Thereâs nothing quite like having 15+ tabs open, deep in a rabbithole of credit card terms, r/PersonalFinanceCanada threads, and finance gurus yapping in your ear. That was me this past week.
I used to shy away from finance, âtil I paid $25K tuition for Life Lessons University. Hereâs where that wentâŠ
I lost $15,000 betting on GameStop.
I lost $2,000 to the CRA for over-contributing to my TFSA (and never opening my notices).
I lost $500 in a day for buying Meta stock (âcuz a YouTuber told me to).
I lost $3000 for pouring my money into the stock market all at once, instead of dollar-cost-averaging.
I lost god knows how much $$ in interest fees for over-borrowing on my Margin account.
I lost $100 for uh⊠dropping my wallet off a bridge, into False Creek.
The ironic part is, Iâve always been frugal. Extremely frugal. As a first-gen Chinese immigrant, Iâd always been conditioned to pinch every penny â so, yes, youâll rarely catch me buying food without analyzing prices to the cent. No matter how much I pinched, however, lack of financial literacy (or rather, neglect) lost me 100x more.
Building income sources is important. Saving is absolutely important (there are millionaires who live paycheck-to-paycheck). But financial literacy is foundational â so here are some things my mistakes taught me, so you donât have to lose $25K to know.
Donât buy the hype. Stay away from r/WallStreetBets (I beg you). Donât buy stocks because some âguruâ online told you to. Be fearful when others are greedy, and greedy when others are fearful. Playing with stocks is gambling in a zero-sum game, so unless you wanna get caught in that, stay clear andâŠ
Invest, invest, invest. Key word invest. For the long-term. Donât stress about what youâre buying. Simply dollar-cost-average into diversified funds that track the S&P500, or other indexes (ie. tech, large cap, growth, international). My portfolio consists of VFV, VUG, IWF, VTI, VGT, and AIQ. Then, let the market do its thing.
Confront every dollar. I was terrible at this. I neglected checking my CRA account, half-assed my taxes, and didnât read the fine print on my margin account. Thatâs where money flows down the drain. Confront every dollar you have â understand fees, audit your subscriptions, analyze bills, and make necessary adjustments. Have peace of mind by staying informed.
Order matters. What I mean is, the order you allocate your money. Beyond your necessities, pay off high-interest debt first (ie. student loans, mortgages). Then, give yourself an emergency fund (~3-6 monthsâ worth of $$ to live off of). With the rest, spend/invest in alignment with your goals.
50/30/20 rule. A benchmark for paycheck allocation. Put 50% to needs (housing, groceries, etc.), 30% to wants (movies, travel, dinners, etc.), and 20% to your future (stock market, GICs, retirement funds, etc.).
Make dollars make dollars. Market investing is the obvious, but exponential ROI can also come from $intoskills,$ into your business, and $$$ into your health (YES! BIG ONE!) â all things thatâll compound into a better life for future you.
Finally, learn how to finesse the boring things. Iâm talking credit cards, taxes, registered accounts, government benefits, and all that jazz. Itâs overwhelming as f*ck, but the more you know, the more you keep. For my fellow Canadians:
Beware of your TFSA and RRSP contribution margin.
Understand your taxes, and how to strategically offset your employment income with RRSPs.
Learn what you can write-off in taxes⊠things like WFH expenses, rental expenses, and more nuanced things (consult a CPA if you need to).
If youâre buying a home, leverage both federal and provincial first-time homebuyer benefits.
Heck, PLEASE read the fine print on new bank accounts, credit cards, and loans to avoid phantom fees.
Learn how your company matches your retirement funds, and max that sh*t out. (Ex. SAP matches the first 2.5% of my contribution to my DCPP, so why not take the free money?)
Get and use a credit card that best-suits your spending lifestyle and goals. (And you can âcredit card churnâ too, if youâre up to track all that â more âfree money.â)
Automate your credit bill payments to keep your credit score afloat.
Take that personal line of credit offer, especially if you donât even need it â because, surprise, it helps your credit score!
âŠand so much more.
I understand â itâs a lot. I went through brain-wrenching research, countless calls, staring at bills in shock, squinting at fine print, and crying over taxes⊠and itâs still an ongoing learning experience.
But it doesnât have to be stressful. Give yourself a âmoney dateâ once a month: pour a glass of wine, hop in a robe, and whip out all your dollars and statements. I promise, it can actually be fun â and exponentially rewarding, when you realize youâre the boss of your money.
Letâs get, keep, and finesse that dough! đ€
đ” Megâs Weeklies
Keeping up with the Kardashians Megatron, through my weekly gems!
Podcast Iâm listening to:
Article Iâm reading:
Tim Ferriss - Testing The "Impossible": 17 Questions That Changed My Life
Quote Iâm pondering:
âIf you do not change direction, you might end up where you are heading.â âLao Tzu
Raw life update:
I am, in fact, not as âin my grandma eraâ as I thought. Went clubbing on Saturday, and thoroughly enjoyed itâŠ
Lots of hangouts and âsee you laterâs. Iâm gonna miss this city and its people.
T-9 days âtil I fly to Toronto, so you can imagine how hectic itâs been. Reminding myself to breathe and take it easy, despite 10,000 emotions, to-doâs, and demands. A biggggg shift is coming⊠and Iâm bracing for impact!
Check out my latest podcast episode: