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Personal DevelopmentPersonal FinanceSelf GrowthTax Planning

Building Assets That Generate Monthly Cash Flow Has Never Been More Important. Here Is Why

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Five ideas to consider in building assets that generate monthly cash flows

If we’ve learned anything from this coronavirus pandemic, it is the importance of having strong diversified sources of monthly cash flow. This pandemic proved that many individuals and businesses could not survive 4 to 6 weeks without the intervention and help from government relief programs.

So, it is important to take a close look at all your sources of cash flow and come up with ways to fortify your existing sources of cash flow, and where applicable, add additional sources of cash flow to protect your ability to continue to generate cash for the foreseeable future.

When building a cash flow plan, you want sources of monthly cash flows that will accomplish one or more of the following:

  • Cash flow that can survive any economic situation
  • Cash flow that is independent of your time
  • Cash flow that is uninterrupted regardless of whether you’re awake or asleep
  • Cash flow built around your lifestyle
  • Cash flow with the potential to grow from month to month
  • Cash flow that is not eroded by commitments to long-term contracts, overhead, debt, salaried full-time employees, etc.
  • Cash flow that is location independent

So, what ideas can you employ to generate these kinds of monthly recurring cash flows?

Here are 5 ideas to consider:

1. Turn your ideas and knowledge into recurring income: You know a lot and you likely don’t realize it. You have the experience that is valuable to others. Consider ways you can turn this into a business that provides extreme value to others; never runs out of inventory; needs no staff; pays no rent; stays open 24/7; and pays you while you sleep.

2. Invest in an online business: There has never been a better time to invest in an online business. This is a sector that has been growing rapidly, even before the coronavirus pandemic that just poured fuel to the growth. It will continue to grow in the coming years as the technology to support these businesses continue to improve. Consider creating and selling courses online; building a retail store on Shopify or other similar platforms; selling information products; etc.

3. Buy an existing business: Consider a business that is undervalued and has the potential to generate a strong monthly cash flow that you can purchase. You can then invest in the business to turn it around and increase its value over time by fortifying existing cash flow sources, adding additional cash flow sources, improving sales, marketing, and operations.

4. Invest in dividend-paying stocks: In May this year, I started a process where I now invest in at least a dividend-paying stock a day in my registered savings account. The idea behind this is to create a consistent habit of growing my stock investment portfolio as well as the income generated from these investments each month. And by being consistent with this process, I will have at least 365 assets that produce cash each year. If on average, these assets pay $1 in dividend per year, I will have $365 in annual dividend income from these assets and at least $3,650 in 10 years. And with compounding and annual increases in dividend income, it is likely that in 10 years, the $3,650 may actually be $7,300 per year or over $600 per month. This is income I can earn regardless of whether I’m awake or asleep.

5. Invest in rental real estate: As some of you already know, this is one of my favorite asset classes. It provides an essential need — shelter. And due to the fact that land cannot be created, it is an asset that grows in value over the long-term. If you own one, two, or more rental properties that are fully paid off, you have the potential to generate great monthly cash flow that can fund the rest of your lifestyle.

Final Thoughts

Consider these ideas and others not listed here and choose one that you like. Focus on building sustainable monthly cash flow from this one source. Once you fully establish that source of income, move on to a second one. Keep doing this to diversify your sources of monthly cash flows.


P.S. I am on a mission to arm you with financial education. That’s one reason I started writing on medium and that’s why I wrote Tax-Efficient Wealth. This book will help you accelerate your wealth in a tax-efficient way. Grab a FREE eBook version of my new book, Tax-Efficient Wealth, to learn how you can build wealth quickly using strategies that will save you a ton in taxes.

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Personal DevelopmentPersonal Finance

10 Money Experts You Should Be Following Right Now

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What you can learn from a diversified crop of personal finance experts

In a time such as the one we’re currently living in, finding a money hack can be a great thing. And the best way to do that is to follow the experts who write regularly about money and share their insights.

It’s about building knowledge and putting that knowledge into action to create financial transformation.

NextAdvisor, in partnership with TIME Magazine recently created a free resource to help you make smart money moves that can create a big impact on your wealth. As part of this partnership, they recently profiled a diversified group of 10 money experts that are worth following.

As you may know, when it comes to personal finance, it is personal. There are many universal truths, but these truths cannot be blindly applied to every situation. So, that’s why it pays to diversify the information you’re getting and hear personal points of view from others.

These crop of personal finance experts featured by TIME are using their platforms to do just that. They are sharing stories of how others are achieving financial freedom via a variety of ways.

