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Personal Development Goals Plus Finance
Last week I posted about how I felt that it was our duty to learn about personal finance. I think it was really the first time I wrote about money in my motivation blog. I’m going to dwell on that further and in fact, I’m going to write about my own experiences with money a bit more often in the near future since I think that personal development goals SHOULD include financial security for ourselves.
I’m just in the midst of doing a HUGE overhaul of my own personal finances. Despite what’s happening around the world in terms of economies, I want to make sure that my own financial security is well taken care of. Using a key principle from my book, The Life Champion In You, I’m making a totally committed decision to take TOTAL responsibility and control for my financial future.
Since I’m sure there are others out there who hope to do the same, especially given how recent years of recession have just pounded our personal investments and savings, I’m going to share with everyone some of the things that I’ll be doing in response to the economic turmoil.
With Personal Development Goals Flavour
However, unlike some financial column, I’m going to illustrate some of my financial moves with a personal development goals flavour. I will try to incorporate important principles from motivational and wisdom thought along with my own emotions into this subject of money.
What I Did Right And What I Did Wrong
First, I think it’s worthwhile to explore how I got to my present level in terms of personal finance in terms of what I think I did right in the past as well as what I did wrong.
As some of you know, I was in corporate life for over 20 years. During the last part of this career, I was in management making a six-figure income. However, I never splurged during this time.
In Canada, we have what we call RRSPs or registered retirement savings plans. I’m sure that many other countries have something similar to this. These are financial vehicles where one can shelter some of their income from income tax by making contributions each year and then use the funds to invest.
Any gains from investments are not taxed by the government until you withdraw money from the RRSP and this usually happens in your retirement years when it is assumed that your income tax bracket will be lower compared to when you were employed full time. So what this helps you do is save on the amount of income tax you would otherwise have had to pay if you didn’t use a RRSP.
What I did right back then was that for many years, I contributed money to my RRSP to whatever the maximum allowable level I was permitted to do so each year. There is a maximum contribution level each year for RRSPs. It’s not like I was about to sock away 50% of my income but I was still able to put away a few thousand dollars each year.
So instead of blowing my money on stuff like all the latest gadgets and electronics or outfits that I don’t really need, I made sure that I actively saved money by contributing to my RRSP as much as I could. This turned out to be sometime really positive over the years as I’m now sitting on RRSPs that are more than double of what the average Canadian has in his or her RRSP.
Even though I drove a nice sports car, I was still more of a saver than a spender. I didn’t really live the high-life. My vacation trips were not always the most luxurious but then, I seeked adventure rather than five-star.
So I’ve built up a nice investment egg over the years during my corporate life. Although I lived comfortably, I didn’t blow my money on what I considered unnecessary. I didn’t need all the brand name stuff and I didn’t blow money at the bars either. I gasped when my brother showed me his TAG watch that he spent a ridiculous amount of money on. I could never spend money like that.
Okay, so that’s one thing I did right – I didn’t spend recklessly. Now here’s what I did wrong.
Although I invested my money, I made some rather poor investment choices. Like I hinted in my first article about personal finance, I invested too much into a company called Nortel, which back then was considered a blue chip tech company. Not only did I buy too many shares, I failed to keep monitoring them over time. I thought that I could just invest and forget.
As a result, I lost about $15,000 on Nortel – OUCH! I should have bailed out long before they started getting into so much trouble. But I always thought for some reason that a big company like that would recover. Guess that didn’t happen.
Fortunately, my other investments turned out better with some nice growth. My bank stocks were a fine example as well as some Asian mutual funds. But still overall, I think I could have done some other things with my RRSP money. I could have grown my funds much more even compared to what I have today.
Here’s Where The Motivational Lessons Come In
But no use harping about the past. This is where the motivational lessons come in here. It’s okay to fail and make mistakes as long as one learns from them. Although some of these mistakes were costly, as in my Nortel investment, the lessons I learned will still benefit me.
I learned not to ignore my investments anymore and take a more active stance on them. I also learned that I should have perhaps researched more into different investment possibilities even though finance is not exactly my favourite topic.
Again, from what I suggested in my previous article, if I had invested my RRSP funds more wisely, and this included using my savings in some things outside my RRSP, I could have been a millionaire by now. But I must not let this awful conclusion deter my future goals.
Another very important thing is that one must take ACTION to achieve success. So that’s why I’m in the process of doing some important things to ensure that my investments from now on are not at the mercy of the world economy. Taking action is what separates those who are successful and those who are not.
I’ll fill you in on some of the things I’m presently doing soon. In the meantime, if you could related to this post and willing to share some of your own financial experiences, please do so below in the comments.
