Just Buy ONE Share

I totally understand why some people can be intimidated by investing. It makes sense to think that if you are uninformed, you might lose all of your money. Or, that someone will rip you off. I get it. Money is a very emotional subject. It represents our survival, our happiness, and our status. We are not always comfortable thinking about putting it to work.

But if you really want to experience what it is like to invest and more specifically, invest for dividend income, like I suggest in my books and courses, then you can do it without much pain at all, and experience what it feels like to earn passive income.

Open an investing account.

There are a ton of online brokerages that offer low-cost trading and investing options. Look around and find one that offers you the ability to make trades yourself. Your bank probably has a discount brokerage available through their brand.

This first step costs you very little, except some time and maybe a few account fees. You might get a very well-rehearsed sales pitch to buy thier “products” and how you should trust thier investment advisors to manage your money for you. You are free to hand it over to them, but that defeats the purpose of what I am suggesting here.

By opening an investment account you are taking the first step towards overcoming your fear or uncertainty surrounding investing. Once you have everything in place and are able to make trades on your own you will begin to feel what it is like to be in control of your financial destiny. 

At this point you are free to do nothing if you wish. Take as much time as you need to explore all of the feelings you are experiencing when you begin to think of investing. When you are feeling OK with where you are at, you are ready to take the next step.

Buy ONE share

If you are wondering what you should buy, I suggest you begin with ONE share of a blue-chip stock. By blue-chip, I mean a company that has been around forever and is very unlikely to go out of business any time soon. You are not looking to jump on the latest IPO or skyrocketing tech stock. You want stability and boring. 

Sign up for my newsletter and you will receive a free download of my “how to pick stocks” guide, which offers a few suggestions.

If you buy ONE share of a blue-chip stock, make sure it is a stock that pays dividends. Dividends are your share of the profit a company makes and is distributed between all of the currently held shares. Some are paid quarterly and some are paid monthly. 

HOLD

Once you take the leap and buy ONE share of your favourite blue chipper, sit back and relax. Now it is time to feel the magic. You have bought ONE share and are now going to receive money on a regular basis for doing NOTHING. This is called passive income. 

The big day will come when your account receives the dividend. You will see a small amount of money deposited into your brokerage account. You are now officially an investor. You are NOT a trader. Trading stocks is a very different thing, and is gambling from my point of view. You have invested in the company and are now sharing in the profits. 

Congratulations !

You are now an investor and your total risk is probably less than $100.  You now are able to feel what investing for passive income is like. You will get used to the feeling of receiving that dividend, like clockwork, every three months or every month. You are in the big leagues now. Savour it. 

Because you are an investor, and not a trader, the price of the stock and the fluctuations of the stock market are really not your concern. As long as that payment keeps coming you are happy. You do not need to care about the value of your portfolio, you only care about your regular income from dividends. You rate your wealth by how much you receive without having to work for it. Now you are in a different class. 

Go BIG or Not

Once you feel comfortable with this setup, now you are free to scale it up or down as you see fit. Buy ONE MORE share. Or buy a hundred. It is up to you. 

By starting small and dipping your toes in the water first, you are learning the ropes and getting to experience the thrill of passive income without incurring more risk than you feel is necessary. You are totally in control. This is a beautiful, easy way to become an investor. 

So if you are interested in exploring more of what I am proposing here, read my books or take my course. I explain all the ins and outs of this system and how you can be a sophisticated investor without needing to be wealthy to begin with. You can start with very little and grow from there.

Investing is for everyone. You don’t have to wait until you have money to make money. 

Why a non-registered margin account is better than an RRSP

Taxes

*See Disclaimer*

RRSPs are awesome when you are trying to reduce your tax payable while you are working. I get it. I am tempted every year to top up my contributions so I don’t have to pay as much tax on my income. 

RRSPs will entice you with concepts such as:

1. The growth is tax-free within the account

2. You can subtract your contributions from your regular earned income

These seem like an advantage over a non-registered investment account such as a dividend bearing stock in a margin account..

But there is one thing you have to remember: You pay taxes when you withdraw any money from an RRSP at regular income rates. This is how the government ensures you pay taxes for your whole life, not just your working years. 

Concept 1 “The growth is tax free”

A Margin account with a good dividend paying stock also grows “tax free” until you sell it. There is no taxes due on “appreciation of value” unless you sell the stock. Then you will only be paying tax on 50% OF THE CAPITAL GAINS. 

Concept 2 “ You can subtract your contributions from you regular income”

This is pretty awesome, I must admit. Everyone likes to get a tax refund. But what do you do with a tax refund? Re-invest it? 

I you re-invest the tax refund back into your RRSP that would be great. 

“Can I see a show of hands how many of you re-invest your tax refunds?”

Crickets..

That’s what I thought. 

Opportunity cost.

That tax refund money sat in the government coffers doing nothing for you until they sent it back to you. This could be well over a year before you get that back from an RRSP contribution you made last year. 

If you invested in a dividend bearing investment you would be seeing a return, and compounding right away. You money will be working for you and making money from money ASAP. It is also there if you need it right away. The stock market and other investment vehicles can change quickly and unpredictably so it would be great to be able to pivot and take advantage of new opportunities as they appear.  

Back to Taxes

RRSP accounts are not “tax-free” they are “tax deferred”. You will pay tax when you use them for anything and it will be taxed as personal income, one of the highest tax rates there is. 

Now, if you are a very high earner, contributing to RRSPs might still be a good idea as you will be enjoying the tax break at the highest marginal income tax rate and perhaps when you withdraw your income level will be lower, putting you in a lower tax bracket.

Federal Income Tax Canada

2020 Federal income tax brackets*	2020 Federal income tax rates
$48,535 or less	15%
$48,535 to $97,069	20.5%
$97,069 to $150,473	26%
$150,473 to $214,368	29%
More than $214,368	33%
* These amounts are adjusted for inflation and other factors in each tax year.

From the chart above, You could be getting back 33% of your contributions and then paying 15% when you withdraw. This is cool, but it is limiting, especially if you enjoy a higher standard of living. 

Also, your RRSP nest-egg will be depleted faster than a non-registered account as you have to adjust your withdrawals for the tax burden.

e.g. If I want to withdraw $10,000 to go on a vacation

Margin - I withdraw $10,000 - I may need to pay tax on 50% of the portion that is considered capital gains. That is dependant upon how much I consider return of capital. 

or..

I BORROW $10,000 from the margin account. Then the dividends pay it back. I still receive dividends on the full amount and I pay no tax on the money I withdrew. My nest egg never shrinks.

Or..

RRSP - I need to withdraw almost $15,000 in order to have $10,000 in my pocket. This will reduce your nest egg considerably faster than a margin account. 

Borrowing

Some people find it incredible when they find out you can borrow from your RRSP to get a first mortgage or finance your existing mortgage. This is cool unless you take into consideration all of the limitations and regulations involved. You can only do so much in a certain way, if you play nice with the CMHC. 

If you borrow from your margin account you can do whatever you want. You are free to finance anything you wish. If you invest that money, the interest is tax deductible. You are your own bank.

Capital gains tax 

Capital gains tax is awesome because you only pay tax on 50% of your capital gains. So iff you invested $100000 and it grew to $300000 you could withdraw it and you would pay tax on:

300000

-100000 initial investment

=200000

50% of 200000 is 100000

You would be taxed on $100,000 of income even though you withdrew $300,000 ($23,884 if this was your only source of income)

After tax amount = $276,116

If you withdraw 300000 from an RRSP you would be taxed for 300000 of income, OUCH ($109,637)

After tax amount = $190,363

..a difference of $85,753!

For US citizens

I don’t know very much about the US tax system but I can tell you that capital gains are still taxed much more favourably than regular income. You also have to contend with short term and long term capital gains, but in the context of a retirement plan, long term capital gains apply most of the time. Since I tend to lean towards not touching your principle anyways, capital gains tax really isn’t an issue until you die. 

Dividends

Of course, I have spoken before about how dividends are taxed very favourably. Dividends are considered “after tax” profit distributions from corporations. So the income tax the corporation already paid is subtracted from your tax rate. 

E.g. if the corporation paid 18% tax on income and gives you the remainder as a distribution or dividend, you would pay your nominal tax rate LESS 18%. This is a simplification of course but the principle is accurate.

If you made $100000 in dividends and this was your only source of income you would pay:

Tax= 7,665

After tax amount = $92,335

..and if you split the dividend income with your spouse, you would pay almost no tax.

Control

A margin account is totally in your control. You buy and sell the stocks and pay a very small commission on each transaction. There are no fees, unless you are buying mutual finds. A good ETF is always an option. 

Collateral

You can use your margin balance as collateral for getting other types of loans. If you have money in a LIRA, for example, you cannot use it as it is locked in. 

Death and Taxes

When you die, your estate is taxed as if you sold everything in the year that you died. If your fortune is in the form of RRSPs it will be taxed at personal income tax rates BEFORE your beneficiarys inherit your wealth. If it is a non-registered account, it will only be subject to capital gains taxes, which will leave a lot more to your loved ones.

The Money Shot

Of course, my most passionate argument is to NEVER touch the principle. You leave your nest-egg intact and let it grow. You live off of the dividends it produces. This way you ensure money for life, and a favourable tax rate forever. If you want to learn more about this strategy. Check out my books or courses. They lay out a step-by-step plan to create this type of scenario that anyone can follow, no matter what your income level. 

As a final word, I think RRSPs (and ROTH IRA, 401K for you US folks) are great if you are not confortable with investing in general and are risk adverse. As well, if your employer offers a matched RRSP savings plan of some sort  you would be very wise to participate to the maximum. I believe that investing in registered plans is WAY better than doing nothing and that is always the key to success. Do SOMETHING. Learn as you go. 

Full disclosure - I have BOTH RRSPs and non-registered investments. I use each for different things and it works for me. The key is to know what your options are. 

Thanks

*Disclaimer* - I am not a tax expert, nor am I qualified to give tax advice. These are just my opinions and as much, may be biased and or completely wrong. Do not make serious financial decisions without consulting a real expert.

Can We Eliminate the Class Struggle?

One of the priviledges that being wealthy brings is the practice of paying other people to do stuff that you don’t want to do. It is a common perk of being rich to have people, who are “lower in standing than you”, to wait upon you. We see the world of the upper class in shows like Downton Abby where the wealthy lords are waited upon by an army of servants who work for minimal wages and spend their lives toiling while the elite attend dinner parties and dress for afternoon tea. It is an interesting dilemma to those who come from humble beginnings, once they have money, to have people wait on them as they were once the ones doing the serving. The formerly “poor” feel uncomfortable in that situation, whereas people who always had money think nothing of it. The question I have is, 

“Is this morally appropriate”? 

Is it morally correct to have a society where the rich are waited upon by the poor? Well, in a sense, it might be the wrong question. The right question might be,

“Are the people waiting upon the wealthy doing it by choice?

That is one of the fundamental questions. If they were there because they had no other choice, then the situation is flirting with indentured servitude which basically amounts to slavery. This should never happen and I could never support a system that perpetuates that. However, if someone’s vocation is a choice, based on interest, aptitude or ambition (or lack thereof) then is is perfectly acceptable and I am all for it. The problem then becomes, whether the elite or the “help” are aware of the “choice” and are willing to accept either lifestyle as an option (or consequence) , based on merit.

This class struggle is apparent in all of modern society. The wealthy get poor people to build things, move things, and clean things that they don’t want to do themselves. Often, the poor work much harder than the rich and yet, make a lot less money. So is this an individual problem or a systemic problem?

The hard core capitalists would suggest that it is an individual problem. They believe that everyone has the opportunity to make something of themselves in a free society and the only roadblock is ambition or lack thereof. They are not wrong. We live in a world that has more opportunity than ever before in human history. We are truly blessed. 

But the other side of this argument is that not everyone is starting from the same place. Some people’s struggles are excessive. People who are starting from nothing or live in a community that is less than safe do not have the same opportunity as someone who has a well constructed support system. The fact that there are vast multitudes of people barely getting by is definitely a systemic issue.

If we all have a common starting point, the definition of “poor” becomes something new altogether. I believe there will always be some sort of “class” system - but it can, and should, evolve as we become more enlightened. There is a very real need for us, as humans, to be compensated for our efforts. This is as it should be. We should also try to define our contributions in the context of thier value to society as a whole. If our product or service is rare or extremely hard to reproduce, it therefore should have a higher value than something that is fairly abundant. This is supply and demand. However, we need to place a certain base value on human beings in general and derive a formula to make sure that everyone has basic survival available to them at a minimum. This would allow everyone to have a foundation of safety. If people feel safe, they are far more likely to make decisions that contribute to society than not.