Here is a brief highlight of these 10 pros and why you might want to consider following them. For more details, check out the TIME Magazine story on these experts here:

  1. Danetha Doe is a Jamaican-Ghanaian money mentor, writer, entrepreneur, and the creator of Money and Mimosas, a financial well-being resource and social club for influencers, bloggers, and creatives. Her mission is to elevate the self-worth and net worth of women.
  2. Jully-Alma Taveras, aka Investing Latina, shares personal finance tips and tricks through her social media platforms. She’s also a contributor with NextAdvisor. In a recent article, Jully writes. “It’s about being intentional with your spending, clear about your financial goals, and mindful about your consumption.”
  3. Tiffany “The Budgetnista” Aliche blogs about personal finance for The Huffington Post and her Budgetnista Blog. She’s the co-hosts of the podcast show “Brown Ambition,” and she created an online school, the Live Richer Academy, that teaches women how to create and implement a personalized financial plan.
  4. Rebecka Zavaleta is the co-founder of Finance Snacks. A platform where they make personal finance advice bite-sized and accessible for their family, friends, and community.
  5. Nathalie Figueroa is the co-founder of Finance Snacks . Nathalie and Rebecka met while studying at the University of Pennsylvania, and they immediately connected over their passion for making wealth creation actionable and accessible. Finance Snacks was born after they realized they were both unhappy with the financial state of their communities.
  6. Farnoosh Torabi is a personal finance author and expert and host of the “So Money” podcast, which features candid money conversations and strategies from well-known entrepreneurs, authors, and celebrities. Torabi launched a special series of “So Money” episodes in June called Black Wealth Matters, featuring Black thought leaders and experts from Queen Latifah to business coach Rachel Rodgers.
  7. Suze Orman, one of America’s most recognized personal finance experts, is a certified financial planner, television personality, and author now hosts a weekly podcast called “Women and Money,” which speaks primarily to women on a wide range of personal finance topics, from the emotions of money to how to prepare for the costs of health care in retirement.
  8. Erin Lowry helps millennials “get their financial lives together” by offering advice on how to make more money, get out of debt, and build savings. Through her “Broke Millennial” blog, books, lectures, and workshops, Lowry tackles questions like whether you should share personal financial information with your partner and how to manage student loan debt after college.
  9. Ramit Sethi is a New York Times best-selling author and founder of iwillteachyoutoberich.com, which focuses on strategies for investing and earning more. Sethi doesn’t believe in saying “no” to spending on everything, so he won’t shame you for buying lattes or avocado toast. Instead, he encourages big-picture thinking — moves like getting a raise or starting a side hustle that can have a transformational approach on your wealth.
  10. Jill Schlesinger is a certified financial planner and Emmy-nominated business analyst for CBS News. She regularly appears on CBS radio and TV stations across the country and is the host of the “Jill on Money” podcast and nationally syndicated radio show. Schlesinger has a talent for breaking down complex personal finance ideas and topics into understandable, relatable themes. She not only tells you what you’re doing wrong and how to fix it — she tells you why, too.

Final Thoughts

Now you have a dose of personal finance advice from a variety of experts. Follow them, learn from them, and get ideas that you can implement in your life to transform your financial journey for good.


P.S. I am on a mission to arm you with financial education. That’s one reason I started writing on medium and that’s why I wrote Tax-Efficient Wealth. This book will help you accelerate your wealth in a tax-efficient way. Grab a FREE eBook version of my new book, Tax-Efficient Wealth, to learn how you can build wealth quickly using strategies that will save you a ton in taxes.

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Personal DevelopmentPersonal FinanceSelf Growth

Money Can’t Buy Happiness. Broke Can’t Buy Anything.

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7 reasons why you’re broke

Money can’t buy you happiness.

Broke can’t buy you anything.

Two true statements. If you had the option to choose between having money and being broke, which one will you choose?

Your guess is as good as mine. Yet, people still choose to be broke.

Jelleestone has a popular song titled “Money Can’t Buy Me Happiness” and while I don’t endorse the entirety of the lyrics, I like the line where he says…

“Money can’t buy me happiness, but I’m happiest when I can buy what I want, anytime that I want…”

We know the high we get when we go on a buying spree, and we know that buying stuff will not give you true happiness as Jelleestone seems to suggest in his song.

So, it is obvious money cannot buy you happiness. However, this is not an excuse to be broke because being broke may just be worse — you can’t buy anything.

To get out of your broke state, do the opposite of these 7 things that prevent you from achieving a financial breakthrough.

Here are 7 reasons why you are broke:

1. You are lazy

“Success is not easy and it is certainly not for the lazy.” — The Everygirl

Yes, you heard me right. You are lazy.

Don’t be mad at me. Be mad at yourself.

But if it makes you feel better, we all have our lazy moments. I have my lazy moments and I have my lazy days. This is excusable.

What is not excusable is consistently being lazy day in, day out. If you’re always lazy, you will be broke forever.

You don’t want to put in the hard work required to achieve success.

You give up too soon when you’re just a few steps away from achieving a breakthrough.

You buy into the lie that achieving success in anything is easy. No, it is not.

It never gets easier. You get better.

Achieving success in business and in your career requires hard work. It requires sacrifice. And it requires patience and perseverance.

You may have to work 80-hour weeks. You may have to sleep less. You may have to give up on some of your favorite TV shows for now.

If you work hard and work smarter, success is guaranteed and you will never be broke.


2. You don’t invest in your education

“Learning is not attained by chance, it must be sought for with ardor and attended to with diligence” — Abigail Adams

I had a chat with a friend a few weeks ago who recently invested $40,000 in a U.S Commercial Real Estate Education and Coaching Program.

