Does Money Stress You Out?

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One thing that I know for sure, is if you are feeling a heavy financial weight, it can have a ripple effect into more aspects of your life than just your feelings toward money. You can be irritable with your family, you can feel frustrated with your work situation, you might just get sluggish and lazy. 

What I want you to know is that you are NOT ALONE. This is SO normal + this moment of doubt or stress with your $$ isn't permanent. And the fact that you are feeling it is actually a good thing. #saywhat ?!? When you are out of alignment with anything in your life and DON'T feel uncomfortable I'd say you have a blindspot there and the issue will not push your buttons until it's a huge monster that just can no longer be ignored.

What does it mean to you to be "good with money?" This will be different for every person and may change monthly (daily... okay hourly... lol) depending on the person and the season of life that you are in. Does it mean no debt? does it mean being able to save every month? does it mean being able to go to the grocery store and not having to buy sale items or adding up the total in your cart?

I want to share 3 things you can do right now if you are feeling overwhelm with your money. 

#1. What's going right?

Let's throw this irritation of money (or lack of money) out the window for a minute. Is there 1 (or more) things that you feel joy about? Are you a good cook? Do you plan fun family moments (not weeks, not full days, M.O.M.E.N.T.S)? Like bedtime. Like lunch with your best friend/sister/spouse. Are you able to create beautiful art? Do you have a green thumb? Give yourself some credit. These are all things that some people wish they had. So appreciate them and own it.

#2. Are there people in your life that make you feel bad about your financial position?

Do you have a 'keeping up with the Jones' friend? Or are your parents trying to help but instead of making you feel supported, you feel judged? Is it something they are doing/saying or is it your reaction to their behaviour and decisions. If it is them you need to set some boundaries. Like friends inviting you to expensive events, encouraging purchases you can't afford, etc. You have to get in the habit of saying - "sounds amazing, but I can't". Some of the scripts I have in my repertoire are:

  • I can't go - I'm still recovering from _____
  • I'd love to, but I just opened my Visa statement and almost had a heart attack
  • Sounds amazing!! But I have to say "no" I'm really trying to save for ________

If it is you - it's nothing they are doing, it's purely jealousy or judgement on your part. You will need to either filter your interactions with them. Think it - BUT NEVER VOCALIZE IT, there's something about verbalizing your negative thoughts that actually makes your brain believe it. And this is not a healthy thought and you just need to think it, and throw it away. Kind of like when you have a terrible dream and as long as you don't talk about it you seem to forget the details. You remember the feeling it gave you, but not the story behind the emotions. My favourite tool is to create a mantra you can repeat to yourself when you feel this green monster taking over.

  • their success is something to celebrate + does not limit mine
  • I'm so grateful that my friends/family are so happy
  • having friends/family that are worried about me is a blessing
  • I appreciate that offer of help - and when they need help I'll be there for them

#3. What's going on? Let's talk about the specifics.

Why are you feeling stressed? What's pissing you off? Do you feel like the family finances are your responsibility and you'd like some help. Is the weight of your debt overwhelming? Do you just want to go on a family trip without using a credit card? What exactly is it?

That's where the magic is. Because that's where instead of putting bandaid on the issue you can dive into it and really isolate your triggers. You have to then brainstorm ideas on what you can do to fix that problem. 

#4. It takes a village - look for some support/guidance/outside perspective

This is where you have to show a touch of vulnerability. You have to ask for help. It is in our nature to try and blame others and outside influences. You're in this situation because of what's-his-name, it's the market, it's my job, it's my kids, etc. But you really have to take ownership and start gathering your tools + resources to change.

Whether it's in secret, by reading blogs + books + other content. Or by showing up and reaching out to a professional, friend, mentor or family member. Do whatever feels right. And keep in mind that what feels 'right' isn't always what feels easy.

3 Income Property Myths

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When I first started thinking about buying my first investment property the statements I heard from others seemed to be on one extreme, or the other. Some comments made me doubt my decision while others made me want to get started YESTERDAY. It wasn’t until I found a mentor and experienced real estate investor that the advice was more grounded, real and experience based.

These are the 3 most common comments I heard (and still hear) and… they just aren’t true.

Myth #1:  Rental Income is Passive

To me, passive means NO INPUT or WORK or EFFORT. So when people say to me: rental income is passive - this is saying that you get to deposit rental income into your bank account without any effort. In my opinion, whoever refers to rental properties as “passive” are not landlords. When you purchase a property you will require a downpayment, this lump sum will either have to be hard earned $ saved by yourself or acquired from an outside investor/partner. Accumulating these funds may take awhile + will not feel “passive”. Getting a tenant is not something that is “effortless”. It requires applications, credit checks, viewings, no shows, saying no, going through the lease, etc. Then once you get tenant, you will need to interact with them. Develop a relationship and rapport with them. Maintain the building. Do your bookkeeping/taxes. There are so many facets that landlords must consider, and if you are in the business of making money - passive is not the strategy I would advise.

Myth #2: Tenants will wreck your property

I’ve been a renter. I want to live somewhere nice. When I live there I think of it as “my place”. I don’t want people to come over and think I live in a dump. Yes, there are people who have lower standards of living or aren’t concerned with the state of their surroundings… but just like you wouldn’t drop your kid off at any adult’s house - you need to screen + trust your tenants.

Myth #3: You can’t lose. You will get monthly $ + the property will rise in value

Careful here. This is either advice coming from someone who has been investing in an “up” market, isn’t a real estate investor, isn’t paying close attention to their actual numbers or is just plain lucky. Not every rental property is a winner. You need to not only do your due diligence at the time of the buy (in terms of offer price, rent estimates, repair cost, etc.) but you also have to treat your rental property like a business. Not just collecting the rent payment but keeping up with the expenses, comparing them to prior years, watching for inefficiencies to help cut costs, and evaluating your overall investment portfolio + monitoring their rate of return.

