit card. This is an option that banks and credit card companies would rather you not know about. I say this even though banks offer both these products when it comes to credit. The fact is that banks can make much more money on you with a credit card than with a line of credit. Why? Because, most credit cards have very high interest rates that are charged on the total you spent and didn't pay off in full. A line of credit however carries a much lower interest rate that is usually linked to the prime rate. You only pay interest on the amount that you used for the time that you used it.

In essence a line of credit is like having a preapproved low interest loan available to you 24/7 without having to apply for it each time you need money. You can pull money from it directly from an ATM machine or transfer money from it to your bank account via internet banking.

Another advantage of a line of credit is that there are no yearly fees as with many premium credit cards. You only pay interest on the amount that you borrow for the time that you borrow it.

In addition some banks allow you to pay back a minimum payment of only the interest owed on the amount borrowed or some small percentage of the amount borrowed like 3%.

I didn't give numerical examples here because I advise you to discuss this option with a financial advisor who can analyze your situation and give personalized recommendations. If you don't have a financial planner, get one, this alone can save you tons of money and accelerate your financial independence. Just be sure to look for one that doesn't work for a bank or a mutual fund company, these so called financial advisors are really just glorified sales people - I know because my cousin works at a bank. Look for an independent advisor who can offer you products from any company, they usually give better, more objective advice.

"Consumption and consumer debt are the plagues of our generation."