When I asked him why he invested that much in a program, he replied “If I don’t invest in my education, who will?”

I watched this friend invest $20,000 in a similar program in Canada not too long ago. In less than two years, he did two commercial real estate transactions and made more than 10X the amount he invested in the program.

Most people stop their education as soon as they graduate with a Bachelor’s degree. They fail to realize that most Bachelor degrees don’t prepare you for financial success.

When you stop investing in continuing education, you don’t build the knowledge that is required for success.

You’re too busy at work and distracted by social media that you have no time to read. The majority of people will only read one book per year, thus missing out on an amazing learning opportunity.

You fail to realize that the more knowledge you have, the more competent and confident you will be. The more knowledge you have, the better your decisions. Decisions that can open opportunities for you.

Reading is part of my daily routine. I read and journal every day. I listen to audiobooks as I work out and as I drive. I’m constantly reading and listening to insightful content on topics that help me get better at my game.

You can do the same too. Make learning a priority. Make building knowledge and learning new skills a priority. If you do this every day, you will be a better version of yourself in a couple of months. And you will automatically earn more.

“Personal confidence comes from making progress toward goals that are far bigger than your present capabilities.” — Dan Sullivan

As you grow in your knowledge, you will start to take meaningful action that drives you closer to your long-term goals. As you take action and make progress, your confidence grows. And the more confident you become, the bigger actions you can take.

Investing in yourself is critical. It is fundamental to making huge leaps in your business or professional career.


3. You don’t mind paying too much in taxes

“There may be liberty and justice for all, but there are tax breaks only for some.” — Martin A. Sullivan

Whether you like it or not, taxes affect all of us.

If you earn a decent income, then taxes are by far your largest cost. Yet, you don’t take any action to intentionally manage your taxes.

You give in to the lie that you have no control over the amount of taxes you pay.

You don’t realize that the tax laws reward certain groups of people with favorable tax breaks for engaging in certain activities.

Because you pay no attention, you religiously pay taxes without much consideration.

In fact, you allow the government to take a huge portion of your money upfront before you even see it.

And if you’re a Canadian resident for tax purposes, the more you earn, the higher your taxes.

The point is you must pay attention to how much you pay in taxes. It is critical if you want to keep and grow your money.

A basic understanding of taxes is thus critical to ensure you keep as much of your money as possible. The more money you have, the more you can invest to grow your money.

There is absolutely nothing wrong with paying taxes. In fact, we must pay taxes to maintain the amenities we have. But, you don’t have to pay more than your fair share of taxes.


4. You don’t model what works or what successful and rich people do

“Success leaves clues.” — Unknown

You think you know it all.

You think you will be the next great inventor.

There is nothing wrong with thinking like this. But, you must realize that whatever you want to do would have been done already in one form or another.

So, save yourself time, money, and painful experiences by looking for those that have gone before you. Look for those that have achieved the same thing you’re looking to achieve and model them.

I made the same mistake of trying to figure things out myself and wasted so much time and money along the way.

For a long time, I hesitated to work with coaches and mentors. I did not invest in mastermind programs early on to surround myself with high achievers. And I paid for this in time, money, and painful experiences.

If you want to be a great digital marketer and online business guru, model people like Ryan Deiss, Russell Brunson, and many other great minds in the online business space.

By modeling successful people, you will duplicate the extraordinary results they have achieved in their own businesses.

When you invest in a coaching program offered by someone that has achieved the extraordinary results you’re looking to achieve, you will have access to their knowledge, their thinking patterns, and you can learn from them directly.

There are so many ways to model. Here are some ideas to consider:

  1. Read biographies of successful people. Study people you admire. Read their articles. Watch their interview clips. All of these will inspire you to keep pushing towards your goals.
  2. If you know people that have the personality traits you admire, look for them and spend time with them. By doing this you will develop those skills and traits. As much as you can, make sure you are never the smartest person in the room.
  3. One reason why we never learn is ego. Often times, the smartest people are not usually the most successful because they have too big of an ego. They think they know it all. Never put your ego in front of learning something new. You must realize that there is always something to learn from other people.
  4. Get a coach. Find someone that has achieved exactly the same thing as you want to achieve. Ask them to coach you. This is one of the best ways to achieve great results in the shortest time.
  5. Join a mastermind group. A mastermind group is a group of high achievers with similar goals. It may be a group of business owners or a group of marketing agents. These groups often meet regularly and they share ideas and experiences that can help you grow.

5. You are unaware of your money mindset

“Money is only a tool. It will take you wherever you wish, but it will not replace you as the driver.” — Ayn Rand

A money mindset is your unique and individual set of core beliefs about money and how money works in the world.

It is your overriding attitude about money.

It shapes what you believe you can and cannot do with money, how much money you believe you’re allowed, entitled, and able to earn.

It shapes how much you can and should spend, the way you use debt, how much money you give away, and your ability to invest with confidence and success.

