Retirement Planning Vancouver | Building Wealth in Canada
No matter where you are in your wealth building journey, Thomas and Team want to help you reach your goal. Thomas C. Chan is a trusted financial advisor with a wealth of knowledge about retirement planning, wealth building and investing for your future. He shares some steps here that will get you going as well as take you the distance to building the wealth you desire. Imagine a future with one million dollars of wealth at the finish line. Now we will dive into seven steps to see how you can go from where you are now to where you want to be.
Understanding your cashflow is the first step in saving for retirement. How much money do you have coming in and how are you spending it? This takes some time to gather the info and being honest with yourself is the key to understanding. You cannot just wonder if you are assigning all your resources in a way that will build wealth. You need to manage your cashflow so you can measure it. Like in most things, knowledge is power.
Get rid of bad debt
Reducing bad debts is step number two in building wealth for your future. Many people hear the word debt and automatically associate a negative connotation with it. There are effective ways to use debt to help you save for your future. You want to have a financial return on your debt to consider it good. You may have a mortgage, car loan or student loans. These are considered good debts because they have low interest rates and bring you a higher than interest paid return on investment. Low interest rate loans are not the problem, it is high interest ones like credit card or payday loans that are.
Credit card debt is a valuable tool if you use it wisely. You must pay it off every month so that you are not charged the interest on using the funds available. You can build your credit rating with this tool but paying it off monthly is the key to that. Never fall for the illusion of paying only the minimum payment. When you only pay the bare minimum you end up paying double the debt in four years. The larger it is the harder it is to eliminate it. By paying off your credit card debt first you can save and invest after.
Must be more frugal
Reduce spending and increase income to build wealth. It is not so much the amount you make but rather the amount you spend. The goal is to reduce unnecessary spending. The more money you can save the more you have to set aside for building wealth. Even if this is just a little bit it can still make an impact on building wealth. To increase your income, use the skills you have and are passionate about using to create additional income. It has never been an easier time to do this.
Expenses can only be lowered so much, so it is a great idea to create a simple budget to track everything. The budget can be broken into three parts. Fifty percent to living expenses, twenty to fun money and thirty to savings. Of course, if you are willing to live with less fun money then you can allocate more of that into savings and investments. A good rule of practice is to evaluate your budget regularly.
Start building an emergency fund
Build an emergency fund. This helps you out when you need money on the spot. You do not want to be going to the credit card or your investments for such a time as this. If your car breaks down or you have unexpected bills you want to be able to cover those costs easily. If you have an unexpected layoff having three months of expenses covered will give you time to get your income back elsewhere.
Having more than that is not the most optimal way to go. It just means that money is not being used somewhere else where it can give a higher return. That would be a waste of an opportunity. In terms of actual dollar amounts you can build an emergency fund of ten thousand to twenty thousand.
Insurance can help build wealth
Get insurance to help you build wealth. It is the lowest utilized tool. Early on it is used to protect your income and assets. Later your insurance is there to help your assets become tax efficient and time efficient. The wonderful thing about insurance is that there are so many types for whatever the scenario may be.
Good investments are the way to grow your wealth rather than just protect it. There is no reason to get complicated with your investments. The wealthy investors choose the stock market, real estate, or businesses for their primary investments. Most people think investing is hard to do and they do not take the risk to do it but instead just save their money. This does not create wealth. What most do not realize is you do not have to be an expert at investing but rather know where to invest and who can help you.
Contact Us Today!
This is where you either must research to find the answers you need or have a financial advisor who is an expert to help you. Thomas Chan is knowledgeable, experienced, and enthusiastic about helping Canadians build wealth. You can call for a free consultation to help get you started. Visit thomascchan.com or call 1-604-877-4211 to find out why Thomas has the most five-star life insurance advisor Google reviews in Vancouver.
The last step in building wealth in Canada is self explanatory that it is surprising it needs mentioning, do not rely on luck. Many people put their hope in gambling or the lottery, but these are a sure way to throw away your money. The chances of gaining wealth from them are next to zero. Hope is not a strategy. You need to set SMART goals to guild wealth. Know your money, protect it, and grow it.