Now I agree that there are still a good many crappy jobs out there and that someone has to do them. I am not naive enough to think that everyone is cut out to do all things. Everyone has a different level of intelligence, strength, creativity, and aptitude. That is what makes mankind so diverse and amazing. We all bring something unique to the table. There are people who like to think for a living and others that like to use their hands. Some people need to express themselves, while others just like to see a job well-done. That is great. We hope that everyone has the opportunity to find meaningful work that allows them to earn a living (at a minimum) and fullfill their purpose (in a perfect scenario). 

People’s differences aside, we should be careful not to demean any particular walk of life based on its relative “hardness” compared to any another vocation. Jobs that require a unique skillset or a rare amount of brainpower should be compensated as such, as they are in short supply and tend to solve big problems. This is perfectly natural. 

Work that “anyone can do” is compensated poorly because, as a commodity, there are many people who can do that job. However, there is some value in a person doing an “easy” job well, and with enthusiasm. We are dealing with people after all. The soft skills of camaraderie and attitude do have a value. If you don’t care about that, hire a robot. 

So is it morally OK to have “poor” people working for the “rich”?

Absolutely

But we need to remember that everyone deserves respect, dignity and a minimum standard of living. Everyone deserves a common starting point and help, guidance and resources if they ask for it. Equal opportunity should be available to everyone. 

The smart, creative and ambitious deserve to have their gifts rewarded by contributing to the world. But let’s not live by “survival of the fittest”. Let’s live by “survival for everyone” AND “To the victor goes the spoils”

My new book “We Can Save the World..but there’s no money in it” is available now. I go into this subject in great depth and make the argument that there is a system of capitalism where we can all win. Shake up the status quo and check it out. 

Know Thyself

Don’t Believe the Hype

Before you quit your job and pursue that dream of entrepreneurship or side-hustle riches, take a moment to self assess. Are you the type of person that can live with uncertainty? Can you manage money well? Are you good at self-motivation?

If you can’t answer these question honestly, ask someone who knows you well and has your best interests at heart to tell you. Being an entrepreneur or a business owner may seem glamorous but it is not, at least not at first. I know people that are smart, hard-working, conscientious and ambitious that are not cut out for entrepreneurship. Some people are best-suited to being an employee. They derive great comfort in knowing there will be another paycheck in 2 weeks. They like that they can just follow instructions and leave for home at 5 o’clock. There is absolutely nothing wrong with this lifestyle. It is a time-honoured way to move forward in life and take care of your needs. 

But if the thought of working for someone else makes you cringe, you may have what it takes. I am not implying that entrepreneurial folks are special in any way. I am just suggesting that they tend to be a certain type of person. They have an inner voice that makes them want to solve the worlds problems and be their own boss. They have to make mistakes to learn and were not always the best students. Following instructions tends to make them feel stifled. 

I have been both an employee and an entrepreneur over the years and I found out a lot about myself in the process. I learned that I am happier working for myself than for others. I tend to work harder at my own endeavours than I do at my job. (Sorry bosses)  I have a very serious mental aversion to being told what to do. I need to try and fail. It makes me happy to know my effort is contributing directly to my and my family’s future. I hate the idea of my effort being measured and rewarded based on someone’s arbitrary opinion of my productivity, within the parameters defined by the corporate salary band guide. It feels like slavery to me. I cannot endure it for long before I start to go a little crazy. But that is just me. 

It took a long time to figure this out about myself. It didn’t happen overnight. I realized this revelation over a long time time as I rose through the ranks of my corporate journey. I made lots of money and had lots of responsibility, but it never felt like I was in control. I always felt like I was at the mercy of some other person’s agenda, and I was just a resource for them to get what THEY wanted. I was just a tool. As much as I was quite good at my career, I grew to hate it and resent the whole game. It was like being in school and whomever was the most subservient got the most attention and rewards. 

Entrepreneurship Is Awesome

I like being in control of my own destiny. What can I say? It feels good. To me, I like knowing that my security and/or success is in my own hands. That makes me feel safe. I trust myself and I know that I can decide how much I succeed or fail. Yes, I realize that I am still subservient to the market and to my customers. My investments are still dependent on the actions of the people who manage the companies I invest in, but I still feel that I am free to make my own decisions. I can move my investments around at my whim. I can fire a terrible customer who wants all of my time and pays very little. I can pivot my strategy as I see the winds of change starting to blow in my field. I love being my own boss.

I know many people who find everything I am discussing terrifying. They would feel constantly stressed out about the uncertainty of not knowing if they are going to receive a paycheck, or what their next assignment is. They like having a schedule and a path laid out for them. They like knowing and executing processes and procedures that produce results. These people are happy being employees and I applaud them for their self-awareness. The world needs employees and entrepreneurs would not be able to get very far without them. There are many types of jobs out there that are suited to all the different personality types. If you can find a job that you like going to everyday and it pays the bills, you are living the dream, my friend. Carry on..

I encourage you to spend the time to self-reflect and figure out which type of person you are. I know people who are entrepreneurs that would be more suited to employment and vice versa. I hate to see people unhappy because they are doing something they aren’t suited for just because they believe it is the “right thing to do” or “I have no choice”. This is not ideal for anyone and I dream of a day when everyone has the opportunity to make a conscious choice about their vocation and not pursue a career just to pay the bills. 

My new book discusses some possible solutions to this problem and how we can, as a society, make changes that will allow everyone to have that choice. It is idealistic, but I believe we at least need to start talking about it. 

So if you are an employee and you feel trapped and hate working for others, I hope you can find the courage to take a chance and pursue your entrepreneurial dream. If you are a business owner and are far too stressed out everyday to keep going, there is absolutely no shame in cashing out and getting a job. If it makes you feel happier then it is the right thing to do. Until we can figure out a better way to live where we don’t have a financial gun to our heads to survive, we must earn money. So start by earning money in a way that fits your personality and stress level.  Peace of mind is the goal after all, not just financial stability.

Invest for your Personality Type

Investing is similar to this notion, as not everyone is suited to investing the way I teach in my books and courses. Some people are far better off to just invest in mutual funds or their company’s matched savings plan. Some people may be better off investing through their financial advisor at the bank, or insurance company. That is OK. My methods are not for everyone. I offer my ideas so that you have the choice as to how you invest. My only aim is to inform you that you HAVE a choice. You are free to make whatever investment decisions you feel comfortable with. But I would hate to see you make those very important decisions without knowing all of your options. That is where my investment strategy comes in. It is just another option. You may learn my strategy and decide that it makes you feel uncomfortable and stick with the tried and true. I am totally OK with that. You need to be able to sleep at night. 

I hope you see the value in choosing a life that makes sense for you as a unique individual. Whether it is your career or your financial plan, you would be doing yourself a disservice to follow the herd. Make these choices from a place of knowledge and self discovery. You owe it to your self.

Happy investing.

Economic Theory vs. Reality

All Talk, No Action

It is amazing to me that knowledge can exist in two distinct forms:

1. Theoretical knowledge

2. Experiential knowledge

Of course, the world is chock full of theoretical knowledge. This is what they fill our heads with while we are in school. It is an avalanche of facts and figures about things that we may or may not care about. They are mostly true, but not contextually relevant. He have no frame of reference for why we should care about these things. 

Experiential knowledge is what we learn from doing. We gather information based on the feedback we gain from our experiences in the real world and formulate theories based on this feedback. These theories are incomplete as they are biased towards our own frame of reference and usually are tainted by emotions and prejudices. We may not have enough experience to put our results into the proper context, therefore we are prone to derive incorrect assumptions.

Learn then Apply

The best scenario is to learn the theories and apply them to the real world. Read a book about investing and then go and invest. Then you have the best of both worlds. You will be well equipped to make mostly good decisions from the theory, but you will need to get your hands dirty in order to truly understand the point of the theory. You must make a few mistakes and see a few ideas come to fruition in order to appreciate where the theory originated from and why it is the way it is.

Blindly doing without having done your homework ahead of time is going to teach you things, but trial and error is not the most efficient use of your time. If you learn from other peoples experience you can save yourself a lot of heartache and avoid the pitfalls that may arise in the process of trying and receiving real-world feedback.

Also, reading books and taking courses will give you knowledge but that knowledge is useless unless you apply it. There is no substitute for action. You need to actually do something in order to move forward. The whole “Law of attraction” philosophy is only as effective as your willingness to participate in the manifesting of your desires through massive action towards your goals. If you visualise a desire, the universe will appreciate it if you help out. As Dr. Phil once said:

“The universe don’t drive no parked cars”

So theory is like a roadmap. It shows you possibilities and the general direction to can take to get to where you want to go, but you still must actually drive there and take in the scenery as you go. You will have direct experience of the trip and will have made a mental “map” of the journey, but you also know how that route fits into the grander scale. You know that the alternate route exists even though you didn’t take that particular road, and you see why the first hand experience you had to avoid the scenic route, or bypass a particularly congested road.

My books, courses and articles are theory. They are a roadmap to financial success. You may read my books or take my course but they will be nothing but light reading if you don’t take action and try the methods outlined within. You need to actually do it. And my “theories” are just some of many that exist out there in the universe. There are many “roadmaps” to financial abundance, yet none are helpful at all unless you apply them. 

Reality vs. Ideas

In my own journey towards financial freedom I read hundreds, if not thousands, of books about wealth, investing, real estate, and economic theory. I could speak to anyone who was willing to listen for hours about money, finances and wealth building. I had a ton of theory but no practical experience. The issue there was twofold:

1. I did nothing. Therefore my knowledge was useless. And I went nowhere financially.

2. I didn’t REALLY understand or appreciate the profound nature of some of the ideas I had read about.

Example - Multiple Streams of Income

I read dozens of books, mostly by real estate guys, that spoke about multiple streams of income. It was an interesting idea, and it was easy to grasp the concept, but it seemed like something that other people did. It didn’t really make any sense to me at the time.

As I meandered down the winding path towards financial literacy and actual financial abundance, I slowly built up a few different streams of income; most were small but steady. As these streams of income grew I began to take them seriously. Over time, they became not just cool ideas, but real-world bank deposits. I saw the money coming into my bank account regularly and in larger and larger amounts. Then something crazy happened…

I lost my job. 

I was laid off from my cushy, well-paying job and was suddenly unemployed. This was the first time in 30 years of working that this ever happened to me. It was scary and upsetting at first. My wife and I sat down and went over our finances. As much as we did not like the sudden drop in our income, we realized that the money coming in from our investments and side hustles was making the situation a whole lot easier. We would not starve to death. Yes we were going to have to tighten our belts until I could find another job, but we were not desperate. In fact, we even considered that I may not even have to go back to work as I could possibly just focus on growing my investments and other businesses. 

This situation would spell disaster for many people who rely on JUST their salary to get by. By having multiple streams of income, I was able to make a bad situation tolerable. I was able to navigate a storm that could have otherwise been disastrous. 

The “concept” of multiple streams of income was just an interesting idea until I was able to receive the full impact of it in my own life. This “idea” now had a profound effect on my life. This was no longer theory, it was a magnificent reality. I had absolutely no way of knowing how significant and life changing this idea could be until I implemented it in my own life. The reality of multiple streams of income was a thousand times better than the concept ever was. 

So I encourage you to spend time learning as much as you can about money, investing, and financial freedom. We live in a world that is ruled by money and our well-being is intricately tied to our income level. I talk about this in my new book “We Can change the World - but there’s no money in it”. I encourage you to take in as much information as possible, but for a more tangible purpose..

YOUR LIFE.

Take action on what you learn. Be willing to make a few mistakes. Be patient enough to take it slowly. Your every day reality will change, and that will make your life change. You will really feel it. You will have a new perspective on things. 

Nothing beats the feeling of a real positive change in your real life. You can have that.

Learn..

Take action.

Repeat.

Happy investing.

Economic Prosperity is Good For the Environment

I have always thought that “progress” was a double-edged sword - whereby we enjoy a higher standard of living, but we produce much more waste. It may be true in some areas but sometimes it is not so simple.