If you are trying to find your first income property + are hearing these things, just be sure to filter the advise you are getting. Check out this BLOG POST. It has some tips for getting started.

If you haven't already, please "like" my Facebook page. For the last couple months I have been posting some good rules of thumb, so other great finance expert resources + occasionally pop on to chat with you live! 

How to Set Your 2018 Financial Goals

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We are a halfway through January and this might be the time when your 2018 big ideas start to slip through the cracks.

What was your 2018 New Year's Resolution? Get in better shape, get in control of your money, give something up? #allthethings

I have a strategy for making + sticking to my financial goals that you might want to try! 

Step #1: Write it down

What is #1 thing you would like to change about your finances in 2018? Less debt? More savings? Set a budget? Maybe there’s an element of all these things you would like to see, but just pick one. Is there an actual number you would like to see? Once you’ve proclaimed your goal, look at your current situation. Where are you right NOW? How does it feel? How will it feel to accomplish your goal? What will  this change mean for you + your family?

Step #2: Plan it out with small steps

Instead of focusing on a YEAR goal - what does 90-days from now look like? By transforming your goal from a YEAR down to QUARTERS you are better able to adjust to changes. It also makes the goal feel more manageable and hopefully takes away some of the overwhelm. In the first step you reflected at your current situation + your goal outcome. Now it’s important to brainstorm the tasks that will get you there. Some ideas might be: put your ideal line of credit balance on the calendar for every Friday, plan a monthly family budget meeting, pick one ‘no spending day’ a week, try the cash envelope system, setup monthly savings deposits, etc.

Step #3: Create guardrails

Now that you have your goal, your quarterly result + some steps to move the needle in the right direction, it’s time to plan for failure. What I mean by that is… what are some sneaky situations, habits, or (heaven forbid) people that might derail you from the path to success. By identifying these things, can start thinking of how we can pivot and avoid these temptations. What can you do when #FOMO #YOLO make you start to think that a last minute family vacation is a good idea? What about when you have a crazy week and eating out would just be so much easier?

By going through this exercise you are already 10 steps closer to success than simply stating a goal + hoping for the best. CLICK HERE TO GET THE WORKSHEET

When you wanted your job, you didn’t just proclaim “I NEED A JOB” and it happened. You started looking at job postings, creating your resume, completing applications, going to interviews, etc… Same thing with setting your financial goals. You need to pick something to strive for and then create a roadmap to follow to get you there.

Save vs. Pay off Mortgage

Save or Invest

This is one of the most common questions. If you have extra cash, should you save it? Or pay off your property? And as a classical advisor... my first instinct is to say the annoying "well, it depends".  Because there are SO many factors that go into this decision: interest rates, rates of return, TFSA limits, RSP room, age, debt/equity ratio, blah blah blah... are your eyes glossing over yet?

There are definite number crunching approaches that can show you the BLACK + WHITE (or red) "logical" side of each scenario. But factors like risk, stress, relief, peace of mind - are all real pieces of the equation. If by reducing your overall household debt will help you sleep at night or cause less arguments at home, it might be worth it even if the numbers say not to. If you know a family vacation is just what you need for your mental health, squirrel that $$ away for that.

If you're excited getting your investment statements in the mail every quarter

Invest it. You can ALWAYS change your mind. The money is there for you to use. Deposit the extra cash in your account (hopefully tax sheltered - see your advisor for recommendations). If you are going to feel joy and accomplishment when you get your statement and see a healthy sum on there, then "save" it. Your mortgage payments are standard and are not typically reduced even if you make extra payments. So a lumpsum will reduce your overall debt, the amount of time you'll be paying off the property - but not the short term monthly obligations.

You crave some cushion

It's completely natural to feel more comfortable when you have some emergency funds or extra fun disposable cash. Our instincts are to avoid discomfort. If you (1) don't have an emergency fund (2) know there is a big expense coming up that you aren't quite ready for (3) etc. etc. you get my drift... Put that extra cash somewhere safe. Plus, don't forget interest on your mortgage is a tax deduction*. *if the mortgage in question is your investment property

If you want to start seeing more cashflow sooner

The sooner your mortgage is wiped out, the sooner you can put 100% of the cash flow from your rental in your pocket. Which is why we all got into real estate in the first place #amiright. By making a big payment on your mortgage (but be careful not to trigger any fees) you'll pay (1) less interest over the longterm (2) be debt free sooner (3) have more equity in your property to acquire more properties [if that is something you are considering] and (4) going to have more income from your property. 

Why not do both?

I love the idea of "a happy medium". Take the extra $ you have. Divide it in half. If you were to split it 50 / 50 between saving and debt repayment, how does that make you feel? Play around with the numbers, ask your advisor, your parents, your mentor. They might all have different answers for you, but by doing your own research and gathering information (plus how your stress levels react to the various scenarios) you can make a decision that is more in line with you, your goals and your future.

If you would be tempted to spend the money on silly, buyers-remorse items - I would suggest putting up your own guardrails. Whether that is investing in a more restrictive investment (like a GIC or RSP). By putting it somewhere where there are barriers (GICs are time + RSPs are tax consequences) you'll be less likely to make poor choices.

Some resources that could help you to make your decision:

I'm a planner, and I like to have a roadmap to follow + system that help keep me focused. By setting up a financial plan with all your investments, debts, goals, and habits you'll be more prepared to make the decisions. A plan provides me the peace of mind that I know I'm on the right track + can adapt quickly if there's a change in 'plans'. So maybe the right choice is do nothing, and make a plan - that would be a great place to start.

"Life is what happens to you while you are busy making other plans."