3 Golden Rules Of Money Management

In order to have a good head on your shoulders about money, it’s important to know the basics first.  Being smart with your money knows where to set limits for yourself, and what moves to take in order to prepare yourself for the future.

Money is something that should be seen in the long-term vision, rather than just in the moment.  When you are able to take control of your money and confidently say that you know what it takes in order to plan for your future while taking care of what needs to be done today, it’s a great feeling.  Ready to get started with the basics?  Here are the golden rules of money management to get you started.

Always Have Savings Account

It’s important to always have a backup plan if something goes wrong.  When you have a medical emergency or need to take care of your home by making unexpected repairs, it’s a huge relief to know that you put some money to the side in order to be able to fund it.

A general rule of thumb when it comes to saving money is to put away at least 10% of every paycheck.  This way you won’t see a huge chunk come out each time, but rather a small trickle that eventually starts to grow and grow.  You won’t only just have a great sense of satisfaction when you look at the final result of your savings efforts, but you’ll be relieved to find that you have extra security in the event of any emergencies.

Set Up Auto Payments

One of the easiest ways to waste money is to forget to pay a bill.  When you forget to pay then you are hit with a late payment fee, or an insufficient funds fee.  You may as well be burning your money and throwing it out the window.

The best way to eliminate the risk of forgetting to make payments is to sign up for auto-pay.  This way everything is done for you without needing to worry about accumulating fees.  

Don’t Live Beyond Your Means

Many people don’t have the best self-control.  When you aren’t able to recognize when something is too expensive for your lifestyle then you may have a problem with self-control.  In order to ensure that you make the best decisions for your financial future, you should be constantly making an assessment of how well you are doing at your spending patterns.

People who take out credit in order to pay for something that they want but don’t need are setting themselves up for a mountain of debt.

Remember to never take out more than 30% of your total available credit.

4 Biggest Mistakes That People Make With Their Money

When it comes to people and how they spend their money, there are usually a considerable amount of areas that they could make improvements.  Unfortunately, money management isn’t taught in schools, so most people have to learn their money management skills on their own.

When it comes to some of the biggest mistakes that people make when it comes down to money, here are some of the most common.

Letting Their Debt Pile Up

When you accumulate debt by taking out loans or charging things on your credit cards, you are setting yourself up to have to pay these things back eventually.  Some people see loans and credit as a magical source of free money.

However, this money comes at a price.  For every amount that you charge or borrow, you will be expected to pay it back as well as interest.  This means that the longer that you take to pay it back, the more debt you will owe from the interest.

Therefore, paying off your debts rather than letting them pile and pile is the best route.

Paying Minimum Due

Many people make the mistake of paying only the minimum amount due on their loans and credits.  What happens as a result is that they pay a significant amount of interest over the years rather than the small amount they would have paid had they paid as much as they could each payment cycle.

Although it may seem appealing to keep as much money in your pocket as possible, rather than to spend it on bills, it’s in your best interest long term to pay as much as you can each time to get rid of the debt sooner.

Not Budgeting

When you fail to set a budget for yourself which has guidelines and limits in order to be able to pay for all of your bills and basic necessities each month, you are setting yourself up for the potential to overspend.

People who fail to budget tend to frequently find themselves at the end of the month overdrawn and stressed out due to lack of preparation.

Creating a budget, however, isn’t something that has to be complicated.  It’s easy to create within an app or a simple spreadsheet created in a program like Excel.  Once you get into the habit you won’t be bothered to do it every time that you make a charge.

No Savings

The single biggest mistake that you can do is fail to have savings set aside.  Without a savings account, you aren’t prepared for emergencies like medical problems, auto incidents, or having to replace a big expense like a computer.

Try to set aside a bit of savings each month so that you always know you have a backup plan.

Understanding the Differences Between Financial Advisors and Brokers

Advice Channel
Advisors Channel

As a fee-only financial advisor, I am surely biased to this type of advisor. I do think everyday investors are much better off if they have someone in their corner who is recommending a particular investment product because it actually is the best product for them, given their circumstances and life stage. Not because there’s a commission on the sale at the end of the day.

That doesn’t mean, though, that you shouldn’t be mindful of possible issues – and that’s for any financial advisor, whether fee-based or full-service brokers. For that matter, you also should be mindful of potential drawbacks to other options that may seem (superficially, at least) appealing.