If you don’t know your money mindset, it may be very challenging to make money. So, given the powerful impact, your money mindset has on your relationship with money it is important to understand your money mindset.

When it comes to money mindset, there are two extremes — Scarcity/Lack and Wealth/Abundance.

Most of us will fall in between these two extremes.

If you think money is a scarce commodity, you’ll feel stressed and anxious. You won’t be generous.

On the other hand, if you think that there is enough money to go around, you’ll feel calm, positive, and optimistic. You’ll openly share and be more generous.

One suggested approach for uncovering your money mindset is to test yourself by marking True or False to the following statements:

  • I’m no good with money
  • I always make the wrong money decisions
  • I’m financially learning disabled
  • I’m no good with numbers
  • Money can’t buy you love
  • Money makes the world go around
  • Rich people are snobby and shallow
  • Poor people are hardworking and noble
  • There’s a limited supply of money in the world

This exercise along with many other ideas can help increase your awareness of your money mindset.


6. You pay no attention to the return on your time

“The key is in not spending time, but in investing it.” — Stephen R. Covey

This concept of looking at the return on your time requires you to look at the time you spend as an investing activity.

You can spend time on useful and useless things. But if you call it “investing”, you’ll definitely invest it in something that has value. Something that is important to you.

So, you must choose your goals wisely so that time you spend on them becomes an investment, not an expense.

Often times we forget that time is money. As a result, we don’t always pay attention to how we spend our time.

“Time is money.” — Benjamin Franklin

In the past, I never attached a lot of value to my time and how I spent my time. Now, I value my time more as I know lost time can never be recovered. Although I make mistakes from time to time with managing my time, I’m more conscious of it now than I’ve ever been in the past.

You have to look at time with the concept of opportunity cost. This means each choice you make with your time has its cost. If you take action quickly, you will achieve results faster. If you delay, it will lead to a decrease in output that will cost you.

You should constantly be looking for ways to save time by automating repetitive tasks, delegating, and outsourcing certain tasks.

If you’re struggling to find a solution for a project or task you’re working on, you can hire an expert to help you. Rather than wasting hours trying to figure stuff out, get someone that can do it in less time and even better.

As an entrepreneur, I struggle with this as most entrepreneurs do. Often, we waste time trying to figure out how to do stuff when someone else can do it faster and better.

So, get in the habit of always thinking of the “Who” rather than the “How”. Find other capable people that can help you accomplish a task rather than wasting time trying to figure it out yourself.

By regularly assessing how you spend your time, you may find the following as examples of things you can cut out of your life to save time:

  • Events/conferences and social gatherings that don’t inspire and add value to your long-term vision
  • Social media is an addictive waste of time and energy
  • Checking your messages and emails every time your phone beeps
  • Picking your phone every time it rings
  • Excessive addiction to news media
  • Doing chores you don’t enjoy when you can pay others to do them
  • Watching excessive TV
  • And many more that I can’t list here…

“Time is free, but it’s priceless. You can’t own it, but you can use it. You can’t keep it, but you can spend it. Once you’ve lost it you can never get it back.” — Harvey Mackay


7. You always hang out with broke people

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Image Credit: Angie Leonard at pinterest.ca

We are all familiar with the famous quote.

“Show me your friends and I’ll tell you who you are.”

It is true.

If you hang out with broke people, you will be broke. If you hang out with rich and successful people, you will be rich and successful.

Dan Peña (a.k.a. the trillion-dollar man) has a similar expression.

“Show me your friends and I’ll show you your future.”

Dan makes a point that if your friends are losers, then you should dump them on the scrap heap where they belong. They will only drag you down to their level if you continue to hang out with them.

Of course, Dan has an extreme viewpoint on this. He openly admits that he has no friends. He sees people as a steppingstone to his life goals.

You may not be that extreme.

There is nothing wrong with keeping friends, particularly friendship that has been built over a long period of time. Good friends will serve many other purposes other than helping you advance your business or career goals.

The point here is that you should seek to hang out with people who force you to level up.

Have you heard the expression…

“If you’re the smartest person in the room, you’re in the wrong room”

Rich and successful people seek out people who are smarter than they are. They are always looking for smarter people to learn from.

If you consider the relationships you have and the people you hang out with, what’s the discussion like?

Do they talk about what they are learning or experiencing?

Do they talk about intellectually stimulating topics?

Do they talk about the challenges they’ve conquered in business or in life?

Do they discuss strategies on how to be a better you? How to be more effective and efficient?

Conversations like this will reveal the kind of people you hang out with.


Conclusion

Next time when you hear yourself say “I’m broke”, read this article.

When someone you know complains that they are broke, share this article with them.

Now, you have what it takes to get the results you want. You have what it takes to make all the money you want.

So, go for it!


P.S. I am on a mission to arm you with financial education. That’s one reason I started writing on medium and that’s why I wrote Tax-Efficient Wealth. This book will help you accelerate your wealth in a tax-efficient way. Grab a FREE eBook version of my new book, Tax-Efficient Wealth, to learn how you can build wealth quickly using strategies that will save you a ton in taxes.