Some interesting facts from the EPA - (From the Book Ten Global Trends Every Smart Person Should Know)

Between 1970 and 2018:

1. US population grew by 60%

2. Vehicle miles travelled increased 191%

3. Gross domestic product grew 275%

4. Energy consumption grew by 49%

You would think that this would increase environmental impact by a LOT due to the increase in people using resources.

BUT

CO2 emissions only increased 22% in that timeframe.  Total emissions of the six principal air pollutants (Co2, Lead, Nitrogen Dioxide, Ozone, smoke, sulphur dioxide)  DECREASED by 74%!

How is this possible? 

Well, some scholars have postulated that a society in the midst of initial economic growth will create a deteriorating environmental footprint as they industrialise and spread their economic wings. However, within a few decades as that prosperity propagates to more and more of the population, the citizenry will demand environmental controls and regulations. They will be more conscious of their environmental footprint and will have the time and mental space to care about bigger things than survival. Many of the less than scrupulous means of earning a living in the world are engaged in due to desperation and lack, not maliciousness. It seems economic prosperity and morality go hand in hand. 

We need to keep this in mind when we read about “other places” that are not as environmentally conscious as we may be here in comfy North America. Those countries may be at a different stage of economic growth than us and, therefore, have not had the luxury of time and/or resources to make the necessary changes to their environmental protection behaviours.

This also applies to individuals and communities that are struggling financially. You may want to judge the moral compass of someone who is willing to cross the line to make ends meet, but morality is much easier to live by when you are fed. Crime is more often driven by need than by greed. 

The logical conclusion here, is that wealth leads to many sociological improvements. Clean water, better sanitation, a healthier populace, lower birth rates, less crime, and egalitarian policies that decrease the likelihood of discrimination based on sex, race, or sexual orientation.

Wealth is good. Yes, there are some who will use wealth as a weapon to control or dominate others. Yes there is still greed and corruption. I am not saying there are not some bad actors in the world. Far from it. But we have data that proves that economic prosperity and the distribution of wealth in an inclusive economic system is good for everyone. We can fight crime by giving everyone a chance to prosper, instead of setting  them up for failure and then punishing them for failing. 

In my new book (coming July 2021) I dive deep into this philosophy. I uncover the reasons why there is economic disparity in the world and explore some ideas that have attempted to counteract this income gap. I suggest new ways of thinking, and perhaps plant the seeds for future generations to prosper and flourish within a new economic paradigm.

I believe that the world is on a positive trajectory, based on the data. There is never progress without strife.

“A smooth sea never made a skilled sailor”

-Franklin D. Roosevelt

I am an optimist. I can’t help but believe that the world is getting better, as I study more and more about economics and read great books such as “Ten Global Trends Every Smart Person Should Know”. I am constantly running into facts and ideas that indicate that we are constantly more prepared to live well. We have a plethora of tools available to us to succeed and information is readily available to those who seek it out. 

Is It Impolite To Talk About Money?

Good Manners?

I was always told while I was growing up that it was impolite to talk about money. It was as “off-limits” as religion and politics. People can get very emotional about money and it sometimes will bring up a lot of negative feelings. So, I avoided this topic my whole life. When someone would start to bring up money issues I would say,

“Gentlemen do not discuss such things” and we would laugh and move on to the next topic. 

In recent years I have changed my stance on this. I think it is good to talk about money, if you are doing it for the right reasons.

It is considered “gauche” among rich people

First of all, NOT talking about money is a point of etiquette inherited from rich people, just like pointless displays of money like weddings and funerals. It used to be a way to show how rich you were by how much you didn’t care about money. I remember in the Movie about Howard Hughes “The Aviator”, Leonardo DiCaprio as Howard Hughes was having dinner at someones house and they stated that they didn’t care about money. Howard Hughes gets angry and says “you don’t care about money because you HAVE IT”

I think this is a silly and pretentious behaviour and we need to get real about money. Specifically, I would love to hear people to talk about money MORE OFTEN.

Pretentious Chatter

In an article I read in Forbes it was discussing this topic and it really did a great job of debunking the “money is off limits” myth. It mentioned that it was a silly quirk of the super-rich and was often used to belittle those of lesser means. 

Shame

I don’t think anyone should go around bragging about how much money they have for many reasons.

If you are announcing your salary or net worth to show you are better than someone, then shame on you. You are a braggart and you suck. 

Secondly, people generally won’t want to be like you, they will just want what you have. It is simple human nature. They will not suddenly have respect and admiration for you if you have a fat wallet. They usually will want your riches for themselves. So there is not much to be gained from rubbing your wealth in peoples faces. It might even put a target on your back for some less than scrupulous people. 

In my opinion, the old-fashioned traits of kindness and decency will get you the respect you crave. 

Talk about money

If you really want people to admire you for your abundance, teach them how to acquire it for themselves. This will garner you as much love and respect as you can handle. You are not going to lose anything by giving away your knowledge. There is plenty to go around and you probably won’t gain wealth by having a scarcity mindset anyways. 

It would even be OK to reveal your income or net worth if it were to inspire someone or to prove that you know what you are doing. It is not necessary but if you felt it would have the proper impact then by all means, let it slip.

Talk to your kids

The most important discussions you should have about money are with your children. They are living in a world that is defined by capitalism and it’s rules. By teaching them how money works your are arming them with the tools they need for success in the real world. You will be giving them a serious advantage over their peers, as financial literacy is not taught in school (as it should be). Where else are they going learn? By openly talking about money, leverage, assets, and taxes, you are teaching them that money is not evil. You are taking away the fear and emotional turmoil that is often attached to money. You would be reinforcing a respect for good money management. 

Make it awesome

Learning about money can be fun! Make up games to play using money. Play monopoly and stock ticker. Let them see how it feels to earn, borrow and spend money in a safe environment before they are forced to deal with these things in the real world.

If you are comfortable with it, let them watch you pay bills and work on your budget. Show them your investments and how they work. Tell them why you picked those particular investment opportunities. If they see that there is a real impact to these concepts, they will learn to put money to work for them, instead of spending every cent they earn. Tell them how much your house cost, it's present worth and how a mortgage works. 

Read books

Of course, I am a huge fan of reading books. I have learned most of what I know from reading books written by people smarter than me who have figured out how to manage money. I get something from nearly every book I read, even if it is something I already knew. A new perspective or one little tidbit of information can sometimes change your whole world. I know it has for me.

I also have written several books on wealth creation. I believe they offer usable strategies that will enable anyone to become financially free if they apply the principles and work the system. I don’t believe in get-rich-quick schemes and I would never suggest one. I know that it is possible to become rich if you are willing to pay the necessary price, in self discipline, delayed gratification, and adopting long-term perspective. Becoming financially free is not magic, nor is it something that is reserved for the folks who “don’t discuss money”. It is for everyone who is able to function in a free society. 

Money is not evil. It is not supposed to be scary. It is simply a tool to be used to live your life in the manner you choose. If you talk about it then it loses it’s mystique. It becomes an everyday activity you manage like your other daily habits. 

Thanks

Make Your Own Rules - Then Live by Them

Just the Facts, Ma’am

I recently read an amazing book entitled “Ten Global Trends Every Smart Person Should Know” and I was instantly drawn into their argument. In this amazing book, which I heard about through the Jordan B Peterson podcast, I learned that, despite what we may believe or have been told, the world is actually improving in a great many ways. We tend to focus on the negative as a survival instinct but the data paints a very clear picture: life is better than than is has ever been in human history. 

The book delves into many different aspects of life on earth:

Economics - How many people are living in poverty today vs. A few decades ago.

Population - How an educated and free populace will naturally control the birth rate

Health - How access to clean water and health care is more ubiquitous than ever

Well-being - How people are generally happier and more well adjusted these days

In most areas of life, the data clearly shows that things are improving at a staggering pace. We are led to believe that the world is always in a state of crisis because we watch the news and buy into their “if it bleeds, it leads” mindset. Negative news captures our attention due to our propensity to focus on survival, so we think that the only things going on in the world are bad. This book gives us hope and a perspective that is hard to refute. If we look at the facts and disregard our emotional bias we can see things as they are or could be. 

The Rules of Money

This mindset applies to money management too. If we make a plan and follow it, despite our emotional spending triggers, we can accomplish great things. We can achieve financial freedom in our lifetime if we look at the facts and let math do the thinking. We are too emotional to always make the right decisions with money. We need to create a plan with a sober outlook, using mathematics and boring concepts to make our financial aspirations a reality. 

If we learn some basic money concepts, like budgeting, investing and some creative side-hustle ideas, we have all the tools we need to create a future of freedom and abundance. But we get in our own way. We make rash decisions about our spending and what is necessary in our lives.

I equate this to someone with an addiction. An addict needs to live by a strict set of rules concerning their addiction. They must follow the rules no matter what. How they “feel” about the rules at any given moment is irrelevant. They can only succeed if they follow the rules that were agreed upon when they made the decision to get better. Money management is no different. You must define a set of rules about your money and live by them. Every. Day.

If you are feeling blue and want to indulge in some retail therapy - you don’t.

Because your rules don’t allow it. 

Your friends are going out to the bar and you want to spend a ton of money on drinks and entertainment outside of your budgeted amount - you don’t.

Because your rules don’t allow it. 

If you have rules, you are saving yourself from yourself. This is the key to financial freedom. 

We need to remove the decision making process from our daily money behaviours. If we have hard and fast rules, we don’t have to constantly make decisions about whether we should or shouldn’t spend money on things in the moment. By having firm rules, we prevent decision fatigue and emotional spending. If I know myself, I tend to make BAD decisions if I leave it up to how I feel in any given moment. I need rules that override my emotions.

How we perceive the world, and our financial situation is actually not helpful. We need to see the world and our journey to financial freedom from a factual and unemotional perspective. 

New Perspectives

I highly recommend you read the book “Ten Global Trends Every Smart Person Should Know” as it will make you realize how much of a negative bias you may have. When you realize how you feel about things isn’t necessarily how things actually are, you can then make the connection to other aspects of your life where you may be making decisions based on feelings rather than facts.

Since this website is focused on money and personal freedom, I am suggesting that you take the lessons from this amazing book and realize that you need to face facts when it comes to your personal wealth. When you do that, you can create a plan. Then you must stick to it. No matter how you feel on any particular day.

There are a ton of great wealth creation strategies out there, and I recommend you find one that fits your life. My books and courses are nice, easy, paint-by-numbers strategies for wealth creation and I would be thrilled of you gave them a try. I also am happy to suggest other people’s work as I have learned a great deal from people smarter than me. My Top 5 Personal Finance Books are a great place to start. If you really want to get schooled, read Unscripted by MJ DeMarco. It will punch you in the face with the truth. Awesome. 

As of this writing, I have finished my new book and it is being edited as we speak. It delves into the world of macro-economics and how we have been living under a system that has been defined by a very biased mindset, focused on domination and competition. I explore how the world is changing due to the great work put forth by amazing thinkers like Riane Eisler and others. I offer a new perspective on capitalism and suggest how we can all prosper while still embracing the undeniable benefits of a free market and an inclusive economic system. 

This new book, and others, are joining the inevitable march towards a better planet, happier people, and prosperity for all who want it. I can’t wait for you to read it.

In the meantime, thanks for your support and happy investing!

No one better that Brian Tracy to teach you the fundamentals of wealth building. Check it out and prosper.

Opportunity Cost

What is Opportunity Cost?

Opportunity cost is often defined as the money you DIDN’T make when you used money for something else, instead of the investment opportunity that you had the chance to partake in. 

This term is thrown about by fancy investors and stock market analysts to show that they know what they are talking about. It is not always something that is relevant to every transaction but it is definitely something that is overlooked by most people when making financial decisions.

I wrote an article about whether you should pay off debt or invest. This is usually a choice you face when you receive a bonus from work or an inheritance or some other form of windfall outside of your usual income. In that article I weighed the pros and cons of both choices and did not really promote one option over the other. 

I do have a preference though.. 

INVEST

Always.

I have my reasons for this opinion and I will try to demonstrate them here. 

Example Scenario

You owe $100,000.00 dollars to the bank. 

You are paying 4.25% interest annually on that loan over 10 years

This equates to a monthly payment of $1,024.38 

Over the 10 years you will pay $22,925.04 in interest

OK 

So now you win $100,000.00 in the lottery (lucky you) 

What do you do with it?

