Continued from page 1
Budget for it: You can scrimp, brown bag it, clip coupons, track every penny you spend, never have fun, and put off living for thirty years in hopeful expectation that someday you'll be able to retire and start enjoying your life. Yuck. That sounds terrible. No wonder this rarely works.
This leaves us with one proven, easy way to get rich. And that is...
PAY YOURSELF FIRST
Pay Yourself First means just what it says. When you earn a dollar, first person you pay is you. Most people don't do this. When most people earn a dollar, first person they pay is government. They earn a dollar and, before it even makes it onto their paycheque, Canadians pay government something like 30 cents and Americans pay somewhere around 18 cents in federal income taxes (often more). On top of that, for Canadians there's Canada Pension Plan, provincial health insurance and employment insurance. In end, they wind up paying government first as much as 35 or 40 cents of their hard-earned dollar. Seems like everyone is getting paid but person who earned paycheque.
The Secret is Way Your Money Flows
You have a right to legally avoid federal and provincial taxes on money you earn. The key word is "legally." You can legally Pay Yourself First, instead of government, simply by using what is called a registered retirement savings plan (RRSP) for Canadians or a 401(k) plan for Americans. You can hold a large number of investments in an RRSP or 401(k).
Who You Work for is Waiting for You at Home
As much as our employers would like us to believe otherwise, reason most of us go to work each morning isn't company mission statement or even serving customer. It's ultimately about us. When it comes down to it, reason most of us go to work is for sake of ourselves and our families. We go to work to protect those we love. Everything else is secondary. We are our first priority.
Or are we? The truth is that we are not raised to put ourselves first. We are raised to be nice. We are raised to share. We are raised to help others.
These are wonderful values, and I believe in them. But there's something else I also believe: old saying that Lord helps those who help themselves. I think there is timeless truth in this. So before you start laying out a financial plan, really focus on these questions: Are we helping ourselves? Are you helping yourself? Are you REALLY working for yourself? I'm not asking if you're self-employed. I'm asking whether you're really working for your own benefit and that of your family when you go to your job each morning.
Visit InvestorGazette.com today for articles about retirement income planning for the individual investor. The Investor Gazette - weekly edition of investment properties and investment opportunities.