March 5, 2010
10 Commandments of Wealth Creation
To Your Success!
Azhar Laher
Thornhill Wealth Forum
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March 12, 2010
How to Teach Your Children About Wealth Creation
Treat the supermarket as a school. Give your kids a grocery cart, a list, and $30, and see how far they can make their money stretch. Send them searching the aisles for goods that you have cents-off coupons for. Ask them to pick the best buys.
Don't lie to your kids.Make a clear distinction between what you can't afford and what you don't think is worth paying for. If they still want it, let them save for it. If it violates your principles, just say no.
By their midteens, start giving your kids a sense of what life is like by having them pay the family bills for two or three months. Sit down together with the bills and show them how to write checks to pay for the family's utilities, mortgage, rent, phone, water and credit cards. They'll find it instructive to see how fast the bank balance drops. They'll also start getting a better idea of how much it costs to live.
Don't shell out for practically everything your kids want or need. That teaches them nothing except dependency, not to mention the fine art of coaxing.They need to make choices within budget limits to learn adult skills. If they want more than their allowance can buy, they should find a part-time job. Children will spend unlimited amounts of their parents' money, given a chance. They are much more careful with their own.
Use cash. Don't put kids under 16 on your credit cards as authorized users or provide them with prepaid debit cards. They need to learn how to allocate real dollars before they can transfer those skills to plastic. Consider plastic after age 16, to introduce them to credit while their spending is still under your supervision.
To Your Success!
Azhar Laher
Thornhill Wealth Forum
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March 19, 2010
The Truth About Debt Consolidation
Myth: Debt consolidation saves interest, and you have one smaller payment.
Truth: Debt consolidation is dangerous because you treat only the symptom.
Debt consolidation is nothing more than a "con" because you think you've done something about the debt problem. The debt is still there, as are the habits that caused it - you just moved it! You can't borrow your way out of debt. You can't get out of a hole by digging out the bottom. True debt help is not quick or easy.
Debt consolidation seems appealing because there is a lower interest rate on some of the debt and a lower payment. However, in almost every case, I find that the lower payment exists not because the rate is actually lower but because the term is extended. If you stay in debt longer, you get a lower payment, but if you stay in debt longer, you pay the lender more, which is why they are in the debt consolidation business.
The Real Way to Get Out of Debt
The answer is not the interest rate; the answer is a Total Money Makeover. The way you get out of debt is by changing your habits. You need to commit to getting on a written game plan and sticking to it. Get an extra job and start paying off the debt. Live on less than you make. It is not rocket science, but it is emotional, which is why most people need help getting through it.
Debt is not the problem; it is the symptom. Debt is the symptom of overspending and undersaving.
To Your Success!
Azhar Laher
Thornhill Wealth Forum
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March 26, 2010
Pick One Action....Today
Pick one action from the list below to mark the beginning of a new chapter in wealth creation
Azhar Laher
Thornhill Wealth Forum
10 Commandments of Wealth Creation
- Pay yourself first
So many people receive their pay packet, and then hand a portion of their money to the supermarket, the garage, the department store and so on. In the end, they discover there's nothing left for themselves. Remember, you worked for it! - Apply the power of compound interest
Often people commence a savings program, and then quit after a few years because they think they're not making much headway. The idea behind compound interest is that each year you earn interest on the previous year's interest. Accordingly, your investment grows exponentially. Compound interest works, but it takes a little time to get started. The secret is, start now. - Don't put all your eggs in one basket
Remember,not all investments perform well at the same time. A diversified portfolio with a balance of shares, property, cash, and fixed interest investments, will reduce volatility and smooth returns. - Understand the risk/return trade-off
A general rule of investment is, the greater the risk, the greater the potential return. Greater risk may not mean the total loss of capital, but merely the volatility of returns over the investment period. Therefore, if you are prepared to invest for the longer term, you should be prepared for some volatility in expectation of higher returns. Remember, there's no such thing as a free lunch! - Keep money aside for emergencies
You should always be careful that you have sufficient funds available to meet unforeseen circumstances. By doing so, you'll avoid being forced into selling an investment at the wrong time. - Don't invest solely for tax benefits
Around tax time every year there will be a host of investments offering 100% (or more) tax deductibility. Remember, an investment should be judged on its overall growth potential, not solely its tax deductibility. If you were to lose ten or twenty thousand dollars, that tax deductibility would offer you little consolation. - Don't try to time the market
Share traders are a lot like punters. They tend to overstate their winnings and understate their losses. If you are going to try and time the market (getting in and out at precisely the right moment), you are not investing - you are speculating. There's nothing inherently wrong with this, provided you speculate with money you can afford to lose. Serious investors who invest for the long-term understand that the secret is time, not timing. - Beware of guarantees
You may be confronted by a friend or family member who has been knocked back on a loan, and asks you to go guarantor for them. This means if they can't pay the loan, you have to. Remember, there is an old saying in legal circles, 'There are no secrets kept, nor guarantees not called up'. - Ensure you are insured
Insurance can cover everything from your life to your home and contents, your business, your car, and even your income. But remember, insurance should be bought, not sold, and should be tailored to your individual needs. - Pay off non-deductible debt first
Your aim should be to reduce non-deductible debt, such as home loans, car loans and credit card debts. Leave deductible loans until last, since the Government is footing part of this bill.