If you pay off your debt you gain 3 things:

1. You save $1,024.38 per month. This is money that you had to cough up after taxes from your earned income.

2. You save yourself $22,925.04 in interest. This is basically money out the window.

3. You have the peace of mind of not owing the bank $100,000.00 anymore.

Your net worth is basically ZERO at this point, but you are out of debt. 

If you invest the 100K in a dividend bearing, blue-chip stock:

ie. Bank of Nova Scotia (TO:BNS) dividend yield 4.64%

1. You now earn $386.66 per month in dividends (paid quarterly)

2. Your loan payments are now only $637.72 per month if you use the dividend to offset your payments.

3. Or you can keep paying the original $1024.38 per month and re-invest the dividends into MORE stocks, thus compounding your returns.

4. You have a $100,000.00 nest egg that you can keep for the rest of your life

5. Bank of Nova Scotia has increased their dividends every year since FOREVER - so your monthly dividend payment will likely go up over time

6. The stock price will most likely go UP over the ten years as well, increasing your net worth

7. The value of debt DECREASES over time due to:

   1. You pay it off over time

   2. Inflation makes the dollar value of your outstanding debt worth less in todays dollars

   3. Or you can use your dividend payments to pay off your debt FASTER than the original 10 years by making extra payments with your dividends in addition to your regular monthly payments of $1024.38 ($1662,10 per month - this will also lower the total interest paid).

As I have suggested, there are far more reasons to invest that extra money than to pay off debt with it. Some people have a hard time sleeping at night due to debt hanging over their head or due to the stock market uncertainty and that is OK. You should know yourself before you make the decision. If you worry a lot - pay off the debt. If you are less prone to worry, I say invest it. 

If you are willing to do some homework, you can find dividend stocks that pay even better than 4.54% and you are even farther ahead. If you sign up for my newsletter you will receive my FREE stock picking guide that offers some good suggestions to start with. 

Money Mindset

Not everyone is as committed to building wealth as they could be, and there are many reasons why we stumble. We are constantly fighting against our own natural instincts to survive and many money making principles are not as intuitive as we would like. 

In order to build wealth:

We need to have long term perspective…BUT…We tend to gravitate towards quick fixes

We need to have self discipline…BUT…We tend to do what is easy

We need to use our heads, not our emotions…BUT…Money makes us crazy.

So when you find yourself facing a decision about where to put excess cash (I know, what extra cash?) do the math and figure out your opportunity cost. What will you NOT get from spending it or paying off debt. Dream big. What are the possibilities?

If you feel you don’t have enough information to make a proper decision then I suggest that you take the time to educate yourself about investing. It is time well spent. Consider it the FIRST investment that you will make..in YOURSELF. 

Read Books about Money

I have written a few books that can help you develop a plan to invest and create a foundation of wealth for you and your family using simple steps without needing extra money. I also provide an online course that give you a paint-by-numbers formula for becoming wealthy that you can watch at your leisure. 

I also recommend these 5 books to get you started. They are required reading in my opinion and will serve you well in your quest to become a money magnet. I also highly recommend this book by MJ Demarco. It is life-changing.

They say that luck is when preparation meets opportunity. I couldn’t agree more. By learning as much as you can about money, investing and economics, you could put yourself on the path to financial freedom and be ready when “opportunity strikes”. 

Good luck, my friends!

How Much Stuff Do We Need?

Consumerism

There has been much written about how our economy is driven my consumerism. Mainstream media would have us believe that If people didn’t buy stuff, the economic engine would fall to peices and we would all die. While this is a bit of an exaggeration, many people tend to buy into this. It is a little bit ingrained in our collective psyche. We buy stuff because we are bombarded with advertising that tells us;

1. If you want status, but this fancy thing

2. If you want to enjoy pure old fashioned family values, buy this stuff

3. If you want to be happy buy this stuff

4. If you want to be a real man and get chicks, buy this

5. If you want to be beautiful and look young forever, buy this snake oil..

.. an so on.

Advertising works, and for good reason. These “Ad Men” have spent decades and a gazillion dollars researching how to appeal to our most primal emotions. They have learned that we buy because of how we feel, not due to rational need, and well thought out budgetary planning. 

Minimalism

Understanding that this is how the world operates, many people have retreated from this battlefield and resorted to a life of stoicism or austerity. This is a natural reaction to our “shop till you drop” society. A good old fashioned fist-fight on black Friday should be enough to turn anyone off of consumerism, but I digress..

These “minimalist” types are all about frugality. On the surface, they are trying to save money, but in a much grander sense they are re-programming their minds. They are focusing on some very basic ideas that get reinforced though their sparse lifestyles.

1. Values - They are figuring out what makes them actually happy. We have been led to believe that “stuff” will make us happy. This is certainly been proven to be false, and it is quite well-documented. Studies have shown that our perceived value for stuff changes over time. If we simplify this down to the feeling of happiness, then it goes like this: Buying something new makes us feel happy, but that feeling diminishes over time and eventually that thing will stop making us feel happy and, potentially, could make us start to feel miserable as that thing wears out.

2. Cost of living - Inflation has run rampant over the last few decades and we haven’t noticed. Basics, such as food, clothing and shelter have increased in price by an order of magnitude in comparison to wages over the last 50 years. I have written about this before, if you want to learn more, check out this website. In my humble opinion, it has become harder and harder to make ends meet these days as society keeps raising the cost of living for us regular folks. By living in a tiny house, or living off-grid, or growing your own food, people are finding ways to get off of the economic treadmill and learn to see alternatives to the usual offerings brought forth buy the “man”.

3. Self reliance - A large part of this stoic movement is learning to be self-sufficient. If you build your own house, grow your own food and generate your own electricity, you become less dependent on the “man” and able to make your own decisions. You have the ability to survive, even if there is a crisis in society as a whole.

4. Experiences - The flip side of the “stuff=happiness” paradigm is that the same studies that told us that stuff loses perceived value over time demonstrated that experiences actually increase in perceived value over time. Memories of experiences get modified and improved over the years as we re-tell the stories to our friends and family and look at the pictures. We tend to remember the good parts and forget the bad parts of experiences. We tend to augment the memories positively as time marches on. People are learning that if they spend their money on interesting experiences, the return on investment is MUCH higher than if they buy things.

5. Time Management - having a frugal lifestyle and re-aligning your values tends to bring ones attention to the fact that our most valuable asset is TIME. If we learn to value time appropriately, we will spend it wisely. We will figure out if we should spend our hours working on something greater than our selves or watching TV. Should we binge a series on Netflix or should we work on our side-hustle? These questions tend to become more apparent when you have less distractions. A simple, sparse life draws attention to the more intricate musings we might have, and begs us to reconsider our priorities.

Balance

My new book is a deep dive into how we might find balance between consumerism and minimalism, but on a much larger scale. How can we find a balance, or a symbiosis between Capitalism and Collectivism. These two ideas seem to be at odds with one another, but they are two aspects of our humanity that need to be reconciled and brought forth when they are needed. 

As far as stoicism and consumerism go, I believe there is a middle ground here, as well. I am far too attached to the comforts of modern living to give the all up. I like my 4K TV…But.. I bought it on sale, and I researched a ton before I found the one I wanted. It was not an impulse buy. 

I also believe that we need to show restraint when it comes to buying stuff. We need to try to be mindful when it comes to purchasing anything. Buy what you need to live the lifestyle that you are happy with, and avoid buying things that you don’t need, or just to keep up with the Jones’.  Remember, people don’t admire YOU for having nice stuff, they admire the STUFF. You will not gain respect for what you have accumulated. Sad, but true. 

So to me, finding balance is the key - buy stuff that you really will get joy from, and avoid stuff that is unnecessary. As Marie Condo says, if it doesn’t bring you joy, throw it out. You will enjoy the benefits of not spending money you don’t have to impress people you don’t like. You will have money for the things that DO have meaning to you. You can value the things you do own, as less choice make for easier choices. 

I believe that finding the balance that works for you is the key to being the master of your money. You will have the deep rooted satisfaction of knowing that you are in control. You decide when and where every dollar you spend goes, and ensure that it always invested for your greater benefit. Mindful spending is where you can find peace and escape. If that means you live in a van and live the vagabond lifestyle, awesome. If that means you live in suburbia and are rocking the minivan, then go for it. As long as your financial choices were deliberate and meaningful, you are living the dream. What I am suggesting is, that you avoid doing the “default” behaviours that you unconsciously picked up from your parents or living a life that you have been told is the “way it’s done” without deciding for yourself what makes you happy.

I believe that there is power in using austerity and spending in their proper contexts. Each have value when used appropriately in the course of your life. The key is to be mindful, and deliberate. Don’t let the advertisers or your peer group tell you how you should spend or earn your money. Be the master of your financial life. 

If you want to learn more about how to master your finances or how to grow your wealth, check out my books and courses. They will give you an exact blueprint for financial freedom. 

Treat Your Assets Like A Business

I stumbled across a concept a while back from Robert Kiyosaki. It was in an article he had written and having read most of his books, I wondered to myself, why has he never said this before? Why is this such a new concept?

Then I realized - He had been saying it all along, I just didn’t get it.
This brings up two important points:

1. The true concepts of wealth really are a departure from conventional thinking

2. You never know when you will come across a nugget of information that changes your world

..I will discuss these points later in the article as you are probably chomping at the bit to know what concept Mr. Kiyosaki was talking about..

The Concept

Here is the gist of what he was speaking about.

He mentioned that he wanted to buy a new car. His wife said to him, 

“OK, what asset is going to buy you that car?”

He laughed and said,

”Right, I forgot”

He went on to say that the rich use assts to pay for their lives. The poor use money earned from labour to pay for their lives. This is a very important distinction.

I have explained this concept to others and my favourite method is to use a metaphor.

If you were to create a blueprint of a “rich person” what would they look like? What would be a typical example of a rich person. I want you to exclude athletes, musicians, actors, and lottery winners. These are not typical wealthy people. These are exceptions to the rule and are not to be emulated. I am talking about the REAL rich people in the world, of whom there are many and most go quietly about their business without being on TV or Instagram. 

If you were to describe the average millionaire, they are an entrepreneur. They have worked at their business for a decade or two, and have made smart choices with their money as they built up their fortune. They exercised self discipline, delayed-gratification, and long-term thinking in their everyday behaviours and decisions. 

So.. 

If you model this typical millionaire into your own world, you have many choices. As I am an evangelist for investing in dividend stocks, I like to use the metaphor of “your dividend stocks are your business”. 

If you built up a business from scratch, you would feel pretty proud of your accomplishment and would consider this business your pride and joy. It is your baby, and you would try to preserve it to the best of your ability. 

I say use the same philosophy with your investment strategy. 

When you build up a portfolio of dividend bearing stocks, you are building a “business”. This business is there to take care of you and your loved ones. It is your source of income and it is in your best interest to keep the business running and profitable. 

So with this in mind there are a few key decisions or behaviours that you now do:

1. If you want to make more money, you grow your business.

2. If you want to retire you can sell your business or you can just keep it going

3. If the word is changing, you pivot your business model

Grow your business

This is my favourite part of my metaphor, because it is so easy to do, simple to understand, and directly beneficial to the bottom line. If you have money, invest it. Simple. If you have found a good, blue-chip dividend stock, you just keep buying it. Every share you buy increases your income, because every share will produce a dividend. It is simple math with a direct correlation.  They more you buy, the more you earn. The stock price is certainly a factor when you buy, as that determines your yield, but through dollar cost averaging and simple growth over time, your take home pay will go up. Yes, occasionally companies decrease or eliminate their dividend, but picking the right companies will drastically reduce this possibility. 

Sign up for my newsletter and receive my free Dividend Stock Picking Guide

Sell Your Business

When you want to retire you have the option of selling your stocks or just continuing to enjoy dividends. If we go back to our initial metaphor, that would be like selling off pieces of your business bit by bit over time in order to have an income. The problem with that is you may run out of money eventually, especially if you live a long time! Also, as you sell of pieces of your company your income declines in lockstep with your shrinking asset value. It seems crazy when I put it like that, but this is exactly what they are encouraging you to do with your retirement savings. You build it up until you are 65 and then you chip away at it until you die. This seems crazy to me. Why would you put yourself in that kind of predicament?

Why not just keep living off of your dividends forever? Then your heirs can enjoy it too. 

The other cool thing is if you have done a good enough job of investing, you can live off of less than you earn (always good advice) and invest the difference. Why would a good habit like that have to stop when you “retire” - just keep doing it for your whole life and your “business” will continue to grow just as your income will! 