Let’s look at the options.

Fee-only financial advisors are considered advantageous because there’s no inherent conflict of interest as there can be with full-service or commission-based brokers. Brokers often recommend investments owned by their company, which is an inherent conflict.  You simply have to consider whether the products recommended are going to be best for your personal financial goals.

What you pay for is financial guidance, planning and assistance. This may be a flat fee. Some advisors charge a percentage of your account’s assets. You may be able to negotiate the amount. But, the fees you pay do not fluctuate according to the type of investments that are being recommended. What you get with this approach is objectivity and investment advice that’s unbiased. Your interests and your advisor’s are aligned.

The commission-based approach to financial advisory services is less the norm today than in the past. You open an account or buy a stock or bond and your advisor gets a percentage. Recurrent trading may also be encouraged – which may not be good for investors with a longer-term perspective. This all can pose a conflict with your best interests and goals.

And on the do-it-yourself front? Well, as attractive as this might sound on the surface, consider the relevance of the saying about the attorney who represents himself. For investment purposes, you might find good information online, but it’s just as likely you’ll find speculative information, if not real fake news. Investing is a risky business; if you don’t have the time or the expertise to do an adequate job of qualifying research, get a professional to help. Your future – financial and otherwise – depends on it.

Speaking of your financial future, it’s never too early to start planning for it. That means Millennials – and even the oldest Generation Zs who are just entering the workforce – should be putting money aside as they think about their long-term financial goals. It’s a challenge, of course, especially for those who are still trying to pay off college. Retirement is maybe too much to think about, right?

With that said, I’ve developed a service package to make it less painless. My new Robo-Advisor Professional service package is specifically targeted to the needs of Millennials and utilizes an in-depth financial data collection sheet, as well as a plan discussion with myself, to collect essential information about your financial background and goals.  This provides a strong base of understanding for clients to invest in ETFs through WealthSimple with a superior portfolio manager with a track record of beating the index.

ETFs are ideal for those with more limited resources, as a “wrapper” around a group of securities. They have a cost advantage over individual stocks and can be traded commission free. They’re similar to mutual funds, but with more flexibility as they can be traded throughout the day, not just once.

The Mortgage Broker

The Mortgage Broker
The Mortgage Broker – Canadian Mortgage Broker – Mortgage Broker Canada

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Mutual Fund Newsletter

Mutual Funds Newsletter Canada

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Mutual Funds Newsletter Canada – Canadian Mutual Funds

Mutual Funds Newsletter is proud to join some of Canada’s top investment and finance professionals as a regular writer for MUTUALFUND.CA and the electronic and industry trade publication called ‘Mutual Fund Magazine’ that is an RRSP Season favorite for mutual fund dealers, representatives and advisors.

Mutual Funds Newsletter is at the top positions of yahoo, google, bing and youtube. The monthly Canadian Mutual Funds Newsletter is available in part online and is primarily sent with CASL approved email newsletter systems. The Mutual Fund Newsletter is the one and only premium communique that is completely free of charge. MutualFund.ca the keyword website that best defines Mutual Funds and the mutual fund industry at large. The entire portal of mutual fund sites protects the interest and sentiment of mutual funds and capital markets in Canada with respect to investors, advisors and product manufacturers.

The Mutual Fund Industry is worth well over 1 trillion dollars of Canadians hard earned capital. A concentration of assets under management worth considering in general and investigating further your place in it. Enjoy the monthly Mutual Fund Review the entire mutual fund market at a glance with winners and losers by sector and by category.

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Ed Rempel Org

What is The Cash Flow Dam?

What Is The Cash Dam and How Does It Work?

 The Cash Dam (sometimes referred to as a “cash flow dam”) is a simple but powerful concept, and it’s an especially attractive option for those who are familiar with the Smith Manoeuvre or other tax minimization strategies. Cash Dam can help you with tax optimization if you have a mortgage and own either a small business or a rental property.

What is cash damming?

 The Cash Dam allows the owner of a small business or rental property to more quickly pay down their non-deductible mortgage on their home. It’s a variation on the Smith Manoeuvre, but without additional investing. The Cash Dam is essentially an expedient way to change bad debt into good debt.

