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Pay Yourself First

Pay Yourself First

Each month you settle down to pay bills. You pay your mortgage lender. You pay the electric company. You pay the trash collector. But do you pay yourself? One of the most basic tenets of sound investing involves the simple habit of “paying yourself first,” in other words, making the first payment of each month into your savings account.

Canadians’ saving patterns vary widely. And too often, short-term economic trends can interrupt long-term savings programs.

The Genius of Pay Yourself First

Anyone who’s ever managed their own finances knows that saving can be a challenge. There seems to be an endless stream of expenses that demand a piece of each month’s paycheck. Herein lies the genius of paying yourself first: you get the cream at the top of the bucket, and not the leftovers at the bottom.

The trick is to prioritize. Make it a point to put your future first. At first, saving may mean a small lifestyle change. But most individuals want to see their net worth increase steadily. For them, finding ways to save becomes more of a long-term commitment than a short-term challenge.

Putting Your Money to Work

What will you do with the money you save?

If retirement is your priority, consider taking advantage of tax-advantaged investments. Employer-sponsored retirement plans, such as pensions and RRSPs, can be a great way to save because the money comes out of your paycheck before you even see it. Also, as an added incentive, some employers offer to match a percentage of your contributions.

For money you may want to access before retirement, consider placing the funds in a separate account. When the balance hits your target, you may want to move the money into investments that offer the potential for higher returns. Of course, this may mean exposing your money to more volatility, so you’ll want to choose vehicles that fit your risk tolerance, time horizon, and long-term goals.

In the pursuit of growing wealth, sound habits can be your most valuable asset. Develop the habit of “paying yourself first” today. The sooner you begin, the more potential your savings may have to grow.

The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by Exceedia Consulting Ltd provide information on a topic that may be of interest. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright 2018 Exceedia Consulting Ltd

Being an entrepreneur isn’t easy

Being an entrepreneur isn’t easy

Being an Entrepreneur Isn’t Easy

Raising money can be humbling. Really humbling. None of us likes being told our baby is ugly…..again and again and again. “Come back when you have two years of financials… it’s  great idea, but call us once you have established sales…”

B2B sales are humbling….and take longer than you can imagine. No, your phone calls aren’t returned as quickly as when you worked in your big company job. You expect that. The more interesting insight to me has been how often people try to be nice and end up stringing you along. They don’t recognize that a “fast no” is ok; it’s the “slow no” that kills you.

And even a “slow yes” can put you out of business. I worked with one guy at a big bank who loved a start-up so much…and encouraged them so much…that the start-up ran out of money and shut its doors as all of the approvals for doing business with them were working their way through the system.

So sometimes a “fast no” can even trump a “slow yes.”

Hiring people is hard. Hiring people is always hard. But at a start-up, the stakes are so much higher. That’s in part because there are simply fewer people, so one has to be more thoughtful about making sure there aren’t any holes in the start-up team’s skillsets (and that includes filling in the founder’s “flat sides”). That’s why, for me, team diversity is so important.

And is it just me?  Because I’ve found, amongst entrepreneurs, some of the most talented people I’ve ever worked with, by good measure; they love the rush of entrepreneurialism and would never thrive in the constraints of a big company.

And then there have been some others. I’ve come across a couple of screamers. By that I mean, people who scream. At work. A lot. The screamers are filtered out of big companies pretty quickly. So watch for people who’ve bounced around a lot, and particularly watch for people who receive less-than-effusive recommendations. And always, always do back-channel reference checks. I once hired someone from a bank who never showed up for work and when asked for his accountability, decided to have a 45 minute screaming match in front of the staff.

Hiring people is hard, Part 2. If you come from a corporate background, many of your contacts won’t fit your job descriptions and needs: the jobs pay less cash than what big company folks are making, the jobs may be broader than what they are doing , and parts of the jobs can be more junior. Everyone wants to be part of the startup once it’s successful, but few can stomach the beginning of the journey.

And everybody’s a critic. If your idea is truly innovative, you’re going to hear from the naysayers. After all, if it were such a good idea, someone would have already done it, right? I was told that a financial advisor doesn’t need all this vision and planning – go sell to anyone and everyone.  Many people didn’t understand my need to build something bigger than what was in front of me.

Oh, and it’s terrifying. Something I never thought about in my job: cash flow. When your business has billions of dollars in revenue, you can make a lot of mistakes and still have a viable business. But in a start-up, make a few hiring mistakes (it takes several months to find the right person, a couple of months to figure out they’re not the right person, a couple of more months when you try to coach them and give them the opportunity to become the right person, then another couple of months after you part ways to find the next right person)….oh, and the work they’re supposed to be doing doesn’t get done in that period of time….well, do that a few times and you’re out of money.