Pivot your Business Model

We all know that the world changes. It changes fast and the prevailing wisdom in the world of business is that the most adaptable survive. Business that can change quickly will persevere while others can become dinosaurs quickly as time change. As a “business Owner” you need to be able to pivot as well. As the winds of change start to blow, you have the advantage of pivoting your “business” with a few clicks of a button, rather than re-imagining an entire business. If the companies that you are invested in start to decline, and the writing is on the wall that their services are not relevant anymore you simply sell those shares and buy new ones in companies that are positioned to succeed in the new world. This is not always as simple as I make it sound, but the principle is very straightforward. You should always spend quality time researching your stock picks and not make rash decisions based on hype or speculation. But pivoting is really not that difficult, when you just have to change your mind. 

The Important Points

As I eluded to earlier this whole discussion brings light to two important facts:

The true concepts of wealth really are a departure from conventional thinking

Rich Dad Poor Dad was a work of genius because it was not a “how to” book an investing. It was a complete paradigm shift to the average person. Of course the concepts in its pages were not news to the rich, but to us commoners it was undiscovered country. The ideas were so different from how we were raised or “conditioned” to think that it is no wonder that it took me a while to wrap my head around it. It is not hard to understand per se, but very hard to “believe”. To truly integrate the idea of “assets” and “passive income” took some time. I am glad I finally figured it out. 

You never know when you will come across a nugget of information that changes your world

I have been repeating this in almost everything I’ve written because it has been my experience that it is fundamentally true. You really never know when you will read or hear a snippet of wisdom that suddenly turns the light on and you see the world differently. When you truly grasp a great idea or finally see a new way to look at your world it is life changing. I have read hundreds of books in my life and there have been many that said the same thing as a previous book that I had read last year. But every once in a while, I read something that is new and my mind is blown. But even more common is I read something that I have read before, but the author said it in a different way that suddenly makes way more sense to me and my quirky brain. Now I get what the concept is and I understand what the last guy was trying to say. It is a wonderful moment and I continue to read voraciously in order to experience as often as I can. 

So when I write books I am aware that many of the things I write about have been said before in one way another, but my hope is that the way I say them will resonate with someone out there and it will be a life changing moment for them.  I hope to make a difference. 

Treat your investment portfolio like a business and enjoy the fruits of other people’s labour. Diversify, grow and adjust. Increase your own salary at your whim. You are now the master of your destiny. If you want to make more money, it is entirely your decision. That is freedom.

How Rich Do I Need To Be?

I have dreamed about becoming rich my whole life. I saw the glamorous lives of celebrities and billionaires and I wanted that for myself. I wanted to live in a mansion and have servants to wait on me hand and foot. I wanted a private jet and a villa in Switzerland. I wanted to sit by my pool and live the life of Riley for the rest of my days. 

Alas, it was not to be. But for a very different reason than you might think. 

I came from humble beginnings. My family were lower middle class and I never had much in the way of luxuries. I really didn’t lack any of the necessities of life, but I didn’t have more than the basics. This state of being, naturally, made me envious of those people who did have the finer things in life. I believed that excess would bring me happiness, respect and satisfaction. 

My pursuit of riches was interrupted by …LIFE.

I had to live in this vast ocean of capitalism starting with next to nothing. I had to make a living to support my family. I had to make sure we had food, shelter and clothing. I had to find the means to survive. Who had time to dream big when the rent was due? 

As I didn’t have the luxury of a trust fund or a family business to fall back on I realized if I was going to rise above my circumstances I would have to take responsibility for my own success. I would have to find a way to become more than I was. 

So I started to read books..

Read Books

I read hundreds of books. Maybe thousands. Books were low cost, and I couldn’t afford seminars or training courses. I didn’t know any rich people. I had limited resources, but I kept on reading. I always read books that taught me something. I would learn about business, real estate, investing, money management, stocks, math, accounting, philosophy, psychology. The more I read, the more I learned. The more I learned, the more I changed. I was becoming a different person. The knowledge that I was absorbing became a part of me and I started to think differently. I started to see opportunities where I wouldn’t have previously. I started to treat money differently. I started to experiment with investing and money management. I made mistakes, I lost big. But I kept learning. 

Eventually I stumbled across a few ideas that actually worked out. I started to move forward financially. I continued to read, learn and experiment. I refined my approaches and pushed my comfort zone. I tried to be humble enough to listen to as many people as possible who had been down this road before. I kept investing.

Eventually a funny thing happened. 

I had enough. 

Enough.

I realized my journey of wealth accumulation had actually arrived at its destination. 

It was certainly a far cry from mansions and private jets like I had imagined. It was a new me. 

In the process of learning all that I did about money, finance and wealth, I figured out not only how to make money, passive income and build a business, I learned what is truly valuable. 

The rich people I had learned from spoke about this concept a lot but it didn’t register with me until I had experienced it myself. The most valuable thing you have is..TIME.

TIME FREEDOM

Time - to live your life on your own terms

Time - to spend with family & friends

Time - to contribute to the world

Time - to push yourself to become the best you can be

Time - to relax

Time - to think

Time - to grow

Yes, financial abundance buys you time. It is the most important asset you can have. Ask a 98 year old if they would rather have a billion dollars or 80 more years. They will choose the time almost always. 

Once you obtain time freedom, the other trappings of wealth and success become silly status symbols that probably won’t have the desired effect anyways. Things do not make us happy, as much as the world of advertising would have you believe. Freedom makes us happy. Purpose makes us happy. Belonging to something bigger than ourselves makes us happy. 

This is not my opinion. This is science. Multiple studies have proven that we value “things” less as time passes, but value “experiences” more over time. We are chasing a broken dream if we think mansions and sports cars are the ultimate end. They are great toys if you can afford them, but they are not going to make you happy, at least not for very long. 

I read in a great book called “The Psychology of Money” that if you pull up to the grocery store in your Lamborghini, expecting people to look at you with respect you would be mistaken. They want your car. They do not want to “be you” or “be like you”. They are thinking about themselves in that car. You are not impressing anyone, unfortunately. Do not pursue riches to impress people or try to feel important. That is a fools errand. People will remember how you made them feel. That is all. 

I always ask my wife,

“Would we do different things in our day to day life if we lived in a giant mansion vs. our current home?”

“Would we spend our TIME differently?”

Probably not.

We enjoy our lives because we spend our TIME as we please with the people we care about. 

So I didn’t achieve my original “dream” - partially because I am not that rich, but mostly because I realized it was a flawed dream. I wanted riches to impress people and feel important. I wanted respect and to feel like I was “somebody”. In becoming the person I needed to be to achieve financial freedom, I learned that I only needed “ENOUGH”.

I didn’t win the lottery. I didn’t steal. I didn’t compromise my integrity. I worked hard. But most importantly I LEARNED. I learned what I needed to know to achieve my dreams. I did it by reading books. I learned and changed myself. I didn’t expect the “world” to serendipitously hand me anything. I went out and got it. It didn’t happen fast. It wasn’t easy, and is sure wasn’t smooth sailing. It happened because I found a way. 

So you can do what I did. You can learn what you need to know. You do not have to be a genius. I am definitely not a genius (just ask my wife). You don’t have to be lucky. I failed a lot. You just have to be tenacious and willing to change. 

Reading is Cheap

Read books. They are cheap. For under $10 you can gain an insight that will change your whole life. I find it hard to believe that you can find a better deal than that. You can take courses, attend seminars, and find a mentor. You only have to put the right information into your brain and then you become the person you need to be to live your “Dream”. There is no magic formula. You just need the right information. 

I encourage you to make a small step forward. That is all it takes. moving. If you don’t have options, move. Options will open up. If you stay the same, things will stay the same. You have to change in order to live a different life. Be willing to change. 

Just like most people, I had a busy life (still do), I had kids to run around to activities, a full time job, a mortgage, bills, and an endless string of apparent crisis that I had to deal with. The beautiful thing about change is it doesn’t have to happen all at once. You can read a book in the gaps between “emergencies” and the information is still intact. You can find a way to fit the “new” you into your already crazy life if you are willing to be patient and persistent. Overnight success is a myth. Don't buy into it. But don’t believe success is impossible, either. It is actually something that happens when you move towards it deliberately. It just might be slow and/or messy. 

You may want to take the time to spend a couple bucks and pick up one of my books. They offer you a plan to become wealthy. Or my training course. You may just change your life. If not I have many book suggestions in my blog that I highly recommend. I just want you to believe that it is possible to change your circumstances. Sometimes it feels like you are trapped, but I am here to tell you that there is a way out. It just may take courage. It just might require you to change. It just may take time. I just really want you to know that it is possible. 

Financial freedom is possible because it is not some crazy billionaire lifestyle. It is attainable because it just requires you to know how much is ENOUGH, and what steps you are going to take to get there. 

I wish you the best in your journey. 

Teach Your Kids to Fish

I am playing upon the old saying:

“Give a man a fish and you feed him for a day. Teach a man to fish and you feed him for a lifetime”

Specifically, I am applying this to financial literacy. We live in a world that is ruled by money. It is our universal language and religion. Everyone plays by the same rules, and it trumps most ideologies and moral aptitudes. We are thrust into a game that has defined rules that we are forced to play by, yet we are wholly unprepared to play because no-one taught us the rules.

Financial literacy is not taught in school, yet I would suggest it is far more useful to our life than advanced calculus. We are doing our children a disservice by not preparing them for the real world. 

There was a generation of parents that believed that they should “Give my kids everything I didn’t have”. This produced a generation of shallow, entitled whiners who expected the world to owe them something . This sentiment is reflected in the writings of many authors today. 

“I think the major factor is that the boomers grew up in a time of uninterrupted prosperity. And so they simply took it for granted. They assumed the economy would just grow three percent a year forever and that wages would go up every year and that there would always be a good job for everyone who wanted it.” - Bruce Gibney author of A Generation of Sociopaths: How the Baby Boomers Betrayed America

Jordan Peterson in his book 12 rules for life talks about how it is so wrong to focus on protecting our children from hardship, rather than prepare them for it. We would be far better off teaching them to stand up to bullies than to try to eliminate bullying. Giving a child a trophy for participating is not helping them. It is making them weak. 

So to circle back to my point, we need to teach kids how to manage money. We need to teach them how to invest. We need to teach them how capitalism works.  We need to teach them the underlying principles that are the foundation of our society. We cannot allow them to wander around thinking the modern world just magically exists. We need to make sure they know how everything came about - through hard-work, ingenuity, and sacrifice.

We Need to Know it First

In order to teach our kids how money works, we need to understand it ourselves. We need to educate ourselves to the best of our abilities and implement what we learn. We need to make mistakes and be humble enough to learn from those who can teach us. 

We need to get over the idea that money is a touchy subject that is not spoken about in polite company. Let your kids see you paying the bills. Talk to them about your investments. Explain to them what your strategy is and how you came up with it. Be enthusiastic about the journey and let them know how important it is to know these things. 

Make them earn it

Above all, don’t give them everything that you didn’t have. I heard someone say recently:

“Don't give your children everything you didn’t have. Teach them everything you didn’t know”

Or something along those lines. It is the best advice I’ve heard in a long time. We need to not only take money matters into our own hands and learn to invest and build wealth, we need to pass that information along. 

The days of..

• Go to school

• Get good grades

• Go to college

• Get a good job

• Work faithfully for 40 years

• Retire with a pension

..are OVER. 

There are very few jobs I would classify as “safe” or “steady” anymore. The world has changed since our parent’s working days. Companies disappear due to technological advances. Skills become obsolete quickly. Corporate ideologies are more severe these days, choosing to lay off staff rather than miss a quarterly target. You cannot rely on anyone else to take care of you anymore. It is up to you to ensure your financial future and this is lesson number one to relay to your kids. Teach them to take care of themselves.

I was quite inspired by the movie “Captain Fantastic” where a father raises his children in the woods and teaches them survival and challenges them intellectually. The lessons prove to be not super relevant in the modern world, but the spirit of independence and self-efficacy were super powerful. It was a cool example of the right approach, however fantastical it was.

I know it is difficult to raise children these days as they have so many outside influences on them. We are all stretched in many directions and having the time to devote to their financial education can sometimes feel impossible between piano lessons and soccer practice. However, managing money is a part of everyone’s life and we are forced to find time to pay bills, balance budgets, and make decisions. Try to let your little angels see your decision making process. Let them in on how things work financially. It would be beneficial for them to realize that electricity to power their video games is not free. I know it can feel like we are making them bitter by telling them how the real world works, but I think it is not like that at all.

