Many times, I have been asked: “What is with your obsession with saving?” So here is my blog about why I am obsessed with saving money and why it is good to.
To me, if all earned money is spent there really is no point working. Imagine a business that generates $100,000 per year. Every year, after expenses and taxes, it generates $0 profit. What’s worse is this company invests all its money into depreciating assets such as cars and equipment, but not property or cash generating assets, so the value of the company remains constant. It seems ludicrous that anybody would run such a business and surely few would invest such a company, including me.
My entire purpose for growing wealth is financial freedom in retirement, not just to have a big bank account. The ideal situation is to have enough money-generating assets to cover your expenses into retirement. This does not include your primary residence, vehicle and cash but does include stocks, investment property, RRSP, mutual funds and the like. Although you can annuitize your assets to conver how long you expect to live, it seems far less stressful knowing your interest income (minus taxes of course) can cover your expenses.
Although, I perceive myself as a good saver, my good friend Sam K is legendary. I have so much to learn from him and will post any saving tips I learn. Stay tuned for my next post on my annual financial goal setting session. Right now, I have to get back to work and make money for my retirement. Man, I am so far off...
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3 comments:
are you blogging at work?? ;)
i'm good, just finishing up my last year at ivey and off to work in toronto come september.
i definitely agree with the money-saving creedo, mostly influenced by matt. i already have my own budget complete with planned rsp contributions, etc.
Hey Ron - I'm glad you found my little corner (semi-circle?) of the blogosphere! Led me right here.
I wish I could save. I'm horrible at it, but my parents are good at it. My grandmother is also legendary, but then again, she grew up in a poor family of 14 kids, through the Great Depression after moving to another country to find her husband broke.
Me, I'm having trouble with my credit. I have too much and I need to stop using it! I bought a house last year (finally!) but I'm still suffering the effects of the expenses associated with the move-in. I'm just trying to figure out the best course of action...
I guess the best idea, well the simplest, is "don't buy anything", along with my dad's "if you have to pay every month, why did you get it?" Hydro is one thing, but cable is something he doesn't agree with.
I think a good tip in these modern homes is to "shut it off if you aren't using it". This applies to game systems, settop boxes, computers - along with the ordinary "lights". So many things are in a fake power-off mode or a hibernation that an unplugging is the only real way to handle them.
Did you enjoy my blog entry about debt? It was posted on Dec 20/06, entitled "Forever In Your Debt" and pretty much sums up my feelings on people living beyond their means.
I'm with you 100% on the topic of how important saving money is. I had a period in my childhood when we were pretty poor, and those years motivated me ever since to do everything I could to never find myself back in that situation again.
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