To Your Success!
Azhar Laher
Thornhill Wealth Forum
-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
March 12, 2010
How to Teach Your Children About Wealth Creation
Treat the supermarket as a school. Give your kids a grocery cart, a list, and $30, and see how far they can make their money stretch. Send them searching the aisles for goods that you have cents-off coupons for. Ask them to pick the best buys.
Don't lie to your kids.Make a clear distinction between what you can't afford and what you don't think is worth paying for. If they still want it, let them save for it. If it violates your principles, just say no.
By their midteens, start giving your kids a sense of what life is like by having them pay the family bills for two or three months. Sit down together with the bills and show them how to write checks to pay for the family's utilities, mortgage, rent, phone, water and credit cards. They'll find it instructive to see how fast the bank balance drops. They'll also start getting a better idea of how much it costs to live.
Don't shell out for practically everything your kids want or need. That teaches them nothing except dependency, not to mention the fine art of coaxing.They need to make choices within budget limits to learn adult skills. If they want more than their allowance can buy, they should find a part-time job. Children will spend unlimited amounts of their parents' money, given a chance. They are much more careful with their own.
Use cash. Don't put kids under 16 on your credit cards as authorized users or provide them with prepaid debit cards. They need to learn how to allocate real dollars before they can transfer those skills to plastic. Consider plastic after age 16, to introduce them to credit while their spending is still under your supervision.
To Your Success!
Azhar Laher
Thornhill Wealth Forum
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
March 19, 2010
The Truth About Debt Consolidation
Myth: Debt consolidation saves interest, and you have one smaller payment.
Truth: Debt consolidation is dangerous because you treat only the symptom.
Debt consolidation is nothing more than a "con" because you think you've done something about the debt problem. The debt is still there, as are the habits that caused it - you just moved it! You can't borrow your way out of debt. You can't get out of a hole by digging out the bottom. True debt help is not quick or easy.
Debt consolidation seems appealing because there is a lower interest rate on some of the debt and a lower payment. However, in almost every case, I find that the lower payment exists not because the rate is actually lower but because the term is extended. If you stay in debt longer, you get a lower payment, but if you stay in debt longer, you pay the lender more, which is why they are in the debt consolidation business.
The Real Way to Get Out of Debt
The answer is not the interest rate; the answer is a Total Money Makeover. The way you get out of debt is by changing your habits. You need to commit to getting on a written game plan and sticking to it. Get an extra job and start paying off the debt. Live on less than you make. It is not rocket science, but it is emotional, which is why most people need help getting through it.
Debt is not the problem; it is the symptom. Debt is the symptom of overspending and undersaving.
To Your Success!
Azhar Laher
Thornhill Wealth Forum
_________________________________________________________________________________________________________________________________________________________
March 26, 2010
Pick One Action....Today
Pick one action from the list below to mark the beginning of a new chapter in wealth creation
- Put off a purchase. Then bank the money you did not spend.
- Set some earnings targets: How much would you like to be earning in 2011? In 2015?
- Haggle for a lower price or demand a better rate.
- Cancel that subscription or membership you never use.
- Ask a friend what their best money habit is. Try it.
- Negotiate a higher fee, raise your prices or do research on what it would take to get a raise.
- Call your bank, credit card, utility company or landlord. Ask them to refund a late fee. All they can say is no.Get used to asking.
- Define financial peace: What does it look like, feel like, smell like?
Azhar Laher
Thornhill Wealth Forum