The more I learn about money, finance and investing, the more excited I get. I tell my kids everything I learn and they have started investing themselves. I realize that life doesn’t have to be a struggle if we choose to better ourselves and learn how wealth creation happens. I gain a bit of wisdom and then I share my revelations with them. If you have the opinion that the world of money is cruel, harsh and dog-eat-dog then you are only seeing one perspective. Yes, the world of money can be nasty but money is also a means to help others in need. It enables us to have time freedom to pursue all manner of humanistic pursuits. Money is not evil, what you do with it is the true nature of the beast.

By educating ourselves and then teaching what we learn to our kids, we are helping them feed themselves for a lifetime. We should try to instil in them the desire to learn more and take chances. We show them that the world is truly full of opportunity, and that it is up to them to take advantage of those opportunities. The world will not give them anything for free. I also believe that kids will more likely do as you do, not what you say. If they witness you learning, growing and pursuing self improvement, they will take that to heart. If they see you carefully planning your wealth creation plan and executing on it, they will not only see that it is possible, but they will set new expectations for themselves. Your example is massively powerful. 

Empowering our kids, instead of sheltering them seems like the right thing to to. In theory it should be a no brainer, but in practice we hate to see them stumble and fail. I get it. But failure is a great teacher and those lessons tend to stick with you. 

How to Become Wealthy

Answer:

You become wealthy by moving in the direction of riches, and away from the direction of poverty. This means you need to develop rich habits and repeat them day after day until you are wealthy.

That little nugget of advice is not very sexy, and most people are feeling a little let-down after reading this. You were hoping for a revelation, right?

 The truth is often so boring and mundane that it is almost not worth trying to sell. Nobody wants to hear the truth about wealth. They want to hear about shortcuts or schemes or inside stock tips. Nobody wants to hear that to become wealthy, you do a bunch of boring things over and over again, day after day, gradually succeeding over a long period of time.

 This is how it happens most of the time. People work for 20 years at something, usually a business, and then eventually they start to see the fruits of their labour. 

People invest in stocks and leave their investments to weather the storms for 20-30 years and they end up with a significant portfolio. It is very rare for someone to make a fortune with an insightful stock purchase that balloons beyond imagination. 

Quit chasing the get-rich-quick dream. The odds are not much better than playing the lottery. You will usually end up broke, in debt or in jail. I  previously wrote about how to get rich slowly, and I stand by my assertion that you can get anything you want, but not everything you want. 

There are tried and true methods to build wealth and gain financial independence out there, and you are welcome to try them. But you must accept that they take time. 

Here are the basics:

1. Spend less than you earn

2. Invest the difference

3. Start Young

4. Create multiple streams of income.

Spend less than you earn.

You will never get rich if you spend more than you bring home. If you are living paycheck to paycheck, even if you are breaking even, you will never be rich. I don’t care if you make a million dollars a year, if you spend a million dollars a year, you are poor. It is simple as that. I wrote an article that makes this point HERE and I feel it is a good argument. I also include this concept in my books and courses. It is the rock upon which all good financial plans are built. 

Invest the difference.

This is where the real power is. If you can live on less than you earn and you have money left over, put it to work. Make your money earn money. This creates what is called “passive income” and is truly amazing. Imagine earning money while you sleep. It is very cool. The world is full of awesome ways to invest your money, and I have written books and developed courses that will show you exactly how to make your money work for you. 

Start Young

Time is your most valuable asset. Because I am trying to get you to believe that it takes time to become rich, you can see that if you start investing young, you will have more time to enjoy your wealth once it accumulates to the level you desire. You must allocate the appropriate timeframe to your plan, and then execute it. There are ways to accelerate the plan, but if you start early you are giving yourself some leeway to make a few mistakes along the way.

Create Multiple Streams Of Income.

If you have a job and are earning money through traditional forms of employment, you are basically trading your time for money. You only have so much time in a day to earn, so there is a hard limit on that. You can increase the value of your time, but that will eventually top out too. The only way to make more money than you have time to is to leverage time. This means -  find a way to acquire investments that earn money without you. If you have money coming in from a rental property or a good dividend stock, then you are earning passive income. You can still work your day-job and your money keeps working at the same time. This is the path to wealth. There are ways to accelerate this concept too.

Do Something

Sitting around wishing and hoping and dreaming about getting rich is not going to help you. You can visualise riches all you want and try to get the “law of attraction” to bring you wealth without you lifting a finger, but I would rather take ownership of my own destiny. As you actually start to invest and learn how to grow your money, your mindset will change too, and your affirmations will have exponentially more power, as you are seeing tangible proof of your money growing. The spiritual gurus say “believe it and you will see it” but “Seeing is believing” is also true. It works both ways.

“God don’t drive no parked cars” - Dr. Phil

This means when you move in the direction of your dreams, divine providence moves too. I am suggesting you are more likely to get a boost from your guardian angels if you are already moving towards what you desire. 

It is doable

You can become wealthy. If you have a decent job and are living in a relatively safe country that embraces capitalism, you can do it. I can show you how. But you have to get real about the journey and accept that it is probably going to take time. Likely 20 years or more. This is the hard facts. However - it is still doable. You can do it, just by following the recipe. You don’t have to use my methods, there are a ton of great books and ideas out there. Here are five great books that I recommend. You can make the decision right now to stop dreaming about riches and start moving toward riches. It will require self-discipline. It will require patience, and it will require mental toughness. The price you must pay for wealth is a change of thinking, a change of behaviour, and a dash of courage. If you are willing to pay the price, get busy paying it. 

I wish you the best of luck in your journey. 

How To Make Money Online

There so many ways to make money online

When it comes to making money online, the number of possibilities is almost overwhelming. There are so many ways, I really can’t possibly fit a good synopsis of them all in one measly blog post. I will explain how I do it, and how some other people do it, but I promise you that I will miss many of them, as there are online businesses that I haven’t even thought of out there, probably making a lot more money than me. I will also explain a few things that are common to all of them   

Websites

We will start with the standard stuff and get more exotic as we go along. If you have a business of any sort, you will probably need a website. A website that explains what you do, where you do it, and the value you offer is almost a no-brainer these days. A website, where people can learn about you and contact you to inquire about your product or service, is not an optional “Nice to have” luxury anymore. You need to be online and you need to do it now. The Yellow Pages have been obsolete for a while now. 

OK, now that we have arrived in the twenty first century, let’s get creative.

Books

I write books. They are about personal finance and investing. My first book, BYOB, is a very popular book as it introduces an investing strategy that I have not come across before, and is very effective. I had a great idea one day, I tried it in the real world and it worked. I was so excited I started to tell friends and family about it. They were all so impressed by it they started bringing their friends and family over to hear me talk about it. I was so overwhelmed by people wanting to hear about my idea, I decided to write a book explaining my strategy. You might have something that you should share with the world, and a book is a great platform to do it. Why not make a little money from sharing your experience?

You can self publish it via many online retailers like:

Amazon

Apple

Kobo

Barnes & Noble

Online Courses

Of course, not everyone enjoys reading books. So I developed an online course that explains my entire investing strategy step by step with videos, animations, and diagrams. This format appeals to some people more than others and it is available here.

If you really need to explain things in detail and like to teach, you can create an online course via websites like:

Teachable

Udemy

All of these websites have excellent tutorials how to create and publish content. Share your gifts with the world! People would like to know.

Drop Shipping

My friend Matt Kearns (Who is a Chef - www.freshmenuplanner.com) and I have a company called Fresh Menu Kitchen. We sell cool kitchen gadgets on Amazon. We research and select gadgets that we feel reflect our standards for quality and usefulness. We then have them custom branded and manufactured by factories that specialise in that type of product. We ship them to Amazon and create listings on both Amazon.com and Amazon.ca.

When people order our products, Amazon takes care of the fulfilment from end to end. They pick the products and ship them to the customer. They take care of the billing and any customer service related issues like returns etc. This is all dome behind the scenes! We love it. You can sell just about anything on Amazon and they make it easy and convenient for both the buyers and the sellers. 

If you like drop shipping, there are many ways to do. Amazon is just one. If you have a brand that people recognise or a really extensive customer base, you can start your own e-commerce website. Many platforms like Shopify make it easy to do. 

There are also sites that let you do custom printed T-shirts and things that you can utilise. People come to your website and design their own T-Shirts or use one of your designs and order the items. Coffee mugs, pillows, and all kinds of print-on-demand items are available. The sites will print the items and ship it to your customers without you having to touch anything. Super easy and cool. 

Affiliate Marketing

If you have a website or social medal platform that attracts a lot of attention and/or you have a boatload of followers you have an opportunity to make money by recommending other peoples products and services. You just put a link on your website or social media page that directs people to a specific product and you get a small commission if they purchase the item. It is simple and uses your popularity to promote good products that you believe in. The website that you direct them to pays the commission out of their profits as they are grateful for the traffic, and the price is the same for the customer. It is a win/win for everyone. 

I often recommend products (usually books) and create a clickable link in my blogs etc. that go to another website. These are affiliate links. I have set up affiliate accounts on amazon.com, amazon.ca, apple.com, and kobo.com. I make it a point to only recommend products that I believe in and am passionate about, but you are free to make that choice for yourself. There are hundreds of online vendors that have affiliate programs.

Here are the big boys:

Amazon Affiliate Program US

Amazon Affiliate Program CAN

Apple Affiliate Program

Shopify

YouTube

This platform is crazy. If you like to make videos, posting them on YouTube can make you a lot of money. The model is simple. The more people who watch your video, the more money you make. This comes from running advertisements in your videos and YouTube will choose which advertisements work best with the type of content that is contained in your videos. There are people making millions from their YouTube channels. Some “YouTubers” have big production budgets and film crews while others just use smart phones or screen shares. If you can make something that people will watch, you are good to go. 

HOW I BUILT 4 INCOME STREAMS THAT GENERATE OVER $250,000 PER MONTH (FROM HOME) / In this video I am breaking down exactly how I've built my 4 income streams ...

The Good, the Bad, and the Ugly of e-Commerce

The Good - Having an online presence is great. It allows you the opportunity to provide value to the world and share your unique gifts with as many people as possible. You can scale your business to almost any size as you are not limited to a brick and mortar location. You can set up your business so that is almost runs itself. You create content via a blog, a website, a video etc. and it becomes “evergreen” in that it is there perpetually and can earn you income forever, while you create more. This is called leverage. Earning money while you sleep is not only possible, but ongoing.

The Bad - The biggest hurdle to all of this is the double-edged sword of “ease of use”. It is so easy to do all of these things that it has created a tidal wave of internet content creators. There are literally BILLIONS of websites, blogs and YouTube videos. The main challenge is finding a way to stand out amongst the billions of other sites doing the same thing as you. There are whole industries dedicated to online marketing and Search Engine Optimisation (SEO) to help people find a way to be found online. I suggest you learn as much as you can about these things if you are going to pursue an online business. Focus on putting out quality content and providing value. This will be your first priority as a content creator. Once you have given your best, then worry about getting seen.

The Ugly - Being online has its dark side. It brings out the nasty people. There are people in the world who like nothing better than to rip to to shreds for your efforts. You will be called names, accused of lying, cheating and stealing, laughed at, and ridiculed. The cloak of anonymity the the internet provides makes it easy to be mean, and some people can’t hep themselves. Do not put yourself out there online unless you are willing to grow a thick skin.

Possibilities

There are opportunities to make money online that I have not mentioned, either because I don’t know about them or I don’t know enough about them to explain. I hope you can see that there are paths to success available if you are willing to explore them. 

My main objective on this website is to offer you ideas about how to become financially free and to think about money in new ways. I teach dividend investing, and I evangelise passive income as the holy grail of wealth building. I personally earn money from dividends, books, courses, affiliate marketing, selling kitchen gadgets, consulting, investing and a full-time job. I learned about the concept of “multiple streams of income” many years ago and I believe in it deeply. As the world changes and becomes more “interesting” relying on ONE source of income to support you and your loved ones is less appealing as it once was. 

I encourage you to find something you can be passionate about enough to do well and explore that opportunity. You never know how many people you can help, and how it might reward you for doing so. 

Best of luck to you all. 

