photo credit: DonkeyHotey
Learn Enough About Personal Finance
I’ve been looking at my RRSPs lately, which in Canada is our registered retirement savings plans. Unlike many people in Canada, I started contributing to my RRSP quite early pretty well as soon as I started my professional career back in the late 1980s. Although not a financial expert, I learned enough about personal finance to know about general investing.
I’ve built quite a nice accumulation in my RRSP over the years however like most people, my investment portfolios have shrunk due to the poor performances in the stock market in recent years. So technically on paper, I have become poorer as a result, as with most people.
Personal Finance Requires Monitoring
One of my mistakes was that I did not keep on top of what was happening to my investments on a regular enough basis. I thought that as long as I made what I thought were good decisions in investing back then, I could just let things ride without much supervision. I was so wrong on this. Personal finance does require monitoring.
One clear example was Nortel, the telecommunications tech company. I had quite a bit of stock in Nortel and didn’t sell out when its price starting dropping. Like so many other people, I never thought that a giant like Nortel would crumble like it did. So I lost a ton on Nortel.
It was almost the same scenario with the company Bombardier, who makes planes, trains and snowmobiles (I think they have recently sold their snowmobile division). I invested a lot into Bombardier as well and their stock price sank too. But fortunately in this case, I’ve since recovered as its stock price has slowly creeped back up enough so that I’m just above break even point.
As for mutual funds, well, their performance has been pretty lack lustre over the years in general and so has my overall investment portfolio as a result.
My Shocking Relevation
Despite the relatively poor performance of my RRSP as well as investments outside of my RRSPs, I’ve still been pretty good at saving over the years. So the nest egg so to speak has accumulated nicely.
However, a shocking relevation came to me this week as I looked at my RRSP. With the amount that I invested in there, if I had only put my money into real estate instead of mutual funds and stocks, I would easily have become a millionaire by now — easily.
But luckily for me, I didn’t do as bad as some people out there as I just saw on the evening news that one lady who was interviewed in the Toronto financial area claimed that she lost 50% of her investment portfolio value. Ouch, that hurts.
One thing I do take pride in though is that although I’ve had credit cards ever since the mid 1980s shortly after graduating from university, I’ve never, ever had to pay interest on my credit cards even though I use them a lot. I have always paid off my balances each month and I intend to continue with this.
As a result, I do not have any debt unlike many others out there. I don’t purchase anything unless I know that I can afford it. And I have learned how to cut many unnecessary expenses (but there’s still room for improvement of course).
Don’t Be Ignorant About Personal Finance
Unfortunately, personal finance was never taught to us in school yet it is one of the most important areas to learn in life. Although it is a dull topic at times, we still must not allow ourselves to be ignorant about personal finance.
We have an obligation to our families as well as to ourselves to ensure that the economic turmoils in the world do not sink us. I certainly am learning more about my own personal finance options, especially in the area of real estate investing.
I will no longer ignore my investment portfolios like I did before. I’ve going to take a very active stance and position it well for my future. I’ll report more about this in the near future.
Everyone should get a handle on their own personal finance situation. If we have to cut back on things, do it. We should also learn to position ourselves so that we will be okay despite the recession.
There is a lot of good information out there on personal finance so don’t make the excuse of not finding any. Even the libraries have a lot on this topic. It’s your duty to learn enough about personal finance so that you come out okay from these bad economy.
If you are willing to share a bit about your own personal finance tales, please do so below in the comments section. And hey, if you haven’t seen my free 3-part Personal Development Video Series yet, sign up below (or watch the short intro video up at the top left of this blog).