How about business partners who enjoy the title but don’t enjoy sharing the expenses?  When you all sign personal guarantees on a lease but they refuse to contribute to the expenses and you worry about losing your home? When you spend more money at the lawyer’s office trying to remove them from the company than their financial contribution to start the business?

Being an entrepreneur is the only time in my career that I’ve lost sleep (and I don’t need much sleep to start with!).

There is a lot of paperwork…and taxes….and regulations…. I can’t tell you the number of people who tell me they slipped up on some of the paperwork needed for their company. It’s one of the no-fun parts of being an entrepreneur that nobody talks about. Wonder why I’m at the office from 9am to 2am? Trying to figure out liability and compliance procedures.

You can’t coast. You know those days at the office when you used to come in and didn’t really do that much? You don’t have those days as entrepreneur. If you don’t do much, then not much happens. And remember what I said about cash flow? Yeah….that.

This last paragraph is the one in which I am supposed to say that, even with all of this, I wouldn’t trade being an entrepreneur for anything. And, for me, this is right. But the failure rate for entrepreneurs is high, so I have to be very, very honest with myself about my, and my family’s, willingness to take on this professional risk. This risk isn’t always financial – without the support of your family, you can end up losing the thing you are building this for.

I started Exceedia Consulting Ltd because we wanted to help micro-entrepreneurs and small businesses grow and develop together… to soften the risk, share our wisdom and most of all, to be a support to each other in the hard times while celebrating our small wins along the way

Changing unhealthy behaviours

Changing unhealthy behaviours

Most Canadians know the fundamentals of good health: exercise, proper diet, sufficient sleep, regular check-ups, and no smoking or excessive alcohol. Yet, despite this knowledge, changing existing behaviors can be difficult. Look no further than the New Year’s Resolution, with its 9% success rate.¹

Generally, negative motivations are inadequate to affect change. (“I need to quit smoking because my spouse hates it.”) Motivation needs to come from within and be positively oriented. (“I want to quit smoking so I see my grandchildren graduate.”)

Goals must be specific, measurable, realistic, and time-related. In other words, “I am going to exercise more” is not enough. You need to set a more defined goal, such as, “I am going to walk 30 minutes a day, five days a week.”

Permanent Change is Evolutionary, not Revolutionary

As a rule, individuals travel through stages on their way to permanent change. These stages can’t be rushed or skipped.

Phase one: Precontemplation. Whether through lack of knowledge or because of past failures, you are not consciously thinking about any change.

Phase two: Contemplation. You are considering change, but aren’t yet committed to it. To help move through this phase, it may be useful to write out the pros and cons of changing your behavior. Examine the barriers to change. Not enough time to exercise? How could you create that time?

Phase three: Preparation. You’re at the point of believing change is necessary and you can succeed. When making plans, it’s critical to begin anticipating potential obstacles. How will you address temptations that test your resolve? For instance, how will you decline a colleague’s lunch invitation to that greasy spoon restaurant?

Phase four: Taking action. This is the start of change. Practice your alternative strategies to avoid temptation. Remind yourself daily of your motivation; write it down if necessary. Get support from family and friends.

Phase five: Maintenance. You’ve been faithful to your new behavior. Now it’s time to prevent relapse and integrate this change into your life.

Remember, this process is not a straight line. You may fail, even repeatedly, but don’t let failure discourage you. Reflect on why you failed and apply that knowledge to your efforts going forward.

  1. StatisticBrain.com, January 1, 2017

The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by Exceedia Consulting Ltd provide information on a topic that may be of interest. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright 2018 Exceedia Consulting Ltd

How to prioritize using a master checklist

How to prioritize using a master checklist

Prioritization happens on different levels. You have the tasks that need to be done today. The goals you have for this week. And the accomplishments that would make you feel like the past month has been a success. At Exceedia Consulting Ltd., when we work with clients, we often find those lists don’t always match up. It’s all too easy to default to what seems urgent today and ignore the fact that it isn’t getting you any closer to your bigger priorities. So before you can learn how to prioritize your daily work, you need to get everything down in one place.

Start by making a master list—a document, app, or piece of paper where every current and future task will be stored. One great way to do this is David Allen’s Get Things Done (GTD) methodology.

Once you have all your tasks together, it’s time to break them down into monthly, weekly, and daily goals.

As productivity consultant Brian Tracy explains, your monthly list pulls from your master list. Your weekly list pulls from your monthly list. And so on. This way, you know your daily priorities are aligned with your bigger goals.