Using The Pareto Principle for Wealth

The 80/20 principle is your friend

You may have heard abut the 80/20 rule. It is often quoted as a basis for many distributions and statistics results in many facets of life. It was proposed by an Italian economist, Vilfredo Pareto, who somewhere around 1895, noted that about 80% of Italy’s land belonged to 20% of the country’s population. It is applied to many facets of life, like work, where 20% of your efforts will result in 80% of your results. Or 20% of your customers are responsible for 80% of your revenue. This is a naturally occurring pattern, similar to the phi ratio of the fibonacci sequence, that appears in many natural phenomena. Even the stock market has been accused of following a Fibonacci pattern. 

Economic Theory

One area that the Pareto principle is famous for is its ability to explain economic disparity and why a small fraction of the population control the vast majority of the wealth. This is considered a natural result of any trading game, which capitalism is. Like Monopoly®, where eventually one person ends up with all the money and everyone else ends up with nothing, the 80/20 rule seems to create economic disparity eventually as we play the game. This is similar to real-life. We all seem to have agreed to accept that fact.

However, we can use this naturally occurring phenomenon to our benefit. We can play the odds and make sure we are the ones getting ahead. 

How?

We can do TWO very important things:

1. Learn

2. Do something

Learn

We can educate ourselves. We can spend some time learning how money works. We can learn how to invest, and how to buy real estate and how to trade stocks and how to run a business. We can read books, take courses, and get a mentor. 

We are far better equipped to do well in the world when we have some prior knowledge. If we go on a trip without a map we may or may not end up in our destination. This is pretty basic advice, but super powerful. We need to know where we are going. Trial and error is fine, but why re-invent the wheel? If people have already done what you want to do and you would like to have results similar to what they have achieved, then why not learn from them how they did it and repeat it. It will save you time, money and heartache. A small investment in someone else’s knowledge can change your life in a massive way. 

Do Something

This is not a weird as it comes across. The vast majority of people live their lives in a way that really is little more than existing. They go to work, come home and watch TV and repeat the same thing day in and day out. They maybe go out on the weekend or take a vacation once in a while to break the monotony but their hours are spent in unremarkable ways and their results in life are going to be pretty mediocre as well. Unless they fall into some unexpected luck, they are doomed to dream. A proportion of these people read the odd book or talk to their successful acquaintances and maybe get some ideas. But that is usually as far as it goes. Talking about it and actually doing it are light-years apart. 

Just doing SOMETHING is going to get you 80% of the way to your dreams than doing nothing but wishing and hoping. You cannot underestimate the power of ACTION. Even if you screw up royally, you will have learned something and are far better prepared for the next attempt. If you do nothing but pray and imagine your life being different or better, you are putting your life and your happiness in the hands of fate and chance. Last time I checked fate and chance are pretty unreliable when it comes to helping me out. I feel much better being in the drivers seat. 

Being Canadian, I always love to fall back on the hockey metaphors. One old saying in hockey, as in many team sports I imagine, goes something like this:

“It doesn’t matter which system you use, as long as everybody buys into the system”

What I get out of this is there are many ways to improve your life. There are dozens of great strategies to build wealth and make money. Take your pick. The key concept here is to actually pick one. Then do it. You are 80% of the way there just by committing and taking action. The remaining 20% of your success will come from perseverance and adjusting your course to meet the changing tides of the real world. It will not be easy, and we all make mistakes. But the journey teaches us to be better. 

“Never wish life were easier, wish that you were better.” - Jim Rohn

By learning how to make the improvements you want in your life, and executing on your plan, you are now putting yourself in the upper few percentages of people who get all the goodies. You are doing what most people don’t, because they are afraid or indifferent. The world is chock full of information to help you in your quest. You just have to look for it and try it. You can be exceptional just by trying to be, because few people ever even try.

So to be the 20% that make a difference, you just need to be doing what the other 80% are not doing. Those “secret” 20% activities are not hidden from you. You do not need to belong to some insidious secret society to gain access to the path to riches. You just need to seek out the info. 

I recommend my books and courses if you need a step-by-step “paint by numbers” approach to creating a fortune from the money you already earn. I truly believe my plan can help you. 

I also recommend these 5 books to get you started on your journey. If you really want to have your mind blown, read Unscripted by MJ DeMarco. 

There is so much material out there to help you. There is always opportunity if you know what to look for. If you are dreaming and hoping for a better financial life, start making it a reality by using the Pareto principle and actually doing something. 

Why Dividend Income Rules

It’s All About Taxes

Disclaimer - I am NOT a tax accountant, nor a tax attorney, not even a tax expert. I am just a guy who likes to earn passive income. Please do not take this as tax advice or recommendations. This is for informational purposes only. 

There. Now that the disclaimer is out of the way, it’s time to get really excited about taxes. 

HUH? 

I know, you hate paying taxes. So does everyone. It sucks. However, using the tax laws to your advantage may be a way to make it suck just a little less.

Not all income is created equally

If you have read my books or taken one of my courses you are probably aware of the fact I teach a system whereby you will create passive income for yourself via dividend investing. I love this type of investing because it features all of the things I like most:

1. It’s easy

2. It takes very little effort

3. It gives me a periodic raise for no reason

4. It is taxed favourably

What’s this you say? I heard tax and favourable in the same sentence? Say wha’?

Yes, you heard me right. Dividend income is taxed at a lower rate than normal income and much lower than interest income. 

Why?

Corporations pay out dividends to you monthly or quarterly out of their profits. Their after-tax profits. That means that they have already paid tax on that income. So when you, as a partial owner of the company via your shares, get your cut of the profits, corporate tax has already been paid. In order for the government not to double tax this income, they offer a tax credit to you , the owner of the company. Your income from the company that you partially own can only be taxed once. How nice of our government to be so fair. 

Now, I live in Canada and the rules are slightly different here than in the USA, but the overall philosophy of our tax collection agencies is very similar.

USA

In the US, dividends are called “Qualified” or “Non-Qualified” which means that if the company that pays you dividends is considered “qualified” you are eligible for a discounted tax rate on that particular income. According to the IRS, a dividend is considered “qualified” if you “have held the stock for more than 60 days during the 121-day period that begins 60 days before the ex-dividend date.”

This is fancy-talk for if you appear to be a long-term investor and not a trader, you can reap the benefits of the tax incentive. 

Because everyone has a different tax bracket depending on how much they earn, and being a single filer vs. A joint filer makes things complicated quickly. But to simplify, just assume that you will pay the capital gains rate instead of the earn income rate. Up to $78,750 can be earned absolutely tax-free if dividend income was your ONLY source of income for a couple who file jointly. After that you will pay around 15% tax on your dividend income until you earn over $488,850. If you are earning more than that, you might want to get a good accountant and listen to him instead of me. 

Canada

In Canada they make it a bit more complicated. They take the amount of your dividend income and multiply it by 1.38. Then they charge you %15 income tax on that grossed up amount. It mathematically works out kind of the same as the US, but you need to think about it a little harder. I won’t get into the math, I just let my tax software do the work. (Although I actually found it quite fun to do my taxes with a pencil on the paper tax forms, just to see how it is done - nerd alert) So a couple in Canada can earn almost $100,000 in dividend income (If it is their ONLY source of income) without paying any tax. When I tell people that, they usually don’t believe me. 

The key point here is “eligible” dividends (Canada) or “qualifying” dividend (USA). If your dividends are considered ineligible or non-qualified you will incur a higher tax rate - but still not as much as regular income or interest income. This can apply to non regular dividends, income trust distributions etc, but you should check out the rules in your own tax jurisdiction.

RRSP/401K

If you receive dividends within a registered retirement account, that income is not taxable until you withdraw it. You can earn as much dividend income as you like and the tax you pay will only depend on how much you withdrawal come retirement time. So you can take advantage of a lower tax bracket when you are retired as opposed to when you are in your prime working years.

Reality

As I am always preaching that you should have multiple streams of income and not rely on any one source for your cash flow, you will probably end up paying tax on your dividend income if you make money from other sources and the gross earned income is over the base personal amount in a year. As I mentioned before,  tax software will do all of the calculations for you, and you don’t really need to worry about it, unless you are making a ton of income from dividends as well as other sources, and you neglect to put away a percentage for taxes, or make instalment payments to the tax people. You don’t want to assume your tax bill is going to be lower than you think because you have dividend income. Play it safe. Do your homework.

Choose Wisely

Either way, if you were to compare two investments side by side, you should consider the tax implications when calculating your actual return on investment. Earning 12% interest might seem great until you factor in how much you will have left after taxes vs. Earning 8% from dividends and paying a reduced tax rate.

Every investing opportunity is different and due-diligence is paramount to your success. Be aware of the possible “gotchas” when putting your hard-earned money to work. Remember to factor in taxes as a necessary part of the equation. It is in your best interest to legally make the tax laws work for you. 

Happy investing!

Mental Health and Investing

Introduction

I recently was watching a video by one of my favourite intellectuals, Dr. Jordan B. Peterson (Maps of Meaning, 12 Rules for Life,) and he was speaking to Joe Rogan about the simple act of making your bed in the morning. (Watch on YouTube Here)

His suggestion that if you want to change your life for the better, a good place to start would be to make you bed. His suggestion is that your life is not just defined by “who you are” ie. your personality but also by your acts. Your sphere of “being” is not just the thoughts in your head, it is your body, and your acts, and your environment. All these things are intertwined inextricably. So the key concept is “what can I do?” What do you actually have control over. ( I won’t get into how he believes we really don’t have control over anything, that would fill a book). 

Trajectory

His point of view is that no matter where your life is at, if you want it to improve you have to point at where you want to go. You cannot fix your crappy life by focusing on how crappy it is, nor can fix it by doing nothing. Of course, it doesn’t need to be said that doing things to make you life even WORSE will probably not be helpful, either. 

If you have a long way to go to get to the life you want, then the key here is to “Aim Lower” as he put it. Pick something small, like making your bed, and do it. You will have improved your life by a small increment. This is the start of a journey. It is a first step . The objective of this is to get your world in order, but doing things that you are capable of doing right now and taking steps towards your ultimate goal, not trying to fix everything that is wrong all at once. This points you in an upward trajectory and gets you moving. You need to focus on where you want to go, not where you don’t want to go. It is a very important point. Your mind needs to be thinking about its goals, not ruminating on what is bad. 

Once you begin your upward journey it seems that your are not making very much progress at first, but is is an exponential curve, The longer you stick with it and the more improvements you make, the changes start to build upon one another and your rate of change or improvement will multiply as well. It is compounded. 

Money

These principles work exactly the same no matter what aspect of your world you are talking about. I would like you to consider that these ideas work perfectly in the world of investing and your personal financial situation. 

If you want to be financially free, you can start by “making your bed”. The analogy here is to begin with something simple and build from there. 

For example, you could start by reducing your spending or making a budget. This will put you in a good position to move forward without making things worse.

If you want to get out of the hole, stop digging. 

I wrote an entire blog post about the importance of “Spending less than earn” and have belaboured the point in my books, If you cannot do this one thing, you are destined to struggle financially forever, unless serendipity intervenes. This one step is doable for ANYONE, regardless of income level. It is the “prime directive” of financial jurisprudence. By doing this first step you will have put yourself on the right path, aiming in the right direction to achieve great things. This seems, at first glance, to be as inconsequnetial as making your bed, but it has tremendous power. 

It is important to remember that getting to where you want to be financially is NOT going to happen overnight. It is going to take time, effort and good habits to get there, but it is doable. There is no magic formula. There is no “Secret” to building wealth. It is just a matter of adhering to a set of principles and actions using self discipline and restraint. 

Long term thinking

We live in a “instant gratification” type of society where we start to believe everything we want should be easy and quick because we have made many things fit that model. We can get food delivered with the press of a button. We can hire a ride, or learn any information we need just by looking it up on our smart phones. We have been led to believe that life is supposed to be easy. This is just NOT the case. Yes, many things have become easier over the years, and we can create little bubbles of safety for ourselves that might protect us from the harsh parts of the world, but the really worthwhile things in life, that actually make an impact and create real change are still hard to do. They require sustained effort over a long period of time, and may require trial and error. Failure is probably going to be a part of the journey, and you must be willing to accept that. As Mr. Peterson says, you must be willing to humble yourself enough to make the small incremental changes that are necessary to move forward, instead of going for the top and falling flat on your face. Success is a ladder that must be climbed rung by rung. You usually cannot jump to the top. 