For someone who’s using the Cash Dam, what it involves is using a line of credit to pay for business expenses. Then, while using the increased business cash flow, you pay down a non-deductible mortgage or loan. This, in turn, produces an increasing tax-deductible business loan, while paying down a non-deductible mortgage or loan. Be advised that the Cash Dam as described above will only work for those who own a non-incorporated personal or partnership-based small business or a rental property.


 If you own a small non-incorporated business that has $2,000 in expenses each month and you also have a readvanceable mortgage, then the $2,000 per month expense would be paid by the home equity line of credit (HELOC). You then use the additional $2,000 you have in your business expense account to make a payment on your non-deductible mortgage. Interest paid on money that’s borrowed for business expenses is tax-deductible; by using the Cash Dam, you’ll be left with a tax-deductible business loan and a non-deductible mortgage that’s been quickly paid down.

One of the keys to the Cash Dam, however, is capitalizing the interest on the business line of credit. That way, you avoid using any of your own cash flow and you keep the business line of credit tax-deductible.

How does the Cash Dam differ from the Smith Manoeuvre?

The Cash Dam relies on using a tax-deductible business loan to allow you to pay down a non-deductible debt, while the Smith Manoeuvre allows you to buy investments. Investing from your credit line is why the Smith Manoeuvre has much higher risk and return than the Cash Dam.

Potential applications

 Say that you’re a rental investor, instead of using your own cash flow to pay for rental-related expenses, you can use the Cash Dam and a line of credit. In this instance, using the Cash Dam would help you pay for your personal mortgage and help you satisfy your tax obligations as well.

And if you are a small business owner, the Cash Dam can be extremely advantageous. The strategy gives you a way to quickly pay down your non-deductible mortgage and convert that debt into a tax-deductible business loan.

Maybe the grass is greener

I have seen thousands of clients over the last 17 years in the Financial Services industry. Although there is no “one size fits all” or “cookie cutter” solution for every individual or couple, the problems tend to be very similar, and the cause is almost always the same. By investing some of your time reading this article and the rest of my blog series you will be able to put yourself in a better financial position tomorrow than you are today.

The majority of people that I’ve met who want to be in a better financial position have spent time feeling like the fences between the 5 stages of Financial Success are too high. They know that the grass really is greener but they lack the tools, resources or knowledge to experience life on the other side of those fences. It’s time for people to stop wondering what it’s like to be financially comfortable, and start experiencing it by making different choices.

People are creatures of habit. We wake up at the same time each day. We go to bed at the same time. We travel the same route to go to school, work and home. There are times and situations where repetitive behaviour is a good idea. If I want to be a marathon runner I am going to go running every day, and I will expect, over time, for my running ability to improve. I will be able to run faster for a longer period of time. This is true for professional athletes in all sports. They practice and train over and over and they get better. However, there are also many situations where repetitive behaviours are detrimental. When we are in the cycle of living paycheque to paycheque or carrying high levels of debt, which most people are, this is probably a time where we need to do some things differently.

The first thing that people in that type of position need to do is to make a decision that they truly want to improve their situation. This will usually involve behavioural changes. It isn’t possible to get different results by continuously doing the same thing over and over again.

The second thing that needs to be done is to identify what stage of Financial Success you are presently in, and which stage you want to achieve. This is a lot like a sport or a game in many ways; the more you practice, the more you play the better you get at it. If you want to be really good at anything you have to invest time into understanding how to do it better.

The name of the game is Financial Success which will mean different things to everyone, but the basic principles are the same for most people. The basic principles of the game are:

1) Spend less than you earn
2) Have a plan
3) Have a back-up plan
4) Monitor and track your progress
5) Update your plan at least once or twice a year
6) Make proactive positive changes as required

I once heard someone say “Money isn’t everything, but you can’t say that without it” and I feel this is a very accurate statement. When you are trying to enjoy life and raise your Standard of Living it is impossible to do this without money. That is an undeniable truth.

Imagine that your lifestyle, or standard of living, is a snowball which, throughout life, you are pushing up a hill.

During childhood we are Dependent on family to provide us with the necessities of life. As we grow up, move out on our own we perhaps rely on the charity of friends and family to a certain degree. Think about your first apartment or even your first home. In the beginning maybe you had Grandma’s 30 year old couch, it was dark green and really didn’t match other stuff in your place, but that didn’t matter because it was still comfortable, it was free, and it could pull out into a bed for when your buddy couldn’t quite make it home after that poker game. During that time perhaps you were a “starving student” and every so often a family member would come to visit with a bag of groceries or you spent your weekends at Mom and Dad’s house doing laundry and eating your only meals that came from the traditional four food groups as opposed to the post-secondary food groups: bottled, bagged, canned or frozen. This is how many of us spend those years in higher education.