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Personal FinanceTax Planning

What Is a Perfect Income Plan?

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10 considerations for creating a perfect income plan

One of the biggest concerns retirees face is the fear of running out of money during retirement. As you transition into retirement, one big question that is front and centre is “How much monthly income will my retirement account and other investment accounts provide me?”

This is a real question faced by many. Once retired, your regular monthly or bi-weekly cash that is credited to your bank account without fail comes to a stop. Unfortunately, your bills and lifestyle needs do not stop.

When planning for your income during retirement, it is important to design an income plan that will give you peace of mind. In other words, you need a plan that guarantees a minimum monthly income required to meet your basic needs, plus more, for the rest of your life.

This plan should include guaranteed income sources like Canada Pension Plan and Old Age Security payments in Canada, Social Security in the U.S., Company’s pension benefits, where applicable, and annuities.

In his book, Retired + Free, Pedro Adao, provides the following key attributes of what a perfect income plan might look like:

  1. Monthly income that exceeds your expenses. This is self-explanatory. But, it is not always easy to achieve in retirement. Thus, the first goal of any income plan is to provide enough income to support your lifestyle, at least, at a basic level.
  2. Guaranteed income that can never be reduced. Once your lifestyle has been established on a certain level of income, any reduction in income could require sacrifices to lifestyle. Therefore, it is best to use guaranteed sources of income to meet your basic income needs required to maintain your lifestyle. This will provide you with a financial foundation.
  3. Guaranteed income that will last forever. Having sufficient income to cover your cost of living is great. However, this is not enough. You want an income that is guaranteed to last for life. With this, you avoid the fear of running out of money. Guaranteed income that you cannot outlive provides comfort.
  4. Guaranteed income that can be increased over time. An amount of income sufficient to meet your lifestyle goals in the first few years of retirement might not be enough once you get into the middle and later years of retirement. The perfect income plan should be able to increase income over time to help keep up with increased medical expenses or with rising inflation.
  5. Tax efficient. If not planned carefully, you may end up paying a lot of taxes during retirement. A well-designed income plan will seek to protect as much of your income from taxes as possible by maximizing your available deductions and landing you in the lowest tax brackets possible given your income level.
  6. Access to lump sums. While income is probably one of, if not the most important consideration in retirement, there still might be times where you need access to lump sums of money. A well-designed retirement plan will not only provide all the income benefits we discussed but also give you access to lump sums of money along the way should you need it as a safety net.
  7. Minimal fees. During retirement, you’re relying more on your savings and investments to provide you with income. Therefore, it is important to reduce or eliminate the fees that are being charged to your accounts where possible. It’s simple, the more you pay in fees to other people, the less you have. It’s time to minimize fees going to other people and financial institutions so that there is more for you.
  8. Easy to understand. While implementing an income plan will take some work, it doesn’t have to be overly complicated and beyond your understanding. True confidence and peace of mind can be easier to achieve when we replace complexity with simplicity.
  9. Not stock market dependent. With the volatility that is synonymous with the stock market, a well-designed income plan should not be largely dependent on stock market gains. You need an income plan that will provide you with guaranteed income regardless of what the stock market is doing. This is essential to achieve freedom from stress, worry, and fear.
  10. Can be adjusted over time. One thing that is constant in life is change. Therefore, being able to adapt and respond to life events that occur during retirement is an important and often-overlooked requirement. A key feature and major benefit of having the perfect income plan is its flexibility.

Final Thoughts

A perfect income plan will consider the safety of income, the longevity of income, and the simplicity and flexibility of the plan. The exact components of the perfect income plan will vary widely from person to person but with careful planning, it can be designed to meet your specific needs.


P.S. I am on a mission to arm you with financial education. That’s one reason I started writing on medium and that’s why I wrote Tax-Efficient Wealth. This book will help you accelerate your wealth in a tax-efficient way. Grab a FREE eBook version of my new book, Tax-Efficient Wealth, to learn how you can build wealth quickly using strategies that will save you a ton in taxes.

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Personal Development

5 Ways to Make Daily Progress on Your Goals

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Daily progress on your goals creates momentum towards your major life goals

Accomplishing great goals in life requires small incremental steps taken daily. These daily steps focused on your major goals create a consistent pattern. And it is this consistency that creates the momentum that is required to accomplish your huge life goals.

Jerry Seinfeld, the stand-up comic and co-creator of Seinfeld, credits his success to a consistent daily habit of writing a joke per day. Early on in his career, Jerry hung a giant calendar on the wall, and every time he finished his daily joke, he drew a big red X over the day. Over time, the string of Xs formed a long chain.

According to Jerry, this visual tracking of his daily joke was the key motivation for writing every day. He did not want to break the chain of Xs on his giant calendar.

You too can achieve the same success by making daily progress on your goals. Follow these 5 steps and you will be on your way to crushing your life goals:


Step 1: Get clear on your vision and goals

A vision inspires action. A powerful vision pulls in ideas, people, and other resources. It creates energy and the will to make change happen. It inspires individuals and organizations to commit, to persist, and to give their best.