However, when setting your priorities, try not to get too “task oriented”. Sure, checking items off a list feels good. But you want to make sure you’re prioritizing the more effective work.

When filling out your different lists, remember the Pareto Principle—or, the 80/20 rule—which says that 20% of your efforts tend to produce 80% of your results. Look for those tasks that don’t just get checked off, but that bring you real results.

Planning for Special Needs Children

Planning for Special Needs Children

It has been said that the best inheritance we can give our children is a few minutes of our time every day. It’s also true, though, that our children will not always have us in their lives.

Children with special needs may require lifetime assistance, which can necessitate that parents prepare for their child’s care after they are gone, or are unable to care for him or her any longer.

Envisioning a Life Without You

Parents have to think about the potential needs of their surviving child. Will he or she requires daily custodial care? Ongoing medical treatments? Will their child live alone or in a group home? Can family assume some of the care? Answers to these and other questions can help form the vision of what may need to be done to plan for your child’s care.

Planning Your Estate

Supporting lifetime needs can outstrip your resources. One funding resource is government benefits, which your child may qualify for when he or she becomes an adult, e.g. AISH (Assured Income for the Severely Handicapped). Because such government programs have low asset thresholds for qualification, you may want to consider whether to make property transfers to your special needs child. Ensure you have an up-to-date will that reflects your wishes. Consider creating a special needs trust, the assets of which can be structured to fund your child’s care without disqualifying him or her from government assistance.

Involve the Family

All affected family members should be involved in the decision-making process. You will want a united front of surviving family members to care for your child after you’ve passed.

Identify a Caregiver

In order for caregivers to make financial and healthcare decisions after your child reaches adulthood, the caregiver must be appointed as guardian. This can take time, so contemplate starting early. Consider a “Letter of Intent” to the caregiver and family to express your wishes, along with information about your child’s care. This isn’t a legal document, but it may help to communicate your desires. Store this letter alongside your will in a safe place. Planning for a special needs child can be complicated, confusing, and even overwhelming. Be sure to work with qualified professionals to help you navigate the myriad considerations that come with this challenge.

  1. Using a trust involves a complex set of tax rules and regulations. Before moving forward with a trust, consider working with a professional who is familiar with the rules and regulations

The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by Exceedia Consulting Ltd to provide information on a topic that may be of interest. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright 2018 Exceedia Consulting Ltd.

PREVENT A RIFT: MONEY TIPS FOR NEWLYWEDS

In a recent study, 88% of millennials admitted that financial decisions are a source of tension in their relationship with a spouse or partner. This could help explain why some experts say financial problems are the #1 reason marriages fail.1,2

Fortunately, couples may be able to head off many of the problems money can cause in a marriage.

10 Tips for Newly Married Couples

  1. Communication—Couples should consider talking about their financial goals, memories, and habits because each may come into the marriage with fundamental differences in experiences and outlook that will drive their behaviors.
  2. Set Goals—Setting goals establishes a common objective that both become committed to pursuing.
  3. Create a Budget—A budget is an exercise for developing a spending and savings plan that is designed to reflect mutually agreed upon priorities.
  4. Set the Foundation for Your Financial House—Identify assets and debts. Look to begin reducing debts while building your emergency fund.
  5. Work Together—By sharing the financial decision-making, both spouses are vested in all choices, reducing the friction that can come from a single decision-maker.
  6. Set a Minimum Threshold for Big Expenses—While possessing a level of individual spending latitude is reasonable, large expenditures should only be made with both spouses’ consent. Agree to what purchase amount should require a mutual decision.
  7. Set Up Regular Meetings—Set aside a pre-determined time every two weeks or once a month to discuss finances. Talk about your budgeting, upcoming expenses and any changes in circumstances.
  8. Update and Revise—As a newly married couple, you may need to update the beneficiaries on your accounts, reevaluate your insurance coverage, and revise (or create) your will.²
  9. Love, Trust, and Honesty—Approach contentious subjects with care and understanding, be honest about money decisions you know your spouse might be upset with, and trust your spouse to be responsible about handling finances.
  10. Consider Speaking with a Financial Advisor—A financial advisor may offer insights to help you work through the critical financial decisions that all married couples face.
  1. AICPA.org, February 11, 2016
  2. Divorce.com, 2017
  3. When drafting a will, consider enlisting the help of a legal, tax, or financial professional who may be able to offer additional insight, especially if you have a large estate or complex family situation.

The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by Exceedia Consulting Ltd to provide information on a topic that may be of interest. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright 2018 Exceedia Consulting Ltd.

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