Retirement Planning
for the
Canadian Investor

Home Page

Services

Client's Comments

Associated Sites

F.Y.I.

Financial Commentary

Tax Strategies

Borrowing to Invest

Biography

Links

 

Design by
CY7 Computer Services

 

January/February 2010

Commentary - Hans H. Mathisen

I'm sorry, but until further notice, my usual commentary will not be available. However, I can still provide you the valuable benefits and financial insight of LIFE LETTER and LIFE LETTER MATURE:

Budget your way to financial independence - LIFE LETTER for January offers a "budget worksheet" designed to help you get started putting aside for unforseen emergencies, opportunities and to provide future income.

Four financial promises you'll want to keep - February's LIFE LETTER explains some financial promises you need to consider that will definitely give your finances an extra boost in the coming year.

LIFE LETTER MATURE - deals with what to do when a close family member passes away (What do I do?), and Canada Pension Plan Update.

HAPPY INVESTING!
Sincerely,
Hans Mathisen


 

 

 

LIFE LETTER

Budget your way to financial independence

For the book The Millionaire Next Door, researchers asked the question, "Do you know how much your family spends each year for food, clothing and shelter?" Almost two thirds (62.4 percent) of the millionaires said "yes." Only about 35% of nonmillionaires said they did, even though they are highincome earners.

The millionaires also budgeted very carefully for savings and most save 20% or more of their gross income. Few save less than 15%. "Why save so much," you ask? Quite simply, for emergencies, opportunities and to provide future income.

Following is a Budget Worksheet to help you get started. Keep track of your monthly spending and try to account for every dollar. On a daily basis, record each expenditure and what it was used for. This should give you a clearer picture of where your money goes and where you can make changes in your spending habits. Make sure you account for every expenditure, and donít overlook small or routine expenses. Use a pencil or make copies so changes can be made as needed, and review often.

INCOME

   
Salary, Wages, Commissions
Investment Income
Other
  $........................
$........................
$........................
EXPENSES    

Housing

   
Rent, Mortgage & Property Taxes
Maintenance & Repairs
Insurance
  $........................
$........................
$........................
Utilities    
Water, Power & Gas
Phones, Intenet & TV
  $........................
$........................
Vehicle    

Loan or Lease Payment(s)
Insurance
Fuel
Maintenance & Repairs

  $........................
$........................
$........................
$........................
Other Expenses    

Groceries
Restaurants & Entertainment
Clothing
Toiletries
Medical & Dental
Public Transportation
Newspapers, Magazines & Books
Hobbies, Clubs & Memberships
Vacation, Travel & Leisure
Gifts
Miscellaneous

  $........................
$........................
$........................
$........................
$........................
$........................
$........................
$........................
$........................
$........................
$........................
Personal Insurance    
Life Insurance
Accident & Sickness Insurances
Health Insurance
  $........................
$........................
$........................
Financial    
Personal & Consumer Loans
Credit Cards & Bank Fees
Savings
Pension & RRSP Contributions
  $........................
$........................
$........................
$........................
Taxes    
Income Tax
CPP, EI Premiums & Union Dues
  $........................
$........................
     
Total Income
-Total Expenses
  $........................
$........................
     
= Difference (should be positive)   $........................

 

Want help with your wealth planning?

Call Hans Mathisen today at (306)242-7042.
or email -
hans@mathisen.ca

Copyright © 2010 Life Letter. All rights reserved

[Top Of Page]

 

 

 

 

LIFE LETTER

Four financial promises you'll want to keep

Okay, we've had a few weeks to make and break our New Year's resolutions. Now is a good time to make some financial promises to give your finances an extra boost in 2010 and will help see you better off by year-end.

1. Promise to make the biggest RRSP contribution you can.

When it comes to improving both your immediate and long-term financial position, an RRSP deposit can deliver big time. First, you are putting money away for your future and reaping tax savings now. Second, your money grows faster in an RRSP because taxes are postponed on the investment income. Depending on your marginal tax bracket and type of investment income, the return in your RRSP may be enhanced by as much as 40% or more.

2. Promise to re-invest your tax savings.

It is very tempting to spend a tax refund on gratification now items, but you'll be better off in the long run if you tuck it away. Treat any tax refund as a bonus for your portfolio and put it to work building your future wealth. An annual refund of, say, $2,500 invested at 7% compounded annually will grow to $34,541 in just 10 years.

3. Promise to budget for Christmas spending throughout the year.

Many open their credit card bills in January and are stunned by the amount they spent on Christmas. A $5,000 Christmas spending spree, using a credit card with a 19.5% financing rate and taking 12 months to pay the bill off, will actually cost $5,544. Don't forget this is after-tax money. Budgeting a certain amount for Christmas spending now, dividing by 10, and putting that amount aside each month can help you avoid January credit card shock.

4. Promise to invest regularly.

Save more throughout the year and you'll have more at the end of it. It's that simple. Review your spending habits and look for ways to cut back. If you leave the money in your everyday bank account, it will be too tempting to spend it. To make sure your savings plan has a better chance of success, set up a separate investment account. You can even set up an automatic monthly deposit plan. Considered the secret of many successful investors, regular, systematic investing can help you two ways:

First, it provides you with a disciplined process for building your wealth. The normal ups and downs of the markets are less likely to distract you when you're building your portfolio with a regular automatic investment plan.

Second, you can benefit from what is known as dollar-cost averaging. Simply put, your regular investment purchases more units when markets are low and fewer units when market values are high. Averaged over time, you can build your investment plan at a lower overall cost.

Want help with your financial promises?

Call Hans Mathisen today at (306)242-7042.
or email -
hans@mathisen.ca

Copyright © 2010 Life Letter. All rights reserved

[Top of Page]

[Home Page] [Services] [Financial Commentary] [Tax Strategies]
[Associated Sites] [F.Y.I.] [Client's Comments] [Biography] [More Info]

Mutual confidence is the power that binds together all harmonious human relationships.


Mathisen Financial, Inc.
335 Redberry Road
Saskatoon, Saskatchewan S7K 4W5
Bus. (306) 242-7042 Fax. (306) 242-4314
Email:
hans@mathisen.ca