Standen’s Top 10 Financial Planning Tips

The following are a few rules and guidelines I have used in my life. They are offered freely with no guarantees, warrantees or whatevers. May good fortune be with you.

1. Avoid debt. It inhibits your ability to grow wealth.

2. Diversify. So fixed income, some trusts, some short term and long term growth opportunities. Some stock market. Some real estate, etc. etc.

3. Your primary real estate investment should be your own home. Select the most you can afford in the best location, location and … oh yeah … location. Buy it, live in it, consider renting the basement (if that is a legal option), and kill the mortgage asap. Capital gains on your personal are tax free (if the house doubles in value, you get to keep it all, gratis)

4. Pay yourself first. Set aside a monthly installment to be devoted to long term investments and always make your payment. (Time is the most important factor in investing, the earlier you begin the more you will eventually accumulate – or … the addition of one year at the start adds accumulation of that humungous fund for one more year at the far end).

5. Never buy a new car.

6. Do the RRSP thing. There are few tax break opportunities in Canada. This is one. And remember, an RRSP is a deferral program, not an exemption. At some point in time, adding cash to an RRSP may be a bad decision.

7. Read. You should be the best expert for your own wealth. Recommended books include:

8. Understand tax. This comes over time, but understanding tax-deductions can be very valuable, both in the short and long term.

9. Minimize your purchasing costs. For example, the above books are available in used book stores. Annie’s, located at 912-16 Avenue NW (282-1330) is highly recommended.

10. Marry into wealth. Just joking – a better number 10 is to look after your health, exercise, eat good foods, smell the daisies, etc. The richest guy in the world who also happens to have ill health, is not a happy camper.