A vision is a practical guide for creating plans, setting goals and objectives, making decisions, and coordinating and evaluating the work on any project, large or small.

Your vision will inform and clarify your goals. You can’t accomplish a goal until you’ve defined it.

You should write your goals — short term and long term goals. By taking a few minutes each morning to look at your vision and read your long-term goals, you will put your day into perspective.

You will think about them every day. If you think about them every day and spend your days working toward them, they’ll manifest.

I have found this step of writing down my goals super useful. I break down my long-term goals into annual goals. And then break these down into quarterly goals. As I write my goals down daily, I keep them in focus, and doing this helps me align my daily tasks to my 30-day and 90-day goals.


Step 2: Identify the right daily habit you require to make progress on your goals

Having the right daily habit is critical to making progress on your goals. It’s best to keep this simple. Remember, it’s the daily incremental small steps that you do consistently over and over again that make a big difference over time.

I recently completed my first book, Tax-Efficient Wealth. I credit the effort it took to complete this book to the daily steps I took each day to write a piece of the book. It was the small incremental steps taken each day, put together over time, that resulted in a completed book within a few months.

That’s all it took. Every day, I focused on a simple step. It was easy. And it did not feel like I had this insurmountable goal of writing a book. Staying consistent day after day on this daily habit of writing and working on small pieces of the book made the difference.

Develop the right daily habit and consistently follow it to make progress on your goals.


Step 3: Use a system

You need a system to execute your priorities every day.

A system that will allow you to breakdown your decade long goals into annual goals, and eventually to your daily tasks.

You are three times more likely to achieve your goals by stating your implementation intentions. You can use the 3×3 Achievement System to reach your life goals by breaking down your:

  • Quarterly Big 3 Goals
  • Weekly Big 3 Outcomes
  • Daily Big 3 Tasks

By doing this, you ensure that you are doing at least one thing each day towards your long-term goals. And by taking one step towards your big goals every day, you’ll soon achieve your life goals.


Step 4: Track and visualize your progress

Anything that is not measured is not improved.

By tracking and visualizing your progress each day, you accomplish two objectives:

  1. You reinforce your habit through self-accountability.
  2. You boost motivation as you visualize your progress.

Like Jerry Seinfeld’s fascination to keep his chain of Xs going, recording your progress will keep you motivated. Seeing the progress you’re making and the successes you’re achieving will generate more momentum for the days ahead.


Step 5: Get an accountability partner

This is probably the most important step you can take. Establishing a good relationship with an accountability partner will have a significant impact on accomplishing your goals. However, care must be taken to ensure you get an accountability partner that is the right fit for the task you’re looking to accomplish.

You want someone that will encourage you, push you beyond your comfort zone, and provide support when needed. Your accountability partner may be a friend or coworker. It could also be a professional counselor, coach, or trainer.


Final Thoughts

Making progress on your goals is within reach for you, but you might need to make a few changes to how you think about goals. When you put these 5 steps into practice, you’ll get moving in no time.


P.S. I am on a mission to arm you with financial education. That’s one reason I started writing on medium and that’s why I wrote Tax-Efficient Wealth. This book will help you accelerate your wealth in a tax-efficient way. Grab a FREE eBook version of my new book, Tax-Efficient Wealth, to learn how you can build wealth quickly using strategies that will save you a ton in taxes.

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Personal FinanceTax Planning

How to Invest the SAME Money in Two Different Places at the Same Time

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“You don’t buy life insurance because you are going to die, but because those you love are going to live.” — Unknown author

In my new book, Tax-Efficient Wealth, I discuss tax-exempt life insurance as one of the tax-efficient tools for building and accelerating your wealth.

Of the four tax-free options that the Canadian tax law permits, the use of tax-exempt life insurance is one of the least known tax strategies. You’re likely familiar with the other three options — Principal Residence; Tax-Free Savings Account (TFSA); and Lottery Winnings.

Under section 143(3) of the Canadian federal income Tax Act, assets accumulate within a tax-exempt life insurance contract free of annual accrual taxation.

When you pass away, any proceeds of the policy are distributed to your beneficiaries on a tax-free basis outside the scope of your estate, bypassing its associated costs.

Insurance is a no-brainer tool that allows for:

  • Tax-deferred growth, similar to the registered pool of capital in an RRSP (Registered Retirement Savings Plan)
  • Potential for tax-free income during retirement
  • Tax-free distribution upon your death

“Fun is like life insurance; the older you get, the more it costs.” — Frank Mckinney

Below is a quote from the PIVOT Magazine published by the Chartered Professional Accountants of Canada:

“Life insurance is still an excellent investment tool…one of the few investments that allow for the tax-sheltered accumulation of funds and at the same time covers the risk of death. The pretax compounding effect and the tax-free access to this accumulating fund are two of the attractions of life insurance. The tax-free maturity on death is the ultimate plus.”

Let me draw your attention to the bolded text (bolded texts are all mine) because I think this is one of the most understood and understated benefits of tax-exempt life insurance.

Tax-exempt life insurance is the only product that allows you to double-dip your investments.

In other words, by investing in a tax-exempt life insurance policy, you have the opportunity to earn a guaranteed rate of return that compounds year after year.

At the same time, you can withdraw up to 100% of the invested funds and invest the proceeds in another investment vehicle to earn additional returns without any impact on the original guaranteed returns from the insurance policy.

Essentially, you could invest the SAME money in two different places at the same time!

So why is the use of tax-exempt life insurance not as common given the tremendous tax advantages it provides and the fact that you can double-dip?

There are potentially many reasons for this, but here are my top 5 reasons:

1. Lack of Knowledge

This is probably one of the biggest reasons why people don’t consider life insurance as a tax planning tool or even as a tool to protect the financial welfare of their loved ones.

There is so much misinformation about insurance and in the midst of this kind of information, it’s challenging for most to see the real benefits of having insurance as a great financial and tax planning tool.

“I detest life insurance agents: they always argue that I shall someday die, which is not so.” — Stephen Butler Leacock


2. Insurance is expensive

Truth be told, insurance is expensive, particularly the kind of life insurance (whole life and universal life) that is suitable for tax planning purposes.

With the ever-growing costs of keeping up and managing family budgets to pay for things like food, clothing, housing, daycare, car payments, kids’ education, etc., insurance is just outside of those “necessities” when money is tight.


3. Insurance provided through your job

Many people are offered life insurance as part of their employee benefits package and often, decide not to get additional insurance.

They forget that coverage provided by this kind of employer-provided insurance is often not sufficient. In addition, if you leave the job, it’s typically the type of insurance that doesn’t “move on” with you.


4. It is intangible

For those like me, that prefer to buy things that are real, paying for insurance that we don’t see will seem like a waste of your hard-earned money.

All you get from buying an insurance policy is pages and pages of contract that you don’t understand and will likely never read.

A mindset shift is required here to see insurance as an investment, as protection for rainy days, and as a hedge for risk.


5. Life insurance — it’s on my list…eventually

There’s no deadline on life insurance, no mandate from the government on purchasing it.

Your parents may have never talked to you about its importance, and it’s certainly not the most invigorating topic for conversation. As a result, most never get to it.

“If a child, a spouse, a life partner, or a parent depends on you and your income, you need life insurance.” — Suze Orman


Conclusion

Consider the benefits of insurance, particularly as it relates to wealth planning and tax optimization. Start by educating yourself. Review your existing policies, if applicable, and engage a knowledgeable professional that can guide you and provide a plan that will match your unique situation.


P.S. I am on a mission to arm you with financial education. That’s one reason I started writing on medium and that’s why I wrote Tax-Efficient Wealth. This book will help you accelerate your wealth in a tax-efficient way. Grab a FREE eBook version of my new book, Tax-Efficient Wealth, to learn how you can build wealth quickly using strategies that will save you a ton in taxes.

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Personal Finance

How Good Are Your Buckets?

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In this article, I explored the meaning of financial independence.

According to Wikipedia, financial independence is the status of having enough income to pay one’s living expenses for the rest of one’s life without having to be employed or dependent on others.

In order to accumulate sufficient funds to take care of your living expenses for the rest of your life, you have to generate income today by working or by running a business.

You then take those funds, and save and invest in “buckets” that will compound the growth to build up sufficient funds that will allow you to achieve financial independence.

So, what are these buckets?

These buckets are the different tools and vehicles we use to save and invest for retirement. These vehicles, if used correctly, will allow for the compounding and growth of your hard-earned resources so you can achieve your dream of financial independence in the future.

Many people work so hard for several years. They follow the advice of their employers and their financial advisors. And they think they have been saving and investing in retirement buckets that look like this:

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Photo by sarah tatton on Unsplash

Unfortunately, this is, in fact, not the case.

The majority of Canadians have been saving for retirement using Registered Retirement Savings Plan (RRSP), Company-sponsored Registered Pension Plans (RPP), Tax-Free Savings Account (TFSA). Those in the U.S. have been saving for retirement using 401k, IRA, 403b. These vehicles mostly invest in mutual funds, index funds, stocks, bonds, and other money market instruments.

Unknowingly to most of these working-class professionals is that these retirement buckets they have been saving and investing in, actually look and behave a lot more like this bucket:

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Credit: Getty Images/iStockphoto

How much of your retirement money do you suspect has already “leaked” out of your buckets over the years?

Do you have any idea how much money is leaking out of your retirement bucket right now?

Do you know what/who is responsible for the holes in your bucket?

Do you know what steps you can take to plug the holes in your existing bucket, or how you can upgrade to a better bucket?

These are important questions that must be answered if you really want to secure your financial freedom.

We’ve all heard stories of retirees who worked so hard for 20, 30, 40 years dedicating their talents and life to a particular corporation only to retire half a million dollars short, $400,000 short, or $300,000 short, because of these holes in their buckets.

Painfully, these retirees will now have to work longer — another 3, 4, 5 years or more, often at jobs that don’t fulfill them in order to make up for the shortfall.