Then school is over and other than student loans many people don’t have a lot of other debt so our monthly debt payments are reasonably affordable at this time and our other lifestyle expenses are also reasonably low. We have simultaneously graduated post-secondary and into the next stage of life – Independence.
Independence is the stage where we are able to float in the ocean of life on our own without the big rubber ring of external support around our financial waist to keep our head above the water. Progress is slow and may, at times, seem non-existent but the income and expenses are relatively equal. We are now able to support ourselves without assistance.

Each of these stages we all experience at different points in our lives depending on the decisions we make, how well we establish the foundation and plan for the unexpected.

We work hard building our career, enjoying our personal life, then we meet that special someone, buy a house, and start a family. Now we are starting to acquire assets, things we own that have a resale value, because Grandma’s couch isn’t going to be worth much more than memories. For as important as those memories are, it doesn’t help increase your standard of living. At this point we are starting to enjoy a Quality Lifestyle.

Over the years we finance new cars, the mortgage gets paid down further and further, and we start to enjoy some of the Comforts. Some of the Comforts may include a trip for the family occasionally, a vacation here or there, a newer vehicle even though maybe the old one is not that bad, extra gifts “just because” for those special people in our lives.

So we continue to work hard, save, pay off and eliminate debt, perhaps purchase a vacation property, and other Luxuries, things that we want but do not necessarily need. This is the final stage, Luxuries. This is the point where our debts are virtually gone (except those which are giving us tax benefits, I will discuss this more later) and each month we have the bulk of our income being available to do with as we please. Many people, for a variety of reasons never make it to the “Comforts” stage let alone the “Luxury” stage.

By virtue of the fact that you’re reading this, you already have one of the most important components in financial success.


If you do not want it, aspire for it, and do everything in your ability to acquire it, simply put, you won’t get it. In anything you do, your level of success is in direct correlation to your level of desire and motivation to succeed.

Where many individuals find their desire and motivation can become challenged is when life throws us a curveball and we are not prepared. In order to reduce the impact of these curveballs you must have a plan. We cannot predict the future but we can prepare for it.

Now this snowball, called our Standard of Living, which we have been pushing up the Hill of Life – what holds this standard of living in place? We work 40 – 60 hours per week trying to build a standard of living that will provide our 2.5 kids and our chosen life partner with (what we hope will be) not only what they need but what they want as well. That standard of living is held in place and indeed is pushed forward by our income and assets. So what happens when this wedge of income and assets that we have lodged in place, gets hit by a curveball in the game of life (health issues, changes in the economy)? Suddenly, it’s like our snowball has hit an ice patch and it starts rolling back down the hill because we have a significantly reduced income/assets. Proper planning for these “what ifs” can help secure your snowball in its place on the hill so that it doesn’t slide very far, thus making your move up the hill easier the further up the hill you get.

Over the years I have seen many situations where people did not have a plan and when they started to slide down the hill they experienced significant financial stress and sometimes families were torn apart.

By following my advice in this blog series you have just made an excellent investment in your future.

Ed Rempel Org

Ed Rempel – Not Sold on ETF’s and Index Funds

Why I Won’t Own an Index Fund or ETF

 Skilled Fund Managers

Many investors are skeptical that there exist fund managers who have skill and who can beat the index over the long-term. Other investors believe that there are fund managers who have skill, but that it’s impossible to identify them ahead of time.

There are skilled fund managers that can be identified ahead of time. I know quite a few of them. You just have to look using the right criteria.

Identifying Skill

When looking at funds, many investors take an objective approach and study recent returns, look at ratings or statistics, or try to forecast which sectors will perform well.

Other kinds of skill evaluations are more subjective and rely on insider judgments, e.g., doctors assessing other doctors, or even actors judging performances of their peers.

The evaluation of a fund manager falls somewhere in between those two approaches, the objective and the subjective. I believe that, to find the best fund managers, you have to study them, not the fund.