So when it comes to your finances, try spending less than you earn. Then, once you have that step down, you can learn how to invest and start small. You can build up your wealth incrementally and watch it grow over time. I have a complete “how to” course on doing exactly this method, and it works. 

You can also learn how to do this by reading my books.  Keep in mind that none of the outcomes you expect are going to happen overnight. That is unrealistic and not in line with reality. Good things take time. You must accept that. 

The good news here is that change is not only possible, but probable if you are willing to approach it the right way. I can give you the step-by-step plan, but you have to do it. You have to have the discipline and the long term perspective to see it through. You can make progress towards your goals and that is the point. Overnight success is a myth and TV and movies lie to us by making years of hard work and trill error into a 3 minute “Training montage”. That three minutes usually take about 20 years, and who you become in that 20 years can be amazing. Why would you want to skip that step? As they say don’t wish life was easier, wish that you were better. 

Financial Freedom is Possible

So many people think that becoming financially free is a pipe-dream or is not something that is possible for them. They think this because they are either in very difficult circumstances or they have bought into the lie that you need to be special or lucky to be rich. 

I want to tell you that you can overcome any circumstances with the right information and the right actions. You just need to learn what they are. I can provide that blueprint. You also have to  learn that wealth is not a fairy tale. It is a real state of being that can be attained by anyone if they follow the appropriate steps in the right order. 

It is not easy. 

It is not fast.

You will encounter all kinds of obstacles that are attempting to prevent you from achieving your dream. You will have setbacks. You will have people that you care about questioning your decisions. You will have self-doubts. You must have the fortitude to keep going. 

As a popular success guru once said: 

“Obstacles are just just God’s way of seeing how bad you want it. “

The Time to Buy Stock is NOW!

Learn from Real Estate Investors

The old saying in real estate is:

“The best time to buy real estate is 20 years ago. The next best time is now”

As I often do in my books and courses, I occasionally model my stock investing strategy after time-tested real estate investing practices. People have been making millions in real estate for a very long time and will continue to do so, through good times and bad - if they know what they are doing. Therefore, in the spirit of “if it ain’t broke, don’t fix it”, I recommend getting into the stock market 20 years ago. If that is not an option for you, then getting in now is probably your best bet.

COVID-19

For one, the COVID-19 pandemic has created a buying opportunity, and many great, solid stocks are “on sale” right now. If you are looking for my recommendations, sign up for my newsletter and receive my free “How to invest in stocks” guide, which gives you my method for picking great dividend bearing stocks. 

Capital Gains vs. Cash Flow

Secondly, if you have followed my work, I don’t subscribe to investing in stocks for capital gains. I am in it for the dividends. Dividend investing is a cool way to earn monthly income without doing much, even while you are sleeping. This is what they call “passive Income” and it beats the heck out of sitting in a cubicle all day. If you want to learn more about my strategy, read my book “BYOB: Be Your Own Bank” or “Invest in Yourself” to learn how it works!

The key concept in this strategy is that the normal fluctuations in the stock market really don’t factor into the plan, and if you do it right, you don’t even care. The market can do whatever it wants and you will sleep like a baby. 

Do Something

The difference between doing something and doing nothing is immense. So many people talk about or dream about escaping the 9 to 5 and becoming financially free, yet they do nothing about it. I would never claim that my investing strategies are the best. Heck, I wouldn’t even say they are particularly unique either, but they work. That is the point. If you follow my plan, you will be on a path to financial abundance. 

Are there are other ways to invest and make money? YUP

 There are better strategies? Probably

Will I get rich by visualising and wishing? NOPE

Mark Twain

“The secret to getting ahead is getting started.” 

― Mark Twain

I want to encourage you to do your homework. There is no substitute for “knowing what you are doing”. Learn as much as you can. I suggest my top 5 personal finance books as a great place to start. The only difference between you and the rich guy down the street is that they know something that you don’t. All you have to do is learn what that “something” is. There is no secret club that only allows members to know the way to wealth. There are countless books, courses and mentors out there who will happily give you the strategies to grow your wealth. Maybe not for free, but a book usually costs less than $20. Not a bad deal to change your whole life. Just sayin’..

So I stand by my first statement - the time to get into the stock market is NOW. If you do a little research and perhaps read one of my books, you will understand why. You can take advantage of the magic power of dividends and dollar-cost averaging.

Why wait? 

I Didn’t Realize I was an Economic Misogynist

The Battle of the Sexes Rages On

I am currently reading an amazing book by Riane Eisler entitled “The REAL Wealth Of Nations”. The title is a play on words derived from the early 20th century classic “The Wealth of Nations” by Adam Smith on which much of current economic theory has been built. Riane Eisler tends to write about feminism and social change in most of her books and she takes her ideas and applies them to the world of economics. I am aware of the mainstream feminist issues and I thought I was pretty up to date but when Ms. Eisler takes a microscope to economics, and even our basic valuation of most things, she exposes a deep, dark, sinister paradigm that we all buy into.

Her basic premise is that we tend to value things that are decidedly masculine and undervalue things that are feminine. She argues that in order to sustain the world we need to value caring as much as we value domination. It is a very compelling argument. I realized that I had completely bought into the male way of seeing the world of money and value - I am amazed at how biased I was without realizing it.   

He-Man Woman Hater

I thought I was one of these enlightened, modern, progressive men of the new era, that saw the world without race, religion, sexual preference, or geopolitical separation.  I mean, I was born in the 60s when men were men and women were women and “traditional” roles were very well defined. In contrast to the attitudes of today, I was raised in an insane asylum. There were a lot of behaviours and attitudes prevalent in that time that were widely accepted as normal, yet would be ghastly today. It turns out that particular time in history was an odd blip in the fabric of time.

Two weird things happened:

1. The ideas that men were the bread winners and women stayed at home and didn’t work was not at all how the world had functioned for most of human history up until then. The TV show “Mad Men” is a perfect example of how things were back then. It may or may not be an exaggeration of the attitudes of men toward women but it looks pretty similar to what I saw growing up. This article I read recently sums up just how strange that time really was in the context of history and how some of the concepts we will be talking about were actually concealed in the social paradigm of the time.

2.  In the book “ No More Mr. Nice Guy” the author talks about the strange decades of the post war era where children were raised almost exclusively by women. This was a departure from time immemorial when children were raised by a village and at a certain age they were taken out of the safety of the tribe by the men and taught how to hunt and fight. It spawn many “coming of age” male rituals and ideas, but they are rooted in the ida that men should teach boys how to be men, not women, It created a generation of men that tend to be “women pleasers”.  They subconsciously believed that in order to please a woman (mom) they had to be a “good boy”. Strange, indeed.

The way it is Here, isn’t the way it is everywhere

I was mentioning that I had to do something for my wife on the way home from work one day and I flippantly said “If Mama ain’t happy, ain’t NOBODY happy” as I put on my jacket to leave. A coworker who had recently immigrated to Canada from a developing nation looked at me and said with a strange look on her face - “You know, that is only true in the Western world” Everywhere else, how “mama” feels doesn’t really matter at all. The man is the ruler of the household and all efforts must be made to keep HIM happy. 

I was taken aback by this. I thought our attitudes in the west were pretty universal but it turns out that there is still a lot of work to do. In fact, the western world still has a lot of work to do, in spite of the progress we think we have made.  The nordic countries (Sweden, Finland, an Norway) have mile ahead of us here in North America. I have posted a couple of articles about Finland here and here.

Jordan Peterson, in his book “The 12 Rules for Life” looks at feminism and tries to make the argument that feminism is only a good thing when it addresses the opportunities available to women, not the outcome of equality, as most women will naturally place themselves in traditionally feminine roles when given the chance. He also suggests that hierarchies occur naturally in nature (using studies of lobsters as an example) and that we should not consider hierarchy a bad thing as much as we should treat it as just a way that things occur. This is a rigid masculine sociological structure that is purposefully male and leads to such ideologies as Nazi Germany and Stalinist Russia, two things that Mr Peterson vehemently opposes. Perhaps Riane Easier has discovered the real concept behind all of this mess. 

Riane Eisler talks about the concept of Domination/Partnership whereas I have always talked about Cooperation/Competition. It is the same continuum. She argues that many of the most terrible societies that have risen in the twentieth century were based on male domination ideas. Without giving too much away, she really frames the world through a feminist perspective and as uncomfortable as it is at first, I cannot help but agree with her most of the time. It is a little hard on the sense of self to realize that what you have been thinking about something your whole life is inherently misguided. 

She posits that Competition/Domination is a male oriented mindset and philosophy and Cooperation/Partnership is a female . Her ideas are decidedly feminist in nature and tends to view the world through that lens, but I can see her point. I have written about competition vs cooperation in my books and I have offered up ideas that are considered radical from our very masculine economic point of view. We see the word of money and economics through a masculine perspective and didn’t even realise there is another way. Economic theory is based on competition and domination. It is a hierarchical model that supports the survival of the fittest ideology and we never think to question it. 

There have been some great ideas presented in the world that were in alignment with the caring economy that Ms. Resler talks about in her book. Ubuntu Contributionism is one that conforms to a cooperation/partnership model. Universal Basic Income is another. These ideas seem so radical because they are based on a non-masculine paradigm. 

This book totally blew my mind because in spite of the fact I thought I put women on a pedestal and was all about gender equality, I didn’t even realize that I saw the world of economics through a masculine perspective that actually is unsustainable and cruel. The world needs a “caring economy” -  this means the things that sustain and nurture life are valued as highly as war and prisons. The US spend over 50% of their national budget on the military. Why is that valued so much? I am not sure the world is that dangerous. She offers a suggestion that if the US cut their military spending by 40 billion dollars and reallocated that money towards social programs and education and child care, they would change the entire economic system. I know that sounds crazy, but she makes a compelling argument for it.

What is Valuable?

There is no more important job in the world than making people. Studies show that children who are cared for in a nurturing and well thought out environment of support, education and encouragement statistically earn more, produce more, stay out of prison, are healthier which lowers the burden on the healthcare system, and generally contribute to society more than children who are raised in less nurturing environments. Poverty tends to produce people who are a drain on society because they were never given the chance to thrive. Education, in the form of reading writing and arithmetic are great, but teaching values such as cooperation and equality and critical thinking make the planet as a whole a better place. 

Included in this syllabus should be financial education as well, as the world will still need to run on money for the foreseeable future. Even a caring economy is still an economy and last time I checked, money is still the medium used to denote value. What we value may change, but it still needs to be represented by something. So if you understand money, and how to add value to the world then you will have a leg up. I know that sounds like a “Competitive/Dominating” statement and it is.. the world still runs in a masculine  system when it comes to economics and wealth. That is why those at the top of the pyramid have most of it. Yet, int he words of the great Eddie Van Halen,

“You have to know the rules before you can break them”

I believe that in my years of studying wealth and the habits of the rich, I have not only learned to play the game as it currently is, but to envision a future where we do it differently or, dare I say better… 

Riane Eisler has written a book that frames the new philosophy perfectly. If we all understood its perspective, we would see that perhaps there is a way for everyone to be prosperous, and taken care of. People shouldn’t have to struggle to survive in our modern world. We have the means and the knowledge to take care of everyone. If we truly valued caring then the economic policies and decisions by those in power would be very different. We would make taking care of people a priority and then we could reduce or even eliminate suffering. It is morally reprehensible that we believe that it is OK to let people who have no money suffer and die. Coming from a country where were have universal health care, for instance, it seems morally wrong to allow people to be sick and die because they can’t afford health care. I can even wrap my head around that. Yet that is how it is in many countries. The point is that we need to realize that we have bought into this mindset because that is the way is has always been, but we can do better.

Educate Yourself

Learn as much as you can about money and you can not only take care of yourself and your loved ones, but you can have the perspective that there might be a better way. Let's learn to value cooperation and partnership. Competition and hierarchy are not going away and may even be an important part of human society in the correct proportions or the right context, but they cannot be the primary structure of society. Masculine and feminine traits are awesome and we admire and are attracted to those traits in others, but they must be used in the correct way and with equal measure as we all will benefit from the output of each. The fact remains, as Ms. Eisler says so eloquently,  is that without both, we wouldn’t even be here. 

I am glad she opened my eyes to the fact I saw the world of money and power from a male perspective. I now realize that economics and power can be understood for what they actually are, and still have room to evolve for the betterment of everyone.