These holes in your retirement buckets represent:

  1. Disclosed and hidden fees on your investments, including the high mutual funds’ fees
  2. Avoidable taxes paid on your investment earnings
  3. Losses from market volatility
  4. Inefficient use of these vehicles due to improper planning that is not tax-efficient
  5. Lack of financial knowledge on the part of the individual investor

Without question, the number one concern among people in retirement, and those approaching retirement, is the fear of running out of money. So, it is, therefore, critical to ensure that you eliminate the holes in your bucket.

And this is why…

Every dollar that leaks out of your bucket is one less dollar you can spend today, or one less dollar growing for a future use.

We often focus on making more money so we can add more money to our retirement bucket. However, we fail to understand that making new money often involves taking some element of risk. Instead, if you take steps to keep more of the money you already have, you can achieve a great outcome 100% of the time when you take the right action.

It’s Not How Much You Make That Counts, It’s How Much You Keep

So, how do you plug some or all of these holes?

Here are a few quick suggestions:

  • Invest in your financial education so you can ask intelligent questions of your financial advisors and be a part of your investment management team.
  • Review your statements, call your investment advisors and your banks to find out exactly how much fees you’re paying. Then look for alternative investments with lower fees to invest in.
  • Consider managing a portion or all of your investments to avoid or minimize investment management fees.
  • Consider better vehicles that provide tax advantages, such as real estate, business, and tax-exempt life insurance.

Final Thoughts

Your journey to financial freedom or a life of great retirement doesn’t have to be complicated or confusing. But you wonder why investing and planning for retirement can be so hard to understand.

It’s because the odds are stacked against you.

The multitrillion-dollar financial institutions and mutual funds industries that profit from “helping” you save for retirement have unfortunately made this seem more complex so you can remain dependent on them and their advisors.

The more complex and confusing managing your money is, or at least as it appears to be, the more likely you are to hire a “trained professional” to manage your money for you.

The more complicated or confusing something is, the less likely you are to understand what is actually going on. As a result, you limit your ability to ask the important tough questions regarding what’s being done with your money.

Therefore, it has never been more urgent to arm yourself with the financial knowledge you require to challenge this massive financial industry and protect yourself from these leaks that are making your journey to financial freedom harder than it should be.


P.S. I am on a mission to arm you with financial education. That’s one reason I started writing on medium and that’s why I wrote Tax-Efficient Wealth. This book will help you accelerate your wealth in a tax-efficient way. Grab a FREE eBook version of my new book, Tax-Efficient Wealth, to learn how you can build wealth quickly using strategies that will save you a ton in taxes.

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Personal FinanceTax Planning

Why You Should Care About the Type of Income You Earn

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“Next to being shot at and missed, nothing is quite as satisfying as an income tax refund.” — F.J. Raymond

When it comes to taxes, the term “income” isn’t quite as straightforward as you might think.

In Canada, there are four main distinct groups of income you may have as an individual with a variety of different tax implications. In some cases, you may have sources of income with zero tax!

So, understanding this and arranging your affairs accordingly will enable you to enjoy tax breaks that most people don’t know about. This is why I love this quote by Martin Sullivan.

“There may be liberty and justice for all, but there are tax breaks only for some.” — Martin Sullivan

Below are the four main groups of income in Canada:

1. General income

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Photo by Danielle MacInnes on Unsplash

This includes income from employment, self-employment, sales commissions, tips and gratuities, pensions and other social benefits, interest, etc.

General income sources are taxed the most heavily in Canada.

2. Dividend income

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This is dividends paid to company shareholders. Dividend income receives a special deduction that can reduce the rate of taxation. However, the effect of the deduction varies.

3. Capital gains income

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This is the income you make by selling shares or other property, which are taxes on only half the profit made on the sale (except your home, which is exempt from tax when it is your principal residence).

4. Tax-free income

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Photo by Markus Spiske on Unsplash

Yes, there is such a thing as tax-free income.

This includes income from insurance, income from sale of your principal residence, gaming and gifts, which are generally tax-free (except gifts from your employer, and some gifts of capital, such as company shares — if the gift produces income, then the income is usually taxed).

In Conclusion

Note that general income sources are taxed the most heavily in Canada.

Dividend income and Capital gains income attract lower taxes compared to General income.

The best part is that there are certain income sources that are tax-free. In addition to the income sources included in this tax-free income group listed in #4 above, proceeds from loans such as equity from your home or loan from your tax-exempt insurance policies can also be included in this income group.

This 4th group of income represents a great source of tax-free income that can be used to significantly accelerate your wealth.

Depending on the type of income you earn, you may end up keeping less or more of your income. So, it is key to understand this and plan accordingly to structure your income to keep more of your money.

“The best things in life are free, but sooner or later the government will find a way to tax them.” — Anonymous

Note that every dollar saved in taxes will help accelerate your wealth.


P.S. Do you know I have a new book that can help you accelerate your wealth in a tax-efficient way? Grab a FREE eBook version of my new book, Tax-Efficient Wealth, to learn how you can build wealth quickly using strategies that will save you a ton in taxes.

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