Start by finding fund managers that have beaten their index over their career or long periods of time. This could be in more than one fund. They do not need to beat the index every year – just over time. Then study them to find out how they do it. Is it because of stock-picking skill?

Outperforming the appropriate indexes is just one factor in the criteria. Top fund managers are usually not trying to secretly follow the index–they’re more likely to have an effective style (like value investing), and have high “active share,” which means that they’re investing in a way that differs from the index; they also often have great experience and have their own money invested in the funds that they manage, i.e. “skin in the game”.

My All-Star Fund Managers

One of my special skills is identifying all-star fund managers — it’s essentially my main focus related to investments. I’ve found around 50 fund managers over the years who I would characterize as having superior skill, and all of them have beaten their index over long periods of time.

Most of those 50 managers are on my “watch list”. I own only a handful of those funds. Although I’m resistant to the idea of sharing statistics about my own personal investments, mostly because my investment style may not be suitable for every investor, I want to emphasize that it’s possible to identify skilled fund managers early and ahead of time.

Why I Will Never Own an ETF or Index Fund

I won’t ever own an ETF or an index fund because I’m not happy with below-index returns. I choose investments based on the fund managers–I want to invest with the Albert Einstein of investors, the absolute best. ETFs and index funds don’t have fund managers, so I’m not interested. The goal of investing is to obtain the highest long-term return after fees, and a skilled fund manager provides enough value to pay for those fees and more.

Above-Index Returns

There are really two options when you’re pursuing above-index returns: one, you can find yourself an all-star fund manager, or, second, you can choose a portfolio manager who’s paid by performance fee. When portfolio managers are paid by performance fee, they’re motivated to beat their index. If they don’t beat the index, the fees are similar to ETFs. If they do beat the index, the fee pays for itself.

Getting above-index returns is all about finding skill.

An Introduction to Financial Instruments

What are financial instruments, and how are they used in the world of finance? These are the kinds of questions you might be asking yourself as a newcomer to the market. You will certainly need to know what they are, and how you can make the most out of such assets.

These financial instruments are simply the types of assets which can be bought and sold. Such financial instruments are often also regarded as capital packages which are up for trade. The majority of financial instruments will keep a very useful stream of capital which fuels investors all over the world and their various activities in the market.

Making the Most out of your Means

Such assets come in various forms, including as cash, or in some cases as a right stipulated by a contract that the delivery of receiving of cash must be adhered to. They can also be a piece of evidence that one is entitled to ownership of a particular entity.

Financial documents are generally broken down into two forms, virtual or real documents which connote a tangible agreement made regarding any kind of monetary amount. Those financial instruments which are equity-based will provide proof of ownership for a particular asset.

A financial instrument based on debt will obviously be for things like loans which were formed by investors for the sake of asset owners.

More Interesting and Valuable Forms

Then there are the financial instruments that fall under a third and very unique category, that of foreign exchange instruments. Such a division is broken down further into other subcategories, such as common share equity and preferred share equity.

The International Accounting Standards has outlined financial instruments to be any binding contract which will provide financial assets to one party, while to another it will provide a liability which possesses an equity or financial liability.

The Variety in Financial Instruments

There are two main kinds of financial instruments: Derivative instruments and cash instruments. Such cash values will be influenced directly and stipulated by the current markets. The relevant securities need to be easily transferable.

One can also use cash instruments in the form of deposits, as well as loans which were appropriately set up between a lender and a borrower.

The attached characteristics and values seen in derivative instruments will generally be based on what the underlying vehicle factors happen to be, such as indices, interest rates, and of course assets.

The Classes of Assets

There is indeed what is known as an asset class when we look at financial instruments. Such classification will depend on an asset’s formation as an equity-based or debt-based asset. In terms of financial instruments that are short-term and based on debt, you can expect a lifetime of around a year or less.

You need to ensure that you know how this classification system works, especially with the assets you are most likely to encounter the most, depending on the main sectors of the market you may be entering.

Ed Rempel CFS

Ed Rempel Top Key Note Speaker at The Canadian Financial Summit

Ed Rempel is a well known Canadian “Financial” Keynote Speaker and shares his enthusiasm and many years of experience to primed financial audiences that want, need and deserve more and better insight and information. Join Ed Rempel a senior financial industry expert with a host of other top speakers at the Canadian Financial Summit. www.canadianfinancialsummit.com September 13-16 Online Event.